CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), made as of the first day
of August, 1998, is entered into by Homes for America Holdings, Inc., a Nevada
corporation with its principal business office at 000-0 Xxxx 000xx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (the "Company"), and International Business & Realty
Consultants, L.L.C., a Virginia limited liability company with a business office
at 0000 XxXxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000 (the
"Consultant" or "IB&R"), for services to be rendered by an IB&R employee, Xxxxxx
X. Xxxx ("Xxxx"), through the Consultant to the Company.
The Company has embarked upon a national program to acquire and
rehabilitate high quality apartment projects and other multifamily or multiple
unit residential projects, using where available tax-exempt or subsidized
financing and tax credits available to such projects, especially for what is
known in the industry as "affordable housing", and the Consultant, represented
by its key employee Xxxx who has an established network of brokers, financial
institutions, and property owners operating in this industry.
The Company desires to engage the Consultant, and the Consultant
desires to contract with and provide consulting services to the Company. In
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, including the previous performance by each
party from the Commencement Date (described below), now ratified and accepted,
the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the parties agree as follows:
1. Term of Engagement.
The Company hereby agrees to engage the Consultant, and the Consultant
hereby accepts engagement to work with the Company, to provide the Consulting
Services (described hereinbelow) upon the terms set forth in this Agreement, for
the period that commenced on August 1, 1998 (the "Commencement Date"), and
continuing to and including July 31, 2003, renewable thereafter for successive
twelve (12) month periods, unless sooner terminated in accordance with the
provisions of Section 4 (the "Engagement Period"). Unless either party shall
notify the other of its intention not to renew this Agreement before the day
sixty (60) days prior to the last day of the then current term, it shall
automatically renew for another twelve (12) month period on the same terms as
then in effect.
2. Consulting Services; Officer; Responsibility. (a) The Consultant
hereby agrees to provide real estate acquisition and development services,
including the preparation and implementation of the Company's business plan, the
identification in the national market of prospective acquisitions, the review
and due diligence investigation of prospective properties (including the
supervision of professional firms therefor), the negotiation and representation
of the Company in the acquisitions and the related applications for financing
(whether tax-exempt, government-subsidized, conventional, or other) therefor and
property fundings, including equity and tax credit sales or joint ventures
related to such acquisitions, the development of operation and management plans
for acquired properties, and related matters as the business plan of the Company
is implemented.
(b) The Consultant's key employee Xxxx shall serve as Director or in
such other position as the Company or its Board of Directors (the "Board") may
determine from time to time; provided however that his duties, obligations, and
responsibilities shall not be materially changed without the written consent of
the Consultant and Xxxx. Xxxx is also referred to herein as an "Officer".
(c) The Officer is serving in these offices to demonstrate the real
estate credentials of the Company and not to perform any services for the
Company. The Officers will serve in the designated capacity only during the
Engagement Period and only to facilitate the delivery of the Consulting
Services. To the extent an Officer receives Proprietary Information in this
capacity he shall be governed by the provisions of Section 7 herein below.
(d) Neither the Officer nor the Consultant is being engaged by this
Agreement to be, nor shall either of them be by virtue of the terms of or in
consideration of the consulting fees hereunder, responsible for the securities
and other compliance related to the raising of capital. An Officer may have the
duties customarily assigned to the office designated under Section 2(b) above
except where the Board either discharges such duties as a collective body
directly or through other designees, as the Company does for example in raising
capital, preparing securities disclosures, marketing therefor, and the like, in
which instance the Officer shall restrict his presentation and oversight to
matters related to the real estate transactions of the Company.
(e) The Consultant's employee Xxxx shall operate out of the Company's
business office in Washington, D.C., and shall not be transferred without his
written consent. Xxxx shall be subject to the supervision of, and shall have
such authority as is delegated to him by the Board or such other officer of the
Company as may be designated by the Board or the bylaws of the Company. Subject
to the terms of this Section 2 Xxxx shall cooperate fully with the executive
officers of the Company and the Board on all matters affecting the business of
the Company. By endorsement the Xxxx hereby accepts such office and agrees to
undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Board or its designee shall from time
to time reasonably assign to him.
(f) At all times during the performance of services under this
Agreement the Company shall indemnify and hold harmless Xxxx, the Officer, and
the Consultant against any claim, liability, expense, and charge therefor and
shall defend it or him at Company expense in any proceeding related thereto
(except for gross negligence or wilful misconduct of the indemnified person).
This indemnification right shall survive termination of services under this
Agreement.
3. Payments.
3.1 Consulting Fee.
(a) Beginning on the Commencement Date and thereafter for so long as
the Consultant shall continue to be engaged hereunder by the Company pursuant to
the terms of this Agreement, the Company shall pay the Consultant, in monthly
installments, paid in advance on or before the tenth (10th) day of each month,
for the period of engagement a monthly consulting fee as follows:
(1) For the period from July 1998 to December 1998:
the sum of Fifteen Thousand Dollars ($15,000);
(2) For the period from January to December in each succeeding year
during the Term of this Agreement, the sum determined by the Board of Directors
of the Company but in no event less than one hundred five per cent (105%) of the
monthly consulting fee of the immediately preceding period.
