Consulting Agreement
Agreement effective as of the 1st Day of April 1997 by and between BLC
Capital Corp., a Delaware Corporation with offices at 000 Xxxxx Xxxxxx, Xxx
Xxxx, X.X. 00000 (the "Company") and R. Xxxxxxx XxXxx residing at 0000 Xxxxxx
Xxxxx, Xxxxxxxx, Xx. 00000 (the "Consultant").
WHEREAS, the Company was formed to originate, place and/or fund loans
Small Real Estate Loans ( as hereinafter defined), and Non Qualifying Small
Business Loans (as hereinafter defined), or portions thereof, that are not
eligible for funding or that are not accepted for funding in whole or in part as
an SBA Loan (as hereinafter defined) by Business Loan Center under its United
States Small Business Administration ("SBA") 7a Guaranteed Lending Program; and
WHEREAS, the Consultant has experience in originating , underwriting and
packaging Small Real Estate Loans, Non Qualifying Small Business Loans as well
as Small Business Loans; and
WHEREAS, the Company wishes to employ Consultant for the purposes set
forth hereinbelow and Consultant wishes to accept said employment in accordance
with the terms and conditions hereof.
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency
thereof is hereby acknowledged, the parties hereto do hereby agree as follows:
1. Employment and Term
Company shall employ Executive for a period of five years commencing
on the effective date hereof and ending on March 31, 2002, subject to the
termination provisions hereinafter set forth. Thereafter this Agreement shall be
automatically extended for additional successive one year periods, unless the
Company or Consultant notifies the other at least 90 days prior to the end of
the initial term or any extension thereof that it or he does not wish to extend
the Agreement.
2. Compensation
(a) As compensation for Consultant's performance of all required
duties hereunder, and conditioned upon full, faithful and diligent performance
of all promises and undertakings herein, the Company shall pay to Consultant the
sum of One Hundred Thirty-Six Thousand Dollars ($136,000) per year.
(b) All payments made by the Company to the Consultant hereunder
shall be subject to such tax, FICA and other deductions or withholdings as the
Company shall be required
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to make by law or which the Company uniformly makes as a matter of policy from
compensation paid to other employees.
(c ) Consultant will be provided the employee benefits such as
health insurance in accordance with the programs available to the other
employees of the Company or its affiliates.
(d) Consultant will be entitled to reasonable periods of vacation,
not to exceed two weeks per year for each of the first two years of this
Agreement, three weeks per year thereafter, to be taken at times which do not
unreasonably interfere with the performance of his duties hereunder.
(e) The Company may at its option provide Consultant with an
automobile for use in connection with the services he is to provide hereunder.
3. Duties
(a) Consultant shall primarily be responsible for originating,
screening and underwriting and Small Real Estate Loans and Non Qualifying Small
Business Loans for the Company to determine whether they meet the Company's
lending criteria (for purposes of this Agreement Small Real Estate Loans and Non
Qualifying Small Business Loans shall sometimes be jointly referred to as
"Loans") . In connection therewith and without limiting the generality of the
foregoing, Consultant shall actively seek out and refer Loans to the Company and
actively seek to promote, coordinate and expand the Company's network of loan
brokers, loan representatives and other loan sources. Consultant agrees to
perform such other duties of an executive nature for the Company or its
affiliates, as may be requested from time to time by the Board of Directors of
the Company. Consultant agrees to travel as reasonably required in performing
his functions hereunder.
(b) Consultant will devote all of his skill, knowledge and working
time to the conscientious performance of his duties pursuant to this Agreement.
He may not otherwise engage in other business activities for his own account or
for others.
4. Prohibitions
(a) Anything contained herein to the contrary notwithstanding,
Consultant shall not participate in the loan process on any SBA guaranteed loan
and shall not Conduct Business with the SBA. The term "Conduct Business" with
the SBA means:
(i ) Preparing or submitting on behalf of an applicant an
application with the SBA for (a) financial assistance of any
kind, (b) assistance from
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the Investment Division of SBA, or (c) assistance in
procurement and technical matters;
(ii) Preparing or processing on behalf of a lender or a
participant in any of SBA's programs an application for
federal financial assistance;
(iii) Participating with or communicating in any way with
officers or employees of SBA on an applicant's, participant's,
or lender's behalf;
(iv) Acting as a "Lender Service Provider". A Lender Service
Provider is an agent who carries out lender functions in
originating, disbursing, servicing or liquidating a specific
SBA business loan or portfolio; and
(v) Such other activity as SBA reasonably shall determine of
which the Company provides Consultant written notice.
