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EXHIBIT-10.8
Consulting Agreement
dated as of August 1, 1996
between the Company
and Ralph V. Williams
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into as of the 1st
day of August, 1996 by and between Cardinal Realty Services, Inc., an Ohio
corporation (the "Company"), and Ralph V. Williams ("Consultant").
R E C I T A L S
A. Concurrent with the execution of this Agreement, the Company is
acquiring Lexford Properties, Inc., a Texas corporation ("Lexford") through a
merger of a subsidiary of Cardinal with and into Lexford pursuant to an
Agreement and Plan of Merger dated as of July 19, 1996 by and among the Company,
Rexflor Acquisition Corporation, a wholly-owned subsidiary of Cardinal, and
Lexford (the "Merger Agreement").
B. The business of Lexford has in large part been developed over a
period of years and sustained through the efforts, knowledge and skill of
Consultant.
C. Consultant is willing to provide certain services to the Company, as
described herein.
D. This Agreement is required to be executed and delivered by the
parties hereto pursuant to Section 5.11 of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, and pursuant to the Merger Agreement, the parties
hereby agree as follows:
1. Consulting Period. The Company will engage Consultant on the terms
and conditions set forth herein from the date of this Agreement through July 31,
2000 (the "Consulting Period").
2. Consulting Services. During the Consulting Period, the Consultant
shall, at the reasonable request of senior officers of the Company and upon
reasonable prior notice, advise the Company with respect to matters involving
the business of the Company (the "Business") and actively seek out and review
potential acquisitions of real property, property management companies and/or
property management contracts for the Company ("Potential Acquisitions"). The
Company acknowledges that the Consultant's services during the term of this
Agreement shall not constitute a full-time engagement, and that the Consultant
may have duties and responsibilities to other individuals and entities during
the Consulting Period which are not in competition, directly or indirectly, with
the Company; provided, that Consultant may in all events continue to acquire, on
his own behalf and on behalf of others, own, develop and sell multifamily
residential real property and other income producing real property. Subject to
the preceding sentence, the Company agrees that the Consultant may perform his
duties during the Consulting Period at such times, places and frequencies as are
necessary so that such duties will not unreasonably interfere with his duties
and responsibilities to other individuals and entities or with prior personal
commitments. In no event will Consultant be required to perform his services in
excess of twenty (20) hours per month.
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3. Compensation.
(a) As compensation in full for his services under this
Agreement, the Company will pay Consultant at the rate of Fifty
Thousand Dollars ($50,000) per year, payable monthly in advance.
Consultant will be responsible for all expenses incurred by Consultant
in rendering his services hereunder.
(b) In addition to the compensation set forth in the preceding
paragraph, Consultant shall be paid an incentive fee ("Fee") based on
the purchase price paid by the Company or Lexford on account of any
acquisitions of real estate, directly or indirectly through the
acquisition of equity interests in entities owning real property,
presented to the Company by Consultant during the Consulting Period
which acquisitions are completed during the Consulting Period or within
six (6) months thereafter. No Fee is payable to Consultant on account
of any acquisitions of property management companies or property
management contracts. For purposes of this paragraph 3(b), the
acquisitions as to which Consultant's Fee is payable will be limited to
those as to which no other brokers are owed a commission by the Company
or Lexford, as the case may be, with respect to such acquisition. The
Fee shall be paid at the closing of the qualifying acquisition, or, if
the total price is to be paid in installments, the Fee shall be paid on
each installment when paid by the Company or Lexford, as the case may
be. If the Fee results from an acquisition in which the purchase price
paid by the Company or Lexford, as the case may be, is, in whole or in
part, common stock of the Company, then the value of the common stock
used shall be based on a formula mutually agreeable to the Consultant
and the Company. If the Consultant and the Company cannot reach
agreement on the formula within thirty (30) days after the closing of
the acquisition, then the value of the common stock will be deemed to
be the average of the closing bid quotation as reported by NASDAQ, or
the average closing price of the common stock if it is listed on a
national securities exchange, for the ten (10) trading days immediately
preceding the closing date of the acquisition. The Fee for any
acquisition shall be one percent (1%) of the purchase price paid.
