Exhibit 10.14


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of August     ,
2009 (the “Effective Date”), between COLLECT
AMERICA, LTD., a Delaware corporation (the “Company”),
and L. HEATH SAMPSON (“Executive”).  The Company and Executive agree as follows:


 


1.0          PURPOSE OF THE
AGREEMENT.


 


1.1          Executive and the Company
are entering into this Agreement setting forth the terms and conditions of
Executive’s employment with the Company. 
The Company hereby employs Executive and Executive hereby accepts
employment with the Company, such employment to commence no later than September 1,
2009, upon the terms and conditions contained in this Agreement.


 


1.2          As an executive officer
of the Company, Executive has access to valuable confidential and proprietary
information used in the business of the Company, including financial data,
customer data, operational data, trade secrets and other intellectual property
that if disclosed to or used by competitors or potential competitors would
cause irreparable harm to the Company.


 


1.3          Executive and the Company
desire to enter into this Agreement in order to provide the Company with
adequate protection from the unauthorized disclosure or use of the Company’s
confidential and proprietary information and unfair competition or solicitation
of the Company’s customers.  The Company
would not have employed Executive, or provided Executive with the equity
incentives outlined in Exhibit B to this Agreement, but for Executive’s
promises contained in Sections 4.7 and 4.8.


 


2.0          DEFINITIONS.


 


2.1          Affiliate: “Affiliate” means, with respect to any party, any
corporation, limited liability company, partnership, joint venture, firm and/or
other entity which Controls, is Controlled by or is under common Control with
such party.


 


2.2          Board of Directors:
“Board of Directors” shall mean the
board of directors of the Company.


 


2.3          Business: “Business” means (i) the providing of operational
assistance and/or software to collection law firms or collection agencies,
including without limitation the operation of a franchise network of collection
law firms, (ii) the purchasing of debt; (iii) the collection of debt
on a contingency basis or otherwise; (iv) the development and sale of
software for the collections industry; and/or (v) any other line of
business in which the Company or its Affiliates engage in, or formulate
business plans to engage in, during the term of Executive’s employment with the
Company.


 

















 


2.4          Compensation Committee:
“Compensation Committee” shall mean a
committee of the Board of Directors which has been delegated responsibility for
employee compensation matters or, in the absence thereof, the entire Board of
Directors.


 


2.5          Confidential and
Proprietary Information: “Confidential and
Proprietary Information” means all proprietary trade secrets and/or
proprietary information and any idea in whatever form, tangible or intangible,
pertaining in any manner to the Business of the Company or any Affiliate of the
Company, or to the Company’s clients, consultants, or business associates,
unless the information is or becomes publicly known through lawful means (other
than disclosure by Executive, unless such disclosure by Executive is made in
good faith in the course of performing Executive’s duties under this Agreement,
or with the express written consent of the Board of Directors).


 


2.6          Control: “Control” means (i) in the case of corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the stock or
participating assets entitled to vote for the election of directors; and (ii) in
the case of non-corporate entities (such as individuals, limited liability
companies, partnerships or limited partnerships), either (A) direct or
indirect ownership of at least fifty percent (50%) of the equity interest, or (B) the
power to direct the management and policies of the noncorporate entity.


 


2.7          Covered Entity: “Covered Entity” means every Affiliate of Executive, and
every business, association, trust, corporation, partnership, limited liability
company, proprietorship or other entity in which Executive has invested in
(whether through debt or equity securities), or has contributed any capital or
made any advances to, or in which any Affiliate of Executive has an ownership
interest or profit sharing percentage, or a firm from which Executive or any
Affiliate of Executive receives or is entitled to receive income, compensation
or consulting fees in which Executive or any Affiliate of Executive has an
interest as a lender (other than solely as a trade creditor for the sale of
goods or provision of services that do not otherwise violate the provisions of
this Agreement). The agreements of Executive contained herein specifically
apply to each entity which is presently a Covered Entity or which becomes a
Covered Entity subsequent to the date of this Agreement. Notwithstanding the
foregoing, nothing contained in this Agreement prohibits Executive or any
Affiliate of Executive from owning less than five percent (5%) of any class of voting
securities registered under the Securities Exchange Act of 1934, as amended, of
any issuer, and no such issuer shall be considered a Covered Entity solely by
virtue of such ownership or the incidents thereof. Further notwithstanding
anything contained in the foregoing provisions to the contrary, the term “Covered
Entity” shall not include the Company, any Subsidiary of the Company, or any
Affiliate of the Company or any such Subsidiary.


 


2.8          Discharge For Cause:
“Discharge For Cause” shall mean termination
of employment for any one or more of the following: (i) willful
misfeasance or nonfeasance by Executive of his assigned duties, which includes
not following the reasonable written direction of the Board of Directors or any
committee thereof (other than by reason of disability), or repeated intentional
refusal by Executive to perform his assigned duties (other than by reason of
disability) which continues uncured for thirty (30) days following receipt of
written notice from the President, CEO, or the Chairman of the Board of
Directors; (ii) such Executive personally engaging in illegal conduct or
in any act of moral turpitude that causes material harm to the 


 

















 


reputation, business, or finances of the Company or
any Affiliate of the Company; (iii) such Executive breaching in any
material respect any provision of this Agreement except Sections 4.7 or 4.8,
(other than by reason of disability) which continues uncured for thirty (30)
days following receipt of written notice from the President, CEO, or Chairman
of the Board of Directors; (iv) such Executive breaching any obligation
contained in Sections 4.7 or 4.8 of this Agreement; and (v) such Executive’s
commencement of employment with another company while he is an employee of the
Company without the prior consent of the Board of Directors.


 


2.9          Discharge Without
Cause: “Discharge Without Cause” shall
mean the Company’s termination of Executive’s employment hereunder during the
term hereof for any reason other than a Discharge For Cause or due to Executive’s
death or Permanent Disability.


 


2.10        EBITDA: “EBITDA” shall mean earnings before interest, taxes,
depreciation and amortization, as determined by generally accepted accounting
principles, consistently applied, and including without limitation, an accrual
for bonuses of officers and employees (including the Executive) for the year
for which EBITDA is determined.


 


2.11        Permanent Disability:
“Permanent Disability” shall mean
Executive’s inability to perform Executive’s duties hereunder due to a physical
or mental condition for a period of one hundred twenty (120) consecutive days
or an aggregate of one hundred eighty (180) days in any twelve (12) month
period.


