Document:

ex101.htm

EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 30th day of May, 2012 by and between VANITY EVENTS HOLDING, Inc., a Delaware corporation (the “Company”), and the Investor set forth on the signature page affixed hereto (the “Investor”).

Recitals

A.           The Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and

B.           The Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in this Agreement, securities of the Company as more fully described in this Agreement, a $150,000 principal amount of 8% convertible debenture, in the form attached hereto as Exhibit A (the “Debenture”).

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Definitions.  In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed into.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

 

  

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“Confidential Information” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Debenture” means the 8% Convertible Debenture due, subject to the terms therein, 12 months from their date of issuance, issued by the Company to the Investor hereunder, in the form of Exhibit A attached hereto.

“Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation).

“Irrevocable Transfer Agent Instructions” means the instruction letter, dated as of May 30, 2012, by and between the Company and Olde Monmouth Stock Transfer, in the form attached hereto as Exhibit B.

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“Purchase Price” means One Hundred Fifty Thousand Dollars ($150,000).

“SEC Filings” has the meaning set forth in Section 4.6.

“SEC” means the United States Securities and Exchange Commission.

“Securities” means the Debentures and the Shares.

“Shares” means the shares of Common Stock issuable upon conversion of the Debenture.

 

  

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“Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE Amex LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

 

“Transaction Documents” means this Agreement, the Debenture, and the Irrevocable Transfer Agent Instructions.

“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

2.           Purchase and Sale of the Debenture.  Subject to the terms and conditions of this Agreement, on the Closing Date, the Company shall sell and issue to the Investor, a Debenture in the aggregate principal amount of $150,000 in exchange for the Purchase Price.

 

  

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3.           Closing.  Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investor, the Company shall deliver to the Investor, a Debenture registered in the name of the Investor, and the Investor shall cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing the Purchase Price for the Debenture (the “Closing Date”). The closing of the purchase and sale of the Debenture shall take place at the offices of the Company, or at such other location and on such other date as the Company and the Investor shall mutually agree.

4.           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Investor that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”):

4. 1           Organization, Good Standing and Qualification.  Each of the Company and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.  Each of the Company and its subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to have a Material Adverse Effect.  All of the direct and indirect subsidiaries of the Company are listed on Schedule 4.1 hereto.

4.2           Authorization.  The Company has full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Securities.  The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

4.3           Capitalization.  Schedule 4.3 and/or the SEC Filings (as defined below) sets forth (a) the authorized capital stock of the Company on the date hereof; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company.  All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights.  Except as described on Schedule 4.3 or in the SEC Filings (as defined below), all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim.  Except as described on Schedule 4.3 or in the SEC Filings (as defined below), no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company.  Except as described on Schedule 4.3 or in the SEC Filings (as defined below), there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind.

 

  

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Except as described on Schedule 4.3 or in the SEC Filings (as defined below), the issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

Except as described on Schedule 4.3 or in the SEC Filings (as defined below), the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

4.4           Valid Issuance.  The Debenture has been duly and validly authorized and, when issued and paid for pursuant to this Agreement, shall be free and clear of all encumbrances and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.  Upon the due conversion of the Debenture, the Shares will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.  The Company has reserved a sufficient number of shares of Common Stock for issuance upon the exercise of the Debenture, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

4.5           Consents.  The execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.  Subject to the accuracy of the representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Shares upon due conversion of the Debenture and the sale of the Warrant Shares upon due exercise of the Warrant, and (iii) the other transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of Incorporation or By-laws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investor or the exercise of any right granted to the Investor pursuant to this Agreement or the other Transaction Documents.

 

  

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4.6           Delivery of SEC Filings; Business.  The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-K for its last fiscal year (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”).  The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period.  The Company and its subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

4.7           Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes.

4.8           No Conflict, Breach, Violation or Default.  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Articles of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

4.9           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

4.10           No Directed Selling Efforts or General Solicitation.  Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

4.11           No Integrated Offering.  Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act.

 

  

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4.12           Private Placement.  The offer and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.

5.           Representations and Warranties of the Investor.  The Investor hereby represents and warrants to the Company that:

5.1           Organization and Existence.  Such Investor is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.

5.2           Authorization.  The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

5.3           Purchase Entirely for Own Account.  The Securities to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time.  Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4           Investment Experience.  Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5           Disclosure of Information.  Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities.  Such Investor acknowledges receipt of copies of the SEC Filings.  Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

 

  

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5.6           Restricted Securities.  Such Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

5.7           Legends.  It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(a)           “The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144(i), or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws.”

