Exhibit 10.16


 


EXECUTION COPY


 


EXECUTIVE
EMPLOYMENT AGREEMENT


 


THIS EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered
into as of February 20, 2006 (the “Effective Date”),
between COLLECT AMERICA, LTD, a Delaware corporation (the “Company”),
and MICHAEL A. JONES (“Executive”).


 


1.0          RECITALS.


 


1.1          Executive and the Company
are entering into this Agreement setting forth the terms and conditions of
Executive’s continued employment with the Company.  The Company hereby employs Executive and Executive
hereby accepts employment with the Company 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.


 


NOW, THEREFORE, IN
CONSIDERATION of the foregoing facts, the mutual covenants and agreements
contained herein and other good and valuable consideration, the Company and
Executive agree as  follows:


 


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 and/or (iii) the
collection of debt on a contingency basis or otherwise.


 


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 


 


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whatever form, tangible or intangible, pertaining
in any manner to the business of the Company of 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 Board
of Directors, the Compensation Committee 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 of
the Company or any Affiliate of the Company; (iii) such Executive
breaching in any material respect any provision of this Agreement, (other than
by reason of disability) which continues uncured for thirty (30) days following
receipt of written notice from the Board of Directors, the Compensation
Committee or the Chairman of the Board of Directors; and (iv) 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 


 


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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 through 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.


 


2.13        Termination For Good
Reason: “Termination For Good Reason”
shall mean voluntary termination of this Agreement by Executive if, without the
prior consent of Executive: (i) there is a reduction by the Company in
Executive’s annual salary then in effect; (ii) the Company acts in any way
that would adversely affect Executive’s participation in or materially reduce
Executive’s benefit under any benefit plan of the Company in which Executive’s
is participating, except those
changes generally affecting similarly situated employees of the Company, and except any action not taken in bad faith
and which is remedied by the Company promptly upon receipt of notice thereof
given by Executive; (iii) 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; (iv) there is a material diminution of Executive’s job title,
reporting relationship, job duties, responsibilities (which include, without
limitation, responsibilities in managing the Business) or requirements that are
inconsistent with the position or positions listed in Section 3.1; or (v) there
is a relocation of Executive to a facility or location more than twenty-five
(25) miles from the Company’s current location.


 


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 Chief Financial Officer of the Company.  Executive shall report directly to the
President and Chief Executive Officer of the Company and shall be subject to
his or her 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 previously provided to Executive, 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 the Chief Financial
Officer of the Company.


 


3.2          Exclusive Services: During the Term,
Executive agrees to devote Executive’s 


 


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best efforts and full business time to rendering
services to the Company. Executive is specifically restricted front 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; provided
that neither (i) Executive’s ownership of less than a five percent
(5%) ownership interest in another 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),
nor (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 entity that is not in direct
competition with the Business, nor (iii) managing Executive’s personal
investments and affairs and the personal investment and affairs of any of his
family members, nor (iv) acquiring any interest in any entity, whether or
not part of a Control group, that is directly or indirectly owned or
Controlled, in whole or in part, by Executive and/or one or more members of his
family, or a partnership, trust or other entity held by or for the benefit of
Executive and/or one or more members of his family, nor (v) performing
services for any entity, whether or not part of a Control group, that is
directly or indirectly owned or Controlled, in whole or in part, by Executive
and/or one or more members of his family, or a partnership, trust, or other
entity held by or for the benefit of Executive and/or one or more members of
his family, shall not be a violation of this Section 3.2, 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 addressed in Sections 3.2(i) through (v) 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 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 42, 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
terns 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.”


 


4.2          Discharge For Cause: Executive’s
employment under this Agreement may be terminated by the Company (subject to
the notice and cure period set forth in Section 2.8, if applicable), by
vote of a majority of the Board of Directors, specifically finding that an
action constituting a Discharge for Cause has occurred, without further
obligation by the Company, except for payment of any base salary compensation
and expense reimbursement accrued and unpaid through the effective date of
termination and except as otherwise required by law, upon written notice to
Executive of a Discharge For Cause.  The
Company shall provide Executive in such written 


 


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notification such facts as shall be reasonably
necessary to apprise Executive of the basis for such Discharge For Cause and
for Executive to exercise Executive’s right to cure under Section 2.8, if
applicable.