 


2.12        Subsidiary: “Subsidiary” shall mean any corporation, trust, general or
limited partnership, limited liability company, limited liability partnership,
firm, company or other business enterprise which is Controlled by the Company
thorough direct ownership of the stock or other proprietary interests of such
business enterprise or indirectly through the ownership of stock or other
proprietary interests in one (1) or more other business enterprises which
are connected with the Company by means of one (1) or more chains of
business enterprises that are connected by ownership of stock or other
proprietary interests.   Attached as
Schedule A lists the Company’s current subsidiaries.  An updated Schedule A will be provided to
Executive at the time of any separation of employment for any reason.


 


2.13        Termination For Good
Reason: “Termination For Good Reason” shall
mean voluntary termination of this Agreement by Executive if, without the
written consent of Executive: (i) there is a material reduction by the
Company to either (a) Executive’s annual salary then in effect or (b) Executive’s
bonus target established under Section 5.2 of this Agreement (although the
award of any bonus is discretionary and a bonus award that is less than the
target shall not give Executive the right to terminate this Agreement for Good
Reason); except for any reduction which is remedied by the Company promptly
after receipt of written notice thereof given by Executive; (ii) the
Company materially breaches the terms of this Agreement and such breach is not
cured within thirty (30) days after receipt of written notice thereof given by
Executive; (iii) there is a material, adverse, and non-temporary
diminution of Executive’s current job title, reporting relationship, or duties
as Senior Vice President, Chief Financial Officer, or requirements that are
inconsistent with the position of Senior Vice President, Chief Financial
Officer, excluding for this purpose any action not taken in bad faith and that
is remedied by the Company promptly after receipt of written notice thereof
given by Executive as outlined below; or (iv) there is a relocation of
Executive to a facility or location more than forty 


 

















 


(40) miles from the Company’s current
location.  If circumstances arise giving
Executive the right to terminate this Agreement for Good Reason, Executive
shall within 60 days notify the Company in writing of the existence of such
circumstances, and the Company shall have an additional 30 days within which to
investigate and remedy the circumstances, after which 30 days Executive shall
have an additional 60 days within which to exercise the right to terminate for
Good Reason.  If Executive does not
timely do so the right to terminate for Good Reason shall lapse and be deemed
waived, and the Executive shall not thereafter have the right to terminate for
Good Reason unless further circumstances occur giving rise independently to a
right to terminate for Good Reason under this paragraph.


 


2.14        Territory: “Territory” means the United States and Canada.


 


3.0          CAPACITIES AND
DUTIES: INDEMNIFICATION.


 


3.1          Title: Executive
is hereby employed in the capacity of Senior Vice President, Chief Financial
Officer of the Company. Executive shall report directly to the President and
shall be subject to President’s, CEO’s, and Chairman of the Board’s
supervision, control and direction. Executive will at all times abide by the
Company’s written personnel policies applicable to similarly situated employees
of the Company as in effect from time to time and provided to Executive
(including without limitation its equal employment opportunity and harassment
policies), and will faithfully, industriously and to the best of Executive’s
ability, experience and talents perform all of the duties that may be required
of and from Executive pursuant to the terms hereof, consistent with Executive’s
status as a Senior Vice President of the Company.


 


3.2          Exclusive Services:
During the Term, Executive agrees to devote Executive’s best efforts and full
business time to rendering services to the Company. Executive is specifically
restricted from being employed by any other company, other than a Subsidiary or
an Affiliate of the Company, while under the Company’s employ pursuant to this
Agreement.  Notwithstanding the foregoing
sentence, the following activities shall not be prohibited by this Section 3.2:
(i) less than a one percent (1%) ownership interest by Executive in a
publicly-traded competing business entity (where such ownership does not
constitute Control and where Executive does not act as a director, officer,
consultant or otherwise provide services to such entity), (ii) Executive’s
service on the board of directors of any charitable, non-profit or educational
institution without compensation (other than reimbursement of out-of-pocket
expenses) or any for-profit entity that does not compete with the Business,
provided that Executive has obtained advance authorization by the Board to
serve in such capacity, such authorization to be given or withheld in the Board’s
discretion; provided, however, that any such services shall be insubstantial
and shall not include any active involvement in the management of such entity
and provided further that such service or ownership shall not detract from
Executive’s performance of his duties to the Company or, except in the case of Section 3.2(i),
be in direct competition with the Business.


 


3.3         Indemnification:
The Company shall, to the maximum extent permitted by the Company’s bylaws and
applicable law, indemnify and hold harmless Executive for any loss, injury,
damage, expense (including reasonable attorneys’ fees, and costs), and claim or
demand,


 

















 


arising out of, connected with, or in any manner
related to, any act, omission, or decision made in good faith while performing
services for the Company from and after the Effective Date.


 


4.0          TERM.


 


4.1          Term: Subject to
Sections 4.2, 4.3, 4.4, 4.5 and 4.6, the term of this Agreement shall be three (3) years
commencing on the Effective Date, unless terminated earlier pursuant to the
terms herein (the “Initial Term”);
provided that, unless earlier terminated pursuant to the terms herein, the
Initial Term shall be automatically extended for additional one-year terms
(each, a “Renewal Term”) upon the expiration of
the Initial Term or any such Renewal Term unless the Company or Executive
delivers to the other at least thirty (30) days prior to the expiration of the
Initial Term or the then-current Renewal Term, as the case may be, a written
notice specifying that the term of Executive’s employment will not be renewed
at the end of the Initial Term or the then-current Renewal Term, as the case
may be. The Initial Term or, in the event that Executive’s employment hereunder
is terminated earlier pursuant to the terms herein or renewed pursuant to this Section 4.1,
such shorter or longer period, as the case may be, is referred to herein as the
“Term.”  In the event that (i) the
Company elects not to renew this Agreement and (ii) this Agreement
terminates by expiration of the Initial Term, or by expiration of the first
Renewal Term, if applicable, then the Company shall have no payment obligation
to Executive except for (i) payment of sums specified in Section 4.2;
and (ii) payment to Executive of the Without Cause Severance Pay, provided
that the Conditions (defined in Section 4.4. below) are met.  If the Agreement terminates by expiration of
the Term in any other instance except those outlined in the foregoing sentence,
the Company’s only obligation shall be payment of sums specified in Section 4.2.


