Document:

FEDERAL DEPOSIT INSURANCE CORPORATION
                                WASHINGTON, D.C.

------------------------------
In the Matter of               )                        CONSENT ORDER
                               )
CORNERSTONE COMMUNITY BANK     )                        FDIC-10-1037b
CHATTANOOGA, TENNESSEE         )

(INSURED STATE NONMEMBER BANK) )
------------------------------

     The  Federal  Deposit  Insurance  Corporation  ("FDIC")  is the appropriate
Federal  banking  agency  for Cornerstone Community Bank, Chattanooga, Tennessee
("Bank"),  under  12  U.S.C.  ss. 1813(q).

     The Bank, by and through its duly elected and acting Board of Directors
("Board"), has executed a "STIPULATION TO THE ISSUANCE OF A CONSENT ORDER"
("STIPULATION"), dated March 31, 2010, that is accepted by the FDIC. With the
Stipulation, the Bank has consented, without admitting or denying any charges of
unsafe or unsound banking practices or violations of law or regulation relating
to deficient credit underwriting and monitoring, failure to identify problem
assets, inadequate Allowance for Loan and Lease Losses ("ALLL"), and weaknesses
in capital, interest rate risk and liquidity, to the issuance of this CONSENT
ORDER ("ORDER") by the FDIC.

     Having determined that the requirements for issuance of an order under 12
U.S.C.  ss. 1818(b) have been satisfied, the FDIC hereby orders that:

             COMPLIANCE COMMITTEE - NON-EMPLOYEE DIRECTORS REQUIRED
             ------------------------------------------------------

1.     (a)     Within 30 days after the effective date of this ORDER, the Bank's
Board shall establish a committee of the Board of the Bank charged with the
responsibility of ensuring that the Bank complies with the provisions of this
ORDER. At least a majority of the members of such committee shall be directors
not employed in any capacity by the Bank other than as a director. The committee
shall report monthly to the full Board, and a copy of the report and any
discussion relating to the report or the ORDER shall be noted in the minutes of
the Bank's Board meetings. The establishment of this subcommittee shall not
diminish the responsibility or liability of the entire Board to ensure
compliance with the provisions of this ORDER.

<PAGE>
                          MANAGEMENT - STAFFING STUDY
                          ---------------------------

     2.     (a)     Within 30 days after the effective date of this ORDER, the
Bank shall retain a bank consultant acceptable to the Regional Director of the
FDIC's Dallas Region ("Regional Director") and to the Commissioner of the
Tennessee Department of Financial Institutions ("Commissioner"). The consultant
shall develop a written analysis and assessment of the Bank's management and
staffing needs ("Management Plan") for the purpose of providing qualified
management for the Bank.

     (b)     The Bank shall provide the Regional Director and the Commissioner
with a copy of the proposed engagement letter or contract with the consultant
for review before it is executed. The contract or engagement letter, at a
minimum, should include:

               (1)  A description  of  the  work  to  be  performed  under  the
                    contract  or  engagement  letter;

               (2)  The responsibilities  of  the  consultant;

                                       2
<PAGE>

               (3)  An identification  of  the  professional  standards
                    covering  the  work  to  be  performed;

               (4)  Identification  of  the  specific  procedures  to  be  used
                    when  carrying  out  the  work  to  be  performed;

               (5)  The qualifications  of  the  employee(s)  who  are  to
                    perform  the  work;

               (6)  The time  frame  for  completion  of  the  work;

               (7)  Any restrictions  on  the  use  of  the  reported  findings;
                    and

               (8)  A provision  for  unrestricted  examiner  access  to  work
                    papers.

     (c)  The  Management  Plan  shall  be  developed  within  90 days after the
effective  date  of this ORDER. The Management Plan shall include, at a minimum:

               (1)  Identification  of  both  the  type  and  number  of officer
                    positions  needed  to  properly  manage  and  supervise  the
                    affairs  of  the  Bank;

               (2)  Identification  and  establishment  of  such  Bank
                    committees  as  are needed to provide guidance and oversight
                    to  active  management;

               (3)  Evaluation  of  all  Bank  officers  and  staff  members  to
                    determine  whether  these  individuals  possess the ability,
                    experience  and  other  qualifications  required  to perform
                    present  and  anticipated duties, including adherence to the
                    Bank's  established  policies and practices, and restoration
                    and  maintenance  of the Bank in a safe and sound condition;
                    and

               (4)  A plan  to  recruit  and  hire  any  additional  or
                    replacement personnel with the requisite ability, experience
                    and  other  qualifications  to  fill  those officer or staff
                    member  positions  identified  in  the  Management  Plan.

                                       3
<PAGE>

     (d)     The Management Plan shall be submitted to the Regional Director and
the Commissioner for review and comment upon its completion. Within 30 days from
the receipt of any comments from the Regional Director and the Commissioner, and
after the adoption of any recommended changes, the Bank shall approve the
Management Plan, and record its approval in the minutes of the Board meeting.
Thereafter, the Bank, its directors, officers, and employees shall implement and
follow the Management Plan and/or any subsequent modification.

     (e)  Thereafter,  the Bank shall have and retain qualified management. Each
member  of  management  shall possess qualifications and experience commensurate
with  his  or her duties and responsibilities at the Bank. The qualifications of
management  personnel  shall  be  evaluated  on  their  ability  to:

               (1)  Comply  with  the  requirements  of  the  ORDER;

               (2)  Operate  the  Bank  in  a  safe  and  sound  manner;

               (3)  Comply  with  applicable  laws  and  regulations;  and

               (4)  Restore  all  aspects  of  the  Bank  to  a  safe  and sound
                    condition,  including  improve  the  Bank's  asset  quality,
                    capital  adequacy,  earnings,  management  effectiveness,
                    liquidity,  and  its  sensitivity  to  market  risk.

     (f)     Within 30 days after the effective date of this ORDER, the Bank
shall restructure the Information Technology Management, Risk Management, and
Special Assets Committees to include representation of the directors not
employed in any capacity by the Bank other than as a director.

                                       4
<PAGE>
                      ALLOWANCE FOR LOAN AND LEASE LOSSES
                                      AND
                              AMENDED CALL REPORTS
                              --------------------

     3.     (a)     Within 30 days after the effective date of this ORDER, the
Bank shall make provisions to its Allowance for Loan and Lease Losses ("ALLL")
in the amount of at least $1,624,000. The allowance should be funded by charges
to current operating income, and should be calculated in accordance with
generally accepted accounting standards and ALLL supervisory guidance. After the
initial provision is made, the Bank shall thereafter maintain a reasonable ALLL.
Prior to the end of each calendar quarter, the Bank's Board shall review the
adequacy of the Bank's ALLL. Such reviews shall include, at a minimum, the
Bank's loan loss experience, an estimate of potential loss exposure in the
portfolio, trends of delinquent and non-accrual loans and prevailing and
prospective economic conditions. The minutes of the Bank's Board meetings at
which such reviews are undertaken shall include complete details of the reviews
and the resulting recommended increases in the ALLL.

     (b)     Within 30 days after the effective date of this ORDER, the Bank
shall review Consolidated Reports of Condition and Income filed with the FDIC on
or after September 30, 2009, and amend said reports to accurately reflect the
financial condition of the Bank as of the date of each such report. In
particular, such reports shall contain a reasonable ALLL. Reports filed after
the effective date of this ORDER shall also accurately reflect the financial
condition of the Bank as of the reporting date.

                             BUDGET AND PROFIT PLAN
                             ----------------------

                                       5
<PAGE>
     4.     (a)     Within 60 days after the effective date of this ORDER, the
Bank shall formulate and submit to the Regional Director and the Commissioner
for review and comment a written profit plan and a realistic, comprehensive
budget for all categories of income and expense for calendar year 2010. The plan
required by this paragraph shall contain formal goals and strategies, be
consistent with sound banking practices, reduce discretionary expenses, improve
the Bank's overall earnings and net interest income, and shall contain a
description of the operating assumptions that form the basis for major projected
income and expense components.

     (b)  The  written  profit  plan  shall  address,  at  a  minimum:

               (1)  An analysis  of  the  Bank's  pricing  structure;  and

               (2)  A recommendation  for  reducing  the  Bank's  cost of funds.

     (c)     Within 30 days after the end of each calendar quarter following
completion of the profit plan and budget required by this paragraph, the Bank's
Board shall evaluate the Bank's actual performance in relation to the written
profit plan and budget, record the results of the evaluation, and note any
actions taken by the Bank in the minutes of the Board meeting when such
evaluation is undertaken.