 


4.3          Discharge Without Cause
and Payments Upon Expiration of Term: Executive’s employment
under this Agreement may be immediately terminated by the Company upon written
notice to Executive of a Discharge Without Cause.  Upon termination pursuant to this Section 4.3,
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 twelve (12) months from the date
of such termination (“Without Cause Severance
Pay”).  Without Cause Severance Pay shall also
include, in addition to the foregoing, (i) all amounts of base salary
compensation and expense reimbursement accrued to the effective date of
termination and 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
assuming the Company’s EBITDA continued at the same rate per month as
experienced from the beginning of the current period through the date of
termination, by a fraction (y) 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 (z) the denominator of which is 365; and (ii) the
Company shall continue to pay or provide to Executive the medical, dental, life
and disability insurance benefits pursuant to Section 5.4 until the later
to occur of twelve (12) months from the date of such termination or (ii) the
Noncompete Term as defined in that certain Noncompetition and Nonsolicitation
Agreement dated as of the Effective Date between Company and Executive;
provided, however, the Company’s obligation to pay or provide the benefits in
clause (ii) above shall be subject to Section 4.11.  Other than the foregoing, Executive shall not
be entitled to any payment for subsequent periods upon Executive’s termination
of employment upon a Discharge Without Cause. 
Without Cause 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 of employment upon a Discharge Without Cause.  Other than Executive’s claims for amounts
required to be paid pursuant to this Section 4.3, as a condition to
receiving Without Cause Severance Pay, Executive shall execute a release of
claims in the form attached hereto as Exhibit A.


 


4.4          Termination For Good
Reason: This Agreement may be immediately terminated by Executive, subject to
the notice and time limitations set forth in Section 2.13, upon written
notice to the Company of a Termination For Good Reason.  Upon termination pursuant to this Section 4.4,
the Company shall continue to pay 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 twelve (12) months from the elate of
such termination (“Good Reason Severance Pay”).  Good Reason Severance Pay shall also include,
in addition to the foregoing, (i) all amounts of base salary compensation
and expense reimbursement accrued to the effective date of termination and a
bonus equal to the 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
assuming the Company’s EBITDA continued at the same rate per month as
experienced from the beginning of the current period through the date of
termination, by a fraction (y) 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 (z) the denominator of which is 365; and (ii) the
Company shall continue to pay or provide to Executive the medical, dental, life
and disability insurance benefits pursuant to Section 5.4 until the later
to occur of twelve (12) months from the date of such termination or the
Noncompete 


 


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Term as defined in that certain Noncompetition and
Nonsolicitation Agreement dated as of the Effective Date between Company and
Executive; provided, however, that the Company’s obligation to pay or provide
the benefits in clause (ii) above shall be subject to Section 4.11.  Other than the foregoing, Executive shall not
be entitled to any payment upon Executive’s termination of employment upon a
Termination For Good Reason.  Good Reason
Severance Pay shall be payable in accordance with the Company’s general payroll
practices as the same may exist from time to time upon Executive’s termination
of employment upon a Termination For Good Reason.  Other than Executive’s claims for amounts
required to be paid pursuant to this Section 4.4, as a condition to
receiving Good Reason Severance Pay, Executive shall execute a release of
claims in the form attached hereto as Exhibit A.


 


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 all amounts of base salary compensation and expense
reimbursement accrued to the effective date of termination, and except as
otherwise required by law.


 


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, 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”).  Permanent Disability Severance Pay shall also
include, in addition to the foregoing, all amounts of base salary compensation
and expense reimbursement accrued to the effective date of termination.  Permanent Disability Severance Pay shall be
reduced by the amount of any disability benefits paid during and for the same
period to Executive under airy 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.  Other than Executive’s claims for amounts
required to be paid pursuant to this Section 4.6, as a condition to
receiving Permanent Disability Severance Pay, Executive shall execute a release
of claims in the form attached hereto as Exhibit A.