(b)           If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

5.8           Accredited Investor.  At the time the Investor was offered the Securities, it was, and as of the date hereof it is, and on each date on which it converts the Debenture it will be an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

5.9           No General Solicitation.  Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

5.10           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

6.           Conditions to Closing.

6.1           Conditions to the Investor’s Obligations. The obligation of the Investor to purchase the Debenture at Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:

(a)           The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date.  The Company shall have performed in all material respects all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date.

(b)           The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

 

  

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(c)           No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(d)           No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

(e)           The Company shall have executed and delivered the Irrevocable Transfer Agent Instructions; and

(f)           The Company shall have executed and delivered the Debenture.

6.2           Conditions to Obligations of the Company. The Company's obligation to sell and issue the Debenture at Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a)           The representations and warranties made by the Investor in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Investor shall have performed in all material respects all obligations and conditions herein required to be performed or observed by them on or prior to the Closing Date; and

(b)           The Investor shall have delivered the Purchase Price to the Company.

 

  

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6.3           Termination of Obligations to Effect Closing; Effects.

(a)           The obligations of the Company, on the one hand, and the Investor, on the other hand, to effect the Closing shall terminate as follows:

(i)           Upon the mutual written consent of the Company and the Investor;

(ii)           By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii)           By the Investor if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

(iv)           By either the Company or the Investor if the Closing has not occurred on or prior to May 31, 2012;

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

7.           Survival and Indemnification.

7.1  Survival.  The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

7.2  Indemnification.  The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

7.3  Conduct of Indemnification Proceedings.  Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 7.2, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

 

  

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8.           Miscellaneous.

8.1           Successors and Assigns.  This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company, after notice duly given by such Investor to the Company.  The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2           Counterparts; Faxes.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.

8.3           Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.4           Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

 

  

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If to the Company:

VANITY EVENTS HOLDING, Inc.

1111 Kane Concourse, Suite 304

Bay Harbor Islands, FL  33154

Attn: Lloyd Lapidus, Interim CEO

Fax: _____________

If to the Investor:

FLYBACK, LLC

3363 NE 163rd St, Suite 705

North Miami Beach, FL 33160

Attention: Alexander Karakhanian

Fax: _____________

8.5           Expenses.  The parties hereto shall pay their own costs and expenses in connection herewith.  In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

8.6           Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

8.7           Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

 

  

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8.8           Entire Agreement.  This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

8.9           Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

8.10           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to principles of conflicts of law.  THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS DEBENTURE OR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASIS. Each party hereby submits to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York.  If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement or any of the transactions contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules.  The arbitrator shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.  The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator.  Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

[signature page follows]

  

13

  

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

	The Company: 	VANITY EVENTS HOLDING INC.	 
	 	 	 	 
	 	
By: 

	/s/ Lloyd Lapidus	 
	 	Name:	Lloyd Lapidus	 
	 	Title: 	Interim Chief Executive Officer	 
	 	 	 	 

	The Investor: 	FLYBACK, LLC	 
	 	 	 	 
	 	
By: 

	/s/ Alexander Karakhanian	 
	 	Name:	Alexander Karakhanian	 
	 	Title: 	Managing Member	 
	 	 	 	 

 

 

 

 

 

 

 

 

 

14Exhibit101METRO_ZodyMarkAmendedRestatedEmploymentAgreementfinal

Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
METRO BANCORP, INC. AND
METRO BANK

MARK A. ZODY

EFFECTIVE DATE JUNE 1, 2012

                                                
	
			
	TABLE OF CONTENTS

	 
	 PAGE

	1. Employment and Term of Employment.
	1
	

	2. Services and Duties.
	2
	

	3. Compensation.
	2
	

	4. Plans and Fringe Benefits.
	2
	

	5. Termination by Metro for Cause.
	3
	

	6. Disability Leave and Death.
	3
	

	7. Termination by Metro without Cause.
	4
	

	8. Termination by Executive For “Good Reason”.
	4
	

	9. Compensation for “Change in Control.”.
	5
	

	10. Other Provisions Upon Termination Other Than for Cause or Under Section 1.2
	6
	

	11. Confidential Information, Non-Solicitation and Non-Competition.
	7
	

	12. Successors and Assigns.
	9
	

	13. Assignment.
	10
	

	14. Source of Payment and Timing.
	10
	

	15. Interest.
	11
	

	16. Reimbursement and In-Kind Benefits.
	11
	

	17. Notices.
	11
	

	18. Amendment, Waiver and Termination.
	12
	

	19. General Provisions.
	12
	

    

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT 

This Amended and Restated Employment Agreement (“Agreement”) is dated effective as of       June 1, 2012, by and between METRO BANCORP, INC., a Pennsylvania corporation (“Metro”), and METRO BANK, a Pennsylvania bank and a wholly-owned subsidiary of Metro (“Bank”), and MARK A. ZODY (“Executive”). 

