CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, herein referred to as "Agreement" made and
entered into as of the 28th day of January, 1998, 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; provided, however, that Consulting Services are not to exceed one
hundred fifty (150) hours. Consultant and the Company may from time to time
agree that additional hours are desired, for which additional Consulting
Services Consultant shall be paid at an hourly rate to be agreed upon by
Consultant and the Company. The terms of this Agreement shall apply to any such
additional hours per year. 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 100,000 shares of the $.01 par value
common stock of the Company ("Common Stock") at an option price equal to
$6.00 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, 1998, and shall continue until December 31, 1998, 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 fail to make any payment to Consultant required
to be made pursuant hereto within 15 days after such payment was
due.
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
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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
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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
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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
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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.
/s/ Xxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------ ------------------------------
Xxxxxx Xxxxxx Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxxxx Xxxx Its Chief Executive Officer
Xxxxxxxxx, XX 00000 0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
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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.
