CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, herein referred to as "Agreement" made and
entered into as of the 20th day of January, 1999, by and between Arcadia
Financial Ltd., a Minnesota corporation (the "Company") and Xxxxxx Xxxxxx
("Consultant").
WHEREAS, the Company engages in the sales finance business, and
WHEREAS, the Consultant has numerous years of experience in the
financial services accounting and finance profession, and
WHEREAS, the Company desires to engage Consultant to perform certain
consulting services for the Company, and
WHEREAS, Consultant is seeking such engagement, and
WHEREAS, the parties desire to set forth the terms and conditions of
consulting services to be provided by Consultant to the Company.
NOW, THEREFORE, in consideration of the promises and the mutual benefits
which will accrue to the parties to this Agreement, it is mutually understood
and agreed as follows:
1. DESCRIPTION OF SERVICES. Consultant shall furnish and perform the
consulting services pertinent to the operations of the Company which are
specifically set forth in Exhibit A attached hereto and made a part hereof
(the "Consulting Services"). The Consulting Services shall be provided as
needed by the Company. Such services shall be performed to be best of the
Consultant's ability and in a competent, efficient and satisfactory manner.
The Company acknowledges that Consultant is engaged in various other
substantial business activities, that the Company's request for Consulting
Services hereunder from Consultant shall not unreasonably interfere with
Consultant's other business activities and that Consultant shall be entitled
to engage in other business for other persons or entities during the term
hereof subject to the provisions of paragraph 6 hereof.
2. PAYMENT FOR SERVICES. In consideration of the Consulting Services
to be provided by Consultant to the Company and of other obligations of
Consultant contained herein, the Company shall, concurrent with the execution
hereof, execute and deliver to Consultant a non-statutory stock option in the
form and substance of Exhibit B attached hereto (the "Option Agreement").
Pursuant to the Option Agreement, the Company shall grant to Consultant the
option to purchase up to 125,000 shares of the $.01 par value common stock of
the Company ("Common Stock") at an option price equal to $4.00 per share (the
fair market value of the Common Stock on the date of this Agreement), subject
to the terms and conditions of the Option Agreement. Such grant shall also
be subject to
the approval of the shareholders of the Company at its next annual meeting.
3. REIMBURSEMENT OF EXPENSES. Consultant shall be reimbursed for any
and all travel or other expenses borne or expended by Consultant in
connection with the Consulting Services. Any reasonable expenses incurred by
Consultant in performing his duties hereunder shall be reimbursed by the
Company when he furnishes appropriate documentation.
4. TERM OF ENGAGEMENT. Subject to the terms and conditions hereof,
the term of Consultant's engagement hereunder (the "Consulting Term") shall
commence as of January 1, 1999, and shall continue until December 31, 1999,
unless earlier terminated pursuant to paragraph 5.1.
5. TERMINATION.
5.1 TERMINATION. Consultant's engagement hereunder shall terminate
upon the happening of any of the following events:
a. by the mutual written agreement of the Company and Consultant;
b. upon the death of Consultant;
c. upon 14 days' prior written notice from the Company to Consultant with
Cause (as defined below); or
d. upon 14 days' prior written notice from Consultant to the Company, if
the Company shall make a material breach of the terms of this
Agreement.
As used in this Agreement, the term "Cause" shall mean (i) any fraud,
misappropriation or embezzlement by Consultant in connection with the
business of the Company; (ii) any failure by Consultant to perform the
Consulting Services assigned hereunder, provided that Consultant shall first
have received a written notice from the Company which sets forth in
reasonable detail the manner in which Consultant has failed to perform his
duties, in which case Consultant shall have a period of thirty (30) days to
cure the same, unless the same cannot be reasonably cured within said thirty
(30) day period, in which event Consultant shall have up to an additional
ninety (90) days to cure the same; (iii) any material breach by Consultant of
this Agreement, provided that Consultant shall first have received written
notice from the Company which sets forth in reasonable detail the breach by
Consultant and Consultant shall have a period of thirty (30) days after
receipt of such notice to cure such breach, unless the same cannot be
reasonably cured within said thirty (30) day period, in which event
Consultant shall have up to an additional ninety (90) days to cure the same;
(iv) willful destruction of the property or records of the Company; (v)
dishonesty or deliberate falsification of the Company records; or (vi)
harassment (including sexual harassment) of a Company employee. The sole
remedy of the Company in the event of a breach of this Agreement
shall be to terminate this Agreement.