BACKGROUND 

Executive and Metro and Bank entered into an Employment Agreement effective July 1, 2009.  Executive and Metro and Bank now desire to amend and restate the Employment Agreement as hereafter provided.

Executive is employed as Executive Vice President and Chief Financial Officer of Metro and Bank.  The Boards of Directors of Metro and Bank (separately or collectively, the "Board") have determined that the services of Executive in this capacity are valuable to Metro and Bank. Accordingly, the Board wishes to have Executive’s services available to Metro for at least two (2) years and to provide supplemental benefits to Executive should Executive’s employment with Metro terminate under certain circumstances or if Executive should die or become disabled before the termination of this Agreement. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained here, and intending to be legally bound, the parties agree as follows: 

1. Employment and Term of Employment. 
1.1 Metro offers Executive employment, and Executive accepts such employment, subject to all the terms and conditions of this Agreement, for a term of two (2) years beginning on the date hereof and subject to automatic renewal and extension as stated below and to Metro's and Bank’s right to terminate Executive’s employment as stated below. Notwithstanding anything provided to the contrary, on each Anniversary Date of this Agreement, this Agreement and Executive’s employment shall automatically be renewed and extended (upon the same terms and conditions) for a new two (2) year term unless written notice by either party is given pursuant to Section 1.2 below. "Term" means the original two (2) year employment period, as well as any renewed or extended periods as provided for in this Agreement. “Anniversary Date” means June 1, 2013, as well as each annual June 1st thereafter if this Agreement is automatically renewed or extended.  Provided, however, if there is a “Change in Control” as defined in Section 9.1 during the term of this Agreement and prior, neither party has given to the other party written notice of termination as provided in Section 1.2, the Term of this Agreement shall be automatically extended until the second (2nd) year anniversary of the Change in Control.
1.2 Either party may terminate this Agreement on any Anniversary Date of this Agreement by giving to the other party written notice of termination no later than ninety (90) days before any such Anniversary Date in which event the Term of this Agreement shall expire as of the end of the current two (2) year term. 
2. Services and Duties. 
During the Term, Executive shall be employed as Executive Vice President and Chief Financial Officer of Metro and Bank and shall have such powers and duties as may from time to time be prescribed by the respective executive officers and Board of Directors of Metro and Bank. Executive agrees to his continued employment and to devote Executive’s full time and efforts to the business and affairs of Metro, Bank and their subsidiaries, if any, and to use Executive’s best efforts to promote the interests of Metro, Bank and their subsidiaries. 
3. Compensation. 
3.1 Metro shall pay the following compensation to Executive for all services to be rendered by him under this Agreement and for all positions held by him during the Term, payable at regular intervals in accordance with Metro's normal payroll practices now or subsequently in effect:  “base salary” at the rate of $290,000.00 per year, subject to an annual review and such upward adjustments as may be deemed appropriate by the Board or a Board-designated Committee.  The Board or Board-designated Committee may approve an increase in salary for Executive, but shall have no obligation to do so.  For this Agreement, a “year” shall be deemed to commence upon the signing of this Agreement and on January 1 of each subsequent calendar year.  Compensation for a portion of a year shall be pro-rated. 
3.2 During the Term, Metro will reimburse Executive for all expenses incurred by Executive which Metro determines to be reasonable and necessary (in accordance with its normal reimbursement practices now or subsequently in effect) for Executive to carry out Executive’s duties under this Agreement.  

4. Plans and Fringe Benefits. 
4.1 During the Term, Executive shall be entitled to participate in any bonus programs, incentive compensation plans, stock option plans or similar benefit or compensation programs now or hereafter in effect which are generally made available from time to time to executive officers of Metro.  For any period less than a full year, Executive shall receive an amount equal to the prorated portion of the compensation payable pursuant to such plan or program.  Any annual bonus (or prorated portion of an annual bonus) earned and payable to Executive hereunder shall be paid on or after January 1 but not later than March 15 of the calendar year following the calendar year for which the annual bonus (or prorated portion of an annual bonus) is earned.
4.2 During the Term, Executive shall also be entitled to: (a) participate in all fringe benefits as then in effect that are generally available to Metro's salaried officers including, without limitation, family medical, dental and vision insurance programs, hospitalization coverage, life insurance coverage, disability coverage and long-term care insurance; (b) automobile allowance and (c) such other fringe benefits as the Board, or a designated Committee of the Board, shall deem appropriate.
5. Termination by Metro for Cause.
5.1 Metro shall have the right at any time to terminate Executive’s employment, for cause, on thirty (30) days’ prior written notice to Executive.  For this Agreement, the term “for cause” means only the following:
(i) If at any time during the Term, Executive is indicted for, convicted of or enters a plea of guilty or nolo contendere to, a felony, a crime of falsehood or a crime involving fraud, moral turpitude or dishonesty; or 
(ii) If at any time during the Term, Executive willfully violates any of the covenants or provisions of this Agreement including, without limitation, the willful failure of Executive to perform Executive’s duties hereunder or the instructions of the Board after written notice of such instructions (other than any such failure resulting from Executive’s incapacity due to illness or disability) or Executive engages in any conduct materially harmful to Metro's business, and in either case fails to cease such conduct or correct such conduct, as the case may be, within thirty (30) days subsequent to receiving written notice from the Board advising Executive of same (which conduct shall be specifically set forth in such notice).
5.2 If Executive’s employment shall terminate for cause, then Metro shall pay Executive in accordance with the regular payroll practices of Metro, Executive’s full base salary through the date of termination at the rate in effect at the time notice of termination is given and Metro shall have no further obligations to Executive under this Agreement other than to pay Executive such other compensation as may have accrued and be due Executive pursuant to Section 4 above.
6. Disability Leave and Death.
6.1 If Executive becomes disabled while employed during the Term, 