(b) Without limiting the foregoing the Consultant shall not Conduct
Business with the SBA in connection with any SBA Loan in which Business Loan
Center, its successors or assigns, is in any way involved.
5. Definitions
(a) SBA Loan - A loan authorized by section 7(a) of the Small
Business Act (the "Act") 15 U.S.C. 636(a), a loan authorized by section 7(m) of
the Act 15 U.S.C. 636(m) or a "504" loan authorized by Title V of the Act 15
U.S.C. 695-697(f).
(b) Small Real Estate Loan - A loan in a principal amount equal to
or less than $2,500,000 that is not an SBA Loan and is secured by real estate.
(c ) Non Qualifying Small Business Loans - A loan that is not an SBA
Loan or a loan once it has not been accepted for funding by Business Loan
Center, its successors or assigns.
(d) Confidential Information - Confidential Information includes,
but is not limited to, loan sources, mailing lists, customer lists, data bases,
loan underwriting criteria and procedures, loan closing and servicing
procedures, loan administration procedures, sources of financing and terms
thereof, loan sales and securitization procedures and agreements, confidential
technical information, information concerning loan procurement or sales
activities or procedures, promotion or pricing techniques, credit or financial
data (including data concerning customers of the Company or its affiliates.
(e) Affiliates - Affiliate or affiliates shall mean BLC Financial
Services, Inc. ("BLCF") and every subsidiary thereof and any entity in which
BLCF and any of its subsidiaries
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holds an equity interest and any licensee of BLCF and its subsidiaries.
(f) Associate(s) - Shall mean any person, corporation or other
entity that has entered into or enters into an Associates Agreement with the
Company or any of its affiliates prior to or during the term of this Agreement.
6. Non-Competition
(a) Consultant covenants and agrees to promptly deliver to the
Company, upon termination of his employment or at any other time the Company may
so request, all memoranda, notes, records, reports, mailing lists, customer
lists, data bases and other documents (and all copies thereof) relating to the
Company's business or that of its Affiliates.
(b) During the term of this Agreement and for two years after the
termination of this Agreement (the "Non-Competition Term"), in order to preserve
the goodwill and ongoing business value of the Company and its Affiliates, and
in view of Consultant's experience and access to unique and proprietary
information with respect to the current and proposed business activities of the
Company and its Affiliates, Consultant will not directly or indirectly:
(i) Disclose to any third party any trade secrets or
Confidential Information of the Company or its Affiliates.
(ii) Use any Confidential Information for his own purposes or
for the benefit of any firm, corporation, person or other
entity except the Company or its Affiliates.
(iii) The restrictions contained in this subparagraph (b)
shall be inapplicable to any Confidential Information which
becomes generally available to the public other than as a
result of disclosure by Consultant. In addition this
restriction shall not apply if Consultant is compelled to
disclose the Confidential Information required by a
governmental regulatory authority or court order.
(iv) Divert, solicit or interfere with any loans originated by
or for any person, corporation or other entity which has been
a loan broker, loan representative, loan originator, loan
source, associate, borrower or customer of the Company or its
Affiliates prior to the date hereof or at any time during the
term hereof.
(v) Interfere with the employment, contractual or business
relationships of the Company or its Affiliates which currently
exist, or which shall have arisen or been developed at any
time during the term of this Agreement or which has been or is
being negotiated during the term of
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this Agreement by and between the Company or its Affiliates
any other person, corporation or other business entity,
including, but not limited to, loan brokers, loan
representatives, associates and other loan sources.
