Document:

PURCHASE OPTION AGREEMENT

 

THIS PURCHASE OPTION AGREEMENT (“Agreement”) is made and entered into as of this 30th day of June, 2011, by and between OXFORD HAMPTON PARTNERS, LLC, a Georgia limited liability company (“Seller”), and TRAIL CREEK MEZZANINE LENDING, LLC, a Delaware limited liability company and its successors and assigns (collectively “Purchaser”).

 

GRANT OF OPTION TO PURCHASER

 

In consideration of the sum of ONE THOUSAND AND NO/100 DOLLARS ($1,000.00) in cash paid by Purchaser to Seller (the “Option Fee”), and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Seller grants to Purchaser, its successors and assigns, on the terms and conditions set forth below, the exclusive irrevocable right and option (the “Option”) to purchase all right, title and interest of Seller in those certain tracts or parcels of land containing approximately 10.191 acres of land (the “Land”) located in Hampton, Virginia, identified and described on Exhibit “A” attached hereto and made a part hereof (the Land and the real and personal property described below is referred to collectively the “Property”).  The Option Fee shall not be credited against the Purchase Price at Closing.  The Option Fee shall be non-refundable, except as otherwise expressly set forth in this Agreement.

 

The Property to be sold hereunder includes, without limitation, all buildings, fixtures, structures and other improvements now or hereafter on, to or attached to the above-described land, and all other property owned by Seller and attached to the above described Land; all tenements, hereditaments, easements, privileges, reversions, remainders and other rights and appurtenances belonging or in any manner appertaining to the Land, including all reversionary interests in and to any adjoining or abutting rights-of-way, as well as, to the extent assignable, any and all tangible and intangible property owned or controlled by Seller pertaining to the Land, including, without limitation, all engineering and architectural design plans and specifications, licenses, franchises, permits, zoning rights, density rights, prepaid impact fees, credit for impact fees and other prepaid items, entitlements and governmental applications, submittals and approvals, development orders, concurrency certificates and other vested rights or claims pertaining to the Land.

 

STATEMENT OF AGREEMENT

 

The Option is granted on the following terms and conditions:

 

1.           Purchase Price.  (a) The purchase price of the Property shall be equal to SEVENTEEN MILLION EIGHT HUNDRED TWENTY-FIVE THOUSAND SIX HUNDRED AND NO/DOLLARS ($17,825,600.00) (the “Purchase Price”).  Notwithstanding anything contained herein to the contrary, there shall be credited against the Purchase Price at Closing, any amounts outstanding under the documents and instruments evidencing and securing that certain $6,000,000 mezzanine loan (the “Mezzanine Loan”) made on or about the date hereof from Purchaser to Seller and evidenced by a Note dated as of even date herewith made by Seller to the order of Purchaser in the principal face amount of $6,000,000 (as modified, amended and/or restated from time to time, the “Mezzanine Note”; the Mezzanine Note and the other documents, instruments and agreements evidencing, securing and otherwise relating to the Mezzanine Loan are referred to herein as the “Mezzanine Loan Documents”).   The Purchase Price for the Property shall be adjusted to account for any credits, prorations and adjustments provided in this Agreement, and shall be paid to Seller at Closing by wire transfer of immediately available funds.

 

  

  

 

 

2.           Term.  Purchaser shall have the right to exercise the Option by giving Seller written notice of exercise at any time commencing at 8:00 a.m. on April 1, 2014 (the “Option Commencement Date”), through and including 5:00 p.m. on June 30, 2014 (the “Option Expiration Date”; the period on and after the Option Commencement Date until the Option Expiration Date, is hereinafter sometimes referred to as the “Option Term”).

 

3.           Warranty of Title and Authority.  Seller represents and warrants that (a) Seller has full right, power and authority to execute and deliver this Agreement and to consummate the purchase and sale transactions provided for herein without obtaining any further consents or approvals from, or the taking of any other actions with respect to, any third parties; (b) at the Closing, Seller will convey to the Purchaser good and marketable, fee simple title to the Property, free and clear of all liens and encumbrances, subject only to taxes for the current year not yet due and payable (which taxes shall be prorated at Closing) and the Permitted Encumbrances, and (c) no other options to purchase, purchase agreements, purchase and sale agreements, rights of refusal or other rights or options to acquire or lease all or any portion of the Property (except leases permitted under the Mezzanine Loan Documents (the “Permitted Leases”)), or any gas, oil, coal or mineral rights with respect to the Property, exist.

  

2

 

4.           Title Examination.  Within thirty (30) days after Purchaser’s exercise of the Option, Purchaser shall have the right to obtain, at Purchaser’s expense, a current survey of the Property (the “Updated Survey”) and an ALTA Title Commitment for the Property from a title company acceptable to Purchaser (the “Title Company”), setting forth the status of title to the Property, and showing all liens, claims, encumbrances, reservations, restrictions and other matters, if any, relating to the Property (the “Title Commitment”), including legible copies of all encumbrances, restrictive covenants and other documents evidencing exceptions to said Title Commitment (the “Exception Documents”).  If the Title Commitment and/or Updated Survey reveals any exception(s) to title to which Purchaser objects (a “Title Objection”) and is(are) not either (i) listed as title exceptions in the title insurance policy and/or survey obtained by Seller in connection with the closing of the Mezzanine Loan and/or (ii) permitted by this Agreement (collectively, the “Permitted Encumbrances”), Purchaser may notify Seller in writing that it would like Seller to cure or remove such Title Objections.  Seller shall have the right, but not the obligation (except as set forth below), to remedy or cure any such Title Objection(s) during the twenty (20) day period following Seller’s receipt thereof (the “Cure Period”).  Purchaser shall have the continuing right to have such title examination and Title Commitments updated from time to time, and to obtain updates to the Survey, and to give Seller written notice of any Title Objections appearing of record, or otherwise created, after the effective date of the initial Title Commitment and being revealed by any title examination, Survey or investigation of the Property, and Purchaser shall be entitled to object (in the same manner as set forth hereinabove) to matters shown by the updated Title Commitments or updated Survey or investigations.  Seller shall have the right, but not the obligation (except as set forth below), to remedy those Title Objections identified by Purchaser to the satisfaction of Purchaser within twenty (20) days after Purchaser’s notice.  If any of the Title Objections are not so cured or remedied, or provision satisfactory to Purchaser made therefor, prior to any closing date selected by Purchaser, then Purchaser, at its election, shall have the right and option to either: (a) accept title to the Property subject to said uncured Title Objections that Purchaser elects to accept, and any Title Objection accepted by Purchaser in writing shall become part of the Permitted Encumbrances; or (b) terminate this Agreement by written notice to Seller, in which event, immediately upon receipt of said notice, this Agreement shall terminate, be null and void and of no further force or effect.  Notwithstanding the foregoing, Seller, at Seller’s sole cost and expense, shall be obligated to cure or remove at or before Closing all mortgages, deeds of trust, deeds to secure debt, judgments liens, mechanics and materialman’s liens, and other monetary liens against the Property, whether or not Purchaser objects thereto, and Purchaser shall credit the cost to cure, satisfy, release and remove such matters against the Purchase Price provided the same is actually paid by Purchaser or Title Company on Seller’s behalf.  In addition, Seller shall not allow any easements, liens, leases, licenses, permits or other encumbrances to be placed on or granted with respect to the Property, nor shall Seller convey any rights in the Property, without the prior written consent of Purchaser, except to the extent expressly permitted, or consented to in writing by Purchaser under the Mezzanine Loan Documents.  If any such prohibited easements, liens, leases, licenses, permits or other encumbrances arise after the Effective Date, notwithstanding any other term or provision of this Agreement to the contrary, Seller shall, at its sole cost and expense, cure, satisfy, release and remove such matters prior to Closing; provided, however, that any easements or encumbrances that are taken by eminent domain shall be governed by the terms of Section 5 immediately below.

