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EXHIBIT 10.16
PRE-OPENING CONSULTING AGREEMENT
THIS PRE-OPENING CONSULTING AGREEMENT (the "Agreement") is made as of the
16th day of June, 1997, by and between The Emmaus Calling, Inc. ("Owner") and
Capital Senior Management 1, Inc. ("Consultant").
WHEREAS, Owner is engaged in the development, marketing, pre-leasing and
other pre-opening duties for a 104 unit assisted living facility located in
Mesquite, Texas (the "Facility") and
WHEREAS, Owner desires to employ Consultant to assist in the marketing and
pre-leasing of the Facility as well as assist in pre-opening and other
operational duties for the Facility during the term herein provided and
Consultant desires to accept such employment.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. RENDITION OF SERVICES
The Consultant agrees to provide professional services to Owner in
accordance with the terms and conditions of this Agreement.
2. SCOPE OF SERVICES
During the term of this Agreement, Consultant shall provide consulting
services to Owner relating to the marketing, lease-up, pre-opening and
other operational activities for the Facility. These services shall
include the following:
A. Operational Services
1. Budget. Consultant shall provide the initial operating
budget within five (5) weeks of execution of this
Agreement.
2. Policy/Procedure Manuals. Consultant shall provide
assistance to Owner in development of policy/procedure
manuals and appropriate forms/systems developed by Owner
that may be required for each department.
3. Inventories. Consultant shall assist Owner in
determining initial equipment, smallwares, and supply and
food inventories for each department of the Facility.
4. Open House. Consultant will provide input/direction to
Owner in effective planning and implementation of the
"open house" festivities that will be performed by Owner.
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5. Hiring. Consultant shall provide assistance to Owner in
interviewing final candidates being considered for key
staff positions, such as Executive Director, (if
applicable), and Department Managers.
6. Financial Accounting Systems. Consultant shall review
and provide input regarding the financial accounting
systems to be purchased or utilized by Owner.
7. Resident Handbook. Consultant shall provide input and
direction to Owner in order for Owner to develop an
effective resident handbook.
8. Staffing Schedules. Consultant shall assist Owner in
determining staffing and hire dates during the
pre-opening process for specific personnel (i.e.,
Department Managers, Housekeepers, etc.).
9. Training. Consultant shall provide assistance to Owner
in determining staff training/orientation programs
provided by Owner.
10. Move-In Schedules. Consultant shall provide assistance
to Owner regarding move-in coordination performed by
Owner.
B. Marketing Services.
1. Marketing Plan. Consultant shall review, evaluate and
make recommendations with regard to the existing
marketing plan and budget. Such review will include
evaluation and analysis of the product, competition and
the Facility's position within the market.
2. Lead Generation. Consultant shall evaluate the existing
components of the Facility's lead generation and make
recommendations to create or improve these sources. The
sources include general advertising, signage (on and off
site), community outreach and public relations, resident
referral programs, special events, special promotions and
direct mail.
3. Brochures. Consultant shall assist the existing staff in
the development of brochures and collaterals for
marketing and lease-up of the Facility.
4. Model Apartments. Consultant shall assist in the
establishment of "model apartments" for the Facility.
5. Hiring and Training. Consultant shall provide input to
Owner in the selection and hiring of marketing staff and
shall also provide input with regard to staff training
and orientation. These responsibilities shall include
assistance in the identification of the Marketing
Director's key responsibilities, the Resident Liaison's
key responsibilities and the Executive Director's
marketing support role.
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6. Sales Policies and Procedures. Consultant will review,
evaluate and make recommendations regarding the
Facility's sales office functions, procedures and
policies.
7. Sales Strategy. Consultant will assist and make
recommendations to Owner with regard to the following
sales strategies: lead management, identifying sales
goals, telephone procedures and guidelines, sales closing
techniques, overcoming prospect's objections, and
procedures for touring the prospect's family and
advisors.