(vi) In any city, village, town or the like in which the
Company or any of its Affiliates or Associates maintained or
maintains an office on the date of termination of this
Agreement or at any time two years prior to such date, and
within a five mile radius from the center thereof, act in any
manner or capacity, as principal, agent, partner, officer,
director, employee, consultant, advisor or investor in or for
any person or business entity or enterprise which is engaged
in or which during the Non Competition Term becomes engaged in
the making, origination, underwriting and/ or placement of
Small Real Estate Loans, Non Qualifying Small Business Loans
or SBA Loans. The restrictions contained in this subparagraph
(vi) shall apply during the term of this Agreement and for
eighteen (18) months after the termination of this Agreement.
(vii) Consultant has carefully reviewed the above restrictions
on his future business activities with his legal counsel and
represents to the Company that they will not unreasonably
interfere with his future ability to be gainfully employed.
However, if the scope of any restriction contained herein is
too broad to permit enforcement of such restriction to its
full extent, then such restriction shall be enforced to the
maximum extent permitted by law and Consultant hereby consents
and agrees that such scope may be judicially modified
accordingly in any proceedings to enforce such restrictions.
7. Consultant's Work Product
All of the results and proceeds of Consultant's services under this
Agreement, including without limitation, any and all programs, written
procedures, trade names, trademarks, service marks, inventions, improvements,
technical information, software, suggestions and the like, relating to the
Company's and its affiliate's business, which Consultant, during the term of
this Agreement, creates, develops or acquires (whether or not during usual
business hours and whether alone or in collaboration with others), together with
all patent applications, letters patent, trademarks, copyrights, and reissues
and renewals thereof, that during the term hereto are filed or granted for or
upon any such invention, improvement, trade name, trademark, service xxxx,
materials or technical information, shall at all times be and remain the sole
and exclusive property of the Company.
8. Termination of Employment
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(a) Default - This Agreement may be terminated for Cause by the
Company. "Cause" shall mean (i ) the willful failure or refusal by Consultant to
substantially perform his duties hereunder promptly after written demand for
performance has been given to the Consultant by the Company's Board of
Directors, specifying the manner in which the Board believes the Consultant has
failed to perform his duties; (ii) the Consultant's breach of any
representation, covenant or warranty hereunder, including but not limited to the
covenants and agreements set forth in paragraph 6 hereof and the Prohibitions
set forth in paragraph 4 hereof; (iii) gross negligence, fraud, material
misrepresentation or malfeasance; (iv) the Consultant's conviction of, or
entering into a plea of nolo contendere to a crime after the date hereof or the
violation of his "supervised release" obligations; or (v) a determination by the
Company, in its sole and absolute discretion, that the continued employment of
the Consultant by the Company may jeopardize the ability of any affiliate(s) of
the Company involved in the SBA lending business to continue to participate in
the SBA lending program(s) or the ability of the Company or any affiliate(s) to
sell their loans, or participations therein, in the securitization market.
(b) Disability - This Agreement may be terminated by the Company in
the event of Disability of the Consultant. The term "Disability" shall mean a
physical or mental disability that prevents the substantial performance by
Consultant of his duties hereunder that lasts for a period of four and one half
(4 1/2) months or longer. The reasoned good faith judgment of the Company as to
Consultant's Disability shall be final and shall be based upon such competent
medical evidence as shall be presented to the Company by Consultant or by any
physician(s) or other competent medical experts on behalf of the Consultant
and/or the company. Prior to termination, the Company shall be entitled to
deduct from all payments to be made to Consultant during any disability period
(whether or not there has been a reduction in Consultant's compensation) an
amount equal to all disability payments received by Consultant from Worker's
Compensation, Social Security and/or disability insurance policies, if any,
maintained by the Company.
(c) Death - In the event of the death of the Consultant, this
Agreement shall automatically terminate upon the date thereof.
(d) Termination by Consultant - The Consultant may terminate this
Agreement in the event of a material breach by the Company of its obligations
hereunder, which breach remains uncured for thirty days after receipt of written
notice specifying in reasonable detail the nature of the breach.