 

5.           Eminent Domain.  If, prior to the Closing, all or any material part of the Property is taken by eminent domain or if condemnation proceedings are commenced, Purchaser may terminate this Agreement by delivery of written notice to Seller, in which event neither party shall have any further liability to the other except as otherwise expressly set forth in this Agreement.  If Purchaser does not elect to terminate this Agreement and Purchaser exercises the Option, then at Closing there shall be credited to the Purchase Price all condemnation proceeds received by Seller prior to Closing and Seller shall assign, transfer and set over to Purchaser at the Closing in form satisfactory to Purchaser all of Seller’s right, title and interest in and to any condemnation awards that remain to be paid for such taking.

 

6.           Inspections and Survey.  From and after the Effective Date until the Closing or any earlier termination of the Agreement pursuant to a right granted herein (such period referred to herein as the “Term of this Agreement”), Purchaser and its agents shall have, and Seller hereby grants to Purchaser, the right to make and perform any inspections, studies, evaluations, explorations, surveys (both boundary line and topographical) and tests on and to the Property as Purchaser shall desire, including, without limitation, Phase I, Phase II and other environmental inspections, soils tests, samplings, drilling and maintenance of test wells, percolation tests and studies and other engineering tests.  Purchaser shall provide Seller with reasonable prior notice before entering the Property to conduct any such investigations or inspections.  Seller shall extend all reasonable cooperation to Purchaser, its agents, employees and contractors to facilitate such investigations and approvals.  Purchaser, at Purchaser’s expense, shall have the right to cause a licensed surveyor or engineer to prepare an ALTA land title boundary and improvements survey of the Property (or an Updated Survey) (the “Survey”), establishing the boundaries of the Property.  The Survey shall certify the acreage of the Property to the nearest hundredth of an acre.  Seller grants Purchaser the right of ingress and egress on, over, through, across, to and from the Property and Seller’s other adjoining property, if any, for the purpose of making the foregoing inspections.  Purchaser reserves the right to make written objections to title based upon the Survey or any update thereto as provided in Section 4 above.  In addition to the Limited Warranty Deed (as hereinafter defined), Seller shall execute and deliver to Purchaser a Quitclaim Deed at Closing conveying the Property based upon legal description of the Property taken from the Survey (the “Quitclaim Deed”).

  

3

 

 

By entering the Property for this or any other purpose, Purchaser accepts the risk of any physical damage Purchaser or its agents or contractors may cause to the Property or Seller’s personal property on the Property, and agrees, in the event Purchaser does not purchase the Property, to repair any damage caused by Purchaser or its agents or contractors to the Property, including closing, in accordance with Applicable Law (as hereinafter defined), any test wells.  Purchaser agrees to keep the Property free and clear of any mechanic’s or materialmen’s liens resulting from Purchaser’s or its agents’ or contractors’ activities on the Property and to restore the Property, to the extent practicable, to its original condition prior to such activity by Purchaser.  Additionally, Purchaser agrees to indemnify Seller against and hold Seller harmless from all liability caused by Purchaser’s or its agents’ or contractors’ gross negligence or willful misconduct in connection with Purchaser’s or its agents’ or contractors’ activities on the Property during the Term of this Agreement, except to the extent caused by the negligence or willful misconduct of Seller, its agents, employees, managers, tenants, subtenants, licensees, permittees, invitees, contractors or subcontractors.  Notwithstanding the foregoing indemnity, the parties agree that in no event shall Purchaser be liable with respect to any claims, damages, liabilities or expenses arising out of the mere discovery by Purchaser or its agents or contractors, or the failure to report, any pre-existing conditions, or any acts or omissions of Seller, its agents, employers, contractors, officers or invitees.  The provisions of this paragraph shall survive the expiration or any earlier termination of this Agreement.

 

7.           Exercise of Purchase Option.  If Purchaser elects to exercise this Option, it shall do so by sending a written notice of such exercise to Seller prior to the expiration of the Option Term.  Purchaser’s notice shall specify the date and time that the closing of the purchase and sale of the Property (the “Closing”) will take place, which shall be no earlier than the date that is thirty (30) days after the date of the exercise of the Option and no later than the date that is forty-five (45) days after the date of the exercise of the Option.  Purchaser and Seller shall conduct an escrow-style closing through the Title Company so that it will not be necessary for any party to physically attend the Closing.  Notwithstanding any provision to the contrary in this Agreement, if the notice of exercise is mailed via the U.S. Postal Service, the notice shall be deemed to have been delivered when mailed if sent with prepaid postage by certified or registered mail, or if sent via overnight delivery service, the notice shall be deemed to have been delivered when deposited with such overnight delivery service.

  

4

 

Within three (3) business days following Purchaser’s exercise of the Option, ONE THOUSAND AND NO/DOLLARS ($1,000.00) shall be paid by Purchaser to Title Company as earnest money (the “Earnest Money”).  The Earnest Money shall be held in a segregated interest bearing account by Title Company.  All interest and earnings shall be paid to Purchaser.  The Earnest Money shall be credited against the Purchase Price at Closing.  Title Company shall act as escrow agent until Closing and shall hold and disburse the Earnest Money as provided in this Agreement.  Seller shall have no right to receive any payment of the Earnest Money unless Seller terminates this Agreement in accordance with Section 16(a) below as a result of an uncured default of this Agreement by Purchaser, or the Earnest Money is credited against the Purchaser Price due at Closing.  Seller and Purchaser agree to cause to be executed, acknowledged and delivered to Title Company such further reasonable and necessary escrow instruments and documents requested by the Title Company in connection with Title Company holding and disbursing the Earnest Money and Title Company conducting the Closing, in order to carry out the intent and purpose of this Agreement.

 

8.           Intentionally Omitted.

 

9.           Closing Documents.  The Title Company shall serve as the disbursing agent for the Closing.  At the Closing, Seller at its expense, shall deliver or cause to be delivered to Purchaser the following:

 

(a)           release(s) of liens, from all lienholders holding liens affecting the Property (other than liens in favor of Purchaser under the Mezzanine Loan Documents).

 

(b)           a Limited Warranty Deed in recordable form conveying good and marketable Indefeasible Fee Simple Title (as hereinafter defined) to the Property to Purchaser, its successors or assigns, free and clear of all liens and encumbrances other than Permitted Encumbrances, in form and substance reasonably satisfactory to Purchaser (the “Limited Warranty Deed”).

 

(c)           the Quitclaim Deed.

 

(d)           An affidavit in the form required by Section 1445 of the Internal Revenue Code of 1986 to establish that the Seller is not a foreign person.

 

(e)           Such affidavits, agreements or certifications required by the Title Company to issue the Title Policy (as hereinafter defined).

 

(f)           an Owner’s Policy of Title Insurance (the “Title Policy”) in the amount of the Purchase Price issued by Title Company, insuring that Purchaser is the owner of indefeasible title to the Property, together with any easements, rights of way and appurtenances benefiting or serving the Property, subject only to the Permitted Encumbrances, provided further that, all exceptions, conditions or requirements described in the Title Commitment obtained from Purchaser, as updated from time to time, shall be released and/or satisfied prior to or at Closing by Seller, at Seller’s sole expense, and no such items shall be exceptions to the Title Policy (herein referred to as “Indefeasible Fee Simple Title”).  Notwithstanding the first line of this Section 9 above, the cost of all title examination fees, costs and expenses, and the cost of any title insurance premium and endorsement costs, shall be paid by Purchaser.

