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EXHIBIT 10.20
NAB ASSET CORPORATION
00000 XXXXXX
XXXXXXX XXXXX, XX 00000
(000) 000-0000 / FAX (000) 000-0000
as of June 4, 1999
Xxxxx Financial Services, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
CONSULTING AND FINDER'S AGREEMENT
Gentlemen:
This letter confirms our mutual agreement with respect to the engagement by
NAB Asset Corporation, a California corporation ("NAB"), of Xxxxx Financial
Services, Inc., a California corporation (the "CONSULTANT"), as a business
consultant to NAB.
Our agreement is as follows:
SECTION 1. TERM OF CONSULTING AND CONSULTING DUTIES.
(a) Engagement as a Consultant. On the terms and conditions set forth in
this Agreement, NAB hereby retains the Consultant on a nonexclusive basis as a
consultant to NAB for a period (the "CONSULTING PERIOD") beginning June 5, 1999
and ending on the earlier to occur of (i) December 4, 2002, or (ii) the date, if
any, on which this Agreement is terminated pursuant to Section 5.
(b) Duties. During the Consulting Period, the Consultant will render such
business advisory services to the NAB Group, including the following: corporate
and financial planning; investment recommendations; identification of possible
sources of debt financing; identification of potential buyers of assets of the
NAB Group; identification of potential business and asset acquisitions; and such
other advisory work in connection with the organization, financing, management
and operations of NAB Group, as NAB may reasonably request. As used in this
Agreement, (i) the term "NAB GROUP" means, at any time, collectively NAB and
each corporation that is a NAB Subsidiary at such time and (ii) the term "NAB
SUBSIDIARY" means, at any time, each corporation more than 50% of whose voting
stock is owned by NAB at such time.
NAB will use the services of the Consultant, and the Consultant shall make
himself available for the performance of services under this Agreement, upon
reasonable notice during the Consulting Period. The Consultant shall perform its
services at the times and places reasonably requested by NAB to meet its needs
and requirements, taking into account other engagements that the Consultant may
have. In no event shall the Consultant be required to render more than 120 hours
of consulting services per calendar quarter under this Agreement (prorated for
any partial quarter).
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SECTION 2. COMPENSATION OF THE CONSULTANT.
(a) Consulting Fee Retainer. Subject to the terms and conditions hereof,
commencing as of June 5, 1999, for the Consultant's services under this
Agreement, NAB shall pay the Consultant a non-refundable consulting fee retainer
of Fifteen Thousand One Hundred Fifty Dollars ($15,150) per month during the
Consulting Period, prorated for any partial month. The consulting fee retainer
shall be payable on the last day of each calendar month in arrears. The
aggregate amount paid and/or payable to the Consultant under this Section 2(a)
during the Consulting Period (the "SECTION 2(a) PAYMENTS") shall be applied and
credited to reduce the amount, if any, of Transaction Fees payable to the
Consultant pursuant to Section 2(b); provided, however, that in no event shall
the due dates for the payment of the installments of the consulting fee retainer
be accelerated, regardless of whether any Transaction Fees are earned pursuant
to Section 2(b). If this Agreement is not terminated prior to December 4, 2002,
the amount of the Section 2(a) Payments will be $636,300.
(b) Transaction Fees.
(i) If during the Applicable Period (as defined in Section 2(b)(v) any
member of the NAB Group purchases a finance business (the "ACQUIRED BUSINESS")
from a seller introduced to the NAB Group by the Consultant during the
Consulting Period, then, subject to Sections 2(b)(v) through 2(b)(xi), NAB shall
pay, or cause the purchasing member to pay, the Consultant a fee equal to one
quarter of one percent (0.25%) of the aggregate amount of loans originated by
the Acquired Business during the 12 months ended as of the end of the calendar
month next preceding the calendar month in which such member purchases the
Acquired Business.
(ii) If during the Applicable Period any member of the NAB Group other
than NAB sells any of its assets to a buyer introduced to the NAB Group by the
Consultant during the Consulting Period, then, subject to Sections 2(b)(v)
through 2(b)(xi), NAB shall pay, or cause the selling member to pay, the
Consultant a fee equal to one quarter of one percent (0.25%) of the net sales
proceeds received by the selling member.
(iii) If during the Applicable Period any member of the NAB Group
receives a loan from an institutional lender introduced to the NAB Group by the
Consultant during the Consulting Period, then, subject to Sections 2(b)(v)
through 2(b)(xi), NAB shall pay, or shall cause the borrowing member to pay, the
Consultant a fee equal to one percent (1.0%) of the principal amount of such
loan.