 


4.2          Payments Upon
Termination.  In the event Executive’s
employment under this Agreement is terminated for any reason, Executive shall
be paid for all accrued, unpaid base salary and all accrued, unused vacation,
in each case through the date of termination, in accordance with applicable
law.  Executive shall also be reimbursed
for any expenses incurred in accordance with Section 5.3 of this
Agreement.


 


4.3          Discharge For
Cause: Executive’s employment under this
Agreement may be immediately terminated by the Company for Cause, without
further obligation by the Company, except for payment of sums specified in Section 4.2,
upon written notice to Executive of a Discharge For Cause. The Company shall
provide Executive in such written notification such facts as shall be
reasonably necessary to apprise Executive of the basis for such Discharge For
Cause.


 


4.4          Discharge Without Cause
or Termination for Good Reason: 
Executive’s employment under this Agreement may be immediately
terminated by the Company upon written notice to Executive of a Discharge
Without Cause or immediately terminated by Executive upon written notice to the
Company of a Termination for Good Reason. In the event of such termination and
subject to the Conditions (defined in this Section 4.4 below), the Company
shall continue to pay to Executive an amount equal to Executive’s base salary,
as provided in Section 5.1, at the annual rate in effect at the time of
termination, over a period equal to six (6) months from the date of such
termination (“Without Cause Severance Pay”).
Without Cause Severance Pay shall also include, in addition to the foregoing, (i) a
bonus equal to a pro 


 

















 


rata portion of the bonus amount that would have
been paid to Executive for the current bonus period had Executive not been
terminated, which bonus amount is determined by multiplying the bonus that
would have been earned for the then-current twelve (12) month bonus period by a
fraction, the numerator of which is number of calendar days in the then-current
bonus period that have elapsed as of the date of termination and the
denominator of which is 365, such bonus to be paid at the time that comparable
executives at the Company are paid bonuses for the bonus period; and (ii) to
the extent Executive is eligible under and elects to continue his health care
coverage under COBRA, the Company shall continue to pay Executive’s COBRA
continuation premiums for medical and dental insurance pursuant to Section 5.4
for six (6) months from the date of such termination or, if sooner, the
date Executive becomes eligible to receive health care pursuant to a subsequent
employer’s group health care plan. Other than the foregoing, Executive shall
not be entitled to any payment for subsequent periods after the effective date
of any Discharge Without Cause or Termination for Good Reason. Without Cause
Severance Pay, except as specified above, shall be payable to Executive in
accordance with the Company’s general payroll practices as the same may exist
from time to time. As a condition to receiving any payment under this Section 4.4,
Executive must comply with his post employment obligations under Section 4.7
and 4.8 and must execute and not revoke a 
release of claims in the form attached hereto as Exhibit A
within 45 days of Executive’s termination of employment, collectively (the “Conditions”).


 


4.5          Termination Upon Death:
This Agreement shall be immediately terminated without action or notice by
either party upon the death of Executive and without further obligation by the
Company, except for payment of sums specified in Section 4.2


 


4.6          Termination Upon
Permanent Disability: Executive’s employment under this Agreement may be
immediately terminated by the Company upon written notice of a termination for
the Permanent Disability of Executive. Upon termination pursuant to this Section 4.6
and in addition to payment of the sums specified in Section 4.2, the
Company shall continue to pay to Executive an amount equal to Executive’s base
salary, as provided in Section 5.1, at the annual rate in effect at the
time of termination, for a period equal to three (3) months from the date
of termination (“Permanent Disability Severance Pay”),
provided that Executive complies with
the Conditions outlined in Section 4.4 above.  Permanent Disability Severance Pay shall be
reduced by the amount of any disability benefits paid during and for the same
period to Executive under any disability insurance policy provided by the
Company as a benefit to Executive. Permanent Disability Severance Pay shall be
payable to Executive, in accordance with the Company’s general payroll
practices as the same may exist from time to time, upon Executive’s termination
pursuant to this Section 4.6.


 


4.7          Confidential and
Proprietary Information: Executive agrees that he will not, either directly
or indirectly, both during and after the termination of his employment with the
Company, and Executive will not permit any Covered Entity which is Controlled
by Executive to, either directly or indirectly, divulge to any person or use
any of the Confidential and Proprietary Information, except (i) as
required in connection with the performance of such Executive’s duties to the
Company, (ii) as required to be included in any report, statement or
testimony requested by any municipal, state or national regulatory body having
jurisdiction over Executive or any Covered Entity which is Controlled by
Executive, (iii) as required in response to any summons or subpoena or in
connection with any litigation, (iv) to the extent necessary in 


 

















 


order to comply with any law, order, regulation,
ruling or governmental request applicable to Executive or any Covered Entity
which is Controlled by Executive, (v) as required in connection with an
audit by any taxing authority, or (vi) is made with the express written
consent of the Board of Directors. In the event that Executive or any such
Covered Entity which is Controlled by Executive is required to disclose
Confidential and Proprietary Information pursuant to the foregoing exceptions (ii) through
(v) inclusive, Executive shall promptly notify the Company of such pending
disclosure and assist the Company (at the Company’s expense) in seeking a
protective order or in objecting to such request, summons or subpoena with
regard to the Confidential and Proprietary Information. If the Company does not
obtain such relief after a period that is reasonable under the circumstances,
Executive (or such Covered Entity) may disclose that portion of the
Confidential and Proprietary Information which counsel to such party advises
such party that they are legally compelled to disclose or else stand liable for
contempt or suffer censure or penalty. In such cases, Executive shall promptly
provide the Company with a copy of the Confidential and Proprietary Information
so disclosed.


 


4.8          Non-Compete and Non-Solicitation:


 


(i)            During
the term of Executive’s employment with the Company or any Affiliate of the Company
and for one (1) year thereafter, regardless of the reason for the
termination of Executive’s employment, Executive shall not either directly or
indirectly, and will not permit any Covered Entity which is Controlled by
Executive to either directly or indirectly, compete with the Business in the
Territory or otherwise participate in, assist, aid or advise in any way, any
competitive business or enterprise that competes with the Business in the
Territory.


 


(ii)           During
the term of Executive’s employment with the Company or any Affiliate of the
Company and one (1) year thereafter, Executive will not, either directly
or indirectly and will not permit any Covered Entity which is Controlled by
Executive to, either directly or indirectly, (a) (1) attempt in any
manner to solicit the business of any franchisee of the Company or Affiliates
of the Company, or (2) solicit the business of any financial institution
or other creditors with which the Company or its Affiliates has had a
relationship, except that Executive may solicit such institutions or creditors
if doing so would not violate his obligations under Section 4.8(i); or (b) hire,
solicit, take away, or attempt to hire, solicit or take away (either on such
Executive’s behalf or on behalf of any other person or entity) any person (1) who
is then an employee of the Company or any Affiliate of the Company or an
employee or a franchisee of the Company; or (2) who has terminated his or
her employment with the Company or any Affiliate of the Company within the previous
ninety (90) days.