(c) Consultant shall indemnify and hold the Company and
Lexford harmless from all loss, damage and expense arising out of
Consultant's failure to obtain and keep all state or federal licenses
necessary for Consultant lawfully to receive any Fee to be paid
hereunder.
(d) So long as this Agreement is in force and provided that
there is available space not being utilized by Lexford, office space
shall be made available for Consultant's use at the offices of Lexford,
8615 Freeport Parkway, Suite 200, Irving, Texas 75063.
4. Attendance at the Company Board of Directors. During the Consulting
Period, if Consultant is not a member of the Board of Directors of the Company,
Consultant shall have the right to attend all meetings of such Board.
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5. Acquisition Capital. Subject to the following sentence, during the
Consulting Period, the Company will provide investment capital of up to Ten
Million Dollars ($10,000,000) in the aggregate (indirectly in the form of
capital stock of the Company or directly in the form of cash) to Lexford for the
purpose of effecting Potential Acquisitions recommended by Consultant, provided
that (i) the Potential Acquisition meets all the criteria for acquisitions as
enunciated from time to time by management of the Company, (ii) the Company is
satisfied with the results of its and Consultant's financial, business and legal
due diligence review of the assets and business operations which are the subject
matter of the Potential Acquisition, and (iii) the Potential Acquisition is
approved by the Board of Directors of the Company.
6. Consultant's Properties. During the Consulting Period, Consultant
will use his best efforts to cause all entities owning residential rental
property that Consultant, individually or jointly with others with whom he is
acting in concert, owns or controls to enter into management contracts with the
Company to the exclusion of other property management companies, subject to
Consultant's exercise of his fiduciary duties, if any, owed to other interest
holders in such entities by virtue of Consultant's direct or indirect position
or relationship with such entity.
7. Competition with Company after Consulting Period.
(a) Consultant agrees that for a period of one (1) year after
the expiration of the Consulting Period, for any reason, he will not,
directly or indirectly own, manage, control or participate in the
ownership, management or control of, or be employed or engaged by or
otherwise affiliated or associated as a consultant, independent
contractor or otherwise with, any other corporation, partnership,
proprietorship, firm, association, or other business entity, or
otherwise engage in any business, which is engaged in any manner in, or
otherwise competes with, the real property management business of the
Company (as conducted from time to time during the Consulting Period)
in the continental United States; provided, however, that the ownership
of not more than 1% of the stock of any publicly traded corporation
shall be deemed a violation of this covenant.
(b) In the event Consultant violates the provisions of Section
7(a), such violation shall toll the running of the one year time period
from the date of such violation until the date
that the violation ceases.
8. Solicitation of Other Employees. Consultant agrees that during the
Consulting Period and thereafter, he will not, directly or indirectly, solicit
any employee or consultant of the Company for the purpose of causing that
employee or consultant to terminate his employment or contractual relationship
with the Company.
9. Solicitation of Clients. Consultant agrees that during the
Consulting Period and thereafter, he will not divert or attempt to divert from
the Company any business whatsoever, through any means whatsoever including, but
not limited to, through influencing or attempting to influence any of the
clients with whom he had been dealing during the Consulting Period.
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10. Termination. The Company will have the right to terminate this
Agreement, upon thirty (30) days' written notice to Consultant, in the event of
Consultant's material failure to perform his duties hereunder, which failure
continues during such 30-day period, or in the event that Consultant is in
breach of the provisions of Sections 7, 8 or 9 hereof. This Agreement will
terminate automatically upon Consultant's death or disability (as defined
below). Upon any such termination, Consultant will be entitled to no further
consulting fees, or other compensation or benefits hereunder. For purposes of
this Agreement, "disability" means the inability of Consultant to fully
discharge his duties hereunder by reason of his physical or mental disability or
illness for thirty (30) consecutive days or during any forty (40) days within a
sixty (60) day period.