  

5

 

(g)           Seller and Purchaser shall execute and deliver an assignment agreement whereby Seller shall assign and transfer to Purchaser all rights, title and interest of Seller in and to any leases, intangibles and other personal property, if any, with respect to the Property.  Seller shall assign all leases to Purchaser at Closing, and Purchaser shall assume all liability thereunder.  Seller hereby agrees (which agreement shall survive the closing) to indemnify, defend, and hold Purchaser free and harmless from any loss, injury, liability, damage, claim, lien, cost or expense, including attorneys’ fees and costs, arising out of any claims related to such leases arising or accruing prior to Closing Date

 

(h)           Seller shall execute a certified rent roll for the Property.

 

(i)            Seller shall execute and deliver to Title Company an Owner’s Affidavit in a form satisfactory to the Title Company so as to enable the Title Company to issue the Title Policy without any of the standard title exceptions.

 

(j)            Seller shall deliver to Purchaser instruments reasonably satisfactory to Purchaser and the Title Company reflecting the proper authority of Seller to consummate the transactions contemplated by this Agreement.

 

(k)           Seller and Purchaser shall each execute such other instruments as are customarily executed in the State where the Property is located to effectuate the conveyance and acceptance of property similar to the Property, and to transfer the Property, with the effect that, after the Closing, Purchaser will have succeeded to all of the rights, title and interests of Seller related to the Property and Seller will no longer have any right, title or interest in and to the Property.

 

(l)           Purchaser shall at the conclusion of the Closing pay the Seller the Purchase Price, subject to credits, prorations and adjustments to the Purchase Price as set forth in this Agreement, including Section 1 hereof, in readily available funds and said funds shall be wired to the Seller at such time on the day of the Closing pursuant to the Seller’s wiring instructions.

 

10.         Possession.  Seller shall deliver exclusive possession of the Property to Purchaser at the Closing, in the same condition as on the date that Purchaser exercises the Option, ordinary wear and tear excepted, free and clear of all tenants, occupants, parties in possession, leases and licenses, except tenants under Permitted Leases.

 

11.         Proration of Taxes, Income and Rents.  Subject to Section 1 of this Agreement, the following items pertaining to the Property shall be prorated as of midnight of the day immediately preceding the day of Closing:  rents; fees and assessments; any prepaid expenses and obligations relating to the Property; accrued expenses; ad valorem real estate taxes for the year of Closing; water and other utility charges; and all other items of income and expense with respect to the Property.  There shall be a proration of personal property taxes, if any, for the year of Closing.  Real estate taxes shall be prorated based upon the amount of said taxes for the year in which the Closing occurs if said amount is known at the time of the Closing (after making a fair and reasonable allocation of such assessment between the Property and any other property covered by such assessment); if said amount is not known, then such taxes shall be prorated on the basis of the taxes assessed for the preceding year after making a fair and reasonable allocation of such assessment between the Property and any other property covered by such assessment.  Notwithstanding the foregoing, Purchaser, at the sole discretion of Purchaser, shall have the right, in the name of Purchaser or Seller but at the expense of Purchaser, to contest and appeal any such tax or assessment, and any adjustment in proration shall be based upon the amount of such taxes finally determined upon such contest or appeal and shall be paid promptly upon the determination of such amount, if Purchaser shall elect to make such contest or appeal.  Subject to Section 1 of this Agreement, Seller shall be responsible for all utility or other expenses of the Property incurred through the Closing Date.

 

  

6

 

 

Seller shall deliver to the Purchaser any rents paid to the Seller by Tenants, subsequent to the Closing Date.  No proration shall be made for rents delinquent as of the Closing Date (hereinafter called the “Delinquent Rents”).  All rent collected on or after the Closing Date by Seller or Purchaser shall be allocated to the most recent month for which rental is due for that Tenant, including Delinquent Rents.  Any Delinquent Rents collected by Purchaser after Closing shall be paid by Purchaser to Seller.

 

Purchaser shall take all steps reasonably necessary to effectuate the transfer of any utilities for the Property to its name as of the Closing Date, and where necessary, post deposits with the utility companies.  Seller shall ensure that all utility meters, if any, for the Property are read as of the Closing Date.  Seller shall pay all utilities, if any, up to and including the Closing Date and all utilities for the Property thereafter shall be paid by Purchaser.  Seller shall be entitled to recover any and all deposits held by any utility company for the Property as of the date of Closing unless otherwise agreed by Purchaser and Seller in which case the deposit(s) will be assigned to Purchaser who shall have rights to have the deposit(s) released to it upon satisfaction of the conditions imposed by the utility company.

 

12.         Brokers.  Each of Seller and Purchaser represents and warrants to the other that it has not hired, engaged, consulted or dealt with any broker or agent to which the other party has or will have any obligation.  Seller agrees to pay any commissions due any broker or agent Seller dealt with in connection with this Agreement.  Seller agrees to indemnify and hold Purchaser and the Property harmless from and against any claims, demands, liabilities, losses, liens, costs and expenses (including reasonable attorneys’ fees and expenses) and damages, of any kind or natures (collectively “claims”), arising from or in connection with Seller’s breach of the representations or warranties contained in this Section 12, any failure of seller to pay the commission due any broker or agent that Seller dealt with, or any other claims made by any broker or agent that Seller dealt with.  Purchaser agrees to indemnify and hold Seller harmless from and against any claims arising from or in connection with Purchaser’s breach of the representations or warranties contained in this Section 12, or any other claims made by any broker or agent that Purchaser dealt with.  If for any reason whatsoever the purchase and sale hereunder is not closed, including but not limited to failure to close due to default by Seller or default by Purchaser, no commission shall be owing to any broker, agent finder or other person under this Agreement by any party hereto.  The provisions of this Section 12 shall survive the Closing, and any earlier termination or expiration of this Agreement.

  

7

 

13.         Closing Expenses.  The Seller shall pay any costs incurred to clear title to the Property.  The Seller shall pay the State and local transfer taxes (and State and County Revenue Stamps) and any settlement fees charged by the Title Company to conduct the Closing.  The Purchaser shall pay for the cost of the Purchaser’s investigation of the Property, the cost to record the Limited Warranty Deed, and the Quitclaim Deed, the cost of the Updated Survey, the costs, expenses and examination fees for obtaining the Title Commitment for the Property (including legible copies of all title exceptions) and the title insurance premium and title endorsement fees for the title policy in the amount of the purchase price issued to the Purchaser at the Closing.  The Seller and Purchaser shall each be responsible for its own attorneys’ fees.

 

14.         Intentionally Omitted.

 

