|
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
531110
(Primary Standard Industrial
Classification Code Number) |
| |
82-3334945
(I.R.S. Employer
Identification Number) |
|
|
Large accelerated filer ☐
Non-accelerated filer ☒ |
| |
Accelerated filer ☐
Smaller reporting company ☒ Emerging growth company ☒ |
|
| | |
PER SHARE
|
| |
TOTAL
|
| ||||||
Public offering price
|
| | | $ | [•] | | | | | $ | [•] | | |
Underwriting discounts and commissions(1)
|
| | | $ | [•] | | | | | $ | [•] | | |
Proceeds, before expenses, to us
|
| | | $ | [•] | | | | | $ | [•] | | |
| | | | | 1 | | | |
| | | | | 2 | | | |
| | | | | 2 | | | |
| | | | | 2 | | | |
| | | | | 4 | | | |
| | | | | 5 | | | |
| | | | | 9 | | | |
| | | | | 12 | | | |
| | | | | 13 | | | |
| | | | | 41 | | | |
| | | | | 41 | | | |
| | | | | 42 | | | |
| | | | | 44 | | | |
| | | | | 46 | | | |
| | | | | 64 | | | |
| | | | | 83 | | | |
| | | | | 89 | | | |
| | | | | 97 | | | |
| | | | | 99 | | | |
| | | | | 101 | | | |
| | | | | 108 | | | |
| | | | | 109 | | | |
| | | | | 112 | | | |
| | | | | 117 | | | |
| | | | | 117 | | | |
| | | | | 117 | | |
| | |
Year Ended December 31,
|
| |
Nine Months Ended September 30,
(unaudited) |
| ||||||||||||||||||
|
2020
|
| |
2019
|
| |
2021
|
| |
2020
|
| ||||||||||||||
Net Rental Revenue
|
| | | $ | 8,273,859 | | | | | $ | 5,433,544 | | | | | $ | 14,135,276 | | | | | | 6,058,062 | | |
Cost of Revenue
|
| | | $ | 11,232,643 | | | | | $ | 4,710,955 | | | | | $ | 13,773,826 | | | | | $ | 7,657,405 | | |
Gross profit (loss)
|
| | | $ | (2,958,784) | | | | | $ | 722,589 | | | | | $ | 361,450 | | | | | $ | (1,599,343) | | |
Total operating costs
|
| | | $ | 1,107,240 | | | | | $ | 826,792 | | | | | $ | 1,611,088 | | | | | $ | 699,841 | | |
(Loss) from operations
|
| | | $ | (4,066,024) | | | | | $ | (104,203) | | | | | $ | (1,249,638) | | | | | $ | (2,299,184) | | |
Total other (expense)
|
| | | $ | (549,701) | | | | | $ | (373,396) | | | | | $ | (1,226,328) | | | | | $ | (451,860) | | |
Net (Loss)
|
| | | $ | (4,615,725) | | | | | $ | (477,599) | | | | | $ | (2,475,966) | | | | | $ | (2,751,044) | | |
| | |
As of December 31,
|
| |
As of September 30,
(unaudited) |
| ||||||||||||||||||
|
2020
|
| |
2019
|
| |
2021
|
| |
2020
|
| ||||||||||||||
Current Assets
|
| | | $ | 493,013 | | | | | $ | 346,678 | | | | | $ | 1,907,115 | | | | | $ | 432,625 | | |
Total Assets
|
| | | $ | 493,013 | | | | | $ | 346,678 | | | | | $ | 1,907,115 | | | | | $ | 432,625 | | |
Current Liabilities
|
| | | $ | 5,916,630 | | | | | $ | 1,655,657 | | | | | $ | 10,544,580 | | | | | $ | 3,965,430 | | |
Long-Term Liabilities
|
| | | $ | 2,372,052 | | | | | $ | 797,954 | | | | | $ | 2,669,619 | | | | | $ | 1,983,226 | | |
Total Liabilities
|
| | | $ | 8,288,682 | | | | | $ | 2,453,611 | | | | | $ | 13,214,469 | | | | | $ | 5,948,656 | | |
Stockholders’ Deficit
|
| | | $ | (7,795,669) | | | | | $ | (2,106,933) | | | | | $ | (11,307,354) | | | | | $ | (5,516,031) | | |
Liabilities and Stockholders’ Deficit
|
| | | $ | 493,013 | | | | | $ | 346,678 | | | | | $ | 1,907,115 | | | | | $ | 432,625 | | |
| | |
December 31,
|
| |
Sept 30,
|
| ||||||||||||||||||
|
2020
|
| |
2019
|
| |
2021
|
| |
2020
|
| ||||||||||||||
Net Loss
|
| | | $ | (4,615,725) | | | | | $ | (477,599) | | | | | $ | (2,475,966) | | | | | $ | (2,751,044) | | |
Add: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest and financing costs
|
| | | | 577,769 | | | | | | 374,026 | | | | | | 1,226,328 | | | | | | 479,928 | | |
EBITDA
|
| | | $ | (4,037,956) | | | | | $ | (103,573) | | | | | $ | (1,249,638) | | | | | $ | (2,271,116) | | |
| | |
Actual
|
| |
Pro Forma
(unaudited) |
| |
Pro Forma
As Adjusted (unaudited)(1) |
| |||||||||
Cash
|
| | | $ | 34,444 | | | | | | 2,534,444 | | | | | $ | 27,034,442 | | |
Total liabilities
|
| | | $ | 13,214,469 | | | | | | 15,714,469 | | | | | $ | 13,214,469 | | |
Stockholder’s equity: | | | | | | | | | | | | | | | | | | | |
Preferred stock; par value $0.00001 per share, 20,000,000 shares authorized
|
| | | | — | | | | | | — | | | | | | — | | |
Common stock, par value $0.00001 per share; 200,000,000 shares authorized; 89,000,000 and 93,285,714 issued and outstanding,
respectively |
| | | | — | | | | | | 890 | | | | | | 933 | | |
Additional paid-in capital
|
| | | | — | | | | | | (11,308,244) | | | | | | 15,691,711 | | |
Accumulated deficit
|
| | | | — | | | | | | — | | | | | | — | | |
Members’ deficit
|
| | | | (11,307,354) | | | | | | — | | | | | | — | | |
Total stockholders’ equity
|
| | | | (11,307,354) | | | | | | (11,307,354) | | | | | | 15,692,644 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 1,907,115 | | | | | | 4,407,115 | | | | | $ | 28,907,113 | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
Assumed public offering price
|
| | | | | | | | | $ | 7.00 | | |
|
Historical actual net tangible book value before this offering
|
| | | $ | (0.15) | | | | | | | | |
|
Increase attributable to pro forma adjustment
|
| | | $ | — | | | | | | | | |
|
Pro forma net tangible book value before this offering
|
| | | $ | (0.15) | | | | | | | | |
|
Increase attributable to new investors
|
| | | $ | 0.30 | | | | | | | | |
|
Pro forma as adjusted net tangible book value after this offering
|
| | | | | | | | | $ | 0.15 | | |
|
Dilution to new investors
|
| | | | | | | | | $ | 6.85 | | |
| | |
Shares Purchased
|
| |
Total Consideration
|
| |
Weighted
Average Price per Share |
| |||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||
Existing stockholders
|
| | | | 89,000,000 | | | | | | 95% | | | | | $ | 982,041 | | | | | | 3% | | | | | $ | 0.01 | | |
New investors
|
| | | | 4,285,714 | | | | | | 5% | | | | | $ | 29,999,998 | | | | | | 97% | | | | | $ | 7.00 | | |
Total
|
| | | | 93,285,714 | | | | | | 100% | | | | | $ | 30,982,039 | | | | | | 100% | | | | | $ | 0.33 | | |
Year
|
| |
OCC
|
| |
REVPAR
|
| | ||||||||
2018 | | | | | 86.29% | | | | | | 160 | | | | | |
2019 | | | | | 83.66% | | | | | | 157 | | | | | |
2020 | | | | | 60.87% | | | | | | 103 | | | | | |
2021 | | | | | 70.51% | | | | | | 115 | | | | | |
| | |
2019
|
| |
2020
|
| |
As of 9/2021
|
| |||||||||
Average Unit Count
|
| | | | 110 | | | | | | 300 | | | | | | 469 | | |
# of Active Reservations Received
|
| | | | 3003 | | | | | | 4020 | | | | | | 9886 | | |
Reservations/Unit Ratio
|
| | | | 27 | | | | | | 13 | | | | | | 21 | | |
| | |
2019
|
| |
2020
|
| |
As of 9/2021
|
| |||||||||
Total Gross Revenue
|
| | | $ | 6,350,628 | | | | | $ | 13,540,488 | | | | | $ | 21,485,067 | | |
Refund attributed to normal course of Business
|
| | | $ | 917,084 | | | | | $ | 2,200,000 | | | | | $ | 4,401,229 | | |
Covid Related Refunds
|
| | | | — | | | | | $ | 3,066,629 | | | | | $ | 2,948,562 | | |
% Refund due to normal course of Business
|
| | | | 14.44% | | | | | | 16.25% | | | |
20.49%
|
| |||
% Covid Related Refunds
|
| | | | — | | | | | | 22.65% | | | |
13.72%
|
|
Annual % of Revenue By City
|
| |
2021
|
| |
2020
|
| |
2019
|
|
Boston
|
| |
15%
|
| |
6%
|
| |
—
|
|
DC
|
| |
5%
|
| |
15%
|
| |
13%
|
|
Denver
|
| |
4%
|
| |
1%
|
| |
7%
|
|
Fort Lauderdale
|
| |
2%
|
| |
—
|
| |
—
|
|
Los Angeles
|
| |
13%
|
| |
6%
|
| |
—
|
|
Miami
|
| |
10%
|
| |
16%
|
| |
10%
|
|
Miami Beach
|
| |
21%
|
| |
20%
|
| |
23%
|
|
New York
|
| |
25%
|
| |
30%
|
| |
18%
|
|
Seattle
|
| |
5%
|
| |
5%
|
| |
16%
|
|
Nashville
|
| |
—
|
| |
—
|
| |
13%
|
|
Total
|
| |
100%
|
| |
100%
|
| |
100%
|
|
Annual % of Expenses By City
|
| |
2021
|
| |
2020
|
| |
2019
|
|
Boston
|
| |
10%
|
| |
8%
|
| |
—
|
|
DC
|
| |
6%
|
| |
15%
|
| |
14%
|
|
Denver
|
| |
3%
|
| |
3%
|
| |
10%
|
|
Fort Lauderdale
|
| |
2%
|
| |
—
|
| |
—
|
|
LA
|
| |
17%
|
| |
10%
|
| |
—
|
|
Miami
|
| |
7%
|
| |
15%
|
| |
14%
|
|
Miami Beach
|
| |
29%
|
| |
12%
|
| |
25%
|
|
New York
|
| |
21%
|
| |
34%
|
| |
15%
|
|
Seattle
|
| |
4%
|
| |
3%
|
| |
14%
|
|
Nashville
|
| |
—
|
| |
—
|
| |
8%
|
|
Total
|
| |
100%
|
| |
100%
|
| |
100%
|
|
| | |
Year Ended December 31,
|
| |
Nine Months Ended September 30,
(unaudited) |
| ||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
%
change |
| |
2021
|
| |
2020
|
| |
%
change |
| ||||||||||||||||||||
Net Rental Revenue
|
| | | $ | 8,273,859 | | | | | $ | 5,433,544 | | | | | | 52% | | | | | $ | 14,135,276 | | | | | $ | 6,058,062 | | | | | | 133% | | |
Cost of Revenue
|
| | | $ | 11,232,643 | | | | | $ | 4,710,955 | | | | | | 138% | | | | | $ | 13,773,826 | | | | | $ | 7,657,405 | | | | | | 80% | | |
Gross profit (loss)
|
| | | $ | (2,958,784) | | | | | $ | 722,589 | | | | | | (509)% | | | | | $ | 361,450 | | | | | $ | (1,599,343) | | | | | | 123% | | |
| | |
Year Ended December 31,
|
| |
Nine Months Ended September 30,
(unaudited) |
| ||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
%
change |
| |
2021
|
| |
2020
|
| |
%
change |
| ||||||||||||||||||||
Total operating costs
|
| | | $ | 1,107,240 | | | | | $ | 826,792 | | | | | | 34% | | | | | $ | 1,611,088 | | | | | $ | 699,841 | | | | | | 130% | | |
(Loss) from operations
|
| | | $ | (4,066,024) | | | | | $ | (104,203) | | | | | | (3,802)% | | | | | $ | (1,249,638) | | | | | $ | (2,299,184) | | | | | | (46)% | | |
Total other (expense)
|
| | | $ | (549,701) | | | | | $ | (373,396) | | | | | | 47% | | | | | $ | (1,226,328) | | | | | $ | (451,860) | | | | | | 171% | | |
Net (Loss)
|
| | | $ | (4,615,725) | | | | | $ | (477,599) | | | | | | 866% | | | | | $ | (2,475,966) | | | | | $ | (2,751,044) | | | | | | (10)% | | |
| | | |
As of September 30, 2021
|
| |
As of December 31, 2020
|
| ||||||
|
Cash
|
| | | $ | 34,444 | | | | | $ | 512 | | |
|
Other Current Assets
|
| | | $ | 1,872,671 | | | | | $ | 492,501 | | |
|
Total Current Assets
|
| | | $ | 1,907,115 | | | | | $ | 493,013 | | |
|
Total Current Liabilities
|
| | | $ | 10,544,850 | | | | | $ | 5,916,630 | | |
|
Working Capital (Deficit)
|
| | | $ | (8,637,735) | | | | | $ | (5,423,617) | | |
| | | |
As of 9/30/2021
|
| | 2020 | |
| % Refund due to normal course of Business | | | 20.5% | | | 16.3% | |
| % Covid Related Refunds | | | 13.7% | | | 22.7% | |
| Total | | | 34.2% | | | 38.9% | |
| | |
Payments Due by Period
|
| |||||||||||||||||||||||||||
|
Total
|
| |
1 Year
|
| |
2 – 3 Years
|
| |
4 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||||
Loans payable
|
| | | $ | 5,433 | | | | | $ | 2,932 | | | | | $ | 1,460 | | | | | $ | 69 | | | | | $ | 972 | | |
Operating Lease Obligations(1)
|
| | | | 60,445 | | | | | | 11,130 | | | | | | 12,006 | | | | | | 11,019 | | | | | | 26,290 | | |
Total
|
| | | $ | 65,878 | | | | | $ | 14,062 | | | | | $ | 13,466 | | | | | $ | 11,088 | | | | | $ | 27,262 | | |
Name
|
| |
Age
|
| |
Position
|
|
Brian Ferdinand | | |
44
|
| | Chief Executive Officer and Chairman of the Board | |
David Gurfein | | |
56
|
| | President and Chief Operating Officer | |
Shanoop Kothari | | |
49
|
| | Chief Financial Officer (Principal Financial Officer) | |
Karl Rothman | | |
55
|
| | Chief Accounting Officer (Principal Accounting Officer) | |
Kevin J. Mikolashek | | |
51
|
| | Chief Compliance Officer | |
Jimmie Chatmon | | |
28
|
| | Executive Vice President and Director | |
Leonard Tobororff | | |
89
|
| | Director | |
Aimee J. Nelson | | |
44
|
| | Director Nominee | |
Jeffrey Webb | | |
72
|
| | Director Nominee | |
Name and Principal Position
|
| |
Salary ($)
|
| |
Bonus ($)
|
| |
Option
Awards ($) |
| |
Non-Equity
Incentive Compensation ($) |
| |
All Other
Compensation ($) |
| |
Total ($)
|
| ||||||||||||||||||
Brian Ferdinand(1)
2020 |
| | | $ | 358,593 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 358,593 | | |
2021
|
| | | $ | 719,006 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 719,006 | | |
David Gurfein(2)
2020 |
| | | $ | 53,250 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 53,250 | | |
2021
|
| | | $ | 7,560 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 7,560 | | |
Karl Rothman(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2020
|
| | | | 28,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 28,500 | | |
2021
|
| | | | 98,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 98,000 | | |
Jimmie Chatmon(4)
2020 |
| | | $ | 193,047 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 193,047 | | |
2021
|
| | | $ | 57,907 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 57,907 | | |
Name
|
| |
Shares of
Common Stock Owned(1) |
| |
Percentage
Ownership Prior to Offering |
| |
Percentage
Ownership Following Offering |
| |||||||||
Brian Ferdinand, Chairman and Chief Executive Officer(2)
|
| | | | 65,750,000 | | | | | | 73.06% | | | | | | 69.73 | | |
Jimmie Chatmon, Executive Vice President and Director(3)
|
| | | | 9,629,771 | | | | | | 10.82% | | | | | | 10.32 | | |
David Gurfein, President and Chief Operating Officer(4)
|
| | | | 4,316,794 | | | | | | 4.85% | | | | | | 4.63 | | |
Shanoop Kothari, Chief Financial Officer(5)
|
| | | | — | | | | | | — | | | | | | — | | |
Karl Rothman, Chief Accounting Officer(6)
|
| | | | — | | | | | | — | | | | | | — | | |
Kevon J. Mikolashek, Chief Compliance Officer(7)
|
| | | | — | | | | | | — | | | | | | — | | |
Leonard Toboroff, Director
|
| | | | 1,250,000 | | | | | | 1.4% | | | | | | 1.33 | | |
Aimee J. Nelson, Director Nominee
|
| | | | — | | | | | | — | | | | | | — | | |
Marc Packer, Director Nominee
|
| | | | — | | | | | | — | | | | | | — | | |
David Berg, Director Nominee
|
| | | | — | | | | | | — | | | | | | — | | |
Jeffrey Webb, Director Nominee
|
| | | | — | | | | | | — | | | | | | — | | |
All executive officers and directors (and nominees) as a group(7)
|
| | | | 80,946,565 | | | | | | 90.95% | | | | | | 85.85 | | |
Underwriter
|
| |
Number of
Units |
| |||
Maxim Group LLC
|
| | | | [•] | | |
Total
|
| | | | [•] | | |
| | |
Per Unit
|
| |
Total without
Over-allotment Option |
| |
Total with
Over-allotment Option |
| |||||||||
Public offering price
|
| | | $ | [•] | | | | | $ | [•] | | | | | $ | [•] | | |
Underwriting discount (7.0%)
|
| | | $ | [•] | | | | | $ | [•] | | | | | $ | [•] | | |
| | |
Per Unit
|
| |
Total without
Over-allotment Option |
| |
Total with
Over-allotment Option |
| |||||||||
Proceeds, before expenses, to us
|
| | | $ | [•] | | | | | $ | [•] | | | | | $ | [•] | | |
| | |
Page
|
| |||
| | | | F-2 | | | |
Consolidated Financial Statements | | | | | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | |
| | |
Page
|
| |||
Accountants’ Disclaimer Report
|
| | | | | | |
Consolidated Financial Statements | | | | | | | |
| | | | F-15 | | | |
| | | | F-16 | | | |
| | | | F-17 | | | |
| | | | F-18 | | | |
| | | | F-19 | | |
| | |
December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
ASSETS | | | | | | | | | | | | | |
Current Assets
|
| | | | | | | | | | | | |
Cash
|
| | |
$
|
512
|
| | | | $ | 15,040 | | |
Processor retained funds
|
| | |
|
58,514
|
| | | | | 17,988 | | |
Security deposits
|
| | |
|
433,987
|
| | | | | 313,650 | | |
Total Assets
|
| | |
$
|
493,013
|
| | | | $ | 346,678 | | |
LIABILITIES AND MEMBERS’ DEFICIT | | | | | | | | | | | | | |
Current Liabilities
|
| | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | |
$
|
3,772,919
|
| | | | $ | 497,081 | | |
Rents received in advance
|
| | |
|
858,538
|
| | | | | 618,030 | | |
Merchant cash advances
|
| | |
|
320,079
|
| | | | | 290,188 | | |
Loans payable – current portion
|
| | |
|
355,182
|
| | | | | 90,030 | | |
Loans payable – SBA – PPP Loan – current portion
|
| | |
|
534,950
|
| | | | | — | | |
Loans payable – related parties – current portion
|
| | |
|
74,962
|
| | | | | 160,328 | | |
Total Current Liabilities
|
| | |
|
5,916,630
|
| | | | | 1,655,657 | | |
Long-term Liabilities
|
| | | | | | | | | | | | |
Loans payable
|
| | |
|
617,271
|
| | | | | 231,000 | | |
Loans payable – SBA – PPP Loan
|
| | |
|
280,233
|
| | | | | — | | |
Loans payable – SBA – EIDL Loan
|
| | |
|
800,000
|
| | | | | — | | |
Loans payable – related parties
|
| | |
|
367,875
|
| | | | | 284,229 | | |
Line of credit
|
| | |
|
94,975
|
| | | | | 94,975 | | |
Deferred rent
|
| | |
|
211,698
|
| | | | | 187,750 | | |
Total Long-term Liabilities
|
| | |
|
2,372,052
|
| | | | | 797,954 | | |
Total Liabilities
|
| | |
|
8,288,682
|
| | | | | 2,453,611 | | |
Commitments and Contingencies | | | | | | | | | | | | | |
Members’ Deficit
|
| | |
|
(7,795,669)
|
| | | | | (2,106,933) | | |
| | | |
$
|
493,013
|
