Exhibit 10.28
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "Agreement") is made and entered into as
of the 10th day of February, 2002, by and between Ventas, Inc., a Delaware
corporation (the "Company"), and Paragon Consulting Group, LLC, a Michigan
limited liability company (the "Consultant").
R E C I T A L S:
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WHEREAS, the Company desires to obtain the asset management
advisory services of and obtain certain restrictive covenants from the
Consultant, as described below, and the Consultant is willing to cause XxXxx
X'Xxxxxxx ("X'Xxxxxxx") to provide such services to the Company and is willing
to agree to such restrictive covenants, on the terms and for the consideration
set out below; and
WHEREAS, the Consultant and the Company desire to embody in
this Agreement the terms and conditions of the Consultant's engagement by the
Company, which terms and conditions shall supersede all prior oral and written
agreements, arrangements and understandings relating to the Consultant's
services.
NOW, THEREFORE, in consideration of the foregoing premises,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, it is hereby agreed as follows:
1. ENGAGEMENT: The Company hereby agrees to engage the
Consultant, and the Consultant does hereby accept its engagement with the
Company and agrees to serve the Company and agrees to cause X'Xxxxxxx to
exclusively serve the Company, in the capacities, for the term, and subject to
the terms and conditions, as herein contained, including Section 9(a) hereof.
2. TERM: The consulting services to be provided by the
Consultant to the Company pursuant to this Agreement shall commence as of
February 18, 2002 (the "Commencement Date") and shall continue for twelve (12)
months thereafter, subject to earlier termination only as provided for in
Section 7 hereof ( the "Term").
3. DUTIES:
(a) Consultant hereby acknowledges and agrees that the
services to be provided by Consultant under this Agreement must be performed
solely and exclusively by X'Xxxxxxx. During the Term of this Agreement, subject
to the limitation set forth in Section 3(b), the Consultant agrees, and agrees
to cause X'Xxxxxxx, to furnish to the Company the Consultant's best advice,
information, judgment and knowledge for the management of the Company's assets,
including without limitation, the following responsibilities and duties:
(i) Defining, establishing and implementing a strategic plan
that will initially document and catalogue existing asset information
leading to the development of a
sustainable, value added and structured asset management function;
establishing and documenting policies and procedures with scale to
effectively monitor existing assets as well as those added through
portfolio acquisitions and/or merger and acquisition transactions.
(ii) Instilling a culture and discipline that will result in a
seamless asset management function with the common goal of increasing
profitability and managing volatility within the portfolio.
(iii) In a cost-effective manner, thoroughly researching and
presenting recommendations to acquire scaleable technology system to
monitor operations; creating baselines by state with information
required to accurately review historical and present asset performance.
(iv) Building relationships with tenants and staff; developing
a knowledge base of the real estate portfolio via on-site visits and
in-person meetings with operators.
(v) Through effective communication, monitoring tenants
compliance with their obligations under the agreements set forth;
actively reviewing and monitoring tenant covenants and immediately
addressing issues that arise.
(vi) Evaluating current systems and recommending changes if
necessary such as determining whether third party execution or in-house
monitoring of tax payments, rent collection etc. would be most cost
effective.
(vii) Advising senior management on all lease rollovers while
maximizing value and providing local market information and dynamics
required to recommend proposed terms.
(viii) Monitoring the financial and functional status of
assets; ensuring complete, timely and accurate monthly reporting to
senior management and ultimately shareholders.
(ix) Based on the overall organization goals and profitability
measures, making cost effective recommendations to senior management
regarding the building of the asset management team including annual
budgeting, forecasting and hiring.
The Company shall provide Consultant with administrative and financial analyst
support adequate to enable Consultant to accomplish the foregoing objectives.
During the Term, the Company shall also provide X'Xxxxxxx an office in the
Company's Chicago, Illinois or Louisville, Kentucky office.
(b) The Consultant shall cause X'Xxxxxxx to provide such services to
the Company during normal business hours on all business days during the Term;
provided however X'Xxxxxxx shall also be generally available to provide services
after normal business hours and on weekends as reasonably required by the
Company. X'Xxxxxxx may be unavailable to provide services under this Agreement
for up to, but not exceeding, fifteen (15) business days in aggregate during the
Term provided that she shall not be unavailable for more than five (5)
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business days consecutively. X'Xxxxxxx shall be located at either of the
Company's offices in Chicago, Illinois or Louisville, Kentucky or traveling on
the Company's business at least three (3) business days per week, as directed by
the Company. X'Xxxxxxx shall report directly to Xxxx X. Xxxxxxxx, Executive Vice
President - Chief Investment Officer, or such other executive officer designated
by the Company.
