EXHIBIT 10BC
RETENTION AGREEMENT OF DEVELOPMENT SPECIALISTS, INC.
----------------------------------------------------
THIS AGREEMENT is made as of the 14th day of July, 1998, by
and among Mercury Finance Company of Alabama; Mercury Finance Company of
Arizona; Mercury Finance Company of California; Mercury Finance Company of
Colorado; Mercury Finance Company of Delaware; Mercury Finance Company of
Florida; Mercury Finance Company of Georgia; Mercury Finance Company of Idaho;
Mercury Finance Company of Illinois; Mercury Finance Company of Indiana; Mercury
Finance Company of Iowa; Mercury Finance Company of Kansas; Mercury Finance
Company of Kentucky; Mercury Finance Company of Louisiana; Mercury Finance
Company of Michigan; Mercury Finance Company of Mississippi; Mercury Finance
Company of Missouri; Mercury Finance Company of Nevada; Mercury Finance Company
of New Mexico; Mercury Finance Company of New York; Mercury Finance Company of
North Carolina; Mercury Finance Company of Ohio; Mercury Finance Company of
Oklahoma; Mercury Finance Company of Oregon; Mercury Finance Company of
Pennsylvania; Mercury Finance Company of South Carolina; Mercury Finance Company
of Tennessee; Mercury Finance Company of Texas; Mercury Finance Company of Utah;
Mercury Finance Company of Virginia; Mercury Finance Company of Washington;
Mercury Finance Company of Wisconsin; Filco Marketing Company; MFC Financial
Services, Inc.; Gulfco Finance Company; Gulfco Investment Company; Midland
Finance Company; and MFN Insurance Company ("Subsidiaries" or "Employer") and
Development Specialists, Inc. ("DSI").
W I T N E S S E T H:
WHEREAS, on or about May 14, 1998, Mercury Finance Company
("Mercury") entered into an agreement with substantially all the institutional
holders of claims, notes, and/or commercial paper issued by Mercury ("Senior
Lenders") providing for the financial restructuring and recapitalization of
Mercury (the "Restructuring Agreement");
WHEREAS, the Restructuring Agreement contemplates that the
restructuring will be implemented under a prestructured plan of reorganization
to be filed in a federal bankruptcy court (the "Plan");
WHEREAS, the Subsidiaries will benefit from the financial
restructuring and recapitalization of Mercury; and
WHEREAS, DSI has requested a signing bonus/incentive payment
in recognition of the services rendered and to be rendered by DSI;
NOW, THEREFORE, in consideration of the mutual undertakings of
the parties hereto, it is agreed as follows:
1. Retention of DSI
----------------
(a) DSI hereby accepts the terms of its retention by Employer as set
forth in this Agreement and agrees to provide the continued availability of Xxxx
X. Xxxxxx, as Acting Chief Operating Officer of Employer, and Xxxxxxx X.
X'Xxxxxx, as Chief Accounting Officer of Employer, both as required by Employer
so that they are available to fully perform and discharge such duties and
responsibilities as are attendant to their respective offices.
(b) The term of employment shall continue until the earlier of (i)
thirty (30) days following notice by Employer to DSI that its employment is
terminated, or (ii) one hundred eighty (180) days following notice by DSI of its
intent to terminate employment.
(c) Until the "effective date" of the Plan, DSI agrees not to
undertake any assignment with or assist in any business or undertaking which
engages in a business substantially similar to or in competition with the sub-
prime financing business conducted by Employer.
2. Compensation and Success Fee
----------------------------
Upon execution of this Agreement and subsequent approval of DSI's
retention by Mercury in its chapter 11 case, Employer shall pay one million six
hundred thousand dollars ($1,600,000) to DSI (" Signing Bonus and Incentive
Fee").
3. Employee Benefits
-----------------
DSI shall not be entitled to any employee benefits and waives all
rights thereto.
4. Restrictions
------------
DSI agrees that it shall continue to be bound by the terms of the
Confidentiality Agreement of DSI entered into with Mercury and its subsidiaries
prior to the date hereof (the "Confidentiality Agreement").
5. Breach of Confidentiality Agreement
-----------------------------------
DSI acknowledges that any breach of the Confidentiality Agreement
shall cause substantial harm to the Subsidiaries that cannot be adequately
compensated for in money damages, and that any breach by DSI, its officers,
directors, employees or representatives of the Confidentiality Agreement will
cause irreparable harm to the Subsidiaries. Therefore, if DSI, its officers,
directors, employees or representatives breach or threatens to breach the
Confidentiality Agreement, the Subsidiaries shall, in addition to any other
remedies that may be available to it, have the right to obtain from
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any court having jurisdiction such equitable relief as may be appropriate,
including but not limited to a decree enjoining DSI, its officers, directors,
employees and/or representatives from any further breach.
6. Indemnification
---------------
Employer shall indemnify DSI to the fullest extent permitted under
applicable Delaware law.