     (d)     A written profit plan and budget shall be prepared for each
calendar year for which this ORDER is in effect and shall be submitted to the
Regional Director and the Commissioner for review and comment within 30 days
after the end of each year. Within 30 days after receipt of all such comments
from the Regional Director and the Commissioner and after adoption of any
recommended changes, the Bank shall approve the written profit plan and budget,
which approval shall be recorded in the minutes of the Board meeting.
Thereafter, the Bank shall implement and follow the plan.

                                       6
<PAGE>
                                 STRATEGIC PLAN
                                 --------------

     5.     (a)     Within 60 days after the effective date of this ORDER, the
Bank shall prepare and adopt a comprehensive strategic plan. The strategic plan
required by this paragraph shall contain an assessment of the Bank's current
financial condition and market area, and a description of the operating
assumptions that form the basis for major projected income and expense
components.

     (b)  The  written  strategic  plan  shall  address,  at  a  minimum:

               (1)  Strategies  for  pricing  policies  and  asset/liability
                    management;

               (2)  Plans for  sustaining  adequate  liquidity,  including
                    back-up  lines  of  credit to meet any unanticipated deposit
                    withdrawals;

               (3)  Goals for  reducing  problem  loans;

               (4)  Plans for  attracting  and  retaining  qualified
                    individuals  to fill vacancies in the lending and accounting
                    functions;

               (5)  Financial  goals,  including  pro  forma  statements  for
                    asset  growth,  capital  adequacy,  and  earnings;

               (6)  Formulation  of  a  mission  statement  and  the development
                    of  a  strategy  to  carry  out  that  mission.

     (c)     The  Bank  shall submit the strategic plan to the Regional Director
and  the  Commissioner  for  review  and  comment.  After consideration all such
comments,  the  Bank shall approve the plan, which approval shall be recorded in
the  minutes  of  the Bank's Board meeting. Thereafter, the Bank shall implement
and  follow  the  strategic  plan.

                                       7
<PAGE>
     (d)     Within 30 days after the end of each calendar quarter following the
Board approval of this plan, the Bank's Board shall evaluate the Bank's
performance in relation to the strategic plan required by this paragraph and
record the results of the evaluation, and any actions taken by the Bank, in the
minutes of the Bank's Board meeting at which such evaluation is undertaken.

     (e)     The strategic plan required by this ORDER shall be revised and
submitted to the Regional Director and the Commissioner for review and comment
30 days after the end of each calendar year for which this ORDER is in effect.
Within 30 days after receipt of all such comments from the Regional Director and
the Commissioner and after consideration of all such comments, the Bank shall
approve the revised plan, which approval shall be recorded in the minutes of the
Bank's Board meeting. Thereafter, the Bank shall implement the revised plan.

                              DIVIDEND RESTRICTION
                              --------------------

     6.          (a)     As of the effective date of this ORDER, the Bank shall
not declare or pay any cash dividend without the prior written consent of the
Regional Director and the Commissioner.

                                  CAPITAL PLAN
                                  ------------

     7.  (a)  Within  60  days  after the effective date of this ORDER, the Bank
shall  submit  a  written  capital  plan  to  the  Regional  Director  and  the
Commissioner to increase its Tier 1 Capital by no less than eight percent of the
Bank's Average Total Assets. The capital plan shall also require the Bank, after
establishing an Allowance for Loan and Lease Losses, to achieve and maintain its
Tier  1  Leverage  Capital  ratio  equal to or greater than eight percent of the
Bank's  Average  Total  Assets;  to  achieve  and maintain its Tier 1 Risk-Based
Capital  ratio  equal  to  or  greater  than  ten  percent  of  the Bank's Total
Risk-Weighted  Assets;  and to achieve and maintain its Total Risk-Based Capital
ratio  equal to or greater than twelve percent of the Bank's Total Risk Weighted
Assets.

                                       8
<PAGE>

     (b)     Such capital plan shall detail the steps that the Bank shall take
to achieve and maintain the capital requirements set forth in paragraph 7(a)
above. In developing the capital plan, the Bank must take into consideration:

               (1)  The volume  of  the  Bank's  adversely  classified  assets;

               (2)  The nature  and  level  of  the  Bank's asset concentration;

               (3)  The adequacy  of  the  Bank's  ALLL;

               (4)  The anticipated  level  of  retained  earnings;

               (5)  Anticipated  and  contingent  liquidity  needs;  and

               (6)  The source  and  timing  of  additional  funds  to  fulfill
                    future  capital  needs.

In addition, the capital plan must include a contingency plan in the event that
the Bank has: (1) failed to maintain the minimum capital ratios required by
paragraph 7(a); (2) failed to submit an acceptable capital plan as required by
this subparagraph; or (3) failed to implement or adhere to a capital plan to
which the Regional Director and the Commissioner have taken no written objection
pursuant to this subparagraph. Said contingency plan shall include a plan to
sell or merge the Bank. The Bank shall implement the contingency plan upon
written notice from the Regional Director and the Commissioner.

     (c) After the Regional Director and the Commissioner respond to the capital
plan, the Bank's Board shall adopt the capital plan, including any modifications
or  amendments  requested  by  the  Regional  Director  and  the  Commissioner.
Thereafter, the Bank shall immediately initiate measures detailed in the capital
plan,  to the extent such measures have not previously been initiated, to effect
compliance  with  the  plan  within  30 days after the Regional Director and the
Commissioner  respond  to  the  capital  plan.

                                       9
<PAGE>
     (d)     Such increase in Tier 1 Capital and any increase in Tier 1 Capital
necessary to meet the capital ratios required by this ORDER may be accomplished
by:

               (1)  The sale  of  securities  in  the  form  of common stock; or

               (2)  The direct  contribution  of  cash  subsequent  to  October
                    8, 2009, by the directors and/or shareholders of the Bank or
                    by  the  Bank's  holding  company;  or

               (3)  Receipt  of  an  income  tax  refund  or  the capitalization
                    subsequent  to  October  8,  2009, of a bona fide tax refund
                    certified as being accurate by a certified public accounting
                    firm;  or

               (4)  Any other  method  approved  by  the  Regional  Director and
                    the  Commissioner.

     (e)  If  any  such  capital  ratios are less than required by the ORDER, as
determined  as  of  the  date  of  any  Report  of Condition and Income or at an
examination  by  the  FDIC  or  the  State, the Bank shall, within 30 days after
receipt of a written notice of the capital deficiency from the Regional Director
or the Commissioner, present to the Regional Director and the Commissioner a new
capital  plan  to increase the Bank's Tier 1 Capital of the Bank or to take such
other  measures  to  bring all the capital ratios to the percentages required by
this  ORDER. After the Regional Director and the Commissioner respond to the new
capital  plan,  the Bank's Board shall adopt the new capital plan, including any
modifications  or  amendments  requested  by  the  Regional  Director  and  the
Commissioner.

                                       10
<PAGE>
     (f)   Thereafter, the Bank shall immediately initiate measures detailed in
the plan, to the extent such measures have not previously been initiated, to
increase its Tier 1 Capital by an amount sufficient to bring all the Bank's
capital ratios to the percentages required by this ORDER within 30 days after
the Regional Director and the Commissioner respond to the new capital plan.

     (g)     If all or part of the increase in Tier 1 Capital required by this
ORDER is to be accomplished by the sale of new securities, the Bank's Board
shall adopt and implement a plan for the sale of such additional securities,
including soliciting proxies and the voting of any shares or proxies owned or
controlled by them in favor of the plan. Should the implementation of the plan
involve a public distribution of the Bank's securities (including a distribution
limited only to the Bank's existing shareholders), the Bank shall prepare
offering materials fully describing the securities being offered, including an
accurate description of the financial condition of the Bank and the
circumstances giving rise to the offering, and any other material disclosures
necessary to comply with Federal securities laws. Prior to the implementation of
the plan, and in any event, not less than 20 days prior to the dissemination of
such materials, the plan and any materials used in the sale of the securities
shall be submitted to the FDIC, Accounting and Securities Disclosure Section,
550 17th Street N.W., Washington, D.C. 20429, for review. Any changes requested
to be made in the plan or the materials by the FDIC shall be made prior to their
dissemination. If the increase in Tier 1 Capital is to be provided by the sale
of non-cumulative perpetual preferred stock, then all terms and conditions of
the issue shall be presented to the Regional Director and the Commissioner for
prior approval.

