EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made as of the first day
of August, 1998, is entered into by Homes for America Holdings, Inc., a Nevada
corporation with its principal business office at ▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, c/o The
MacFarlane Company, Inc., a New York corporation with its principal business
office at ▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Employee" or
"MacFarlane"), replacing that certain Restated Consulting Agreement dated as of
October 31, 1996, as amended and restated as of January 1, 1997, as of January
1, 1998, and again on July 1, 1998 (as in effect on the date hereof, the
"Original Agreement"), by and between the Company and the Employee's controlled
company, The MacFarlane Company, Inc. (the "Original Consultant"), which has
assigned and surrendered its interest in the Original Agreement to the Employee
directly.
The Company has embarked upon a national program to acquire and
rehabilitate high quality apartment projects and other multifamily or multiple
unit residential projects, using where available tax-exempt or subsidized
financing and tax credits available to such projects, especially for what is
known in the industry as "affordable housing", and the Employee has an
established working history in affordable housing and the multifamily real
estate market and has represented some of the largest property owners operating
in this industry.
The Company desires to engage the Employee, and the Employee desires to
be employed by and provide services to the Company. In consideration of the
mutual covenants and promises contained herein, and other good and valuable
consideration, including the previous performance by each party (or its
predecessor) from the Commencement Date (described below), now ratified and
accepted, the receipt and sufficiency of which are hereby acknowledged by the
parties hereto, the parties agree as follows:
1. TERM OF EMPLOYMENT.
The Company hereby agrees to engage and employ the Employee, and the
Employee hereby accepts employment with the Company, to provide the Services
(described in Section 2 hereinbelow) upon the terms set forth in this Agreement,
for the period that commenced on August 1, 1998 (the "Commencement Date"), and
continuing to and including July 31, 2003, renewable thereafter for successive
twelve (12) month periods, unless sooner terminated in accordance with the
provisions of Section 4 (the "Employment Period"). Unless either party shall
notify the other of its intention not to renew this Agreement before the day
sixty (60) days prior to the last day of the then current term, it shall
automatically renew for another twelve (12) month period on the same terms as
then in effect.
2. SERVICES; OFFICES; RESPONSIBILITY. (a) The Employee hereby agrees
to provide real estate acquisition and development services, including the
preparation and implementation of the Company's business plan, the
identification in the national market of prospective acquisitions, the review
and due diligence investigation of prospective properties (including the
supervision of professional firms therefor), the negotiation and representation
of the Company in the acquisitions and the related applications for financing
(whether tax-exempt, government-subsidized, conventional, or other) therefor and
property fundings, including equity and tax credit sales or joint ventures
related to such acquisitions, the development of operation and management plans
for acquired properties, and related matters as the business plan of the Company
is implemented.
(b) The Employee shall serve as President or Chief Executive Officer
and as Director or in such other position as the Company or its Board of
Directors (the "Board") may determine from time to time; provided however that
his duties, obligations, and responsibilities shall not be materially changed
without the written consent of the Employee.
(c) The Officer is serving in these offices to demonstrate the real
estate credentials of the Company and not to perform any services for the
Company. The Officers will serve in the designated capacity only during the
Employment Period and only to facilitate the delivery of the Services. To the
extent an Officer receives Proprietary Information in this capacity he shall be
governed by the provisions of Section 7 herein below.
(d) The Employee shall operate out of the Company's business office in
New York, New York, and shall not be transferred without his written consent.
The Employee shall be subject to the supervision of, and shall have such
authority as is delegated to him by the Board or such other officer of the
Company as may be designated by the Board or the bylaws of the Company. Subject
to the terms of this Section 2 the Employee shall cooperate fully with the
executive officers of the Company and the Board on all matters affecting the
business of the Company. By endorsement the Employee hereby accepts such office
and agrees to undertake the duties and responsibilities inherent in such
position and such other duties and responsibilities as the Board or its designee
shall from time to time reasonably assign to him.
(e) At all times during the performance of services under this
Agreement the Company shall indemnify and hold harmless the Officer and the
Employee against any claim, liability, expense, and charge therefor and shall
defend him at Company expense in any proceeding related thereto (except for
gross negligence or wilful misconduct of the indemnified person). This
indemnification right shall survive termination of services under this
Agreement.
3. PAYMENTS.
3.1 BASE SALARY.
(a) Beginning on the Commencement Date and thereafter for so long as
the Employee shall continue to be engaged hereunder by the Company pursuant to
the terms of this Agreement, the Company shall pay the Employee, in monthly
installments, paid in advance on or before the tenth (10th) day of each month,
for the period of engagement a monthly base salary (the "Base Salary") as
follows:
(1) For the period from August 1998 to December 1998: the sum of
Fifteen Thousand Five Hundred Dollars ($15,500).