 


4.7          Confidential and
Proprietary Information: Executive agrees that he will not, either
directly or indirectly, 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 in
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 attic 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,
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 


 


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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 eases, 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, Executive shall not either directly or indirectly, and will not
permit any Covered Entity which is Controlled by Executive to either directly
or Indirectly, participate in, assist, aid or advise in any way, any
competitive business or enterprise that competes with the Business in the
Territory.  For purposes of this
Agreement, the Company shall be deemed to be conducting the Business in the
Territory if the applicable collection account debtors are located in the
Territory or if the applicable franchisees or other customers (or such franchisee’s
or customer’s respective collection account debtors) are located in the
Territory, regardless of whether the collection activities or services are
performed from locations outside of 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; 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 agrees that the payment of
any Without Cause Severance Pay or Good Reason Severance Pay is conditioned on
Executive’s compliance with this Section 4.8 and that the Company will
have the right to withhold payment if Executive is in breach of this Section 4,8.


 


(iv)          Notwithstanding the provisions of
Sections 4.8(i) and (ii) above, (a) Executive’s ownership of
less than a five percent (5%) ownership interest in another 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), (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 is not in
direct competition with the Business, (c) managing Executive’s persona’
investments and affairs and the personal investment and affair of any of his
family members, (d) acquiring any interest in any entity, whether or not
part of a Control group, that is directly or indirectly owned or Controlled, in
whole or in part, by Executive and/or one or more members of his family, or a
partnership, trust or other entity held by or for the benefit of Executive
and/or one or more members of his family, (e) performing services for any
entity, whether or not part of a Control group, that is directly or indirectly
owned or Controlled, in whole or In part, by Executive and/or one or more
members of his family, or a partnership, trust, or other entity held by or for
the benefit of Executive and/or one or more members of his family, shall not be
considered a violation of Sections 4.8(i) and (ii), provided, however,
that 


 


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any such services or ownership addressed in
this Section 4.8(iv) shall not detract front Executive’s performance
of his duties to the Cowpony during the term of his employment with the Company
or, except in the case of Section 4.8(iv)(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 a 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        COBRA: If, following a
Termination For Good Reason by Executive or a Discharge Without Cause by the
Company, Executive elects continued coverage under the Company’s health plan
pursuant to the Comprehensive Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), then the
Company shall continue to pay the premium for Executive’s continued coverage
under the Company’s health plan until the first to occur of (i) twelve
(12) months from the date of termination; (ii) Executive is employed by a
third party, or (iii) Executive elects to cease such coverage or fails to
pay his portion of the premium. If the Company changes its insurance provider
or the amounts or terms of such coverage for its employees during such period,
including changes and contribution percentages or costs, the Company may
provide such substitute or changed coverage to Executive in full satisfaction
of its obligations under this Section 4.10.


 


4.11        Severance Pay Benefit
Conditions: If, following a Termination For Good Reason by
Executive or a Discharge Without Cause by the Company, Executive is no longer
entitled to the medical, dental, life and disability insurance benefits
referenced in Section 4.3(ii) and Section 4.4(ii) because
Executive is no longer an employee of the Company, then the Company shall first
attempt to resolve the eligibility issue by paying Executive a nominal (no less
than minimum wage) salary, less applicable tax withholdings, during the period
for which Executive is entitled to the benefit under Section 4.3(ii) or
Section 4.4(11).  If the Company’s
attempt to resolve the eligibility issue in the previous sentence is not
permitted by the applicable benefit plan or policy, then Company shall pay to
Executive a monthly amount equal to the monthly premium that the Company paid
under the applicable benefit plan, or policy with respect to the Executive’s
benefits in the month prior to the termination of Executive’s employment with
the Company.  The monthly payments
described in the foregoing sentence shall be paid for the period during which
Executive was otherwise entitled to receive the benefits under Section 4.3(ii) or,
Section 4.4(11).


 


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 $285,000 (Two Hundred Eighty Five Thousand
Dollars) to be paid according to the Company’s general payroll 


 


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practices as same may exist from time to time.
Executive’s base compensation will be subject to annual reviews and increases
as approved by the Board of Directors and the Compensation Committee. Such
annual reviews will be conducted on or about Executive’s normal anniversary
date of hire in accordance with past practice of the Company.