                                       11
<PAGE>
     (h)     In complying with the provisions of this ORDER and until such time
as any such public offering is terminated, the Bank shall provide to any
subscriber and/or purchaser of the Bank's securities written notice of any
planned or existing development or other change which is materially different
from the information reflected in any offering materials used in connection with
the sale of the Bank securities. The written notice required by this paragraph
shall be furnished within 10 days after the date such material development or
change was planned or occurred, whichever is earlier, and shall be furnished to
every purchaser and/or subscriber who received or was tendered the information
contained in the Bank's original offering materials.

     (i)     In addition, the Bank shall comply with the FDIC's Statement of
Policy on Risk-Based Capital found in Appendix A to Part 325 of the FDIC Rules
and Regulations, 12 C.F.R. Part 325, App. A.

     (j)     For purposes of this ORDER, all terms relating to capital shall be
calculated according to the methodology set forth in Part 325 of the FDIC's
Rules and Regulations, 12 C.F.R. Part 325.

                RESTRICTION ON ADVANCES TO CLASSIFIED BORROWERS
                -----------------------------------------------

     8.  (a)  While this ORDER is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
existing  credit has been classified Loss either in whole or in part by the FDIC
or  the State and is uncollected, or to any borrower who is already obligated in
any  manner  to  the  Bank  on  any  extension  of credit, including any portion
thereof,  that  has  been  charged  off  the  books  of  the  Bank  and  remains
uncollected. The requirements of this paragraph shall not prohibit the Bank from
renewing  credit  already extended to a borrower after full collection, in cash,
of  interest  due  from  the  borrower.

                                       12
<PAGE>
     (b)     While this ORDER is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
extension of credit is classified Doubtful and/or Substandard either in whole or
in part by the FDIC or the State and is uncollected, unless the Bank's Board has
signed a detailed written statement giving reasons why failure to extend such
credit would be detrimental to the best interests of the Bank. The statement
shall be placed in the appropriate loan file and included in the minutes of the
applicable Bank Board meeting.

             CLASSIFIED ASSETS - CHARGE-OFF AND PLAN FOR REDUCTION
             -----------------------------------------------------

     9.     (a)     Within 30 days after the effective date of this ORDER, the
Bank shall, to the extent that it has not previously done so, eliminate from its
books, by charge-off or collection, all assets or portions of assets classified
Loss by the FDIC or the State as a result of its examination of the Bank as of
October 8, 2009. Elimination or reduction of these assets through proceeds of
loans made by the Bank shall not be considered "collection" for the purpose of
this paragraph.

     (b)     Within 60 days after the effective date of this ORDER, the Bank
shall submit a written plan to the Regional Director and the Commissioner to
reduce the remaining assets classified Doubtful and Substandard as of October 8,
2009. The plan shall address each asset so classified with a balance of $300,000
or greater and provide the following:

                                       13
<PAGE>

          (1)  The name  under  which  the  asset  is  carried  on  the books of
               the  Bank;

          (2)  Type of  asset;

          (3)  Actions  to  be  taken  in  order to reduce the classified asset;
               and

          (4)  Timeframes  for  accomplishing  the  proposed  actions.

     The  plan  shall  also  include,  at  a  minimum:

          (1)  Review  the  financial  position  of  each  such  borrower,
               including  the  source  of  repayment,  repayment  ability,  and
               alternate  repayment  sources;  and

          (2)  Evaluate  the  available  collateral  for  each  such  credit,
               including  possible  actions  to  improve  the  Bank's collateral
               position.

     In addition, the Bank's plan shall contain a schedule detailing the
projected reduction of total classified assets on a quarterly basis. Further,
the plan shall contain a provision requiring the submission of monthly progress
reports to the Bank's Board and a provision mandating a review by the Bank's
Board.

     (c)     The Bank shall present the plan to the Regional Director and the
Commissioner for review. Within 30 days after the Regional Director's and the
Commissioner's response, the plan, including any requested modifications or
amendments shall be adopted by the Bank's Board which approval shall be recorded
in the minutes of the meeting of the Bank's Board. The Bank shall then
immediately initiate measures detailed in the plan to the extent such measures
have not been initiated.

     (d)  For purposes of the plan, the reduction of adversely classified assets
as  of October 8, 2009, shall be detailed using quarterly targets expressed as a
percentage  of  the Bank's Tier 1 Capital plus the Bank's Allowance for Loan and
Lease  Losses  and  may  be  accomplished  by:

                                       14
<PAGE>

                    (1)  Charge-off;

                    (2)  Collection;

                    (3)  Sufficient  improvement  in  the  quality  of adversely
                         classified assets so as to warrant removing any adverse
                         classification, as determined by the FDIC or the State;
                         or

                    (4)  Increase  in  the  Bank's  Tier  1  Capital.

     (e)     While this ORDER is in effect, the Bank shall eliminate from its
books, by charge-off or collection, all assets or portions of assets classified
Loss as determined at any future examination conducted by the FDIC or the State.

                                LENDING POLICIES
                                ----------------

     10.     Within 60 days after the effective date of this ORDER, the Bank
shall ensure policies are enhanced and procedures are implemented to correct
credit underwriting and loan administration deficiencies disclosed in the
October 8, 2009, Report of Examination, including the Bank's Asset-Based and
Commercial Real Estate ("CRE") lending strategy, policies and procedures. They
shall include:

     (a)     Guidance consistent with the December 6, 2006, Financial
Institution Letter pertaining to Concentrations in Commercial Real Estate
Lending, Sound Risk Management Practices including, at a minimum, the following:

                    (1)  Limits  for  total  exposure  in  relation  to  total
                         loans,  total  risk-based  capital  and  by  loan type,

                                       15
<PAGE>
                    (2)  Reporting  requirements,

                    (3)  Risk mitigation  strategies,

                    (4)  Guidelines  for  reevaluation  of  real  estate
                         collateral,  and

                    (5)  Sensitivity  analysis  of  individual  CRE  loans  and
                         CRE  portfolio.

     (b)  Guidance  addressing  Asset-Based lending that includes, at a minimum,
the  following:

                    (1)  The requirement  of  personal  guarantees,

                    (2)  Lender  liability  issues,

                    (3)  Guidelines  for  qualified  customers,

                    (4)  Advance  rates  are  justified  by  the  value  and
                         marketability  of  underlying  collateral,

                    (5)  The  requirement  of an asset-based loan agreement that
               sets  forth conditions governing the handling of the relationship
               and  the  remedies  available  in  the event of default. The loan
               agreement  should  address  the  following  areas:

                         (A)  Eligible  accounts  receivable,

                         (B)  Delinquent  accounts,

                         (C)  Contra  accounts,

                         (D)  Affiliate  accounts,

                         (E)  Concentration  accounts,

                         (F)  Bill-and-hold  sales,

                                       16
<PAGE>

                         (G)  Progress  billings,

                         (H)  Receivables  subject  to  a  purchase-money
                              interest,

                         (I)  Percentage  advanced  against  or  acceptable
                              accounts  receivable,

                         (J)  Percentage  advanced  against  eligible
                              inventory,

                         (K)  Audits,  and

                         (L)  Confirmations.

     (6)  Periodic on-site audits of borrowers that include the following in the
analysis  as  appropriate:

                         (A)  Shipping  documents,

                         (B)  Inventory  invoices,

                         (C)  Turnover  of  account  receivables  and  account
                              payables,

                         (D)  Direct  verification  of  account  receivables
                              and  account  payables,

                         (E)  Concentrations  of  customers'  account
                              receivables  (Poor  credit  quality  in  a
                              concentration  may  warrant  lower advance rates.)

                         (F)  Sales dilution  resulting  from  merchandise
                              returns,  bad  debt  allowances  or  uncollectible
                              receivables,

                         (G)  Borrower's  credit  and  collection  procedures,

                         (H)  Ineligible  affiliate  and  inter-company
                              receivables,

                         (I)  Other possibly  ineligible  account  receivables
                              such  as:

                                       17
<PAGE>

                              (1)  Restarts  (new  account  receivable  issued
                                   by  borrower to replace an account receivable
                                   that  is  over 90 days effectively "restarts"
                                   the  invoice),

                              (2)  Service  (lawyers,  repair  work,  etc.  are
                                   sometimes  excluded,

                              (3)  Foreign  (sometimes  excluded  because  of
                                   perfection  difficulties  outside  the United
                                   States),  and

                              (4)  Chronic  delinquents.

                         (J)  Aging of  account  receivables  and  account
                              payables,

                         (K)  Inventory  make  up  such  as:

                              (1)  Shelf Life,

                              (2)  Obsolescence,

                              (3)  High tech,  and

                              (4)  Work in  Process  (exclude  from  borrowing
                                   base).

                         (L)  Machinery  and  equipment  listing.  (Specialty
                              equipment  is  typically  excluded  as  eligible
                              collateral),

                         (M)  Operational  risk  of  the  borrower.