3. SCHEDULE AND TIME OF COMPLETION
This Agreement shall commence six (6) months before the issuance of the
Certificate of Occupancy for the Facility (estimated July 1, 1998), and
terminate on the later of August 31, 1998, or the receipt by Owner of a
Certificate of occupancy for the Facility from the appropriate
governmental officials (the "Term"). Due to the necessary time and
personnel commitment by Consultant, Owner agrees that it will not enter
into any discussions, negotiations or oral or written agreements with any
other consultant regarding the marketing and management of the Facility on
or before the expiration of the Term.
4. OWNERSHIP OF WORK
All reports, schedules and other materials prepared, or in the process of
being prepared, for the services to be performed by Consultant shall be
and are the property of Owner, and Owner shall be entitled to access
thereto, and copies thereof, during the progress of the work. Any such
remaining in the hands of the Consultant or in the hands of any
subcontractor upon completion or termination of the work shall be
forthwith delivered to Owner. If any materials are lost, damaged or
destroyed before final delivery to Owner, the Consultant shall replace
them at its own expense and the Consultant hereby assumes all risks of
loss, damage or destruction of or to such materials. The Consultant may
retain a copy of all material produced under this Agreement for its use in
its general business activities.
5. USE OF SUBCONTRACTORS
Consultant shall not subcontract any services to be performed by it under
this Agreement.
6. CHANGES
Owner may, at any time, by written order, make changes within the scope of
work and services described in this Agreement. If such changes cause an
increase in the budgeted cost of or the time required for performance of
the agreed upon work, an equitable adjustment as mutually agreed shall be
made regarding the compensation as set forth in Section 8. In the event
that Consultant encounters any unanticipated conditions or contingencies
that may affect the scope of work or services and result in an adjustment
in the amount of compensation specified herein, Consultant shall so advise
Owner immediately upon notice of such condition or contingency. The
written notice shall explain the circumstances giving rise to the
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unforeseen condition or contingency and shall set forth the proposed
adjustment in compensation resulting therefrom. Such notice shall be
given to Owner prior to the time that Consultant performs work or services
related to the proposed adjustment in compensation. Any and all pertinent
changes shall be expressed in a written supplement to this Agreement prior
to implementation of such changes.
7. RESPONSIBILITY; INDEMNIFICATION
Consultant and Owner shall indemnify, keep and save harmless the other
party to this Agreement, and its directors, officers, agents and employees
against any and all suits, claims or actions arising out of any injury to
persons or property that may occur, or that may be alleged to have
occurred, in the course of the performance of this Agreement by the
Consultant or Owner as applicable, caused by an act or omission of the
Consultant or Owner as applicable, or its employees, subcontractors or
agents. Consultant and Owner further agree to defend the other party to
this Agreement in any and all such actions, suits or claims and pay all
charges of attorneys and all other costs and expenses arising therefrom or
incurred in connection therewith; and if any judgment be rendered against
one party, or any of the other individuals enumerated above in such
action, then the other party shall, at its expense, satisfy and discharge
the same.
8. COMPENSATION
The Consultant agrees to perform the operational services included in
Section 2 for a sum of Four Thousand and No/100 Dollars ($4,000.00) per
month and the marketing services included in Section 2 for a sum of Four
Thousand and No/100 Dollars ($4,000.00) per month (collectively the
"Compensation"), payable on or before the tenth of each month. A
nonrefundable prepayment of two (2) months' fees shall be paid and deemed
earned by Consultant upon execution of this Agreement.
9. CONSULTANT'S STATUS
Neither the Consultant nor any party contracting with the Consultant shall
be deemed to be an agent or employee of Owner. The Consultant is and
shall be an independent contractor, and the legal relationship of any
person performing services for the Consultant shall be one solely between
said parties.
10. RECORDS
During the term of this Agreement, Consultant shall permit representatives
of Owner to have access to, examine and make copies, at Owner's expense,
of its books, records and documents relating to this Agreement at all
reasonable times.
11. CONSULTANT WARRANTIES
Owner makes no warranties, representations, or agreements, either express
or implied, beyond such as are explicitly stated herein.