 


(iii)          Executive
acknowledges that the foregoing geographic restriction on competition is fair
and reasonable, given the nature and geographic scope of the Company’s business
operations and the nature of Executive’s position with the Company.  Executive also acknowledges that while
employed by the Company, Executive will have access to information that would
be valuable or useful to the Company’s competitors, and therefore acknowledges
that the foregoing restrictions on Executive’s future employment and business
activities are fair and reasonable. 
Executive acknowledges and is prepared for the possibility that
Executive’s standard of living may be reduced during the one-year period
following the termination of Executive’s employment, and assumes and accepts
any risk associated with that possibility.


 

















 


(iv)          Executive
acknowledges the following provisions of Colorado law, set forth in Colorado
Revised Statutes § 8-2-113(2):


 


Any covenant not to compete which restricts
the right of any person to receive compensation for performance of skilled or
unskilled labor for any employer shall be void, but this subsection (2) shall
not apply to:


 


 


(b)           Any
contract for the protection of trade secrets;


 


 


(d)           Executive
and management personnel and officers and employees who constitute professional
staff to executive and management personnel.


 


Executive acknowledges that this agreement
is a contract for the protection of trade secrets within the meaning of §
8-2-113(2)(b) and is intended to protect the Confidential Information and
Confidential Records identified above and that Executive is an executive or
manager, or professional staff to an executive or manager,  within the meaning of § 8-2-113(2)(d).


 


(v)           Executive
agrees that the payment of any Without Cause Severance Pay is conditioned on
Executive’s compliance with this Section 4.8 and that the Company will
have the right to withhold payment, and/or seek to recover any payments already
made, if Executive is in breach of this Section 4.8.


 


(vi)          Notwithstanding
the provisions of Sections 4.8(i) and (ii) above, (a) Executive’s
ownership of less than a one percent (1%) ownership interest in a
publicly-traded competing business entity (where such ownership does not
constitute Control and where Executive does not act as a director, officer,
consultant or otherwise provide services to such entity), or (b) Executive’s
service on the board of directors of any charitable, non-profit or educational
institution without compensation (other than reimbursement of out-of-pocket
expenses) or any entity that does not compete with the Business, shall not
constitute a violation of this Section 4.8, provided, however, that any
such services shall be insubstantial and shall not include any active
involvement in the management of such entity and provided further that such
service or ownership shall not detract from Executive’s performance of his
duties to the Company or, except in the case of Section 4.8(vi)(a), be in
direct competition with the Business.


 


4.9          Enforcement; Remedies:
Executive acknowledges that Executive’s expertise in the Business is of a
special and unique character which gives this expertise a particular value, and
that a breach of Sections 4.7 or 4.8 by Executive will cause serious and
potentially irreparable harm to the Company. Executive therefore acknowledges
that a breach of Sections 4.7 or 4.8 by Executive cannot be adequately
compensated in an action for damages at law, and equitable relief would be
necessary to protect the Company from a violation of this Agreement and from
the harm which this Agreement is intended to prevent. By reason thereof,
Executive acknowledges that the Company is entitled, in addition to any other
remedies it may have under this Agreement or otherwise, to preliminary and permanent
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement. Executive acknowledges, however, that no specification in this
Agreement of a specific legal or equitable remedy may be 


 

















 


construed as a waiver of or prohibition against
pursuing other legal or equitable remedies in the event of a breach of this
Agreement by Executive. Executive’s sole and exclusive remedy in the event of a
breach of this Agreement by the Company shall be payment of the Without Cause
Severance Pay or Good Reason Severance Pay.


 


4.10        Limitations Under Code Section 409A


 


(i)            If
at the time of Executive’s separation from service, (i) Executive is a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by the Company from time to time), and (ii) the
Company makes a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A) the
payment of which is required to be delayed pursuant to the six-month delay rule set
forth in Section 409A in order to avoid taxes or penalties under
Section 409A, then the Company will not pay such amount on the otherwise
scheduled payment date but will instead pay it in a lump sum on the first
business day after such six-month period, together with interest for the period
of delay, compounded annually, equal to the prime rate (as published in the
Wall Street Journal) in effect as of the dates the payments should otherwise
have been provided.


 


(ii)           It
is the intention of the parties that payments or benefits payable under this
Agreement not be subject to the additional tax imposed pursuant to Section 409A
of the Code.  To the extent such
potential payments or benefits could become subject to such Section, the parties
shall cooperate to amend this Agreement with the goal of giving Executive the
economic benefits described herein in a manner that does not result in such tax
being imposed.


 


(iii)          With
respect to payments under this Agreement, for purposes of Section 409A of
the Code of 1986, each severance payment and COBRA continuation reimbursement
payment will be considered one of a series of separate payments.


 


(iv)          Executive
will be deemed to have a termination of employment for purposes of determining
the timing of any payments that are classified as deferred compensation only
upon a “separation from service” within the meaning of Section 409A.


 


(v)           Any
amount that Executive is entitled to be reimbursed under this Agreement will be
reimbursed to Executive as promptly as practical and in any event not later
than the last day of the calendar year after the calendar year in which the
expenses are incurred, and the amount of the expenses eligible for
reimbursement during any calendar year will not affect the amount of expenses
eligible for reimbursement in any other calendar year.


 


(vi)          If
on the due date for any payment pursuant to Section 4 (except for payments
under Section 4.2), the release has not been executed and delivered and
all revocation periods with respect to the release have not yet expired, such
payment will not be made until such revocation period has expired and if such
revocation period has not expired by the end of the calendar year in which the
payment would have otherwise been made, the payment shall be forfeited.  To the extent not forfeited pursuant to the
prior sentence, the Company will pay all amounts that would have otherwise been
paid pursuant to Section 4 prior to the


 

















 


executive’s delivery and lapse of the
revocation periods for the release within five days after satisfaction of these
requirements.


 


5.0          COMPENSATION AND
BENEFITS. For Executive’s services, the Company agrees to pay Executive
compensation as follows:


 


5.1          Salary: Base
compensation equal to an annual salary of $300,000 (Three Hundred Thousand
Dollars) to be paid according to the Company’s general payroll practices as
same may exist from time to time.