     (7)  Borrowing  base  is  adequately  monitored,

     (8)  When  a  credit  approval  presentation is required and what it should
contain,

     (9)  Controls  over  disbursements,  and

     (10)  Controls  over  borrower  operating  accounts.

     (c)  Underwriting  standards  including;

                                       18
<PAGE>

                         (1)  Loan terms,

                         (2)  Pricing  structures,

                         (3)  Obtaining,  validating,  and  updating
                              appraisals  and  evaluations,  when  warranted;

                         (4)  Collateral  valuation  and  appraisal  review,

                         (5)  LTV limits,

                         (6)  Requirement  for  feasibility  studies,
                              sensitivity  analyses  and/or  stress  testing,

                         (7)  Minimum  requirements  for  initial  investment
                              and  maintenance  of  hard equity by the borrower,

                         (8)  Minimum  standards  for  borrower  net  worth,
                              property  cash flow, and debt service coverage for
                              the  property,  and

                         (9)  Ensuring  compliance  with  the  Interagency
                              Policy  Statement  on  the  Allowance for Loan and
                              Lease  Losses,  specifically  relating  to testing
                              large  impaired  loans  according  to  Financial
                              Accounting  Standard  114.

     (d)  Loan  administration  standards  including;

                         (1)  Loan disbursement  procedures,

                         (2)  Inspection  processes,

                         (3)  Documentation  on  construction  progress,

                         (4)  Tracking  pre-sold  units,

                         (5)  Exception  monitoring  and  reporting,

                                       19
<PAGE>
                         (6)  Ongoing  monitoring  of  borrower  property  cash
                              flow  and  debt service coverage for the property,
                              and

                         (7)  Regular  credit  reviews  to  assess  credit
                              quality.

     (e)  Perform  portfolio-level  stress  tests  or  sensitivity  analysis  to
quantify  the impact of changing economic conditions on asset quality, earnings,
and  capital

     (f) Procedures to monitor economic conditions and real estate values in the
Bank's  larger  geographic  trade  areas,

     (g) Procedures to identify, track, and report exceptions to the loan policy
and  to  establish  procedures for approval of loans granted in exception to the
loan  policy,

                         (1)  Controls  to  ensure  adherence  to  and  monitor
                              compliance  with  the policies and strategies. The
                              Bank's  Board  will approve all policy deviations,
                              with  a record of this approval noted in the Board
                              minutes;  and

                         (2)  Provisions  for  the  submission  of  monthly
                              progress  reports  to  the  Board  for  review and
                              notation  in  the  minutes.

The adequacy of the policy will be reviewed at future examinations or
visitations of the Bank.

                    SPECIAL MENTION AND TECHNICAL EXCEPTIONS
                    ----------------------------------------

     11.     (a)     Within 60 days after the effective date of this ORDER, the
Bank shall correct all deficiencies in the loans listed for Special Mention in
the Report of Examination as of October 8, 2009.

                                       20
<PAGE>
     (b)     Within 60 days after the effective date of this ORDER, the Bank
shall correct the technical exceptions listed in the Report of Examination as of
October 8, 2009

     (c)     Within 90 days after the effective date of this ORDER, the Bank
shall implement a system of monitoring loan documentation exceptions on an
ongoing basis and implement procedures designed to reduce the occurrence of such
exceptions in the future.

                           REDUCTION OF DELINQUENCIES
                           --------------------------

     12.     (a)     Within 60 days after the effective date of this ORDER, the
Bank shall formulate and submit to the Regional Director and the Commissioner
for review and comment a written plan for the reduction and collection of
delinquent loans. Such plan shall include, but not be limited to, provisions
which:

                         (1)  Prohibit  the  extension  of  credit  for  the
                              payment  of  interest;

                         (2)  Delineate  areas  of  responsibility  for
                              implementing  and monitoring the Bank's collection
                              policies;

                         (3)  Establish  specific  collection  procedures  to
                              be  instituted  at  various stages of a borrower's
                              delinquency;

                         (4)  Establish  dollar  levels  to  which  the  Bank
                              shall  reduce  delinquencies per calendar quarter;
                              and

                         (5)  Provide  for  the  submission  of  monthly written
                              progress  reports  to  the Bank's Board for review
                              and  notation  in  minutes  of the meetings of the
                              Bank's  Board.

     (b)  For  purposes  of  the  plan,  "reduce"  means  to:

                                       21
<PAGE>

                         (1)  Charge-off;  or

                         (2)  Collect.

     (c)     After the Regional Director and the Commissioner have responded to
the plan, the Bank's Board shall adopt the plan as amended or modified by the
Regional Director and the Commissioner. The plan will be implemented immediately
to the extent that the provisions of the plan are not already in effect at the
Bank.

                  LOAN COMMITTEE AND LOAN REVIEW REQUIREMENTS
                  -------------------------------------------

     13.     (a)     Within 30 days after the effective date of this ORDER, the
Bank's Board shall establish a loan review committee to periodically review the
Bank's loan portfolio and identify and categorize problem credits. The committee
shall file a report with the Bank's Board at each Board meeting. This report
shall include the following information:

                    (1)  The  overall  quality  of  the  loan  portfolio;

                    (2)  The identification,  by  type  and  amount,  of  each
                         problem  or  delinquent  loan;

                    (3)  The identification  of  all  loans  not  in conformance
                         with  the  Bank's  lending  policy;  and

                    (4)  The identification  of  all  loans  to  officers,
                         directors,  principal  shareholders  or  their  related
                         interests.

     (b)     At least a majority of the members of the loan review committee
shall be directors not employed in any capacity by the Bank other than as a
director.

                                       22
<PAGE>

                          APPRAISAL/EVALUATION POLICY
                          ---------------------------

     14.          Within 90 days after the effective date of this ORDER, the
Bank's Board shall establish and enforce an appraisal review policy. The policy
shall provide a process for identifying appraisals containing weaknesses that
bring the appraised value into question. The policy shall provide guidance
pertaining to evaluation/appraisal procedures as set forth in the Interagency
Appraisal and Evaluation Guidelines dated October 27, 1994.

             CORRECTION OF VIOLATIONS AND CONTRAVENTIONS OF POLICY
             -----------------------------------------------------

     15.          (a)     Within 60 days after the effective date of this ORDER,
the Bank shall eliminate and/or correct all violations of law and regulation
noted in the October 8, 2009, Report of Examination.

     (b)  Within  60 days after the effective date of this ORDER, the Bank shall
implement  procedures  to  ensure future compliance with all applicable laws and
regulations.

     (c)     Within 60 days after the effective date of this ORDER, the Bank
shall address any contraventions of policy noted in the October 8, 2009, Report
of Examination.

                      LIQUIDITY/ASSET/LIABILITY MANAGEMENT
                      ------------------------------------

     16.  (a)  Within  90  days after the effective date of this ORDER, the Bank
shall  develop  and  submit  to  the  Regional Director and the Commissioner for
review  and comment a written plan addressing liquidity, the Bank's relationship
of  volatile  liabilities to temporary investments, rate sensitivity objectives,
and  asset/liability  management.  Annually  thereafter,  while this ORDER is in
effect,  the  Bank  shall  review  this  plan  for adequacy and, based upon such
review,  shall  make  necessary  revisions  to  the  plan  to  strengthen  funds
management  procedures  and  maintain  adequate  provisions  to  meet the Bank's
liquidity  needs.  The  initial  plan  shall  include, at a minimum, provisions:

                                       23
<PAGE>

               (1)  Establishing  limitations  on  the  total  loan  to  total
                    deposits ratio. The requirements of this paragraph shall not
                    be  construed  as  standards  for future operations, and the
                    Bank's total loan to total deposits ratio shall be monitored
                    on a monthly basis and maintained at a level consistent with
                    safe  and  sound  banking  practices;

               (2)  Establishing  a  reasonable  range  for  its  net  non-core
                    funding  ratio  as  computed in the Uniform Bank Performance
                    Report;

               (3)  Identifying  the  source  and  use  of  borrowed  and/or
                    volatile  funds;

               (4)  Establishing  lines  of  credit  at  correspondent  banks,
                    including  the Federal Reserve Bank or the Federal Home Loan
                    Bank  Board,  that  would  allow the Bank to borrow funds to
                    meet  depositor  demands  if the Bank's other provisions for
                    liquidity  proved  to  be  inadequate;

               (5)  Requiring  the  retention  of  securities  and/or  other
                    identified  categories of investments that can be liquidated
                    within  one  day  in  amounts  sufficient  to  ensure  the
                    maintenance  of  the  Bank's  liquidity  posture  at a level
                    consistent  with  short- and long-term liquidity objectives;

                                       24
<PAGE>

               (6)  Establishing  a  minimum  liquidity  ratio  and defining how
                    the  ratio  is  to  be  calculated;

               (7)  Establishing  contingency  plans  by  identifying
                    alternative  courses  of  action designed to meet the Bank's
                    liquidity  needs;

               (8)  Addressing  the  use  of  borrowings  (i.e., seasonal credit
                    needs, match funding mortgage loans, etc.) and providing for
                    reasonable  maturities  commensurate  with  the  use  of the
                    borrowed funds; addressing concentration of funding sources;
                    and  addressing  pricing  and  collateral  requirements with
                    specific  allowable  funding  channels  (i.e.,  brokered
                    deposits,  internet  deposits, Fed funds purchased and other
                    correspondent  borrowings);  and

               (9)  Establishing  procedures  for  managing  the  Bank's
                    sensitivity  to  interest  rate  risk, which comply with the
                    Joint Agency Statement of Policy on Interest Rate Risk (June
                    26,  1996),  and  the  Supervisory  Policy  Statement  on
                    Investment  Securities  and  End-user  Derivative Activities
                    (April  23,  1998).

