EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this 4th day of March 1998, by and between AMERICAN FACTORS GROUP, INC., a
Florida corporation (the "Company"), and XXXXXXXXX XXXXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has more than twenty years of experience in the
development, marketing and operating an account receivable factoring business,
and
WHEREAS, the Company desires to retain, engage and employ Employee,
and Employee desires to be so retained, engaged and employed by the Company as
the Company's President and Chief Executive Officer upon the terms and
conditions set forth in this Agreement, and.
WHEREAS, Employee by reason of the nature of Employee's duties and
responsibilities will be provided access to the Company's trade secrets and
other confidential and proprietary information which the Company desires to
maintain confidential.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency is hereby acknowledged, the Parties agree as follows:
1. The above and foregoing recitals are true and correct and are
incorporated herein.
2. Relationship of the Parties: The Employer hereby employs, hires and
engages Employee as an employee and the Employee hereby accepts and agrees to
such hiring, engagement and employment subject to the supervision and pursuant
to the orders, advice and discretion of the Employer's Board of Directors. The
Employee shall also perform such other duties as are customarily performed by
one holding such position in other, same or similar
businesses as that engaged in by the Employer and shall also perform such
further duties as may be assigned to Employee from time to time by the
Employer's Board of Directors.
3. Duties: The Company hereby employs Employee as the Company's
President, Chief Executive Officer for the terms set forth herein. During the
term of the Employee's employment, the Employee shall be the principal officer
of the Company responsible for the development, refinement and implementation
of the Company's account receivable factoring program and the compliance of
such program with applicable laws, rules and regulations which responsibility
includes (i) the development of factoring documents, (ii) the hiring and
supervision of the Company's clients and (iii) insuring that the Company's
account receivable factoring program is in compliance with all applicable laws,
rules and regulations of the jurisdictions wherein the Company does business.
During the term of his employment, the Employee agrees to work on a full time
basis and to carry out his employment in a good and professional manner and to
the reasonable satisfaction of the Company's Board of Directors.
4. Term: The term of Employee's employment shall be from April 1, 1998
through March 31, 2001, subject to the termination provisions set forth in this
Agreement, provided however, that the term of this Agreement shall be
automatically extended for additional one year terms unless the Company in its
sole discretion, upon written notice to the Employee no later than thirty (30)
days prior to the expiration of any term elects to decline such extension.
5. Compensation:
A. The Company covenants and agrees that in consideration of
the services performed and to be performed hereunder, it will pay to Employee,
during the term of
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Employee's employment under this Agreement, at the Company's regular and
customary intervals for payment of compensation to employees, salary as
follows:
(1) Commencing on April 1, 1998 through June 30,
1998 the sum of Five Thousand and 00/100 ($5,000.00) Dollars per month.
(2) Commencing on July 1, 1998 and each month
thereafter during the term of this Agreement the sum of Ten Thousand and 00/100
($10,000.00) Dollars per month.
6. Benefits: The Employee shall be entitled to the following benefits
during the period of his employment hereunder.
A. Employee shall be entitled, in accordance with the
Company's general policies for senior management, to participate in paid
vacation leave, health, casualty, disability and life insurance programs and
any other benefits as are made available from time to time by the Company.
B. During the term of his employment the Employee shall be
entitled to reimbursement of all reasonable expenses actually paid or incurred
by Employee in the course of, and pursuant to the performance of his duties
hereunder. Any single expense in excess of Five Hundred and 00/100 ($500.00)
Dollars shall be verbally approved in advance by the Board Chairman.
C. Employee shall be entitled to three (3) weeks paid
vacation in the first twelve (12) month period during the term of this
Agreement and four (4) weeks in each twelve (12) month term thereafter. Paid
vacation shall be prorated in any calendar year during which the Employee is
employed under this Agreement for less than an entire year. The Employee shall
also be entitled to all paid holidays given by the Company to its senior
management.
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7. Incentive Stock Option Program: Employee shall be entitled to
participate in the Incentive Stock Option Program which will be based upon the
Company's return on its capital in excess of the cost of its capital. The
Incentive Stock Option Program shall be funded with shares of the Company's
parent, Medley Credit Acceptance Corp., pursuant to the terms of that certain
agreement between Employee and Medley Credit Acceptance Corp. Dated March ___,
1998.
