EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 25, 2002, between GENESIS FUNDING, INC.
("Genesis"), a Washington corporation, having its principal place of business at
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, and Xxxxxxx X.
Xxxxxx, an individual residing in Spokane, Washington ("Durham").
WITNESSETH:
WHEREAS, Genesis, has executed documents relating to an investment in
GENESIS by Temporary Financial Services, Inc. ("TFS"), Xxxx X. Xxxxxxx, Xxxxxxx
X. Xxxx, and Xxxxxxx X Xxxxxx (the "Investors").
WHEREAS, Durham is acknowledged as a capable and qualified executive in
the financial services business that Genesis will be engaged in;
WHEREAS, the parties acknowledge that Durham's abilities and services
are unique and essential to the prospects of Genesis and the Investors have
invested in Genesis in reliance on Durham's continuing services to Genesis
pursuant to this Agreement; and
WHEREAS, in light of the foregoing, Genesis desires to employ Durham as
its Chairman and Durham desires to accept such employment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. Genesis hereby employs Durham and Durham hereby accepts
employment upon the terms and conditions hereinafter set forth.
2. Term. This Agreement shall commence on the date hereof and shall
terminate as of the earlier of:
(a) Two years from the date hereof (the "Initial Term") unless
either Durham or Genesis notifies the other that he or it
elects to extend the term hereof for an additional one year
(the "Renewal Period"), such notice to be given within 90 days
before the end of the Initial Term hereof or within 90 days
before the end of each successive Renewal Period;
(b) The death of Durham;
(c) Unless cured by Durham within the thirty day period, thirty
days after notice is given by Genesis to Durham of a material
breach hereof by Durham; or
(d) Unless cured by Genesis within the thirty day period, thirty
days after notice is given by Durham to Genesis, of a material
breach hereof by Genesis.
The exercise of the right of Genesis or Durham to terminate
this Agreement pursuant to clause (c) or (d) hereof, as the
case may be, shall not abrogate the rights and remedies of the
terminating party in respect of the breach giving rise to such
termination. Genesis shall only be
deemed to have materially breached this Agreement and the
terms of Durham's employment if it fails to pay compensation
as required under Section 3 or if it reassigns Durham to a
position other than senior executive as required Section 4.
3. Compensation. For all services rendered under this Agreement:
(a) Base Salary. Genesis shall pay Durham a base salary of $12,000
per annum in equal monthly or semi-monthly installments. The
Board of Directors will review, at least annually, Durham's
compensation with a view to increasing it if, in the sole
judgment of the Board of Directors, the earnings of Genesis or
the services of Durham merit such an increase.
(b) During the Initial Term, Durham shall also receive, at the
discretion of the Board of Directors, incentive compensation
in amounts and at the times set by the Board. Incentive
compensation payable under this subparagraph is intended to
reward exemplary performance.
(c) During the term of his employment, Durham shall be entitled to
participate in employee benefit plans or programs of Genesis,
if any, to the extent that his position, tenure, salary, age,
health and other qualifications make him eligible to
participate, subject to the rules and regulations applicable
thereto. Such additional benefits shall include, subject to
the approval of the Board of Directors, full medical, three
weeks paid vacation, and qualified pension and profit sharing
plans.
(d) Durham shall be entitled to reimbursement of all expenses
incurred by him in the performance of his duties, subject to
the presenting of appropriate vouchers in accordance with
Genesis's policy.
4. Duties. Durham is engaged initially with the title and functions of
Chairman of Genesis and, subject to the direction of the Board of
Directors, shall perform and discharge well and faithfully the duties
which may be assigned to him from time to time by Genesis in connection
with the conduct of its business. Nothing herein shall preclude the
Board of Directors of Genesis from changing Durham's title and duties
if the Board has concluded in its reasonable judgment that such change
is in Genesis's best interests; provided, however, that at all times
during the term of this Agreement, Durham shall be employed as a senior
Executive of Genesis with appropriate and commensurate compensation,
title, rank and status. If Durham is elected or appointed a director or
officer of Genesis or any subsidiary thereof during the term of this
Agreement, Durham will serve in such capacity without further
compensation.
5. Extent of Services. Durham shall devote part time to the business of
Genesis. It is understood by Genesis that Durham is currently employed
by Production Finance International, LLC ("PFI"), and Durham will
continue his employment with PFI during the term of this Agreement. PFI
does not compete with Genesis. Durham is prohibited, during the term of
this agreement from providing services to a competitor of Genesis. This
prohibition shall not be construed as preventing Durham from (a)
investing his personal assets in businesses which do not compete with
Genesis, (b) purchasing securities in any corporation whose securities
are regularly traded provided that such purchase shall not result in
his collectively owning beneficially at any time
five percent or more of the equity securities of any corporation
engaged in a business competitive to that of Genesis, and (c)
participating in conferences, preparing or publishing papers or books
or teaching so long as the Board of Directors approves of such
activities prior to Durham's engaging in them. Prior to commencing any
activity described in clause (c) above, Durham shall inform the Board
of Directors of Genesis in writing of any such activity.
6. Disclosure of Information.
(a) Durham represents and warrants to Genesis that his resume
included in the Genesis Funding Business Plan sets forth all
material information about Durham's background. Durham further
represents that he is not subject to any covenants not to
compete.
(b) Durham recognizes and acknowledges that Genesis's trade
secrets and proprietary information and processes, as they may
exist from time to time, are valuable, special and unique
assets of Genesis's business, access to and knowledge of which
are essential to the performance of Durham's duties hereunder.