 


5.2          Incentive Compensation
Program: During the Term, Executive shall be eligible for an annual
discretionary performance-based bonus, with a target bonus of 100% of base
salary, and based upon the actual performance of the Company in relation to
projected EBITDA milestones, other tangible financial metrics, and Individual
Scorecard Objectives to be established by the President and consistent with
plans approved by the Compensation Committee of the Board of Directors (the “Compensation
Committee”) after consultation with the Chairman of the Board. The President
will set such Individual Scorecard Objectives within the first 45 days of each
calendar year, and within 45 days following Executive’s first day of employment
for the for calendar year 2009. Any bonus payable as a performance bonus shall
be in the amount and paid in the manner, as determined by the Compensation
Committee or the Board of Directors in its sole discretion.  Any such bonus payable shall be paid within
fifteen (15) days of the delivery of the Company annual audit but in any event
by the end of the calendar year after the calendar year to which the
performance relates. Executive shall not be entitled to any bonus for the
calendar year in which Executive’s employment with the Company is terminated
for any reason, except as provided in Sections 4.1 and 4.4.  Executive shall be entitled to receive a
prorated bonus for calendar year 2009  at the target
rate of 100% of base salary, prorated based on Executive’s first day of
employment with the Company, and with a guaranteed minimum bonus for 2009 of
$75,000 such guarantee to be enforceable only if Executive remains employed with
the Company through December 31, 2009 or Executive’s employment terminates
prior to that date due to a Discharge Without Cause or Termination for Good
Reason.


 


5.3          Relocation Bonus.  The Company will pay Executive
a one-time relocation bonus in the gross amount of $75,000, plus a one-time
gross up of this bonus amount for tax purposes (the bonus plus the
gross-up,  the “Relocation Bonus”).  If during the Initial Term, Executive (i) is
Discharged for Cause or (ii) resigns his employment under circumstances
that are not a Termination for Good Reason, then Executive will be obligated to
repay the entire Relocation Bonus and, by Executive’s signature below,
Executive authorizes the Company to withhold the amount due, in whole or in
part, from any final wages, compensation, bonus, accrued vacation, or other
payment due to Executive upon termination.


 


5.4          Reimbursement of
Expenses: The Company shall
reimburse Executive for any reasonable business expenses incurred by Executive
in the ordinary course of the Company’s business in accordance with the Company’s
reimbursement policies then in effect. These expenses shall be substantiated by
invoices and receipts, to be submitted by Executive within thirty (30) days
after incurrence.


 






 










 


5.5          Benefits: During
the Term, Executive shall be entitled to receive all benefits of employment
generally available to the Company’s other executive employees on the same
terms and conditions applicable to such executive employees.  At present, such benefits include
participation in the Company’s: (i) group health plan; (ii) 401(k) retirement
plan upon the first eligible commencement date following six (6) months of
continuous employment; and (iii) 125 Cafeteria Plan. .


 


5.6          Stock:  In addition, the Company shall
use its reasonable best efforts to issue Executive within 120 days of the
Effective Date of this Agreement the stock described in Exhibit B, subject
to the terms contained in such Exhibit B and the Certificate(s) of
Designation for such stock.


 


5.6         Reimbursement for
House-Hunting Expenses.  The Company
will reimburse Executive for the reasonable costs of travel and lodging for up
to two (2) trips to the Denver area for Executive and Executive’s spouse
for the purposes of securing permanent housing. 
If Executive is unable to secure permanent housing prior to Executive’s
first day of employment, the Company will reimburse Executive, in an amount not
to exceed $6,000.00, to assist Executive in paying for the cost of temporary
housing in the Denver metropolitan area for the shorter of (i) 45 days, or
(ii) until such time as Executive secures and is able to occupy permanent
housing (the “Stipend Period”).


 


5.7          Vacation: During the Term, Executive shall be entitled to  four
(4) weeks (160 hours) of paid vacation each year during the Term, accrued
on a pro rata basis through each full year of the Term. Executive will use his
reasonable efforts to schedule vacation periods to minimize disruption of the
Company’s business.  Any accrued vacation
time that is not used by December 31st of each calendar year will not roll over to
the following year absent written approval by the President.


 


5.8          Withholding:
Executive authorizes the Company to make any and all applicable withholdings of
federal and state taxes and other items the Company may be required to deduct,
as such items may exist under this Agreement or otherwise from time to time.


 


6.0          SUCCESSORS AND ASSIGNS.
This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive, the Company and their respective heirs, successors
and assigns, except that Executive shall not have any right to assign or
otherwise transfer this Agreement, or any of Executive’s rights, duties or any
other interest herein to any party without the prior written consent of the
Company, and any such purported assignment shall be null and void.


 


7.0          SURVIVAL OF RIGHTS AND
OBLIGATIONS. The rights and obligations of the parties as stated herein
shall survive the termination of this Agreement.


 


8.0          ENTIRE AGREEMENT.


 


8.1          Sole Agreement:
This Agreement (including any attachments and exhibits hereto) contain the
parties’ sole and entire agreement regarding the subject matter hereof, and
supersedes any and all other agreements, statements and representations of the
parties.


 

















 


8.2          No Other
Representations: The parties acknowledge and agree that no party has made
any representations (i) concerning the subject matter hereof, or (ii) inducing
the other party to execute and deliver this Agreement, except those
representations specifically referenced herein. The parties have relied on
their own judgment in entering into this Agreement.


 


9.0          MODIFICATIONS OR
WAIVERS. Waivers or modifications of this Agreement, or of any covenant,
condition, or limitation contained herein, are valid only if in writing duly
executed by the parties hereto.


 


10.0        GOVERNING LAW. This
Agreement shall be governed pursuant to the laws of the State of Colorado.


 


11.0        SEVERABILITY. If any
part, clause, or condition of this Agreement is held to be partially or wholly
invalid, unenforceable, or inoperative for any reason whatsoever, such shall
not affect any other provision or portion hereof, which shall continue to be
effective as though such invalid, unenforceable or inoperative part, clause or
condition had not been made.


 


12.0        INTERPRETATION.


 


12.1        Section headings:
The section and subsection heading of this Agreement are included for purposes
of convenience only, and shall not affect the construction or interpretation of
any of its provisions.


 


12.2        Gender and Number: Whenever required by the context, the singular shall include the
plural, the plural shall include the singular, and the masculine gender shall
include the neuter and feminine genders and vice versa.