3.2 Reimbursement of Expenses. The Company shall reimburse the
Consultant for all reasonable travel, entertainment, and other expenses incurred
or paid by the Consultant in connection with, or related to, the performance of
its duties, responsibilities, or services under this Agreement, upon
presentation by the Consultant of documentation, expense statements, vouchers,
and such other supporting information as the Company may request, provided,
however, that the amount available for such travel, entertainment, and other
expenses may be fixed in advance, but not retroactively, by the Board.
3.3 Indemnification. At all times during the performance of services
by the Consultant under this Agreement the Company shall indemnify and hold
harmless the Consultant and the Officer against any claim, liability, expense,
and charge therefor and shall defend Consultant and the Officers at Company
expense in any proceeding related thereto (except for gross negligence or wilful
misconduct of Consultant or the Officers). This indemnification right shall
survive termination of services under this Agreement.
3.4 Unrelated Tax Credit Fees and Expense Reimbursement.
(a) The parties understand and agree that Xxxx or an affiliate thereof
may receive (i) separate compensation as consulting or brokerage fees or (ii)
separate compensation as consulting or brokerage fees for sales of tax credits
for Company transactions supervised or conducted by the Consultant or Xxxx and
subject hereto. Such tax credit fees or commissions and real estate commissions
due to Xxxx, his affiliate, or to the Consultant for any acquisition, transfer,
or sale by the Company or any of its affiliates are separate from monies due
under this Agreement and no credit or set-off is allowed for such fees or
commissions against obligations of the Company hereunder.
4. Engagement Termination. The engagement of the Consultant by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the following:
4.1 Thirty (30) days after the death or disability of Xxxx. As used in
this Agreement, the term "disability" shall mean the inability of Xxxx, due to a
physical or mental disability, for either (a) a period of one hundred twenty
(120) days, whether or not consecutive, during any 360-day period, or (b) a
period of ninety (90) consecutive days to perform the services contemplated
under this Agreement. A determination of disability shall be made by a physician
satisfactory to both the Consultant and the Company, provided that if the
Consultant and the Company do not agree on a physician, the Consultant and the
Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all
parties.
4.2 At the election of the Company, for cause, immediately upon
written notice by the Company to the Consultant. For the purposes of this
Section 4.1, cause for termination shall be deemed to exist upon (a) the willful
engaging by the Consultant in gross misconduct resulting in material injury to
the Company or willful breach of fiduciary duty, or (b) the nonappealable
conviction of the Consultant or of Xxxx of, or the entry of a pleading of guilty
or nolo contendere by the Consultant or Xxxx, to any crime involving moral
turpitude or fraud. For purposes of this paragraph, no act, or failure to act,
on the Consultant's part shall be considered "willful" unless done, or omitted
to be done, by it not in good faith and without reasonable belief that its act
or omission was in the best interest of the Company or otherwise not likely to
result in material injury thereto.
4.3 At the election of the Company, in its sole discretion, upon not
less than sixty (60) days prior written notice of termination.
4.4 At the election of the Consultant, in its sole discretion, upon
not less than sixty (60) days prior written notice of termination.
4.5 At the election of the Consultant, upon failure of the Company to
perform or observe any of the material terms or provisions of this Agreement,
and the failure of the Company to cure such failure within fifteen (15) days
after written notice of such failure and demand for performance has been given
to the Company by the Consultant, which notice and demand shall describe
specifically in detail the nature of such alleged failure to perform or observe
such material term or provision, provided that if cure is not possible within
such fifteen (15) day period it shall suffice for the Company to commence and
diligently pursue thereafter the cure within the shortest reasonable time.
5. Effect of Termination.
5.1 Termination for Death or Disability. If the Consultant's
engagement is terminated by death or because of death or disability pursuant to
Section 4.1, the Company shall pay to the Consultant the compensation which
would otherwise be payable to the Consultant up to the end of the month in which
the termination of its engagement because of death or disability occurs.
5.2 Termination for Cause. In the event the Consultant's engagement is
terminated for cause pursuant to Section 4.2 the Company shall pay to the
Consultant the compensation and benefits otherwise payable to it under Section 3
through the last day of its actual engagement by the Company.
5.3 Termination for Cause or at Election of Either Party. In the event
the Consultant's engagement is terminated by the Company pursuant to Section 4.3
the Company shall remain liable to the Consultant for the amount of compensation
otherwise due under Section 3.1 through the end of the then current term (either
through July 31, 2003, or the current renewal period thereafter) but without
liability for costs or reimbursements for any costs incurred after the
termination (other than indemnification pursuant to Section 3.3). In the event
the Consultant's engagement is terminated at the election of the Consultant
pursuant to Section 4.4, the Company shall pay to the Consultant the
compensation and benefits otherwise payable to it under Section 3 through the
last day of its actual engagement by the Company.