15.         Representations and Warranties.  Seller represents and warrants that, as of the Effective Date and through the date of Closing, and renewed as of the date of Closing, (a) there are no pending, and, to Seller’s actual knowledge and belief, no threatened, claims, lawsuits, administrative proceedings, enforcement actions or investigations concerning the Property by any private party or governmental entity, nor has Seller received written notice of any such activities, and Seller agrees to give Purchaser prompt written notice of any such actions or investigations instituted between the date hereof and the date of Closing, (b) Seller has not received any written notice of any judicial or administrative consent orders calling for compliance with any legal requirement or for correction of any violation with respect to the Property, (c) Seller has not received written notice that the Property has been the site of any activity that would violate any environmental law or regulation of any governmental body or agency having jurisdiction over the Property, (d) to Seller’s actual knowledge and belief, there are not now and have never been any solid or hazardous wastes, substances, chemicals, or constituents, petroleum, or other dangerous or toxic substances, stored, placed, treated, released or disposed of anywhere on the Property in a manner or at a location that has given or would give rise to liability, including any liability for response costs, corrective action costs, personal injury, property damage, natural resources damages or attorney fees, pursuant to any applicable federal, state or local law, rule or regulation, (e) Seller has not received written notice that the Property is not in compliance in any material respect with any federal, state and local, statutes, rules, regulations, codes, ordinances, orders, directives and other applicable laws, including, without limitation environmental laws (collectively “Applicable Law”), (f) Seller is not a party to any pending litigation, arbitration, mediation or other proceeding with respect to the Property, nor does Seller have any actual personal knowledge of, any threatened litigation with respect to the Property or any portion thereof, (g) Seller has received no written notice of, nor does Seller have any actual knowledge of, any pending or threatened special assessment, taking or condemnation with respect to the Property or any portion thereof, (h) Seller is not a party to any agreements with any governmental or quasi-governmental entity, agency or department regarding the Property or any part thereof, (i) to Seller’s actual knowledge no agreements exist with any governmental or quasi-governmental entity, agency or department that would restrict the use or development of the Property or any part thereof or access thereto, except the Permitted Encumbrances, and (j) Seller has not received written notice of any regulatory, governmental or other changes that would adversely affect the use or development of the Property.  For purposes of this Agreement, the terms “to Seller’s actual knowledge and belief,” “to Seller’s knowledge” and other terms of similar import shall mean and include, without limitation, the knowledge of W. Daniel Faulk, Jr. and Richard A. Denny, III, the individuals who, in the ordinary course of their responsibilities, have the primary responsibility for the matters being represented and warranted and are the primary representatives of Seller regularly involved with the management and operation of the Property .  Seller agrees to give prompt oral and written notice to Purchaser of its receipt of any notice of a violation of any law, rule, regulation, ordinance or code covered herein, or of any notice of any other claim relating to the environmental condition of the Property, or the occurrence, or failure to occur, of any matter that would render untrue any of the representations or warranties set forth in this Agreement.

  

8

 

 

The warranties and representations set forth above in this Section 15 shall be deemed remade as of Closing and shall be updated by Seller prior to Closing, if necessary, to reflect any change in such warranties and representations as are necessary to correct any knowledge of facts obtained by Seller following the date of this Agreement.  The representations and warranties under this Agreement shall survive only for a period of one hundred eighty (180) days from the date of the Closing (the “Closing Date”).

 

16.         Default.  (a)   If Purchaser defaults under this Agreement and such default continues for five (5) days after receipt of written notice of default from Seller to Purchaser, the sole and exclusive remedy of Seller shall be to terminate this Agreement by giving Purchaser a further written notice of termination while such default is outstanding and uncured, whereupon, Seller shall keep and retain the Option Fee paid prior to the date of such default, and Title Company shall pay the Earnest Money to Seller, as full liquidated damages for Purchaser’s default, it being agreed that Seller’s damages as a result of any default by Purchaser might be impossible to ascertain and that the Option Fee and Earnest Money are not and shall not be deemed to be a penalty, but are a reasonable estimate of such damages; provided, however, that the foregoing shall not be construed to limit any right Seller shall have to indemnification from Purchaser as provided under the terms of Sections 6 and 12 hereof.

 

(b)           In the event the purchase and sale contemplated hereby is not closed by reason of Seller’s inability, failure or refusal to perform Seller’s obligations hereunder, or in the event of Seller’s breach of its covenants hereunder, or in the event any warranty or representation made herein by Seller proves materially untrue and is not waived by Purchaser, then, Escrow Agent shall immediately return the Earnest Money to Purchaser, and Purchaser may thereupon avail itself of any and all remedies at law or in equity, including, without limitation, a suit for specific performance of this Agreement.

 

17.         Intentionally Deleted.

 

18.         Memorandum of Option to Purchase. Seller shall execute a Memorandum of Option to Purchase, in recordable form, which Purchaser may record at Purchaser’s expense at the applicable Recorder of Deeds or similar office in the County wherein the Property is located.  In the event the Term of the Option expires or is terminated by Seller or Purchaser in accordance with the terms hereof, the Purchaser shall, within fifteen (15) days after written notice and request from Seller, execute and deliver to Seller a release of any Memorandum of  Option to Purchase in recordable form.

 

  

9

 

19.         Seller’s Covenants.  (a)  During the Term of this Agreement, Seller shall not: (i) enter into any other agreement, or amend or modify any existing agreement, for the use, sale or lease of the Property, except for Permitted Leases, and Seller shall not enter into any agreement with respect to the Property which would survive the Closing or otherwise affect the use, operation or enjoyment of the Property after the Closing, except to the extent consented to in writing by Purchaser or as permitted under the Mezzanine Loan Documents; (ii) commit or permit to be committed any material waste or change in the condition or appearance of the Property (including, without limitation, the construction of any improvements on the Property) except as expressly permitted under the Mezzanine Loan Documents; (iii) commit or permit the withdrawal or severing of any gas, oil coal or minerals from the Property within the control of Seller; or (iv) perform or consent to any zoning, re-zoning or land use change affecting the Property.

 

(b)           Seller, at its expense, shall deliver to Purchaser the following documents and information within twenty (20) days after Purchaser’s exercise of the Option (to the extent such documents are in Seller’s or its agent’s possession or control as of such date (other than any such documents that were delivered to Purchaser by Seller in connection with the Mezzanine Loan)):  (i) any title policies, abstracts of title and surveys relating to the Property, (ii) any engineering and technical reports that concern the Property, including any soils testing reports, environmental audits, reports of environmental or hazardous waste inspections or studies, and (iii) any documents relating to any government programs associated with the use of the Property.

 

20.         Assignment.  Purchaser shall have the right to assign its rights under this Agreement to any Affiliate, without the consent of Seller, by delivering written notice of the assignment to Seller at any time prior to the Closing; provided that any assignee of Purchaser’s rights shall assume in writing all duties, obligations and liabilities of Purchaser under this Agreement accruing or arising from and after the date of such assignment.  Should Purchaser assign its rights under this Agreement to any party and such assignment is consented to by Seller, in writing, such consent not to be unreasonably withheld, conditioned or delayed, then the Purchaser assigning its rights under this Agreement shall be released from any duties, liabilities or obligations hereunder accruing or arising from and after the date of such assignment.  Seller shall not have the right to assign or otherwise transfer its rights under this Agreement to any party, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed.  For purposes hereof, “Affiliate” means an entity which controls, is in common control with or is controlled by, another entity.  An entity will be deemed to control another entity if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other entity, whether through the ownership of voting securities, by contract or otherwise.

 

21.         Time of the Essence.  Time shall be of the essence in the performance of all obligations under this Agreement.  If Purchaser does not exercise the Option on or before the Option Expiration Date, as extended in accordance herewith, the Option shall automatically terminate.  If the time period by which any right, option or election provided under this Agreement must be exercised, or by which any act required under this Agreement must be performed, or by which Closing must be held, expires on a Saturday, Sunday or a holiday, then such time period shall be automatically extended to the next business day.

 

22.         Controlling Law.  This Agreement has been entered into under, and shall be interpreted and construed according to, the laws of the State where the Property is located.

  

10

 

23.         Entire Agreement, Modification.  This Agreement and all exhibits attached hereto constitute the entire and complete agreement between the parties hereto and supersede any prior oral or written agreements between the parties with respect to the Property.  Seller and Purchaser expressly agree that there are no oral or written understandings or agreements between them that in any way change the terms, covenants and conditions set forth in this Agreement, and that no modification of this Agreement, and no waiver of any of its terms or conditions, shall be effective unless made in writing and duly executed by Seller and Purchaser.

 

24.         Notices.  All notices provided or permitted to be given under this agreement must be in writing and shall be served by depositing same in the United States mail or guaranteed overnight delivery service, or by hand delivering the same to such person.  For purposes of notice, the addresses of the parties shall be those addresses set forth below their signature blocks at the end of this Agreement.  Except as set forth in Section 7 above, any notice shall be considered given on the date of hand delivery to all parties to be served, one (1) business day after consignment to a guaranteed overnight delivery courier to all parties to be served, or the date ) business days after deposit in the United States mail to all parties to be served as provided above.  By giving at least ten (10) days’ prior written notice thereof, any party may from time to time and at any time change its mailing address hereunder.