4. FEES
A) CONSULTING FEE: The Company shall pay the Consultant, and
the Consultant hereby agrees to accept as payment for all consulting services
rendered hereunder (the "Consulting Fee"), an amount equal to $13,333.33 per
month, payable in arrears on the 18th day of each month, provided that if the
18th of a month is not a business day then on the first business day preceding
the 18th day of that month. If the Term shall be terminated prior to expiration
under Section 7 hereof, the Company shall pay the Consulting Fee to and
including the date of such termination.
(B) SUCCESS FEE: At the end of the Term, the Company, in its
sole and absolute discretion, may pay the Consultant a success fee based upon
the Consultant's performance during the Term.
5. INDEPENDENT CONTRACTOR STATUS: The Consultant will perform its
obligations and duties under this Agreement solely as an independent contractor
performing work for the Company, doing so in the manner determined by the
Consultant, subject to applicable objectives set by the Company, and not as an
agent or employee of, or joint venturer with, the Company. Except as otherwise
provided in Section 6, the Consultant and its designees, including X'Xxxxxxx,
shall not, by reason of this Agreement, acquire any benefits, privileges or
rights under any benefit plan maintained by the Company or its subsidiaries or
affiliates for the benefit of their employee including, without limitation, (a)
any pension or profit-sharing plans or (b) any plans providing medical, dental,
disability or life insurance protection. The Consultant shall be solely
responsible for the payment of any federal, state and local taxes applicable to
the fees and expenses paid or payable by the Company in connection with the
Consultant's engagement. The Consultant hereby agrees to indemnify and hold the
Company harmless against any liability, cost or expense incurred by the Company
for failure to satisfy any payment of any federal, state and local taxes
applicable to the fees and expenses paid or payable by the Company in connection
with this Agreement.
6. EXPENSES AND BENEFITS: Upon presentation of expense statements or
vouchers and such other supporting information as the Company may reasonably
request, and in accordance with such policies set forth by the Company for its
executives, the Company shall pay or reimburse the Consultant for all reasonable
travel, entertainment, lodging, home office (such as long distance, office
supplies and courier delivery services, but excluding any rent) and other
expenses incurred by the Consultant in connection with the performance of its
services under this Agreement, including coach class travel and lodging expenses
related to O'Donovan's location at the Company's offices in Louisville and
Chicago, provided, however, that the Consultant must obtain prior written
approval from the Company with respect to all individual expenditures exceeding
two thousand dollars ($2,000). Company shall provide X'Xxxxxxx with a cell phone
(including long distance) and laptop computer for her use during the Term.
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7. TERMINATION: This Agreement and the engagement of the Consultant
hereunder shall terminate on the first to occur of the following events or
conditions:
(a) The expiration of the Term specified in Section 2.
(b) The death or total and permanent disability of X'Xxxxxxx.
(c) The Consultant's providing 60 days' prior written notice to the
Company of its voluntary termination of its engagement by the Company; provided,
however, that the Consultant hereby agrees not to give such notice for a
three-month period commencing on the Commencement Date.
(d) The Company's providing 60 days' prior written notice to the
Consultant of its voluntary termination of the Consultant's engagement with the
Company, provided, however, that the Company hereby agrees not to give such
notice for a three-month period commencing on the Commencement Date.
Notwithstanding the foregoing, (1) the Company may terminate the Consultant's
engagement under this Agreement at any time on less than 60 days' prior written
notice if such termination shall be for "Cause" and (2) the Consultant may
terminate this Agreement at any time on less than 60 days' prior written notice
after a material breach of the terms of this Agreement by the Company which
remains uncured seven (7) days after written notice of such breach from the
Consultant to the Company. "Cause" shall mean (a) the failure of X'Xxxxxxx to
perform the duties and responsibilities set forth in Section 3(a) above; (b) a
material breach of the terms of this Agreement by the Consultant or X'Xxxxxxx
and such breach remains uncured for seven (7) days after written notice of such
breach from the Company to the Consultant and X'Xxxxxxx; or (c) the commission
of any of the following by the Consultant or X'Xxxxxxx: the commission of any
act of fraud or embezzlement, any unauthorized use or disclosure of the
Company's confidential information, or any intentional wrongdoing involving the
Company.
