Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

AGREEMENT dated as of May 27, 2015 between PHILIP THOMAS, residing at
______________ (“Executive”), and Long Island Iced Tea Corp., a Delaware
corporation having its principal office at 116 Charlotte Avenue, Hicksville, NY
11801 (“Company”);

 

WHEREAS, Executive is currently employed as Chief Executive Officer of Long
Island Brand Beverages LLC (“LIBB”);

 

WHEREAS, the Company has entered into an Agreement and Plan of Reorganization
(the “Merger Agreement”), dated as of December 31, 2014 and amended as of April
23, 2015, by and among the Company, Cullen Agricultural Holding Corp. (“Cullen
Ag”), Cullen Merger Sub, Inc., LIBB Acquisition Sub, LLC, LIBB and the founders
of LIBB;

 

WHEREAS, the Company desires to enter into an employment agreement with
Executive to take effect upon consummation of the transactions contemplated by
the Merger Agreement (the “Commencement Date”); and

 

WHEREAS, Executive is willing to enter into such employment agreement on the
terms, conditions and provisions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, the parties hereby
agree as follows:

  

 

IT IS AGREED:

 

1.               Employment, Duties and Acceptance.

 

1.1            General. During the Term (as defined in Section 2), the Company
shall employ Executive in the position of Chief Executive Officer of the Company
and such other positions as shall be given to Executive by the Board of
Directors of the Company (the “Board”). In addition, Executive agrees to serve
as Chairman of the Board. All of Executive’s powers and authority in any
capacity shall at all times be subject to the direction and control of the
Company’s Board of Directors. The Board may assign to Executive such management
and supervisory responsibilities and executive duties for the Company or any
subsidiary of the Company, including serving as an executive officer and/or
director of any subsidiary, as are consistent with Executive’s status as Chief
Executive Officer. The Company and Executive acknowledge that Executive’s
primary functions and duties as Chief Executive Officer shall be to be
responsible for the day to day operations of the Company; working with the board
of directors to define long-term strategic initiatives; insuring that directives
from the Board of Directors are implemented to achieve maximum profitability of
the Company’s operations, maximize shareholder value; and overseeing the
operations of the Company and its wholly owned subsidiaries. The Executive’s
duties shall be similar to those customarily performed by comparable officers of
similar companies. The Company also appoints Executive as Chairman and Chief
Executive Officer to all of its subsidiaries.

 

 

 

 

1.2            Full-Time Position. Executive accepts such employment and agrees
to devote substantially all of his business time, energies and attention to the
performance of his duties hereunder. Nothing herein shall be construed as
preventing Executive from making and supervising personal investments, provided
they will not interfere with the performance of Executive’s duties hereunder or
violate the provisions of Section 5.4 hereof.

 

1.3            Location. Executive will perform his duties in or around
Hicksville, New York. Executive shall undertake such occasional travel, within
or outside the United States, as is reasonably necessary in the interests of the
Company.

 

2.               Term. The term of Executive’s employment hereunder shall
commence on the Commencement Date and shall continue until the second
anniversary of the Commencement Date (“Term”) unless terminated earlier as
hereinafter provided in this Agreement, or unless extended by mutual written
agreement of the Company and Executive. This Agreement shall become null and
void in the event of the termination of the Merger Agreement prior to the
consummation of the transactions contemplated thereby. Notwithstanding any
provision in this Agreement to the contrary, this Agreement shall become
effective only upon consummation of the transactions contemplated by the Merger
Agreement. Unless the Company and Executive have otherwise agreed in writing, if
Executive continues to work for the Company after the expiration of the Term,
his employment thereafter shall be under the same terms and conditions provided
for in this Agreement, except that his employment will be on an “at will” basis
and the provisions of Sections 4.4 and 4.6(c) shall no longer be in effect.

 

 

 

 

3.               Compensation and Benefits.

 

3.1            Salary. The Company shall pay to Executive a salary (“Base
Salary”) at the annual rate of $150,000. Executive’s compensation shall be paid
in equal, periodic installments in accordance with the Company’s normal payroll
procedures.

 

3.2            Incentives. For the period from the Commencement Date until
December 31st, 2015, the Executive shall be paid a bonus (“Bonus”) of up to 50%
of the Base Salary. The incentive paid (if any) will be determined by the Board
at their discretion. The Bonus will be paid in cash or stock as per the
recommendation of the Board..

 

3.3            Benefits. Executive shall be entitled to such medical, life,
disability and other benefits as are generally afforded to other executives of
the Company, subject to applicable waiting periods and other conditions, as well
as participation in all other company-wide employee benefits, including a
defined contribution pension plan and 401(k) plan, as may be made available
generally to executive employees from time to time. If the benefits in this
Section 3.3 are not implemented by the date being six (6) months from the
Commencement Date the Executive will accept by way of substitution the sum of
$500.00 per month for the period until the benefits are made available to the
Executive.