8. Disability: In the event the Employee shall be incapacitated by
reason of mental or physical disability during the term of his Employment such
that he is substantially prevented from performing his principal duties and
services hereunder for a period of sixty (60) consecutive days or for shorter
periods, aggregating ninety (90) days during any twelve (12) month period, the
Company thereafter shall have the right to terminate Employee's employment
under this Agreement by sending written notice of such termination to Employee
or his legal representative and thereupon his employment shall hereunder
immediately terminate. Upon such termination, the Employee shall be entitled to
receive and shall be paid by the Company's customary intervals for the payment
of salaries based upon the base the Agreement. Upon such termination, the
Employee shall also be entitled to receive and shall be paid by the Company his
salary in effect on the date of termination paid at the Company's regular and
customary intervals for the payment of salaries for the lesser of three (3)
months or the remaining terms of this Agreement, whichever is shorter. In
addition, during such period, Employee shall continue to receive his benefits
described in this Agreement as in effect at the date of termination.
Immediately following the expiration of such applicable period the Employee
shall no longer be entitled to further Company benefits. The Employee agrees to
accept the payment described
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herein in full discharge and release of the Company of and from any further
obligations under this Agreement. Such discharge and release shall not effect
any rights or remedies which may be available to Employee or the Company
otherwise than under this Agreement.
9. Termination for Cause:
A. The Company shall have the right to terminate the
employment of Employee hereunder at any time for cause (as used herein,
"cause") if:
(1) Employee shall be convicted by a court of competent and
final jurisdiction of any crime (whether or not involving the Company) which
constitutes a felony in the jurisdiction involved or shall be habitually drunk
or intoxicated in public or otherwise commit acts of moral turpitude in such a
manner as to adversely reflect the reputation of the Company; or
(2) Employee shall commit any act of embezzlement or similar
material dishonest or injurious conduct against the Company; or
(3) Employee shall demonstrate willful and injurious
misconduct in connection with the performance of his duties and
responsibilities under or assigned pursuant to, this Agreement; or
(4) Employee shall demonstrate reckless or grossly negligent
and injurious conduct in connection with the performance of, or a gross
disregard for, his duties and responsibilities under, or assigned pursuant to
this Agreement; or.
(5) After the first six (6) months following the Commencement
Date of this Agreement, in the event the net monthly sales volume (total amount
of all accounts receivable purchased in any calendar month) of the Company is
less than One Million Dollars
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($1,000,000.00) per month in any consecutive two (2) month period or in a three
(3) month aggregate in any twelve (12) month period.
B. In the event that the employment of Employee shall
terminate by the Company for cause pursuant to paragraph 9A hereof, Employee
shall be entitled to receive his salary then in effect through the date of such
termination. Employee shall accept the payments pursuant to this paragraph in
full discharge and release of the Company of and from any further obligations
under this Agreement. Nothing contained in this paragraph shall constitute a
waiver or release by the Company of any rights or claims it may have against
Employee, including, but not limited to, any claims or rights pursuant to the
provisions set forth in this Agreement.
10. Best Efforts of Employee: The Employee agrees that Employee will,
at all times, faithfully, industriously and to the best of his ability,
experience and talents, perform all of the express and implicit terms hereof,
to the reasonable satisfaction of the Company. The duties to be rendered by the
Employee shall be rendered at the principal address of the Company or at such
other place or places as the Company shall require. It is understood that the
Employee must devote his full time and effort to the business of the Company
with the exception that the Company will allow Employee to continue to give
seminars on the business of factoring. Employee shall also be entitled to all
revenue received by him on the sale of his books and audio tapes.
11. Employee's Limitations on Ability to Make Company Commitments: The
Employee by virtue of his position as President and Chief Executive Officer of
the Company shall have the legal authority to enter into contracts and
commitments for and on behalf of the Company. However, the Employee shall not
enter into any contract or commitment on behalf of
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the Company which would violate the parameters of the Company's underwriting
guidelines or be in derogation of the express requirements of the Company's
credit committee with respect to the factoring of client receivables or an
expenses in excess of Five Thousand Dollars ($5,000.00) for non-business
related expenditures without the express written consent of the Company's Board
of Directors or the Credit Committee.
12. Trust Funds: All monies which come into the possession of Employee
shall be received by Employee in trust for the Company and Employee shall
immediately deliver said funds to the Company for deposit. All of such funds
shall be considered "Trust Funds".
13. Covenants, Representations and Warranties of Employee: The
Employee represents and warrants to the Company as follows:
A. Employee has the power and authority to enter into this
Agreement and perform its duties hereunder.
B. Employee shall be in furtherance of the Company's
business, Employee shall use his best efforts to comply with all laws,
regulations, rules and ordinances pertaining to the Company's business.
C. Employee shall weekly, deliver to the Chairman of the
Board sales reports which shall identify all clients and their sales activity.