     (b)     Within 30 days after the receipt of all such comments from the
Regional Director and the Commissioner, and after revising the plan as
necessary, the Bank shall adopt the plan, which adoption shall be recorded in
the minutes of the Board meeting. Thereafter, the Bank shall implement the plan.

                               INTEREST RATE RISK
                               ------------------

     17.  (a)  Within  60  days  after the effective date of the ORDER, the Bank
shall  develop, adopt, and implement an interest rate risk policy and procedures
that  shall  include,  at  a minimum:

                                       25
<PAGE>
               (1)  Measures  designed  to  control  the  nature  and  amount of
                    interest  rate  risk  the  Bank  takes  including those that
                    specify  risk  limits  and defines lines of responsibilities
                    and  authority  for  managing  risk;

               (2)  A system  for  identifying  and  measuring  interest  rate
                    risk;

               (3)  A system  for  monitoring  and  reporting  risk  exposures;
                    and

               (4)  A system  of  internal  controls,  review,  and  audit  to
                    ensure the integrity of the overall risk management process.

                                PROGRESS REPORTS
                                ----------------

     18.     Within 30 days after the end of the first calendar quarter
following the effective date of this ORDER, and within 30 days after the end of
each successive calendar quarter, the Bank shall furnish written progress
reports to the Regional Director and the Commissioner detailing the form and
manner of any actions taken to secure compliance with this ORDER and the results
thereof. Such reports may be discontinued when the corrections required by the
ORDER have been accomplished and the Regional Director has released the Bank in
writing from making additional reports.

                            SHAREHOLDER NOTIFICATION
                            ------------------------

                                       26
<PAGE>

     19.     Within 30 days after the effective date of this ORDER, the Bank
shall send a copy of this ORDER, or otherwise furnish a description of this
ORDER, to its shareholders. The description shall fully describe the ORDER in
all material respects. The description and any accompanying communication,
statement, or notice shall be sent to the FDIC Accounting and Securities
Disclosure Section, 550 17th Street N.W., Washington, D.C. 20429, for review at
least 20 days prior to dissemination to shareholders. Any changes requested by
the FDIC shall be made prior to dissemination of the description, communication,
notice, or statement.

     The  provisions of this ORDER shall not bar, stop, or otherwise prevent the
FDIC  or  any  other federal or state agency or department from taking any other
action  against  the  Bank  or  any  of  the  Bank's  current  or  former
institution-affiliated  parties.

     This ORDER shall be effective on the date of issuance.

     The provisions of this ORDER shall be binding upon the Bank, its
institution-affiliated parties, and any successors and assigns thereof.

     The provisions of this ORDER shall remain effective and enforceable except
to the extent that and until such time as any provision has been modified,
terminated, suspended, or set aside by the FDIC and the State.

     Issued pursuant to delegated authority 2nd day of April, 2010.

                                               /s/ Kristie K. Elwquist
                                               ------------------------
                                           For: Thomas J. Dujenski
                                                Regional Director
                                                Dallas Region
                                                Division of Supervision and
                                                Consumer Protection
                                                Federal Deposit Insurance
                                                Corporation

                                       27ex10-36.htm

Exhibit 10.36

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is made and entered into as of the 1 day of September 2009, by and between One Holdings, Corp, a Florida corporation (the “Corporation”) and Michael Weingarten (the “Executive” or “Mr. Weingarten”) as follows:

 

WITNESSETH:

 

WHEREAS, the Executive is currently serving as the Chairman of the Corporation; and

 

WHEREAS, the parties hereby desire to enter into this Agreement to set forth the terms and conditions for the employment relationship of the Executive with the Corporation; and

 

WHEREAS, the Board of Directors of the Corporation (the “Board”) has approved and authorized the Corporation’s execution and entry into this Agreement with the Executive; and

 

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

 

1.             Incorporation of Recitals.  The above recitals are hereby incorporated into and made a part of this Agreement.

 

2.             Term.  Employment shall be for a term commencing on the date hereof and expiring five (5) years from the date hereof, unless terminated earlier pursuant to Section 7 hereof.  Notwithstanding the previous sentence, this Agreement and the employment of the Executive shall be automatically renewed (subject to Section 7) for successive one-year periods upon the terms and conditions set forth herein, commencing on the fifth anniversary of the date of this Agreement, and on each anniversary date thereafter.  For purposes of this Agreement, any reference to the “term” of this Agreement shall include the original term and any extension thereof.

 

3.             Employment of the Executive/Duties of the Executive.

 

(a)          The Corporation hereby agrees to employ the Executive as the Chairman of the Corporation and the Executive hereby agrees to be employed by the Corporation in such capacity upon the terms and conditions herein set forth.

 

(b)           The Executive shall serve as Chairman of the Corporation, reporting to the Board.  The Executive shall devote business time, efforts, attention, skill and energy to the Company’s business as Executive deems necessary to fulfill his responsibilities.  During the term of this agreement the Executive may serve as an officer, director or otherwise participate in educational, welfare, social, religious and civic organizations of any other corporation.

 

(c)           Executive agrees that he will at all times faithfully, industriously, and to the best of his ability, experience, and talents, perform all of the duties that may be required of and from him pursuant to the express and implicit terms of this Agreement, to the reasonable satisfaction of the Company.

 

(d)          Before the end of each of the Company’s fiscal years, the Executive shall meet with the Board to set agreed management performance objectives for the Executive for the upcoming year which shall be formally reviewed annually, with informal reviews to be performed from time to time throughout the year.

 

  

Page 1 of 13

  

 

4.             Compensation; Base Salary; Bonuses; Milestones.

 

(a)           During the term of this Agreement, the Corporation shall pay to the Executive a base salary in the amount set forth in Schedule A per annum (“Base Salary”), which Base Salary may be adjusted from time to time by the Corporation, payable in equal bi-monthly installments and in the manner consistent with the Corporation’s general policies regarding compensation of executive employees.

 

(b)          The Board (or a committee of the Board) shall review Executive’s Base Salary compensation annually at the conclusion of the Company’s fiscal year, and make a recommendation for any adjustment to the then-current Base Salary.  Subject to the immediately preceding sentence, the actual increase in Executive’s Base Salary shall be made within the Board’s sole judgment and discretion and shall be based, in part, on an analysis of total compensation paid to chairman of comparable entities within this region and any other criteria the Board determines are appropriate.

 

(c)          Notwithstanding Sections 4(a) and (b), the Executive hereby agrees to defer receipt of payment of the Base Salary until the earlier to occur of the following milestones:

 

(i) the Corporation generating positive EBITDA on a consolidated basis of $1.5 million for two consecutive quarters.  As used in this Agreement, EBITDA is defined as earnings before interest, one time non-recurring charges and taxes, depreciation and amortization.  The determination of positive EBITDA shall be made by the Corporation’s independent certified public accountants in accordance with generally accepted accounting principles; or

 

(ii) the Corporation closing a registered public offering of its securities for a minimum amount of $10 million; or

 

(iii) the Corporation obtaining approval for listing of its securities on either NASDAQ or the America Stock Exchange.

 

The Corporation agrees that upon the occurrence of any one of the foregoing milestones, all Base Salary that has been deferred as set forth in section 4(c) shall be immediately due and payable to the Executive.