8. INDEMNIFICATION: The Company hereby agrees to (1) indemnify and hold
the Consultant and X'Xxxxxxx harmless against any liability, cost or expense
arising out of the Consultant's or X'Xxxxxxx'x association with the Company to
the full extent legally permissible under the Delaware General Corporation Law,
as may be amended from time to time; and (2) advance to the Consultant or
X'Xxxxxxx the cost of defending any such action against them on such terms and
conditions as the Board of Directors of the Company shall deem appropriate;
provided, however, that the Company shall not be required to indemnify the
Consultant and X'Xxxxxxx for any liability, cost or expense arising from or
relating to the Consultant's or X'Xxxxxxx'x gross negligence or willful
misconduct.
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9. RESTRICTIVE COVENANTS:
(a) NONCOMPETE: During the Term, the Consultant and X'Xxxxxxx
(collectively, the Consultant, for purposes of this Section 9) shall not,
directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in a business which is in competition
with the business of the Company as presently conducted (the "Business");
provided that such provision shall not apply to the acquisition by the
Consultant, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or
automated dissemination of quotations of securities prices in common use, so
long as the Consultant does not control, acquire a controlling interest in or
become a member of a group which exercises direct or indirect control of, more
than five percent of any class of capital stock of such corporation, or (2) the
performance of pre-existing, contractually obligated services to Omega
Healthcare Investors, Inc., a Maryland corporation, which pre-existing
obligations shall not interfere with Consultant's or X'Xxxxxxx'x performance and
compliance with the terms of this Agreement.
(b) NONSOLICITATION: During the Term and for one (1) year following the
expiration of the Term, the Consultant shall not, directly or indirectly, for
itself or for any other person, firm, corporation, partnership, association or
other entity (i) employ or attempt to employ or enter into any contractual
arrangement with any employee or former employee of the Company, unless such
employee or former employee has not been employed by the Company for a period in
excess of six months, and/or (ii) call on or solicit any of the actual or, to
the Consultant's knowledge, targeted prospective clients of the Company on
behalf of any person or entity in connection with any business competitive with
the Business of the Company, nor shall the Consultant make known the names and
addresses of such clients or any information relating in any manner to the
Company's trade or business relationships with such customers, other than in
connection with the performance of the Consultant's duties under this Agreement.
(c) CONFIDENTIALITY: The Company's Confidential Information (as defined
below) is the property of the Company, and its use, misappropriation or
disclosure will constitute a breach of trust and cause irreparable injury or
harm to the Company and to its strategic and competitive position. It is
essential to the protection of the Company's business and good will and to the
maintenance of the Company's strategic and competitive position that the
Confidential Information be kept secret and confidential and that Consultant not
disclose the Confidential Information to any other person or entity or use the
Confidential Information to its own advantage or the advantage to others.
Consultant shall not, without the prior written consent of the Company, comment
to or talk, speak or otherwise communicate with the media in any manner on any
matter directly or indirectly relating to or regarding Company.
Consultant agrees that it will not disclose or make available to anyone
for use outside the Company's organization at any time any of the Company's
Confidential Information, whether or not developed by it, except to the extent
that such information (i) is or becomes
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generally available to the public other than as a result of a disclosure by
Consultant in violation of this Agreement, (ii) was available to Consultant on a
non-confidential basis prior to the date hereof, or (iii) is required to be
disclosed pursuant to a court order or other legal process (provided Consultant
gives the Company notice of such obligation when it receives notice of such
obligation and prior to any disclosure pursuant to such obligation affords the
Company the opportunity and cooperates with the Company in any efforts by the
Company to limit the scope of such obligation and/or to obtain confidential
treatment of any material disclosed pursuant to such obligation).
For purposes of this Agreement, the term "Confidential
Information" includes information of any nature and in any form which at the
time or times concerned is not generally known to the public and which relates
to any one or more of (i) the Company's business or assets, (ii) actual or
potential products of the Company, (iii) the Company's strategies or potential
liabilities, including, but not limited to, information protected by the
Company's attorney/client, work product, or tax advisor/audit privilege, (iv)
tax matters and information, (v) negotiations with third parties, (vi) methods,
policies, processes, formulas, techniques, know-how and other knowledge, (vii)
trade practices or trade secrets, (viii) financial statements or financial
matters, (i) customers, lists of customers or customers' purchases, (ix) lists
of representatives, (x) requirements for systems, programs, machines, or other
equipment, (xi) information regarding Company's bank accounts, credit agreement,
or financial projections information, (xii) information regarding the Company's
tenants, subtenants, managers or operators and (xiii) information regarding the
Company's directors or officers or their personal affairs.
