Document:

Exhibit

Exhibit 10.1

FIRST AMENDMENT TO 
PURCHASE AND SALE AGREEMENT

This FIRST AMENDMENT (this “Amendment”), effective as of February 1, 2018, is to that certain Purchase and Sale Agreement dated November 13, 2017 (the “Agreement”), by and between VEREIT Operating Partnership, L.P., a Delaware limited partnership (“Seller”) and CCA Acquisition, LLC, a Delaware limited liability company (“Purchaser”).  Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Agreement.

WHEREAS, pursuant to Section 9.6 of the Agreement, the Agreement may be amended, restated, supplemented or otherwise modified by a written instrument signed by Purchaser and Seller; and

WHEREAS, Purchaser and Seller desire to amend certain terms of the Agreement as set forth in this Amendment. 

NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1.The definition of “Company Transaction Expenses” is hereby deleted in its entirety and replaced with the following:

“‘Company Transaction Expenses’ means the unpaid obligations, fees and expenses incurred by or on behalf of the Company or any of the Purchased Subsidiaries (together, the ‘Responsible Entities’) or that are payable by the Responsible Entities (whether due prior, on or after the Closing) in connection with the transactions contemplated by this Agreement or the Transaction Documents (except for the Services Agreement), including (i) fees and expenses of legal counsel, investment bankers, accountants and other advisors, (ii)(x) transaction bonuses, severance payments, change of control payments, excise tax gross-up payments, retention payments, stay bonuses, payments with respect to stock appreciation rights, dividend equivalent payments or other payments that arise as a result of the consummation of the transactions contemplated by this Agreement and the employer portion of any FICA and other payroll Taxes payable in respect thereto, and (y) any unpaid severance obligations or other termination payments resulting from terminations of employment on or before the Closing, (iii) except as set forth in Section 9.1, all fees and expenses associated with obtaining approvals, consents and waivers and (iv) any broker’s fees incurred or payable by or on behalf of the Responsible Entities.”

2.Section 1.4 is amended by inserting new paragraphs (f) and (g) reading as follows:  

“(f)    Notwithstanding the foregoing provisions of this Section 1.4, solely with respect to the current portion of program development costs with respect to Cole Office & Industrial REIT (CCIT III), Inc., (i) for purposes of the Closing Balance Sheet, the amount of the current portion of program development costs shall be equal to $120,000 (the “Initial CCIT III Adjustment Amount”), and (ii) within ten (10) Business Days after the first anniversary of the Closing Date, Purchaser shall deliver or cause to be delivered to Seller a statement (the “CCIT III Statement”) setting forth in reasonable detail the total dollar amount of capital raised by Cole Office & Industrial REIT (CCIT III), Inc. during the twelve months ending January 31, 2019 (the “CCIT III Capital Raise Amount”) and its calculation of the lesser of one percent (1%) of the CCIT III Capital Raise Amount and $2,231,146 (the “CCIT III Expected Amount”).  If the CCIT III Expected Amount as set forth in the CCIT III Statement is (x) greater than the Initial 

CCIT III Adjustment Amount, then Purchaser shall pay or cause to be paid to Seller, within five (5) Business Days after delivery of the CCIT III Statement, an amount equal to the difference between the CCIT III Expected Amount and the Initial CCIT III Adjustment Amount, and (y) less than the Initial CCIT III Adjustment Amount, then Seller shall pay or cause to be paid to Purchaser or its designee, within five (5) Business Days after delivery of the CCIT III Statement, an amount equal to the difference between the CCIT III Expected Amount and the Initial CCIT III Adjustment Amount (such payment, the “CCIT III True-Up Payment”).  The review and dispute resolution provisions of Section 1.4(b), (c) and (d) shall apply mutatis mutandis with respect to the calculation of the CCIT III Capital Raise Amount and the determination of the amount of the CCIT III True-Up Payment and the components thereof.  Within five (5) Business Days after the date on which the CCIT III True-Up Payment amount and the components thereof are finalized, Purchaser or Seller, as applicable, shall pay to the other Party the difference between the CCIT III True-Up Payment as so finalized and the amount of the CCIT III True-Up Payment previously paid to or by such other Party, as applicable.  All payments to Seller under this Section 1.4(f) shall be made in the same manner as Seller received the Closing Cash Payment Amount or in such other manner as Seller may direct in writing.