 

(d)          In consideration of Executive’s agreement to defer receipt of the Base Salary until attaining one of the milestones set forth in Section 4(c), and, additionally, in recognition of and in consideration for Executive’s efforts in achieving the milestones set forth in 4(c) the Corporation shall pay to the Executive a bonus upon the achievement of each of the milestones set forth in Section 4(c) as follows:

 

	

    (i)

	

$50,000 upon achieving the milestone set forth in Section 4(c)(i); and

 

	
     (ii)

	

$100,000 upon achieving the milestone set forth in Section 4(c)(ii); and

 

	
      (iii)

	

$50,000 upon achieving the milestone set forth in Section 4(c)(iii).

 

  

Page 2 of 13

  

 

(e)  As a material term of this Agreement, and in consideration for the Executive’s accepting the position and responsibilities as the Chairman of the Corporation, the Corporation agrees to purchase from the Executive 1.1 million shares of the Corporation’s common stock owned by the Executive at price of $1.00 per share (the “Purchase Price”). The Corporation shall purchase said shares simultaneous with the execution of this Agreement and in consideration for such sale the Executive agrees to accept and the Corporation agrees to issue to the Executive its promissory note in the full amount of the Purchase Price which note shall provide for the payment of the Purchase Price (including interest which shall accrue at the rate of 6% per annum) upon the achievement of the milestones set forth in Section 4(c) as follows:

 

	
     (i)

	
40% upon achieving the milestone set forth in Section 4(c)(i); and

 

	
      (ii)

	
30% upon achieving the milestone set forth in Section 4(c)(ii); and

 

	
       (iii)

	
30% upon achieving the milestone set forth in Section 4(c)(iii).

 

(f)           After the first year of this Agreement, if the Board authorizes cash incentive compensation to the other executive officers of the Corporation, the Executive shall be eligible to participate in such plan, program or arrangement as determined by the Board in its sole discretion.

 

(g)           The Board (or a committee of the Board) shall review Executive’s performance at the conclusion of the Company’s fiscal year, and make a recommendation for any annual incentive bonus compensation for the Executive.  Any bonus shall be paid to the Executive in a lump sum no later than March 1 of the year following the year in which the bonus compensation was earned.  Subject to the immediately preceding sentence, the amount of any such bonus, as determined by the Board in the exercise of its reasonable discretion will be based on, among other things, the Company’s performance for the completed fiscal year (December 31) as reflected by such factors as gross revenue, net profits, and achievement of specific predetermined goals, including without limitation development of a strategic acquisition and organic growth plan.  Executive shall also be eligible to participate in such other bonus or incentive compensation programs as may be established by the Company for other executives.

 

5.              Executive Benefits.

 

(a)           In addition to the compensation described in Section 4, the Corporation shall make available to the Executive, subject to the terms and conditions of the applicable plans, including without limitation the eligibility rules, participation for the Executive and the Executive’s eligible dependents in the Corporation-sponsored employee benefit plans or arrangements and such other usual and customary benefits now or hereafter generally available to employees of the Corporation.  The benefit plans will include health insurance, life insurance, disability insurance, and all other normal and customary benefits such as vacation.  Executive shall also be entitled to participate in, or enjoy the benefit of, any other fringe benefits or prerequisites that are now or may be or become applicable to the Corporation’s executive employees, including any executive stock option plan or program adopted for executive officers of the Company. The Corporation is not obligated to provide or continue any of these benefits and may on an executive group basis, without prior notice, discontinue any benefit already provided or as may be provided in the future, within the exclusive discretion of the Board, however in such event the Executive shall be entitled to received any benefits, accrued but unpaid as of the effective date of any such discontinuance of benefits.

 

  

Page 3 of 13

  

 

(b)           In the event of Change in Control, as hereafter defined, or involuntary termination of the Executive’s employment hereunder, any unvested stock option of the Executive will immediately vest.  For purposes of this Agreement, a “Change in Control” will be deemed to have occurred is there is a merger or consolidation of the Corporation, or any sale, lease or exchange of all or substantially all of the consolidated assets of the Corporation and its subsidiaries (if any) to any other entity or person, and (a) in the case of a merger or consolidation, the voting stockholders of the Corporation before the transaction hold less than fifty-one percent (51%) of the voting common stock of the survivor of such merger or consolidation or its parent corporation, or (b) in the case of a sale, lease or exchange, the Corporation does not own at least fifty-one percent (51%) percent of the voting common stock of the other entity.  However, no “Change in Control” will be deemed to have occurred if Executive is part of the purchasing group that consummates the Change in Control transaction.

 

(c)           Executive is entitled to thirty (30) days of paid time off (“Paid Time Off”) per year, in addition to the Company’s normal holidays.  Paid Time Off will be scheduled taking into account the Executive’s duties and obligations at the Company.  Sick leave, holiday pay and all other leaves of absence will be in accordance with the Company’s stated personnel policies.  In the event the Executive’s employment is terminated for any reason, Executive shall have the right to compensation for any un-used Paid Time Off for the last twenty four months.

 

6.              Expenses.  The Corporation shall also pay or reimburse the Executive for reasonable and necessary expenses incurred by the Executive in connection with his duties on behalf of the Corporation, including, but not limited to all expenses of travel and living expenses while away from home on business or at the request of and in the service of the Corporation, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Corporation. Executive shall be entitled to parking expenses (excluding violations) when on the job, be it at the office or while on business trips.

 

7.              Termination.

 

(a)           Either party to this Agreement may give the other party written notice of such party’s intention to terminate this Agreement and the employment of the Executive at least ninety (90) days prior to the end of the initial or an extended term.

 

(b)           The Corporation may, subject to applicable law, terminate this Agreement by giving the Executive three (3) months notice if the Executive incurs a condition that prevents Executive from carrying out his essential job functions for a period of six (6) months or longer.  The incapacity of the Executive as described in the preceding sentence shall be determined by a medical doctor mutually selected by the Corporation and the Executive or Executive’s representative.

 

(c)           Any other provision of this Agreement notwithstanding, the Corporation may terminate Executive’s employment without notice and without any further compensation obligations, (except his accrued benefits and any benefit continuation or conversion rights he may have under the terms of the benefit plan or applicable law) including without limitation any severance pay, if the termination is based on a material violation of this Agreement, fraud, embezzlement, securities law violation, sexual harassment, other gross misconduct which causes material economic damage to the Corporation or material damage to the business reputation of the Corporation, or an intentional breach of the confidentiality, non-solicitation and non-competition provisions set forth herein.  For purposes of this Agreement, no act or failure to act on the part of the Executive shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Corporation

 

  

Page 4 of 13

  

 

(d)           Should the Corporation terminate the Executive’s employment for any reason other than those listed in Section 7(c) above, or in the event there is a change in the majority of the directors of the Company, or the sale of a controlling interest in the stock of the Company or sale of substantially all of the assets of the Company’s operating subsidiaries, the Executive shall be paid as severance (a) an amount equal to 5 years Base Salary at Executive’s then current compensation less customary withholdings, payable in six equal installments on the first day of each calendar month beginning on the first day of the first month after his termination, plus his accrued benefits and any benefit continuation or conversion rights he may have the terms of the Corporation’s benefit plans or applicable law and (b) all amounts payable to the Executive under section 4(d), provided the respective milestones set forth in section 4(c) are achieved prior to such termination of employment and (c) all amounts payable to the Executive under section and 4(e) shall immediately become due and payable. This severance pay shall be doubled if the Executive is terminated as a result of a Change in Control of the Corporation or any subsidiary of the Corporation.  The Corporation shall have no other compensation obligations to the Executive.

 

(e)           Employment and any further compensation obligations, pursuant to this Agreement will be deemed terminated upon the death of the Executive, except for any compensation obligation that has vested prior to the death of the Executive.

 

(f)            If the Corporation requires the Executive to relocate, without Executive’s consent, to an office more than one hundred (100) miles from which Executive conducted business as of the date of this Agreement the Executive may resign his position and terminate his employment hereunder and, in such event, if the Executive so resigns, (i) he shall receive the severance and other entitlements provided under Section 7(d) above and (ii) all unvested options issued to Executive, if any, shall vest immediately.

 

(g)           The Executive agrees that after his employment with the Corporation has terminated Executive will provide, upon reasonable notice, such information and assistance to the Corporation as may reasonably be requested by the Corporation in connection with any litigation in which it or any of its affiliates is or may become a party; provided, however, that the Corporation agrees to reimburse the Executive for any related expenses, including travel expenses.