Executive’s employment and this Agreement will not terminate at such time but Executive shall be placed on disability leave until the first to occur of the expiration of  this Agreement or Executive’s recovery from disability, but in no event longer than twenty-nine (29) months.  Metro shall compensate Executive during the disability leave at a rate equal to 70% of Executive’s annual base salary at the time Executive became disabled.  Metro agrees that it will make the payments due under this Section 6.1 on the first day of each month, commencing with the first day of the month following the month in which Executive is determined to be disabled, in an amount equal to 1/12 of 70% of Executive’s annual base salary at the time Executive is determined to be disabled.  Such payments shall be reduced each month, however, by the amount of any disability payments made to Executive under any Metro-sponsored disability insurance plan.  The amount of the reduction under the preceding sentence shall be computed as if Executive had elected to receive monthly payments of disability benefits (regardless of the actual payment frequency).  If Executive becomes disabled as provided in this Section 6, then Executive shall nonetheless continue, after becoming so disabled and until the end of the Term, to be entitled to receive at Metro's expense such group hospitalization coverage, life insurance coverage and disability coverage as is generally made available from time to time to executive officers of Metro, if and to the extent permitted by the respective insurers of such coverage.  Until such time as Executive is determined to be disabled as defined in Section 6.2, Executive shall continue to receive Executive’s full base salary and other compensation and fringe benefits due him under Section 4 above. 
6.2 For purposes of determining Executive’s eligibility for disability leave under this Agreement, Executive shall be deemed to have become "disabled” upon Executive’s inability to perform the duties and services of the character contemplated by this Agreement, because of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months. 
6.3 If Executive dies during the Term while employed hereunder, then Executive’s employment and Executive’s rights to compensation hereunder shall automatically terminate at the close of the calendar week in which death occurs.  Any amount owed to Executive upon Executive’s death shall be paid to the personal representative of Executive’s estate.
7. Termination by Metro Without Cause
If Metro shall terminate Executive’s employment other than for cause or as provided in Section 1.2 above, then:
(i) Metro shall pay to Executive his full base salary through the date of termination in accordance with the regular payroll practices of Metro, and any compensation due him as provided in Section 4 above; and 
(ii) In lieu of any further salary payments to Executive, for a period subsequent to the date of termination, Metro shall pay as severance pay to Executive a lump sum severance payment equal to the amount Executive would have been paid for the remainder of the Term had Executive continued working until the end of Executive’s Term. 
8. Termination by Executive For “Good Reason.”

8.1 For this Agreement, "Good Reason" means (i) that without Executive’s consent:  (a) the nature and scope of Executive’s authority, responsibilities or duties with Metro or Bank or a surviving or successor to Metro are materially reduced to a level below that which he enjoys on the date hereof, (b) the duties and responsibilities assigned to Executive are materially inconsistent with that which he has on the date of this Agreement, resulting in a diminution of Executive’s authority, duties or responsibilities, (c) the salary and fringe benefits which Metro provides on the date of this Agreement or at any time hereafter are materially reduced, (d) Executive’s position or title with Metro or the surviving or successor is reduced from his/her current position or title with Metro, resulting in a material reduction in Executive’s authority, duties or responsibilities or (e) there’s a material change in the geographic location at which Executive must perform the services, provided that such material change results in any relocation or transfer of Metro's principal executive offices to a location more than thirty (30) miles from its location on the date hereof without Executive consent; (ii) Metro materially breaches this Agreement; or (iii) a material breach of this Agreement by any successor to Metro by such successor’s failure or refusal to assume all duties and obligations of Metro under this Agreement
8.2 Executive shall have the right to terminate his employment for “Good Reason” if any of the conditions described in Section 8.1 exists and: 
(a) Prior Written Notice. Executive has given notice to Metro of the existence of the condition(s) described in Section 8.1 within ninety (90) days of the initial existence of the condition(s);  
(b) Failure to Cure. If within a period of thirty (30) days after receipt of such notice (the “Cure Period”), Metro fails to cure, cease or remedy the reason(s) for such termination; and
(c) Separation from Service.  Executive’s separation from service occurs within a period of ninety (90) days following the expiration of the Cure Period.  If Executive’s termination occurs after the expiration of ninety (90) days following the Cure Period, such termination shall not be treated as a termination pursuant to a Good Reason and Executive shall have no right to the payments and benefits described in this Agreement.
 