 

3.4            Vacation and Sick Days. Executive shall be entitled to twenty
(20) days of paid vacation and five (5) days of paid sick days in each year
during the Term and to a reasonable number of other days off for religious and
personal reasons in accordance with customary Company policy.

 

3.5            Expenses. The Company shall pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by Executive on
business trips and for all other ordinary and reasonable out-of-pocket expenses
actually incurred by him in the conduct of the business of the Company against
itemized vouchers submitted with respect to any such expenses and approved in
accordance with customary procedures.

 

3.6            Stock Options. Subject to approval by the Board, the Company
shall grant Executive an option (“Option”) to purchase 80,000 shares of the
Company’s Common Stock under the Company’s 2015 Long-Term Incentive Equity Plan,
such Option to vest quarterly in equal portions over the Term and have an
exercise price of $3.75. The duration of the Option is for a five year period
ending on the fifth anniversary of the Commencement Date.

 

 

 

 

4.               Termination.

 

4.1            Death. If Executive dies during the Term, Executive’s employment
hereunder shall terminate and the Company shall pay to Executive’s estate the
amount set forth in Section 4.6(a).

 

4.2            Disability. The Company, by written notice to Executive, may
terminate Executive’s employment hereunder if Executive shall fail because of
illness or incapacity to render services of the character contemplated by this
Agreement for six (6) consecutive months. Upon such termination, the Company
shall pay to Executive the amount set forth in Section 4.6(a).

 

4.3            By Company for “Cause”. The Company, by written notice to
Executive, may terminate Executive’s employment hereunder for “Cause”. As used
herein, “Cause” shall mean: (a) the refusal or failure by Executive to carry out
specific directions of the Board which are of a material nature and consistent
with his status as Chief Executive Officer (or whichever positions Executive
holds at such time), or the refusal or failure by Executive to perform a
material part of Executive’s duties hereunder; (b) the commission by Executive
of a material breach of any of the provisions of this Agreement; (c) fraud or
dishonest action by Executive in his relations with the Company or any of its
subsidiaries or affiliates (“dishonest” for these purposes shall mean
Executive’s knowingly or recklessly making of a material misstatement or
omission for his personal benefit); or (d) the conviction of Executive of a
felony under federal or state law. Notwithstanding the foregoing, no “Cause” for
termination shall be deemed to exist with respect to Executive’s acts described
in clauses (a) or (b) above, unless the Company shall have given written notice
to Executive within a period not to exceed ten (10) calendar days of the initial
existence of the occurrence, specifying the “Cause” with reasonable
particularity and, within thirty (30) calendar days after such notice, Executive
shall not have cured or eliminated the problem or thing giving rise to such
“Cause;” provided, however, no more than two cure periods need be provided
during any twelve-month period. Upon such termination, the Company shall pay to
Executive the amount set forth in Section 4.6(b).

 

 

 

 

4.4            By Executive for “Good Reason”. The Executive, by written notice
to the Company, may terminate Executive’s employment hereunder if a “Good
Reason” exists. For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the following circumstances without the Executive’s prior
written consent: (a) a substantial and material adverse change in the nature of
Executive’s title, duties and/or responsibilities with the Company that
represents a demotion from his title, duties or responsibilities as in effect
immediately prior to such change (such change, a “Demotion”); (b) material
breach of this Agreement by the Company; (c) a failure by the Company to make
any payment to Executive when due, unless the payment is not material and is
being contested by the Company, in good faith; or (d) a liquidation, bankruptcy
or receivership of the Company. Notwithstanding the foregoing, no “Good Reason”
shall be deemed to exist with respect to the Company’s acts described in clauses
(a), (b) or (c) above, unless Executive shall have given written notice to the
Company within a period not to exceed ten (10) calendar days of the Executive’s
knowledge of the initial existence of the occurrence, specifying the “Good
Reason” with reasonable particularity and, within thirty (30) calendar days
after such notice, the Company shall not have cured or eliminated the problem or
thing giving rise to such “Good Reason”; provided, however, that no more than
two cure periods shall be provided during any twelve-month period of a breach of
clauses (a), (b) or (c) above. Upon such termination, the Company shall pay to
Executive the amount set forth in Section 4.6(c).

 

4.5            By Company Without “Cause”. The Company may terminate Executive’s
employment hereunder without “Cause” by giving at least thirty (30) days written
notice to Executive. Upon such termination, the Company shall pay to Executive
the amount set forth in Section 4.6(c).