6. PROPRIETARY INFORMATION.
6.1 PROPRIETARY INFORMATION. Except by the prior written permission
from the Company, Consultant shall never disclose or use any proprietary
information ("Proprietary Information") of the Company of which Consultant
becomes or has become informed during his past or future engagement with the
Company or any of its subsidiaries, whether or not developed by Consultant,
except as required by his duties to the Company or any of its subsidiaries.
Proprietary Information shall mean information concerning the Company, its
business or its customers that derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can derive economic value
from its disclosure or use. Proprietary Information includes, but is not
limited to, the following types of information and other information of a
similar nature (whether or not reduced to writing), all of which Consultant
agrees constitutes the valuable trade secrets of the Company; research,
development, know-how, plans and processes, marketing plans and techniques,
existing and contemplated products and services, customer and prospect names
and related information, prices, sales, credit scoring, personnel, computer
programs and related documentation, technical and strategic plans, and
finances. Proprietary Information also includes any information of the
foregoing nature that the Company treats as proprietary or designates as
Proprietary Information, whether or not owned or developed by the Company.
Information does not lose its Proprietary Information status merely because
it was known by a limited number of other persons or entities or because it
did not entirely originate with the Company. Such nondisclosure and non-use
shall mean, without limiting the generality of the foregoing, during the
Consulting Term and at all times thereafter, the Consultant agrees to
receive, maintain, and use Proprietary Information in the strictest
confidence and, except with the consent of the Company will not directly or
indirectly reveal, report, publish, disclose, or transfer any Proprietary
Information to any person, firm, corporation, or other entity or utilize any
Proprietary Information for the Consultant's own benefit or intended benefit
or for the benefit or intended benefit of any other person, firm, corporation
or other entity.
6.2 DELIVERY OF PROPRIETARY INFORMATION. Upon the request of the
Company or the termination of his engagement, Consultant agrees to deliver to
the Company all materials that include Proprietary Information, including
without limitation customer lists, instruction sheets, manuals, computer
programs (including source codes), letters, financial records, notes,
notebooks, reports and copies thereof, and all other materials which are
under his control and which relate to the business of the Company or its
subsidiaries. Consultant agrees and understands that the Proprietary
Information and all information contained therein shall be at all times the
property of the Company. Further, upon termination of his engagement,
Consultant agrees to make available to any person designated by the Company
all information concerning pending or preceding transactions or programs
which may affect the operation of the Company or any of its subsidiaries
about which Consultant has knowledge. The obligations of Consultant
contained in this
paragraph are in addition to the obligation of Consultant to return to the
Company, upon the request of the Company or the termination of his
engagement, all property of the Company then in his possession.
6.3 SEVERABILITY. The covenants of Consultant set forth in this
paragraph 6 are separate and independent covenants for which valuable
consideration has been or will be paid or given, receipt of which is
acknowledged by Consultant, and have also been made by Consultant to induce
the Company to enter into this Agreement. Each of the aforesaid covenants
may be availed of or relied upon by the Company in any court of competent
jurisdiction.
6.4 SPECIFIC ENFORCEMENT. Consultant understands and agrees that a
breach by him of any provisions of this Agreement will cause the Company
irreparable injury and damage which cannot by compensable by receipt of money
damages. Consultant, therefore, expressly agrees that the Company shall be
entitled, in addition to any other remedies legally available, to injunctive
and/or other equitable relief to prevent a breach of this Agreement or any
part thereof.
7. OWNERSHIP OF PROPRIETARY INFORMATION. All Proprietary Information
prepared, created or assembled by Consultant or caused by Consultant to be
prepared, created or assembled in connection with this Agreement, as well as
any copyright, patent and trademark rights related thereto, shall be work
made for hire and shall at all times remain the sole and exclusive property
of the Company.
8. RELATIONSHIP OF PARTIES. Consultant is engaged by the Company only
for the purpose and to the extent set forth in this Agreement, and
Consultant's relationship to the Company shall, during the period covered by
this Agreement, be that of an independent contractor. Consultant shall not
be considered an employee of the Company and shall not be entitled to
participate in any plans, arrangements or distributions by the Company
pertaining to or in connection with any insurance, pension, stock, bonus,
profit sharing or similar employee benefits given employees of the Company.
