Consulting Agreement

CONSULTING AGREEMENT


THIS CONSULTING AGREEMENT is made this ____ day of February, 1999, by and between CANNON FINANCIAL COMPANY, a Kansas corporation, hereinafter referred to as "Company," and SEQUOIA COMPANY, a Kansas corporation, hereinafter referred to as "Consultant."


WHEREAS, Company is engaged in the Business of collecting, on behalf of clients, accounts receivable related to the client's business ("Business"); and


WHEREAS, Consultant will designate during the entire term of this Agreement a designated employee (hereinafter the "designated employee") of Consultant to be the sole individual providing services on behalf of Consultant hereunder; and


WHEREAS, Company desires to obtain the services of Consultant to assist it in generating a collection business for Company; and


WHEREAS, Consultant desires to be retained by Company in the aforesaid capacity; and


WHEREAS, Consultant acknowledges that Company would suffer substantial and irreparable loss and damage in the event Consultant or the designated employee should disclose confidential information to competitors of Company; and


WHEREAS, Company and Consultant desire to set forth in writing the terms and conditions of their agreements and understandings.


NOW, THEREFORE, in consideration of the foregoing, of the mutual promises and undertakings herein contained, the consideration set forth in paragraph 4 hereafter, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending legally to be bound, hereby agree as follows:


1. Consulting. Company hereby agrees to retain Consultant for a period of five (5) years, commencing upon the date of this Agreement as a consultant to Company with respect to the Business. In such capacity, Consultant shall render such advice and consultation in connection with the Business as Company may require. In particular, Consultant's duties shall consist primarily of advice from time to time respecting broad aspects of profit-making opportunities in the general credit collection business. This shall include, but not be limited to, the determination of various companies in the Business and in areas involving or similar to credit collection which Company could acquire from time to time, the location and acquisition of books or groups of non-performing credit card debt that could be purchased by Company, and the entrance into agreements with third parties to provide services to those third parties, assisting them in the collection of their non-performing debt accounts. Consultant hereby agrees that, at all times during the term of this Agreement, without the prior written consent of Company, the designated employee will be the only party who will, on behalf of Consultant, be providing the services Consultant is required to provide to Company hereunder. In performing these services,


Company will develop written guidelines that indicate the criteria that must be present in order for Company to consider these various facets of services to be provided by Consultant. Consultant agrees to use its best efforts to follow the guidelines in connection with the Business that it proposes to Company. In performing these consulting services, Consultant will be an independent contractor. Company understands that it will have no control over the number of hours worked by Consultant and where it works in satisfaction of its services hereunder. Nothing herein will create a partnership or joint venture relationship between Company and Consultant. Consultant will not be responsible for day-to-day operations of Company and will perform services, specifically requested by and reporting to the President of Company or a Vice President designated by the President at times and places reasonably agreeable to both parties. Consultant understands that it shall have no authority whatsoever to bind Company as to any obligation, liability, arrangement, contract or in any manner or way whatsoever and it agrees that, in all dealings with third parties on behalf of Company, that it shall communicate such fact to said third parties.


2. Compliance With All Laws. Consultant certifies that it will comply with all local, state and federal statutes, rules, regulations and laws with respect to all matters pertaining to this Agreement and the services performed on behalf of Company hereunder, and shall indemnify and hold Company harmless from claims, damages, expenses and costs, including reasonable attorneys' fees, for any violation or claimed violation thereof. Consultant understands that if it does not so comply with such laws, such actions shall be deemed unauthorized by Company.


3. Term. The term of this Agreement shall be for a period of five (5) years beginning on March 1, 1999, and terminating February 28, 2004, unless earlier terminated.


4. Compensation and Other Benefits.


a. As and for compensation for the services to be rendered for
Company by Consultant under this Agreement, Consultant shall be paid
the monthly sum of Eleven Thousand Five Hundred Dollars($11,500)
during the term of the engagement hereunder beginning March 1, 1999.


b. As additional compensation hereunder, Consultant shall be
entitled to receive a bonus determined as follows:


i In the event that net income for book purposes after
depreciation, interest and taxes for calendar year-end 2000
exceeds Five Hundred Thousand Dollars ($500,000), Consultant
shall be paid a bonus of Four Thousand Dollars ($4,000) per month
in connection with its services rendered during calendar year
2001.


ii In the event that net income for book purposes after
depreciation, interest and taxes for calendar year-end 2001
exceeds Five Hundred Thousand Dollars ($500,000), Consultant
shall be paid a bonus of Four Thousand Dollars ($4,000) per month
in connection with its services rendered during calendar year
2002.


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iii. In the event that net income for book purposes after
depreciation, interest and taxes for calendar year-end 2002
exceeds Five Hundred Thousand Dollars ($500,000), Consultant
shall be paid a bonus of Four Thousand Dollars ($4,000) per month
in connection with its services rendered during calendar year
2003.


c. Consultant understands that, other than as specifically set
forth herein, it shall be obligated to pay for all of its necessary
expenses in connection with performance of its services hereunder.
Company will not be obligated to reimburse Consultant for any expenses
whatsoever it incurs in connection with the conduct of its services
hereunder, other than those expressly allowed by Company policy,
without the prior written agreement of Company in each event. However,
Company does agree that it will provide to Consultant reasonable
office space, monthly office parking for the designated employee only,
phone usage and secretarial assistance in connection with the
provision of its services to Company hereunder.


5. Disclosure of Information.


a. Consultant acknowledges that, in and as a result of its
engagement hereunder, it and its designated employee will be making
use of, acquiring and/or adding to confidential information of a
special and unique nature and value relating to such matters as
Company's secrets, systems, procedures, manuals, confidential reports
and lists of customers of Company and the Business. As a material
inducement to Company to enter into this Agreement, and to pay to
Consultant the compensation referred to in Paragraph 4 hereof,
Consultant covenants and agrees that neither it, nor its designated
employee or any of Consultant's shareholders, officers, directors,
partners, members, employees or agents, shall, at any time during or
following the term of Consultant's engagement hereunder, directly or
indirectly, use, disseminate, divulge, disclose, lecture upon or
publish articles with respect to, for any purpose whatsoever, any of
such confidential information which has been obtained by or disclosed
to them as a result of Consultant's engagement by Company. Such
confidential information includes information not generally known in
the industry in which Company is or may be engaged and information in
any form concerning Company's customers, products, processes, methods,
technology, computer programs, development, inventions, manufacturers,
purchasing, distribution, accounting, marketing, merchandising and
selling. It is understood and agreed, however, that confidential
information will not include any information or documentation in the
public domain and will likewise not include any information or
documentation obtained by Consultant from any third party as long as
such third party was not under a similar confidentiality restriction
or an employee of Company or AFI. In the event of a breach or
threatened breach by Consultant, its designated employee, or
Consultant's shareholders, officers, directors, partners, members,
employees or agents, of any of the provisions of this Paragraph 5,
Company, in addition to and not in limitation of any other rights,
remedies or damages available to Company at law or in equity, shall be
entitled to a permanent injunction in order to prevent or to restrain
any such breach by Consultant, its designated employee or by
Consultant's


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shareholders, directors, officers, partners, agents, representatives,
employees, and/or any and all persons directly or indirectly acting
for or with it or him.


b. Upon termination of its engagement wi ...