Durham will not, during or after the term of his employment by
Genesis, in whole or in part, disclose such secrets,
information or processes to any person, firm, corporation,
association or other entity for any reason or purpose
whatsoever, nor shall Durham make use of any such property for
his own purposes or for the benefit of any person, firm,
corporation or other entity (except Genesis) under any
circumstances during or after the term of his employment,
provided that after the term of his employment these
restrictions shall not apply to such secrets, information and
processes which are then in the public domain (provided that
Durham was not responsible, directly or indirectly, for such
secrets, information or processes entering the public domain
without Genesis's consent). Durham agrees to hold as Genesis's
property, all memoranda, books, papers, letters, formulas and
other data, and all copies thereof and therefrom, in any way
relating to Genesis's business and affairs, whether made by
him or otherwise coming into his possession, and on
termination of his employment, or on demand of Genesis, at any
time, to deliver the same to Genesis.
7. Inventions. Durham hereby sells, transfers and assigns to Genesis or to
any person, or entity designated by Genesis, the entire right, title
and interest of Durham in and to all inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable
material, made or conceived by Durham, solely or jointly, or in whole
or in part, during the term of this Agreement which (i) relate to
methods, apparatus, designs, products, processes or devices sold,
leased, or used by Genesis or any subsidiary or (ii) otherwise relate
to or pertain to the business, functions or operations of Genesis or
any subsidiary. Durham shall communicate promptly and disclose to
Genesis, in such form as Genesis requests, all information, details and
data pertaining to the aforementioned inventions, ideas, disclosures
and improvements; and, whether during the term hereof or thereafter,
Durham shall execute and deliver to Genesis such formal transfers and
assignments and such other papers and documents as may be required of
Durham to permit Genesis or any person or entity designated by Genesis
to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereon. Any invention by Durham,
relating to the business of Genesis, within one year following the
termination of this Agreement shall be deemed to fall within the
provisions of this paragraph unless proved by Durham to have been first
conceived and made following such termination.
8. Covenant Not to Compete.
(a) During the term hereof and, unless this Agreement is
terminated pursuant to Section 2(d) hereof, for a period of
two years thereafter, Durham shall not compete, directly or
indirectly, with Genesis, interfere with, disrupt or attempt
to disrupt the relationship, contractual or otherwise, between
Genesis and any customer, client, supplier, consultant or
employee of Genesis, including, without limitation, employing
or being an investor (representing more than a 5% equity
interest) in, or officer, director or consultant to, any
person or entity which employs any former key or technical
employee whose employment with Genesis was terminated after
the date which is one year prior to the date of termination of
Durham's employment therewith. An activity competitive with an
activity engaged in by Genesis shall include becoming an
employee, officer, consultant or director of, or being an
investor in, or owner of, an entity or person engaged in the
business then engaged in by Genesis.
(b) It is the desire and intent of the parties that the provisions
of this Section 8 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if
any particular portion of this Section 8 shall be adjudicated
to be invalid or unenforceable, this Section 8 shall be deemed
amended to delete or modify the offending portion to the
extent required to make this Section 8 enforceable in the
particular jurisdiction in which such adjudication is made.
(c) Nothing in this Section 8 shall reduce or abrogate Durham's
obligations during the term of this Agreement under Sections 4
and 5 hereof.
9. Remedies.
(a) The parties hereto acknowledge that the damages suffered by
Genesis and the Investors from Durham's breach of this
Agreement, by his continued neglect of his duties in Section 4
or 5, may not be ascertainable. Accordingly, if Durham
breaches Section 4 or 5 hereof by continuously neglecting his
duties in either of said Sections, Genesis and the Investors
shall be entitled to the greater of actual proven damages
(determined by a court or arbitrator) or liquidated damages
from Durham in the amount of $18,000.
(b) If there is a breach or threatened breach of the provisions of
Section 5, 6(b), 7 or 8 of this Agreement, Genesis shall be
entitled to an injunction restraining Durham from such breach.
Nothing herein shall be construed as prohibiting Genesis from
pursuing any other remedies for such breach or threatened
breach.
(c) If this Agreement is terminated pursuant to Section 2(d)
hereof, Durham is not required to mitigate damages otherwise
obtainable from Genesis as a result Genesis' breach and any
income received by Durham after such termination shall not
reduce the amount of damages otherwise obtainable from Genesis
hereunder.
10. Insurance. Genesis may, at its election and for its benefit, insure
Durham against accidental loss or death and Durham shall submit to such
physical examination and supply such information as may be required in
connection therewith.
11. Assignment. This Agreement may not be assigned by Durham. Genesis may
assign this Agreement in connection with a merger or consolidation
involving Genesis or a sale of substantially all its assets to the
surviving corporation or purchaser, as the case may be, so long as such
assignee assumes Genesis's obligations under this Agreement.
12. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered mail
to Durham at his residence at 0000 Xxxx 00xx, Xxxxxxx, Xxxxxxxxxx 00000
or Genesis at its address set forth above, Attention: The Board of
Directors.
13. Waiver of Breach. A waiver by Genesis or Durham of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
14. Entire Agreement. This instrument contains the entire agreement of the
parties. It may be changed only by an agreement in writing signed by a
party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first hereinabove written.
Genesis Funding, Inc. Durham
_/s/ Xxxxxxx X. Kirk____________ _/s/ Xxxxxxx X. Durham________
Name: _Michael A. Kirk__________ Xxxxxxx X. Xxxxxx
Title: ___President_____________