14. Restrictive Covenants:
A. Employee recognizes and acknowledges that as a consequence
of his duties hereunder, Employee will be provided access to or will come in
contact with confidential information of or regarding the Company and its
parent, Medley Credit Acceptance Corp., from time to time. Accordingly,
Employee agrees that he will not, during or after the term of his
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engagement except with prior written consent of the Company, disclose any
confidential information relating to the Company or its Parent. The Provisions
of this section shall not apply to information which Employee is required to
disclose by law or by order a court of competent jurisdiction but only to the
extent required by law or by order and when reasonably possible, only if
Employee shall give the Company prior notice of such intended disclosure so
that the Company has the opportunity to seek a protective order if it deems
such appropriate.
B. As used in this Agreement, "confidential information"
shall mean and include studies, plans, reports, records, promotional materials,
agreements, memoranda, documents, information related to Company activities,
systems, finances, client lists, research data, personnel data, financing
sources, and such other related information not of a public knowledge.
C. For so long as the Employee is employed hereunder,
Employee shall not engage either as principal, agent or consultant, or through
any corporation, firm or organization in which he is or may be an officer,
director, employee, shareholder, partner, member or with which he is otherwise
affiliated in any business for profit which is engaged in any activity or
business similar to that of the Employer.
D. The Employee covenants and agrees that for a period of two
(2) years from the date of his termination of employment with the Employer,
either voluntary or involuntary, that he will not directly or indirectly
solicit, circularize or aid in the solicitation of any business from any client
who dealt with the Employer during the period which the Employee first brought
to Employer at the commencement of his employment. Said clients are described
on Exhibit "A" attached hereto.
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E. It is agreed by the Employee that should he violate the
provisions of this section, the Company shall have the right to obtain an Order
from a court of competent jurisdiction enjoining him from violating any and all
of the provisions of this section or of this Agreement and the Company's
application for such a writ in injunction shall be deemed without prejudice to
any all other rights, remedies or actions which may accrue in favor of the
Company as a result of the Employee's breach of this provision or of the terms
of this Agreement. In the event the Company is required to institute any
litigation concerning the terms and conditions of this section or of this
Agreement, the prevailing party shall be entitled to reimbursement of all
reasonably attorney's fee and costs at both the trial and the appellate court
level. The Employee further agrees that in the event of litigation venue shall
only be proper in Dade County, Florida.
15. Notices: All notices, requests, demands, waivers, consents,
approvals or other communications required or permitted hereunder shall be in
writing and shall be deemed to have been given when received if delivered
personally or by recognized overnight carrier, or three (3) days after being
sent if sent by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses::
If to the Company:: Medley Credit Acceptance Corp.
Attention: Xxxxxx X. Press
0000 Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
To the Company: Xxxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Any party may by notice change the address to which notice or
other communications to it are to be delivered or mailed.
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16. Miscellaneous Provisions:
A. Captions and Paragraph Headings: Captions and paragraph
headings contained in this Contract are for convenience and reference only and
in no way define, described, extend or limit the copy or intent of this
Contract nor the intent of any provision hereof.
B. Counterparts: This Contract may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same Contract.
C. Binding Effect: This Contract shall enure to the benefit
of and shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns. However, under no
circumstances shall this Contract be assignable by Horwin.
D. Entire Agreement: This Contract constitutes the entire
understanding agreement between the parties and may not be changed, altered or
modified, except by an instrument in writing signed by all parties against whom
ands enforcement of such Contract would be sought. In the event any provision
of this Contract shall be determined by appropriate judicial authority to be
illegal or otherwise invalid, such provision, shall be given its nearest legal
meaning or be construed or deleted as such authority determines. The remainder
of this Contract shall be construed to be in full force and effect. This
Contract shall not be modified unless said modification is in writing and
signed by the party to be charged.
E. Governing Law and Venue: This Contract shall be construed
and interpreted according to the laws of the State of Florida. Venue for any
litigation hereunder shall be in Dade County, Florida.
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F. Joint Preparation: The preparation of this Contract has
been a joint effort of the parties and the resulting documents shall not,
solely as a matter of judicial construction, be construed more severely against
one of the parties than the other.
G. Attorney's Fees: In the event of any litigation arising
out of or relating to this Contract, the unsuccessful party in such litigation
shall pay to the successful party all costs and expenses incurred therein by
the successful party, including, without limitation, reasonably attorney's fees
and costs at the trial and appellate court level.
IN WITNESS WHEREOF, the Parties have hereunto set their hands
and seals this 4th day of March, 1998.
Witnesses:
AMERICAN FACTORS GROUP, INC.
______________________
______________________ By:__________________________________
______________________ _____________________________________
Xxxxxxxxx Xxxxxx
______________________
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