EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and effective as of the
30th day of January, 2015, by and between ROBERTS REALTY INVESTORS, INC., a
Georgia corporation (the “Company”) and CHARLES S. ROBERTS (“Employee”).

 

WHEREAS, the Company, Roberts Properties Residential, L.P, a Georgia limited
partnership (together with the Company, the “Seller Parties”) and A-III
Investment Partners LLC, a Delaware limited liability company (the “Purchaser”)
have entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”),
dated as of November 19, 2014, pursuant to which, among other things, (i) on the
date hereof, the Purchaser has purchased from the Company, and the Company has
issued and sold to the Purchaser, 8,450,704 shares (the “Closing Shares”) of
common stock, $.01 par value per share, of the Company, (ii) the Company has
agreed, in general terms and subject to the terms and conditions of the Stock
Purchase Agreement (including Section 1.3 thereof), to issue additional shares
of Common Stock to the Purchaser if, as a result of a post-closing true-up that
takes into account, among other things, the actual aggregate net sale proceeds
received by the Company for its four Legacy Properties, the adjusted net asset
value of the Company is less than the estimated aggregate net asset value
determined as of the Closing Date (the “True-up”), and (iii) the Company will
grant to Purchaser a warrant to purchase up to $38 million of additional shares
of Common Stock at a purchase price per share that is determined after giving
effect to the True-Up; and

WHEREAS, as an essential element of the willingness of the Seller Parties to
agree to the True-up, the Stock Purchase Agreement provides that the Company and
Employee shall enter into this Agreement to provide that Employee shall
supervise the disposition by the Seller Parties of the Legacy Properties,
subject to the terms and conditions of this Agreement; and

WHEREAS, Employee is willing to assume the duties provided below to achieve the
business goals of the Seller Parties and the Purchaser as reflected in the
True-up if and only if he has the broad authority described below;

NOW, THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:

 1. Condition of Employment; Title, Duties and Authority.

  (a) The Company agrees to employ Employee, and Employee accepts such
employment, subject to the terms and condition of this Agreement. Employee shall
be an officer of the Company and shall have the title of Executive Vice
President. Employee shall conduct a marketing process (which may, but shall not
be required in all cases to, include the use of third party commercial real
estate brokers) with respect to the sale of the following properties that are
currently owned by the Company (the “Legacy Properties”): North Springs,
Northridge, Highway 20 and Bradley Park. Employee shall be responsible for the
marketing process, including positioning the properties for sale, identifying
buyers, and negotiating terms of sale that are customary for similarly situated
properties. All sales shall be subject to approval by the Board of Directors of
the Company, including by a majority of the independent members of the Board of
Directors of the Company, which approval shall not be unreasonably withheld or
delayed, subject to their fiduciary duties. The Company acknowledges that
Employee shall not be required to, and in fact will not, devote his full-time
business attention to his duties and responsibilities hereunder.

 

 

  (b) Employee shall keep the Company’s Chief Executive Officer informed,
through telephone calls and emails, on a regular basis (and in any event no less
frequently than bi-weekly), of the status of the marketing process with respect
to the Legacy Properties. Employee shall provide copies to the Chief Executive
Officer (and any other officer of the Company designated by the Chief Executive
Officer) of the following written communications to the extent that Employee
deems them to be material: term sheets, letters of intent, indications of
interest, offers, due diligence requests, responses to due diligence requests
and other material written communications with potential purchasers.

  (c) Without the express prior written consent of the Chief Executive Officer
and, if applicable, the prior approval of the Board of Directors, which consent
or approval shall not be unreasonably withheld or delayed, subject to their
fiduciary duties, Employee shall not be authorized to enter into, on behalf of
the Company or any of its affiliates, any agreement, contract, term sheet,
letter of intent, indication of interest or other binding or non-binding
agreement with a potential buyer of a Legacy Property with respect to any
potential sale of a Legacy Property, and Employee shall promptly provide the
Chief Executive Officer copies of all such documents once they are signed by
Employee on behalf of the Company.