8.3 Compensation for “Good Reason” Termination.  If Executive shall terminate Executive’s employment for "Good Reason" as provided in this Section 8, then:
(i) Metro shall pay to Executive his full base salary through the date of termination in accordance with the regular payroll practices of Metro and any other compensation due him as provided in Section 4 above; and 
(ii) In lieu of any further salary payments to Executive, for a period subsequent to the date of termination, Metro shall pay as severance pay to Executive a lump sum severance payment equal to the amount Executive would have been paid for the remainder of the Term had Executive continued working until the end of Executive’s Term.  
9. Compensation for “Change in Control.”

9.1 For purposes of this Agreement, a “Change in Control” of Metro means that in any merger, consolidation, purchase or acquisition of stock or similar business transaction Metro is not the surviving corporation and that such “Change in Control” shall be the first to occur of any of the following: (a) any person or group acquires ownership of stock of Metro that, together with stock already held by such person or group (not including in the shares beneficially owned by such person any stock acquired directly from the Company or its affiliates), constitutes more than 50 percent of the total fair market value or total voting power of the stock of Metro; (b) any person or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock possessing 30 percent or more of the total voting power of the stock of Metro; (c) a majority of members of Metro’s Board of Directors is replaced during any 24-month period by directors whose appointment or election is not approved by a majority of the members of Metro’s Board before the date of the appointment or election of any of the “replacement” directors; or (d) any person or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) of assets from Metro that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of Metro immediately before such acquisition(s). For purposes of this Section, “group” is defined or determined pursuant to Treasury Regulation §1.409A-3 paragraph (i)(5)(v)(B).
9.2 Compensation Following a Change in Control.  If a “Change in Control” (as defined in Section 9.1) shall occur during the Term of this Agreement, then Executive  shall be entitled to a "Change in Control Payment" which shall be equal to two (2) times the sum of Executive’s current annual base salary, as defined in Section 3.1 and additional compensation as defined in Section 4.1 of this Agreement, paid during the twenty-four (24) months immediately preceding the Change in Control, the payment of which is subject to this Section 9.2.  The Change in Control Payment shall be paid by Metro in two (2) equal installments, less applicable withholding taxes, with the first installment being paid on the first anniversary of the date of the Change in Control, and the remaining installment being paid on the second successive anniversary of the date of the Change in Control.  Notwithstanding the foregoing, if Executive terminates employment voluntarily or if Executive's employment is terminated by Metro for Cause, in either case prior to the second anniversary of the date of the Change in Control, Executive shall not be entitled to receive, and Metro shall have no further obligation to pay, any remaining unpaid installment(s) of the Change in Control Payment (for purposes of clarity, the foregoing are the only circumstances pursuant to which the Change in Control Payment will not be fully paid to Executive on the respective anniversary dates set forth above).
10. Other Provisions Upon Termination Other Than for Cause or Under Section 1.2
10.1 In addition to the other compensation set forth above, upon termination of Executive’s employment, Executive shall be entitled, following the date of termination, to participate in all Metro medical, disability, hospitalization and life insurance benefits for a period of one (1) year except that should Executive accept subsequent employment during the one (1) year period following the date of termination, continuation of any medical, disability, hospitalization or life insurance benefit will cease to the extent that any such benefit is provided through or by Executive’s subsequent employer.  