(g)    Neither the Estimated Closing Working Capital Amount nor the Closing Working Capital Amount shall reflect a tax refund receivable from any taxing jurisdiction or a liability related to the proposed assessment by the state of New York with respect to the Company’s taxable years ending December 31, 2013 and December 31, 2014.”

; and re-labeling the existing paragraphs (f) and (g) as (h) and (i), respectively.

3.Section 5.9(b) is amended by inserting new paragraph (iv) as follows:

“Seller shall prepare the United States federal and any state income tax returns of the Company for calendar year 2017 and for the short period beginning on January 1, 2018 and ending on the Closing Date, and shall provide drafts of such returns to Purchaser in accordance with Section 5.9(b)(i).  On the 2017 federal income tax return, Seller shall request a refund of overpayments, net of amounts to be credited with respect to the short period 2018 (which Seller intends to be at least equal to the amount due for the short period 2018).  Purchaser shall file or cause to be filed such tax returns as promptly as practicable and will file or cause to be filed Form 8050 with the 2017 federal tax return, requesting a direct deposit of the 2017 refund into a bank account designated by Seller.  If the IRS issues a check for the refund, Purchaser shall deposit or cause to be deposited the check and promptly wire or cause to be wired the amount of the refund to Seller.  To the extent that there is tax due on the short period 2018 tax return in excess of the amount credited from 2017, Purchaser shall pay or cause to be paid such excess and Seller shall promptly reimburse Purchaser or the payor for such amount.  To the extent that there is a refund on the short period 2018 federal tax return, Purchaser shall seek to have the refund deposited directly with Seller or, if the IRS issues a check for the refund, Purchaser shall deposit or cause to be deposited the check and promptly wire or cause to be wired the amount of the refund to Seller.  Any liability resulting from the proposed assessment by the state of New York with respect to the Company’s taxable years ending December 31, 2013 and December 31, 2014 shall be paid to the relevant New York taxing authority promptly upon the resolution or settlement of such proposed assessment, such payment to be made by Seller if practicable, otherwise by Purchaser or one of its Affiliates (in which case Seller will indemnify Purchaser and all applicable Purchaser Indemnified Parties for such payment in accordance with Section 7.2).  In the event of any conflict between this Section 5.9(b)(iv) and Section 5.9(b)(i), this Section 5.9(b)(iv) shall control.”

4.The definition of “Seller-Developed Software” is hereby deleted in its entirety and replaced with the following:

“Seller-Developed Software” is defined in Section 5.16(a).”

5.Section 2.2(a)(vii) is hereby deleted in its entirety and replaced with the following:

“[Reserved]”
 
6.Pursuant to Section 5.16(b) of the Agreement, the Parties agree that: 

“Seller shall deliver the Seller-Developed Software on a mutually agreed upon date following the Closing.  Such date shall be reasonably determined by the Parties based on the migration schedule to be agreed by the Parties following the Closing and transition of support from Seller (or its applicable Affiliates) to Purchaser (or its applicable Affiliates).”

7.Section 3.3(b) of the Disclosure Schedule is hereby amended by adding the following entity name and related information to the end of the table contained therein:

	
			
	Name of Purchased Subsidiary
	Jurisdiction of organization
	Jurisdiction where qualified to do business

	CCA Real Estate, LLC
	Delaware
	AZ

Pursuant to Section 5.1(a)(vii), Purchaser hereby consents to the Company’s formation of CCA Real Estate, LLC.

8.Except as expressly modified and amended as set forth in this Amendment, the Agreement remains in full force and effect, enforceable in accordance with its terms.  The terms and provisions of Article IX (except for the first two sentences in Section 9.7 (Waiver)) of the Agreement are incorporated herein by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Amendment, provided that references in the Agreement to “as of the date hereof” or “as of the date of this Agreement” or words of like import shall refer to November 13, 2017.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written.

PURCHASER: 
	
				
	 
	CCA Acquisition, LLC

	 
	 

	 
	By:
	/s/ Richard Ressler
	 

	 
	Name:
	Richard Ressler
	 

	 
	Title:
	Vice President
	 

SELLER:
	
				
	 
	VEREIT Operating Partnership, L.P.

