Document:

AMENDED EMPLOYMENT AGREEMENT

AMENDED EMPLOYMENT AGREEMENT

This Amended Employment Agreement (the “Amended Employment Agreement”) is made and entered into this 26th day of June, 1997, by and between MONMOUTH REAL ESTATE INVESTMENT CORPORATION, a Delaware corporation (the “Company”) and EUGENE W. LANDY, an individual (the “Employee”).

W I T N E S S E T H:

WHEREAS, the Company desires to employ the Employee and the Employee desires to be employed by the Company upon the terms and subject to the conditions set forth in this Amended Employment Agreement; and

WHEREAS, in accordance with the recommendations of the Compensation Committee of the Company and the approval of the Board of Directors of the Company at its meeting on March 9, 1997, it was determined to amend the current Employment Agreement dated December 9, 1994 between the Employee and the Company.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1.

Employment.

The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company, upon the terms and subject to the conditions set forth in this Amended Employment Agreement.

Section 2.

Description of Employment.

The Employee is employed as President, Chief Executive Officer and Chairman of the Board of the Company.  The Company shall have the right to appoint a Chief Operating Officer of the Company whose title may be President.  It is agreed that the Employee may also serve as Chairman of the Board of United Mobile Homes, Inc. and as President of Monmouth Capital Corporation.  It is further agreed that Employee may serve as counsel with the law firm of Landy & Landy and as President of Burtenn, Inc.  It is recognized that employment of an individual with the experience and ability of the Employee would require substantially greater compensation than is set forth in this Amended Employment Agreement and, therefore, the only means of acquiring the Employee’s services is that he be permitted to receive compensation by three corporations so that, in effect, three companies are assuming part of the total cost.

Section 3.

Term of Employment.

Unless sooner terminated in accordance with the provisions hereof, the term of this Amended Employment Agreement shall be for a five-year period commencing January 1, 1995 and terminating December 31, 1999.  At each December 31, an additional one year will be added to the term of employment.  Thus, at all times, the Employee will be working on a contract which will provide for three years’ employment.

Section 4.

Place of Employment.

The Employee’s principal place of work shall be located at such offices of the Company as the Board of Directors may, from time to time, determine.

Section 5.

Compensation.

As compensation for all services to be rendered by the Employee under this Amended Employment Agreement, the Company shall pay to the Employee effective January 1, 1997 a base salary of $110,000.00 annually, in such intervals (at least monthly) as salaries are paid generally to other executive officers of the Company.  In addition to the base salary, the Company shall pay to the Employee for services based on performance in 1996 a bonus of $50,000.00.  The bonus will be payable April 15, 1997.  In future years, the Employee will receive a bonus in accordance with the suggested 1997 bonus schedule attached hereto.

The Company shall grant to the Employee stock options for 150,000 shares in 1997, none in the next two years, and 65,000 shares per year thereafter.

As compensation on severance of employment for any reason, the Employee shall be entitled to the payment of $300,000.00, payable $100,000.00 on severance and $100,000.00 on the first and second anniversary of severance,  In addition, an additional transactional severance/bonus will be provided:

In the event of a transaction which exchanges shares of the Company for significant property holdings, or a merger which leads to a significant increase in the market cap of the Company, but results in termination, the following special bonus will be awarded:

Transaction increasing market cap by 100%--grant (not option) of 35,000

shares

Transaction increasing market cap by 200%--grant (not option) of 50,000

shares

Transaction increasing market cap by 300%--grant (not option) of 65,000

shares

Immediate vesting of options.

Benefit continuation for one year. 

In the event of the death of the Employee, the Employee’s designated beneficiary shall be entitled to $500,000.00, $250,000.00 to be paid within thirty (30) days of death, and the balance one (1) year later.

In the event of disability of the Employee, his salary shall continue for a period of three (3) years, payable monthly.

References to salary shall be the current salary or the 1998 salary, whichever is greater.

Section 6.

Benefits.

The Employee shall participate in all health, dental, insurance and similar plans of the Company.  The Employee shall be entitled to five (5) weeks vacation and the same holidays as provided for the other members of the staff.

Section 7.

Pension.