  (d) Employee is expressly authorized, without the prior written consent of the
Chief Executive Officer or the prior approval of the Board of Directors, to
engage, on behalf of the Company or any of its affiliates, any service provider,
vendor, legal counsel, consultant, civil engineer, environmental consultant,
architect, land planner, broker, surveyor, photographer, marketing firm, website
designer or developer or other third party as Employee deems appropriate,
necessary or helpful in selling the Legacy Properties, so long as such
engagements are on terms that are commercially reasonable and do not, when taken
together with all other Selling Costs (as such term is defined on Exhibit A
hereto), cause the aggregate Selling Costs to exceed $810,362 (the “Budgeted
Selling Costs”). In that regard, Employee is authorized to retain, on behalf of
the Company or any of its affiliates, without the need for any further approval
by the Chief Executive Officer, the services of employees of Roberts Properties,
Inc. and Roberts Properties Construction, Inc. (the “Roberts Companies”) to
assist with the sale of the Legacy Properties, including assisting Employee in
negotiating letters of intent and sales contracts in that regard, providing
potential buyers with due diligence materials, responding to requests by
potential buyers, reviewing the closing documents, closing the sales and other
related matters. The Company shall pay for such services of employees of the
Roberts Companies in accordance with the Company’s current reimbursement
arrangement with the Roberts Companies, and such reimbursements shall be part of
the Selling Costs. Employee shall promptly provide the Chief Executive Officer
copies of all agreements engaging third parties as described in this Section
1(d) once they are signed by Employee on behalf of the Company.

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  (e) Employee shall provide to the Company monthly statements of payment and
reimbursement obligations and other Selling Costs incurred by Employee on behalf
of the Company in accordance with this Agreement, together with copies of
invoices, receipts and other reasonable documentation, and the Company shall pay
or reimburse such amounts within 30 days after Employee provides such
documentation to the Company. For the avoidance of doubt, Employee shall not
have the right to bind the Company under any of the contractual arrangements
referenced in Section 1(d) above or otherwise, to incur any costs or to obligate
the Company to pay any amounts if and to the extent that any such contractual
arrangements, costs or amounts, when taken together with all other Selling
Costs, cause the aggregate Selling Costs to exceed the Budgeted Selling Costs.

  (f) The Company acknowledges that Employee’s business location shall be
metropolitan Atlanta and, although Employee may be required to travel from time
to time in the course of performing his duties for the Company, Employee shall
not be required to relocate his residence or his place of business outside of
the metropolitan Atlanta area.

  2. Term and Termination.

  (a) Term; Termination. The term of this Agreement shall commence on the date
hereof and, unless sooner terminated as hereinafter provided, shall continue
until the first (1st) anniversary of the date hereof (the “Term”).
Notwithstanding the foregoing, this Agreement shall terminate earlier than the
first (1st) anniversary of the date hereof in the event any of the following
occurs prior to such first (1st) anniversary: (i) the death of Employee or
long-term disability of Employee; (ii) termination of this Agreement by the
Company for Cause in accordance with Section 2(b) below; or (iii) the closing of
the sale of all of the Legacy Properties. Even if all of the Legacy Properties
have not been sold by the first (1st) anniversary of the date hereof, this
Agreement and Employee’s employment with the Company shall nonetheless terminate
on the first (1st) anniversary of the date hereof, and the Company’s other
officers shall immediately assume responsibility for the disposition of any
remaining Legacy Properties.