11. Successors and Assigns; Affiliates. The rights and obligations of
the Company and Consultant under this Agreement shall inure to the benefit of
and shall be binding upon their respective successors and assigns. An Affiliate
(as defined below) shall have the same rights as the Company under Paragraphs 7,
8 and 9 of this Agreement and Consultant's obligations owed to the Company under
said Paragraphs shall be owed to all Affiliates in the same manner as they are
owed to the Company. An Affiliate is (1) any other company which controls a
majority of the voting shares of the Company (including, without limitation,
Cardinal), (2) any company a majority of whose voting shares are controlled by
such other company, and (3) any company a majority of whose voting shares are
controlled by the Company.
12. Notices. Any notice required under this Agreement will be
personally delivered in writing or will be deemed given after it is posted in
the United States Mail, postage prepaid, registered or certified, return receipt
requested, and if mailed to the Company, addressed to 6954 Americana Parkway,
Reynoldsburg, Ohio 43068, Attention: Mark D. Thompson, and if mailed to
Consultant, addressed to 8615 Freeport Parkway, Suite 200, Irving, Texas 75063,
or at such other address or addresses as is designated in writing by either of
the parties to the other.
13. Waiver. The failure of either party to enforce any provision of
this Agreement will not in any way be construed as a waiver of such provision as
to any future violations thereof, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
the parties are cumulative and the waiver of any single remedy will not
constitute a waiver of such party's right to assert all other legal remedies
available to it under the circumstances.
14. Miscellaneous. This instrument constitutes the entire understanding
of the parties with respect to the subject matter of this Agreement, and
supersedes all prior consulting agreements and understandings between the
parties. Section headings used in this Agreement are for convenience only and
are not a part of this Agreement and are not to be used in construing it. No
modification, termination or attempted waiver of any provision of this Agreement
will be valid or effective unless in writing signed by the party against whom
the same is sought to be enforced.
15. Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be void or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement shall nevertheless
continue with full force and effect, and Consultant agrees that a court of
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competent jurisdiction shall have jurisdiction to reform such provision to the
extent necessary to cause it to be enforceable to the maximum extent permitted
by law and agrees to be bound by such reformation.
16. Governing Law. This Agreement will be governed by and construed
according to the laws of the State of Ohio.
17. Attorneys' Fees. If any legal proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions of this Agreement,
the party whose claim is upheld by the court or an arbitrator in a final
judgment shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that proceeding, in addition to any other relief to which it may be
entitled.
18. Injunction for Violation of This Covenant. Consultant acknowledges
that a breach of Paragraphs 7, 8 or 9 of this Agreement may cause the Company
continuing and irreparable injury to its business which may not be adequately
compensated for by money damages. Consultant therefore agrees that in the event
of any actual or threatened breach of said Paragraphs, the Company shall be
entitled, in addition to any other remedies available to it, to a temporary
restraining order and to preliminary and final injunctive relief against him to
prevent any violations of said Paragraphs.
CONSULTANT HAS CAREFULLY CONSIDERED THE NATURE AND EXTENT OF THE
RESTRICTIONS UPON HIM AND THE RIGHTS AND REMEDIES CONFERRED UPON THE COMPANY
UNDER THIS AGREEMENT, AND HEREBY ACKNOWLEDGES AND AGREES THAT THE SAME ARE
REASONABLE IN BOTH TIME AND TERRITORY, ARE DESIGNED TO PROTECT THE COMPANY FROM
UNFAIR COMPETITION, ARE NO GREATER THAN WHAT IS NEEDED TO PROTECT THE COMPANY
FROM SUCH UNFAIR COMPETITION, DO NOT STIFLE HIS INHERENT SKILL AND EXPERIENCE,
WOULD NOT OPERATE AS A BAR TO HIS SOLE MEANS OF SUPPORT, WOULD NOT PLACE AN
UNDUE HARDSHIP ON HIM, ARE FULLY REQUIRED TO PROTECT THE LEGITIMATE INTERESTS OF
THE COMPANY AND DO NOT CONFER A BENEFIT UPON THE COMPANY WHICH IS
DISPROPORTIONATE TO THE DETRIMENT TO HIM.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
CARDINAL REALTY SERVICES, INC.
By: Mark D. Thompson
Its: Executive Vice President of
Corporate Acquisitions
/s/ Ralph V. Williams
----------------------------
Ralph V. Williams
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