| | | | $ | 346,678 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Rental Revenue
|
| | |
$
|
13,540,488
|
| | | | $ | 6,350,628 | | |
Refunds and Allowances
|
| | |
|
5,266,629
|
| | | | | 917,084 | | |
Net Rental Revenue
|
| | |
|
8,273,859
|
| | | | | 5,433,544 | | |
Cost of Revenue
|
| | |
|
11,232,643
|
| | | | | 4,710,955 | | |
(Loss) Gross Profit
|
| | |
|
(2,958,784)
|
| | | | | 722,589 | | |
General and Administrative Expenses | | | | | | | | | | | | | |
Administrative and other
|
| | |
|
1,045,728
|
| | | | | 814,292 | | |
Professional fees
|
| | |
|
61,512
|
| | | | | 12,500 | | |
Total General and Administrative Expenses
|
| | |
|
1,107,240
|
| | | | | 826,792 | | |
Loss from Operations
|
| | |
|
(4,066,024)
|
| | | | | (104,203) | | |
Other Income (Expense) | | | | | | | | | | | | | |
Other income
|
| | |
|
28,068
|
| | | | | 630 | | |
Interest and financing costs
|
| | |
|
(577,769)
|
| | | | | (374,026) | | |
Total Other (Expense)
|
| | |
|
(549,701)
|
| | | | | (373,396) | | |
Net Loss
|
| | |
$
|
(4,615,725)
|
| | | | $ | (477,599) | | |
| | |
For the Years Ended
December 31, 2020 and 2019 |
| | |||||
Balance – January 1, 2019
|
| | | $ | (714,242) | | | | ||
Net loss
|
| | | | (477,599) | | | | ||
Contributions
|
| | | | 161,172 | | | | ||
Distributions
|
| | | | (1,076,264) | | | | ||
Balance – December 31, 2019
|
| | | | (2,106,933) | | | | ||
Net loss
|
| | | | (4,615,725) | | | | ||
Contributions
|
| | | | 500,884 | | | | ||
Distributions
|
| | | | (1,573,895) | | | | ||
Balance – December 31, 2020
|
| | | $ | (7,795,669) | | | | | |
| | |
For the Years Ended
December 31, |
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Cash Flows from Operating Activities | | | | | | | | | | | | | |
Net loss
|
| | |
$
|
(4,615,725)
|
| | | | $ | (477,599) | | |
Adjustments to reconcile net loss to net cash (used in) provided by operating
activities: |
| | | ||||||||||
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) in:
|
| | | | | | | | | | | | |
Processor retained funds
|
| | |
|
(40,526)
|
| | | | | (17,988) | | |
Security deposits
|
| | |
|
(120,337)
|
| | | | | (46,650) | | |
Increase in:
|
| | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | |
|
3,275,838
|
| | | | | 457,421 | | |
Rents received in advance
|
| | |
|
240,508
|
| | | | | 327,353 | | |
Deferred rent
|
| | |
|
23,948
|
| | | | | 120,295 | | |
Net cash (used in) provided by operating activities
|
| | |
|
(1,236,294)
|
| | | | | 362,832 | | |
Cash Flows from Financing Activities | | | | | | | | | | | | | |
Proceeds from (repayments of) loans payable – net
|
| | |
|
651,423
|
| | | | | (49,442) | | |
Proceeds from loans payable – SBA – PPP loan
|
| | |
|
815,183
|
| | | | | — | | |
Proceeds from loans payable – SBA – EIDL loan
|
| | |
|
800,000
|
| | | | | — | | |
(Repayments of) proceeds from loans payable – related parties – net
|
| | |
|
(1,720)
|
| | | | | 231,579 | | |
Proceeds from line of credit
|
| | |
|
—
|
| | | | | 94,975 | | |
Proceeds from merchant cash advances – net
|
| | |
|
29,891
|
| | | | | 290,188 | | |
Contributions from members
|
| | |
|
500,884
|
| | | | | 161,172 | | |
Distributions to members
|
| | |
|
(1,573,895)
|
| | | | | (1,076,264) | | |
Net cash provided by (used in) financing activities
|
| | |
|
1,221,766
|
| | | | | (347,792) | | |
Net (Decrease) Increase in Cash
|
| | |
|
(14,528)
|
| | | | | 15,040 | | |
Cash – beginning
|
| | |
|
15,040
|
| | | | | — | | |
Cash – end
|
| | |
$
|
512
|
| | | | $ | 15,040 | | |
Supplemental Disclosures of Cash Flow Information | | | | | | | | | | | | | |
Cash paid for:
|
| | | | | | | | | | | | |
Interest
|
| | |
$
|
434,587
|
| | | | $ | 279,157 | | |
Noncash financing activities:
|
| | | | | | | | | | | | |
Imputed interest on related party loans with below market interest rates reported as contributions from members
|
| | |
$
|
25,140
|
| | | | $ | 19,569 | | |
For the Fiscal Years Ending
|
| | | | | | |
2021 | | | |
$
|
534,950
|
| |
2022 | | | |
|
280,233
|
| |
| | | |
$
|
815,183
|
| |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024
|
| | |
$
|
20,500
|
| | | | $ | 20,500 | | |
Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024
|
| | |
|
210,500
|
| | | | | 210,500 | | |
Original borrowings of $20,000, bears interest at 1%, and is payable on demand
|
| | |
|
20,000
|
| | | | | 20,000 | | |
Original borrowings of $121,000, requires weekly payments of $5,822 until total payments of $139,728 have been made. The loan is personally guaranteed by the managing member and originally matured in March of 2020. Maturity date was extended to 2021
|
| | |
|
17,182
|
| | | | | 70,030 | | |
Original payable of $553,175, requires monthly payments of $25,000 until total payments of $553,175 have been made
|
| | |
|
553,175
|
| | | | | — | | |
Original payable of $151,096, requires monthly payments of $1,500 until total payments of $151,096 have been made
|
| | |
|
151,096
|
| | | | | — | | |
| | | |
|
972,453
|
| | | | | 321,030 | | |
Less: Current maturities
|
| | |
|
355,182
|
| | | | | 90,030 | | |
| | | |
$
|
617,271
|
| | | | $ | 231,000 | | |
For the Fiscal Years Ending
|
| | | | | | |
2021 | | | |
$
|
355,182
|
| |
2022 | | | |
|
271,175
|
| |
2023 | | | |
|
18,000
|
| |
2024 | | | |
|
249,000
|
| |
2025 | | | |
|
18,000
|
| |
Thereafter
|
| | |
|
61,096
|
| |
| | | |
$
|
972,453
|
| |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Original borrowings of $87,000, bears interest at 1%, requires no payments until maturity in December 2021. Lender is controlled by the managing member
|
| | |
$
|
46,150
|
| | | | $ | 36,950 | | |
Original borrowings of $4,975, no stated repayment terms – lender is owned and controlled by the managing member
|
| | |
|
4,975
|
| | | | | 4,975 | | |
Convertible Revolving credit line of $650,000, bears interest at 1%, requires no payments until maturity in March 2024. Contingently convertible upon certain triggering events, at the holder’s option, but no earlier than maturity, at a conversion ratio equal to 1% of enterprise value measured at conversion. Lender is related to the managing member
|
| | |
|
367,875
|
| | | | | 284,229 | | |
Original borrowings of $275,000, bears interest at various rates based on the lenders
borrowing rates, requires various payments in accordance with the loan agreement until maturity in January 2020 when all unpaid principal and interest is due – maturity date was extended into 2021 and balance was satisfied in 2021. Lender is a member of the Company |
| | |
|
23,837
|
| | | | | 118,403 | | |
| | | |
|
442,837
|
| | | | | 444,557 | | |
Less: Current maturities
|
| | |
|
74,962
|
| | | | | 160,328 | | |
| | | |
$
|
367,875
|
| | | | $ | 284,229 | | |
For the Fiscal Years Ending
|
| | | | | | |
2021 | | | |
$
|
74,962
|
| |
2022 | | | |
|
—
|
| |
2023 | | | |
|
—
|
| |
2024 | | | |
|
367,875
|
| |
| | | |
$
|
442,837
|
| |
| | |
September 30,
2021 |
| |
December 31,
2020 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current Assets
|
| | | | | | | | | | | | |
Cash
|
| | |
$
|
34,444
|
| | | | $ | 512 | | |
Processor retained funds
|
| | |
|
121,844
|
| | | | | 58,514 | | |
Security deposits
|
| | |
|
1,750,827
|
| | | | | 433,987 | | |
Total Assets
|
| | |
$
|
1,907,115
|
| | | | $ | 493,013 | | |
LIABILITIES AND MEMBERS’ DEFICIT | | | | | | | | | | | | | |
Current Liabilities
|
| | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | |
$
|
4,623,121
|
| | | | $ | 3,772,919 | | |
Rents received in advance
|
| | |
|
2,989,962
|
| | | | | 858,538 | | |
Merchant cash advances
|
| | |
|
1,051,070
|
| | | | | 320,079 | | |
Loans payable – current portion
|
| | |
|
783,000
|
| | | | | 355,182 | | |
Loans payable – SBA – PPP Loan – current portion
|
| | |
|
815,183
|
| | | | | 534,950 | | |
Loans payable – SBA – EIDL Loan – current portion
|
| | |
|
8,869
|
| | | | | — | | |
Loans payable – related parties – current portion
|
| | |
|
273,645
|
| | | | | 74,962 | | |
Total Current Liabilities
|
| | |
|
10,544,850
|
| | | | | 5,916,630 | | |
Long-term Liabilities
|
| | | | | | | | | | | | |
Loans payable
|
| | |
|
1,024,017
|
| | | | | 617,271 | | |
Loans payable – SBA – PPP Loan
|
| | |
|
—
|
| | | | | 280,233 | | |
Loans payable – SBA – EIDL Loan
|
| | |
|
791,131
|
| | | | | 800,000 | | |
Loans payable – related parties
|
| | |
|
591,480
|
| | | | | 367,875 | | |
Line of credit
|
| | |
|
94,975
|
| | | | | 94,975 | | |
Deferred rent
|
| | |
|
168,016
|
| | | | | 211,698 | | |
Total Long-term Liabilities
|
| | |
|
2,669,619
|
| | | | | 2,372,052 | | |
Total Liabilities
|
| | |
|
13,214,469
|
| | | | | 8,288,682 | | |
Commitments and Contingencies
|
| | | | | | | | | | | | |
Members’ Deficit
|
| | |
|
(11,307,354)
|
| | | | | (7,795,669) | | |
| | | |
$
|
1,907,115
|
| | | | $ | 493,013 | | |
| | |
For the Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Rental Revenue
|
| | |
$
|
21,485,067
|
| | | | $ | 8,969,733 | | |
Refunds and Allowances
|
| | |
|
7,349,791
|
| | | | | 2,911,671 | | |
Net Rental Revenue
|
| | |
|
14,135,276
|
| | | | | 6,058,062 | | |
Cost of Revenue
|
| | |
|
13,773,826
|
| | | | | 7,657,405 | | |
Gross Profit (Loss)
|
| | |
|
361,450
|
| | | | | (1,599,343) | | |
General and Administrative Expenses | | | | | | | | | | | | | |
Administrative and other
|
| | |
|
1,354,356
|
| | | | | 638,329 | | |
Professional fees
|
| | |
|
256,732
|
| | | | | 61,512 | | |
Total General and Administrative Expenses
|
| | |
|
1,611,088
|
| | | | | 699,841 | | |
Loss from Operations
|
| | |
|
(1,249,638)
|
| | | | | (2,299,184) | | |
Other (Expense) Income | | | | | | | | | | | | | |
Other income
|
| | |
|
603
|
| | | | | 28,068 | | |
Interest and financing costs
|
| | |
|
(1,226,931)
|
| | | | | (479,928) | | |
Total Other (Expense)
|
| | |
|
(1,226,328)
|
| | | | | (451,860) | | |
Net Loss
|
| | | $ | (2,475,966) | | | | |
$
|
(2,751,044)
|
| |
|
Balance – January 1, 2021
|
| | | $ | (7,795,669) | | |
|
Net loss
|
| | | | (2,475,966) | | |
|
Contributions
|
| | | | 107,526 | | |
|
Distributions
|
| | | | (1,143,245) | | |
|
Balance – September 30, 2021
|
| | | $ | (11,307,354) | | |
| | |
For the Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash Flows from Operating Activities | | | | | | | | | | | | | |
Net loss
|
| | |
$
|
(2,475,966)
|
| | | | $ | (2,751,044) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
(Increase) in:
|
| | | | | | | | | | | | |
Processor retained funds
|
| | |
|
(63,330)
|
| | | | | (26,014) | | |
Security deposits
|
| | |
|
(1,316,840)
|
| | | | | (74,542) | | |
Increase in:
|
| | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | |
|
850,202
|
| | | | | 1,724,040 | | |
Rents received in advance
|
| | |
|
2,131,424
|
| | | | | 97,028 | | |
Deferred rent
|
| | |
|
(43,682)
|
| | | | | 112,695 | | |
Net cash used in operating activities
|
| | |
|
(918,192)
|
| | | | | (917,837) | | |
Cash Flows from Financing Activities | | | | | | | | | | | | | |
Proceeds from (repayments of) loans payable – net
|
| | |
|
834,564
|
| | | | | (40,400) | | |
Proceeds from loans payable – SBA – PPP loan
|
| | |
|
—
|
| | | | | 815,183 | | |
Proceeds from loans payable – SBA – EIDL loan
|
| | |
|
—
|
| | | | | 800,000 | | |
Proceeds from loans payable – related parties – net
|
| | |
|
422,288
|
| | | | | 17,403 | | |
Proceeds from (repayments of) merchant cash advances – net
|
| | |
|
730,991
|
| | | | | (30,904) | | |
Contributions from members
|
| | |
|
107,526
|
| | | | | 477,849 | | |
Distributions to members
|
| | |
|
(1,143,245)
|
| | | | | (1,135,903) | | |
Net cash provided by financing activities
|
| | |
|
952,124
|
| | | | | 903,228 | | |
Net Increase (Decrease) in Cash
|
| | |
|
33,932
|
| | | | | (14,609) | | |
Cash – beginning
|
| | |
|
512
|
| | | | | 15,040 | | |
Cash – end
|
| | |
$
|
34,444
|
| | | | $ | 431 | | |
Supplemental Disclosures of Cash Flow Information | | | | | | | | | | | | | |
Cash paid for:
|
| | | | | | | | | | | | |
Interest
|
| | |
$
|
901,884
|
| | | | $ | 378,546 | | |
Noncash financing activities:
|
| | | | | | | | | | | | |
Imputed interest on related party loans with below market interest rates reported as contributions from members
|
| | |
$
|
38,606
|
| | | | $ | 25,598 | | |
For the Twelve Months Ending September 30,
|
| | | | | | |
2022 | | | |
$
|
815,183
|
| |
| | |
September 30, December 31
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024
|
| | |
$
|
20,500
|
| | | | $ | 20,500 | | |
Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024
|
| | |
|
210,500
|
| | | | | 210,500 | | |
Original borrowings of $20,000, bears interest at 1%, and is payable on demand
|
| | |
|
—
|
| | | | | 20,000 | | |
| | |
September 30, December 31
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Original borrowings of $121,000, requires weekly payments of $5,822 until total payments of $139,728 have been made. The loan is personally guaranteed by a managing member original maturity date of March 2020 was extended into 2021
|
| | |
|
—
|
| | | | | 17,182 | | |
Original payable of $151,096 with additional net borrowings of $89,154,
requires monthly payments of $1,500 until total payments of $240,250 have been made |
| | |
|
240,250
|
| | | | | 151,096 | | |
Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made
|
| | |
|
678,587
|
| | | | | 553,175 | | |
Original payable of $492,180, requires monthly payments of $25,000 until total payments of $492,180 have been made
|
| | |
|
492,180
|
| | | | | — | | |
Original borrowings of $195,000, requires monthly payments of $10,000
from July 2021 through June 2022, then monthly payments of $25,000 from July through September 2022 |
| | |
|
165,000
|
| | | |
|
—
|
| |
| | | |
|
1,807,017
|
| | | | | 972,453 | | |
Less: Current maturities
|
| | |
|
783,000
|
| | | | | 355,182 | | |
| | | |
|
1,024,017
|
| | | | $ | 231,000 | | |
|
| | |
September 30, December 31
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Original borrowings of $87,000, bears interest at 1%, requires no
payments until maturity in December 2021. Lender is controlled by the managing member |
| | |
$
|
46,150
|
| | | | $ | 46,150 | | |
Original borrowings of $4,975, no stated repayment terms – lender is owned and controlled by the managing member
|
| | |
|
4,975
|
| | | | | 4,975 | | |
Convertible revolving credit line $650,000, bears interest at 1%, requires no payments until maturity in March 2024. Contingently convertible upon certain triggering events, at the holder’s option, but no earlier than maturity, at a conversion ratio equal to 1% of enterprise value measured at conversion. Lender is related to the managing member
|
| | |
|
591,480
|
| | | | | 367,875 | | |
| | |
September 30, December 31
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Original borrowings of $275,000, bears interest at various rates based on
the lenders borrowing rates, requires various payments in accordance with the loan agreement until maturity in January 2020 when all unpaid principal and interest is due – maturity date was extended and balance was satisfied in 2021. Lender is a member of the Company |
| | |
|
—
|
| | | | | 23,837 | | |
Original borrowings of $150,000, bears interest at various rates based on
the lenders borrowing rates. No stated repayment terms. Lender is controlled by the managing member and owned by his spouse |
| | |
|
84,600
|
| | | | | — | | |
Original borrowings of $300,000, bears interest at 1%, requires no payments until maturity in January 2022. Lender is a trust whose beneficiary is the wife of the managing member of the Company
|
| | |
|
137,920
|
| | | | | — | | |
| | | |
|
865,125
|
| | | | | 442,837 | | |
Less: Current maturities
|
| | |
|
273,645
|
| | | | | 74,962 | | |
| | | |
$
|
591,480
|
| | | | $ | 367,875 | | |
|
For the Twelve Months Ending September 30,
|
| | | | | | |
2022 | | | |
$
|
273,645
|
| |
2023 | | | |
|
—
|
| |
2024 | | | |
|
591,480
|
| |
| | | |
$
|
865,125
|
| |
|
SEC registration fee
|
| | | | | | $ | 4,509 | | |
|
FINRA filing fee
|
| | | | | | | 7,300 | | |
|
NYSE listing fee
|
| | | | | | | | | |
|
Transfer agent and registrar fees
|
| | | | | | | 8,000 | | |
|
Accounting fees and expenses
|
| | | | | | | | | |
|
Legal fees and expenses
|
| | | | | | | 500,000 | | |
|
Printing and engraving expenses
|
| | | | | | | 50,000 | | |
|
Miscellaneous
|
| | | | | | | 100,000 | | |
|
Total
|
| | | | | | | | | |
Exhibit No.