(2) For the period from January to December in each succeeding year
during the Term of this Agreement, the sum determined by the Board of Directors
of the Company but in no event less than one hundred five per cent (105%) of the
monthly Base Salary of the immediately preceding period.
3.2 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment, and other expenses incurred
or paid by the Employee in connection with, or related to, the performance of
its duties, responsibilities, or services under this Agreement, upon
presentation by the Employee of documentation, expense statements, vouchers, and
such other supporting information as the Company may request, provided, however,
that the amount available for such travel, entertainment, and other expenses may
be fixed in advance, but not retroactively, by the Board.
3.3 INDEMNIFICATION. At all times during the performance of services
by the Employee under this Agreement the Company shall indemnify and hold
harmless the Employee and the Officer against any claim, liability, expense, and
charge therefor and shall defend Employee and the Officers at Company expense in
any proceeding related thereto (except for gross negligence or wilful misconduct
of Employee or the Officers). This indemnification right shall survive
termination of services under this Agreement.
3.4 UNRELATED TAX CREDIT FEES AND EXPENSE REIMBURSEMENT.
The parties understand and agree that the Employee is the principal
owner for the Original Consultant and that the Employee or the Original
Consultant or an affiliate thereof may receive separate compensation as
consulting or brokerage fees for sales of tax credits for Company transactions
supervised or conducted by the Employee or the Original Consultant and subject
hereto. Such tax credit fees or commissions due to the Employee or to the
Original Consultant for any acquisition, transfer, or sale by the Company or any
of its affiliates, as well as the one-time expense reimbursement to F.C.
Partners, an affiliate of the Employee, and described in Note 5 to the May 31,
1996, financial statements of the Company, are separate from monies due under
this Agreement and no credit or set-off is allowed for such fees, commissions,
or reimbursements against obligations of the Company hereunder.
4. ENGAGEMENT TERMINATION. The engagement of the Employee by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the following:
4.1 Thirty (30) days after the death or disability of MacFarlane. As
used in this Agreement, the term "disability" shall mean the inability of
MacFarlane, due to a physical or mental disability, for either (a) a period of
one hundred twenty (120) days, whether or not consecutive, during any 360-day
period, or (b) a period of ninety (90) consecutive days to perform the services
contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Employee and the Company, provided that
if the Employee and the Company do not agree on a physician, the Employee and
the Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all
parties.
4.2 At the election of the Company, for cause, immediately upon
written notice by the Company to the Employee. For the purposes of this Section
4.2, cause for termination shall be deemed to exist upon (a) the willful
engaging by the Employee in gross misconduct resulting in material injury to the
Company or willful breach of fiduciary duty, or (b) the nonappealable conviction
of the Employee of, or the entry of a pleading of guilty or nolo contendere by
the Employee, to any crime involving moral turpitude or fraud. For purposes of
this paragraph, no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by it not in good faith
and without reasonable belief that its act or omission was in the best interest
of the Company or otherwise not likely to result in material injury thereto.
4.3 At the election of the Company, in its sole discretion, upon not
less than sixty (60) days prior written notice of termination.
4.4 At the election of the Employee, in his sole discretion, upon not
less than sixty (60) days prior written notice of termination.
4.5 At the election of the Employee, upon failure of the Company to
perform or observe any of the material terms or provisions of this Agreement,
and the failure of the Company to cure such failure within fifteen (15) days
after written notice of such failure and demand for performance has been given
to the Company by the Employee, which notice and demand shall describe
specifically in detail the nature of such alleged failure to perform or observe
such material term or provision, provided that if cure is not possible within
such fifteen (15) day period it shall suffice for the Company to commence and
diligently pursue thereafter the cure within the shortest reasonable time.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR DEATH OR DISABILITY. If the Employee's engagement
is terminated by death or because of death or disability pursuant to Section
4.1, the Company shall pay to the Employee the compensation which would
otherwise be payable to the Employee up to the end of the month in which the
termination of its engagement because of death or disability occurs.
5.2 TERMINATION FOR CAUSE. In the event the Employee's engagement is
terminated for cause pursuant to Section 4.2 the Company shall pay to the
Employee the compensation and benefits otherwise payable to him under Section 3
through the last day of its actual engagement by the Company.
5.3 TERMINATION FOR CAUSE OR AT ELECTION OF EITHER PARTY. In the event
the Employee's engagement is terminated by the Company pursuant to Section 4.3
the Company shall remain liable to the Employee for the amount of compensation
otherwise due under Section 3.1 through the end of the then current term (either
through July 31, 2003, or the current renewal period thereafter) but without
liability for costs or reimbursements for any costs incurred after the
termination (other than indemnification pursuant to Section 3.3). In the event
the Employee's employment is terminated at the election of the Employee pursuant
to Section 4.4 or 4.5, the Company shall pay to the Employee the compensation
and benefits otherwise payable to him under Section 3 through the last day of
his actual employment by the Company.