 

4.6            Compensation Upon Termination. In the event that Executive’s
employment hereunder is terminated, the Company shall pay to Executive the
following compensation:

 

(a)          Payment Upon Death or Disability. In the event that Executive’s
employment is terminated pursuant to Sections 4.1 or 4.2, the Company shall no
longer be under any obligation to Executive or his legal representatives
pursuant to this Agreement except for: (i) the Base Salary due Executive
pursuant to Section 3.1 hereof through the date of termination; (ii) all valid
expense reimbursements; (iii) all accrued but unused vacation pay; and (iv) all
earned and previously approved but unpaid Bonuses for any year prior to the year
of termination.

 

 

 

 

(b)          Payment Upon Termination by the Company For “Cause”. In the event
that the Company terminates Executive’s employment hereunder pursuant to Section
4.3, the Company shall have no further obligations to the Executive hereunder,
except for: (i) the Base Salary due Executive pursuant to Section 3.1 hereof
through the date of termination; (ii) all valid expense reimbursements; and
(iii) all unused vacation pay through the date of termination required by law to
be paid.

 

(c)          Payment Upon Termination by Company Without Cause or by Executive
for Good Reason. In the event that Executive’s employment is terminated pursuant
to Sections 4.4 or 4.5, the Company shall have no further obligations to
Executive hereunder except for: (i) six (6) months of Base Salary due Executive
pursuant to Section 3.1; (ii) all valid expense reimbursements; and (iii) all
accrued but unused vacation pay (pro rata for the period to the date of
termination).

 

(d)          Executive shall have no duty to mitigate awards paid or payable to
him pursuant to this Agreement, and any compensation paid or payable to
Executive from sources other than the Company will not offset or terminate the
Company’s obligation to pay to Executive the full amounts pursuant to this
Agreement.

 

5.               Protection of Confidential Information; Non-Competition.

 

5.1            Acknowledgment. Executive acknowledges that:

 

(a)          As a result of his employment with the Company, Executive has
obtained and will obtain secret and confidential information concerning the
business of the Company and its subsidiaries (referred to collectively in this
Section 5 as the “Company”), including, without limitation, financial
information, proprietary rights, trade secrets and “know-how,” customers and
sources (“Confidential Information”).

 

(b)          The Company will suffer substantial damage which will be difficult
to compute if, during the period of his employment with the Company or
thereafter, Executive should enter a business competitive with the Company or
divulge Confidential Information.

 

 

 

 

(c)          The provisions of this Agreement are reasonable and necessary for
the protection of the business of the Company.

 

5.2         Confidentiality. Executive agrees that he will not at any time,
during the Term or thereafter, divulge to any person or entity any Confidential
Information obtained or learned by him as a result of his employment with the
Company, except (i) in the course of performing his duties hereunder, (ii) with
the Company’s prior written consent; (iii) to the extent that any such
information is in the public domain other than as a result of Executive’s breach
of any of his obligations hereunder; or (iv) where required to be disclosed by
court order, subpoena or other government process. If Executive shall be
required to make disclosure pursuant to the provisions of clause (iv) of the
preceding sentence, Executive promptly, but in no event more than 48 hours after
learning of such subpoena, court order, or other government process, shall
notify, confirmed by mail, the Company and, at the Company’s expense, Executive
shall: (a) take all reasonably necessary and lawful steps required by the
Company to defend against the enforcement of such subpoena, court order or other
government process, and (b) permit the Company to intervene and participate with
counsel of its choice in any proceeding relating to the enforcement thereof.

 

5.3         Documents. Upon termination of his employment with the Company,
Executive will promptly deliver to the Company all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies
thereof) relating to the business of the Company and all property associated
therewith, which he may then possess or have under his control; provided,
however, that Executive shall be entitled to retain copies of such documents
reasonably necessary to document his financial relationship with the Company.

 

5.4         Non-Competition. For and in consideration of the transactions
contemplated by the Merger Agreement and the consideration the Executive will
receive as a result thereby, Executive hereby agrees as follows:

 

(a)            Executive shall not during the period of his employment by or
with the Company and for the Applicable Period (defined below), for himself or
on behalf of, or in conjunction with, any other person, persons, company,
partnership, limited liability company, corporation or business of whatever
nature:

 

 

 

 

(i)        engage, as an officer, director, manager, member, shareholder, owner,
partner, joint venturer, trustee, or in a managerial capacity, whether as an
employee, independent contractor, agent, consultant or advisor, or as a sales
representative, in an entity that designs, researches, develops, markets, sells
or licenses products or services that are substantially similar to or
competitive with the business of the Company that is located within seventy-five
(75) miles of any market in which Company currently operates or has plans to do
business in at the time of termination;