|
| |
Description
|
|
1.1
|
| | Form of Underwriting Agreement(1) | |
3.1
|
| | | |
3.2
|
| | | |
3.3
|
| | Certificate of Conversion from LLC to “C” corporation(*) | |
4.1
|
| | Specimen common stock certificate(1) | |
4.2
|
| | | |
4.3
|
| | | |
4.4
|
| | Form of Underwriter’s Warrant (included in Exhibit 1.1)(1) | |
4.5
|
| | Form of Warrant included in Units(1) | |
5.1
|
| |
Opinion of Graubard Miller(1)
|
|
10.1
|
| | 2022 Performance Equity Plan(*) | |
10.2
|
| | | |
10.3
|
| | | |
10.4
|
| | Employment Agreement with Shanoop Kothari(*) | |
10.5
|
| | | |
10.6
|
| | | |
10.7
|
| | | |
10.8
|
| | | |
10.9
|
| | | |
10.10
|
| | Form of Warrant Agency Agreement(1) | |
23.1
|
| | | |
23.3
|
| | Consent of Graubard Miller (included in its opinion filed as Exhibit 5.1)(1) | |
99.1
|
| | | |
99.2
|
| | |
| | | | CORPHOUSING LLC | | ||||||
| | | | By: | | |
/s/ Brian L. Ferdinand
|
| |||
| | | | | | | Name: | | | Brian L. Ferdinand | |
| | | | | | | Title: | | | Chief Executive Officer | |
|
Name
|
| |
Position
|
| |
Date
|
|
|
By:
/s/ Brian L. Ferdinand
|
| |
Brian L. Ferdinand
Chairman and Chief Executive Officer (Principal Executive Officer) |
| | January 11, 2022 | |
|
By:
/s/ David Gurfein
|
| |
David Gurfein
President and Chief Operating Officer |
| | January 11, 2022 | |
|
By:
/s/ Shanoop Kothari
|
| |
Shanoop Kothari
Chief Financial Officer (Principal Financial Officer) |
| | January 11, 2022 | |
|
By:
/s/ Karl Rothman
|
| |
Karl Rothman
Chief Accounting Officer (Principal Accounting Officer) |
| | January 11, 2022 | |
|
By:
/s/ Jimmie Chatmon
|
| |
Jimmie Chatmon
Director |
| | January 11, 2022 | |
|
By:
/s/ Leonard Toboroff
|
| |
Leonard Toboroff
Director |
| | January 11, 2022 | |
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
CORPHOUSING GROUP INC.
--------------------------------------------------
Pursuant to Section 102 of the
Delaware General Corporation Law
--------------------------------------------------
I, the undersigned, in order to form a corporation for the purposes hereinafter stated, under and pursuant to the provisions of the General Corporation Law of the State of Delaware (the “GCL”), do hereby certify as follows:
FIRST: The name of the corporation is CorpHousing Group Inc. (hereinafter sometimes referred to as the “Corporation”).
SECOND: The registered office of the Corporation is to be located at 850 New Burton Road, Suite 201, Dover, Kent County, Delaware 19904. The name of its registered agent at that address is Cogency Global Inc.
THIRD: The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the GCL.
FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 220 million, of which 200 million shares shall be common stock, par value $.00001 per share (“Common Stock”) and of which 20 million shares shall be preferred stock, par value of $.00001 per share (“Preferred Stock”). The Board of Directors of the Corporation is expressly granted authority to issue shares of the Preferred Stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the GCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
FIFTH: The name and mailing address of the sole incorporator of the Corporation is as follows:
Address
c/o Graubard Miller
The Chrysler Building
405 Lexington
Avenue
New York, NY 10174-1901
SIXTH: The number of directors of the Corporation shall be fixed by, or in the manner provided in, the Bylaws of the Corporation (the “Bylaws”).
SEVENTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director. No amendment to, modification of or repeal of this Paragraph SEVENTH shall apply to, or have any effect on the liability or alleged liability of, any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.
EIGHTH: The Corporation shall indemnify, advance expenses, and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that lie or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liabilities and losses suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except for claims for indemnification (following the final disposition of such Proceeding) or advancement of expenses not paid in full, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation. Any amendment, repeal or modification of this Paragraph EIGHTH shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
NINTH: Unless and except to the extent that the Bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. Meetings of the stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside of the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the Bylaws.
TENTH: In furtherance of, and not in limitation of, the powers conferred by the GCL, the board of directors is expressly authorized to adopt, amend or repeal the Bylaws or adopt new Bylaws without any action on the part of the stockholders; provided that any Bylaw adopted or amended by the board of directors, and any powers thereby conferred, may be amended, altered or repealed by the stockholders.
ELEVENTH:
A. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the GCL or this Certificate of Incorporation or the Corporation’s Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware, or if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
B. If any action the subject matter of which is within the scope of Section A immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
C. If any provision or provisions of this Article ELEVENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article ELEVENTH (including, without limitation, each portion of any sentence of this Article ELEVENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article ELEVENTH.
IN WITNESS WHEREOF, I have signed this Certificate of Incorporation this December 30, 2021.
/s/ Brian Ferdinand | |
Incorporator |
Exhibit 3.2
BY LAWS
OF
CORPHOUSING GROUP INC.
ARTICLE I
OFFICES
1.1 Registered Office. The registered office of CorpHousing Group Inc. (the “Corporation”) in the State of Delaware shall be established and maintained at 251 Little Falls Drive, Wilmington, Delaware 19808, and The Company Corporation shall be the registered agent of the corporation in charge thereof.
1.2 Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 Place of Meetings. All meetings of the stockholders shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.
2.2 Annual Meetings. The annual meeting of stockholders shall be held on such date and at such time as may be fixed by the Board of Directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these Bylaws (the “Bylaws”).
Written notice of an annual meeting stating the place, date and hour of the meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the annual meeting.
To be properly brought before the annual meeting, business must be either (i) specified in the notice of annual meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the annual meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than seventy (70) days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by a stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder’s notice to the Secretary shall set forth (a) as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, and (ii) any material interest of the stockholder in such business, and (b) as to the stockholder giving the notice (i) the name and record address of the stockholder and (ii) the class, series and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Article II, Section 2. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the annual meeting that business was not properly brought before the annual meeting in accordance with the provisions of this Article II, Section 2, and if such officer should so determine, such officer shall so declare to the annual meeting and any such business not properly brought before the meeting shall not be transacted.
1
2.3 Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), may only be called by a majority of the entire Board of Directors, or the Executive Chairman, and shall be called by the Secretary at the request in writing of stockholders owning a majority in amount of the voting power of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Unless otherwise provided by law, written notice of a special meeting of stockholders, stating the time, place and purpose or purposes thereof, shall be given to each stockholder entitled to vote at such meeting, not less than ten (10) or more than sixty (60) days before the date fixed for the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
2.4 Quorum. The holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.
2.5 Organization. The Executive Chairman shall act as chairman of meetings of the stockholders. The Board of Directors may designate any other officer or director of the Corporation to act as chairman of any meeting in the absence of the Executive Chairman, and the Board of Directors may further provide for determining who shall act as chairman of any stockholders meeting in the absence of the Chairman of the Board of Directors and such designee. The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary the presiding officer may appoint any other person to act as secretary of any meeting.
2
2.6 Voting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question (other than the election of directors) brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the voting power of the stock represented and entitled to vote thereon. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder, unless otherwise provided by the Certificate of Incorporation. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize any person or persons to act for him by proxy. All proxies shall be executed in writing and shall be filed with the Secretary of the Corporation not later than the day on which exercised. No proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.
2.7 Action of Shareholders without Meeting. Unless otherwise provided by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
2.8 Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the election, either at a place within the city, town or village where the election is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where said meeting is to be held. The list shall be produced and kept at the time and place of election during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.
3
2.9 Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 8 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
2.10 Adjournment. Any meeting of the stockholders, including one at which directors are to be elected, may be adjourned for such periods as the presiding officer of the meeting or the stockholders present in person or by proxy and entitled to vote shall direct.
2.11 Ratification. Any transaction questioned in any stockholders’ derivative suit, or any other suit to enforce alleged rights of the Corporation or any of its stockholders, on the ground of lack of authority, defective or irregular execution, adverse interest of any director, officer or stockholder, nondisclosure, miscomputation or the application of improper principles or practices of accounting may be approved, ratified and confirmed before or after judgment by the Board of Directors or by the holders of Common Stock, as applicable, and, if so approved, ratified or confirmed, shall have the same force and effect as if the questioned transaction had been originally duly authorized, and said approval, ratification or confirmation shall be binding upon the Corporation and all of its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned transaction.
2.12 Inspectors. The election of directors and any other vote by ballot at any meeting of the stockholders shall be supervised by at least one inspector. Such inspectors shall be appointed by the Board of Directors in advance of the meeting. If the inspector so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.
ARTICLE III
DIRECTORS
3.1 Powers; Number; Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The number of directors which shall constitute the Board of Directors shall be not less than one (1) nor more than nine (9). The exact number of directors shall be fixed from time to time, within the limits specified in this Article III Section 1 or in the Certificate of Incorporation, by the Board of Directors. Directors need not be stockholders of the Corporation.
3.2 Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the next annual meeting of stockholders at which his class of directors stands for election or until such director’s earlier resignation, removal from office, death or incapacity. Unless otherwise provided in the Certificate of Incorporation, and subject to the provisions of Section 3.8, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director and each director so chosen shall hold office until the next annual meeting and until such director’s successor shall be duly elected and shall qualify, or until such director’s earlier resignation, removal from office, death or incapacity.
4
3.3 Nominations. Nominations of persons for election to the Board of Directors of the Corporation at a meeting of stockholders of the Corporation may be made at such meeting by or at the direction of the Board of Directors, by any committee or persons appointed by the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Article III, Section 3. Such nominations by any stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided however, that in the event that less than seventy (70) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such stockholder’s notice to the Secretary shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (a) the name, age, business address and residence address of the person, (b) the principal occupation or employment of the person, (c) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, and (d) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, as amended, and (ii) as to the stockholder giving the notice (a) the name and record address of the stockholder and (b) the class and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
3.4 Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. The first meeting of each newly elected Board of Directors shall be held immediately after and at the same place as the meeting of the stockholders at which it is elected and no notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting, provided a quorum shall be present. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Executive Chairman or a majority of the entire Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, facsimile, telegram or e-mail on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
5
3.5 Quorum. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors or of any committee thereof, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
3.6 Organization of Meetings. The Executive Chairman shall be the Chairman of the Board of Directors. The Chairman of the Board of Directors shall lead the Board of Directors in fulfilling its responsibilities as set forth in these By-Laws, including its responsibility to oversee the performance of the Corporation, and shall determine the agenda and perform all other duties and exercise all other powers which are or from time to time may be delegated to him or her by the Board of Directors. Meetings of the Board of Directors shall be presided over by the Chairman of the Board of Directors, or in his or her absence, by the President, or in the absence of the Chairman of the Board of Directors and the Chief Executive Officer by such other person as the Board of Directors may designate or the members present may select.
3.7 Actions of Board of Directors without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filled with the minutes of proceedings of the Board of Directors or committee.
3.8 Removal of Directors by Stockholders. Notwithstanding anything to the contrary contained in these Bylaws, the entire Board of Directors or any individual director may be removed from office with or without cause by a majority vote of the holders of the outstanding voting power of the shares then entitled to vote at an election of directors. In case the Board of Directors or any one or more directors be so removed, new directors may be elected by the stockholders in accordance with the foregoing and the other provisions of these bylaws at the same time for the unexpired portion of the full term of the director or directors so removed.
3.9 Resignations. Any director may resign at any time by submitting his written resignation to the Board of Directors or Secretary of the Corporation. Such resignation shall take effect at the time of its receipt by the Corporation unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed. The acceptance of a resignation shall not be required to make it effective.
3.10 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided by law and in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution or amending the Bylaws of the Corporation; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
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3.11 Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed amount (in cash or other form of consideration) for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
3.12 Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. This Section 3.12 shall remain in all respects subject to, and the case of any conflict, superseded by, the provisions of the Corporation’s certificate of incorporation.
3.13 Meetings by Means of Conference Telephone. Members of the Board of Directors or any committee designed by the Board of Directors may participate in a meeting of the Board of Directors or of a committee of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting.
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ARTICLE IV
OFFICERS
4.1 General. The officers of the Corporation shall be elected by the Board of Directors and may consist of: an Executive Chairman (who shall also serve as the Chairman of the Board), Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Compliance Officer, Secretary and Treasurer. The Board of Directors, in its discretion, may also elect one or more Vice Presidents (including Executive Vice Presidents and Senior Vice Presidents), Assistant Secretaries, Assistant Treasurers, a Controller and such other officers as in the judgment of the Board of Directors may be necessary or desirable. Any number of offices may be held by the same person and more than one person may hold the same office, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation, nor need such officers be directors of the Corporation.
4.2 Election. The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Except as otherwise provided in this Article IV, any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers who are directors of the Corporation shall be fixed by the Board of Directors.
4.3 Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Executive Chairman, Chief Executive Officer, or Chief Operating Officer and any such officer may, in the name and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
4.4 Executive Chairman. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, the Executive Chairman shall have ultimate authority for decisions relating to the general management and control of the affairs and business of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. The Executive Chairman shall be deemed the principal executive officer of the Corporation.
4.5 Vice Chairman. Subject to the provisions of these Bylaws and to the direction of the Board of Directors and the Executive Chairman, the Vice Chairman shall oversee the general day to day operations of the Corporation and the implementation of the directions of the Executive Chairman and the Board of Directors and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors, the Executive Chairman or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors and the Executive Chairman.
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4.6 Chief Financial Officer. The Chief Financial Officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. In the absence of a named Treasurer, the Chief Financial Officer shall also have the powers and duties of the Treasurer as hereinafter set forth and shall be authorized and empowered to sign as Treasurer in any case where such officer’s signature is required.
4.7 Vice Presidents. At the request of the Executive Chairman or the Chief Executive Officer, or in the absence of the Chief Executive Officer, or in the event of his or her inability or refusal to act, the Vice President or the Vice Presidents if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the Chief Executive Officer or in the event of the inability or refusal of such officer to act, shall perform the duties of such office, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office.
4.8 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Executive Chairman or the Chief Executive Officer, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, then any Assistant Secretary shall perform such actions. If there be no Assistant Secretary, then the Board of Directors or the Executive Chairman or the Chief Executive Officer may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.
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4.9 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Executive Chairman, Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
4.10 Assistant Secretaries. Except as may be otherwise provided in these Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, Executive Chairman, Chief Executive Officer, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.
4.11 Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Executive Chairman, the Chief Executive Officer, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
4.12 Controller. The Controller shall establish and maintain the accounting records of the Corporation in accordance with generally accepted accounting principles applied on a consistent basis, maintain proper internal control of the assets of the Corporation and shall perform such other duties as the Board of Directors, the Executive Chairman, the Chief Executive Officer or any Vice President of the Corporation may prescribe.
4.13 Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
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4.14 Vacancies. The Board of Directors shall have the power to fill any vacancies in any office occurring from whatever reason.
4.15 Resignations. Any officer may resign at any time by submitting his written resignation to the Corporation. Such resignation shall take effect at the time of its receipt by the Corporation, unless another time be fixed in the resignation, in which case it shall become effective at the time so fixed. The acceptance of a resignation shall not be required to make it effective.
4.16 Removal. Subject to the provisions of any employment or other agreement approved by the Board of Directors, any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Form of Certificates. The shares of stock in the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be in uncertificated form. Stock certificates shall be in such forms as the Board of Directors may prescribe and signed by the Chairman of the Board, President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation.
5.2 Signatures. Any or all of the signatures on a stock certificate may be a facsimile, including, but not limited to, signatures of officers of the Corporation and countersignatures of a transfer agent or registrar. In case an officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
5.3 Lost Certificates. The Board of Directors may direct a new stock certificate or certificates to be issued in place of any stock certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new stock certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
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5.4 Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of certificated stock shall be made on the books of the Corporation only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued. Transfers of uncertificated stock shall be made on the books of the Corporation only by the person then registered on the books of the Corporation as the owner of such shares or by such person's attorney lawfully constituted in writing and written instruction to the Corporation containing such information as the Corporation or its agents may prescribe. No transfer of uncertificated stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. The Corporation shall have no duty to inquire into adverse claims with respect to any stock transfer unless (a) the Corporation has received a written notification of an adverse claim at a time and in a manner which affords the Corporation a reasonable opportunity to act on it prior to the issuance of a new, reissued or re-registered share certificate, in the case of certificated stock, or entry in the stock record books of the Corporation, in the case of uncertificated stock, and the notification identifies the claimant, the registered owner and the issue of which the share or shares is a part and provides an address for communications directed to the claimant; or (b) the Corporation has required and obtained, with respect to a fiduciary, a copy of a will, trust, indenture, articles of co-partnership, Bylaws or other controlling instruments, for a purpose other than to obtain appropriate evidence of the appointment or incumbency of the fiduciary, and such documents indicate, upon reasonable inspection, the existence of an adverse claim. The Corporation may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by him or, if there be no such address, at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notification, either (a) an appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or (b) an indemnity bond, sufficient in the Corporation’s judgment to protect the Corporation and any transfer agent, registrar or other agent of the Corporation involved from any loss which it or they may suffer by complying with the adverse claim, is filed with the Corporation.
5.5 Fixing Record Date. In order that the Corporation may determine the stockholders entitled to notice or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than ten (10) days after the date upon which the resolution fixing the record date of action with a meeting is adopted by the Board of Directors, nor more than sixty (60) days prior to any other action. If no record date is fixed:
(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the first date on which a signed written consent is delivered to the Corporation.