The Employee may elect retirement on reaching the age of sixty-six (66) or after twenty-five (25) years of service (whichever comes first).  Since the Employee has already served twenty-five (25) years, he is eligible for retirement.  The Employee shall be entitled to a pension of $40,000.00 a year for ten (10) years, payable in monthly installments.  In the event of a transaction which results in an increase in the market cap of the Company by 100% and shall also result in the Employee’s retirement, the pension for ten years will be $55,000.00 a year. On the death 

of the Employee, the pension funds shall be paid to the Employee’s designated beneficiary.

It is the intent of the parties to phase in the retirement benefits over a five-year period since the Employee currently does not intend to retire during that period.  This provision shall vest as follows:

First Year

 20% vested 1995

Second Year

 40% vested 1996

Third Year

 60% vested 1997

Fourth Year

 80% vested 1998

Fifth Year

           100% vested 1999

The pension benefits are in addition to all other benefits as provided in Paragraph 5 of this Amended Employment Agreement.

Section 8.

Review of Performance.

The Board of Directors of the Company shall annually review and evaluate the performance of the Employee under this Amended Employment Agreement.

Section 9.

Termination.

This Amended Employment Agreement may be terminated by the Board of Directors of the Company at any time by reason of the death or disability of the Employee or for cause.  A termination with “cause” shall mean a termination of this Amended Employment Agreement by reason of a good faith determination by the Board of Directors of the Company that the Employee (i) failed to substantially perform his duties with the Company (if not due to death or disability), or (ii) has engaged in conduct the consequences of which are materially adverse to the Company, monetarily or otherwise.  “Disability” shall mean a physical or mental illness which, in the judgment of the Board of Directors of the Company after consultation with

the licensed physician attending the Employee, impairs the Employee’s ability to substantially perform his duties under this Amended Employment Agreement as an employee, and as a result of which he shall have been absent from his duties with the Company on a full time basis for six (6) consecutive months.

The termination provisions shall not, in any way, affect the disability, severance, death, or pension benefits or salary continuation as provided for in this Amended Employment Agreement.

Section 10.

Notices.

For the purpose of this Amended Employment Agreement, notices and all other communications provided for in this Amended Employment Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, or by expedited (overnight) courier with an established national reputation, shipping prepaid or billed to sender, in either case addressed to the address last given by each party to the other (provided that all notices to the Company shall be directed to the attention of the Board of Directors of the Company with a copy to the Secretary of the Company) or to such other address as either party may have furnished to the other in writing in accordance herewith.

Section 11.

Life Insurance.

The Company may, at any time after the execution of this Amended Employment Agreement, apply for and procure as owner and for its own benefit, life insurance on the Employee, in such amounts and in such form or forms as the Company may determine.  The Employee shall, at the request of the Company, submit to such medical examinations, supply such information, and execute 

such documents as may be required by the insurance company or companies to whom the Company has applied for such insurance.  The Employee hereby represents to the Company that, to his knowledge, he is in excellent physical and mental condition and is not under the influence of alcohol, drugs or similar substance.

Section 12.

Successors.

This Amended Employment Agreement shall be binding on the Company and any successor to any of its businesses or assets.

Section 13.

Binding Effect.

This Amended Employment Agreement shall inure to the benefit of and be enforceable by the Employee’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

Section 14.

Modification and Waiver.

No provision of this Amended Employment Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer as may be specifically designated by the Board of Directors of the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Amended Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

Section 15.

Headings.

Headings used in this Amended Employment Agreement are for convenience only and shall not be used to interpret its provisions.

Section 16.

Waiver of Breach.

The waiver of either the Company or the Employee of a breach of any provision of this Amended Employment Agreement 

shall not operate or be construed as a waiver of any subsequent beach by either the Company or the Employee.

Section 17.

Amendments.

No amendments or variations of the terms and conditions of this Amended Employment Agreement shall be valid unless the same is in writing and signed by all of the parties hereto.

Section 18.

Severability.