 

  (b) Termination for Cause. The Company shall have the right to terminate
Employee’s employment at any time prior to expiration of the Term upon delivery
of written notice of termination for Cause (as defined below) to Employee (which
notice shall specify in reasonable detail the basis upon which such termination
is made), such employment to terminate immediately upon delivery of such notice
(provided that Employee has received any prior notice and opportunity to cure
required by this Section 2(b)), unless otherwise specified by the Board of
Directors of the Company, if a majority of the independent members of the Board
of Directors determines that Employee’s employment hereunder shall be terminated
for Cause. “Cause” shall be deemed to have occurred if Employee: (i) has
misappropriated, stolen or embezzled funds or property from the Company or an
affiliate of the Company, (ii) has been convicted of or entered a plea of “nolo
contendere” for a felony which, in the reasonable opinion of a majority of the
independent members of the Board of Directors, brings Employee or the Company
into disrepute or is likely to cause material harm to the Company’s (or any
affiliate of the Company) business, financial condition or prospects, (iii) has
materially violated or breached any material provision of this Agreement and
failed to cure such breach or violation to the reasonable satisfaction of the
Board of Directors within 30 days after receipt of written notice of such breach
or violation, or (iv) has violated any material law or regulation.

 

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  (c) Effects of Termination. Upon the expiration of the Term or the earlier
termination of Employee’s employment hereunder, all rights and obligations of
the parties arising under this Agreement shall immediately cease, except as
follows:

 

  (i) if this Agreement is terminated prior to expiration of the one-year Term
because of (1) the death of Employee or long-term disability of Employee; or (2)
the earlier closing of the sale of all of the Legacy Properties, the Company
shall (A) remain obligated to continue to pay the remaining amount of Employee’s
Base Salary (as defined in Section 3(a) below) to Employee or Employee’s estate,
as applicable, as if he had been employed through the first (1st) anniversary of
the date hereof, which amount shall be paid to Employee or his estate, as
applicable, in a lump sum not later than thirty (30) days after the termination
of this Agreement, (B) promptly reimburse Employee under Section 3(b) below for
all reasonable business expenses incurred through the date of termination of
this Agreement and (C) promptly reimburse the Roberts Companies for all amounts
that were incurred under, and in accordance with the terms and conditions of,
Section 1(d) above through the date of termination of this Agreement; and

 

  (ii) Sections 4, 5, 6, 7 and 8 of this Agreement shall survive its termination
or expiration.

 

  3. Compensation and Expenses.

  (a) Base Salary. During the Term, the Company shall pay Employee a base salary
at the rate of $250,000 per annum (the “Base Salary”), payable on a monthly
basis in equal monthly installments in accordance with customary payroll
policies and procedures, including withholding requirements.

  (b) Business Expenses. During the Term, Employee shall be authorized to incur,
and shall be reimbursed for, all reasonable out-of-pocket business expenses
incurred by Employee in connection with the performance of his duties and
responsibilities under this Agreement. “Reasonable” is defined as that which
enables Employee to perform his duties for the Company (including meals and
travel) comfortably but not extravagantly. Employee shall provide to the Company
receipts or other reasonable documentation of such expenses for any individual
expenditure over $25, and the Company shall reimburse Employee for such expenses
promptly and in any event not later than 30 days after Employee provides such
documentation to the Company. Employee shall provide the Chief Executive Officer
with a monthly written summary of all reimbursable business expenses incurred by
Employee.

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  (c) Employee Compensation and Related Expenses Not Part of Budgeted Selling
Costs. Employee and the Company acknowledge that the Base Salary and related
employment expenses incurred by the Company in connection with the employment of
the Employee under this Agreement, and all business expenses incurred personally
by Employee that are payable or reimbursable by the Company under this
Agreement, shall not be Selling Costs that count towards the aggregate Budgeted
Selling Costs under this Agreement, but such costs and expenses shall be deemed
to be Selling Costs for purposes of the True-Up under the Stock Purchase
Agreement. (Payments to the Roberts Companies shall not be deemed to be business
expenses incurred personally by Employee.)

