CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into as of April 1, 2000, by and
between Homestead Village Incorporated (the "Company") and Xxxxx X. Xxxxxxxx,
Xx. (the "Consultant").
WHEREAS the Company desires to engage the Consultant's expertise and
experience in a consulting capacity; and
WHEREAS the Consultant desires to render services to the Company as
provided herein, under the terms and conditions set out below;
THEREFORE, the Company hereby engages the services of the Consultant,
and in consideration of the mutual promises contained herein, the parties agree
as follows:
1. Term. The term of this Consulting Agreement (the "Agreement") shall
be a twelve-month period, beginning on April 1, 2000 and ending on March 31,
2001. This Agreement may be terminated earlier as provided in Section 4.
2. Services. The Consultant shall provide professional services
("Services") to the Company. Services shall consist of advice and consultation
with respect to the marketing and sale of the Company's remaining
land-held-for-sale listed on Schedule A and certain developed properties of the
Company listed on Exhibit A (collectively the "Properties"), and oversight of
the construction of an expansion of an existing facility at Milpitas,
California, all under the direction of C. Xxxxxx Xxxxxxxxxxx, Interim Chairman
of the Company, and engaging in other projects as directed by Xx. Xxxxxxxxxxx or
the Company. Such advice shall include: (a) advice on the pricing of the
Properties; (b) introductions to potential purchasers for the Properties; (c)
introductions to, and providing advice on, the selection of real estate brokers
to market the Properties; (d) advice on the terms of sale for the Properties,
such advice to be provided during initial contract negotiations and with respect
to any amendments to the contract so negotiated; (e) advice on the acceptability
of offers received with respect to the Properties; (f) advice on any consultants
required to be retained in connection with sale of the Properties, including,
without limitation, local counsel, development or land use advisors,
environmental consultants, soils engineers, surveyors, title company, escrow
agents; (g) assistance in evaluating the performance of prospective purchasers
of their contractual obligations and whether to exercise any seller termination
rights under any pending contract, and (h) such other advice as Consultant and
the Company shall deem appropriate in connection with the marketing and sale of
the Properties. Notwithstanding the foregoing, the ultimate responsibility for
making all decisions regarding the marketing and sale of the Properties shall
remain with the Company and shall be subject to the approval of Xx. Xxxxxxxxxxx
and Xxxxx X. Xxxxx, Executive Vice President of the Company.
2.1. Services shall be performed in a prompt and efficient
manner to the reasonable satisfaction of the Company. The Consultant
may provide Services at the Company's office in Atlanta, Georgia, or in
such other Company office as mutually agreed, and the Consultant may
utilize the Company's equipment and administrative support located at
that office.
2.2. The Consultant shall devote such time to the performance
of the Services under this Agreement as is reasonably necessary to the
satisfactory performance thereof. The Consultant shall provide regular
written reports to Messrs. Xxxxxxxxxxx and Xxxxx on the status of the
marketing and sale of the Properties.
2.3. The Consultant shall, in providing such Services, abide
by all federal and/or state laws and regulations applicable to both the
Company and the Consultant.
2.4. The Company reserves the right to change the Properties
on Schedule A at any time during the term of this Agreement, provided
that such changes shall not result in the Consultant being paid less
than the amount outlined in Section 4.
3. Fees. For the Services to be rendered pursuant to this Agreement,
the Consultant shall be paid a monthly consulting fee of $40,000 ("Monthly Fee")
(which shall be netted against future Transaction Fees described in Section
3.1), payable on the last day of each month. In addition to the Monthly Fee and
the Transaction Fees, Consultant shall be entitled to receive reimbursement of
any direct business expenses incurred by Consultant for the Services provided
(e.g., cellular phone, business travel and other normal business expenses).
Under this Agreement, the Company shall not be obligated to provide nor shall
the Consultant be entitled to receive any vacation, sick leave, or any other
benefits provided by the Company to its employees.