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(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
5.6 Registered Stockholders. Prior to due presentment for transfer of any share or shares, the Corporation shall treat the registered owner thereof as the person exclusively entitled to vote, to receive notifications and to all other benefits of ownership with respect to such share or shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State Delaware.
ARTICLE VI
NOTICES
6.1 Form of Notice. Notices to directors and stockholders other than notices to directors of special meetings of the Board of Directors which may be given by any means stated in Article III, Section 4, shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by telegram.
6.2 Waiver of Notice. Whenever any notice is required to be given under the provisions of law or the Certificate of Incorporation or by these Bylaws of the Corporation, a written waiver, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular, or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
7.1 The Corporation shall indemnify, advance expenses, and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liabilities and losses suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except for claims for indemnification (following the final disposition of such Proceeding) or advancement of expenses not paid in full, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation.
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7.2 No director or officer of the Corporation shall be personally liable to the Corporation or to any stockholder of the Corporation for monetary damages for breach of fiduciary duty as a director or officer, provided that this provision shall not limit the liability of a director or officer (i) for any breach of the director’s or the officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware, or (iv) for any transaction from which the director or officer derived an improper personal benefit.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Reliance on Books and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation, shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation, including reports made to the Corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care.
8.2 Maintenance and Inspection of Records. The Corporation shall, either at its principal executive office or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these by-laws, as may be amended to date, minute books, accounting books and other records.
Any such records maintained by the Corporation may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to the provisions of the Delaware General Corporation Law. When records are kept in such manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper form accurately portrays the record.
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Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.
8.3 Inspection by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.
8.4 Dividends. Subject to the provisions of the Certificate of Incorporation, if any, dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
8.5 Annual Statement. The Board of Directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the Corporation.
8.6 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the Board of Directors may from time to time designate.
8.7 Fiscal Year. The fiscal year of the Corporation shall be as determined by the Board of Directors. If the Board of Directors shall fail to do so, the President shall fix the fiscal year.
8.8 Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.
8.9 Amendments. The original or other Bylaws may be adopted, amended or repealed by the stockholders entitled to vote thereon at any regular or special meeting or, if the Certificate of Incorporation so provides, by the Board of Directors. The fact that such power has been so conferred upon the Board of Directors shall not divest the stockholders of the power nor limit their power to adopt, amend or repeal Bylaws.
8.10 Interpretation of Bylaws. All words, terms and provisions of these Bylaws shall be interpreted and defined by and in accordance with the General Corporation Law of the State of Delaware, as amended, and as amended from time to time hereafter.
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Exhibit 3.3
Delaware The First StatePage 1I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THAT THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF “CORPHOUSING GROUP INC.” FILED IN THIS OFFICE ON THE FOURTH DAY OF JANUARY, A.D. 2022, AT 3:45 O`CLOCK P.M.6590567 8100V Authentication: 202330072 SR# 20220016558 Date: 01-06-22 You may verify this certificate online at corp.delaware.gov/authver.shtml
State of Delaware Secretary of State Division of Corporations Delivered 03:45 PM 01/04/2022 FILED 03:45 PM 01/04/2022 SR 20220016558 - FileNumber 6590567CERTIFICATE OF INCORPORATIONOFCORPHOUSING GROUP INC.Pursuant to Section 102 of the Delaware General Corporation LawI, the undersigned, in order to form a corporation for the purposes hereinafter stated, under and pursuant to the provisions of the General Corporation Law of the State of Delaware (the "GCL"), do hereby certify as follows:FIRST: The name of the corporation is CorpHousing Group Inc. (hereinafter sometimes referred to as the "Corporation").SECOND: The registered office of the Corporation is to be located at 850 New Burton Road, Suite 20 l, Dover, Kent County, Delaware 19904. The name of its registered agent at that address is Cogency Global Inc.THIRD: The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the GCL.FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 220 million, of which 200 million shares shall be common stock, par value $.00001 per share ("Common Stock") and of which 20 million shares shall be preferred stock, par value of$.00001 per share ("Preferred Stock"). The Board of Directors of the Corporation is expressly granted authority to issue shares of the Preferred Stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a "Preferred Stock Designation") and as may be permitted by the GCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.FIFTH: The name and mailing address of the sole incorporator of the Corporation is as follows: Brian Ferdinand Address c/o Graubard Miller The Chrysler Building 405 Lexington Avenue New York, NY 10174-1901SIXTH: The number of directors of the Corporation shall be fixed by, or in the manner provided in, the Bylaws of the Corporation (the "Bylaws").SEVENTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director. No amendment to, modification of or repeal of this Paragraph SEVENTH shall apply to, or have any effect on the liability or alleged liability of, any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.EIGHTH: The Corporation shall indemnify, advance expenses, and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a "Covered Person")
who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil. criminal, administrative or investigative (a "Proceeding"), by reason of the fact that lie or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liabilities and losses suffered and expenses (including attorneys' fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except for claims for indemnification (following the final disposition of such Proceeding) or advancement of expenses not paid in full, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation, Any amendment, repeal or modification of this Paragraph EIGHTH shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.NINTH: Unless and except to the extent that the Bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot Meetings of the stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws may provide, The books of the Corporation may be kept (subject to any provision contained in the GCL) outside of the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the Bylaws.TENTH: In furtherance of, and not in limitation of, the powers conferred by the GCL, the board of directors is expressly authorized to adopt, amend or repeal the Bylaws or adopt new Bylaws without any action on the part of the stockholders; provided that any Bylaw adopted or amended by the board of directors, and any powers thereby conferred, may be amended, altered or repealed by the stockholders.ELEVENTH:A. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalfofthe Corporation, (ii) any action asserting a claim of breach ofa fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the GCL or this Certificate of Incorporation or the Corporation's Bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware, or ifno state court located \Vithin the State of Delaware has jurisdiction, the federal district court for the District of Delaware) in all cases subject to the court's having personal jurisdiction over the indispensable parties named as defendants.B. If any action the subject matter of which is within the scope of Section A immediately above is filed in a cou1t other than a court located within the State of Delaware (a "Foreign Action") in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A immediately above (an "FSC Enforcement Action") and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder's counsel in the Foreign Action as agent for such stockholder.C. If any provision or provisions of this Article ELEVENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason ,vhatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article ELEVENTH (including, without limitation, each portion of any sentence of this Article ELEVENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article ELEVENTH.
IN WITNESS WHEREOF, I have signed this Certificate of Incorporation this December , 2021. 12/30/2021Incorporator Brian Ferdinand
Exhibit 4.2
NEITHER THIS WARRANT NOR THE COMMON STOCK THAT MAY BE ACQUIRED UPON THE EXERCISE HEREOF ("WARRANT SHARES") HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT ALSO CONTAINS CERTAIN RESTRICTIONS REGARDING THE TRANSFER OF THIS WARRANT AND/OR THE WARRANT SHARES.
CORPHOUSING, LLC
WARRANT FOR THE PURCHASE OF
COMMON STOCK
Corphousing, LLC a Delaware limited liability company ("Company"), anticipates undertaking a conversion of the Company from a limited liability company to a corporation under Delaware law ("Corporate Conversion") and the completion of an initial public offering of the Company's common stock ("IPO"). Upon consummation of the Corporate Conversion, the name of the Company shall be "Corphousing Inc." This Warrant assumes consummation of the Corporate Conversion and IPO. If the Corporate Conversion and IPO is not consummated on or prior to March 31, 2022, this Warrant shall be deemed a warrant to purchase membership interests in the Company representing 1% of the outstanding economic interests of the Company as of October 15, 2021 and shall be exercisable at any time during through April 30, 2022 for same by the surrender of this Warrant to the Company without any further payment. If a Corporate Conversion and IPO occurs on or prior to March 31, 2022, this Warrant shall govern the right of the Holder (as defined below) to purchase shares of the Company's common stock as set forth herein.
The Company hereby certifies that for value received, THA Family II Limited Liability Company, or its registered assigns ("Registered Holder" or "Holder"), with a principal address of at 224 Muttontown Eastwoods Road, Muttontown, New York 11791, is entitled, subject to the terms set forth below, to purchase from the Company, at any time or from time to time commencing on the date of the consummation of an IPO (the "Effective Date") and terminating at 5:00 p.m., New York City time on the fifth anniversary thereof, 2,000,000 shares of common stock of the Company ("Common Stock"), at an exercise price equal to the per-share public offering price in the IPO.
The number of shares of Common Stock purchasable upon exercise of this Warrant, and the exercise price per share, each as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the "Warrant Shares" and the "Exercise Price," respectively.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or in part, by the surrender of this Warrant (with the Notice of Exercise Form attached hereto duly executed by such Registered Holder) at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, in lawful money of the United States, of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise, subject to the cashless exercise provisions set forth in Section 2.3(b) of this Warrant.
(b) Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in subsection 1(a) above, if so surrendered prior to 5:00 p.m., New York City time, or if surrendered after 5:00 p.m., New York City time, as of the next business day. At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 1(c ), below, shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.
(c) Unless exercising this Warrant in its entirety (or the then existing remainder of this Warrant in its entirety), exercises hereunder shall be only in full share increments. Within five (5) business days after the exercise of the purchase right represented by this Warrant, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof (including the requirement that there be a registration statement then in effect with respect to transfers or an exemption therefrom), to such other individual or entity as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant Shares to which such Registered Holder shall be entitled upon such exercise (and, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof), and
(ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, stating on the face or faces thereof the number of shares currently stated on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above.
2. Adjustments; Conversions.
2.1 Adjustments to Exercise Price and Number of Shares. The Exercise Price and the number of shares of Common Stock underlying this Warrant shall be subject to adjustment from time to time as hereinafter set forth:
(i) Stock Dividends - Recapitalization, Reclassification, Split-Ups. If, after the date hereof, the number of outstanding shares of Common Stock is increased by a stock dividend on the Common Stock payable in shares of Common Stock or by a split-up, recapitalization or reclassification of shares of Common Stock or other similar event, then, on the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be increased in proportion to such increase in outstanding shares.
(ii) Aggregation of Shares. If after the date hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock or other similar event, then, upon the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be decreased in proportion to such decrease in outstanding shares.
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(iii) Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted, as provided in this Section, the Exercise Price shall be adjusted (to the nearest cent) by multiplying such Exercise Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of this Warrant immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
(iv) Price Reduction; Exercise Period Extension. Notwithstanding any other provision set forth in this Warrant, at any time and from time to time during the period that this Warrant is exercisable, the Company in its sole discretion may reduce the Exercise Price or extend the period during which this Warrant is exercisable.
(v) No Impairment. The Company will not, by amendment of its Certificate of Incorporation, as amended, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of all such actions as may be necessary or appropriate in order to protect against impairment of the rights of the Holder of this Warrant to adjustments in the Exercise Price.
2.2 Replacement of Shares Upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation ( other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or other transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Warrant immediately prior to such event.
2.3 Restrictions on Transfers: Lock-Up; Cashless Exercise.
(a) The Registered Holder hereby agrees that this Warrant and the shares of Common Stock issuable upon exercise of this Warrant shall not be transferrable except for Permitted Transfers (made in further accordance with Section 4 below). "Permitted Transfers" mean transfers of this Warrant or the Warrant Shares (a) to affiliates of the Registered Holder provided that the transferee agrees to be bound in writing by the transfer restrictions set forth herein, (b) during the Registered Holder's lifetime or on the Registered Holder's death, by gift, will or intestate succession, or by judicial decree, provided, that the transferee agrees to be bound in writing by the transfer restrictions set forth herein or ( c) made by the Registered Holder in private or market sales following the end of the Lock-Up Period. The "Lock-Up Period" means the lock-up period agreed to by all executive officers and directors of the Company and the underwriter of the IPO; provided, that the applicable underwriter or placement agent may shorten or waive this lock-up at its sole discretion. Notwithstanding anything to the contrary, if this Warrant or the Warrant Shares or any portion thereof are included for resale in the IPO by the Company, the portion of same so included in the offering shall not be subject to lock-up.
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(b) Notwithstanding anything contained herein to the contrary, at any time the Common Stock is traded, listed or quoted on a U.S. trading market or electronic exchange, the holder of this Warrant may, in its sole discretion, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula:
Net Number= [(Ax B) - (Ax C)] / B
For purposes of the foregoing formula:
A= the total number of shares with respect to which the Warrant is then being exercised.
B= the arithmetic average of the last sale price of the shares of Common Stock for the five (5) consecutive trading days ending on the date immediately preceding the date of the Notice of Exercise, as reported by the principal market or exchange on which the common stock is traded, listed or quoted ..
C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
2.4 Notice of Adjustment or Conversion. Upon the happening of any event requiring an adjustment of the Exercise Price hereunder, or a conversion of the Warrant or any other material change, the Company shall forthwith give written notice thereto to the Registered Holder of this Warrant stating, in the case of an adjustment, the adjusted Exercise Price and the adjusted number of Warrant Shares, or in the case of a conversion, reasonably detailed instruction on how to surrender this Warrant, and setting forth such other detail as the Company reasonably deems appropriate.
3. Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment thereof in cash on the basis of the last sale price of the Company's Common Stock on the over-the-counter market or on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if neither is applicable, then on the basis of the then fair market value of the Company's Common Stock as shall be reasonably determined by the Board of Directors of the Company.
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4. Limitation on Sales. Further to the restrictions set forth in Section 2.3, above, each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act, as of the date of issuance hereof and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant, or any Warrant Shares issued upon its exercise, in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable Blue Sky or state securities law then in effect or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required.
Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Shares to be issued upon the particular exercise of the Warrant shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue the shares covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a covenant at the time of such exercise that it is acquiring such shares for its own account, and will not transfer the Warrant Shares unless pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event the Registered Holder shall be bound by the provisions of a legend or legends to such effect which shall be endorsed upon the certificate(s) representing the Warrant Shares issued pursuant to such exercise. In such event, the Warrant Shares issued upon exercise hereof shall be imprinted with a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
5. [Reserved]
6. Reservation of Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, that number of Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.
7. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
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8. Transfers. etc.
(a) The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant. Any Registered Holder may change its, his or her address as shown on the warrant register by written notice to the Company requesting such change.
(b) Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
9. No Rights as Stockholder. Except as otherwise provided herein, until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.
10. Successors. The rights and obligations of the parties to this Warrant will inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, assigns, pledgees, transferees and purchasers. Without limiting the foregoing, the registration rights set forth in this Warrant shall inure to the benefit of the Registered Holder and all the Registered Holder's successors, heirs, pledgees, assignees, transferees and purchasers of this Warrant and the Warrant Shares.
11. Change or Waiver. Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought.
12. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
13. Governing Law. This Warrant shall be governed and construed in accordance with the internal law of the State of Delaware without giving effect to choice of law principles. The Company and each other party liable herefor, in any litigation in which Holder shall be an adverse party, waives trial by jury, waives the right to claim that the forum or venue specified herein is an inconvenient forum or venue and waives the right to interpose any setoff, deduction or counterclaim of any nature or description, and irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding, and each party further agrees to accept and acknowledge service of any and all process which may be served upon it in any such suit, action or proceeding certified mail to the address as set forth on the first page of this Warrant.
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14. Registration Rights. The Holder shall have the registration rights set forth on Exhibit A hereto.
15. Mailing of Notices. etc. All notices and other communications under this Warrant (except payment) shall be in writing and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipt delivery, or if mailed, postage prepaid, by certified mail, return receipt requested, or by electronic mail transmission, as follows:
Registered Holder:
To his or her address on page 1 of this Warrant
The Company:
Corphousing LLC
2125 Biscayne Blvd
Suite 253
Miami, Florida 33137
Attn: CEO
Email: brian@corphousinggroup.com
In either case, with copies to:
Graubard Miller
The Chrysler Building
405 Lexington
Avenue
New York, New York 10174
Attn: Brian
L. Ross, Esq.
Email: bross@graubard.com
or to such other address as any of them, by notice to the others may designate from time to time. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.
IN WITNESS WHEREOF, this Warrant has been executed and delivered on the date specified above on behalf of the Company by the duly authorized representative of the Company.
CORPHOUSING LLC | ||
By: | ||
Title: | CEO |
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NOTICE OF EXERCISE
To: Corphousing Inc.
(1) The undersigned hereby elects to exercise Warrant No. (the "Warrant") with respect to ____ _ shares of Common Stock, pursuant to the terms of the Warrant, and tenders herewith or will tender within the time period specified in the Warrant payment of the exercise price in full ( or has elected below to exercise the Warrant on a cashless basis), together with all applicable transfer taxes, if any. If the Warrant is being exercised in full, the Warrant is attached hereto or will be delivered within the time period specified in the Warrant.
(2) | Payment of Exercise Price: |
¨ | Payment shall take the form of lawful money of the United States in accordance with the terms of the Warrant. |
¨ | Payment shall take the form of a cashless exercise in accordance with the terms of the Warrant. |
(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:
[SIGNATURE OF HOLDER]
Name of Holder: | |
Signature: | |
Name of Signatory (if entity): | |
Title of Signatory (if entity): | |
Date: |
The undersigned hereby reaffirms the accuracy of the representations and warranties made by the undersigned as set forth in this Warrant (and the Subscription Agreement) and understands and acknowledges that the Company will rely upon the accuracy of such representations and warranties in issuing the Warrant Shares.
Signature |
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NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES | |
Name | |
(Print in Block Letters) | |
Address |
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Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within Warrant):
FOR VALUE RECEIVED, _____________ does hereby sell, assign and transfer unto _______________ the right to purchase _________ shares of Common Stock of Corphousing Inc. ("Company") evidenced by the within Warrant and does hereby authorize the Company to transfer such right on the books of the Company.
Dated:____________________________, 20__ |
Signature |
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
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Exhibit A
Registration Rights
The shares of Common Stock issuable upon exercise of the Warrant shall be deemed "Registrable Securities." In the event the Registrable Securities have not been previously registered for resale under a registration statement under the Securitas Act of 1933, as amended, (the "Act"), at such time as the Company shall have qualified for the use of a Registration Statement on Form F-3 or Form S-3, the Company shall use its best efforts to qualify and remain qualified to register securities under the Securities Act pursuant to a Registration Statement on Form F-3, Form S-3 or any successor form thereto and each holder of Registrable Securities shall have the right to request on two occasions that all or a portion of its Registrable Securities be registered for issuances and/or resale on Form F-3 or Form S-3 or any similar short-form registration (each a "Short-Form Registration"). Each request for a Short-Form Registration shall specify the approximate number of Registrable Securities requested to be registered (which shall not be less than 30% of the Registrable Securities). Upon receipt of any such request, Company shall cause a Registration Statement on Form F-3 or Form S-3 (or any successor form) to be filed with the Commission within 60 days after the date on which the initial request is given and shall use its commercially reasonable best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter.