 

8.              Confidentiality, Non-solicitation and Non-competition Agreement.

 

(a)            Acknowledgment.  The Executive acknowledges that in the course of his employment by the Corporation, he will or may have access to and become informed of confidential and secret information which is a competitive asset of the Corporation (“Confidential Information”) including, without limitation:  (i) the terms of any agreement between the Corporation and any employee, customer or supplier; (ii) pricing strategy; (iii) merchandising and marketing methods; (iv) product development ideas and strategies; (v) personnel training and development programs; (vi) financial results; (vii) strategic plans and demographic analyses; (viii) proprietary computer systems software; (ix) customer information and lists; and (x) any non-public information concerning the Corporation, its employees, suppliers or customers.  The Executive agrees that he will keep all Confidential Information in strict confidence during the term of his employment by the Corporation and thereafter, and will never directly or indirectly make known, divulge, reveal, furnish, make available, or use any Confidential Information except in the course of his regular authorized duties on behalf of the Corporation.  The Executive agrees that the obligations of confidentiality hereunder shall survive termination of his employment at the Corporation regardless of any actual or alleged breach by the Corporation of this Agreement, until and unless any such Confidential Information shall have become, through no fault of the Executive, generally known to the public or the Executive is required by law to make disclosure.  The Executive’s obligations under this Section 8 are in addition to, and not in limitation of or preemption of, all other obligations of confidentiality which the Executive may have to the Corporation under general legal or equitable principles.

 

  

Page 5 of 13

  

 

(b)           Confidential Information.  Except in the ordinary course of the Corporation’s business, the Executive has not made, nor shall Executive at any time following the date of the Agreement, make or cause to make, any copies, pictures, duplicates, facsimiles or other reproductions or recordings or any abstracts or summaries including or reflecting Confidential Information.  All such documents and other property furnished to the Executive by the Corporation or otherwise acquired or developed by the Corporation shall at all times be the property of the Corporation and the Executive shall not at any time, directly or indirectly, use or disclose, make known, divulge, reveal or furnish to any person, business, firm or corporation, partnership, or other entity any material including or reflecting Confidential Information.  Upon termination of the Executive’s employment with the Corporation, the Executive will return to the Corporation any such documents or other property of the Corporation which are in the possession, custody or control of the Executive.

 

(c)           Competition.  Throughout the period following involuntary termination of employment with the Corporation during which termination payments are being made and accepted by the Executive (hereinafter referred as the “Restricted Period”), the Executive shall not, directly or indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or be a proprietor, director, officer, stockholder, member, partner or an employee or agent of, or consultant to, any person, business, division of a business, firm, corporation, partnership or other entity anywhere in the United States of America which engages in (i) the primary business of the Corporation, and/or (ii) any other principal line of business engaged in or developed by the Corporation or any subsidiary of the Corporation after the date hereof but prior to the date of termination of the Executive’s employment with the Corporation in any state or country in which the Corporation or any subsidiary has conducted business during the Measuring Period (hereinafter the “Restricted Business”).  The “Measuring Period” shall be the six (6) month period preceding the date of termination of the Executive’s employment with the Corporation.

 

(d)           Solicitations of Customers.  During the Restricted Period, the Executive shall not, directly or indirectly, for his own account or as proprietor, stockholder, member, partner, director, officer, employee, agent or otherwise for or on behalf of any person, business, firm corporation, partnership or other entity other than the Corporation, sell or broker, offer to sell or broker or solicit or assist in the offer to sell or broker or solicit any orders for the purchase of any products or services sold by the Corporation (including any subsidiaries) or its successors or assigns during the Measuring Period (“Products”) to or from any person, corporation or other entity which was a customer of the Corporation at any time during the Measuring Period.  For purposes of this Agreement, “customer of the Corporation” means and includes (i) any and all persons, businesses, corporations, partnerships or other entities which: (A) have done business with the Corporation and its successors and assigns as a customer during the Measuring Period, (B) have been contacted by the Corporation, its successors and assigns for the purpose of purchasing products and services, or (C) have preexisting business relationships and/or dealings with the Executive when his employment with the Corporation terminates and (ii) all persons, businesses, corporations, partnerships or other entities which control, or are controlled by, the same person, business, corporation, partnership or other entities which control, or are controlled, by the same person, business, corporation, partnership or other entity which controls any such customer of the Corporation, its successors and assigns.  For the purposes of this Agreement, “customers” includes prospective customers and referral sources of customers.

 

  

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(e)           Solicitations of Employees.  During the one (1) year period following voluntary or involuntary termination of employment with the Corporation (whether or not termination payments are being made) and for the additional time thereafter, if any, during which termination payments are being made, the Executive shall not, directly or indirectly, for his own account or as proprietor, stockholder, partner, director, officer, employee, agent or otherwise for or on behalf of any person, business, firm, corporation, partnership or other entity than the Corporation, its successors or assigns solicit any person who is an employee of the Corporation, its successors and assigns for employment with any person, business, firm, corporation, partnership or other entity other than the Corporation.

 

(f)            Cumulative Provisions.  The covenants and agreements contained in this Section 8 are independent of each other and cumulative.

 

(g)           Binding Effect:  Third Party Beneficiaries.  The provisions of this Section 8 shall inure to the benefit of the Corporation, its successors and assigns.

 

(h)           Remedies for Breach.  The Executive further acknowledges and agrees that his obligations under this Agreement are unique and that any breach or threatened breach of such obligations may result in irreparable harm and substantial damages to the Corporation, its successors and assigns and that the Corporation’s remedy at law for any such violation would be inadequate.  Accordingly, in the event of a breach or threatened breach by the Executive of any of the provisions of this Agreement, the Corporation, its successors and assigns shall have the right, in addition to exercising any other remedies at law or equity which may be available to it under this Agreement.

 

(i)            Divisibility.  The Executive agrees that the provisions of this Section 8 are divisible and separable so that if any provision hereof shall be held to be unreasonable, unlawful or unenforceable, such holding shall not impair the remaining provisions hereof.  If any provision hereof is held to be unreasonable, unlawful or unenforceable in duration, geographical scope or character of restriction of the Executive by any court of competent jurisdiction, it is the express desire and agreement of the Parties that such provisions shall be modified to the extent necessary in order that such provision or portion thereof shall be legally enforceable to the fullest extent permitted by law, and the parties hereto do hereby expressly authorize any court of competent jurisdiction to enforce any such provision or portion thereof or to modify any such provision or portion thereof in order that any such provision or portion thereof shall be enforced by such court to the fullest extent permitted by applicable law.

 

9.             Indemnification.

 

(a)          The Corporation will indemnify the Executive to the fullest extent permitted by the laws of the state of Florida in effect at that time, or certificate of incorporation and by-laws of the Corporation, whichever affords the greater protection to the Executive.  The foregoing notwithstanding, the Corporation shall not indemnify the Executive for acts of his own negligence, willfulness or malfeasance or if the articles of incorporation or by-laws prohibit such indemnification.

 

 

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(b)           The Executive shall notify the Corporation in writing as soon as reasonably practicable after being informed in writing of a claim from a third party and in respect of which a right of indemnification given pursuant to this Indemnification Agreement may apply.  The Corporation shall have the right to elect, by written notice delivered to the Executive within 10 days of receipt by the Corporation of the notice from the Executive in respect of the claim, at the sole expense of the Corporation, to participate in or assume control of the negotiation, settlement or defense of the claim, provided that:  such will be done at all times in a diligent and bona fide matter; the Corporation acknowledges in writing its obligation to indemnify the Executive in accordance with the terms contained in this Agreement in respect of that claim; and the Corporation shall pay all reasonable out-of-pocket expenses incurred by the Executive as a result of such participation or assumption.

 

(c)           If the Corporation elects to assume such control, the Executive shall cooperate with the Corporation and its counsel and shall have the right to participate in the negotiation, settlement or defense of such claim at his own expense. If the Corporation does not so elect or, having elected to assume such control, thereafter fails to proceed with the settlement or defense of any such claim in accordance with paragraphs (a) or (b), the Executive shall be entitled to assume such control. In such case, the Corporation shall cooperate where necessary with the Executive and his counsel in connection with such claim and The Corporation shall be bound by the results obtained by the Executive with respect to such claim.