3.1. The Consultant shall be paid a transaction fee
("Transaction Fee") on the sale of all properties listed on Schedule A.
It is anticipated by the parties that the "Gross Receipts" (as defined
below) from the sale of such Properties will be between $90 million and
$100 million. The Consultant's Transaction Fee will be 1% of the first
$90 million of Gross Receipts from the sale of such Properties, and 2%
of Gross Receipts in excess of $90 million from the sale of such
Properties. "Gross Receipts" shall mean the net sales price received by
the Company for such Properties, excluding the first 2% of the gross
sales price paid to a third-party broker. The Transaction Fees will be
earned on any Properties which are sold, or under either a binding
agreement for sale or a binding letter of intent, on or before March
31, 2001, and which close. All Transaction Fees earned will be
reconciled monthly and will be paid on the first day of July, October,
January and April during the term of this Agreement. Any Monthly Fees
paid prior to payment of any Transaction Fees will be deducted from the
Transaction Fees.
3.2. The Company may terminate the Agreement without Cause (as
defined below) at any time after September 30, 2000, as provided in
Section 4. If the Company terminates the Agreement without Cause after
September 30, 2000, then the Company will pay the Consultant the
greatest of (a) $360,000, or (b) 80% of the total commission value of
contracted properties and "bona fide offers" (as defined below) on
Properties listed on Schedule A, or (c) the unpaid Transaction Fees due
on properties listed on Schedule A sold or under contract at the date
of termination and which close. A "bona fide offer" means a written
offer on a designated Property at 100% or greater of the allocated
value of that Property shown on Schedule A on reasonable commercial
terms. Any Monthly Fees or Transaction Fees paid to the Consultant at
the time of termination of the Agreement in excess of this minimum
amount shall be retained by the Consultant.
3.3. For the Services rendered pursuant to this Agreement, the
Consultant shall be solely responsible for and pay all state, federal,
and local taxes applicable to the Monthly Fees and Transaction Fees
paid. Additionally, for the Services rendered pursuant to this
Agreement, the Company shall not be obligated to pay for any premium of
insurance under which the Consultant may be entitled to receive
coverage under any group hospitalization or medical plan or insurance
plan or policy maintained by the Company.
3.4. Monthly Fees, Transaction Fees and expense reimbursements
under this Agreement shall be made payable to Consultant and shall be
mailed to Consultant at 0000 Xxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxx
00000.
4. Termination of Agreement. Either party may immediately terminate
this Agreement if Cause exists. Additionally, the Consultant may at any time
immediately terminate this Agreement upon two (2) weeks written notice to the
Company, and after September 30, 2000, the Company may immediately terminate
this Agreement upon two (2) weeks' written notice to the Consultant. If there is
any time period between the date either party gives notice of the termination of
this Agreement and the date of termination of this Agreement, the Consultant
must continue to perform Services under this Agreement, must return any files or
property belonging to the Company, must work with the Company in determining the
status of projects and must assist the Company in making any transition
reasonably necessary as a result of the termination of this Agreement. If the
Agreement is terminated by the Company for Cause or by the Consultant without
Cause, the Consultant shall be paid the Monthly Fee and any unpaid Transaction
Fees, net of all Monthly Fees actually paid, through the end of the month in
which termination occurs, and the Company shall have no further monetary
obligations to the Consultant under the Agreement.
4.1. As used in this Agreement, the term "Cause" is defined as
any of the following:
a. The Consultant's willful malfeasance towards the Company,
conviction of a felony, or commission of fraud or embezzlement
against the Company, including but not limited to any act or
acts of personal dishonesty taken by the Consultant and
intended to result in the material personal enrichment of the
Consultant at the expense of the Company; or
b. An act or omission of the Consultant involving gross
negligence or willful misconduct, or the Consultant's material
misrepresentation or failure to report to the Company
concerning material information within the areas of
Consultant's responsibilities hereunder; or
c. A breach by either party of any provision in this Agreement
after a reasonable opportunity to cure such breach.