 


13.0        NOTICES. All notices and other communications under or in connection with this
Agreement shall be in writing and shall be deemed given (i) if delivered
personally, upon delivery, (ii) if delivered by registered or certified
mail (return receipt requested), upon the earlier of actual delivery or three (3) days
after being mailed, (iii) if given by overnight courier with receipt
acknowledgment requested, the next business day following the date sent, or (iv) if
given by telecopy, upon confirmation of transmission by telecopy, in each case
to the parties at the following addresses:


 


	
  To the Company:

  	
  Collect America, Ltd.

  
	
   

  	
  4340 S. Monaco, Second Floor

  
	
   

  	
  Denver, CO 80237

  
	
   

  	
  Attention:

  	
  President/Chairman of the Board

  
	
   

  	
  Facsimile:

  	
  (303) 713-2509

  
	
   

  	
   

  
	
  with a copy to:

  	
  KRG Capital Partners, LLC

  
	
   

  	
  1515 Arapahoe Street

  
	
   

  	
  Tower One, Suite 1500

  
	
   

  	
  Denver, Colorado 80202

  
	
   

  	
  Facsimile:

  	
  (303) 390-5015

  
	
   

  	
  Attention:

  	
  Mark M. King

  
	
   

  	
   

  	
  Damon Judd

  
				



 

















 


	
  with a copy to:

  	
  Hogan & Hartson LLP

  
	
   

  	
  1200 17th Street, 15th Floor

  
	
   

  	
  Denver, Colorado 80210

  
	
   

  	
  Facsimile:

  	
  (303) 899-7333

  
	
   

  	
  Attention:

  	
  George Hagerty, Esq./Robert Mintz, Esq.

  
	
   

  	
   

  
	
  To Executive:

  	
  To the address listed on the signature
  page hereto.

  



 


14.0        JOINT PREPARATION. All parties to this Agreement have negotiated it at length, and have
had the opportunity to consult with and be represented by their own competent
counsel. This Agreement is therefore deemed to have been jointly prepared by
the parties, and any uncertainty or ambiguity existing in it shall not be
interpreted against any party, but rather shall be interpreted according to the
rules generally governing the interpretation of contracts.


 


15.0        THIRD-PARTY
BENEFICIARIES. No term or provision of
this Agreement is intended to be, or shall be, for the benefit of any person,
firm, organization or corporation not a party hereto, and no such other person,
firm, organization or corporation shall have any right or cause of action
hereunder.


 


16.0        COOPERATION AND FURTHER
ACTIONS. The parties agree to perform any and all acts and to execute and
deliver any and all documents necessary or convenient to carry out the terms of
this Agreement.


 


17.0        ATTORNEYS’ FEES. In the event of any dispute related to or based upon this Agreement,
the prevailing party shall be entitled to recover from the other party its
reasonable attorneys’ fees and costs.


 


18.0        COUNTERPARTS. This
Agreement may be executed in one or more counterparts, including electronically
transmitted counterparts, each of which shall be deemed an original and all of
which shall be considered one and the same instrument.


 


19.0        RESOLUTION OF DISPUTES
AND CONSENT TO JURISDICTION.


 


19.1        Litigation of
Disputes Under Sections 4.7 and 4.8 of this Agreement.  All disputes under or related
to the enforcement of Sections 4.7 and 4.8 of this Agreement, together with any
other dispute under this Agreement that is related to whether Sections 4.7 and
4.8 have been or are threatened to be breached (including without limitation
whether any termination under this Agreement was for Cause) shall be litigated
as provided below.  Specifically, with
respect to such disputes or enforcement actions, each party to this Agreement
hereby (a) consents to the jurisdiction of the United States District
Court for the District of Colorado or, if such court does not have jurisdiction
over such matter, the applicable Colorado State or County Court that has
jurisdiction, (b) consents to personal jurisdiction within the City and
County of Denver, Colorado, and (c) accepts, generally and
unconditionally, the exclusive jurisdiction and venue of the aforesaid courts and
waives any defense of lack of personal jurisdiction or inconvenient forum or
any similar defense, and irrevocably agrees to be bound by any non-appealable
judgment rendered thereby.


 

















 


19.2        Arbitration of
Other Disputes Under this Agreement.


 


(i)            Any
controversy, claim or dispute involving the parties (or their affiliated
persons) concerning this Agreement, or the subject matter thereof, except as
provided in Section 19.1, shall be finally settled by arbitration held in
Denver, Colorado by one (1) arbitrator in accordance with the rules of
employment arbitration then followed by the American Arbitration Association or
any successor to the functions thereof. The arbitrator shall apply Colorado law
in the resolution of all controversies, claims and disputes and shall have the
right and authority to determine how his or her decision or determination as to
each issue or matter in dispute may be implemented or enforced. Any decision or
award of the arbitrator shall be final and conclusive on the parties to this
Agreement and their respective affiliates, and there shall be no appeal
therefrom other than from gross negligence or willful misconduct.
Notwithstanding the foregoing, claims of employment discrimination, worker’s
compensation and unemployment compensation benefits shall not be subject to
arbitration under this Agreement. The Company shall bear all costs of the
arbitrator in any action brought under this Section 19.2.


 


(ii)           The
parties hereto agree that any action to compel arbitration pursuant to this Section 19.2
may be brought in the appropriate Colorado court and in connection with such
action to compel the laws of the State of Colorado shall control. Application
may also be made to such court for confirmation of any decision or award of the
arbitrator, for an order of the enforcement and for any other remedies which
may be necessary to effectuate such decision or award. The parties hereto
hereby consent to the jurisdiction of the arbitrator and of such court and
waive any objection to the jurisdiction of such arbitrator and court.


 


[SIGNATURE PAGE FOLLOWS]


 

















 


[SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT
AGREEMENT]


 


IN WITNESS WHEREOF, the parties hereto have
executed, or caused their duly authorized representatives to execute, this
Agreement as of the Effective Date.


 


	
   

  	
  COLLECT AMERICA, LTD.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paul A. Larkins

  
	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  



 


	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  



 


	
   

  	
  /s/ L. Heath Sampson

  
	
   

  	
  L. Heath Sampson

  



 


	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  



 

















 


EXHIBIT A


 


FORM OF MUTUAL RELEASE


 


Mutual Legal Release


 


This Mutual Legal Release (“Release”) is between Collect America, LTD.
(the “Company”) and L. Heath
Sampson (“Executive”) (each a “Party,” and together, the “Parties”) and shall be effective on the day
that Executive signs it, provided that such day is after Executive’s last day
of employment with the Company (“Effective
Date”).