 

25.         Effective Date.  The “Effective Date” of the Agreement shall be the date of execution and delivery of this Agreement by the last to sign of the Purchaser and the Seller.

 

26.         Survival.  All covenants, agreements, representations and warranties contained in this Agreement shall survive the Closing, transfer of the Property to Purchaser and the payment of the Purchase Price, and shall not merge into any deed delivered at Closing.  Additionally, all indemnification obligations of Seller shall survive the Closing.

 

27.         Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors, successors-in-title, and assigns.

 

28.         Exchange.  Each party agrees to cooperate with the other party to allow that party to participate in a like-kind exchange of other property under Section 1031 of the Internal Revenue Code, and to execute any additional documents reasonably necessary to effect the exchange, including, without limitation, an exchange agreement, provided that the cooperating party bears no additional expenses, duties, obligations, liabilities, warranties or delays, nor shall it be required to accept a deed to any exchange property and its name shall not appear in the chain of title with respect to such exchange property.

 

29.         Condition of Property.  Purchaser agrees that they have had full opportunity to inspect the Property, and at the Closing will accept the Property in its condition “AS IS” as of the Effective Date and that SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OF THE PROPERTY OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE WRITTEN DEEDS, DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED AT CLOSING.

  

11

 

 

30.         Severability.  In the event that any term of provision of this Option is found by a court of competent jurisdiction to be invalid and unenforceable, the remaining terms and provisions of this Option shall remain in full force and effect

 

31.         Covenants Running With The Land; Specific Performance.  The covenants and agreements of Seller under this Agreement shall be covenants running with the land with respect to the Property and shall be binding upon Seller and Seller’s successors, successors-in-title and assigns.  This Agreement and the Option, shall be specifically enforceable by Purchaser and Purchaser’s heirs, executors, administrators, personal representatives, successors, successors-in-title and assigns.

 

32.         Counterparts and Execution and Delivery by Electronic Mail Transmission.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.  Furthermore, this Agreement may be executed and delivered by electronic mail transmission.  The parties intend that electronic mail (e.g. pdf. format) signatures constitute originals signatures and that an electronic copy or counterparts of this Agreement containing signatures (original or electronic) of a party is binding upon that party. Each signature page to any counterpart of this Agreement may be detached from such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart of this Agreement identical thereto except having attached to it additional signature pages.

 

33.         Subordination of Agreement to Mortgage Loan.  Purchaser and Seller acknowledge and agree that this Agreement and the rights and obligations of the parties under this Agreement are subject and subordinate to that certain $10,000,000 construction loan made by Atlantic Capital Bank (such lender and any holder from time to time of the Senior Loan, “Senior Lender”) to Seller on or about the date hereof (such loan and any refinancing of such loan, the “Senior Loan”), and in the event of any foreclosure of the Property by Senior Lender or its nominee or assignee (or deed in lieu thereof) pursuant to the loan documents evidencing the Senior Loan, Senior Lender or its nominee or assignee shall take title to the Property free and clear of this Agreement.

 

[SIGNATURES BEGIN ON NEXT PAGE]

  

12

 

IN WITNESS WHEREOF, Seller and Purchaser have executed this Agreement as of the Effective Date.

 

	  	
SELLER:

	  	  
	  	
OXFORD HAMPTON PARTNERS LLC, a

Georgia limited liability company

	  	  
	  	
By:

	
Oxford Hampton Holdings, LLC, a Georgia limited liability company, Its Managing Member

	  	  	  
	  	  	
By:

	
Oxford Hampton Development LLC, a Georgia limited liability company, Its Manager

	  	  	  	  
	  	  	  	
By:

	
/s/ W. Daniel Faulk, Jr.

	
[Seal]

	  	  	  	
Name: 

	
W. Daniel Faulk, Jr.

	  	  	  	
Its:

	
Manager

	 	 	 	 
	  	  	  	
Dated:  June 30, 2011

	
Seller’s Notice Addresses:

	  	  
	
If to Seller:

	
Oxford Hampton Partners LLC

	  	
One Overton Park

	  	
3625 Cumberland Blvd., Suite 500

	  	
Atlanta, Georgia  30339

	  	
Attention:  W. Daniel Faulk, Jr.

	  	
Email Address:  dfaulk@oxford-properties.com

	  	  
	
Plus a copy to:

	
Seyfarth Shaw LLP

	  	
1075 Peachtree Street, NE, Suite 2500

	  	
Atlanta, Georgia  30309

	  	
Attention:  Steve Kennedy, Esq.

	  	
Email Address:  skennedy@seyfarth.com

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

  

13

 

 

	  	
PURCHASER:

	  	  
	  	
TRAIL CREEK MEZZANINE LENDING, LLC, a

Delaware limited liability company

	  	  	  
	  	
By:

	
Preferred Apartment Advisors, LLC, it’s Agent

	  	  	  	  
	  	  	
By:

	
/s/ John A. Williams

	  	  	
Name:

	
John A. Williams

	  	  	
Its:

	
President and Chief Executive Officer

	  	  	  
	  	  	
Dated:  June 30, 2011

 

	
Purchaser’s Notice Addresses:

	 	 
	
If to Purchaser:

	
Trail Creek Mezzanine Lending, LLC

	  	
c/o Preferred Apartment Communities, Inc.

	  	
3625 Cumberland Boulevard, Suite 400

	  	
Atlanta, GA  30339

	  	
Attention:  Leonard A. Silverstein, Esq.

	  	
Email Address:  lsilverstein@corporate-holdings.com

	  	  
	
Plus a copies to:

	
Jess A. Pinkerton, Esq.

	  	
McKenna Long & Aldridge LLP

	  	
303 Peachtree Street

	  	
Suite 5300

	  	
Atlanta, Georgia  30308

	  	
Email Address:  jpinkerton@mckennalong.com

 

  

14

 

EXHIBIT “A”

TO

PURCHASE OPTION AGREEMENT

 

DESCRIPTION OF PROPERTY

 

ALL that certain tract of land lying in the City of Hampton, Commonwealth of Virginia, shown and designated as Parcel 1A-1A, containing 10.191 acres, more or less, as shown on that certain plat by Vanasse Hangen Brustlin, Inc., dated September 7, 2010, entitled "Subdivision Plat Showing Parcels 1A-1 and 1A-2 Property of Oxford Hampton Partners, LLC and Oxford Trail JV, LLC, North Armistead Avenue, City of Hampton, Virginia" a copy of which is recorded in the Clerk's Office, Circuit Court, City of Hampton, Virginia in Plat Book 12, page 138.

BEING the same real estate conveyed to Oxford Hampton Partners LLC from Oxford Properties, LLC by Deed dated July 22, 2005, recorded in the aforesaid Clerk's Office as Instrument No. 050018837.EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) dated as of July 1, 2011 (the “Effective Date”), is by and between NuGen Holdings, Inc., a Delaware corporation (the “Company”), and Marshall G. Webb (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ the Executive as the Company’s Chief Financial Officer (“CFO”),and the Executive desires to serve as the CFO on the terms and conditions contained herein; and

 

WHEREAS, the Company desires to compensate the Executive for a minimum of the initial one year term at an annual base salary of $120,000, plus the issuance of an option to purchase two hundred and fifty thousand (250,000) shares of common stock of the Company through its stock option plan;

 

NOW THEREFORE, in consideration of the mutual benefits to be derived from this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Executive hereby agree as follows:

 

	
1.

	
Term of Employment; Office and Duties.