If, following an IPO, the Company proposes to register any of its common stock, including the Subject Securities ( other than in connection with registrations on Form S-4 or S-8 ( or similar forms) promulgated by the SEC and any successor or similar forms), and the registration form to be used may be used for the registration of the Subject Securities (a "Piggyback Registration"), the Company shall give prompt written notice to the holders of the Registrable Securities (in any event within three business days after the filing of the registration statement relating to the Piggyback Registration), and, shall, subject to the remainder of this Section 3(a), include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwritten offering) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 days after delivery of the Company's notice, subject to the applicable rules and regulations of the U.S. Securities and Exchange Commission and to the Holder becoming party to any underwriting agreement, and agreeing to the terms of any lock-up restrictions or volume limitations imposed by the underwriters, in connection with any related underwritten offering. The Holder agrees and acknowledges that notwithstanding the foregoing, the Registrable Securities shall not be included ( or the number thereof shall be decreased) with respect to any registration statement relating to any offering in which the managing underwriter determines that the inclusion of such Registerable Securities would adversely affect the marketability of such offering or the Company's ability to otherwise complete the offering.
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Exhibit 4.3
NEITHER THIS WARRANT NOR THE COMMON STOCK THAT MAY BE ACQUIRED UPON THE EXERCISE HEREOF (“WARRANT SHARES”) HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT ALSO CONTAINS CERTAIN RESTRICTIONS REGARDING THE TRANSFER OF THIS WARRANT AND/OR THE WARRANT SHARES.
CORPHOUSING, LLC
WARRANT FOR THE PURCHASE OF
COMMON STOCK
CorpHousing, LLC a Delaware limited liability company (“Company”), anticipates undertaking a conversion of the Company from a limited liability company to a corporation under Delaware law (“Corporate Conversion”) and the completion of an initial public offering of the Company’s common stock (“IPO”). Upon consummation of the Corporate Conversion, the name of the Company shall be “CorpHousing Group Inc.” This Warrant assumes consummation of the Corporate Conversion and IPO. If the Corporate Conversion and IPO is not consummated on or prior to March 31, 2022, this Warrant shall be deemed a warrant to purchase membership interests in the Company $500,000 worth of membership interests as determined in good faith by the Company in consultation with the Holder (as defined below) and shall be exercisable at any time during through April 30, 2022 for same by the surrender of this Warrant to the Company without any further payment. If a Corporate Conversion and IPO occurs on or prior to March 31, 2022, this Warrant shall govern the right of the Holder (as defined below) to purchase shares of the Company’s common stock as set forth herein.
The Company hereby certifies that for value received, EBOL Holdings LLC, or its registered assigns (“Registered Holder” or “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at any time or from time to time commencing on the date of the consummation of an IPO (the “Effective Date”) and terminating at 5:00 p.m., New York City time on the fifth anniversary thereof, up to that number of shares determined by dividing $500,000 by the per-share price of a share of common stock of the Company (“Common Stock”) in the IPO. The per-share price in the IPO shall be the per-share exercise price (“Exercise Price’) hereunder subject to adjustment as provided herein.
The number of shares of Common Stock purchasable upon exercise of this Warrant, as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the “Warrant Shares.”
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or in part, by the surrender of this Warrant (with the Notice of Exercise Form attached hereto duly executed by such Registered Holder) at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, in lawful money of the United States, of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise, subject to the cashless exercise provisions set forth in Section 2.3(b) of this Warrant.
(b) Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in subsection 1(a) above, if so surrendered prior to 5:00 p.m., New York City time, or if surrendered after 5:00 p.m., New York City time, as of the next business day. At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 1(c), below, shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.
(c) Unless exercising this Warrant in its entirety (or the then existing remainder of this Warrant in its entirety), exercises hereunder shall be only in full share increments. Within five (5) business days after the exercise of the purchase right represented by this Warrant, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof (including the requirement that there be a registration statement then in effect with respect to transfers or an exemption therefrom), to such other individual or entity as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant Shares to which such Registered Holder shall be entitled upon such exercise (and, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof), and
(ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, stating on the face or faces thereof the number of shares currently stated on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above.
2. Adjustments; Conversions.
2.1 Adjustments to Exercise Price and Number of Shares. The Exercise Price and the number of shares of Common Stock underlying this Warrant shall be subject to adjustment from time to time as hereinafter set forth:
(i) Stock Dividends - Recapitalization, Reclassification, Split-Ups. If, after the date hereof, the number of outstanding shares of Common Stock is increased by a stock dividend on the Common Stock payable in shares of Common Stock or by a split-up, recapitalization or reclassification of shares of Common Stock or other similar event, then, on the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be increased in proportion to such increase in outstanding shares.
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(ii) Aggregation of Shares. If after the date hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock or other similar event, then, upon the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be decreased in proportion to such decrease in outstanding shares.
(iii) Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted, as provided in this Section, the Exercise Price shall be adjusted (to the nearest cent) by multiplying such Exercise Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of this Warrant immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
(iv) Price Reduction; Exercise Period Extension. Notwithstanding any other provision set forth in this Warrant, at any time and from time to time during the period that this Warrant is exercisable, the Company in its sole discretion may reduce the Exercise Price or extend the period during which this Warrant is exercisable.
(v) No Impairment. The Company will not, by amendment of its Certificate of Incorporation, as amended, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of all such actions as may be necessary or appropriate in order to protect against impairment of the rights of the Holder of this Warrant to adjustments in the Exercise Price.
2.2 Replacement of Shares Upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or other transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Warrant immediately prior to such event.
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2.3 Restrictions on Transfers; Lock-Up; Cashless Exercise.
(a) The Registered Holder hereby agrees that this Warrant and the shares of Common Stock issuable upon exercise of this Warrant shall not be transferrable except for Permitted Transfers (made in further accordance with Section 4 below). “Permitted Transfers” mean transfers of this Warrant or the Warrant Shares (a) to affiliates of the Registered Holder provided that the transferee agrees to be bound in writing by the transfer restrictions set forth herein, (b) during the Registered Holder’s lifetime or on the Registered Holder’s death, by gift, will or intestate succession, or by judicial decree, provided, that the transferee agrees to be bound in writing by the transfer restrictions set forth herein or (c) made by the Registered Holder in private or market sales following the end of the Lock-Up Period. The “Lock-Up Period” means the lock-up period agreed to by all executive officers and directors of the Company and the underwriter of the IPO; provided, that the applicable underwriter or placement agent may shorten or waive this lock-up at its sole discretion. Notwithstanding anything to the contrary, if this Warrant or the Warrant Shares or any portion thereof are included for resale in the IPO by the Company, the portion of same so included in the offering shall not be subject to lock-up.
(b) Notwithstanding anything contained herein to the contrary, at any time the Common Stock is traded, listed or quoted on a U.S. trading market or electronic exchange, the holder of this Warrant may, in its sole discretion, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula:
Net Number = [(A x B) - (A x C)] / B
For purposes of the foregoing formula:
A= the total number of shares with respect to which the Warrant is then being exercised.
B= the arithmetic average of the last sale price of the shares of Common Stock for the five (5) consecutive trading days ending on the date immediately preceding the date of the Notice of Exercise, as reported by the principal market or exchange on which the common stock is traded, listed or quoted..
C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
2.4 Notice of Adjustment or Conversion. Upon the happening of any event requiring an adjustment of the Exercise Price hereunder, or a conversion of the Warrant or any other material change, the Company shall forthwith give written notice thereto to the Registered Holder of this Warrant stating, in the case of an adjustment, the adjusted Exercise Price and the adjusted number of Warrant Shares, or in the case of a conversion, reasonably detailed instruction on how to surrender this Warrant, and setting forth such other detail as the Company reasonably deems appropriate.
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3. Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment thereof in cash on the basis of the last sale price of the Company’s Common Stock on the over-the-counter market or on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if neither is applicable, then on the basis of the then fair market value of the Company’s Common Stock as shall be reasonably determined by the Board of Directors of the Company.
4. Limitation on Sales. Further to the restrictions set forth in Section 2.3, above, each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act, as of the date of issuance hereof and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant, or any Warrant Shares issued upon its exercise, in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable Blue Sky or state securities law then in effect or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required.
Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Shares to be issued upon the particular exercise of the Warrant shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue the shares covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a covenant at the time of such exercise that it is acquiring such shares for its own account, and will not transfer the Warrant Shares unless pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event the Registered Holder shall be bound by the provisions of a legend or legends to such effect which shall be endorsed upon the certificate(s) representing the Warrant Shares issued pursuant to such exercise. In such event, the Warrant Shares issued upon exercise hereof shall be imprinted with a legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
5. [Reserved]
6. Reservation of Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, that number of Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.
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7. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
8. Transfers, etc.
(a) The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant. Any Registered Holder may change its, his or her address as shown on the warrant register by written notice to the Company requesting such change.
(b) Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
9. No Rights as Stockholder. Except as otherwise provided herein, until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.
10. Successors. The rights and obligations of the parties to this Warrant will inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, assigns, pledgees, transferees and purchasers. Without limiting the foregoing, the registration rights set forth in this Warrant shall inure to the benefit of the Registered Holder and all the Registered Holder’s successors, heirs, pledgees, assignees, transferees and purchasers of this Warrant and the Warrant Shares.
11. Change or Waiver. Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought.
12. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
13. Governing Law. This Warrant shall be governed and construed in accordance with the internal law of the State of Delaware without giving effect to choice of law principles. The Company and each other party liable herefor, in any litigation in which Holder shall be an adverse party, waives trial by jury, waives the right to claim that the forum or venue specified herein is an inconvenient forum or venue and waives the right to interpose any setoff, deduction or counterclaim of any nature or description, and irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding, and each party further agrees to accept and acknowledge service of any and all process which may be served upon it in any such suit, action or proceeding certified mail to the address as set forth on the first page of this Warrant.
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14. Registration Rights. The Holder shall have the registration rights set forth on Exhibit A hereto.
15. Mailing of Notices, etc. All notices and other communications under this Warrant (except payment) shall be in writing and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipt delivery, or if mailed, postage prepaid, by certified mail, return receipt requested, or by electronic mail transmission, as follows:
Registered Holder:
To its address on page 1 of this Warrant
The Company:
Corphousing LLC
2125 Biscayne Blvd
Suite 253
Miami, Florida 33137
Attn: CEO
Email: brian@corphousinggroup.com
In either case, with copies to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Brian L. Ross, Esq.
Email: bross@graubard.com
or to such other address as any of them, by notice to the others may designate from time to time. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.
IN WITNESS WHEREOF, this Warrant has been executed and delivered on the date specified above on behalf of the Company by the duly authorized representative of the Company.
CORPHOUSING LLC | |||
By: | /s/ Brian L. Ferdinand | ||
Title: | CEO | ||
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NOTICE OF EXERCISE
To: Corphousing Inc.
(1) The undersigned hereby elects to exercise Warrant No. (the “Warrant”) with respect to ____________ shares of Common Stock, pursuant to the terms of the Warrant, and tenders herewith or will tender within the time period specified in the Warrant payment of the exercise price in full (or has elected below to exercise the Warrant on a cashless basis), together with all applicable transfer taxes, if any. If the Warrant is being exercised in full, the Warrant is attached hereto or will be delivered within the time period specified in the Warrant.
(2) Payment of Exercise Price:
¨ | Payment shall take the form of lawful money of the United States in accordance with the terms of the Warrant. |
¨ | Payment shall take the form of a cashless exercise in accordance with the terms of the Warrant. |
(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:
[SIGNATURE OF HOLDER]
Name of Holder:_____________________________________________________________________________________________________________ |
Signature:__________________________________________________________________________________________________________________ |
Name of Signatory (if entity):___________________________________________________________________________________________________ |
Title of Signatory (if entity):____________________________________________________________________________________________________ |
Date:_____________________________________________________________________________________________________________________ |
The undersigned hereby reaffirms the accuracy of the representations and warranties made by the undersigned as set forth in this Warrant (and the Subscription Agreement) and understands and acknowledges that the Company will rely upon the accuracy of such representations and warranties in issuing the Warrant Shares.
Signature |
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NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name | _________________________________________________________________________________________________ |
(Print in Block Letters) | |
Address | _________________________________________________________________________________________________ |
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Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within Warrant):
FOR VALUE RECEIVED, ________________________________ does hereby sell, assign and transfer unto_________________________________ the right to purchase _____________________ shares of Common Stock of CorpHousing Group Inc. (“Company”) evidenced by the within Warrant and does hereby authorize the Company to transfer such right on the books of the Company.
Dated:____________________, 20___
Signature | |
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
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Exhibit A
Registration Rights
The shares of Common Stock issuable upon exercise of the Warrant shall be deemed “Registrable Securities.” In the event the Registrable Securities have not been previously registered for resale under a registration statement under the Securitas Act of 1933, as amended, (the “Act”), at such time as the Company shall have qualified for the use of a Registration Statement on Form F-3 or Form S-3, the Company shall use its best efforts to qualify and remain qualified to register securities under the Securities Act pursuant to a Registration Statement on Form F-3, Form S-3 or any successor form thereto and each holder of Registrable Securities shall have the right to request on two occasions that all or a portion of its Registrable Securities be registered for issuances and/or resale on Form F-3 or Form S-3 or any similar short-form registration (each a “Short-Form Registration”). Each request for a Short-Form Registration shall specify the approximate number of Registrable Securities requested to be registered (which shall not be less than 30% of the Registrable Securities). Upon receipt of any such request, Company shall cause a Registration Statement on Form F-3 or Form S-3 (or any successor form) to be filed with the Commission within 60 days after the date on which the initial request is given and shall use its commercially reasonable best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter.
If, following an IPO, the Company proposes to register any of its common stock, including the Subject Securities (other than in connection with registrations on Form S-4 or S-8 (or similar forms) promulgated by the SEC and any successor or similar forms), and the registration form to be used may be used for the registration of the Subject Securities (a “Piggyback Registration”), the Company shall give prompt written notice to the holders of the Registrable Securities (in any event within three business days after the filing of the registration statement relating to the Piggyback Registration), and, shall, subject to the remainder of this Section 3(a), include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwritten offering) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 days after delivery of the Company’s notice, subject to the applicable rules and regulations of the U.S. Securities and Exchange Commission and to the Holder becoming party to any underwriting agreement, and agreeing to the terms of any lock-up restrictions or volume limitations imposed by the underwriters, in connection with any related underwritten offering. The Holder agrees and acknowledges that notwithstanding the foregoing, the Registrable Securities shall not be included (or the number thereof shall be decreased) with respect to any registration statement relating to any offering in which the managing underwriter determines that the inclusion of such Registerable Securities would adversely affect the marketability of such offering or the Company’s ability to otherwise complete the offering.
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Exhibit 10.1
CorpHousing Group Inc.
2022 Long-Term Incentive Equity Plan
Section 1. Purpose; Definitions.
1.1. Purpose. The purpose of the CorpHousing Group Inc. 2022 Long-Term Incentive Equity Plan (“Plan”) is to enable CorpHousing Group Inc. (the “Company”) to offer to its employees, officers, directors and consultants whose past, present and/or potential future contributions to the Company and its Subsidiaries have been, are or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Common Stock, thereby strengthening their commitment to the Company and aligning their interests with those of the Company's stockholders. The various types of long-term incentive awards that may be provided under the Plan will enable the Company to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its businesses.
1.2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Agreement” means the written award agreement between the Company and the Holder, or such other document as may be determined by the Committee, setting forth the terms and conditions of an award granted under the Plan. Any Agreement is subject to the terms and conditions of the Plan.
(b) “Board” means the Board of Directors of the Company.
(c) “Cause” means (a) the meaning of such term as set forth in the applicable Service Agreement or (b) if no Service Agreement exists, (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an affiliate; (ii) conduct that results in or is reasonably likely to result in harm to the reputation or business of the Company or any of its affiliates; (iii) gross negligence or willful misconduct with respect to the Company or an affiliate; or (iv) material violation of state or federal securities laws.
(d) “Change of Control” means (a) a transaction or series of related transactions in which a person or entity, or a group of related persons or entities (other than any shareholders or any affiliates thereof), acquires shares representing more than fifty percent (50%) of the outstanding voting power of the Company, (b) a merger or consolidation in which the Company is a constituent party or a subsidiary of the Company is a constituent party and the Company issues shares of its Common Stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of Common Stock outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (i) the surviving or resulting corporation or (ii) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation, or (c) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any Subsidiary of all or substantially all the assets of the Company and its Subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more Subsidiaries if all or substantially all of the assets of the Company and its Subsidiaries taken as a whole are held by such Subsidiary or Subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly-owned Subsidiary.
(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference in the Plan to any section of the Code shall be deemed to include any Treasury regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations, or guidance.
(f) “Committee” means the committee of the Board designated to administer the Plan as provided in Section 2.1. If no Committee is so designated, then all references in this Plan to “Committee” shall mean the Board.
(g) “Common Stock” means the Common Stock of the Company, par value $0.00001 per share.
(h) “Company” means CorpHousing Group Inc., a corporation organized under the laws of the State of Delaware.
(i) “Disability” means physical or mental impairment as determined under procedures established by the Committee for purposes of the Plan.
(j) “Effective Date” means the date determined pursuant to Section 11.1.
(k) “Fair Market Value,” unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, means, as of any given date: (i) if the Common Stock is listed on a national securities exchange or any other trading or quotation system, the last sale price of the Common Stock in the principal trading market for the Common Stock on such date, as reported by such exchange or trading or quotation system or, if there are no such sales on that date, then on the last preceding date on which such sales were reported; (ii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) above, such price as the Committee shall determine, in good faith in a manner that complies with Section 409A of the Code, provided, however, as to any awards granted on or with a grant date of the date of the pricing of the Company's initial public offering, "Fair Market Value" shall be equal to the per share price at which the Common Stock is offered to the public in connection with such initial public offering.
(l) “Holder” means a person who has received an award under the Plan.
(m) “Incentive Stock Option” means any Stock Option intended to be and designated by the Committee as an “incentive stock option” within the meaning of Section 422 of the Code and that otherwise meets the requirements set forth in the Plan.
(n) “Non-qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
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(o) “Normal Retirement” means retirement from active employment with the Company or any Subsidiary on or after such age which may be designated by the Committee as “retirement age” for any particular Holder. If no age is designated, it shall be 65.
(p) “Other Stock-Based Award” means an award under Section 8 that is payable by delivery of Common Stock or that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.
(q) “Parent” means any present or future “parent corporation” of the Company, as such term is defined in Section 424(e) of the Code.
(r) “Plan” means this Corphousing Inc. 2022 Long-Term Incentive Equity Plan, as hereinafter amended from time to time.(s) “Repurchase Value” shall mean the Fair Market Value if the award to be settled under Section 2.2(e) or repurchased under Section 5.2(k) or 9.1 is comprised of shares of Common Stock and the difference between Fair Market Value and the Exercise Price (if lower than Fair Market Value) if the award is a Stock Option or Stock Appreciation Right; in each case, multiplied by the number of shares subject to the award.
(t) “Restricted Stock” means Common Stock received under an award made pursuant to Section 7 that is subject to restrictions under Section 7.
(u) “SAR Value” means the excess of the Fair Market Value (on the exercise date) over (a) the exercise price that the Holder would have otherwise had to pay to exercise the related Stock Option or (b) if a Stock Appreciation Right is granted unrelated to a Stock Option, the Fair Market Value of a share of Common Stock on the date of grant of the Stock Appreciation Right, in either case, multiplied by the number of shares for which the Stock Appreciation Right is exercised.
(v) “Service Agreement” means the employment agreement or other service agreement with the Company by which a Holder is bound.