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12. OWNER REPRESENTATIVE
Except when approval or other action is required to be given or taken by
the Board of Directors of Owner, the Owner shall designate which officer
or officers shall represent and act for Owner.
13. TERMINATION OF THIS AGREEMENT
X. Xxxxxxxxx Compensation.
If Owner terminates the Agreement without cause prior to the
expiration of the Term or if Consultant terminates this Agreement
during the Term for cause as provided in Section 13 B2. below,
severance compensation in an amount equal to the monthly
Compensation times the number of months remaining in the Term shall
be paid to Consultant upon the effective date of termination. Any
such termination shall be effective upon the expiration of the
ninety (90) day period following the giving of the notice or on such
later date as may be specified in the notice.
B. Termination For Cause.
1. This Agreement may be terminated by Owner for cause for the
following reasons:
(a) In the event of material breach by Consultant of a
material term hereof, which breach is not cured within
thirty (30) days after notice by Owner and such failure
is the result of Consultant's willful misconduct, gross
negligence or unlawful act.
(b) In the event that a petition in bankruptcy is filed by
Consultant or its permitted assignee, or in the event
Consultant or its permitted assignee makes an assignment
for the benefit of creditors or takes advantage of an
insolvency act, by notice to Consultant or assignee, or
if manager becomes insolvent.
(c) In the event that (i) Consultant's or any permitted
assignee's corporate existence is dissolved and the
duties under this Agreement are not assumed by Consultant
or an affiliate of Consultant, (ii) Consultant or any
permitted assignee ceases to do business for any reason,
by notice to Consultant or such assignee and the duties
under this Agreement are not assumed by Consultant or
Consultant's Affiliate.
(d) In the event Owner reasonably determines the intended
project is not economically or commercially viable and
Owner abandons construction activities for a two year
time period.
2. This Agreement may be terminated by Consultant in the event
that Consultant fails to receive reimbursement of reimbursable
expenses or any compensation due Consultant pursuant to the
terms of this Agreement or any other compensation due
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Consultant, and such failure continues for a period of sixty
(60) days after Consultant's written notice thereof to Owner,
however, that this Agreement shall not be so terminated if
Owner pays Consultant all such expenses and compensation then
due and payable on or before the expiration of said sixty (60)
day period.
3. No termination of this Agreement shall affect any obligation
owning by either party hereto to the other which accrued prior
to the effective date of such termination.
C. Covenants Surviving Termination.
The termination of this Agreement shall not terminate the right of
Owner and Consultant to indemnification relating to events occurring
during the term of this Agreement under Section 7.
14. NOTICES
All communications relating to the day-to-day activities of the project
shall be exchanged between Owner and the Consultant.
All other notices and communications deemed by either party to be
necessary or desirable to be given to the other party shall be in writing
and may be given by personal delivery to a representative of the parties
or by mailing the same postage prepaid, addressed as follows:
If to OWNER: The Emmaus Calling, Inc.
0000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
If to CONSULTANT: Capital Senior Management 1, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, President
The address to which mailings may be made may be changed from time to time
by notice mailed as described above. Any notice given by mail shall be
deemed given on the day after that on which it is deposited in the United
States Mail as provided above.
15. ARBITRATION
In the event of any dispute, claim or controversy of any kind between the
parties, concerning this Agreement or the termination of this Agreement,
the matter shall be submitted to arbitration in accordance with rules of
the American Arbitration Association, except that the selection of the
Arbitrator shall be done Selected Arbitrator. The parties jointly shall
agree on an arbitrator. If the parties are unable to agree, in good faith
within a reasonable time, on the selection of an arbitrator, either party
may request appoint of an arbitrator chosen by
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the American Arbitration Association who shall be the Selected Arbitrator.
Such arbitrator shall be limited in his decision to a choice between the
final position as requested by each party. Said arbitration shall be held
in Dallas/Fort Worth, Texas or such other place as is mutually agreeable.
The arbitration decision shall be final and binding on both parties unless
the arbitration is fraudulent or so grossly erroneous as to necessarily
imply bad faith. Costs of arbitration are to be shared by both parties
equally, provided that the arbitrator may choose to award the costs of
arbitration against the losing party if the arbitrator determined that the
final position urged by the losing party was not reasonable.