The invalidity or unenforceability of any provision of this Amended Employment Agreement, whether in whole or in part, shall not in any way affect the validity and/or enforceability of any other provision herein contained.  Any invalid or unenforceable provision shall be deemed severable to the extent of any such invalidity or unenforceability.  It is expressly understood and agreed that, while the Company and the Employee consider the restrictions contained in this Amended Employment Agreement reasonable for the purpose of preserving for the Company the good will, other proprietary rights and intangible business value of the Company if a final judicial determination is made by a court having jurisdiction that the time or territory or any other restriction contained in this Amended Employment Agreement is an unreasonable or otherwise unenforceable restriction against the Employee, the provisions of such clause shall not be rendered void but shall be deemed amended to apply as to maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable.

Section 19.

Governing Law.

This Amended Employment Agreement shall be construed and enforced pursuant to the laws of the State of New Jersey.

IN WITNESS WHEREOF, this Amended Employment Agreement has been duly executed by the Company and the Employee as of the date first above written.

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

ATTEST:

By /s/Ernest V. Bencivenga 

     Ernest V. Bencivenga

/s/Louise Green

     Treasurer

Louise Green

Secretary

WITNESS:

             /s/Eugene W. Landy

Eugene W. Landy

/s/Elizabeth Chiarella

            Employee

Elizabeth ChiarellaConverted by EDGARwiz

MONMOUTH CAPITAL CORPORATION

as Issuer

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

and

WILMINGTON TRUST COMPANY

as Trustee

___________________________________________

SECOND SUPPLEMENTAL INDENTURE

DATED AS OF NOVEMBER 20, 2007

___________________________________________

with respect to:

The Indenture governing the

8% Convertible Subordinated Debentures Due 2013 

dated as of October 23, 2003

This SECOND SUPPLEMENTAL INDENTURE, dated as of November 20, 2007 (the “Supplemental Indenture”), is entered into by and among Monmouth Capital Corporation, a New Jersey corporation (the “Company”), Monmouth Real Estate Investment Corporation, a Maryland corporation (“MREIC”), and Wilmington Trust Company, as trustee (the “Trustee”), under an Indenture dated as of October 23, 2003, by and among the Company and the Trustee, as amended by that certain First Supplemental Indenture, dated as of July 31, 2007, by and among the Company, MREIC and the Trustee (as so amended, the “Indenture”), governing the Company’s 8% Convertible Subordinated Debentures Due 2013 (the “Securities”). All capitalized terms used herein shall have the meanings assigned to them in the Indenture, except to the extent such terms are otherwise defined in this Supplemental Indenture or the context clearly requires otherwise.

RECITALS

WHEREAS, the Company has heretofore executed and delivered to the Trustee the Indenture under which the Securities were issued, of which approximately $5,270,000 in aggregate principal amount are outstanding as of the date hereof;

WHEREAS, pursuant to Section 8.01 of the Indenture, the Company, when authorized by a Board Resolution, and the Trustee may enter into one or more supplemental indentures, among other things, to make any provision with respect to matters or questions arising under the Indenture as the Company and the Trustee may deem necessary or desirable, provided such action does not adversely affect the interests of the Holders of Securities in any material respect; and

WHEREAS, the Company has requested that the Trustee execute this Supplemental Indenture in accordance with the Indenture.

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

For good and valuable consideration, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE ONE

AMENDMENT TO INDENTURE

The Conversion Notice included in Exhibit A to the Indenture is hereby amended, restated and replaced with the Conversion Notice attached as Exhibit A hereto.

ARTICLE TWO

MISCELLANEOUS

SECTION 2.01.

Effective Date of This Supplemental Indenture.

This Supplemental Indenture shall be effective as of the date first written above.

1

SECTION 2.02.

Indenture Ratified.

Except as hereby otherwise expressly provided, the Indenture is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.

SECTION 2.03.

Counterparts.

This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

SECTION 2.04.

Trustee Not Responsible.

The recitals contained herein shall be taken as the statements of the Company and the Trustee assumes no responsibility for their correctness.

SECTION 2.05.

Supplemental Indenture is an Indenture.

This Supplemental Indenture is an amendment to and implementation of the Indenture, and the Indenture and this Supplemental Indenture shall be read together from and after the effectiveness of this Supplemental Indenture.

SECTION 2.06.

Governing Law.

This Supplemental Indenture shall be governed by and construed in accordance with the internal laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first above written.

[Remainder of page intentionally left blank]

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	THE COMPANY:

	MONMOUTH CAPITAL CORPORATION

	 
	 
	 
	By:

	        /S/Eugene W. Landy

	 	Name: Eugene W. Landy

	 	Title: Chairman of the Board and President

	MREIC:

	MONMOUTH REAL ESTATE INVESTMENT CORPORATION

	 
	 
	 
	By:

	       /S/Eugene W. Landy

	 	Name: Eugene W. Landy

	 	Title: Chairman of the Board and President

3

		
	THE TRUSTEE:

	WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Trustee

	 
	 
	 
	By:

	         /S/Prital K. Patel

	 	Name:  Prital K. Patel

	 	Title:    Financial Services Officer

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EXHIBIT A

CONVERSION NOTICE

The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or any portion of the principal amount hereof (which is U.S. $1,000 or an integral multiple of U.S. $1,000 in excess thereof, provided that the unconverted portion of such principal amount is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof) below designated, into shares of the common stock, par value $0.01 per share (the “Common Stock”), of Monmouth Real Estate Investment Corporation, a Maryland corporation (“MREIC”), in accordance with the terms of the Indenture referred to in this Security, and directs that such shares, together with a check in payment for any fractional share and any Securities representing any unconverted principal amount hereof, be delivered to and be registered in the name of the undersigned unless a different name has been indicated below.  If shares of Common Stock or Securities are to be registered in the name of a Person other than the undersigned, (a) the undersigned will pay all transfer taxes payable with respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.  Any amount required to be paid by the undersigned on account of interest accompanies this Security.

The undersigned Holder of this Security hereby certifies that, upon conversion of this Security or the portion of the principal amount hereof below designated, the undersigned will not own, directly or indirectly, more than 9.8% of the outstanding shares of Common Stock.  

Shares of Common Stock are subject to restrictions on ownership and Transfer for the purpose of MREIC’s maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended (the “Code”).  Except as otherwise provided pursuant to MREIC’s Charter, no Person may Beneficially Own or Constructively Own Equity Stock in excess of 9.8% (in value or in number of shares of Equity Stock, whichever is more restrictive) of the outstanding Equity Stock of MREIC, with further restrictions and exceptions set forth in the Charter of MREIC.  There may be no Transfer that would cause a violation of the Ownership Limit, that would result in MREIC being Beneficially Owned by fewer than 100 Persons, that would result in MREIC’s being “closely held” under Section 856(h) of the Code, or that would otherwise result in MREIC failing to qualify as a REIT.  Any Person who attempts or proposes to own, Beneficially Own or Constructively Own Equity Stock of MREIC in excess of, or in violation of, the above limitations must notify MREIC in writing at least 15 days prior to such proposed or attempted Transfer to such Person.  If an attempt is made to violate these restrictions on Transfers, (i) any Purported Transfer will be void and will not be recognized by MREIC, (ii) MREIC will have the right to redeem the Stock proposed to be Transferred, and (iii) the shares generally will be automatically converted into and exchanged for shares of Excess Stock, which will be held in trust by the Trustee in part for the benefit of a Charitable Beneficiary.  All capitalized terms in this paragraph have the meanings defined in the Charter of MREIC, a copy of which, including the restrictions on ownership and Transfer, will be sent without charge to each stockholder who directs a request for such information to the Chairman of the Board of MREIC.

o

Check here if the undersigned Holder of this Security is not an “accredited investor” as that term is defined in Rule 501(a) of the Securities Act of 1933, as amended, 17 C.F.R. 230.501(a).

[Remainder of page intentionally blank]

A-1

DATED:  

___________________________________________

__________________________________

Signature(s)

If shares or Securities are to be registered in the name of a Person other than the Holder, please print such Person’s name and address:

__________________________________

(Name)

___________________________________

__________________________________

(Address)

Social Security or other Identification Number, if any:  _______________________

__________________________________

[Signature Guaranteed]

If only a portion of the Securities is to be converted, please indicate:

(1)

Principal amount to be converted: U.S. $___________________

(2)

Principal amount and denomination of Securities representing unconverted principal amount to be issued:

Amount: U.S. $___________________ Denominations:  U.S. $___________________ (U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof, provided that the unconverted portion of such principal amount is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof).

A-2

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