Consultant shall be under the control of the Company as to the result of
Consultant's work only and not as to the means by which such result is
accomplished. Consultant shall not represent that Consultant has any power
to bind the Company or to assume or to create any obligation or
responsibility, express or implied, on behalf of the Company or in its name.
The Company shall not be liable for any losses, injuries, damages, or claims
of any nature whatsoever arising out of Consultant's activities or
representations under or in connection with this Agreement.
9. TAXES. Consultant acknowledges and agrees that it shall be the
obligation of Consultant to report as income, all compensation received by
Consultant hereunder and agrees to reimburse, indemnify and to hold and save
the Company harmless to the extent of any obligations imposed by law on the
Company to pay withholding taxes, social security, unemployment or disability
liability insurance or similar items in connection with any compensation paid
to Consultant.
10. MISCELLANEOUS.
10.1 VALIDITY. Whenever possible, each provision of this Agreement
shall be interpreted so that it is valid under applicable law. In case any
one or more of the provisions of this Agreement is to any extent found to be
invalid, illegal or unenforceable in any respect under applicable law, that
provision shall still be effective to the extent it remains valid and the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. If, moreover,
any one or more of the restrictions contained in this Agreement is for any
reason held excessively broad, it shall be construed or rewritten
(blue-lined) so as to be enforceable to the extent of the greatest protection
to the Company compatible with applicable law.
10.2 APPLICABLE LAW. This Agreement is entered into in the State of
Minnesota and shall be construed, interpreted and enforced according to the
statutes, rules of law and court decisions of said state.
10.3 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Option
Agreement constitute the entire agreement of the Company and Consultant with
respect to Consultant's engagement by the Company and supersedes any other
understandings or agreements, whether written or oral. This Agreement may be
amended or superseded only by an agreement in writing by the Company and
Consultant.
10.4 NOTICES. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be sufficiently
given if and when mailed by registered or certified mail, return receipt
requested, to the Company and its executive offices and to Consultant at his
address set forth below or in either case such other address specified by a
party hereto in a written notice hereunder, or when personally delivered.
10.5 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors and assigns. This Agreement
shall also be binding upon the inure to the benefit of Consultant and his
heirs and representatives. This Agreement may not be assigned by either
party without the prior written consent of the other party.
10.6 RESERVATION OF RIGHTS. Nothing contained herein shall limit any
other rights the Company has at law in connection with Consultant's
obligations to the Company, all of which are preserved.
10.7 SURVIVAL. Notwithstanding any termination of Consultant's
engagement hereunder or any termination of this Agreement, the provisions of
paragraph 6 hereof shall survive termination of this Agreement and
termination of Consultant's engagement hereunder.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
Arcadia Financial Ltd.
By:
Xxxxxx Xxxxxx Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxxxx Xxxx Its Chief Executive Officer
Xxxxxxxxx, XX 00000 0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
CONSULTING AGREEMENT
EXHIBIT A
CONSULTANT'S SERVICES. Consultant shall endeavor to promote the interests of
the Company and shall provide to the Company advice as to its manner of doing
business in such of the following areas as are requested by the Company:
long range planning,
tax strategies development, treasury function review,
internal audit function review,
asset liability strategy development,
asset backed securitization development,
asset backed securitization planning,
corporate development (merger, acquisition)
investor relations,
due diligence (re: acquisitions),
financing strategies,
SEC relations,
capital raising strategies,
reserving architecture,
asset quality review, and
note program strategy.
Consultant shall provide advice and services as to such other related areas
of the business of the Company as may be reasonably requested from time to
time by the Chief Executive Officer of the Company. The Company desires to
retain the services of Consultant, even though Consultant may become disabled
or incapacitated. Accordingly, notwithstanding anything to the contrary
contained herein, it is expressly understood that the inability of Consultant
from time to time to render services to the Company by reason of absences, or
temporary, or permanent illness, disability, or incapacity, or for any other
reasonable cause beyond the control of Consultant, shall not constitute a
failure by him to perform his obligations hereunder and shall not be deemed a
breach or default by him hereunder.
