CONSULTING
AGREEMENT
THIS CONSULTING AGREEMENT
(“Agreement”) is made and entered into this 2nd day of
December 2008, by and between American Rental Management Company, a
Delaware corporation (the “Company”), and Edwin L.
Kelly (the “Consultant”).
RECITALS
WHEREAS, the Company is a wholly-owned
subsidiary of American Community Properties Trust
(“ACPT”) and provides management and other services to
ACPT;
WHEREAS, the Consultant has been an executive
officer of the Company for numerous years and therefore possesses
unique and valuable experience and expertise relating to the
Company;
WHEREAS, in order to provide continuity of
management and to take advantage of the Consultant’s
expertise, ACPT, through the Company, wishes to secure the services
of the Consultant, and the Consultant wishes to provide such
services, in accordance with the terms and subject to the
conditions provided herein;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties agree to be bound by the
following terms and conditions:
A. The
Company hereby engages the Consultant, and the Consultant hereby
agrees, to serve as principal business consultant to ACPT and the
Company, and shall be available to provide consulting services as
requested from time to time by the Board of Trustees of ACPT (the
“Board”) or the Chief Executive Officer. The
Consultant shall report directly to the Chief Executive Officer and
shall render such services to ACPT as are customarily rendered by a
consultant, including, but not limited to, advising ACPT on general
business strategies, strategic opportunities, and other matters
related to the business of ACPT and its affiliates.
B. The
Consultant shall not be required to provide more than 250 hours of
services during each year that this Agreement is in
effect.
The term of this Agreement (the
“Term”) shall commence on the date hereof, shall
continue for a term of one year (“Term”), and shall
renew automatically on a year to year basis unless Consultant or
the Company gives the other notice of his/its intent not to renew
this Agreement at least thirty (30) days prior to the date on which
employment would otherwise renew for a successive one year period
under this Agreement. Notwithstanding the preceding, the
Agreement may be terminated as set forth herein:
A. If the
Consultant dies, the Consultant’s engagement and this
Agreement shall terminate automatically upon such date of death and
the Company shall have no further obligations hereunder, subject to
Section IV.B.
B. In the
event that the Consultant becomes Disabled during the Term, the
Company at its option may terminate Consultant’s engagement
and this Agreement, in which case the Company shall have no further
obligations hereunder. For purposes of this Agreement,
the Consultant shall become “Disabled” at such time as
the Consultant has a physical or mental condition, verified by a
physician designated by the Company, which in the judgment of the
Board prevents the Consultant from carrying out one or more of the
material aspects of his assigned duties for at least 120
consecutive days or for more than one hundred twenty (120)
cumulative days in any 12 month period. The Consultant
agrees, upon request of the Board, at a time convenient to the
Consultant during a 30-day period designated by the Board, to
submit to any medically reasonable examination by a physician
designated by the Company.
C. The
Company may, at its election, terminate the Consultant’s
engagement and this Agreement for cause. For purposes of
this Agreement, “cause” shall be defined as
(1) Consultant’s conviction of, or plea of nolo
contendere to, a felony or any crime involving dishonesty,
disloyalty, fraud, or moral turpitude; (2) Consultant’s
material breach of any material obligation in this Agreement; (3)
Consultant’s engaging in conduct constituting a material
breach of any fiduciary duty to the Company or ACPT; or
(4) any act of dishonesty, fraud, theft, misrepresentation, or
embezzlement by Consultant that harms or injures the Company or
ACPT; In the event the Company elects to terminate the
Consultant’s engagement for cause, such termination may be
made effective immediately, and no advance notice shall be
required. The decision to terminate the
Consultant’s engagement for cause must be approved by the
Board.
D. Either
the Company or the Consultant may elect to terminate this Agreement
without cause. In such a case, advance written notice of
termination shall be delivered by the terminating party to the
non-terminating party at least thirty (30) days prior to the end of
the Term. In addition, if the Company terminates the
engagement without cause or the Consultant terminates the
engagement for “Good Reason,” the Company agrees to pay
the Consultant the remaining fee payments due hereunder for the
balance of the Term. The decision to terminate the
Consultant’s engagement without cause must be approved by the
Board.
For purposes of
this Agreement, the Consultant shall have terminated the Agreement
for a Good Reason if the Consultant terminates the Agreement within
30 days of prior written notice to the Company following the
occurrence of (1) the Company instructing the Consultant, despite
his written objection delivered to the Board, to take any action
which is in violation of any law, ordinance or regulation or would
require any act of dishonesty or moral turpitude; or (2) the
Company committing a material breach of any of the provisions of
this Agreement, provided that the Company fails to remedy those
circumstances within thirty (30) days of its receipt of
notice.
E. In the
event that ACPT sells all, or substantially all, of its assets,
this Agreement shall terminate automatically upon the date of such
sale, and neither party shall have any further obligations
hereunder, subject to Section IV.B.
III.
DUTIES AND
RESPONSIBILITIES
A. During
the period of his engagement hereunder, the Consultant shall not,
without the written consent of the Board or a person authorized by
the Board, disclose to any person other than as required by law or
court order, or other than to an authorized employee of the Company
or its affiliates, or to a person to whom disclosure is necessary
or appropriate in connection with the performance by the Consultant
of his duties as an Consultant of ACPT and the Company any
Confidential Information obtained by him while serving as a
consultant to the Company with respect to any of ACPT’s or
its affiliates’ products, services, customers, suppliers,
marketing techniques, methods or future plans. For
purposes of this Agreement, “Confidential Information”
means information that is not generally known or available to the
public and which is used, developed or obtained by ACPT and its
affiliates, including the Company, relating to its business and the
businesses of its clients, vendors, agents, brokers or customers,
including, but not limited to: business and marketing strategies;
distribution channels; products or services; fees, costs and
pricing structures; marketing information; advertising and pricing
strategies; analyses; reports; computer software, including
operating systems, applications and program listings; flow charts;
manuals and documentat
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