5.4 No Additional Compensation upon Termination. Even if the
Consultant's engagement hereunder is terminated under paragraphs 4.3 or 4.5, the
Company shall not be obligated to pay the Consultant any additional severance
compensation other than the consulting fees through the date of termination of
this agreement.
5.5 Survival. The provisions of Sections 2(e), 3.3, 5.3, 6, and
7 shall survive the termination of this Agreement.
6. Non-Compete. (a) During the Engagement Period and for a period of
Two (2) Years after the termination or expiration thereof, or until the date (if
earlier) Two (2) Years from the last day on which the Consultant received
compensation from the Company hereunder, neither the Consultant nor any Officer
will directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer, employee,
director, joint venture, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), engage in
the business of developing, producing, marketing, or selling products
or services of the kind or type developed or being developed, produced,
marketed, or sold by the Company while the Consultant (or IB&R or
Officer, as applicable) was employed by the Company; provided that the
limitations in this subsection 6(a)(i) shall not apply in the event the
Consultant is terminated pursuant to Section 4.3 or 4.5; or
(ii) recruit, solicit, or induce, or attempt to, induce, any employee or
employees of the Company to terminate their engagement with, or
otherwise cease their relationship with, the Company; or
(iii) solicit, divert, or take away, or attempt to divert or to take away,
the business or patronage of any of the clients, customers, or
accounts, or prospective clients, customers or accounts, of the Company
which were contacted, solicited or served by the Consultant (or
Officer, as applicable) while employed by the Company.
(b) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
or time, range of activities, or geographic area as to which it may be
enforceable.
(c) The restrictions contained in this Section 6 are necessary for the
protection of the business and goodwill of the Company and are considered by the
Consultant (and Xxxx and the Officers) to be reasonable for such purpose. The
Consultant agrees that any breach of this Section 6 will cause the Company
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to seek specific performance and injunctive relief. The
Company agrees and understands that the restrictions of this Section 6 do not
apply to any commercial real estate brokerage activities of the Consultant or
Xxxx, whether now in process or later undertaken.
7. Proprietary Information.
7.1 Proprietary Information.
(a) Consultant agrees that all information and know-how, whether or not
in writing, of a private, secret, or confidential nature concerning the
Company's business or financial affairs (collectively, "Proprietary
Information") is and shall be exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, techniques, formulas, compositions,
compounds, projects, developments, plans, research data, clinical data,
financial data, personnel data, computer programs, and member, customer, and
supplier lists. Consultant will not disclose any Proprietary Information to
others outside the Company or use the same for any unauthorized purposes without
written approval by an officer of the Company, either during or after its
engagement, unless and until such Proprietary Information has become public
knowledge without fault by the Consultant, or to comply with the order of a
court exercising jurisdiction of the matter.
(b) Consultant agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, notebooks, program listings, or other
written, photographic, or other tangible material containing Proprietary
Information, whether created by the Consultant or others, which shall come into
its custody or possession, shall be and are the exclusive property of the
Company to be used by the Consultant only in the performance of its duties for
the Company.
(c) Consultant agrees that its obligation not to disclose or use
information, know-how, and records of the types set forth in paragraphs (a) and
(b) above, also extends to such types of information, know-how, records, and
tangible property of members of the Company or customers of the Company or
suppliers to the Company or other third parties who may have disclosed or
entrusted the same to the Company or to the Consultant in the course of the
Company's business.
7.2 Other Agreements. Consultant hereby represents that it is not
bound by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of this engagement with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Consultant further represents that its performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge, or data acquired by it in confidence or in trust prior to its
engagement with the Company.
8. Notice. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 8.
9. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
10. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
11. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Consultant.
12. Governing Law. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of Nevada.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company or the
Consultant may be merged or which may succeed to its assets or business.
14. General Provisions.
14.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
14.2 The captions of the sections of this Agreement are for convenience
of reference only and in no way define, limit, or affect the scope or substance
of any section of this Agreement.
14.3 In case any provision of this Agreement shall be invalid, illegal,
or otherwise unenforceable, the validity, legality, and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
14.4 This Agreement shall be executed in two (2) counterparts each of
which shall be deemed an original hereof and both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parites hereto have executed this Agreement as of the
day and year set forth above intending to be legally bound thereby.
COMPANY:
HOMES FOR AMERICA HOLDINGS, INC.
By: /s/ Xxxxxx X. XxxXxxxxxx ATTEST:
---------------------------- [Corporate Seal]
TItle: Chief Executive Officer
By: -------------------------------
Its: (Assistant) Secretary
CONSULTANT:
INTERNATIONAL BUSINESS AND ATTEST:
REALTY CONSULTANTS, L.L.C. [Corporate Seal]
By: s/s Xxxxxx Xxxx
---------------------------- By: -------------------------------
Title: President Its: (Assistant) Secretary
XXXXXX X. XXXX WITNESS
s/s Xxxxxx Xxxx s/s Xxxxx X. Xxxx
------------------------------- -----------------------------------
Xxxxxx X. Xxxx