(e) Notice of Termination - Any termination by the Company or
Consultant shall be communicated by a written "Notice of Termination" addressed
to the other parties to this Agreement. A "Notice of Termination" shall mean a
notice stating that the Consultant's employment has been or will be terminated,
indicating the specific termination provisions of this Agreement relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination. The termination of Consultant's employment
shall be effective as of the date specified in the Notice of Termination.
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(f) Consequences of Termination - In the event of termination of
this Agreement, the Company shall be released and discharged of and from all
further obligations hereunder other than for payment of compensation due up to
the date of termination. Consultant's obligations, agreements and restrictions
imposed upon Consultant under paragraphs 6 and 7 hereof shall remain in effect
for the period(s) specified therein.
9. Injunctive Relief and Non Waiver of Other Rights
It is mutually understood and agreed that Consultant's services are
special, unique, unusual, extraordinary and of an intellectual character giving
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law, and therefore in the event of any
breach by Consultant, Company shall be entitled to equitable relief by way of
injunction or otherwise without the necessity of posting of a bond or other
security, or the necessity of proving actual damages. This provision shall not,
however be construed as a waiver of any rights which the Company or any of its
affiliates may have for damages under this Agreement or otherwise.
10. Life Insurance
Consultant will permit the Company to purchase "key man" or similar
insurance coverage on his life for he exclusive benefit of the Company, in
amounts that it determines, and Consultant will cooperate with the Company and
the insurance carrier(s) in obtaining such insurance.
11. Miscellaneous
(a) Assignment - This Agreement shall not be assignable by either
party, except the Company shall be entitled to assign this Agreement to, and it
shall thereafter be binding upon any entity with which the Company may merge or
consolidate or any existing or future affiliate of the Company or to any entity
to which the substantially all of the assets of the Company are transferred,
provided that such successor assumes all of the Company's obligations hereunder.
(b) Entire Agreement - This Agreement sets forth the entire
Agreement and understanding of the parties hereto, and supersedes all prior
agreements, arrangements and understandings.
(c ) Partial Invalidity - Nothing contained herein shall be
construed to require the commission of any act contrary to law. Where there is a
conflict between a provision of this Agreement and any present or future
statute, law, ordinance or regulation, the latter shall prevail, but in such
event, the provision of this Agreement affected shall be curtailed and limited
only to the extent necessary to bring it within legal requirements.
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(d) Representations - No representation, promise or inducement has
been made by either party that is not embodied in this Agreement, and neither
party shall be bound by or liable for any alleged representation, promise or
inducement not set forth herein. Consultant warrants that he is free to enter
into this Agreement and to render his services pursuant hereto.
(e) Benefit - The provisions of the Agreement shall inure to the
benefit of the parties hereto, their heirs , legal representatives, successors
and assigns.
(f) Governing Law - This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
(g) Modification - This Agreement may be amended, modified,
superseded, renewed or extended and the covenants, representations, warranties
or terms hereof may be waived only by a written instrument executed by the
parties hereto. The failure of a party at any time or times to require
performance of any provision hereof shall not affect the party's right at a
later time to enforce or act upon the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, shall be deemed to be or construed as a continuing or further
waiver of any such breach or a waiver of the breach of any other term or
covenant contained in this Agreement.
(h) Section Headings - The section headings contained herein are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
(i ) Notices - All notices, requests, demands or other
communications required, or as may be given, under this Agreement shall be in
writing and shall be deemed to have been duly received three (3) days thereafter
if delivered or mailed, certified mail, return receipt requested, first class,
postage prepaid, if to Consultant, to R. Xxxxxxx XxXxx, 0000 Xxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx 00000, if to the Company to BLC Capital Corp., 000 Xxxxx
Xxxxxx, Xxx Xxxx, X.X. 00000 Attention Xxxxxx Xxxxxxxxxxxx; or to such other
address as Consultant or the Company may designate in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first hereinabove written.
CONSULTANT: COMPANY:
BLC Capital Corp.
/s/ R.Xxxxxxx XxXxx /s/Xxxxxx X. Xxxxxxxxxxxx
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R. Xxxxxxx XxXxx Xxxxxx X. Xxxxxxxxxxxx, Pres.
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