(w) “Stock Appreciation Right” means the right to receive from the Company, without a cash payment to the Company, a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value (on the exercise date) as determined under Section 6 and subject to the conditions thereof as well as the applicable Agreement.
(x) “Stock Option” or “Option” means any option to purchase shares of Common Stock which is granted pursuant to Section 5 of the Plan.
(y) “Subsidiary” means any present or future “subsidiary corporation” of the Company, as such term is defined in Section 424(f) of the Code.
Section 2. Administration.
2.1. Committee Membership. The Plan shall be administered by the Committee. Committee members shall serve for such term as the Board may in each case determine and shall be subject to removal at any time by the Board.
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2.2. Powers of Committee. The Committee shall have full authority to award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, and/or (iv) Other Stock-Based Awards. For purposes of illustration and not of limitation, the Committee shall have the authority (subject to the express provisions of this Plan):
(a) to select the officers, employees, directors and consultants of the Company or any Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted Stock and/or Other Stock-Based Awards may from time to time be awarded hereunder;
(b) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder (including, but not limited to, number of shares, share exercise price or types of consideration paid upon exercise of such options, such as other securities of the Company or other property, any restrictions or limitations, and any vesting, exchange, surrender, cancellation, acceleration, termination, exercise or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other factors or criteria which need to be attained for the vesting of an award granted hereunder;
(d) to determine the terms and conditions under which awards granted hereunder are to operate on a tandem basis and/or in conjunction with or apart from other equity awarded under this Plan and cash and non-cash awards made by the Company or any Subsidiary outside of this Plan; and
(e) to make payments and distributions with respect to awards (i.e., to “settle” awards) through cash payments in an amount equal to the Repurchase Value.
The Committee may not modify or amend any outstanding Option or Stock Appreciation Right to reduce the exercise price of such Option or Stock Appreciation Right, as applicable, below the exercise price as of the date of grant of such Option or Stock Appreciation Right. In addition, no Option or Stock Appreciation Right may be granted in exchange for the cancellation or surrender of an Option or Stock Appreciation Right or other award having a higher exercise price.
Notwithstanding anything to the contrary, the Committee shall not grant to any one Holder in any one calendar year awards for more than 10% of the total number of Shares (as defined below) issued and issuable under this Plan.
2.3. Interpretation of Plan.
(a) Committee Authority. Subject to Section 10, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable to interpret the terms and provisions of the Plan and any award issued under the Plan (and to determine the form and substance of all agreements relating thereto), and to otherwise supervise the administration of the Plan. Subject to Section 10, all decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee’s sole discretion and shall be final and binding upon all persons, including the Company, its Subsidiaries and Holders.
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(b) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term or provision of the Plan relating to Incentive Stock Options (including but not limited to Stock Appreciation Rights granted in conjunction with an Incentive Stock Option) or any Agreement providing for Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan or any Incentive Stock Option under Section 422 of the Code or, without the consent of the Holder(s) affected, to disqualify any Incentive Stock Option under such Section 422.
Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the special terms and conditions applicable to Incentive Stock Options as described in this Plan, including but not limited to, Section 5, and for the avoidance of doubt, if shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of within two years following the date the Incentive Stock Option is granted or one year following the transfer of such shares of Common Stock to the Holder upon exercise, the Holder shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Committee may reasonably require.
Section 3. Stock Subject to Plan.
3.1. Number of Shares. Subject to Section 7.1(d), the total number of shares of Common Stock reserved and available for issuance under the Plan shall be 20,000,000 shares. Shares of Common Stock under the Plan (“Shares”) may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares of Common Stock that have been granted pursuant to a Stock Option cease to be subject to a Stock Option, or if any shares of Common Stock that are subject to any Stock Appreciation Right, Restricted Stock award or Other Stock-Based Award granted hereunder are forfeited, or any such award otherwise terminates without a payment being made to the Holder in the form of Common Stock, such shares shall again be available for distribution in connection with future grants and awards under the Plan. Shares of Common Stock that are surrendered by a Holder or withheld by the Company as full or partial payment in connection with any award under the Plan, as well as any shares of Common Stock surrendered by a Holder or withheld by the Company or one of its Subsidiaries to satisfy the tax withholding obligations related to any award under the Plan, shall not be available for subsequent awards under the Plan.
3.2. Adjustment Upon Changes in Capitalization, Etc. In the event of any common stock dividend payable on shares of Common Stock, Common Stock split or reverse split, combination or exchange of shares of Common Stock, or other extraordinary or unusual event which results in a change in the shares of Common Stock of the Company as a whole, the Committee shall determine, in its sole discretion, whether such change equitably requires an adjustment in the terms of any award in order to prevent dilution or enlargement of the benefits available under the Plan (including number of shares subject to the award and the exercise price) or the aggregate number of shares reserved for issuance under the Plan. Any such adjustments will be made by the Committee, whose determination will be final, binding and conclusive.
Section 4. Eligibility.
Awards may be made or granted to employees, officers, directors and consultants who are deemed to have rendered or to be able to render significant services to the Company or its Subsidiaries and who are deemed to have contributed or to have the potential to contribute to the success of the Company. No Incentive Stock Option shall be granted to any person who is not an employee of the Company or an employee of a Subsidiary at the time of grant or so qualified as set forth in the immediately preceding sentence. Notwithstanding the foregoing, an award may also be made or granted to a person in connection with his hiring or retention, or at any time on or after the date he reaches an agreement (oral or written) with the Company with respect to such hiring or retention, even though it may be prior to the date the person first performs services for the Company or its Subsidiaries; provided, however, that no portion of any such award shall vest prior to the date the person first performs such services and the date of grant shall be deemed to be the date hiring or retention commences.
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Section 5. Stock Options.
5.1. Grant and Exercise. Stock Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-qualified Stock Options. The Agreement pertaining to an Option shall designate such Option as an Incentive Stock Option or a Non-qualified Stock Option. All Options granted under the Plan shall be Non-qualified Stock Options unless the applicable Agreement expressly states that the Option is intended to be an Incentive Stock Option. Any Stock Option granted under the Plan shall contain such terms, not inconsistent with this Plan, or with respect to Incentive Stock Options, not inconsistent with the Plan and the Code, as the Committee may from time to time approve. The Committee shall have the authority to grant Incentive Stock Options or Non-qualified Stock Options, or both types of Stock Options which may be granted alone or in addition to other awards granted under the Plan. To the extent that any Stock Option intended to qualify as an Incentive Stock Option does not so qualify, it shall constitute a separate Non-qualified Stock Option appropriately granted under the Plan. The Company shall have no liability to any Holder, or to any other person, if an Option (or any portion thereof) that is intended to be an Incentive Stock Option fails to qualify as an Incentive Stock Option at any time or if an Option (or any portion thereof) is determined to constitute "nonqualified deferred compensation" under Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code.
5.2. Terms and Conditions. Stock Options granted under the Plan shall be subject to the following terms and conditions:
(a) Option Term. The term during which a Stock Option may be exercised shall be fixed by the Committee and set forth in the applicable award Agreement; provided, however, that an Incentive Stock Option may be granted only within the ten-year period commencing from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined voting power of all classes of voting stock of the Company (“10% Shareholder”)).
(b) Exercise Price. The exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Committee as of the time of grant and may not be less than 100% of the Fair Market Value on the date of grant (or, if greater, the par value of a share of Common Stock); provided, however, that the exercise price of an Incentive Stock Option granted to a 10% Shareholder will not be less than 110% of the Fair Market Value on the date of grant.
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(c) Exercisability. Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee. The Committee intends generally to provide that Stock Options be exercisable only in installments, i.e., that they vest over time, typically over a four-year period. The Committee may waive such installment exercise provisions at any time at or after the time of grant in whole or in part, based upon such factors as the Committee determines. Notwithstanding the foregoing, in the case of an Incentive Stock Option, the aggregate Fair Market Value (on the date of grant of the Option) with respect to which Incentive Stock Options become exercisable for the first time by a Holder during any calendar year (under all such plans of the Company and its Parent and Subsidiaries) shall not exceed $100,000. To the extent that the aggregate fair market value of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year (under all plans of the Company) exceeds $100,000, such Options will be treated as Non-qualified Stock Options to the extent required by Section 422 of the Code.
(d) Method of Exercise. Subject to whatever installment, exercise and waiting period provisions are applicable in a particular case, Stock Options may be exercised in whole or in part at any time during the term of the Option by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased, as provided in the applicable Agreement. Such notice shall be accompanied by payment in full of the purchase price, which shall be in cash or, if provided in the Agreement, either in shares of Common Stock (including Restricted Stock and other contingent awards under this Plan) or partly in cash and partly in such Common Stock, or such other means which the Committee determines are consistent with the Plan’s purpose and applicable law. Cash payments shall be made by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; provided, however, that the Company shall not be required to deliver certificates for shares of Common Stock with respect to which an Option is exercised until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof (except that, in the case of an exercise arrangement approved by the Committee and described in the last sentence of this paragraph, payment may be made as soon as practicable after the exercise). No shares of Common Stock shall be issued pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the Company and the Holder has paid to the Company (or otherwise arranged for satisfaction of any required tax withholding in accorance with Section 12.6) an amount equal to any and all Federal, state, local, and non-U.S. income, employment, and any other applicable taxes that are required to be withheld in accordance with Section 12.6 of the Plan. The Committee may permit a Holder to elect to pay the exercise price upon the exercise of a Stock Option by irrevocably authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon exercise of the Stock Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any Federal, state, local, and non-U.S. income, employment, and any other applicable taxes that are required to be withheld in accordance with Section 12.6 of the Plan and resulting from such exercise. The Committee may also permit a Holder to pay the exercise price upon exercise of a Stock Option pursuant to net exercise procedures as determined by the Committee, provided, however, that, with respect to Incentive Stock Options, all such discretionary determinations shall be made by the Committee at the time of grant and specified in the Agreement.
(e) Stock Payments. Payments in the form of Common Stock shall be valued at the Fair Market Value on the date of exercise. Such payments shall be made by delivery of stock certificates in negotiable form that are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances.
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(f) Transferability. Except as may be set forth in the next sentence of this Section or in the Agreement, no Stock Option shall be transferable by the Holder other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Holder’s lifetime, only by the Holder (or, to the extent of legal incapacity or incompetency, the Holder’s guardian or legal representative). Notwithstanding the foregoing, a Holder, with the approval of the Committee, may transfer a Non-Qualified Stock Option (i) (A) by gift, for no consideration, or (B) pursuant to a domestic relations order, in either case, to or for the benefit of the Holder’s “Immediate Family” (as defined below), or (ii) to an entity in which the Holder and/or members of Holder’s Immediate Family own more than fifty percent of the voting interest, subject to such limits as the Committee may establish and the execution of such documents as the Committee may require, and the transferee shall remain subject to all the terms and conditions applicable to the Non-qualified Stock Option prior to such transfer. The term “Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any person sharing the Holder’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent beneficial interest, and a foundation in which these persons (or the Holder) control the management of the assets. The Committee may, in its sole discretion, permit transfer of an Incentive Stock Option in a manner consistent with applicable tax and securities law upon the Holder’s request.
(g) Termination by Reason of Death. If a Holder’s employment by, or association with, the Company or a Subsidiary terminates by reason of death, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of death may thereafter be exercised by the legal representative of the estate or by the legatee of the Holder under the will of the Holder, for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(h) Termination by Reason of Disability. If a Holder’s employment by, or association with, the Company or any Subsidiary terminates by reason of Disability, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(i) Termination by Reason of Normal Retirement. Subject to the provisions of Section 12.3, if such Holder’s employment by, or association with, the Company or any Subsidiary terminates due to Normal Retirement, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of one year (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
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(j) Other Termination. Subject to the provisions of Section 12.3, if such Holder’s employment by, or association with, the Company or any Subsidiary terminates for any reason other than death, Disability or Normal Retirement, any Stock Option held by such Holder, unless otherwise determined by the Committee and set forth in the Agreement, shall thereupon automatically terminate, except that, if the Holder’s employment is terminated by the Company or a Subsidiary without cause, the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for a period of three months (or such other greater or lesser period as the Committee may specify in the Agreement) from the date of such termination or until the expiration of the stated term of such Stock Option, whichever period is shorter.
(k) Buyout and Settlement Provisions. The Committee may at any time, in its sole discretion, offer to repurchase a Stock Option previously granted, at a purchase price not to exceed the Repurchase Value, based upon such terms and conditions as the Committee shall establish and communicate to the Holder at the time that such offer is made.
(l) Rights as Shareholder. A Holder shall have none of the rights of a Shareholder with respect to the shares subject to the Option until such shares shall be transferred to the Holder upon the exercise of the Option.
Section 6. Stock Appreciation Rights.
6.1. Grant and Exercise. Subject to the terms and conditions of the Plan and such other conditions not inconsistent with the Plan as may be reflected in the applicable Agreement, the Committee may grant Stock Appreciation Rights in tandem with an Option or alone and unrelated to an Option, in each case, to be evidenced by an Agreement reflecting the award grant. The Committee may grant Stock Appreciation Rights to Holders who have been or are being granted Stock Options under the Plan as a means of allowing such Holders to exercise their Stock Options without the need to pay the exercise price in cash. In the case of a Non-qualified Stock Option, a Stock Appreciation Right may be granted either at or after the time of the grant of such Non-qualified Stock Option. In the case of an Incentive Stock Option, a Stock Appreciation Right may be granted only at the time of the grant of such Incentive Stock Option.
6.2. Terms and Conditions. Stock Appreciation Rights shall be subject to the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be exercisable as shall be determined by the Committee and set forth in the Agreement, subject, for Stock Appreciation Rights granted in tandem with an Incentive Stock Option, to the limitations, if any, imposed by the Code with respect to related Incentive Stock Options.
(b) Termination. All or a portion of a Stock Appreciation Right granted in tandem with a Stock Option shall terminate and shall no longer be exercisable upon the termination or after the exercise of the applicable portion of the related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be exercisable upon such terms and conditions as shall be determined by the Committee and set forth in the Agreement and, for Stock Appreciation Rights granted in tandem with a Stock Option, by surrendering the applicable portion of the related Stock Option. Upon exercise of all or a portion of a Stock Appreciation Right and, if applicable, surrender of the applicable portion of the related Stock Option, the Holder shall be entitled to receive a number of shares of Common Stock equal to the SAR Value divided by the Fair Market Value on the date the Stock Appreciation Right is exercised, less an amount equal to any Federal, state, local, and non-U.S. income, employment, and any other applicable taxes that are required to be withheld in accordance with Section 12.6 of the Plan.
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(d) Shares Available Under Plan. The granting of a Stock Appreciation Right in tandem with a Stock Option shall not affect the number of shares of Common Stock available for awards under the Plan. The number of shares available for awards under the Plan will, however, be reduced by the number of shares of Common Stock acquirable upon exercise of the Stock Option to which such Stock Appreciation Right relates.
Section 7. Restricted Stock.
7.1. Grant. Each Restricted Stock grant shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Agreement. Shares of Restricted Stock may be awarded either alone or in addition to other awards granted under the Plan. The Committee shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be awarded, the number of shares to be awarded, the price (if any) to be paid by the Holder, the time or times within which such awards may be subject to forfeiture (“Restriction Period”), the vesting schedule and rights to acceleration thereof and all other terms and conditions of the awards.
7.2. Terms and Conditions. Each Restricted Stock award shall be subject to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be represented by a stock certificate or certificates registered in the name of the Holder to whom such Restricted Stock shall have been awarded. During the Restriction Period, certificates representing the Restricted Stock and any securities constituting Retained Distributions (as defined below) shall bear a legend to the effect that ownership of the Restricted Stock (and such Retained Distributions) and the enjoyment of all rights appurtenant thereto are subject to the restrictions, terms and conditions provided in the Plan and the Agreement. Such certificates shall be deposited by the Holder with the Company, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Stock and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested in accordance with the Plan and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued and outstanding shares of Common Stock for all corporate purposes. Subject to the restrictions set forth in this Section 7, Section 12.6 of the Plan and the applicable Agreement, a Holder generally shall have the rights and privileges of a stockholder as to shares of Restricted Stock, including that the Holder will have the right to vote such Restricted Stock and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Restricted Stock, with the exceptions that (i) the Holder will not be entitled to delivery of the stock certificate or certificates representing such Restricted Stock until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been fulfilled; (ii) the Company will retain custody of the stock certificate or certificates representing the Restricted Stock during the Restriction Period; (iii) the Company will retain custody of all dividends and distributions (“Retained Distributions”) made, paid or declared with respect to the Restricted Stock (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such time, if ever, as the Restricted Stock with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested and with respect to which the Restriction Period shall have expired; and (iv) a breach of any of the restrictions, terms or conditions contained in this Plan or the Agreement or otherwise established by the Committee with respect to any Restricted Stock or Retained Distributions will cause a forfeiture of such Restricted Stock and any Retained Distributions with respect thereto.
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(c) Vesting; Forfeiture. Upon the expiration of the Restriction Period with respect to each award of Restricted Stock and the satisfaction of any other applicable restrictions, terms and conditions (i) all or part of such Restricted Stock shall become vested in accordance with the terms of the Agreement, and (ii) any Retained Distributions with respect to such Restricted Stock shall become vested to the extent that the Restricted Stock related thereto shall have become vested. Any such Restricted Stock and Retained Distributions that do not vest shall be forfeited to the Company and the Holder shall not thereafter have any rights with respect to such Restricted Stock and Retained Distributions that shall have been so forfeited.
Section 8. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, purchase rights, shares of Common Stock awarded which are not subject to any restrictions or conditions, convertible or exchangeable debentures, or other rights convertible into shares of Common Stock and awards valued by reference to the value of securities of or the performance of specified Subsidiaries. These Other Stock-Based Awards may include performance shares or options, whose award is tied to specific performance criteria. Other Stock-Based Awards may be awarded either alone or in addition to or in tandem with any other awards under this Plan or any other plan of the Company. Each Other Stock-Based Award shall be subject to such terms and conditions as may be determined by the Committee, subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Agreement evidencing such award
Section 9. Accelerated Vesting and Exercisability.
9.1. Approved Transactions. The Committee may, in the event of a Change of Control, (i) accelerate the vesting of any and all Stock Options and other awards granted and outstanding under the Plan, (ii) require a Holder of any award granted under this Plan to relinquish such award to the Company upon the tender by the Company to Holder of cash in an amount equal to the Repurchase Value of such award, (iii) cancel any Stock Option or Stock Appreciation Right in exchange for a substitute option or stock appreciation right in a manner consistent with the requirements of Treas. Reg. §1.424-1(a) or §1.409A-1(b)(5)(v)(D), as applicable, (notwithstanding the fact that the original Stock Option may never have been intended to satisfy the requirements for treatment as an Incentive Stock Option) or (iv) cancel any Restricted Stock in exchange for restricted stock of any successor corporation. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding the foregoing, the Committee shall not take any action pursuant to this Section 9 that would (i) cause any Option intended to qualify as an Incentive Stock Option to fail to so qualify, (ii) cause an Option that is otherwise exempt from Section 409A of the Code to become subject to Section 409A, or (iii) cause an Option that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A of the Code.
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9.2. Code Section 409A. Notwithstanding any provisions of this Plan or any award granted hereunder to the contrary, no acceleration shall occur with respect to any award to the extent such acceleration would cause the Plan or an award granted hereunder to fail to comply with Code Section 409A.