5. Covenant Not To Compete. The Consultant agrees that, during the term
of this Agreement, Consultant will not, directly or indirectly, either through
any kind of ownership or as a director, officer, agent, employee or consultant,
engage in any business that competes with the Company.
6. Independent Contractor. The Consultant shall be an independent
contractor and not an employee or agent of the Company for purposes of the
Services performed pursuant to this Agreement.
6.1. The Consultant shall have no authority, express or
implied, to bind the Company and shall not hold himself out as
representing the Company in any manner, as an employee, agent, or in
any other capacity, except upon the consent of the Company.
7. Conflict of Interest. During the term of this Agreement, the
Consultant shall not use the relationship between the Consultant and the Company
in any manner that adversely affects the Company and shall not act on behalf of
himself or others in any manner that conflicts with the interests of the
Company.
8. Confidential Information. The Consultant understands and agrees
that, prior to his engagement as a consultant and during the term of this
Agreement, the Consultant has had and will have access to certain proprietary
information belonging to the Company, which information includes information
designated as confidential by the Company and not generally known by non-Company
personnel (all such information shall be hereafter referred to as the
"Confidential Information"). The Company desires to protect such Confidential
Information from subsequent use or disclosure by the Consultant or any other
person or entity acting in concert with the Consultant. The Consultant agrees
that, during the term of this Agreement and after the expiration of this
Agreement, the Consultant shall not use Confidential Information belonging to
the Company for the Consultant's own purposes or for the purposes of any person
or entity other than the Company and shall not disclose any such Confidential
Information to non-Company personnel except as required in connection with the
Consultant's duties under this Agreement, without the prior written consent of
the Company. The obligations set forth in this Section 8 shall survive the
termination of the Consultant's consulting relationship with the Company created
by this Agreement and shall be fully enforceable by the Company at all times
thereafter.
9. Indemnification. The Company hereby agrees to indemnify, defend and
hold harmless Consultant, from and against any and all expenses (including
attorney's fees) as incurred, judgments, fines, taxes, penalties and amounts
paid in settlement actually and reasonably incurred by Consultant in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the fact that he
is or was a consultant to the Company or is or was serving at the request of the
Company as a consultant.
10. Entire Agreement, Amendment. This Agreement constitutes the entire
agreement between the parties with respect to the matters covered by this
Agreement, and may not be modified or amended in any way except by a subsequent,
written agreement signed by both parties.
11. Waiver of Breach. The waiver by either party of any breach of this
Agreement shall not be deemed a waiver of any other breach of the same or any
other provision of this Agreement.
12. Assignment. Except as provided below, Consultant may not assign
this Agreement or any of his duties or obligations hereunder to any other person
without the Company's prior written consent. Consultant may assign this
Agreement to any entity controlled by Consultant, provided that entity agrees to
be bound by the terms and conditions of this Agreement.
13. Legal Construction. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other such provisions and this
Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had not been contained herein.
14. Successors. This Agreement shall be binding upon and inure to the
benefit of both parties, the Company's successors and assigns, as well as to the
Consultant's heirs, administrators, executors and legal representatives.
15. Governing Law. The validity, interpretation, and effect of this
Agreement and of any of its respective terms or provisions, as well as the
rights and duties of the parties hereunder, shall be governed by the laws of the
State of Georgia. The parties agree that venue in an action to enforce this
Agreement will lie in Xxxxxx County, Georgia, and that neither party will
challenge venue if a lawsuit to enforce this Agreement is brought in such
county.
EXECUTED this day of _______, 2000.
HOMESTEAD VILLAGE INCORPORATED
By:
Name: C. Xxxxxx Xxxxxxxxxxx
Title: Interim Chairman and CEO
CONSULTANT
Xxxxx X. Xxxxxxxx, Xx.