 

(a)           Commencing on the Effective Date (the “Employment Date”), and for an initial term ending on June 30, 2012 (the “Initial Term”), the Company shall (i) employ the Executive as a senior executive of the Company; and (ii) immediately upon the effective date of the voluntary resignation of Company’s current CFO, the Board of Directors shall elect Executive as Company’s CFO.  Executive shall perform all duties and responsibilities which are consistent with the positions and such additional duties and responsibilities consistent with such positions as may from time to time be assigned to the Executive by the Board of Directors. Executive agrees to perform such duties and discharge such responsibilities in accordance with the terms of this Agreement. This Agreement shall be automatically renewed for an additional one (1) year term (the “Renewal Period”) unless terminated by either party by written notice to the other party at least ninety (90) days prior to the expiration of the Agreement. The Initial Term and any Renewal Period that has commenced shall be collectively referred to herein as the “Term” in effect as of the relevant time.

 

	
2.

	
Compensation and Benefits.

 

For all services rendered by the Executive in any capacity during the period of Executive’s employment by the Company, including without limitation, services as an executive officer of the Company or any subsidiary, affiliate or division thereof, from and after the Effective Date, the Executive shall be compensated as follows:

 

(a)           Base Salary. The Company shall pay the Executive an annual salary (“Base Salary”) at a rate of one hundred and twenty thousand US Dollars (US $120,000) per year. The Board of Directors may periodically review the Executive’s Base Salary and may determine to increase (but not decrease) the Executive’s salary, in accordance with such policies as the Company may hereafter adopt from time to time, if it deems appropriate. Further, Company and Executive agree that a review will occur at such time as the Company, or any of its Subsidiaries, closes a capital raise and or Executive’s duties and responsibilities are increased.

  

1

  

 

	
  

	
(b)

	
Bonus.

 

(i)           Executive shall be entitled to receive an annual bonus in the sole and absolute discretion of the Board of Directors of the Company. The Company anticipates that said bonus would be for 25% of the Executive’s base salary.

 

(ii)           Executive shall be paid a special bonus in the amount of fifteen thousand US Dollars (US $15,000) for each one million US Dollars (US $1,000,000) raised following the current Series B financing effort currently underway.  Further,

 

(iii)           In the event Executive is directly involved in a Series B financing, Executive shall be paid a bonus calculated in the aforementioned manner, i.e., fifteen thousand US Dollars (US $15,000) for each one million US Dollars (US $1,000,000) raised, or one and one-half percent (1.5%) of any amount less than one million US Dollars (US $1,000,000) raised.

 

	
  

	
(c)

	
Fringe Benefits, Option Grants and Miscellaneous Employment Matters.

 

(i)           At Executive’s election, Executive shall be entitled to participate in such disability, health and life insurance and other fringe benefit plans or programs offered to all employees of the Company, as well as to the key executive employees of Company, including a Section 401(k) and retirement plan of the Company as may be established from time to time by the Board of Directors, subject to the rules and regulations applicable thereto. In addition, the Executive shall be entitled to the following benefits:

 

(ii)           Contemporaneous with the execution of this Employment Agreement, the Executive is to receive a grant (the “Stock Option Grant”), pursuant to the 2010 Stock Option Plan, of stock options (the “Stock Options”) to purchase two hundred and fifty thousand (250,000) shares at an exercise price of $0.45 per share. The Stock Options shall have a term of ten (10) years, shall become exercisable when vested, and shall vest as follows: (a) 125,000 shares at the execution of this Agreement (July 1, 2011); and (b) 125,000 shares ratably over the immediately following twelve month period (1/12th each at the end of each fiscal month), with the first installment vesting on July 31, 2011. However, in the event a Change of Control (as set forth in Rule 405 of the Securities Act of 1933), or sale of substantially all of the assets of the Company or the merger out of existence of the Company should occur, or in the event the providers of the aforementioned Series B and/or subsequent financing elect to replace Executive with their selected CFO candidate, or Company elects to replace Executive for any reason other than “for cause,” all options will be vested immediately. The Executive shall be eligible for additional Stock Option Grants as the Company may establish from time to time with respect to periods during which he is employed by the Company. Notwithstanding the foregoing, the Stock Options shall terminate immediately following a termination of the Executive for “Cause” and upon 90 days following the voluntary termination of service by the Executive that is not for “Good Reason.”

  

2

  

 

(d)           Withholding and Employment Tax. Payment of all compensation hereunder shall be subject to customary withholding tax and other employment taxes as may be required with respect to compensation paid by an employer/corporation to an employee unless Executive elects to have the agreed gross annual base salary and bonus compensation paid directly to his company, Polaris Group (“Polaris”), and Company agrees with such arrangement, whereupon all taxes and benefits will be the responsibility of Polaris and Executive.

 

(e)           Paid Leave. During the Term, the Executive shall be entitled to four (4) weeks of Paid Time Off (PTO) per year as may be provided by the Company in accordance with the most favorable plans, policies, programs and practices of the Company. Planned PTO (for example, vacation) shall be taken at such times and intervals as shall be determined mutually by the Executive and the Company. Up to two (2) weeks of accrued, unused PTO may be carried over from year to year during the Term, up to a limit of 4 weeks in addition to Term’s entitled PTO. In the event of the termination of the Executive’s employment without Cause, the Executive shall be entitled to cash compensation for PTO not used as of the effective date of termination to the extent that such PTO has been accrued during the calendar year in which such termination occurs. The Executive will be entitled to paid holiday in accordance with policies applicable to all full-time regular employees in accordance with the then current policies of the Company.

 

	
3.

	
Business Expenses.

 

The Company shall pay or reimburse all reasonable travel and entertainment expenses incurred by the Executive in connection with the performance of his duties under this Agreement, including travel to offices and facilities in the United States and abroad, reimbursement for attending out-of-town meetings of the Board of Directors, and such other travel as may be required or appropriate in Executive’s discretion, consistent with duly approved Company budgets, to fulfill the responsibilities of his office, all in accordance with such policies and procedures as the Company may from time to time establish for senior officers and as required to preserve any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s normal requirements with respect to reporting and documentation of such expenses. The Company shall also pay or reimburse Executive for all membership fees and dues in appropriate professional associations and organizations utilized by Executive in the course of his service for the Company, as well as all expenses incurred by the Executive for Executive’s cellular telephone and portable text messaging including monthly service charges, equipment maintenance and all other ancillary charges including, but not limited to, text messaging, paging, and wireless communications.

 

	
4.

	
Termination of Employment.

 

Notwithstanding any other provision of this Agreement, Executive’s employment with the Company may be terminated upon written notice to the other party as follows:

  

3

  

 