	 
	 

	 
	By:
	/s/ Glenn J. Rufrano
	 

	 
	Name:
	Glenn J. Rufrano
	 

	 
	Title:
	Chief Executive Officerffwm-ex101_6.htm

Exhibit 10.1

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT (the “Fourth Amendment” or this “Amendment”) is made as of February 7, 2018 (the “Effective Date”), by and between First Foundation Inc., a Delaware corporation and First Foundation Bank (“FFB”), a California corporation (collectively the “Employer”), and Scott F. Kavanaugh (“Executive”), with reference to the following:

 

RECITALS

 

WHEREAS, Employer and Executive are parties to that certain Employment Agreement dated as of December 31, 2009, as amended by that certain First Amendment to Employment Agreement dated as of December 28, 2012, that certain Second Amendment to Employment Agreement dated as of August 31, 2013, and that certain Third Amendment to Employment Agreement dated as of January 26, 2016 (as amended, the “Employment Agreement”).

 

WHEREAS, FFB conducts a banking business and is a wholly-owned subsidiary of First Foundation Inc. (“Parent”), which, through its subsidiaries (collectively “Affiliates”), provides commercial banking, investment management, wealth management, advisory services, trust services and other financial services to the public.

 

WHEREAS, Employer and Executive desire to amend the Employment Agreement in the manner and to the extent set forth hereinafter.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, and with the intent to be legally bound hereby, Employer and Executive agree as follows:

 

1.Amendment to Section 4.  The second sentence of Section 4 of the Employment Agreement is hereby amended to read in its entirety as follows:

 

“The expiration date of the Term of the Agreement is hereby extended to December 31, 2020.”  

 

2.Amendment and Restatement of Section 7.  Section 7 of the Employment Agreement is hereby amended and restated to read in its entirety as follows:

 

“7.Compensation Upon Termination.

(a)Termination Generally.  If Executive’s employment with Employer expires or is terminated (whether by Employer or Executive) for any reason during the Term, Employer shall pay or provide to Executive (or to his/her authorized representative or estate): (i) any unpaid Base Annual Salary earned through the date of such termination; (ii) any unpaid incentive compensation that is deemed earned and has become payable under the terms of any incentive compensation program in which Executive was participating at the time of or had participated prior to such expiration or termination of employment; (iii) unpaid expense reimbursements; (iv) accrued but unused vacation, and (v) any vested benefits Executive may have earned under any employee benefit plan of Employer or Parent prior to the expiration or termination of Executive’s employment; provided, however, that notwithstanding the foregoing provisions of this Section 7(a), if Executive’s employment is terminated for Cause pursuant to Section 6(a) above or pursuant to Section 6(f), due to certain Regulatory Actions, then, unless otherwise required by applicable law, Executive shall not be entitled to receive any unpaid incentive compensation that might otherwise have been due to Executive. All payments required to be made pursuant to this Section 7(a) shall be made within thirty (30) days following termination or on such earlier date as is required by applicable law.

 

 

(b)Termination by the Employer Without Cause or by Executive for Good Reason.  In the event of a termination of Executive’s employment by Employer without Cause pursuant to Section 6(b) above, or by Executive for Good Reason pursuant to Section 6(c) above, then subject to Executive’s execution, delivery and non-revocation within sixty (60) days following the date of termination of an agreement, that is satisfactory in a form and substance to Employer, releasing any and all legal claims (known or unknown) Executive may have against Employer or any or its Affiliates, Employer shall provide to Executive the following termination benefits (“Termination Benefits”):

(i)A severance payment (the “Severance Payment”) in an amount equal to  (x) twelve (12) months of Executive’s Base Annual Salary or (y) the aggregate Base Annual Salary that would have been paid to Executive for the remainder of the Term of the Agreement if such remaining Term is shorter than the aforementioned 12 month period, as the case may be (the “Termination Benefits Period”); and

(ii)continuation during the Termination Benefits Period of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), subject to payment of premiums by Executive at the active employee’s rate and solely to the extent that such continuation will not subject Employer or its Affiliates to any tax or penalty under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”) or the Patient Protection and Affordable Care Act (the “Health Insurance Cost Sharing Benefit”). 