 


Recitals


 


1.             Executive and the Company are parties to an Executive
Employment Agreement to which this Release is appended as Appendix A (the “Agreement”).


 


2.             Executive wishes to receive the Without Cause Severance
Pay or Permanent Disability Severance Pay, as the case may be and as provided
for and defined in the Agreement, and understands that receipt of such benefits
are conditioned upon his execution of this Release and compliance with the
terms of Sections 4.7 and 4.8 of the Agreement.


 


3.             Executive and the Company wish to resolve, except as
specifically set forth herein, all claims between them arising from or relating
to any act or omission predating the Effective Date defined above.


 


Agreement


 


The Parties agree as follows:


 


1.             Confirmation of Severance Pay Obligation  The Company shall pay or provide to the
Executive the [Without Case Severance Pay or Permanent Disability Severance
pay] as, when and on the terms and conditions specified in the Agreement,
including but not limited to continued compliance with Executive’s obligations
under Sections 4.7 and 4.8 of the Agreement.


 


2.             Legal Releases.


 


(a)           Executive,
on behalf of Executive and Executive’s heirs, personal representatives and
assigns, and any other person or entity that could or might act on behalf of
Executive, including, without limitation, Executive’s counsel (all of whom are
collectively referred to as “Executive Releasers”),
hereby fully and forever releases and discharges the Company, its present and
future parents, affiliates, and subsidiaries, and each of their past, present
and future officers, directors, employees, shareholders, investors, independent
contractors, attorneys, insurers and any and all other persons or entities that
are now or may become liable to any Executive Releaser due to any Executive
Releasee’s act or omission, (all of whom are collectively referred to as “Executive Releasees”) of and from any and all actions,
causes of action, claims, demands, costs and expenses, including attorneys’
fees, of every kind and nature whatsoever, in law or in equity, whether now
known or unknown, that Executive 


 

















 


Releasers, or any person acting
under any of them, may now have, or claim at any future time to have, based in
whole or in part upon any act or omission relating to or arising out of
Executive’s employment relationship with, and/or service as a member of the
Board of Directors (if any) for, the Company or its subsidiaries or affiliates
occurring on or before the Effective Date, without regard to present actual
knowledge of such acts or omissions, including specifically, but not by way of
limitation, matters which may arise at common law, such as breach of contract,
express or implied, promissory estoppel, wrongful discharge, tortious
interference with contractual rights, infliction of emotional distress,
defamation, or under federal, state or local laws, such as the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the National Labor
Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay
Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and
any civil rights law of any state or other governmental body, all as amended
and to the extent releasable under the statute, and all claims relating to
equity incentives of any kind, except as specifically set forth in the Agreement; PROVIDED, HOWEVER, that notwithstanding the foregoing or
anything else contained in the Agreement or this Release, the release set forth
in this Supplemental Release shall not extend to:  (i) any vested, unpaid rights under any
pension, retirement, profit sharing or similar plan; or (ii) Executive’s
rights, if any, to indemnification, and/or defense under any Company
certificate of incorporation, bylaw and/or policy or procedure, or under any
insurance contract, in connection with Executive’s acts an omissions within the
course and scope of Executive’s employment with the Company.  Executive hereby warrants that Executive has
not assigned or transferred to any person any portion of any claim which is
released, waived and discharged above. 
Executive further states and agrees that Executive has not experienced
any illness, injury, or disability that is compensable or recoverable under the
worker’s compensation laws of any state that was not reported to the Company by
Executive before the Effective Date, and Executive agrees not to not file a
worker’s compensation claim asserting the existence of any such previously
undisclosed illness, injury, or disability. 
Executive has specifically consulted with counsel with respect to the
agreements, representations, and declarations set forth in the previous
sentence.  Executive understands and
agrees that by signing this Agreement and Release, Executive is giving up any
right to bring any legal claim against the Company concerning, directly or
indirectly, Executive’s employment relationship with the Company, including
Executive’s separation from employment. 
Executive agrees that this legal release is intended to be interpreted
in the broadest possible manner in favor of the Company, to include all actual
or potential legal claims that Executive may have against the Company, except
as specifically provided otherwise in this Agreement or Release.


 


(b)           Executive agrees and acknowledges that Executive: (i) understands
the language used in this Release and its legal effect; (ii) understands
that by signing this Release Executive is giving up the right to sue the
Company for age discrimination;(iii) will receive compensation and/or
benefits under the Agreement to which Executive would not have been entitled
without signing this Release; (iv) has been advised by the Company to
consult with an attorney before signing the Agreement and this Release; and (iv) will
be given no less than [twenty-one OR forty-five} days to consider whether to
sign this Release.


 


(c)           For
a period of seven days after the Effective Date, Executive may, in Executive’s
sole discretion, rescind this Release, by delivering a written notice of
rescission to [insert contact] at the Company. 
If Executive rescinds this Release within seven calendar days 


 

















 


after the Effective Date, this
Release shall be void, all actions taken pursuant to this Release shall be
reversed, and neither this Release nor the fact of or circumstances surrounding
its execution shall be admissible for any purpose whatsoever in any proceeding
between the parties, except in connection with a claim or defense involving the
validity or effective rescission of this Release.  If Executive does not rescind this Release
within seven calendar days after the Effective Date, this Release shall become
final and binding and shall be irrevocable.


 