(iv) If during the Applicable Period NAB sells all of the shares of
the capital stock of any other member of the NAB Group owned by NAB to a buyer
introduced to NAB by the Consultant during the Consulting Period, then, subject
to Sections 2(b)(v) through 2(b)(xi), NAB shall pay the Consultant a fee equal
to five percent (5.0%) of NAB's pre-tax gain on the sale of such shares.
(v) As used in this Agreement, (A) the term "APPLICABLE PERIOD" means
the period beginning on the date hereof and ending on a date which is 60 days
after the date on which the Consulting Period terminates, (B) the term
"TRANSACTION" means a sale, purchase or loan transaction of the types referred
to in Sections 2(b)(i) through 2(b)(iv), (C) the term "TRANSACTION FEES" means
the fees, if any, earned by the Consultant and calculated pursuant to one or
more or all
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Xxxxx Financial Services, Inc.
as of June 4, 1999
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of Sections 2(b)(i) through 2(b)(iv) and (D) the term "TRANSACTION PARTY" means
any seller, buyer or lender (other than a member of the NAB Group) referred to
in any of Sections 2(b)(i) through 2(b)(iv) with which a member of the NAB Group
consummates a Transaction.
(vi) The amount of Transaction Fees earned by the Consultant,
if any, shall be reduced by (or be deemed to have been paid by means of) the
Section 2(a) Payments, without acceleration. Any Transaction Fees earned in
excess of the amount of the Section 2(a) Payments ("EXCESS TRANSACTION FEES")
shall be paid in equal or approximately equal consecutive monthly installments
beginning on the last day of each calendar month in which such Excess
Transaction Fees shall have been earned through the closing of a Transaction and
ending on December 31, 2002.
(vii) Without the prior written authorization of an executive
officer of NAB (which authorization may be withheld by NAB in its discretion for
any reason or for no reason), the Consultant shall not contact any potential
Transaction Party to solicit a Transaction.
(viii) The Consultant shall not be entitled to a Transaction
Fee or other compensation in respect of any transaction between a member of the
NAB Group and a third party not "introduced by Xxxxx to the NAB Group" or in
respect of any transaction not involving a corporation which is a member of the
NAB Group at the time of the closing of such transaction. The Consultant shall
be deemed to have introduced a potential Transaction Party to NAB only if,
pursuant to Section 2(b)(vii), NAB shall have authorized the Consultant to
contact such Transaction Party to solicit a Transaction and such authorization
specifically identifies the Transaction Party and acknowledges that, if such
Transaction is consummated, the Consultant shall be deemed to have introduced
such Transaction Party to NAB in respect thereof.
(ix) As noted, the engagement hereunder is non-exclusive, both
for the Consultant and for NAB. NAB shall be entitled at any time to retain one
or more other persons or entities to perform services which are the same as or
similar to the services to be performed by the Consultant hereunder. In such
case, the Consultant shall not be entitled to payment of any portion of the
compensation payable to such other persons or entities or to any Transaction
Fees or other fees in respect of any transactions introduced by such other
persons or entities.
(x) NAB shall have the absolute right, in its discretion, for
any reason or for no reason at all, to accept or reject or decline to consummate
any Transaction proposed by the Consultant or any Transaction Party introduced
by the Consultant, without incurring any liability to the Consultant.
(xi) During the Consulting Period, the Consultant shall not
present any information about a proposed acquisition of a finance company to any
person or entity other than a member of the NAB Group, unless NAB shall have
expressed no interest in pursuing such proposed acquisition. NAB shall be deemed
to have expressed no interest in pursuing such acquisition if it does so in
writing or if it fails to notify the Consultant in writing of NAB's interest in
pursuing the acquisition within 21 days after the Consultant shall have first
presented the proposed acquisition to NAB in writing.
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as of June 4, 1999
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(c) Expenses. During the Consulting Period, NAB shall reimburse the
Consultant for its reasonable business expenses incurred during the Consulting
Period in connection with the performance of its duties hereunder, provided that
it obtains NAB's approval before incurring such expenses.
SECTION 3. INDEPENDENT CONTRACTOR; NO AGENCY
In performing its duties under this Agreement, the Consultant (i) shall
be an independent contractor, (ii) shall not be deemed for any purpose to be an
employee or agent of any member of the NAB Group and (iii) shall have no
authority, and shall not purport or attempt, to legally bind or obligate, or
make any commitments on behalf of, any member of the NAB Group.