Notwithstanding the foregoing provisions of this Section 7(b) or any other provision of this Agreement to the contrary, (A) the Severance Payment and the Health Insurance Cost Sharing Benefit that would otherwise be payable to Executive pursuant to this Section 7(b) shall be reduced by the amount of any severance compensation or health insurance benefits that are due or are otherwise paid to Executive under any separate severance compensation or change in control or similar agreement between Executive, on the one hand, and Employer or Employer's Parent, on the other hand, or any severance pay or stay bonus plan of Employer or Parent (irrespective of when such agreement is entered into or such plan becomes effective); (B) if Executive commences any employment with another employer during the Termination Benefits Period and that other employer offers group health plan or health insurance benefits reasonably comparable to those available from Employer, then, the Health Insurance Cost Sharing Benefit provided under paragraph 7(b)(ii) above shall cease to be payable as of the date of commencement of such employment; and (C) nothing in this Section 7(b) shall be construed to affect Executive's right to receive COBRA continuation entirely at Executive's  own cost to the extent that Executive may continue to be entitled to COBRA continuation after the Executive's Health Insurance Cost Sharing Benefit under this Section 7(b)(ii) ceases. Executive shall be obligated to give prompt notice of the date of commencement of any employment during the Termination Benefits Period and shall respond promptly to any reasonable inquiries concerning any employment in which Executive may be engaged during the Termination Benefits Period. The Termination Benefits shall be paid by Employer in installments over the Termination Benefits Period in accordance with the customary payroll practices of Employer (net of required deductions and withholdings); provided, that the first payment shall be made on the next regularly scheduled payroll date following the sixtieth (60th) day after the date of termination and shall include payment of any amounts that would otherwise be due prior thereto.

(c)Termination Upon Death. In the event of a termination of Executive’s employment due to death, Employer shall pay to Executive’s estate an amount equal to one hundred percent (100%) of Executive’s Base Annual Salary at the rate in effect immediately prior to such termination (the “Death Benefit”), less the amount of any life insurance benefits which Executive's estate or any of Executive's beneficiaries receive under any Employer-provided life insurance plan or program in which Executive was participating at the time of his/her death.  Any Death Benefit payable pursuant to this Section 7(c) shall be paid in a lump sum payment (net of any tax and any other required withholdings) to the beneficiary designated in writing by Executive, or if no beneficiary was designated, to his/her estate, as soon as is practicable following Executive’s death.

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(d)Exclusivity of Termination Benefits.  Except as may otherwise be set forth in Exhibit A hereto, Executive shall not be entitled to any payments or benefits due to the expiration or termination of Executive’s employment with Employer other than those benefits that are expressly provided for in this Section 7. Without limiting the generality of the foregoing, the Termination Benefits set forth in Section 7(b), together with any severance benefits that Executive may be entitled to receive under any separate severance compensation or change of control or stay-pay agreement to which Executive may be a party or any separate severance or stay pay plan in which Executive may be a participant, shall constitute the exclusive rights and remedies against Employer and its Affiliates to which Executive shall be entitled by reason of termination or Executive’s employment by Employer without Cause or by Executive for Good Reason or for any damages arising therefrom.” 

3. Addition of Section 11. The following is hereby added as a new Section 11 of the Employment Agreement:

“11. Section 409A

(a)The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A of the Code and the Treasury regulations and guidance promulgated thereunder (collectively “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.  In no event whatsoever will Employer be liable for any additional tax, interest or penalties that may be imposed on Executive under Code Section 409A or any damages for failing to comply with Code Section 409A.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits considered “nonqualified deferred compensation” under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (ii) the date of Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Subsection 11(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed on the first business day following the expiration of the Delay Period to Executive in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided in any other taxable year, and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred. For purposes of Code Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of Employer.”

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4. Except as otherwise provided herein, capitalized terms used in this Amendment shall have the definitions set forth in the Employment Agreement.

5.Except as expressly modified hereby, all terms, conditions and provisions of the Employment Agreement shall continue in full force and effect.

IN WITNESS WHEREOF, this Agreement has been executed by Employer and by Executive as of the Effective Date.

 

 

Signature page follows

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EMPLOYER: 

FIRST FOUNDATION BANKFIRST FOUNDATION INC.

By:   /s/ John MichelBy: /s/ John Michel    

Name:    John MichelName: John Michel

Title:      Chief Financial Officer Title: Chief Financial Officer

 

 

EXECUTIVE:

 

/s/ Scott F. Kavanaugh

Name:   Scott F. Kavanaugh

 

 

 

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