 


5.2          Incentive Compensation
Program: During the Term, Executive shall be eligible for an annual
discretionary performance-based bonus of up to 100% of the base salary based
upon the actual performance of the Company in relation to projected EBITDA
milestones and management objectives to be agreed upon. by the Compensation
Committee of the Board of Directors (the “Compensation
Committee”) or the Board of Directors.  The Compensation Committee or the Board of
Directors will set such milestones on or before Decembers 31st of each year of
the Term, and within 30 days following the Closing Date (as detailed in the
Merger Agreement) for fiscal 2005.  Any
bonus payable as a performance bonus shall be in the amount, and paid at the
time and in the manner, as determined by the Compensation Committee or the
Board of Directors.  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 Section 4.3
(Discharge Without Cause) or Section 4.4 (Termination For  Good Reason).


 


5.3          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.


 


5.4          Relocation: Upon the
Effective Date, the Company shall pay to the Executive a lump sum payment in
the amount of $90,000 (net of all applicable withholding) to cover the cost of
the Executive’s relocation.


 


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 when and as such benefits,
if any, become available and Executive becomes eligible for them, including any
vacation and sick leave, medical, dental, life and disability insurance
benefits, long term incentive plan, stock option plan, pension plan and/or
profit-sharing plan, and parking.  In
addition, Executive shall receive, within sixty (60) days following the
Effective Date, the right to purchase restricted stock under Holding’s Equity
Incentive Plan for up to 34,540 shares (subject to the approval by the Board of
Directors within sixty (60) days following the Effective Date) of Series B-1
Contingent Preferred Stock at a price per share equal to $0.10 per share.


 


5.6          Vacation: During the Term,
Executive shall be entitled to four (4) weeks (160 hours) of paid vacation
each year during the Term.  Executive
will use his reasonable efforts to schedule vacation, periods to minimize
disruption of the Company’s business. 
Except upon Discharge Without Cause or Termination for Good Reason, the
Company will not reimburse Executive for any unused vacation.


 


5.7          Withholding: Executive
authorizes the Company to make any and all applicable withholdings of Meted 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 


 


9

















 


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), any non-competition,
non-solicitation., confidentiality or proprietary information agreement 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, including but not limited to any employment agreement or other
agreement regarding Executive’s compensation or terms of employment entered
into prior to the Effective Date.


 


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 (1) 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 


 


10

















 


telecopy, upon confirmation of transmission by
telecopy, in each case to the parties at the following addresses:


 


	
  To the Company:

  	
  Collect America, Ltd.

  
	
   

  	
  5000 Republic Plaza 

  
	
   

  	
  370 Seventeenth Street 

  
	
   

  	
  Denver, CO 80202

  
	
   

  	
  Attention:

  	
  President

  
	
   

  	
  Facsimile:

  	
  (303) 296-8538

  
	
   

  	
   

  
	
  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

  
	
   

  	
   

  	
  Christopher J. Bock

  
	
   

  	
   

  
	
  with a copy to:

  	
  Paul, Hastings, Janofsky & Walker LLP

  
	
   

  	
  695 Town Center Drive, 17th Floor

  
	
   

  	
  Costa Mesa, California 92626

  
	
   

  	
  Facsimile: (714) 979-1921

  
	
   

  	
  Attention: William J. Simpson, Esq.

  
	
   

  	
   

  
	
  To Executive:

  	
  To the address listed or 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        ARBITRATION.


 


(i)            Any controversy, claim or dispute
involving the parties (or their affiliated persons) directly or indirectly
concerning this Agreement, or the subject matter thereat 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 


 


11

















 


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 16.0.


 


(ii)           The parties hereto agree that any
action to compel arbitration pursuant to this Agreement 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.


 


(iii)          Notwithstanding the foregoing
provisions of this Section 16.0, nothing contained herein shall be deemed
to preclude any party from bringing an action for injunctive relief in any
court having jurisdiction.


 


17.0        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.


 


18.0        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.


 


19.0        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.


 


20.0        CONSENT TO JURISDICTION.  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) irrevocably agrees that all actions or
proceedings arising out of or relating to this Agreement which are not subject
to arbitration as set forth in Section 16.0(f) shall be litigated in
such court and (c) consents to personal jurisdiction within the City and
County of Denver, Colorado. Each party to this Agreement accepts for itself and
in connection with its properties, 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
in connection with this Agreement.


 


[SIGNATURE
PAGE FOLLOWS]


 


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[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/ P. Scott Lowery

  
	
   

  	
  Name: P. Scott Lowery

  
	
   

  	
  Title: 
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Michael A. Jones

  
	
   

  	
  Michael A. Jones

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile: