Document:

ex101.htm

Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (“Agreement”) made and entered into as of July 30, 2012, by and between Energy Edge Technologies Corporation (“Buyer”) and Dutchess Private Equities Fund, Ltd. (“Seller”).

This Agreement sets forth the terms and conditions upon which the Seller is selling to the Buyer and the Buyer is purchasing from the Seller twenty million eight hundred eighty thousand two hundred and eighty (20,880,280) unrestricted shares (“Shares”) of common stock of Union Dental Holdings, Inc., a publicly traded Florida corporation with ticker symbol UDHI (“Company”) and a warrant to purchase up to  thirty-nine million six hundred thousand (39,600,000) shares of common stock of the Company (“Warrant”).

In consideration of the mutual agreements contained herein, the parties hereby agree as follows:

I. SALE OF THE SHARES.

1.01           Shares and Warrant being Sold. Subject to the terms and conditions of this Agreement, the Seller is selling the Shares and the Warrant to the Buyer.

1.02           Purchase Price. “The Purchase Price” of the Shares and the Warrant shall be eighty thousand dollars ($80,000) cash (“First Payment”), and eighty thousand dollars ($80,000) cash or one hundred thousand dollars ($100,000) worth of Buyer’s unrestricted shares of common stock paid within 45 days after the UDHI Shares have been cleared on behalf of EEDG and are eligible for sale through a broker (“Final Payment”).

1.03           Settlement. The Seller will arrange for the Shares and the Warrant, properly endorsed and medallion guaranteed to the Buyer, to be delivered to Vincent & Rees (the “Escrow Agent”).  Upon delivery of the shares and warrant, the Buyer will deliver the First Payment to the Escrow Agent at:

Vincent & Rees

Attn: David Rees or Chase Chandler

175 S. Main Street

15th Floor

Salt Lake City, UT 84111

The First Payment shall remain in escrow until the Shares have been deposited into the Buyer’s brokerage account and are eligible for sale in a broker’s transaction, upon such time the First Payment will be immediately delivered to the Seller.  In the event the Shares are not cleared for sale through a broker and it is apparent that the Shares will not clear, the Buyer shall return the Shares to the Escrow Agent and the Escrow Agent shall return the Shares and the Warrant to the Seller and the First Payment to the Buyer and this Agreement shall be declared null and void. In the event the Shares clear and are eligible for sale through a broker, the Buyer will deliver the Final Payment to the Seller within forty five days from such date, and the Escrow Agent shall deliver the Warrant to the Buyer immediately thereafter.

1.04           Closing. The Closing of the transactions shall take place on July 30, 2012, or at such other date and time as the parties may mutually agree in writing.

 

 

1.05           Delivery by the Seller. At the Closing, the Seller shall deliver the Shares and the Warrant to the Escrow Agent.

 

  

  

  

II. RELATED TRANSACTIONS.

2.01           Finders. The Seller and the Buyer acknowledge, respectively, that there were no finders with respect to the transaction contemplated herein that either is obligated to.

 

III. REPRESENTATIONS AND WARRANTIES OF SELLER.

The Seller hereby represents and warrants as follows:

3.01           Organization, Capitalization, etc.  To the best of the Seller’s knowledge, the Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida, and is qualified in no other state.

3.02           Authority; No Violation. The execution and delivery of this Agreement by the Seller, and the consummation of the transactions contemplated hereby have been duly authorized. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of the Certificate of Incorporation or bylaws of the Seller or the Company, or of any contract, commitment, indenture, other agreement or restriction of any kind or character to which the Seller is a party or by which the Seller is bound. 

3.03           Disclosure. No representation or warranty by the Seller contained in this Agreement, and no statement contained in any instrument, list, certificate, or writing furnished to the Buyer pursuant to the provisions hereof or in connection with the transaction contemplated hereby, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading or necessary in order to provide a prospective purchaser of the business of the Company with proper information as to the Company and its affairs.

3.04           Non-Affiliate.  The Seller is not currently, and has not been for the last 90 days, an officer, director, 10% or more shareholder, or in any other way an affiliate of the Company.  The Seller is not a person or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

3.05           Unrestricted Shares.  The Shares are validly issued with no adverse claims pertaining to the Shares.  The Shares are free trading, free and clear of any encumbrance and will not be retracted at a later date.  It is understood that neither the Company, nor the Company’s transfer agent will take any action to cancel or encumber the Shares.  The Seller hereby indemnifies and holds harmless the Buyer and any brokerage and/or clearing firm working with the Buyer against any all claims with respect to the Shares and any reliance on any representations made by the Seller.

3.06           No Additional Shares or Rights.  The Seller (including any affiliates or associated companies) represents that it has no other shares or ownership of the Company besides the Shares and the Warrant.  Further, the Seller has no additional rights, options, warrants, agreements, or understandings to acquire shares of the Company besides the Shares and the Warrant.

3.07           No Additional Buying or Selling Company stock.  The Seller and the Seller’s broker (the “Broker”) agree that upon the execution of this Agreement, no additional shares of the Company’s common stock will be bought or sold or caused to be bought or sold by the Seller (or any of the Seller’s affiliates of associated companies) for a minimum of six (6) months following the execution of this Agreement.

  

  

  

3.08           Limitation on Resale of Shares.  As part of the consideration and to induce Buyer to enter into this Agreement, Seller agrees to enter into a separate Lock-up and Leak-out agreement with Energy Edge as of even date herewith, which among other things, will prohibit the Seller from ever selling an amount of Energy Edge’s common stock that would cause the Seller to be more than twenty percent (20%) of the daily trading volume.

IV. REPRESENTATIONS AND WARRANTIES BY BUYER.

Buyer hereby represents and warrant as follows:

4.01           Authority; No Violation. The execution and delivery of this Agreement by the Buyer and the consummation of the transactions contemplated hereby by Buyer has been duly authorized.  Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of any contract, commitment, indenture, other agreement or restriction of any kind or character to which any of the individual Buyer is a party or by which any of the individual Buyer is bound.

4.02           Representations Regarding the Acquisition of the Shares.

 

 

(a)           The Buyer understands the speculative nature and the risks of investments associated with the Company and confirms that it is able to bear the risk of the investment;

(b)           The Buyer has had the opportunity to ask questions of the Seller and receive additional information about the Company, or could acquire it without unreasonable effort or expense necessary to evaluate the merits and risks of any such purchase.  Further, the Buyer has been given an opportunity to question the Seller and receive related documentation to the purchase;

(c)           The Buyer has sufficient knowledge and experience in financial and business matters, and is sufficiently familiar with investments of the type represented by the Shares, including familiarity with previous private and public purchases of speculative and restricted securities, that it is capable of evaluating the merits and risks associated with purchase of the Shares;

(d)           In evaluating the merits of the purchase of the Shares, Buyer has relied solely on his, her or its own investigation concerning the Company and has not relied upon any representations provided by the Seller;

(e)           The Buyer and its principals have not: (a) been party to any adverse proceeding brought by the SEC or any similar state agency; (b) any material criminal proceeding regarding the purchase or sale of securities or other crimes, excluding only misdemeanor crimes; or (c) filed bankruptcy proceedings within the past five years;

(f)           The Buyer is able to pay his, her or its debts as they become due, and the Buyer (a) is not currently insolvent; (b) has made no general or other assignment for the benefit of creditors; and (c) is not party to any material proceeding that would have an adverse effect on the Buyer’s assets; and

(g)           The Purchase Price that the Buyer is utilizing to purchase the Shares and the Warrant being acquired hereunder were earned or acquired by or paid to the Buyer for lawful purposes.

 

 V. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.

  

  

  

5.01           Survival of Representations. All representations, warranties, and agreements made by any party in this Agreement or pursuant hereto shall survive the execution and delivery hereof and any investigation at any time made by or on behalf of any party.

VI. ADDITIONAL CONDITIONS TO CLOSING

6.01           Obligation of Buyer to Close. The Buyer shall not be obligated to close this transaction unless it is satisfied, following reasonable investigation, that all of the representations of Seller as of the date of execution of this Agreement and as of the date of Closing under this Agreement are true and correct in all material respects.

6.02           Obligation of Seller to Close.  The Seller shall not be obligated to close this transaction unless it is satisfied, following reasonable investigation, that all of the representations of the Buyer as of the date of execution of this Agreement and as of the date of Closing under this Agreement are true and correct in all material respects.

VII. SURVIVAL AND INDEMNIFICATION

7.01           Survival. The representations, warranties and covenants made by the parties in this Agreement and in any other certificates and documents delivered in connection herewith shall survive the Closing and shall apply until the first anniversary of the Closing Date.

VIII. MISCELLANEOUS

8.01           Expenses. Each of the parties shall bear its own expenses incurred in conjunction with the Closing hereunder.

 

8.02           Further Assurances. From time to time, at the request of the Buyer and without further consideration, the Seller shall execute and transfer such documents and take such action as the Buyer may reasonably request in order to effectively consummate the transactions herein contemplated.

8.03           Parties in Interest. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the heirs, beneficiaries, representatives, successors, and assigns of the parties hereto.

8.04           Prior Agreements; Amendments. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof. This Agreement may be amended only by a written instrument duly executed by the parties hereto or their respective successors or assigns.

8.05           Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretations of this Agreement.

8.06           Confidentiality. Each party hereby agrees that all information provided by the other party and identified as “confidential” will be treated as such, and the receiving party shall not make any use of such information other than with respect to this Agreement. If the Agreement shall be terminated, each party shall return to the other all such confidential information in their possession, or will certify to the other party that all of such confidential information that has not been returned has been destroyed.

 

8.07           Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed (registered or certified mail,

  

  

  

postage prepaid, return receipt requested) to the parties at their address specified on the signature page hereto, with a copy sent as indicated on the signature page.

8.08           Counterparts. This Agreement may be executed simultaneously in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.09           Applicable Law. This Agreement shall be governed by, and construed in accordance with the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Buyer, the Seller and the Company on the date first above written.

	
BUYER:

 

 

_________________________________

Robert Holdsworth

President, Energy Edge Technologies Corp.

 

 

 

	
Buyer’s Address for Notices:

 

1200 Route 22 East

Suite 2000

Bridgewater, NJ 08807

 

 

With a copy to:

 

__________________________

__________________________

__________________________

 

	
 

 

 

 

SELLER:

 

Dutchess Private Equities Fund, Ltd.

 

 

 
 

/s/ Douglas Leighten                                 

Name: Douglas Leighten

Title: Director

	
 

 

 

 

Seller’s Address for Notices:

 

__________________________

__________________________

__________________________

 

 

With a copy to:

 

__________________________

__________________________

__________________________ex101.htm

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), originally effective as of August 29, 2002 (the “Effective Date”), and amended and restated as of October 16, 2005 and again as of December 23, 2008 and assigned by CompuCredit Corporation to and assumed by CompuCredit Holdings Corporation effective June 30, 2009, is amended and restated again effective as of August 1, 2012, by and between CompuCredit Holdings Corporation, a Georgia corporation (“CompuCredit” or “the Company”), and J. Paul Whitehead III, an individual resident of the State of Georgia (“Employee”).  This Agreement amends, restates and supersedes the employment agreement between the Company and the Employee effective as of the Effective Date and amended and restated effective as of December 23, 2008 (the “Previous Employment Agreement”).

 

WITNESSETH:

WHEREAS, in consideration of, among other things, CompuCredit’s reappointment of Employee to the position of Chief Financial Officer, Employee agreed to devote all (or such lesser portion as Employee and CompuCredit from time to time mutually agree) of Employee’s full working time to the business efforts of CompuCredit; and

 

WHEREAS, the parties amended and restated the employment agreement, effective as of August 29, 2002, in its entirety into the Previous Employment Agreement to set forth the terms and conditions of Employee’s continued employment with CompuCredit, effective as of December 23, 2008.

 

NOW, THEREFORE, for and in consideration of the Employee’s employment with CompuCredit and the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CompuCredit and Employee hereby agree as follows:

 

1.           Relationship Re-established.  Upon the terms and subject to the conditions of this Agreement, CompuCredit hereby employs Employee to serve as the Chief Financial Officer of CompuCredit, and, as such, Employee shall direct and manage the financial affairs of CompuCredit and shall have such other executive level powers and duties as shall be otherwise conferred on him by CompuCredit’s Board of Directors or Chief Executive Officer consistent with those generally associated with that position (collectively, the “Services”).  Employee shall perform the Services at the direction of CompuCredit’s Chief Executive Officer.  Employee hereby agrees to devote all (or such lesser portion as Employee and CompuCredit from time to time mutually agree) of his full business time, attention, energy, value and skill to performing his obligations and duties hereunder and to engage in no business activities that would interfere with his responsibilities to CompuCredit hereunder, except for those specific activities as the Chief Executive Officer or Board of Directors of CompuCredit shall approve in advance in writing; provided, however, that nothing herein contained shall restrict or prevent Employee from personally and for his own account owning and dealing in stocks, bonds, securities, real estate, commodities, or other investment properties for his own benefit or the benefit of his family.  Further, nothing herein contained shall restrict or prevent Employee from serving on the Board of Directors of a non-profit entity or any entity that the Chief Executive Officer approves of in writing.  Employee shall perform his obligations and duties hereunder diligently, faithfully and to the best of his abilities and, in doing so, shall comply with applicable CompuCredit policies and procedures.  If there is any conflict between such policies and procedures and this Agreement, this Agreement shall control.

 

2.           Term; Termination.

 

2.1           Term of Employment.  The term of Employee’s employment under this Agreement shall commence on the date hereof and shall continue automatically month by month upon the terms and conditions contained herein until terminated in accordance with Section 2.2.  The period of time Employee is employed by CompuCredit shall be collectively referred to as the “Term.”

 

2.2           Termination of Employment.

 

(a)           This Agreement shall automatically and immediately terminate upon the death of Employee.

 

  

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(b)           Either party may terminate this Agreement upon the Complete Disability of Employee. "Complete Disability", as used herein, shall mean the inability of Employee by reason of any physical or mental impairment to perform fully and effectively, as determined in the reasonable judgment of a competent physician selected in good faith by CompuCredit, the Services on a full time basis for an aggregate of 90 days in any period of 180 consecutive days.

 

(c)           In addition to any other rights or remedies available to CompuCredit, CompuCredit may, in its sole discretion, terminate Employee’s employment for Cause effective immediately upon delivery of written notice to Employee.  In this Agreement, “Cause” means the reasonable, good faith determination of a majority of the members of CompuCredit’s Board of Directors that:

 

(i)           (A) Employee has committed an act constituting fraud, deceit or intentional material misrepresentation with respect to CompuCredit or any client, customer or supplier of CompuCredit; (B) Employee has embezzled funds or assets from CompuCredit or any client or customer of CompuCredit; (C) Employee has engaged in willful misconduct or gross negligence in the performance of the Services; (D) Employee has failed to comply in a material way with any of the terms of Section 1 or Section 9 hereof;

 

(ii)           Employee has breached or defaulted in the performance of any other material provision of this Agreement and has not cured such breach or default to CompuCredit’s reasonable satisfaction within thirty (30) days after receiving notice thereof; or

 

(iii)           Employee’s conduct is materially detrimental to the reputation of CompuCredit which Employee has not cured (if such conduct is curable in Employer’s reasonable opinion) to CompuCredit’s reasonable satisfaction within ten (10) days after receiving notice thereof.

 

(d)           In addition to any other rights or remedies available to Employee, Employee may, in his sole discretion, terminate Employee’s employment for Good Reason effective immediately upon delivery of written notice to CompuCredit.  In this Agreement, “Good Reason” shall mean the occurrence of any one of the following events:

 

(i)           The nature, extent and amount of coverage under CompuCredit’s Directors and Officers, Errors and Omissions insurance policy decreases to a level that is below what would be reasonable and customary (other than due to the actions of Employee), provided however, that such coverage shall not be below a minimum threshold of $5,000,000;

 

(ii)           Employee’s status or role within CompuCredit is demoted in any of the following ways:

 

(A)           Employee no longer maintains the title of Chief Financial Officer of CompuCredit;

 

(B)           Employee retains the title of Chief Financial Officer but is not held out by CompuCredit either internally and/or externally as the principal or chief financial officer of CompuCredit responsible for the financial matters of CompuCredit;

 

(C)           a material diminution in the scope and nature of Employee’s duties and responsibilities or the assignment of duties and responsibilities inconsistent with those generally associated with the chief financial officer position;

 

(D)           Employee no longer reports directly to the Chief Executive Officer of CompuCredit;

 

(E)           a material reduction by CompuCredit of Employee’s base annual salary, incentive compensation or a material reduction of Employee’s benefits (taken as a whole) as in effect immediately prior to such reduction, but only to the extent that such reduction is not related to any reduction in the portion of Employee’s full business time, attention, energy, value and skill that he and CompuCredit from time to time mutually agree that Employee will provide to CompuCredit; or

 

(F) A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Employee is required to report.

 

(iii)           CompuCredit’s requirement that Employee be based anywhere other than Metropolitan Atlanta, Georgia.  CompuCredit shall be deemed to have required Employee to be based somewhere other than Metropolitan Atlanta, Georgia if the Employee is required to spend more than two days per week on a regular basis at a business location not within the Atlanta, Georgia metropolitan area.

 

  

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(iv)           the failure of a successor of CompuCredit to assume in writing this Agreement contemporaneously to becoming a successor of CompuCredit; or

 

(v)           CompuCredit has breached or defaulted in the performance of any material provision of this Agreement and has not cured such breach or default to Employee’s reasonable satisfaction within thirty (30) days after receiving notice thereof.

 

(e)           The date on which Employee’s employment expires or terminates for any reason is referred to herein as the “Termination Date.”

 

3.           Compensation.

 

(a)           During the Term, CompuCredit shall pay Employee as compensation for the Services an annual salary as set forth on Exhibit A hereto and incorporated herein by reference.  Such compensation shall be payable in substantially equal bi-weekly installments or in such other installments or at such other intervals as may be the policy of CompuCredit from time to time, but no less frequently than monthly, and shall be subject to such deductions and withholdings as are required by law or policies of CompuCredit in effect from time to time.  Employee’s salary per annum may from time to time be increased but not decreased.  CompuCredit shall review Employee’s compensation hereunder at least on an annual basis.

 

(b)           Notwithstanding anything to the contrary herein, if this Agreement is terminated by CompuCredit for Cause or by Employee without Good Reason (except in the case of death or Complete Disability of Employee), CompuCredit shall be released of its obligation to pay further compensation or benefits to Employee as set forth in this Agreement and any restricted stock grants and options which have not vested shall not become vested; provided, however, subject to Section 21 below, that Employee shall be entitled to receive (i) any salary already earned under Section 3(a) as set forth above, and (ii) a portion of any previously agreed upon bonus (prorated based upon full months worked by Employee) for any fiscal year in which Employee worked for CompuCredit for at least six (6) months within thirty (30) days of the Termination Date; provided, further, that in the case of a termination of employment by Employee without Good Reason (except in the case of death or Complete Disability of Employee), Employee shall have the earlier of (i) two (2) months after the Termination Date or (ii) the original expiration date of the options (disregarding any earlier expiration based on termination of Employee’s employment) to exercise any then vested stock options held by Employee.

 

(d)           If this Agreement terminates as a result of the Complete Disability of Employee, CompuCredit shall be released of its obligation to pay further compensation or benefits to Employee as set forth in this Agreement and any restricted stock grants or options which have not vested as of the Termination Date shall not become vested; provided, however, that Employee shall be deemed to be One Hundred Percent (100%) vested in all restricted stock, provided, further, subject to Section 21 below, that Employee shall be entitled to receive (i) his salary under Section 3(a) above for a period of three (3) months payable in substantially equal bi-weekly installments or in such other installments or other intervals as may be the policy of CompuCredit on the Termination Date, but no less frequently than monthly, as set forth above, (ii) a portion of any previously agreed upon bonus (pro rated based upon full months worked by Employee) for any fiscal year in which Employee worked for CompuCredit for at least six (6) months within thirty (30) days of the Termination Date; and (iii) the ability to exercise any then vested options held by Employee until the earlier of (i) six (6) months after the Termination Date or (ii) the original expiration date of the options (disregarding any earlier expiration based on termination of Employee’s employment).

 

(e)           If this Agreement terminates as a result of the death of Employee, CompuCredit shall be released of its obligation to pay further compensation or benefits to Employee as set forth in this Agreement and any restricted stock grants or options which have not vested shall not become vested; provided, however, that Employee shall be deemed to be One Hundred Percent (100%) vested in all restricted stock, provided, further, subject to Section 21 below, that Employee (or his estate, as applicable) shall be entitled to receive (i) any salary already earned under Section 3(a) above as set forth above, (ii) a portion of any previously agreed upon bonus (pro rated based upon full months worked by Employee) for any fiscal year in which Employee worked for CompuCredit for at least six (6) months within thirty (30) days of the Termination Date; and (iii) the ability to exercise any then vested options held by Employee until the earlier of (i) six (6) months after the Termination Date or (ii) the original expiration date (disregarding any earlier expiration based on termination of Employee’s employment).

 

(f)           Notwithstanding anything to the contrary herein, if CompuCredit terminates this Agreement or Employee’s employment for any reason other than for Cause or if Employee terminates this Agreement or resigns for Good Reason, subject to Section 21 below, Employee shall be entitled to receive (i) his then current base salary for twelve (12) months from the Termination Date payable during such time in substantially equal bi-weekly installments or in such other installments or other intervals as may be the policy of CompuCredit on the Termination Date, but no less frequently than monthly, plus (ii) an amount equal to the largest cash bonus received by Employee during the Term of this Agreement and prior to the Termination Date within thirty (30) days of the Termination Date.  The Employee shall not be obligated in any way to mitigate CompuCredit’s obligations to him under this Section and any amounts earned by Employee subsequent to his termination of employment shall not serve as an offset to the severance payments due him by CompuCredit under this Section.  Further, Employee shall be deemed to be One Hundred Percent (100%) vested in all restricted stock, stock options and benefit plans maintained by CompuCredit, and shall have until the earlier of (i) one year after the Termination Date or (ii) the original expiration date (disregarding any earlier expiration based on termination of Employee’s employment) to exercise any stock option or other similar equity-based compensation arrangements.  Payments under this Section are in addition to and not in lieu of any benefits under the other benefit programs of CompuCredit.  Without limiting the foregoing, to the extent permitted by law, the CompuCredit shall continue the medical, disability and life insurance benefits which Executive was receiving at the time of termination monthly for a period of twenty-four (24) months after termination of employment or, if earlier, until Employee has commenced employment elsewhere and becomes eligible for participation in the medical, disability and life insurance programs, if any, of his successor employer.  Coverage under CompuCredit’s medical, disability and life insurance programs shall cease with respect to each such program as Employee becomes eligible for the medical, disability and life insurance programs, if any, of his successor employer.  CompuCredit shall thereafter have no other obligation or liability to Employee under this Agreement.

 

  

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4.           Vacation.  During the Term of this Agreement, Employee shall be entitled to such number of weeks of paid vacation in each calendar year of the Term as is provided in, and in accordance with, CompuCredit’s policies in effect from time to time for management employees.

 

5.           Benefits.  During the Term of this Agreement, Employee and, as applicable, Employee’s family, shall also have the right to participate in any employee benefit plans or other fringe benefits adopted by CompuCredit for its officers and/or other key management employees or as a part of CompuCredit’s regular compensation structure for its employees, including plans (to the extent offered) providing group hospitalization, medical, dental, accidental death and disability and long-term disability income replacement insurance benefits and any retirement income, capital accumulation, deferred compensation and incentive compensation plans, but only if and to the extent provided from time to time in such executive benefits plans and for so long as CompuCredit provides or offers such benefit plans.

 

6.           Reimbursement for Expenses.  CompuCredit shall reimburse Employee for reasonable out-of-pocket expenses incurred by Employee in connection with the performance of the Services hereunder for travel, entertainment and other miscellaneous expenses to the extent such expenses are consistent with CompuCredit’s reimbursement policy as the same shall be in effect from time to time.  Additionally, CompuCredit shall reimburse Employee for reasonable out-of-pocket expenses incurred by Employee associated with Employee’s efforts to maintain those continuing professional education requirements of his license in the State of Georgia to practice as a Certified Public Accountant, as well as those professional association dues, licensure fees, and business license payments incurred by Employee in connection with his status as a Certified Public Accountant.  Reimbursement shall be made only against an itemized list of such expenses submitted to CompuCredit by Employee within thirty (30) days after being incurred, and, to the extent requested by CompuCredit, receipts and invoices evidencing such expenses.  In no event shall any such reimbursement be made later than thirty (30) days after the period for submitting such itemized list expires.

 

7.           Confidentiality.

 

(a)           Proprietary Information.  Employee acknowledges that as an employee of CompuCredit, he may from time to time have access to and be provided with trade secrets (as defined under applicable law), and other confidential, secret and proprietary information including without limitation, financial statements or information, technical or nontechnical data, formulae, compilations, programs, methods, data, financial plans, models, product plans, marketing or sales strategies, portfolio information, or lists of actual or potential borrowers, loan program participants or other customers not generally available to the public concerning any aspect of the products, services or businesses of CompuCredit, its affiliates, or its and their officers, directors, employees, advisers, agents or other personnel (collectively, “Proprietary Information”).  Employee agrees that he will not, directly or indirectly, disclose, publish, disseminate or use any confidential information except in connection with the performance of the Services.  If disclosure of any Confidential Information is required by law, a court or agency of the government, then Employee may make such disclosure after providing CompuCredit with reasonable notice, to the extent that providing such notice to CompuCredit is legally permissible, so that CompuCredit may seek protective relief.

 

(b)           Notwithstanding the provisions of Section 7(a) above, the following shall not be considered to be Proprietary information:  (i) any information that was in the public domain through no fault or act of Employee prior to the disclosure thereof to Employee; (ii) any information that came to Employee during any employment prior to that with CompuCredit; (iii) any information that comes into the public domain through no fault or act of Employee; and (iv) any confidential business information that is not a trade secret on and after the three (3) year anniversary of the Termination Date; provided, however, that the limited duration of the confidentiality obligation with regard to Proprietary Information not constituting a trade secret shall not operate or be construed as affording Employee any right or license thereafter to use Proprietary Information, or as a waiver by CompuCredit of the rights and benefits otherwise available to CompuCredit under the laws governing the protection and enforceability of patents, trade secrets and other intellectual property.

 

(c)           Return of Materials.  On or before the Termination Date, or when otherwise requested by CompuCredit, Employee will deliver promptly to CompuCredit all Proprietary Information and all other files, customer lists, management reports, drawings, memoranda, forms, financial data and reports and other materials or documents and equipment provided to, or obtained or created by Employee in connection with the Services (including all copies of the foregoing, and including all notes, records and other materials of or relating to CompuCredit or their respective customers) in his possession or control and shall destroy all other Proprietary Information in his possession.

 

  

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8.           Transfer and Assignment to CompuCredit.

 

(a)           To the greatest extent possible, any Work Product will be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and owned exclusively by CompuCredit.  In this Agreement, “Work Product” means work product, property, data, documentation, “know-how,” concepts, plans, inventions, improvements, techniques, processes or information of any kind, prepared, conceived, discovered, developed or created by Employee while employed by CompuCredit.  Employee hereby unconditionally and irrevocably transfers and assigns to CompuCredit all right, title and interest Employee has or will have, by operation of law or otherwise, in or to any Work Product, including, without limitation, all patents, copyrights, trademarks, service marks, trade secrets and other intellectual property rights.  Employee agrees to execute and deliver to CompuCredit any transfers or other instruments which CompuCredit may deem necessary or appropriate to vest complete title and ownership of any Work Product, and all rights therein, exclusively in CompuCredit.

 

(b)           Power of Attorney.  Employee hereby irrevocably constitutes and appoints CompuCredit as his agent and attorney-in-fact, with full power of substitution, in the name, place and stead of Employee, to execute and deliver any and all assignments or other instruments described in Section 8(a) above that Employee fails or refuses promptly to execute and deliver.  The foregoing power and agency are coupled with an interest and are irrevocable.

 

9.           Covenant Against Competition.

 

(a)           Employee acknowledges that the Proprietary Information that he has acquired and will acquire, prior to and during the Term, includes and will include information that could be used by Employee on behalf of a Competitor (as hereinafter defined), its affiliates or others to the substantial detriment of CompuCredit.  Moreover, the parties recognize that Employee during the course of his employment with CompuCredit will develop important relationships with customers, suppliers and others having valuable business relationships with CompuCredit.  In view of the foregoing, Employee acknowledges and agrees that the restrictive covenants contained in this Agreement are reasonably necessary to protect CompuCredit’s legitimate business interests and goodwill.

 

(b)           Definitions.

 

(i)           “Competitive Position”- (A) the direct or indirect equity ownership (excluding ownership of less than 2% of the equity of an Entity listed on a major U.S. exchange or traded on a NASDAQ over-the-counter market) or control of all or any portion of a “Competitor” (as hereinafter defined), or (B) any employment, consulting, partnership, advisory, directorship, agency, promotional or independent contractor arrangement between Employee and any Competitor.

 

(ii)           “Competitor”- Any Entity that provides services substantially similar to the Company Services and the revenues and assets from which represent more than 20% of the revenues or assets of such Entity, respectively.

 

(iii)           “Customers”- All Persons within the Territory during the one-year period prior to the Termination Date (A) to whom Employee offered or sold any of the CompuCredit’s products or services (including, without limitation, any opportunity to participate in any loan program established by CompuCredit), (B) to whom were offered or sold any of CompuCredit’s products or services or about whom Employee had Proprietary Information, (C) who were approached by CompuCredit with regard to a product, or (D) who were identified as potential customers by CompuCredit’s models or processes.

 

(iv)           “Company Services”- (A) purchasing, holding, and selling credit card and home equity loans (purchased, held or sold by CompuCredit), or portfolios thereof, or both, (B) providing credit card or home equity loan servicing services or (C) engaging in the business of making credit card and home equity loans to consumers.

 

(v)           “Territory”- The United States, which is the territory within which customers and accounts of CompuCredit will be located and where Employee will provide Services during the term of his employment under this Agreement.

 

  

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(c)           Covenants of Employee.  In consideration of Employee’s employment by CompuCredit upon the terms and conditions of this Agreement, and based on and subject to the provisions set forth in Section 9(a) above, Employee agrees that, during the Term and for a period of one (1) year from and after the termination of Employee’s employment hereunder for Cause or without Good Reason, Employee will not, without the prior written consent of CompuCredit, directly or indirectly for or on behalf of any Person other than CompuCredit, as principal, agent or otherwise:

 

(i)           take any action in furtherance of a Competitive Position; or

 

(ii)           solicit Customers for the purpose of providing services competitive with any of the Company Services; or

 

(iii)           solicit or induce (or attempt to do so) to leave employment with CompuCredit anyone who is or was, during the last year of Employee’s relationship with CompuCredit, an employee of CompuCredit or an affiliated entity.

 

(d)           Employee hereby represents and warrants to CompuCredit that he is not now a party to any agreement, court order, decree or other restriction which restricts him from using or disclosing to any party any information deemed to be proprietary or confidential or deemed to be a trade secret, of which in any way restricts Employee from engaging in or rendering any of the Services.

 

10.           Restrictions Upon Sale of Shares.  In further consideration of the terms of employment granted herein by CompuCredit to Employee, Employee hereby agrees that in selling any CompuCredit shares of common stock during the Term, he will advise CompuCredit in advance of such sales and will use reasonable efforts to effect such sales so as to minimize any adverse consequences to transactions proposed by CompuCredit which involve its common stock.

 

11.           Indemnification.  In the event that the Employee is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a “claim” by reason of (or arising in part out of) an “indemnifiable event,” CompuCredit shall indemnify Employee to the full extent authorized or permitted by law as soon as practicable after written demand is presented to CompuCredit, against any and all “expenses,” judgments, fines, penalties, and amounts paid in settlement (including interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines or settlement) of such claim, provided that CompuCredit shall be obligated to indemnify only for settlements that it has approved in advance, which approval shall not be unreasonable withheld.  For these purposes, (i) a “claim” shall include any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by or in the right of CompuCredit or any other party, which Employee believes in good faith might lead to the institution of any such action, suit or proceeding, whether civil, administrative, investigative or other, arising in connection with an indemnifiable event, (ii) “expenses” includes attorneys’ fees and all other costs, expenses and obligations paid or incurred in connection with investigation, defending, being a witness in or participating in (including an appeal), or preparing to defend, be a witness in or participate in any Claim relating to an indemnifiable event, provided that any attorney representing Employee shall cooperate fully with CompuCredit and its attorneys in order to minimize the duplication of expenses; and (iii) an “indemnifiable event” means any event or occurrence related to the fact the Employee is or was an executive officer of CompuCredit, or is or was serving at the request of CompuCredit as a director, officer, or trustee of another corporation, trust or other enterprise, or by anything done or not done by employee in such capacity.  Any payments to be made hereunder shall be paid as soon as administratively practical but in no event later than the end of the year following the year in which occurs the settlement or other event for which such indemnification is to be provided.

 

12.           Interpretation; Severability.  All rights and restrictions contained in this Agreement may be exercised and shall be applicable and binding only to the extent that they do not violate any applicable laws and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid or unenforceable.  It is understood and agreed that the provisions hereof are severable; if such provisions shall be deemed invalid or unenforceable as to any period of time, territory, or business activity, such provisions shall be deemed limited to the extent necessary to render it valid and enforceable, and the unenforceability of any provisions hereof shall not in any event cause any other provision hereof to be unenforceable.  No provision of this Agreement shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision.

 

13.           Relief.  In the event of any threatened or actual breach of the provisions of this Agreement by either party, the other party shall be entitled to injunctive relief in addition to any other remedies it may have at law or in equity.

 

14.           Nonwaiver.  Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted hereunder or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by or on behalf of both parties.

 

  

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15.           Notices.  Any notice or other communication required or permitted hereunder shall be deemed sufficiently given if delivered by hand or sent by registered or certified mail, return receipt requested, postage and fees prepaid, addressed to the party to be notified as follows:

 

	
  

	
(a)

	
If to CompuCredit:

	
CompuCredit Holdings Corporation

 

	
  

	
245 Perimeter Center Parkway, Suite 600

 

	
  

	
Atlanta, GA  30346

 

	
  

	
Attn: David G. Hanna

 

	
  

	
(b)

	
If to Employee:

	
J. Paul Whitehead III

 

	
  

	
***************

 

	
  

	
***************

 

or in each case to such other address as either party may from time to time designate in writing to the other.  Such notice or communication shall be deemed to have been given as of the date so delivered or five (5) days after the date so mailed.