(d) RETURN OF PROPERTY AND INFORMATION: After termination of the
engagement, the Consultant shall return to the Company all Company property and
proprietary information of the Company in the Consultant's possession.
(e) ACKNOWLEDGMENT: The Consultant acknowledges and confirms that (i)
the restrictive covenants contained in this Section 9 are reasonably necessary
to protect the legitimate business interests of the Company, and (ii) the
restrictions contained in this Section 9 (including without limitation the
length of the term of the provisions of this Section 9) are not overbroad,
overlong, or unfair and are not the result of overreaching, duress or coercion
of any kind. The Consultant further acknowledges and confirms that its full,
uninhibited and faithful observance of each of the covenants contained in this
Section 9 will not cause it any undue hardship, financial or otherwise, and that
enforcement of each of the covenants contained herein will not impair its
ability to obtain employment commensurate with its abilities and on terms fully
acceptable to it or otherwise to obtain income required for the satisfaction of
the needs of its creditors. The Consultant acknowledges and confirms that its
special knowledge of the business of the Company is such as would cause the
Company serious injury or loss if it were to use such ability and knowledge to
the benefit of a competitor or were to compete with the Company in violation of
the terms of this Section 9. The Consultant further acknowledges that the
restrictions contained in this Section 9 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.
(f) REFORMATION BY COURT: In the event that a court of competent
jurisdiction shall determine that any provision of this Section 9 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this
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Section 9 within the jurisdiction of such court, such provision shall be
interpreted and enforced as if it provided for the maximum restriction permitted
under such governing law.
(g) SURVIVAL: The provisions of this Section 9 shall survive the
termination of this Agreement, as applicable.
(h) INJUNCTION: It is recognized and hereby acknowledged by the parties
hereto that a breach by the Consultant of any of the covenants contained in this
Section 9 will cause irreparable harm and damage to the Company, the monetary
amount of which may be virtually impossible to ascertain. As a result, the
Consultant recognizes and hereby acknowledges that the Company shall be entitled
to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of any or all of the covenants contained in this
Section 9 by the Consultant or any of its affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall
be cumulative and in addition to whatever other remedies the Company may
possess.
10. CONSULTANT REPRESENTATIONS: The Consultant hereby represents to the
Company that it is aware of no legal obligation inconsistent with the terms of
this Agreement or with the Consultant's undertaking of its engagement with the
Company.
11. SUCCESSORSHIP: This Agreement shall inure to the benefit of and be
binding upon the Company, its successors and assigns, including any corporate
successor by merger or consolidation; and as used herein, the term "Company"
shall include such successors or assigns, and any corporate subsidiary or
affiliate of the Company. The services to be provided by the Consultant under
this Agreement are personal to Company and shall not be assignable by the
Consultant without the prior written consent of the Company.
12. ENTIRE AGREEMENT: This Agreement contains the entire Agreement of
the parties relating to and supersedes all prior oral or written agreements
relating to the consulting subject matter hereof, and the parties hereto have no
agreements, representations or warranties relating to the subject matter of this
Agreement which are not set forth herein. No modification of this Agreement
shall be valid unless made in writing and signed by the parties hereto.
13. NOTICE: Any notice or request required or permitted under this
Agreement shall be in writing and given or made by postage paid, registered or
certified mail, return receipt requested, addressed to the Company or the
Consultant at its then principal place of business, or the Consultant at its
address last given to the Company, or to any party hereto at such other address
last given to the Company, or to any party hereto at such other address or
addresses as such party may from time to time specify for such purposes in a
notice similarly given to the other parties.
14. APPLICABLE LAWS: This Agreement is made and is to be performed in
the State of Kentucky and shall be construed and enforced in accordance with the
laws of the State of Kentucky. Consultant and X'Xxxxxxx hereby consent to
jurisdiction in the State of Kentucky.
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15. SECURITIES WARNING: Consultant and X'Xxxxxxx acknowledge that they
are aware that federal and many state securities laws prohibit any person who
has received from an issuer material, non-public information, from purchasing or
selling securities of such issuer or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.
16. ACKNOWLEDGMENT: IN WITNESS WHEREOF, the Company and the Consultant
have each caused this Agreement to be executed by its officer thereunder duly
authorized as of the day and year first written above.
VENTAS, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Its: Executive Vice President
PARAGON CONSULTING GROUP, LLC
By: /s/ XxXxx X'Xxxxxxx
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Its: Principal
XxXxx X'Xxxxxxx
/s/ XxXxx X'Xxxxxxx
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