 

(d)           If any claim is of a nature such that the Executive is required by applicable law to make a payment to any person (a “Third Party”) with respect to such claim before the completion of settlement negotiations or related legal proceedings, including all legal fees and expenses relating to the defense and negotiation of a claim for which the Corporation has not elected to assume control, the Corporation shall, forthwith after demand by the Executive, make such payment on behalf of the Executive or, if the Executive made such payment, reimburse the Executive for any such payment.  If the amount of any liability under the claim in respect of which such a payment was made, as finally determined, is less than the amount which was paid by the Corporation to the Executive, the Executive shall, forthwith after receipt of the difference from the Third Party, pay such difference to the Corporation;

 

(e)           Except in the circumstances contemplated by this section 9, and whether or not the Corporation assumes control of the negotiation, settlement or defense of any claim, the Executive shall not settle or compromise any claim except with the prior written consent of the Corporation (which consent shall not be unreasonably withheld).  A failure by the Corporation to respond in writing to a written request by the Executive for consent for a period of ten (10) days or more shall be deemed a consent by the Corporation to such request;

 

(f)           The Corporation and the Executive shall provide each other on an ongoing basis with all information which may be relevant to the other’s liability hereunder and shall supply copies of all relevant documentation promptly as they become available; and

 

(g)           Notwithstanding Section 9(c), if the Executive has assumed control of the negotiation, settlement and defense of a claim, the Corporation shall not settle any claim or conduct any related legal or administrative proceeding in a manner which would, in the opinion of the Executive, acting reasonably, have a material adverse impact on the Executive, unless the Executive fails to respond in writing to a written request by the Corporation for consent to the proposed action by the Corporation within ten (10) days.  A failure by the Executive to respond in writing to a written request by the Corporation for consent for a period of ten (10) days or more shall be deemed a consent by the Executive to such request.

 

  

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10.           Arbitration. Any dispute between the parties under this Agreement shall be resolved (except as provided below) through informal arbitration by an arbitrator (who is selected as provided below) and under the rules of the American Arbitration Association.  The Arbitration shall be conducted under the rules of said Association at the location where the Executive is then employed by the Corporation, provided, however, that the arbitration shall be conducted at the location specified by the Corporation if the Executive’s out-of-pocket expenses of travel and lodging are borne by the Corporation.  Each party shall be entitled to present evidence and argument to the arbitrator.  The arbitrator shall have the right only to interpret and apply the provisions of this Agreement and may not change any of its provisions.  The arbitrator shall permit reasonable pre-hearing discovery of facts, to the extent necessary to establish a claim or defense to a claim, subject to supervision by the arbitrator.  The determination of the arbitrator shall be conclusive and binding upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof.  The arbitrator shall give written notice to the parties stating his or their determination, and shall furnish to each party a signed copy of such determination.  The expenses of arbitration shall be borne equally by the Executive and the Corporation or as the arbitrator shall otherwise equitably determine.

 

In the event the services of an arbitrator are required and if the Executive and Corporation are unable within five (5) days after determining such services are required to agree upon the identity of an arbitrator, within ten (10) days thereafter the Executive and Corporation shall each select an arbitrator and the two arbitrators shall select by mutual agreement an arbitrator.  If either party fails to select an arbitrator, then the other party shall select the second arbitrator, and an arbitrator shall be selected by mutual agreement of the two arbitrators.  In the event the selected arbitrators are unable to agree on an arbitrator, the two arbitrators shall each select an arbitrator from a list of arbitrator provided by the American Arbitration Association and those arbitrators shall mutually agree upon the selection of an arbitrator who will be the arbitrator.

 

11.           Agreement.  This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to such subject matter.  Each party to this Agreement acknowledges that no representations, inducements, promises, or other agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, pertaining to the subject matter hereof, which are not embodied herein, and that no other agreement, statement, or promise pertaining to the subject matter hereof that is not contained in this Agreement shall be valid or binding on either party.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Corporation.  The prior approval by a majority affirmative vote of the full Board shall be required in order for the Corporation to authorize any amendments or additions to this Agreement, to give any consents or waivers of provisions of this Agreement, or to take any other action under this Agreement.

 

12.           Withholding of Taxes.  The Corporation may withhold from any amount payable under this Agreement all federal, state or provincial, city or other taxes as the Corporation is required to withhold pursuant to any law or government regulation or ruling.

 

  

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13.           Assignment; Successors and Binding Agreement.

 

(a)           Assignment by the Corporation.  Subject to the terms of this Agreement, the Corporation may assign this Agreement to any entity merging with or acquiring the Corporation, provided the Corporation’s obligations hereunder shall be legal obligations and shall be assumed by such entity, as set forth in subsection 13(c) below.

 

(b)           Assignment by Executive.  No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.

 

(c)           Successors.  The Corporation shall require any person or entity which acquired (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) all or a substantial portion of the Corporation’s stock or assets, by agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform this Agreement if no such acquisition had taken place.  Regardless of whether such an agreement is executed, this Agreement shall be binding upon any successor of the Corporation in accordance with the operation of law, and such successor shall be deemed “the Corporation” for purposes of this Agreement.  As used in this Agreement, the term “the Corporation” shall include any acquirer of or successor to the Corporation’s stock,  business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

14.           Notices.  For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as Federal Express, or UPS addressed to the Corporation (to the attention of the Secretary of the Corporation) at its principal executive offices and to the Executive at his principal residence, or to such other address as either party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

 

15.           Law and Interpretation.  This Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of Florida without regard for its conflict of laws provisions.  With respect to each and every term and condition in this Agreement, the parties understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the parties hereto desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.   The parties further acknowledge that they have been advised of the implications of the common representation of the Corporation and the Executive by counsel (with regard to the preparation of this Agreement) and the inherent conflicts of interest that may arise out of such common representation.  The parties expressly consent to such common representation and waive any claims that they may have as a result of such common representation.

 

  

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16.           Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of the Agreement and the application of such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

 

17.           Survival of Provisions.  Notwithstanding any other provision of this Agreement, the parties’ respective rights and obligations under Sections 5, 7,  8, 9, 10, 11, 13, 14, 15, 16, 17, 19, 20 and 22 will survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

 

18.           Legal Fees and Expenses.  If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to such costs and reasonable attorney’s fees, in addition to any other relief to which that party may be entitled. The term “prevailing party” shall mean that party whose position is substantially upheld in a final judgment rendered in such arbitration or litigation

 

19.           Intellectual Property/Assignment.  All ideas, programs, creations, discoveries or inventions, suggestions or improvement by Executive which in any way relate to or connect with any of the Corporation’s products, pricing, costs, sales and/or processes shall be the sole property of the Corporation.

 

20.           Waiver.  No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No delay on the part of either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either party of such right, power or privilege nor any single or partial exercise of any such right, power, or privilege, preclude any other further exercise thereof or the exercise of any other such right, power or privilege.

 

21.           Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument, notwithstanding that all parties are not signatory to the same counterpart.  The exchange of copies of this Agreement and of signature pages by electronic mail or facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted by electronic mail or facsimile shall be deemed to be their original signatures for all purposes.

 

22.           Insurance.  The Corporation shall obtain and maintain customary directors’ and officers’ liability insurance covering the Executive in a form and amount provided by the Company to its other executive officers.  In addition, Executive shall be indemnified by the Company against liability as an officer and director of the Company and any subsidiary or affiliate of the Company to the maximum extent permitted by applicable law or the By-Laws of the Company, whichever is greater.  The foregoing indemnification and directors and officers liability insurance coverage shall continue to apply following termination of the Executive’s employment hereunder for Executive’s actions and omissions during the period of Executive’s employment with the Corporation, except with respect to the Executive’s own acts of negligence, willfulness or malfeasance

 

  

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23.           Currency.  All references to currencies within this Agreement are in US dollars except where otherwise specified.

 

24.           Headings.  Headings in this Agreement are for informational purposes only and will not be used to construe the intent of this Agreement.

 

IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of the day and year first written.

	 	 	 	 	 	 
	
ONE HOLDINGS CORP.,

a Florida corporation

	
EXECUTIVE

 

	 	 	 
	By:	/s/ Marius Silvasan	
 

	
/s/ Michael Weingarten

	 
	
Its: 

	CEO	
 

	
 

	
Michael Weingarten

	 

 

  

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SCHEDULE A

 

BASE SALARY

 

1. Base Salary: Salary of $240,000 per annum

 

2. Stock option Program:

1,000,000 shares at an exercise price of $0.65 that vest 6 months following commencement date.

2,000,000 shares at an exercise price of $0.70 that vest 12 months following commencement date.

2,000,000 shares at an exercise price of $0.75 that vest 24 months following commencement date.

Stock option program rules per The Corporation’ Stock Option Program Guidelines.

Options expire five (5) after being earned by the Executive. Executive may exercise any earned options on a “cashless basis”. Number of shares and exercise price are subject to adjusted for any stock splits or rollbacks

A new stock option program shall be negotiated between the company and Executive two years after the commencement date. Such new stock option program shall cover year 3 to 5 of the employment contract.

 

CORPORATION

 

By: /s/ MS

 

/s/ MW

EXECUTIVE:

 

 

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