7. Miscellaneous
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(a) Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and sent by certified mail (i) to DSI at:
Xxxxxxx X. Xxxxxx, Xx.
Development Specialists, Inc.
Three First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
and
Xxxx X. Xxxxx
Xxxxxx & Coff
00 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000;
and (ii) to Employer at:
Xxxx Xxxxxx
Mercury Finance Company
000 Xxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
and
Xxxxx X. Xxxxxxxxxx
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
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(b) The captions set forth in this Agreement are for convenience only
and shall not be considered as part of this Agreement or as binding or
amplifying the terms and provisions hereof.
(c) This Agreement and all rights and benefits hereunder are personal
to DSI, and neither this Agreement nor any right or interest of DSI herein, or
arising hereunder, shall be subject to voluntary or involuntary sale, transfer
or assignment.
(d) This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Illinois.
8. Dispute Resolution
------------------
Except as provided for in Section 5, any controversy relating to this
Agreement or amendments thereto shall be settled exclusively by arbitration in
Chicago, Illinois in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on an arbitrator's award
relating to this Agreement and amendments thereto in any court having
jurisdiction.
9. Entire Agreement
----------------
This Agreement expresses the entire Agreement of the parties with respect
to the matters set forth herein. No person, other than pursuant to a resolution
of the Board of Directors of Employer, shall have any authority on behalf of
Employer to agree to modify or change this Agreement or anything in reference
thereto. Except as provided for herein, the Agreement between Mercury and the
Subsidiaries dated February 5, 1997 and the First Amendment to Retention and
Letter of Engagement of Development Specialists, Inc. dated June __, 1998, shall
remain in full force and effect.
10. Counterparts
------------
This Agreement may be executed in any number of counterparts, all of which
together constitute one instrument.
IN WITNESS WHEREOF, Employer and DSI have executed or caused this
Agreement to be duly executed, as of the day and year first above written.
EMPLOYER DEVELOPMENT SPECIALISTS, INC.
By: ___________________ By: __________________________
By: ___________________ Title:_________________________
Title: __________________
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MERCURY FINANCE COMPANY
INCORPORATED IN DELAWARE, 11/22/88
00-0000000
SUBSIDIARIES
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NAME OF SUBSIDIARY INCORPORATED DATE FED ID#
Mercury Finance Corporation of Alabama AL 03/31/86 00-0000000
Mercury Finance Company of Arizona AZ 06/23/87 00-0000000
Mercury Finance Company of California CA 05/06/87 00-0000000
Mercury Finance Company of Colorado DEL 06/07/93 00-0000000
Mercury Finance Company of Delaware DEL 03/27/95 00-0000000
Mercury Finance Company of Florida DEL 12/06/83 00-0000000
Mercury Finance Company of Georgia DEL 12/06/83 00-0000000
Mercury Finance Company of Idaho DEL 02/22/96 00-0000000
Mercury Finance Company of Illinois DEL 01/11/84 00-0000000
Mercury Finance Company of Indiana DEL 09/17/84 00-0000000
Mercury Finance Company of Iowa DEL 12/27/96 00-0000000
Mercury Finance Company of Kansas DEL 12/06/83 00-0000000
Mercury Finance Company of Kentucky DEL 12/06/83 00-0000000
Mercury Finance Company of Louisiana DEL 12/06/83 00-0000000
Mercury Finance Company of Michigan DEL 02/22/91 00-0000000
Mercury Finance Company of Mississippi DEL 07/16/84 00-0000000
Mercury Finance Company of Missouri MO 07/13/87 00-0000000
Mercury Finance Company of Nevada NV 12/17/84 00-0000000
Mercury Finance Company of New Mexico DEL 03/28/90 00-0000000
Mercury Finance Company of New York DEL 02/16/96 00-0000000
Mercury Finance Company of North Carolina DEL 12/06/83 00-0000000
Mercury Finance Company of Ohio DEL 10/14/92 00-0000000
MFC Finance Company of Oklahoma DEL 01/11/84 00-0000000
Mercury Finance Company of Oregon DEL 06/09/95 00-0000000
Mercury Finance Company of Pennsylvania DEL 01/04/95 00-0000000
Mercury Finance Company of South Carolina DEL 07/25/84 00-0000000
Mercury Finance Company of Tennessee TN 07/02/87 00-0000000
MFC Finance Company of Texas DEL 12/06/83 00-0000000
Mercury Finance Company of Utah DEL 01/17/96 00-0000000
Mercury Finance Company of Virginia DEL 12/06/83 00-0000000
Mercury Finance Company of Washington DEL 09/20/94 00-0000000
Mercury Finance Company of Wisconsin DEL 03/28/90 00-0000000
Filco Marketing Company DEL 03/22/96 00-0000000
MFC Financial Services, Inc. FL 03/09/88 00-0000000
Gulfco Finance Company LA 07/06/56 00-0000000
Gulfco Investment Company LA 05/20/74 00-0000000
Midland Finance Co. IL 08/26/54 00-0000000
MFN Insurance Company