Section 10. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend or discontinue any of the provisions of the Plan, but no amendment, alteration, suspension or discontinuance shall be made that would impair the rights of a Holder under any Agreement theretofore entered into hereunder, without the Holder’s consent, except as set forth in this Plan.
Section 11. Term of Plan.
11.1. Effective Date. The Effective Date of the Plan shall be the date on which the Plan is adopted by the Board. Awards may be granted under the Plan at any time after the Effective Date and before the date fixed herein for termination of the Plan; provided, however, that if the Plan is not approved by the affirmative vote of the holders of a majority of the Common Stock cast at a duly held stockholders’ meeting at which a quorum is, either in person or by proxy, present and voting within one year from the Effective Date, then (i) no Incentive Stock Options may be granted hereunder and (ii) all Incentive Stock Options previously granted hereunder shall be automatically converted into Non-qualified Stock Options.
11.2. Termination Date. Unless terminated by the Board, this Plan shall continue to remain effective until such time as no further awards may be granted and all awards granted under the Plan are no longer outstanding. Notwithstanding the foregoing, grants of Incentive Stock Options may be made only during the ten-year period beginning on the Effective Date.
Section 12. General Provisions.
12.1. Written Agreements. Each award granted under the Plan shall be confirmed by, and shall be subject to the terms of, the Agreement executed by the Company and the Holder, or such other document as may be determined by the Committee. The Committee may terminate any award made under the Plan if the Agreement relating thereto is not executed and returned to the Company within 10 days after the Agreement has been delivered to the Holder for his or her execution.
12.2. Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Holder by the Company, nothing contained herein shall give any such Holder any rights that are greater than those of a general creditor of the Company.
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12.3. Employees.
(a) Engaging in Competition With the Company; Solicitation of Customers and Employees; Disclosure of Confidential Information. If a Holder’s employment by, or association with, the Company or a Subsidiary is terminated for any reason whatsoever, and within 12 months after the date thereof such Holder either (i) accepts employment with any competitor of, or otherwise engages in competition with, the Company or any of its Subsidiaries, (ii) solicits any customers or employees of the Company or any of its Subsidiaries to do business with or render services to the Holder or any business with which the Holder becomes affiliated or to which the Holder renders services or (iii) uses or discloses to anyone outside the Company any confidential information or material of the Company or any of its Subsidiaries in violation of the Company’s policies or any agreement between the Holder and the Company or any of its Subsidiaries, the Committee, in its sole discretion, may require such Holder to return to the Company the economic value of any award that was realized or obtained by such Holder at any time during the period beginning on the date that is six months prior to the date such Holder’s employment by, or association with, the Company or such Subsidiary is terminated; provided, however, that if the Holder is a resident of the State of California, such right must be exercised by the Company for cash within six months after the date of termination of the Holder’s service to the Company or within six months after exercise of the applicable Stock Option, whichever is later. In such event, Holder agrees to remit to the Company, in cash, an amount equal to the difference between the Fair Market Value of the Shares on the date of termination (or the sales price of such Shares if the Shares were sold during such six month period) and the price the Holder paid the Company for such Shares.
(b) Termination for Cause. If a Holder’s employment by, or association with, the Company or a Subsidiary is terminated for cause, the Committee may, in its sole discretion, require such Holder to return to the Company the economic value of any award that was realized or obtained by such Holder at any time during the period beginning on that date that is six months prior to the date such Holder’s employment by, or association with, the Company or such Subsidiary is terminated. In such event, Holder agrees to remit to the Company, in cash, an amount equal to the difference between the Fair Market Value of the Shares on the date of termination (or the sales price of such Shares if the Shares were sold during such six month period) and the price the Holder paid the Company for such Shares.
(c) No Right of Employment. Nothing contained in the Plan or in any award hereunder shall be deemed to confer upon any Holder who is an employee of the Company or any Subsidiary any right to continued employment with the Company or any Subsidiary, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate the employment of any Holder who is an employee at any time.
12.4. Investment Representations; Company Policy. The Committee may require each person acquiring shares of Common Stock pursuant to a Stock Option or other award under the Plan to represent to and agree with the Company in writing that the Holder is acquiring the shares for investment without a view to distribution thereof. Each person acquiring shares of Common Stock pursuant to a Stock Option or other award under the Plan shall be required to abide by all policies of the Company in effect at the time of such acquisition and thereafter with respect to the ownership and trading of the Company’s securities.
12.5. Additional Incentive Arrangements. Nothing contained in the Plan shall prevent the Board from adopting such other or additional incentive arrangements as it may deem desirable, including, but not limited to, the granting of Stock Options and the awarding of Common Stock and cash otherwise than under the Plan; and such arrangements may be either generally applicable or applicable only in specific cases.
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12.6. Withholding Taxes. Not later than the date as of which an amount must first be included in the gross income of the Holder for Federal income tax purposes with respect to any Stock Option or other award under the Plan, the Holder shall be required to pay in full to the Company or the Holder’s employer (if not the Company), or make alternative arrangements satisfactory to the Committee, for the payment of any Federal, state and local income, employment, and/or other taxes of any kind required by law to be withheld or paid with respect to such an award. If permitted by the Committee, tax withholding or payment obligations may be settled with Common Stock, including Common Stock that is part of the award that gives rise to the withholding requirement. If such tax obligations are satisfied through the withholding of shares of Common Stock that are otherwise issuable to the Holder pursuant to an award granted (or through the surrender of shares of Common Stock by the Holder to the Company), the number of shares of Common Stock that may be so withheld (or surrendered) shall be limited to the number of shares of Common Stock that have an aggregate Fair Market Value on the date of withholding equal to the aggregate amount of such tax liabilities as determined by the Company. The obligations of the Company under the Plan shall be conditioned upon such payment or arrangements and the Company or the Holder’s employer (if not the Company) shall, to the extent permitted by law, have the right to withhold and deduct any such taxes or withholdings from any award granted or any payment of any kind relating to an award under this Plan, including from a distribution of Common Stock, otherwise due to the Holder from the Company or any Subsidiary.
12.7. Governing Law. The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the law of the State of Delaware (without regard to choice of law provisions).
12.8. Other Benefit Plans. Any award granted under the Plan shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or any Subsidiary and shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation (unless required by specific reference in any such other plan to awards under this Plan).
12.9. Non-Transferability. Except as otherwise expressly provided in the Plan or the Agreement, no right or benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void.
12.10. Applicable Laws. The obligations of the Company with respect to all Stock Options, Stock Appreciation Rights, Restricted Stock, Other Stock Grants, and any other awards under the Plan shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the Securities Act of 1933, as amended ( “Securities Act”), and (ii) the rules and regulations of any securities exchange on which the Common Stock may be listed.
12.11. Conflicts. If any provision of the Plan or any Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Holder or award granted under the Plan, or would disqualify the Plan or any award granted under the Plan under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the award granted under the Plan, such provision shall be stricken as to such jurisdiction, Holder or award granted under the Plan and the remainder of the Plan and any such award shall remain in full force and effect. If any of the terms or provisions of the Plan or an Agreement conflict with the requirements of Section 422 of the Code (with respect to Incentive Stock Options), then such terms or provisions shall be deemed inoperative to the extent they so conflict with such requirements. Additionally, if this Plan or any Agreement does not contain any provision required to be included herein or therein under Section 422 of the Code, such provision shall be deemed to be incorporated herein and therein with the same force and effect as if such provision had been set out at length herein and therein; provided, further, that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed a Non-qualified Stock Option for all purposes of the Plan. If any of the terms or provisions of any Agreement conflict with any terms or provisions of the Plan, then such terms or provisions in any Agreement shall be deemed inoperative to the extent they so conflict with the requirements of the Plan. Additionally, if any Agreement does not contain any provision required to be included therein under the Plan, such provision shall be deemed to be incorporated therein with the same force and effect as if such provision had been set out at length therein. Further, the applicable provisions of the nonqualified-deferred compensation rules under Section 409A of the Code are hereby incorporated by reference and shall control over any Plan or Agreement provision in conflict therewith.
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12.12. Certain Awards Deferring or Accelerating the Receipt of Compensation. Some of the awards that may be granted pursuant to the Plan may be considered to be "nonqualified deferred compensation" subject to Section 409A of the Code. It is the general intention, but not the obligation, of the Committee that all awards granted, and all Agreements entered into, under the Plan either will qualify for an exemption or exception or will comply with the requirements of Section 409A of the Code. The Committee, in administering the Plan, intends, and the parties entering into any Agreement intend that the Plan and any applicable Agreement comply with and meet all of the requirements of Section 409A of the Code or qualify for an exception thereto, and shall include such provisions in addition to the provisions of this Plan, as may be necessary to assure compliance with Section 409A of the Code or an exemption or exception thereto. In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Holder on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of the Plan or any Agreement to the contrary, in the event that the Committee determines that any award is or may become subject to Section 409A of the Code, the Committee may amend the Plan and the related Agreements without the consent of the Holder or adopt other policies and procedures (including amendments, policies and procedures with retroactive effective dates), or take any other action that the Committee determines to be necessary or appropriate to either comply with Code Section 409A or to exclude or exempt the Plan or any award granted under the Plan, and any Agreement related thereto, from the requirements of Section 409A of the Code.
12.13. Non-Registered Stock. The shares of Common Stock to be distributed under this Plan have not been, as of the Effective Date, registered under the Securities Act, or any applicable state or foreign securities laws and the Company has no obligation to any Holder to register the Common Stock or to assist the Holder in obtaining an exemption from the various registration requirements, or to list the Common Stock on a national securities exchange or any other trading or quotation system.
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Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and Brian Ferdinand (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Chief Executive Officer and Chairman of the Board, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $300,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.3 [Reserved.]
2.4 Options. [Reserved].
2.5 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.6 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.7 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
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4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from New York. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
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(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
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(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
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(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
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6. Assignment of Rights: Work Product.
6.1 Work Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company.
6.2 Work Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world.
6.3 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company.
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7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
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7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
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7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
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7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. | ||
By: | ||
Name: Brian Ferdinand | ||
Its: | ||
EXECUTIVE: | ||
Name: | ||
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this __________________________________________. 20_______.
Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and David Gurfein (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Chief Executive Officer and Chairman of the Board, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company. Executive shall report to the Chief Executive Officer.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $$250,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.3 [Reserved.]
2.4 Options. Executive is hereby granted an option (the “Option”) to purchase 3,000,000 shares of the common stock of CHG as soon as practicable after the date hereof under the terms of the Company’s 2022 performance equity plan, with a vesting period of three years and an exercise price per share equal to the fair market value per share of the Company’s common stock as of the date of the grant and as evidenced and governed by the terms of a stock option agreement to be executed by the Company and the Executive in connection with such grant (the “Stock Option Agreement”), which shall be executed promptly following the date hereof. Executive may be granted additional options to purchase shares of common stock from time to time as determined by the board, upon recommendation of the compensation committee.
2.5 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.6 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.7 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
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4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from Virginia. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
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4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
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(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
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5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
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5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
6. Assignment of Rights: Work Product.
6.1 Pre-existing Intellectual Property (IP). Executive shall retain ownership of all right, title, and interest in Executive’s Pre-existing IP, to include WHOOPASS Leadership Philosophy© and WHOOPASS Leadership Actions©. CHG acknowledges and agrees that all Executive’s pre-existing IP right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others prior to the period of Executive’s employment by the Company yet may relate in any way to the business or, products, services, activities, research or development of the Company, all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Executive’s Pre-Existing IP”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Executive.
6.2 License. Executive grants CHG a perpetual, irrevocable, royalty-free, nonexclusive, worldwide license, with no duty to account to Executive, WHOOPASS Leadership Philosophy© and WHOOPASS Leadership Actions©. for unrestricted use within CHG, either individually or in combination and both separately and as integrated into other capabilities, including without limitation the right to authorize, implicitly or explicitly, use by any and all CHG subsidiaries. To the extent that the CHG Work Product incorporates or requires use of Executive’s Pre-existing IP with or without modifications, Executive hereby grants to CHG a perpetual, irrevocable, nonexclusive, worldwide, royalty free, license to: (i) use, execute, reproduce, display, perform, prepare derivative works based upon, and distribute copies of the Licensed Materials and their derivative works internally within CHG; and (ii) authorize others to do any, some, or all of the foregoing.
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6.3 Modifications to Executive’s Pre-existing IP. Executive shall retain ownership of all right, title, and interest in any corrections, modifications, improvements, derivatives, updates, and upgrades to Executive’s Pre-existing IP (collectively referred to as “Modifications”) made while Executive is employed by CHG. Executive also grants CHG the same license as in 6.2 for unrestricted use of any such modifications.
6.4 Work Product. Except for Executive’s Pre-existing IP that is incorporated into or used in the performance of the Services or the development of the Deliverables that result from the Services, Executive agrees that any intellectual property conceived or reduced to practice during the performance of the Services shall constitute the work product of CHG (the “CHG Work Product”).The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company; provided, however, this does not apply to Executive’s Pre-existing IP with or without modifications.
6.5 Work Made for Hire; Assignment. Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company; provided, however, this does not apply to Executive’s Pre-existing IP with or without modifications. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world; provided, however, this does not apply to Executive’s Pre-existing IP with or without modifications.
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6.6 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company. capabilities, including without limitation the right to sublicense or otherwise authorize, implicitly or explicitly, use by any and all CHG subsidiaries, provided, however, this does not apply to Executive’s Pre-existing IP with or without modifications.
7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
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7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
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7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
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(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. |
By: |
Name: Brian Ferdinand | |
Its: |
EXECUTIVE: |
Name: | |
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this __________________________________________. 20_______.
Exhibit 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and Shanoop Kothari (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Chief Financial Officer, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company. Executive shall report to the Chief Executive Officer.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $225,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.3 [Reserved]
2.4 Options. Executive is hereby granted an option (the “Option”) to purchase 1,000,000 shares of the common stock of CHG as soon as practicable after the date hereof under the terms of the Company’s 2022 performance equity plan, with a vesting period of three years and an exercise price per share equal to the fair market value per share of the Company’s common stock as of the date of the grant and as evidenced and governed by the terms of a stock option agreement to be executed by the Company and the Executive in connection with such grant (the “Stock Option Agreement”), which shall be executed promptly following the date hereof. Executive may be granted additional options to purchase shares of common stock from time to time as determined by the board, upon recommendation of the compensation committee.
2.5 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.6 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.7 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
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4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from Texas. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
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4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
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(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
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5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
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5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
6. Assignment of Rights: Work Product.
6.1 Work Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company.
6.2 Work Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world.
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6.3 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company.
7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
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7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
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7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
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(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. | ||
By: | ||
Name: | Brian Ferdinand | |
Its: | ||
EXECUTIVE: | ||
Name: | ||
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this __________________________________________. 20_______.
Exhibit 10.5
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and Kevin J. Mikolashek (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Chief Compliance Officer, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company. Executive shall report to the Chief Executive Officer.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $150,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.1 [Reserved.]
2.2 Options. Executive is hereby granted an option (the “Option”) to purchase 375,000 shares of the common stock of CHG as soon as practicable after the date hereof under the terms of the Company’s 2022 performance equity plan, with a vesting period of three years and an exercise price per share equal to the fair market value per share of the Company’s common stock as of the date of the grant and as evidenced and governed by the terms of a stock option agreement to be executed by the Company and the Executive in connection with such grant (the “Stock Option Agreement”), which shall be executed promptly following the date hereof. Executive may be granted additional options to purchase shares of common stock from time to time as determined by the board, upon recommendation of the compensation committee.
2.3 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.4 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.5 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from Virginia. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
6. Assignment of Rights: Work Product.
6.1 Work Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company.
6.2 Work Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world.
6.3 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company.
7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. | ||
By: | ||
Name: Brian Ferdinand | ||
Its: | ||
EXECUTIVE: | ||
Name: | ||
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this______________________________.20________________________. | ||
Exhibit 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and Karl Rothman (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Chief Accounting Officer, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company. Executive shall report to the Chief Executive Officer.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $180,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.3 [Reserved]
2.4 Options. Executive is hereby granted an option (the “Option”) to purchase 500,000 shares of the common stock of CHG as soon as practicable after the date hereof under the terms of the Company’s 2022 performance equity plan, with a vesting period of three years and an exercise price per share equal to the fair market value per share of the Company’s common stock as of the date of the grant and as evidenced and governed by the terms of a stock option agreement to be executed by the Company and the Executive in connection with such grant (the “Stock Option Agreement”), which shall be executed promptly following the date hereof. Executive may be granted additional options to purchase shares of common stock from time to time as determined by the board, upon recommendation of the compensation committee.
2.5 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.6 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.7 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
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4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from Virginia. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
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4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
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(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
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5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
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5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
6. Assignment of Rights: Work Product.
6.1 Work Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company.
6.2 Work Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world.
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6.3 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company.
7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
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7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
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7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
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(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. | ||
By: | ||
Name: Brian Ferdinand | ||
Its: | ||
EXECUTIVE: | ||
Name: | ||
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this ___________________________________. 20 . |
Exhibit 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”), dated as of ________________, 2022 (“Effective Date”), is made and entered into by and between CORPHOUSING GROUP, Inc, a Delaware Corporation (“CHG” or “Company”), having an address of 2125 Key Biscayne Blvd., Suite 253, Miami, Florida 33137 and Jimmie Chatmon (“Executive”), an individual having an address as set forth on the signature page.
WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions herein set forth.
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 General. During the Term (as defined herein), the Company shall employ Executive as Executive Vice President, in which capacity Executive shall have such duties, authority, and responsibilities that are commensurate with the duties, authorities and responsibilities of persons in similar operations and capacities in similarly sized public companies and companies operating within the short-term/vacation rental industry generally and as otherwise mutually agreed upon by Executive and the Company. Executive shall report to the Chief Executive Officer.
1.2 Devotion of Substantially All Business Time. Executive accepts such employment and shall use all reasonable efforts to timely and diligently fulfill Executive’s duties under this Agreement and to promote and protect the interests of the Company and its respective brands, concepts, products, and services. During the Term, Executive shall devote substantially all of Executive’s business time to the Company and its interests; provided, however, that Executive shall be entitled to engage in civic, not for profit and advisory roles and manage personal investments so long as such activities (a) do not materially interfere with Executive’s ability to perform Executive’s duties diligently and faithfully hereunder, (b) do not violate the noncompete and related provisions hereunder and (c) would not be reasonably expected to diminish the value of any of CHG’s or its subsidiaries’ brands, reputation, concepts, products, or services.
1.3 Location and Appearances. Executive shall generally be required to perform Executive’s duties remotely and shall undertake travel, at the Company’s expense, within or outside the United States as reasonably necessary and appropriate in the provision of the duties of Executive’s office. All such travel shall be undertaken in a manner consistent with the Company’s travel policies applicable to senior officers of the Company; provided, however, notwithstanding the Company’s travel policies and practices, the Company will provide not less than business class travel on all flights to or from locations outside of North America.
2. Compensation.
2.1 Salary. During the Term, the Company shall pay to Executive an annualized base salary of $225,000, subject to annual increase as may be determined by the board of directors of the Company, through the end of the Term (“Base Salary”). The Base Salary shall be calculated and paid in substantially equal, periodic installments in accordance with the Company’s normal payroll procedures.