10.2 Except as otherwise specifically provided in this Agreement, this Agreement shall not affect or have any bearing on Executive’s entitlement to other benefits under any plan or program providing benefits by reason of termination of employment, provided that such entitlement would be in compliance with or exempt from Section 409A of the Code.
10.3 In the event Executive terminates his employment for Good Reason and the period of ninety (90) days following the expiration of the Cure Period began in one taxable year and ended in the subsequent taxable year, payment to Executive would be made in the second taxable year.
10.4 Anything in this Agreement to the contrary notwithstanding, Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. 
10.5 Upon termination of Executive’s employment, Metro shall have its independent certified public accountant promptly determine the aggregate present value pursuant to Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the "Code"), of all amounts payable to Executive under this Agreement, and of all other amounts payable to Executive upon or by reason of Executive’s termination which are determined in good faith by Metro’s independent certified public accountant to be "parachute payments" (as defined in Section 280G(b)(2) of the Code and the regulations promulgated thereunder) made pursuant to agreements or plans which are subject to Section 280G.  Such determination of present value and of other amounts constituting "parachute payments" is binding; provided that if Executive obtains an opinion of counsel satisfactory to Metro or an Internal Revenue Service ruling to the effect that the method of determining present value was improper or that specified payments did not constitute "parachute payments," calculations will be made in accordance with such opinion or ruling. The determinations pursuant to this Section shall not change the form of payment (other than reduce, if necessary) or delay the payment of amounts due Executive under this Agreement.  In the event the aggregate present value of all benefits under this Agreement and other "parachute payments" is equal to or in excess of 300% of Executive’s "base amount" as defined in Section 280G(b)(3)(A) and the regulations thereunder, Executive waives the right to "parachute payments" sufficient to reduce the present value of all such payments below 300% of the "base amount."  If any reduction in payments is required pursuant to this Section, payments under this Agreement and all other amounts payable to Executive upon or by reason of Executive’s termination shall be reduced proportionately.  If it is established pursuant to a final determination of a court of competent jurisdiction or an Internal Revenue Service proceeding that, notwithstanding the good faith of Executive, Metro and Metro’s independent certified public accountant  in applying the terms of this Section 10, the aggregate "parachute payments" paid to or for Executive’s benefit are in an amount that would result in any portion of such "parachute payments" not being deductible by Metro or any affiliate by reason of Section 280G of the Code, then Executive shall have an obligation to pay Metro upon demand an amount equal to the sum of (i) the excess of the aggregate "parachute payments" paid to or for Executive’s benefit without any portion of such "parachute payments" not being deductible by reason of Section 280G of the Code and (ii) interest on the amount set forth in clause (i) above at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of Executive’s receipt of such excess until the date of such payment.
11. Confidential Information, Non-Solicitation and Non-Competition. 

11.1 Executive recognizes and acknowledges that during the course of his employment with Metro and/or the Bank Executive has acquired and/or may subsequently acquire privileged and confidential information concerning Metro’s or its affiliates’ current and prospective customers, their methods and ways of doing business, their intellectual property, their plans and goals for future activities, and other confidential or proprietary information belonging to Metro or its affiliates or relating to Metro’s or its affiliates’ affairs (collectively referred to herein as the “Confidential Information”).  Executive further acknowledges and agrees that the Confidential Information is the property of Metro and the Bank and that any misappropriation or unauthorized use or disclosure of the Confidential Information would constitute a breach of trust causing irreparable injury to Metro, and it is essential to the protection of Metro and its goodwill and to the maintenance of Metro’s competitive position that the Confidential Information be kept secret and not be disclosed to others or used to Executive’s own advantage or the advantage of others.  Accordingly Executive covenants and agrees that:
 (i) Executive will not, during the Term of Executive’s employment or at any subsequent time, except with the express prior written consent of the Board, directly or indirectly disclose, communicate or divulge to any Person, or use for the benefit of any Person, any Confidential Information.
(ii) Executive will not, during the Term of Executive’s employment, except with the express prior written consent of the Board, directly or indirectly, whether as employee, owner, partner, consultant, agent, director, officer, shareholder or in any other capacity, engage in or assist any Person to engage in any act or action which Executive, acting reasonably, believes or should believe would be harmful or inimical to the interests of Metro. Nor will Executive directly or indirectly, acting alone or in conjunction with others, disparage or criticize Metro or Bank or any future Metro banking subsidiary, or any of their respective present or future directors, officers, employees, agents or attorneys.
11.2 Executive agrees that following termination of Executive’s employment: 

(i) Executive will not, except with the express prior written consent of the Board, solicit any Metro employees or officers to leave Metro to accept employment by Executive or Executives’ new employer; and 

(ii) Executive will not, except with the express prior written consent of the Board, solicit or encourage any customers of Metro or any of its affiliates to cease doing business with Metro or its affiliates and/or to transfer any or all of their business relationships to any institution which Executive may found or to Executive's new employer.
11.3 (A) Executive covenants and agrees that Executive will not, except with the express prior written consent of the Board, in any capacity (including, but not limited to, owner, partner, shareholder, consultant, agent, employee, officer, director or otherwise), directly or indirectly, for Executive’s own account or for the benefit of any Person, establish, engage or participate in or otherwise be connected with any commercial banking business which conducts business in any geographic area in which Metro and its subsidiaries is then conducting such business except that the foregoing shall not prohibit Executive from owning as a shareholder less than 5% of the outstanding voting stock of an issuer whose stock is publicly traded. 