 

(ii)       call upon any person who is at that time, or within the preceding
twenty-four (24) months has been, an employee of the Company, for the purpose,
or with the intent, of enticing such employee away from, or out of, the employ
of the Company or for the purpose of hiring such person for Executive or any
other person or entity, unless any such person was terminated by the Company
more than six (6) months prior thereto;

 

(iii)      call upon any person who, or entity that is then or that has been
within one year prior to that time, a customer of the Company, for the purpose
of soliciting or selling products or services in competition with the Company;
or

 

(iv)      call upon any prospective acquisition or investment candidate, on the
Executive’s own behalf or on behalf of any other person or entity, which
candidate was known by Executive to have, within the previous twenty-four (24)
months, been called upon by the Company or for which the Company made an
acquisition or investment analysis or contemplated a joint marketing or joint
venture arrangement with, for the purpose of acquiring or investing or enticing
such entity into a joint marketing or joint venture arrangement.

 

For purposes of this Section 5:

 

·the term “Company” shall be deemed to include the Company, Cullen Ag, LIBB and
any of its respective subsidiaries; and

 

·the term “Applicable Period” shall mean two (2) years from the consummation of
the Merger Agreement.

 

 

 

 

5.5            Injunctive Relief. If Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Section 5.2 or 5.4, the Company
shall have the right and remedy to seek to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Executive that the services being rendered hereunder
to the Company are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to the Company
and that money damages will not provide an adequate remedy to the Company. The
rights and remedies enumerated in this Section 5.5 shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or equity. In connection with any legal action or proceeding arising out of or
relating to this Agreement, the prevailing party in such action or proceeding
shall be entitled to be reimbursed by the other party for the reasonable
attorneys’ fees and costs incurred by the prevailing party.

 

5.6            Modification. If any provision of Section 5.2 or 5.4 is held to
be unenforceable because of the scope, duration or area of its applicability,
the tribunal making such determination shall have the power to modify such
scope, duration, or area, or all of them, and such provision or provisions shall
then be applicable in such modified form.

 

5.7            Survival. The provisions of this Section 5 shall survive the
termination of this Agreement for any reason.

 

6.               Miscellaneous Provisions.

 

6.1            Notices. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when (i) delivered
personally to the party to receive the same, or (ii) when mailed first class
postage prepaid, by certified mail, return receipt requested, addressed to the
party to receive the same at his or its address set forth below, or such other
address as the party to receive the same shall have specified by written notice
given in the manner provided for in this Section 6.1. All notices shall be
deemed to have been given as of the date of personal delivery or mailing
thereof.

  

If to Executive:

 

Philip Thomas

 

 

 

 

If to the Company:

 

Long Island Iced Tea Corp.

116 Charlotte Avenue

Hicksville, NY 11801

 

With a copy in either case to:

 

Graubard Miller

405 Lexington Avenue

New York, New York 10174

Attn: David Alan Miller/Jeffrey M. Gallant

 

6.2            Entire Agreement; Waiver. This Agreement sets forth the entire
agreement of the parties relating to the employment of Executive and is intended
to supersede all prior negotiations, understandings and agreements. No
provisions of this Agreement may be waived or changed except by a writing by the
party against whom such waiver or change is sought to be enforced. The failure
of any party to require performance of any provision hereof or thereof shall in
no manner affect the right at a later time to enforce such provision.

 

6.3            Governing Law. All questions with respect to the construction of
this Agreement, and the rights and obligations of the parties hereunder, shall
be determined in accordance with the law of the State of New York applicable to
agreements made and to be performed entirely in New York.

 

6.4            Binding Effect; Nonassignability. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the Company.
This Agreement shall not be assignable by Executive, but shall inure to the
benefit of and be binding upon Executive’s heirs and legal representatives.

 

6.5            Severability. Should any provision of this Agreement become
legally unenforceable, no other provision of this Agreement shall be affected,
and this Agreement shall continue as if the Agreement had been executed absent
the unenforceable provision.

 

6.6            Section 409A. This Agreement is intended to comply with the
provisions of Section 409A of the Internal Revenue Code (“Section 409A”). To the
extent that any payments and/or benefits provided hereunder are not considered
compliant with Section 409A, the parties agree that the Company shall take all
actions necessary to make such payments and/or benefits become compliant.

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

 

 

 

LONG ISLAND ICED TEA CORP.

 

/s/ James Meehan

By:     James Meehan

Title:   Chief Accounting Officer

 

 

 

/s/ Philip Thomas

PHILIP THOMAS