5.4 NO ADDITIONAL COMPENSATION UPON TERMINATION. Even if the
Employee's employment hereunder is terminated under paragraphs 4.3 or 4.5, the
Company shall not be obligated to pay the Employee any additional severance
compensation other than the Base Salary and reimbursements through the date of
termination.
5.5 SURVIVAL. The provisions of Sections 2(e), 3.3, 5.3, 6, and 7
shall survive the termination of this Agreement.
6. NON-COMPETE. (a) During the Employment Period and for a period of
Two (2) Years after the termination or expiration thereof, or until the date (if
earlier) Two (2) Years from the last day on which the Employee received
compensation from the Company hereunder, the Employee (as employee or as
Officer) will not directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer, employee,
director, joint venture, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), engage in
the business of developing, producing, marketing, or selling products
or services of the kind or type developed or being developed, produced,
marketed, or sold by the Company while the Employee (or the Officer, if
applicable) was employed by the Company; provided that the limitations
in this subsection 6(a)(i) shall not apply in the event the Employee is
terminated pursuant to Section 4.3 or 4.5; or
(ii) recruit, solicit, or induce, or attempt to, induce, any employee or
employees of the Company to terminate their engagement with, or
otherwise cease their relationship with, the Company; or
(iii) solicit, divert, or take away, or attempt to divert or to take away,
the business or patronage of any of the clients, customers, or
accounts, or prospective clients, customers or accounts, of the Company
which were contacted, solicited or served by the Employee (or Officer,
as applicable) while employed by the Company.
(b) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
or time, range of activities, or geographic area as to which it may be
enforceable.
(c) The restrictions contained in this Section 6 are necessary for the
protection of the business and goodwill of the Company and are considered by the
Employee (and the Officers) to be reasonable for such purpose. The Employee
agrees that any breach of this Section 6 will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the right
to seek specific performance and injunctive relief. The Company agrees and
understands that the restrictions of this Section 6 do not apply to any
commercial real estate brokerage activities of the Employee or the Original
Consultant, whether now in process or later undertaken.
7. PROPRIETARY INFORMATION.
7.1 PROPRIETARY INFORMATION.
(a) Employee agrees that all information and know-how, whether or not
in writing, of a private, secret, or confidential nature concerning the
Company's business or financial affairs (collectively, "Proprietary
Information") is and shall be exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, techniques, formulas, compositions,
compounds, projects, developments, plans, research data, clinical data,
financial data, personnel data, computer programs, and member, customer, and
supplier lists. Employee will not disclose any Proprietary Information to others
outside the Company or use the same for any unauthorized purposes without
written approval by an officer of the Company, either during or after its
engagement, unless and until such Proprietary Information has become public
knowledge without fault by the Employee, or to comply with the order of a court
exercising jurisdiction of the matter.
(b) Employee agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, notebooks, program listings, or other
written, photographic, or other tangible material containing Proprietary
Information, whether created by the Employee or others, which shall come into
its custody or possession, shall be and are the exclusive property of the
Company to be used by the Employee only in the performance of its duties for the
Company.
(c) Employee agrees that its obligation not to disclose or use
information, know- how, and records of the types set forth in paragraphs (a) and
(b) above, also extends to such types of information, know-how, records, and
tangible property of members of the Company or customers of the Company or
suppliers to the Company or other third parties who may have disclosed or
entrusted the same to the Company or to the Employee in the course of the
Company's business.
7.2 OTHER AGREEMENTS. Employee hereby represents that he is not bound
by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of this engagement with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Employee further represents that his performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge,
or data acquired by him in confidence or in trust prior to his engagement with
the Company.
8. NOTICE. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 8.
9. PRONOUNS. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
11. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
12. GOVERNING LAW. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of Nevada.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company or the
Employee may be merged or which may succeed to its assets or business.
14. GENERAL PROVISIONS.
14.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
14.2 The captions of the sections of this Agreement are for convenience
of reference only and in no way define, limit, or affect the scope or substance
of any section of this Agreement.
14.3 In case any provision of this Agreement shall be invalid, illegal,
or otherwise unenforceable, the validity, legality, and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
14.4 This Agreement shall be executed in two (2) counterparts each of
which shall be deemed an original hereof and both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above intending to be legally bound hereby.
COMPANY:
HOMES FOR AMERICA
HOLDINGS, INC.
By: s/s ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ATTEST:
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Title: President By: s/s ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its: (Assistant) Secretary
EMPLOYEE: WITNESS:
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s/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ s/s ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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