16.           Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia.

 

17.           Entire Agreement; Amendment.  This Agreement contains the sole and entire agreement between the parties hereto with respect to CompuCredit’s employment of Employee and supersedes all prior discussions and agreements between the parties relating to such employment, and any such prior agreements shall, from and after the date hereof, be null and void.  Employee is a sophisticated business person and has received such documents and other information as he has deemed necessary to make his own independent judgment as to the merits of this Agreement and the remuneration that he will receive as a result hereof; further, it is hereby agreed by Employee that neither CompuCredit nor any affiliated entities have made any representation to Employee other than those specifically set forth in this Agreement.  This Agreement shall not be modified or amended except by an instrument in writing signed by or on behalf of the parties hereto.  Furthermore, if any portion of this Agreement conflicts with any future agreement signed between CompuCredit and Employee, this Agreement shall control unless such future agreement clearly specifies that it is intended to supercede all or a specific provision of this Agreement.

 

18.           Parties Benefited.  This Agreement shall inure to the benefit of, and be binding upon Employee, CompuCredit, and its respective heirs, legal representatives, successors and assigns; provided that, as to Employee, this is a personal service contract and Employee may not assign this Agreement or any part hereof.

 

19.           Tax Consequences.  CompuCredit shall have no obligation to Employee with respect to any tax obligation Employee incurs as a result of or attributable to this Agreement, including all supplemental agreements and employee benefit plans, if any, in which Employee may hereafter participate, or arising from any payments made or to be made hereunder or thereunder.

 

  

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20.           Counterparts.  This Agreement may be executed in counterparts, each of which shall for all purposes be deemed an original, and all of such counterparts shall together constitute one and the same agreement.

 

21.           Nonqualified Deferred Compensation Omnibus Provision.  It is intended that any payment or benefit which is provided pursuant to or in connection with this Agreement which is considered to be deferred compensation subject to Section 409A of the Internal Revenue Code shall be paid and provided in a manner, and at such time, including without limitation, payment and provision of benefits only in connection with the occurrence of a permissible payment event contained in Section 409A (e.g., death, disability, separation from service from CompuCredit and its affiliates as defined for purposes of Section 409A of the Internal Revenue Code), and in such form, as complies with the applicable requirements of Section 409A of the Internal Revenue Code to avoid the unfavorable tax consequences provided therein for non-compliance.  In connection with effecting such compliance with Section 409A of the Internal Revenue Code, the following shall apply:

 

(a)           Neither Employee nor CompuCredit shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any manner which would not be in compliance with Section 409A of the Internal Revenue Code (including any transition or grandfather rules thereunder).

 

(b)           If Employee is a specified employee for purposes of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, any payment or provision of benefits in connection with a separation from service event (as determined for purposes of Section 409A of the Internal Revenue Code) shall not be made until the earlier of (i) Employee’s death or (ii) six (6) months after Employee’s separation from service (the “409A Deferral Period”).  In the event such payments are otherwise due to be made in installments or periodically during the 409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled.  In the event benefits are required to be deferred, any such benefits may be provided during the 409A Deferral Period at Employee’s expense, with Employee having a right to reimbursement from CompuCredit once the 409A Deferral Period ends, and the balance of the benefits shall be provided as otherwise scheduled.

 

(e)           For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Internal Revenue Code.

 

(f)           For purposes of determining time of (but not entitlement to) payment or provision of deferred compensation under this Agreement under Section 409A of the Internal Revenue Code in connection with a termination of employment, termination of employment will be read to mean a “separation from service” within the meaning of Section 409A of the Internal Revenue Code where it is reasonably anticipated that no further services would be performed after that date or that the level of bona fide services Employee would perform after that date (whether as an employee or independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period.

 

(g)           For purposes of this Agreement, a specified employee for purposes of Section 409A(a)(2)(B)(i) of the Internal Revenue Code shall be determined on the basis of the applicable 12-month period ending on the specified employee identification date designated by CompuCredit consistently for purposes of this Agreement and similar agreements or, if no such designation is made, based on the default rules and regulations under Section 409A(a)(2)(B)(i) of the Internal Revenue Code.

 

 

(h)           Notwithstanding any other provision of this Agreement, CompuCredit shall not be liable to Employee if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Section 409A of the Internal Revenue Code otherwise fails to comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code.

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

COMPUCREDIT CORPORATION

	
By:

	/s/ David G. Hanna	 

	
  

	
David G. Hanna, Chief Executive Officer

	
  

	/s/ J.Paul Whitehead, III

	
  

	
J. Paul Whitehead III

 

  

9

  

 

Exhibit A

Employee’s per annum base salary shall be equal to $800,000, multiplied by 100% or, if lower, the portion (expressed as a percentage) of Employee’s full business time, attention, energy, value and skill that Employee and CompuCredit from time to time mutually agree that Employee shall provide to CompuCredit.

 

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