 4. Severability. In the event that any portion of this Agreement is determined
    to be invalid or unenforceable for any reason, such determination shall in
    no way affect the enforceability of other portions of the Agreement, which
    shall remain in full force and effect. To the extent that a court or other
    body construing this Agreement can render it enforceable by modifying any
    clause, while continuing to preserve the intent of the parties to protect
    their legitimate business interests, then the parties intend that the court
    or other body shall do so.
 5. Assignment. The rights and obligations of the Company under this Agreement
    shall inure to the benefit of the successors and permitted assigns of the
    Company. Neither party may assign its rights or obligations under this
    Agreement without the prior written consent of the other party; provided,
    however, that the Company may assign its rights and obligations hereunder to
    any successor in connection with any sale, transfer or other disposition of
    all or substantially all of the Company’s assets, stock, or business,
    whether by merger, share exchange, asset sale, consolidation or otherwise.
 6. Governing Law. The validity and effect of this Agreement and the rights and
    obligations of the parties hereto shall be construed and determined in
    accordance with Georgia law excluding the “conflicts of law” rules thereof.
    Each party hereby expressly consents to the exclusive jurisdiction and venue
    of the state and federal courts located in Atlanta, Georgia for any lawsuit
    filed by either party arising from or relating to this Agreement.
 7. Waiver of Jury Trial. The parties waive any right to a trial by jury in any
    action or proceeding to enforce or defend any rights under this Agreement or
    under any instrument, document or agreement delivered in connection herewith
    or hereafter and agree that any such action or proceeding shall be tried
    before a court and not before a jury.

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 8.  Entire Agreement. This Agreement contains the entire agreement of the
     parties with respect to the subject matter hereof and supersedes and merges
     all prior agreements and discussions between the parties in that regard.
     This Agreement may not be changed or amended orally but only by an
     agreement in writing signed by both the parties.
 9.  Opportunity to Consult Counsel. Employee acknowledges receipt of a copy of
     this Agreement prior to the date hereof and also acknowledges having had
     ample time to consult counsel of Employee’s choice concerning the terms and
     conditions of this Agreement.
 10. Counterparts. This Agreement may be executed in one or more counterparts,
     all of which shall be considered one and the same agreement, and shall
     become effective when one or more counterparts have been signed by each
     party and delivered to each other party. Copies of executed counterparts
     transmitted by telecopy, telefax or other electronic means shall be
     considered original executed counterparts for purposes of this Section,
     provided that receipt of copies of such counterparts is confirmed.

[Signatures are on the following page]

 

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IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement
as of the day and year first written above.

 

THE COMPANY:

 

ROBERTS REALTY INVESTORS, INC.

 

 

 

By:  /s/ Charles S. Roberts    

Name: Charles S. Roberts

Title: CEO and President

 

Address for Notices:

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com

 

 

EMPLOYEE:

 

CHARLES S. ROBERTS

 

 

 

   /s/ Charles S. Roberts    

 Signature

 

 

Address for Notices:

Charles S. Roberts

375 Northridge Road

Suite 330

Atlanta, Georgia 30350

Telephone: (770) 394-6000

Email: cr@robertsproperties.com

 

[Signature page to Employment Agreement]

 

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Exhibit A

SELLING COSTS

 

Defined terms used in this Exhibit A and not defined shall have the meanings set
forth in the Employment Agreement to which it is attached.

For purposes of this Exhibit A and the Employment Agreement, “Selling Costs”
means (i) sales commissions, and (ii) all costs incurred by the Company or by
Employee on behalf of the Company in connection with the performance of
Employee’s duties under the Employment Agreement and the marketing and sale of
the Legacy Properties (excluding Base Salary, reimbursable business expenses
incurred by Employee, and other employment expenses incurred by the Company in
connection with the employment of Employee), including but not limited to
(A) costs incurred in connection with the engagement of any service provider,
vendor, legal counsel, consultant, civil engineer, environmental consultant,
architect, land planner, broker, surveyor, photographer, marketing firm, website
designer or developer or other third party, (B) transfer taxes, (C) all costs
incurred by the Company in connection with the services of employees of the
Roberts Companies to assist with the sale of the Legacy Properties and
(D) miscellaneous sales and closing costs.

 

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