(B) The provisions of Section 11.3(A) shall be applicable commencing on the date of this Agreement and ending on one of the following periods, as applicable: 
(i) If this Agreement is terminated by Metro in accordance with the provisions of Section 1.2 of this Agreement, the effective date of termination of this Agreement; 
(ii) If Executive voluntarily terminates his employment one year following the effective date of termination of this Agreement; or 
(iii) If this Agreement is terminated in accordance with the provisions of either Section 7, Section 8 or Section 9, six (6) months following the effective date of termination of this Agreement; provided however, that if Metro is prohibited by any governmental agency regulating the affairs of Metro or Bank from paying Executive, in whole or in part, the severance pay described herein, then the provisions of Section 11.3(A) shall end on the effective date of termination of this Agreement. 
11.4 The parties agree that any breach by Executive of any of the covenants or agreements contained in this Section 11 will result in irreparable injury to Metro for which money damages could not adequately compensate Metro and therefore, in the event of any such breach, Metro shall be entitled (in addition to any other rights and remedies which it may have at law or in equity) to have an injunction issued by any competent court enjoining and restraining Executive and/or any other Person involved from continuing such breach. The existence of any claim or cause of action which Executive may have against Metro or any other Person (other than a claim for Metro's breach of this Agreement for failure to make payments hereunder) shall not constitute a defense or bar to the enforcement of such covenants. In the event of any alleged breach by Executive of any of the covenants or agreements contained in this Section 11, Metro shall continue any and all of the payments due Executive under this Agreement until such time as a Court shall enter a final and unappealable order finding such a breach; provided, that the foregoing shall not preclude a Court from ordering Executive repay such payments made to him for the period after the breach is determined to have occurred or from ordering that payments hereunder be permanently terminated in the event of a material and willful breach. 
11.5 If any portion of the covenants or agreements contained in this Section 11, or the application hereof, is construed to be invalid or unenforceable, the other portions of such covenant(s) or agreement(s) or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 11 is held to be unenforceable because of the area covered, the duration thereof, or the scope thereof, then the court making such determination shall have the power to reduce the area and/or duration and/or limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. 
11.6 For purposes of this Section 11, the term "Metro" shall include Metro, any successor of Metro under Section 12 hereof, and all present and future direct and indirect subsidiaries and affiliates of Metro including, but not limited to, Bank. 
12. Successors and Assigns. 

This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of Metro which will acquire, directly or indirectly, by merger, consolidation, purchase, or otherwise, all or substantially all of the assets of Metro, and shall otherwise inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. Upon the death of Executive any payments or benefits otherwise due Executive hereunder shall be paid to or be for the benefit of Executive’s legal representatives. Nothing in the Agreement shall preclude Metro from consolidating or merging into or with or transferring all or substantially all of its assets to another Person. In that event, such other Person shall assume this Agreement and all obligations of Metro in this Agreement. Upon such a consolidation, merger, or transfer of assets and assumption, the term "Metro," as used in this Agreement, shall mean such other Person and this Agreement shall continue in full force and effect. 
13. Assignment. 
Neither this Agreement nor any rights to receive payments hereunder shall be voluntarily or involuntarily assigned, transferred, alienated, encumbered or disposed of, in whole or in part, without Metro's prior written consent and approval, and shall not be subject to anticipation, levy, execution, garnishment, attachment by, or interference or control of, any creditor.
14. Source of Payment and Timing. 
14.1 All payments provided under this Agreement shall be paid in cash from the general funds of Metro, no special or separate fund shall be required to be established and Executive shall have no right, title or interest whatsoever in or to any investment which Metro may make to aid Metro in meeting its obligations hereunder except to the extent that Metro shall, in its sole and absolute discretion, choose to designate any of its rights it may have under one or more life insurance policies it may obtain to cover any of its obligations under this Agreement. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or fiduciary relationship between Metro and Executive or any other Person. 
14.2 Subject to Section 10.3, all payments due Executive under Sections 7 and 8 above shall be made not later than the thirtieth (30th) day following the date of termination of employment.  It is provided, however, that, if, at the time of Executive’s termination of employment with Metro or Bank, Metro has stock which is publicly traded on an established securities market and Executive is a “specified employee” (as defined in Section 409A of the Code) and it is necessary to postpone the commencement of any payments or benefits otherwise payable pursuant to this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under Section 409A of the Code, then Metro shall postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) that are not otherwise paid within the short-term deferral exception under Section 409A of the Code and are in excess of the lesser of two (2) times (i) Executive’s then-annual compensation or (ii) the limit on compensation then set forth in Section 401(a)(17) of the Code, until the first payroll date that occurs after the date that is six months following Executive’s “separation of service” with Metro or Bank (within the meaning of such term under Section 409A of the Code).  The accumulated postponed amount shall be paid in a lump sum payment within ten days after the end of the six-month period.  If Executive dies during the 

postponement period prior to the payment of postponed amount, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within 60 days after the date of Executive’s death.
15. Interest. 
In the event any benefits due to Executive are not paid when due hereunder, Executive shall be entitled (in addition to Executive’s other rights and remedies) to interest on the past due amounts at a rate equal to two percentage points above the prime rate charged from time to time by Bank, such interest to commence on the date a benefit was due hereunder. 
16. Reimbursements and In-Kind Benefits. 
16.1 Generally. 