(d)  The Company, for itself,
its affiliates, and any other person or entity that could or might act on
behalf of the Company, including, without limitation, the Company’s counsel
(all of whom are collectively referred to as “Company
Releasers”), hereby fully and forever releases and discharges
Executive and Executive’s heirs, personal representatives and any and all other
persons or entities that are now or may become liable to any Company Releaser
due to any Company Releasee’s act or omission, (all of whom are collectively
referred to as “Company Releasees”) of and from
any and all actions, causes of action, claims, demands, costs and expenses,
including attorneys’ fees, of every kind and nature whatsoever, in law or in
equity, whether now known or unknown, that Company Releasers, or any person
acting under any of them, may now have, or claim at any future time to have,
based in whole or in part upon any act or omission occurring within the course
and scope of Executive’s employment relationship with the Company or its
subsidiaries and affiliates occurring on or before the Effective Date, without
regard to present actual knowledge of such acts or omissions, including
specifically, but not by way of limitation, matters which may arise at common
law, such as breach of contract, express or implied, promissory estoppel,
wrongful discharge, tortious interference with contractual rights, infliction
of emotional distress, defamation, or under federal, state or local laws; PROVIDED, HOWEVER, that notwithstanding the foregoing or
anything else contained in this Agreement, the release set forth in this
paragraph shall not extend to:  (i) any
rights of the Company or duties of the Executive pursuant to the Section 4.7,
4.8, or 4.9 of the Agreement, which sections shall survive the signing of this
Release; (ii) to any Executive act or omission that was actively concealed
from the Company by Executive or at Executive’s direction; or (iii) to any
acts of fraud, embezzlement, or other misappropriation of Company funds,
assets, or property.  The Company hereby
warrants that the Company has not assigned or transferred to any person any
portion of any claim which is released, waived and discharged above.  The Company understands and agrees that by
signing this Agreement the Company is giving up any right to bring any legal
claim against Executive concerning, directly or indirectly, Executive’s
employment relationship with the Company, including Executive’s separation from
employment.  The Company agrees that this
legal release is intended to be interpreted in the broadest possible manner in
favor of Executive, to include all actual or potential legal claims that the
Company may have against Executive, except as specifically provided otherwise
in this Release or the Agreement.


 


3.             Executive acknowledges that the Company paid Executive
for all earned, unpaid wages and all accrued, unused vacation, less applicable
withholdings, through his last day of employment, and that Executive is
entitled to no further payments for wages, compensation, benefits, bonuses,
equity, or any other type of compensation or benefit, except for the [Without
Case Severance Pay or Permanent Disability Severance pay] Executive will
receive if he signs and does not revoke this Release.


 

















 


4.             Executive
covenants never to disparage or speak ill of the Company or any of the Company’s
products or services, or of any past or present employee, officer or director
of the Company, nor shall Executive at any time harass or behave
unprofessionally toward any past, present or future Company employee, officer
or director.  If Executive breaches this
non-disparagement obligation, Executive shall be liable to the Company for
liquidated damages, not a penalty, in the amount of $10,000 for each breach.


 


5.             Executive
acknowledges that because of Executive’s position with the Company, Executive
may possess information that may be relevant to or discoverable in connection
with claims, litigation or judicial, arbitral or investigative proceedings
initiated by a private party or by a regulator, governmental entity, or
self-regulatory organization, that relates to or arises from matters with which
Executive was involved during Executive’s employment with the Company, or that
concern matters of which Executive has information or knowledge (collectively,
a “Proceeding”).  Executive agrees that
Executive shall testify truthfully in connection with any such Proceeding,
shall cooperate with the Company in connection with every such Proceeding, and
that Executive’s duty of cooperation shall include an obligation to meet with
the Company representatives and/or counsel concerning all such Proceedings for
such purposes, and at such times and places, as the Company reasonably
requests, and to appear for deposition and/or testimony upon the Company’s
reasonable request and without a subpoena. 
The Company shall reimburse Executive for reasonable out-of-pocket
expenses that Executive incurs in honoring Executive’s obligation of
cooperation under this paragraph.


 


 [SIGNATURES FOLLOW]


 

















 


[SIGNATURE
PAGE TO MUTUAL RELEASE]


 


	
  L. HEATH SAMPSON

  	
  COLLECT
  AMERICA, LTD.,

  
	
   

  	
  a
  Delaware corporation  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  As its:

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  



 

















 


EXHIBIT
B


 


Equity
Incentives


 


Stock Option


 


·        The
Company will grant you, subject to the approval of the Board of Directors, an
option to purchase 2,500 shares of the Common Stock of the Company (the
“Option”).  This grant will be governed
by the CA Holding, Inc. Amended and Restated 2005 Equity Incentives Plan (the
“Plan”) and will vest, in accordance with the Plan, in equal installments over
a five-year period.  As provided by the
Plan, vesting of the Option shall accelerate in the event of a change of
control as defined in the Plan.


 


Series B-2 Contingent Preferred
Stock


 


·                       Executive will
be issued 22,500 shares of B-2 Preferred to be purchased by Executive at the
fair market value of $0.10 per share. 
The Company would use its reasonable best efforts to issue these
securities within 120 days of Executive’s start date.  The fact and timing of the issuance is
subject to final board approval and necessary shareholder votes.


·                       The B-2 would
be convertible into non-voting common stock of the Company based on the KRG ROI
being between 1.50x and 3.50x, with conversion pro rated within that
range.  No shares would convert to the
extent KRG’s IRR (as defined in the Third Amended and Restated Certificate of
Incorporation of CA Holding, Inc.) on its investment was less than 10%.  For example, if the KRG ROI was 2.50x at the
time of an exit (and assuming the 10% IRR had been achieved), one half of
Executive’s B-2 Preferred would convert into non-voting common stock and the
other half would be forfeited.   “KRG
ROI” shall mean the ratio determined by dividing (i) the total proceeds
received by KRG Capital Fund II, L.P. (“KRG”) for its investments in the
preferred and common equity securities of the Company measured as of a
Liquidity Event (as defined in the Third Amended and Restated Certificate of
Incorporation of CA Holding, Inc.), by (ii) the total capital invested by KRG
in the preferred and common equity securities of the Company.  For purposes of calculating the KRG ROI, any
transaction fees or management fees received by KRG Capital Management, L.P.
pursuant to the Management Agreement between Collect America, Ltd. and KRG
Capital Management, L.P. will not be included in the calculation.


·                       The B-2 will
“vest” based on a 5 year schedule with 20% vesting on each anniversary of
issuance.  Vesting would accelerate in a
Change of Control or IPO.  Vesting will
cease as of the date of any termination of employment for any reason.


 

















 


Schedule
A


Current
List of Company Subsidiaries


 


Astrum Fianncial, LLC


Autus, LLC


CA Acquisition Company


CA Holding, Inc.


CA Internet Marketing, LLC


CACH of NJ, LLC


CACH, LLC


CACV of 
New Jersey, LLC


CACV of Colorado, LLC


Candeo, LLC


Collect Air, LLC


Collect America Commercial Services, Inc.


Collect America of Canada, LLC


Collect America, Ltd.


Collect Canada, Ltd.


Healthcare Funding Solutions, LLC


Impulse Marketing Group, LLC


Metropolitan Legal Services, Inc.


Orsa, LLC


Preferred Credit Resources Limited


ReFinance America, Ltd.


Valesco Data Services, LLC