(a)           By the Company, in the event of the Executive’s death or Disability (as hereinafter defined) or for Cause (as hereinafter defined). For purposes of this Agreement, “Cause” shall mean either: (i) the indictment of, or the conviction of formal charges against Executive on charges involving criminal fraud or embezzlement; (ii) the indictment of, or the conviction of formal charges against Executive of a crime involving an act or acts of dishonesty, fraud or moral turpitude by the Executive, which act or acts constitute a felony; (iii) Executive negligently or knowingly having caused the Company to violate the Company’s Bylaws or other policies; (iv) Executive having committed acts or omissions constituting gross negligence or willful misconduct with respect to the Company, including with respect to any valid contract to which the Company is a party; (v) Executive having committed acts or omissions constituting a breach of Executive’s duty of loyalty or fiduciary duty to the Company or any material act of dishonesty or fraud with respect to the Company which are not cured or substantially cured to the satisfaction of the Board of Directors of the Company in a reasonable time, which time shall be at least 30 days from receipt of written notice from the Company of such material breach; (vi) Executive having committed acts or omissions constituting a material breach of this Agreement which are not cured or substantially cured to the satisfaction of the Board of Directors of the Company in a reasonable time, which time shall be at least 30 days from receipt of written notice from the Company setting forth with specificity the particulars of any such material breach as well as the corrective actions required. A determination that Cause exists as defined in clauses (iv), (v), or (vi) (as to this Agreement) of the preceding sentence shall be made by at least a majority of the members of the Board of Directors. For purposes of this Agreement, “Disability” shall mean the inability of Executive, in the reasonable judgment of a physician jointly appointed by the Executive and Board of Directors, to perform, even with reasonable accommodation, his duties of employment for the Company or any of its subsidiaries because of any physical or mental disability or incapacity, where such disability shall exist for an aggregate period of more than 60 days in any 365-day period. The Company shall by written notice to the Executive specify the event relied upon for termination pursuant to this Section 4(a), and Executive’s employment hereunder shall be deemed terminated as of the date of such notice. In the event of any termination under this Subsection 4(a), the Company shall pay all amounts then due to the Executive under Section 2 (a) of this Agreement for any portion of the payroll period worked but for which payment had not yet been made up to the date of termination, and, if such termination was for Cause, the Company shall have no further obligations to Executive under this Agreement, and any and all options granted hereunder shall terminate according to their terms; provided, however, that in the event of a termination for Cause pursuant to clause (vi) above, the Company shall continue to pay to Executive the Base Salary (at a monthly rate equal to the rate in effect immediately prior to such termination) for three (3) months from the date of termination, when, as and if such payments would have been made in the absence of Executive’s termination and any and all options granted hereunder shall terminate according to their terms.

 

(b)           By the Company, in the absence of Cause, for any reason and in its sole and absolute discretion, provided that in such event the Company shall, as liquidated damages or severance pay, or both, continue to pay to Executive the Base Salary (at a monthly rate equal to the rate in effect immediately prior to such termination) for the longer of (x) the remaining Term or (y) four (4) months from the date of termination (the “Termination Payments”), when, as and if such payments would have been made in the absence of Executive’s termination plus: any earned but unpaid amounts set forth in Section 2(b) above, and immediately vest all remaining options as set forth in Section 2(c)(ii) above. The Termination Payments shall be made regardless of Executive’s subsequent re-employment as long as any new employment is not in violation of Sections 5 or 6 of this Agreement.

  

4

  

 

(c)           By the Executive for “Good Reason,” (as the Executive shall reasonably determine in good faith) which shall be deemed to exist: (i) if the Company’s Board of Directors or that of any successor entity of the Company fails to appoint or reappoint the Executive or removes the Executive from the title and/or office of Chief Financial Officer of the Company or from any successor entity operating the Company; (ii) if Executive is assigned any duties materially inconsistent with the duties or responsibilities of the CFO of the Company as contemplated by this Agreement or any other action by the Company that results in a material diminution in such position, authority, duties, or responsibilities, excluding an isolated, insubstantial, and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive (but not excluding changes resulting from a sale of the Company, whether by merger, tender offer or otherwise) provided that Executive shall act within 30 days of becoming aware of any such diminution in the scope of his duties, responsibilities, authority or position; (iii) if the Company shall breach or shall have continued to fail to comply with any material provision of this Agreement after a 30-day period to cure (if such failure is curable) following written notice to the Company of such non-compliance; or (iv) upon a change in control of the Company or within twelve (12) months of any such change in control (for these purposes the term “change in control” shall have the meaning set forth in Rule 405 of the Securities Act of 1933), or within twelve (12) months of a sale of substantially all of the assets of the Company or the merger out of existence of the Company. In the event of any termination for “Good Reason” under this Section 4(c), the Company shall, as liquidated damages or severance pay, or both, pay the Termination Payments, as defined in (b) of this Section 4, to Executive, when, as and if such payments would have been made in the absence of Executive’s termination plus: any earned but unpaid amounts set forth in Section 2(b) above, and immediately vest all remaining options as set forth in Section 2(c)(ii) above.

 

(d)           During any period in which Executive is obligated not to compete with the Company pursuant to Section 5 hereof (unless Executive was terminated for Cause as defined herein), Executive and his family shall continue to be covered by the Company’s life, medical, health and death plans. Such coverage shall be at the Company’s expense to the same extent as if Executive were still employed by the Company. In the event of a termination pursuant to Sections 4(b) or 4(c), the Company shall provide to Executive the pro-rata share of his annual bonus, to the extent one is awarded by the Compensation Committee the consideration of which shall be taken in good faith, giving a full month’s credit for any partial month worked in that bonus year. Additionally, in the event of a termination pursuant to Sections 4(b) or 4(c), the Company shall provide to Executive, at the Company’s expense, outplacement services of a nature customarily provided to a senior executive. Notwithstanding the foregoing, the obligations of the Company pursuant to this Section 4(d) shall remain in effect no longer than the term of the Termination Payments.

 

(e)           In the event that any amounts payable and/or any benefits provided to the Executive under the terms of this Agreement and/or under any other plan, agreement or arrangement by which he is to receive payments or benefits in the nature of compensation would constitute “excess parachute payments” as that term is defined for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (“Code”) and Treasury Regulations promulgated pursuant thereto, then the amounts payable under the terms of this Agreement and/or under any other plan, agreement or arrangement shall be reduced so that no payments are deemed “excess parachute payments.” Any decisions regarding this requirement or implementation of reductions shall be made by tax counsel selected by the Company.

  

5

  

 

(f)           If any payment to Executive under the terms of this Agreement is determined to constitute a payment of nonqualified deferred compensation for purposes of Section 409A of the Code, such payment shall be delayed until the date that is six months after the date of Executive’s separation from service with the Company, so as to comply with the special rule for certain “specified employees” set forth in Code Section 409A(a)(2)(B)(i) unless it is determined that immediate distribution is permissible (and does not trigger any additional tax liability pursuant to Code Section 409A(a)(1)) pursuant to Code Section 409A(a)(2)(A)(v) by reason of being payable in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company.

 

(g)           The Executive agrees that as of or following the termination of the Executive’s employment for any reason or for no reason, he shall immediately resign as a member of the Company’s Board of Directors if he is a member of the Board.

 

	
5.

	
Non-Competition.

 

During the period of Executive’s employment hereunder and during the period, if any, during which payments are required to be made to the Executive by the Company pursuant to Sections 4(b) or 4(c), and for a period of one year thereafter, the Executive shall not, within any state or foreign jurisdiction in which the Company or any subsidiary of the Company is then providing services or products or marketing its services or products (or engaged in active discussions to provide such services), or within a fifty (50) mile radius of any such state or foreign jurisdiction, directly or indirectly own any interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any business engaged or proposed to be engaged in by the Company. Investments in less than five percent of the outstanding securities of any class of a corporation subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited by this Section 5. The provisions of this Section 5 are subject to the provisions of Section 14 of this Agreement.

 

	
6.

	
Inventions and Confidential Information.