SECTION 4. CONFIDENTIALITY.
(a) Covenant of the Consultant. During the Consulting Period and at all
times thereafter, the Consultant shall hold and keep confidential all
Confidential Information (as defined in Section 4(b) as to which it is now, or
at any time during the Consulting Period shall become, informed. The Consultant
agrees that it shall not, directly or indirectly, either disclose any
Confidential Information to any person, firm or corporation, or use the same, or
permit the same to be disclosed or used, except in connection with the business
and affairs of the NAB Group.
(b) Definition of Confidential Information. "CONFIDENTIAL INFORMATION"
shall include, but not be limited to, the following types of information and
regarding the NAB Group: corporate information, including contractual
arrangements, plans, strategies, tactics, policies, resolutions, copyrights and
patent applications, and any litigation or negotiations; marketing information,
including sales or product plans, strategies, tactics, methods, customers,
prospects, or market research data; financial information, including cost and
performance data, debt arrangement, equity structure, investors, and holdings;
operational information, including trade secrets, secret formulae, control and
inspection practices, credit evaluation criteria, servicing and collection
methods and techniques and personal information, including personnel lists,
resumes, personal data, organizational structure and performance evaluations.
Confidential Information is limited to that information which is not generally
known in the industries in which any member of the NAB Group operates, and does
not include general skills, knowledge, and experience acquired by Xxxxxxx X.
Xxxxx ("XXXXX") (who is the President, the sole director and a beneficial owner
of shares of the Consultant's capital stock) during his employment with NAB or
any prior employer.
SECTION 5. TERMINATION OF ENGAGEMENT.
This Agreement may be terminated at any time by NAB if (i) the
Consultant breaches any of its obligations under Section 2(b) or Section 4 or
(ii) the Consultant willfully neglects or breaches any of its duties and
obligations under Section 1, which neglect or breach shall not have been cured
within 30 days after written notice thereof to the Consultant of (iii) if Xxxxx
breaches any of his covenants or obligations under that certain Separation
Agreement of even date herewith between
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Xxxxx Financial Services, Inc.
as of June 4, 1999
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NAB and him (the "SEPARATION AGREEMENT") or (iv) if the Separation Agreement
does not become effective, pursuant to Section 12 thereof, on or before August
10, 1999 or (v) if at any time Xxxxx and his spouse together own beneficially
less than 80% of the outstanding shares of the capital stock of the Consultant.
This Agreement may be terminated at any time by the Consultant if the Company
breaches any of its obligations under this Agreement, which breach shall not
have been cured within 30 days after written notice thereof to NAB. This
Agreement may also be terminated by written agreement signed by NAB and the
Consultant. From and after the date of termination of this Agreement, NAB and
the Consultant shall have no further liabilities or obligations to each other
under this Agreement, except for (i) any unpaid fees under Section 2(a)
allocable to the period prior to the date of termination (but not to the period
beginning on or after such date), (ii) any unpaid Excess Transaction Fees earned
by the Consultant during the Applicable Period, (iii) any unreimbursed expenses
for which the Consultant is entitled to reimbursement under Section 2(c) and
(iv) claims for damages resulting from or arising out of any breach of this
Agreement.
SECTION 6. NOTICES.
All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given if transmitted by telecopier with receipt
acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of
seventy-two (72) hours after mailing, if mailed by first class, registered or
certified mail, return receipt requested, postage and registry fees prepaid, and
addressed as follows:
(a) If to the Consultant:
Xxxxx Financial Services, Inc.
00 Xxxxxxx Xxx Xxx
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to NAB:
NAB Asset Corporation
00000 Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Any of the foregoing parties by notice in writing mailed to the other parties
may change the name and address to which notices, requests, demands and other
communications to it or him shall be mailed.
SECTION 7. MISCELLANEOUS.
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This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of California, without regard to principles
of conflicts of laws. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. This Agreement may not be
modified or amended or any term or provision hereof waived or discharged except
in writing signed by the party against whom such amendment, modification, waiver
or discharge is sought to be enforced.
All of the terms of this Agreement, whether so expressed or not, shall be
binding upon the personal representatives, successors, assigns and heirs of the
parties. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. This Agreement may be
executed in several counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
If you are in agreement with the foregoing, please so indicate by signing
the enclosed copy of this letter and returning it to NAB.
NAB ASSET CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board
Confirmed and accepted:
XXXXX FINANCIAL SERVICES, INC.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