16. APPLICABLE LAW
This Agreement, its interpretation and all work performed thereunder,
shall be governed by the laws of the State of Texas.
17. BINDING ON SUCCESSORS
All of the terms, provisions and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives.
18. CONFIDENTIALITY
The Parties recognize and acknowledge that during entry upon the
Facility or performance of services contemplated hereby Contractor/Owner,
as the case may be, may come into possession of information which
Owner/Contractor deems is secret, peculiar and proprietary in nature and
that the courtesy provided to Contractor as to any entry upon the
Facility, employment, ability to perform work, or the ability to perform
services for Owner and acceptance by Contractor of such employment is
subject to a mutual agreement between the Parties to keep certain items
and information confidential and not to divulge such to others.
Therefore, the Parties agree any and all information provided by Owner to
Contractor, and any information Contractor may come into possession of as
a result of their observations, work, discussions, or provision of goods
or services upon the Facility or to or for the benefit of Owner of
whatever nature ("Owner Information") is intended to be protected hereby.
Similarly, any and all information provided by Contractor to Owner
concerning Contractor's internal operations, management of Contractor's
facilities, or management by Contractor of third party facilities of
whatever nature ("Contractor Information") is intended to be protected
hereby. (Both Owner Information and Contractor Information may hereafter
be referred to collectively as the "Information"). The Information shall
include but not be limited to facilities, equipment, sources of
information, ideas, plans, proposals, inventions, formulae, client lists,
cost and pricing data, supplier lists, purchaser lists,
business/marketing/financial plans and summaries, and any and all other
information which may be protected hereby, and the Parties agree such
Information is the sole and absolute property of Owner/Contractor as the
case may be. For the purposes of this Agreement, the Information shall be
considered proprietary in nature, Trade Secrets, and/or have a competitive
value such that it may be protected. Accordingly, Contractor shall not
use, disclose, distribute, copy or release the Owner Information, in whole
or in part, to any
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person, company, firm, or other entity without the prior written consent
of Owner. Similarly, Owner shall not use, disclose, distribute, copy or
release the Contractor Information, in whole or in part, to any person,
company, firm, or other entity without the prior written consent of
Contractor. This section shall not apply to information which: (a) is or
becomes public knowledge through a source other than a party hereto or a
third party similarly placed under an obligation to keep such
confidential, and such party hereto is a recipient of such knowledge
through no fault of their own; (b) is or becomes lawfully available,
through no fault, request, or otherwise involving in any way a party
hereto, from a source other than a disclosing party hereto or a person or
entity similarly placed under an obligation of confidentiality; (c) is
disclosed by a party hereto with the other party's prior written approval;
(d) was in the party's possession or was known to such party, without an
obligation to keep it confidential, before such information was disclosed
to such party by the other party hereto; (e) is independently developed in
total by or for a party hereto without in any way reference to and
separate and apart from any information transmitted between the parties;
(f) is lawfully required to be given to a court of competent jurisdiction
or governmental agency, however this exception shall apply only to the
extent limited information must by law be disclosed with no other
alterative being available.
The Parties agree that any breach or threatened breach of this Agreement,
particularly with regard to this Article involving confidentiality and
non-competition by a party hereto may cause the other party(ies)
irreparable harm for which monetary damages may be inadequate. Each party
agrees, therefore, that any other party shall be entitled to an injunction
to restrain the breaching party from the breach or threatened breach of
this Agreement or any part thereof. Nothing herein shall be construed as
preventing a party hereto from pursuing any remedy at law or in equity for
any breach or threatened breach of this Agreement or any portion thereof.
This section shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
OWNER: CONSULTANT
THE EMMAUS CALLING, INC. CAPITAL SENIOR MANAGEMENT 1, INC.
BY: /s/ XXXXXX XXXXXXX BY: /s/ XXXXX X. XXXXXXXX
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ITS: President ITS: Vice President
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