All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that:

(i) any reimbursement shall be for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement);

(ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year;

(iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred; 

(iv) the right to in-kind benefits shall not extend beyond the last day of Executive’s second taxable year following Executive’s termination of employment; and 

(v) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

16.2 Reimbursement of Enforcement Expenses.

If Metro fails to pay or provide Executive any of the amounts due him under this Agreement or fails to provide Executive with any of the other benefits due him under this Agreement, and provided Metro does not cure any such failure within thirty (30) days after having received written notice from Executive of such failure, Executive shall be entitled to full reimbursement from Metro for all costs and expenses (including reasonable attorneys’ fees and costs) incurred by Executive in enforcing his rights under this Agreement. 
17. Notices. 
All notices, requests, demands and other communications hereunder shall be 

in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice:
If to Metro, to:
Metro Bank
3801 Paxton Street
Harrisburg, PA 17111
Attn: Gary L. Nalbandian, President

If to Executive:
MARK A. ZODY
___________________
______________, PA __________

and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice. 

18. Amendment, Waiver and Termination.   
No amendment, waiver or termination of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced. Any written amendment, waiver or termination hereof executed by Metro and Executive (or Executive’s legal representatives) shall be binding upon them and upon all other Persons, without the necessity of securing the consent of any other Person including, but not limited to, Executive’s spouse, and no Person shall be deemed to be a third party beneficiary under this Agreement except to the extent provided under Section 12.1 above.
19. General Provisions. 
19.1 This Agreement constitutes the entire agreement between the parties concerning its subject matter, and supersedes and replaces all prior agreements between the parties.
 19.2 Bank or any other subsidiary of Metro may make payments to Executive thereunder in lieu of payments to be made by Metro, and to the extent such payments are so made, Metro shall be released of its obligations to make such payments. 
19.3 The benefits provided under this Agreement shall be in addition to and shall not affect the proceeds payable to Executive’s beneficiaries under group life insurance policies which Metro may be carrying on Executive’s Life. 
19.4 "Person" as used in this Agreement means a natural person, joint venture, corporation, sole proprietorship, trust, estate, partnership, cooperative, association, non-profit organization or any other legal entity.

19.5 This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement. 
l9.6 Except as otherwise expressly stated in this Agreement, no failure on the part of any party to this Agreement to exercise and no delay in exercising any right, power or remedy under this Agreement shall operate as a waiver; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 
19.7 Metro and Executive consent to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and the United States District Court for the Middle District of Pennsylvania in any and all actions arising hereunder and irrevocably consent to service of process as set forth in Section 15 above. 
19.8 The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions of this Agreement. 
19.9 This Agreement shall be governed and construed and the legal relationships of the parties determined in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts executed and to be performed solely in the Commonwealth of Pennsylvania. 
19.10 This Agreement is contingent upon any required approval of the Federal Deposit Insurance Corporation.
19.11 This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption from Section 409A, and shall in all respects be administered in accordance with Section 409A. Executive’s termination of employment under this Agreement shall be interpreted in a manner consistent with the separation from service rules under Section 409A.  For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment and the right to a series of payments under this Agreement shall be treated as a right to a series of separate payments.  In no event shall Executive, directly or indirectly, designate the calendar year of a payment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

SIGNATURE PAGE FOR MARK A. ZODY AMENDED AND RESTATED 
EMPLOYMENT AGREEMENT 
METRO BANCORP, INC. AND METRO BANK

	
			
	 
	 
	METRO BANCORP, INC.

	 
	 
	 

	/s/ Cherie L. Kuta
	 
	By: /s/ Gary L. Nalbandian

	Attest
	 
	Name: Gary L. Nalbandian

	 
	 
	Title: Chairman and Chief Executive Officer

	 
	 
	 

	 
	 
	METRO BANK

	 
	 
	 

	/s/ Cherie L. Kuta
	 
	By: /s/ Gary L. Nalbandian

	Attest
	 
	Name: Gary L. Nalbandian

	 
	 
	Title: Chairman and Chief Executive Officer

	 
	 
	 

	 
	 
	EXECUTIVE:

	/s/ Percival B. Moser, III
	 
	/s/ Mark A. Zody

	Witness
	 
	Mark A. Zody

            
567496v1

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