 

The parties hereto recognize that a major need of the Company is to preserve its specialized knowledge, trade secrets, and confidential information. The strength and good will of the Company is derived from the specialized knowledge, trade secrets, and confidential information generated from experience with the activities undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge to competitors would be beneficial to them and detrimental to the Company, as would the disclosure of information about the marketing practices, pricing practices, costs, profit margins, design specifications, analytical techniques, and similar items of the Company and its subsidiaries. The Executive acknowledges that the proprietary information, observations and data obtained by him while employed by the Company concerning the business or affairs of the Company are the property of the Company. By reason of his being a senior executive of the Company, the Executive has or will have access to, and has obtained or will obtain, specialized knowledge, trade secrets and confidential information about the Company’s operations and the operations of its subsidiaries, which operations extend throughout the United States. For purposes of this Section 6, “Company” shall mean the Company, its affiliates and each of its controlled subsidiaries. Therefore, subject to the provisions of Section 14 hereof, the Executive hereby agrees as follows, recognizing that the Company is relying on these agreements in entering into this Agreement: During the period of Executive’s employment with the Company and thereafter, the Executive will not use, disclose to others, or publish or otherwise make available to any other party any inventions or any confidential business information about the affairs of the Company, including but not limited to confidential information concerning the Company’s products. “Confidential Information” shall include commercial or trade secrets about Company’s products, methods, engineering designs and standards, analytical techniques, technical information, customer information, employee information, or financial and business records, any of which contains proprietary information created or acquired by the Company and which information is held in confidence by Company. Confidential Information does not include information which: (i) becomes generally available to the public, unless said Confidential Information was disclosed in violation of a confidentiality agreement; or (ii) becomes available to Executive on a non-confidential basis from a source other than the Company or its agents, provided that such source is not bound by a confidentiality agreement with the Company.

  

6

  

 

(a)           Disclosure and Assignment. The Executive will promptly disclose in writing to the Company complete information concerning each and every invention, discovery, improvement, device, design, apparatus, practice, process, method or product, whether patentable or not, made, developed, perfected, devised, conceived or first reduced to practice by the Executive, either solely or in collaboration with others, during the period of his employment by the Company, whether or not during regular working hours, relating either directly or indirectly to the business of the Company, or the practices or techniques in carrying on the Company’s business (“Developments”). The Executive, to the extent that he has the legal right to do so, hereby acknowledges that any and all of the Developments are the property of the Company and hereby assigns and agrees to assign to the Company any and all of the Employee’s right, title and interest in and to any and all of the Developments during the period of his employment by the Company. At the request and expense of the Company, the Executive will confer with the Company and its representatives for the purpose of disclosing to the Company all Developments accomplished during the period of his employment by the Company, as the Company shall reasonably request during the period ending one year after termination of the Executive’s employment with the Company.

 

(b)          Limitation on Section 6(b). The provisions of Section 6(b) shall not apply to any Development which the Employee can demonstrate through written records meet all of the following conditions:

 

(i)           such Development was developed entirely on the Executive’s own time not in breach of this Agreement;

 

(ii)           such Development was made without the use of any Company equipment, supplies, facility or trade secret information;

 

(iii)           such Development does not relate (A) directly to the business of the Company or (B) to the Company’s actual or demonstrably anticipated research or development; and

 

(iv)           such Development does not result from any work performed by the Executive for the Company.

  

7

  

 

(c)           During the period of Executive’s employment with the Company and for twelve (12) months thereafter, (a) the Executive will not directly or indirectly through another entity induce any employee, agent or representative of the Company to leave the Company’s employ or in any way interfere with the relationship between the Company and any such person or (b) tortuously interfere with the Company’s business relationship with any customer, supplier, licensee, licensor or other business relation of the Company.

 

	
7.

	
Indemnification.

 

The Company will indemnify (and advance the costs of defense of) and hold harmless the Executive (and his legal representatives) to the fullest extent permitted by the laws of the state in which the Company is incorporated, as in effect at the time of the subject act or omission, or by the Certificate of Incorporation and Bylaws of the Company, as in effect at such time or on the date of this Agreement, whichever affords greater protection to the Executive, and the Executive shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its executive officers, against all judgments, damages, liabilities, costs, charges and expenses whatsoever incurred or sustained by him or his legal representative in connection with any action, suit or proceeding to which he (or his legal representatives or other successors) may be made a party by reason of his being or having been an officer of the Company or any of its subsidiaries except that the Company shall have no obligation to indemnify Executive for liabilities resulting from conduct of the Executive with respect to which a court of competent jurisdiction has made a final determination that Executive committed gross negligence or willful misconduct.

 

	
8.

	
Litigation Expenses.

 

In the event of any litigation or other proceeding between the Company and the Executive with respect to the subject matter of this Agreement and the enforcement of the rights hereunder, the losing party shall reimburse the prevailing party for all of his/its reasonable costs and expenses relating to such litigation or other proceeding, including, without limitation, his/its reasonable attorneys’ fees and expenses.

 

	
9.

	
Consolidation; Merger; Sale of Assets; Change of Control.

 

Nothing in this Agreement shall preclude the Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of corporate combination provided that the corporation resulting from or surviving such combination, consolidation or merger, or to which such assets are transferred, or such partnership or joint venture assumes this Agreement and all obligations and undertakings of the Company hereunder. Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint venture or other entity, and this Agreement shall continue in full force and effect and shall entitle the Executive and his heirs, beneficiaries and representatives to exactly the same compensation, benefits, perquisites, payments and other rights as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership or joint venture not occurred.

  

8

  

 

	
10.

	
Survival of Obligations.

 

Sections 4, 5, 6, 7, 8, 9, 11, 12 and 14 shall survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Executive, upon the expiration of this Agreement or otherwise).

 

	
11.

	
Executive’s Representations.

 

The Executive hereby represents and warrants to the Company that : (i) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound, (ii) the Executive is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms. The Executive hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

 

	
12.

	
Company’s Representations.

 

The Company hereby represents and warrants to the Executive that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Company is a party or by which it is bound; (ii) upon the execution and delivery of this Agreement by the Executive, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms; and (iii) the Company’s representations made by the Board of Directors and members of senior management to the Executive prior to the execution of this Agreement regarding the science, business or fiscal propriety of the Company are accurate in all material respects.

 

	
13.

	
Enforcement.

 

Because the Executive’s services are unique and because the Executive has access to confidential information concerning the Company, the parties hereto agree that money damages would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of any provision of this Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).

  

9

  

 

Severability.

 

In case any one or more of the provisions or part of a provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in limitation of the foregoing, the Company and the Executive each intend that the covenants contained in Sections 5 and 6 shall be deemed to be a series of separate covenants, one for each and every state of the United States and any foreign country set forth therein. If, in any judicial proceeding, a court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time, scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such court.

 

	
14.

	
Entire Agreement: Amendment.

 

This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and supersedes any prior agreement or understanding. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

 

	
15.

	
Notices.

 

All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given: if physically delivered, upon delivery; if delivered by express mail or other expedited service, upon delivery; or if mailed, postage prepaid, via certified mail, return receipt requested, upon receipt; addressed as follows:

 

	
(a)

	
To the Company:

	
(b)

	
To the Executive:

	 	 	 	 
	  	
c/o NuGen Mobility

	  	
Marshall G. Webb

	  	
44645 Guilford Road, #201

	  	
6110 Inwood Drive

	  	
Ashburn, VA 20147

	  	
Houston, TX 77057

 

and / or to such other persons and addresses as any party shall have specified in writing to the other pursuant to this provision.

 

	
16.

	
Assignability.

 

This Agreement shall not be assignable by either party and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal representatives, successors and assigns of the parties. In the event that all or substantially all of the business of the Company is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this Agreement is expressly assigned to the transferee.

  

10

  

 

	
17.

	
Governing Law.

 

This Agreement shall be governed by and construed under the laws of the State of Delaware.

 

	
18.

	
Waiver and Further Agreement.

 

Any waiver of any breach of any terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other party may reasonably require in order to effectuate the terms and purposes of this Agreement.

 

	
19.

	
Headings of No Effect.

 

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

 

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

	  	
COMPANY:

	  	  
	  	
NUGEN HOLDINGS, INC.

	  	  
	  	
By /s/ Henry Y.L Toh

	  	
Henry Y.L. Toh, Vice Chairman

	  	  
	  	
EXECUTIVE:

	  	  
	  	
/s/ Marshall G. Webb

	  	
Marshall G. Webb

 

  

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}]]