2.2 Annual Performance Bonus. For each calendar year during the Term (“Bonus Year”), Executive shall be eligible to earn an annual performance bonus as recommended by the compensation committee of the board of directors of the Company and approved by the board. Bonus targets and goals shall be determined each calendar year by the board of directors upon recommendation of the compensation committee. All performance bonuses shall be paid to (or in the case of Executive’s death, Executive’s designated beneficiary) during the first month of the calendar year following the Bonus Year in which such bonus has been earned at the same time at which the Company pays bonuses for such Bonus Year to other executives of the Company. Annual bonuses shall be deemed earned on December 31 of the Bonus Plan Year. The first Bonus Year shall be the year ending December 31, 2022.
2.3 [Reserved]
2.4 [Reserved]
2.5 Executive Benefits. During the Term, Company shall provide Executive (and, to the extent eligible, Executive’s dependents and beneficiaries) all medical, health, dental, vision, prescription reimbursement, life insurance, welfare, perquisite, and other Executive benefits plans that are sponsored by the Company for the benefit of its Executives, on terms and conditions set forth in such programs and plans (as amended from time to time).
2.6 Expenses. During the Term, the Company shall reimburse Executive in accordance with the Company’s reimbursement policies for all reasonable out-of-pocket expenses incurred by Executive in connection with the performance of Executive’s duties hereunder. Expenses will be reimbursed within 30-days of Executive properly submitting expense for reimbursement.
2.7 Vacation. During the Term, Executive shall be entitled to three (3) weeks paid vacation per calendar year, such vacation time to be taken as mutually convenient for Executive and the Company. Except as otherwise provided in Section 4 hereof, Executive shall not be paid for unused vacation time.
3. Term. The term of Executive’s employment hereunder (the “Term”) shall commence as of the Effective Date and shall continue for three (3) years from the Effective Date. Thereafter, the Term shall be extended automatically for successive one-year periods, unless CHG or Executive provides the other with written notice of election to not so renew at the end of the then current Term at least 90 days prior to the end of the then current Term.
4. Termination.
4.1 Death. Executive’s employment hereunder shall automatically terminate upon the Executive’s death.
4.2 Disability. The Executive’s employment hereunder may be terminated by the Company by reason of the Executive’s Disability. “Disability” means that Executive is substantially unable to perform or effectively discharge Executive’s customary duties due to an accident, physical or mental condition, disability, or illness for a period of 90 consecutive days or a period of any 120 days in any twelve-month period.
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4.3 By Company with or without Cause. The Company may terminate Executive’s employment hereunder with or without Cause. “Cause” means (a) the continued and willful refusal or failure by Executive to perform a material part of Executive’s duties hereunder (so long as such duties are lawful, reasonable and consistent with similarly titled Executives at the Company or in the industry); (b) the conviction of Executive for any crime which constitutes a felony in the jurisdiction involved or any conviction of, or plea of guilty or nolo contendere to, any crime involving moral turpitude; (c) Executive’s commission of any act of fraud, misappropriation, or embezzlement, in any case involving the properties, assets or funds of the Company or its subsidiaries, parents, or affiliates; or (d) Executive’s commission of an act or failure to act that involves willful misconduct, or gross negligence of Executive in connection with the performance of Executive’s duties to the Company. Notwithstanding the foregoing, “Cause,” for purposes of clause (a) of this Section 4.3, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Cause, the Company delivers written notice to the Executive that specifically identifies such event(s); (y) if curable, the Executive fails to cure such event within 30 days after the date of such notice; and (z) the Company terminates the Executive’s employment by written notice within 30 days following the end of such cure period.
4.4 By Executive with or without Good Reason. Executive may terminate Executive’s employment hereunder with or without Good Reason. “Good Reason” means the occurrence of any of the following circumstances without the Executive’s prior written consent: (a) a material adverse change in Executive’s title, duties, or responsibilities with the Company that represents a demotion from Executive’s title, duties, or responsibilities as in effect immediately prior to such change; (b) a material breach of this Agreement by the Company; (c) a failure by the Company to make any payment to Executive when due, unless the payment is not material and is being contested by the Company in good faith; (d) any reduction in Base Salary; (e) the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law; or (f) the relocation of Executive’s principal office more than 25 miles from Florida. Notwithstanding the foregoing, “Good Reason,” for purposes of clauses (a) and (b) of this Section 4.4, shall not exist unless (x) within 90 days of first learning of the event(s) purporting to constitute Good Reason, the Executive delivers written notice to Company that specifically identifies such event(s); (y) if curable, the Company fails to cure any such event within 30 days after the date of such notice; and (z) the Executive terminates Executive’s employment by written notice within 30 days following the end of such cure period.
4.5 Obligations of the Company upon Termination.
(a) Death or Disability. In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay to Executive (or Executive’s executor, administrator or personal representative, as applicable) (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the date of Executive’s termination of employment (the “Date of Termination”), (ii) all allowable expenses incurred by Executive, in accordance with Section 2.3 above, prior to the Date of Termination (the “Expenses”) and (iii) the performance bonus to which Executive would have been entitled pursuant to, and as calculated in accordance with, Section 2.2 for the year in which such termination occurs prorated through the date of Executive’s termination of employment (the “Prorated Performance Bonus”). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) at the same time in which the Company pays bonuses for such calendar year to other Executives of the Company.
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(b) Termination by the Company for Cause or By Executive without Good Reason. In the event that Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (i) the Base Salary, and any accrued but unused vacation, through the Date of Termination, and (ii) the Expenses. Executive will forfeit any then unpaid bonus.
(c) Termination by the Company without Cause or By Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause or by Executive with Good Reason, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company): (i) the Base Salary, any earned but unpaid performance bonus, and any accrued but unused vacation, through the Date of Termination, (ii) the Expenses, and (iii) the Prorated Performance Bonus (subject to Section 4.5(d) hereof). Such Prorated Performance Bonus, if any, shall be paid to Executive (or in the case of Executive’s death, Executive’s designated beneficiary) during the calendar year following the Bonus Plan Year at the same time at which the Company pays bonuses for such Bonus Plan Year to other Executives of the Company, subject to Section 4.5(d) hereof. In addition, subject to Section 4.5(d) hereof, the Company shall pay to Executive (or in the case of Executive’s subsequent death, the legal representative of Executive’s estate or such other person or persons as Executive shall have designated by written notice to the Company) an amount equal to one (1) year of Executive’s salary, less all applicable taxes and other withholdings (the “Severance Payment”).
(d) Release. Payment by the Company of the Severance Payment and the Prorated Performance Bonus due to Executive pursuant to this Section 4.5(c) shall be conditioned upon Executive’s executing a release of claims in the form attached hereto as Exhibit A (the “Release”) within twenty-one days (or, to the extent required by law, forty-five days) following the Date of Termination, and not revoking such Release within seven days thereafter.
(e) Effect on Options. The effect on the Option of any termination of Executive’s employment hereunder shall be as provided by the Stock Option Agreement.
5. Protection of Confidential Information and Reputation; Noncompetition.
5.1 Acknowledgment. Executive acknowledges that:
(a) As a result of Executive’s employment with the Company, Executive has obtained and will obtain secret and confidential information concerning the business of the Company and its affiliates (referred to collectively in this Section 5 as the “Company”), including, without limitation, financial information, proprietary rights, trade secrets and “know-how, customers and sources (“Confidential Information”).
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(b) The Company will suffer substantial damage which will be difficult to compute if during the period of Executive’s employment with the Company or thereafter, Executive should enter a business competitive with the Company or divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary for the protection of the business of the Company and that without these protections, the Company would not have entered into this Agreement (or the Stock Purchase Agreement) or provided Executive with access to the Company’s confidential information.
5.2 Confidentiality. Executive agrees that Executive will not at any time, during the Term or thereafter, divulge to any person or entity any Confidential Information obtained or learned by Executive as a result of Executive’s employment with the Company, except (a) in the course of performing Executive’s duties hereunder, (b) with the Company’s prior written consent, (c) to the extent that any such information is in the public domain other than as a result of Executive’s breach of any of Executive’s obligations hereunder or (d) where required to be disclosed by court order, subpoena or other government process. If Executive shall be required to make disclosure pursuant to the provisions of clause (d) of the preceding sentence, Executive shall promptly if practicable and permissible by law, but in no event more than 48 hours after learning of such subpoena, court order, or other government process, notify, confirmed by mail, the Company and, at the Company’s expense, Executive shall: (i) take all reasonably necessary and lawful steps requested by the Company to defend against the enforcement of such subpoena, court order or other government process and (ii) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof at the Company’s expense.
5.3 Documents. Upon termination of Executive’s employment with the Company, Executive will promptly deliver to the Company all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the business of the Company and all property associated therewith, which Executive may then possess or have under Executive’s control; provided, however, that Executive shall be entitled to retain copies of such documents reasonably necessary to document Executive’s financial relationship with the Company.
5.4 Non-Disparagement. During and for five (5) years after the Term, Executive shall not publicly or privately disparage the Company or its brands, concepts, products or services, officers, directors, Executives or affiliates. In addition, Executive shall not intentionally take any action to harm the reputation of the Company or diminish the value of its brands, concepts, products or services.
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5.5 Non-Compete and Non-Solicitation.
(a) During such time as Executive is employed by the Company and for a period of twelve months thereafter, Executive shall not directly or through any affiliate engage in any other business or commercial activity within the short-term/vacation rental industry.
(b) Notwithstanding the foregoing, the following in and of themselves shall not be deemed a breach of Section 5.5(a):
(i) Ownership of less than 5% of the outstanding stock of any publicly traded corporation regardless of its business;
(ii) Personal use by Executive of the name “Corphousing” solely for biographical reference; and
(iii) Passively investing in private companies, the activities of which, at the time of such investment, would not reasonably be deemed to violate this Section 5.5 were Executive to be engaged in such activity directly.
(c) During the Term, and for a period of one year thereafter, Executive shall not, directly or indirectly, for himself or any other person (i) induce or attempt to induce any Executive to leave the employ of the Company or its successors, assigns, and affiliates or (ii) in any way knowingly interfere with the relationship between the Company and any Executive, customer, publisher, author, or supplier of the Company, provided that nothing herein shall prevent general solicitations not specifically directed at a person.
5.6 Acknowledgment. Executive acknowledges and agrees that the noncompetition and non-solicitation obligations provided for in this Agreement are integral components of the consideration being provided to the Company for its agreement to enter into this Agreement.
5.7 Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 5, the Company shall have the right and remedy to seek to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Executive that the services being rendered hereunder to the Company are of a special, unique, and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. The rights and remedies enumerated in this Section shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.
5.8 Legal Fees. In connection with any legal action or proceeding arising out of or relating to this Agreement, the prevailing party in such action or proceeding shall be entitled to be reimbursed by the other party for the reasonable attorneys’ fees and costs incurred by the prevailing party.
5.9 Modification. If any provision of Section 5 is held to be unenforceable because of the scope, duration, or area of its applicability, the tribunal making such determination shall have the power to modify such scope, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.
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5.10 Survival. The provisions of this Section 5 shall survive the termination of this Agreement for any reason.
6. Assignment of Rights: Work Product.
6.1 Work Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Executive individually or jointly with others during the period of Executive’s employment by the Company and relate in any way to the business or, products, services, activities, research or development of the Company or result from any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), mask works, and rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of the world, shall be the sole and exclusive property of the Company.
6.2 Work Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire right, title, and interest in and to all Work Product and intellectual property rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world.
6.3 Further Assurances. Upon the request of the Company, the Executive shall enter into the Company’s standard form of Proprietary Invention Assignment Agreement so long as such terms are consistent to the terms found herein. The Executive shall reasonably cooperate with the Company to apply for, obtain, perfect, transfer to the Company, and maintain and enforce the Work Product and any intellectual property rights therein, all at the sole cost and expense of Company.
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7. Miscellaneous Provisions.
7.1 Indemnification. If Executive is made a party to, is threatened to be made a party to, or otherwise receives any other legal process in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that Executive (a) is or was an officer, director, advisor, or Executive of the Company, or (b) is or was serving at the request of the Company as a director, officer, member, partner, Executive, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to Executive benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity, the Company will indemnify and hold Executive harmless to the fullest extent permitted or authorized by applicable law against, and shall promptly advance upon request, all costs, expenses, liabilities and losses (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and any cost and fees incurred in enforcing Executive’s rights to indemnification or contribution) incurred or suffered by Executive in connection therewith; provided, however, that Executive shall reimburse the Company any such advanced amounts in the event it is finally determined by arbitration pursuant to Section 7.3, below, or a court of competent jurisdiction as otherwise prescribed by this Agreement, that Executive is not eligible for indemnification under this provision. In addition, Executive shall be covered by any Company-sponsored liability policy in effect for officers of the Company on terms and conditions no less favorable to Executive than to senior officers generally. Notwithstanding the foregoing, the Company shall have no obligations under this Section 7.1 with respect to claim(s) or Proceedings that directly relate to (i) breaches by Executive of the terms of this Agreement or (ii) Executive’s fraud, willful misconduct, bad faith, gross negligence or violation of law. Executive shall comply with mandatory requirements of California law as may be required for such indemnification and Executive shall cause Executive’s counsel to cooperate fully in good faith with the Company and its counsel in connection with the defense of Executive. The Company shall at all times maintain directors’ and officer’s liability insurance and shall cause Executive to be included, in Executive’s capacities hereunder, under all liability insurance coverage (or similar insurance coverage) maintained by the Company, including such directors’ and officers’ liability insurance. Further, the Company shall continue to cover Executive under its directors’ and officers’ liability insurance after Executive’s separation from employment to the extent that the Company continues to provide directors’ and officers’ liability insurance for other directors and officers of the Company and subject to the terms, conditions and limitations of such directors’ and officers’ liability insurance.
7.2 Notices. All notices provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when (a) delivered personally to the party to receive the same, or (b) when mailed first class postage prepaid, by certified mail, return receipt requested, addressed to the party to receive the same at Executive’s or its address set forth below, or such other address as the party to receive the same shall have specified by written notice given in the manner provided for in this Section 7.2. All notices shall be deemed to have been given as of the date of personal delivery or mailing thereof to the party at the address indicated in the preamble of this Agreement, with a copy in any case to:
If to the Company:
CorpHousing Group Inc.
At the address provided in the Recital
Attention: CEO and CFO
If to Executive, at the address provided in the Recital.
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7.3 Arbitration. Except as set forth in Section 5.6 above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in California in accordance with the then-existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the event Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator. Neither Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement, and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written reasoned opinion in support thereof within 60 days from the date arbitration commenced. Judgment upon the award may be entered in any court having jurisdiction thereof.
7.4 Entire Agreement; Waiver. Effective as of the Effective Date, this Agreement sets forth the entire agreement of the parties relating to the employment of Executive with the Company (or any predecessor thereof) and is intended to supersede all prior negotiations understandings and agreements. No provisions of this Agreement may be waived or changed except by a writing that is executed by the party or parties against whom such waiver or change is sought to be enforced. The failure of any party to require performance of any provision hereof or thereof shall in no manner affect the right at a later time to enforce such provision.
7.5 Governing Law. All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Florida applicable to agreements made and to be performed entirely in Florida.
7.6 Binding Effect; Non-assignability. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement shall not be assignable by Executive, but shall inure to the benefit of and be binding upon Executive’s heirs and legal representatives.
7.7 Severability. Should any provision or this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall continue as if the Agreement had been executed absent the unenforceable provision.
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7.8 Compliance with Section 409A.
(a) This Agreement and the benefits provided hereunder are intended to comply with, or otherwise be exempt from, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other guidance promulgated thereunder (collectively, “Section 409A of the Code”), and the provisions of this Agreement shall be interpreted and construed to be consistent with this intent. Severance payments provided under this Agreement are intended to be exempt from Section 409A of the Code under the “separation pay” exception or the “short-term deferral” exception, to the maximum extent applicable. All payments to be made upon a termination of employment may only be made upon Executive’s “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements, periodic payments of Base Salary, or otherwise) shall be treated as a right to receive a series of separate payments, and accordingly, each installment payment hereunder shall at all times be treated as a separate and distinct payment. In no event will Executive designate, directly or indirectly, the year of payment, subject to Section 409A of the Code.
(b) Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of Executive’s separation from service to be a “specified Executive” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of payments or benefits is required in order to avoid a prohibited distribution under Section 409A(a)(2), such portion of Executive’s payments or benefits to which Executive otherwise would become entitled hereunder shall not be made or paid to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s separation from service or (B) the date of Executive’s death. Upon the expiration of the applicable Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.8(b) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise specified herein. If Executive dies during the six-month period, any delayed payments shall be paid to the Executive’s estate.
(c) All reimbursements to Executive under the terms of this Agreement shall be made following the submission of a reimbursement request by Executive. To the extent reimbursements and other in-kind benefits provided under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, such reimbursements and other in-kind benefits hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the reimbursement of any eligible expense shall be made no later than the end of the calendar year following the calendar year in which the expense is incurred, (ii) the amount of expenses eligible for reimbursement to Executive under the terms of this Agreement and in-kind benefits payable during a calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits payable in another calendar year and (iii) no right to reimbursement or payment of in-kind benefits shall be subject to liquidation or exchange for any other payment or benefit.
(d) To the extent permitted under Section 409A of the Code, the Company and Executive agree to negotiate in good faith to make amendments to this Agreement, as the parties mutually agree are necessary or desirable, to comply with or otherwise avoid the imposition of taxes, penalties or interest under Section 409A of the Code; provided, however, that in no event shall the Company be required to pay any additional monies or increase payments to Executive under the terms hereof. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except (i) where payment may be made within a certain period of time, the timing of payment within such period will be in the sole discretion of Company; and (ii) to the extent specifically permitted or required by Section 409A of the Code.
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7.9 Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
7.10 Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CORPHOUSING GROUP INC. | ||
By: | ||
Name: Brian Ferdinand | ||
Its: | ||
EXECUTIVE: | ||
Name: | ||
Address: |
[Signature Page to Employment Agreement]
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Corphousing Group Inc. (the “Company”), and its subsidiaries, parents, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, Executives, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them, including, without limitation, any claim for wages, salary, commissions, bonuses, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, separation pay or other benefits; any claim for monetary or equitable relief, including but not limited to attorneys’ fees, costs, disbursements, back pay, front pay, reinstatement, or expert’s fees; any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts (whether intentional, negligent, or otherwise); any alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; any claims under federal, state, or local occupational safety and health laws or regulations, all as amended; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, Section 1981 of U.S. Code Title 42, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the Americans with Disabilities Act, Sections 503 and 504 of the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the Immigration Reform and Control Act, the Executive Retirement Income Security Act (including the Genetic Information Nondiscrimination Act), and the National Labor Relations Act, the Age Discrimination In Employment Act (including the Older Workers Benefit Protection Act of 1990), the Americans With Disabilities Act, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code, §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Florida Civil Rights Act of 1992 (f/k/a Human Rights Act of 1977), Section 760.01 et. seq., Florida Statutes (FCRA), any claims/actions under the retaliation section of Florida’s Worker’s Compensation statute (Chapter 440, Florida Statutes), the Florida Public Sector Whistleblower Act (Fla. Stat. § 112.3187 et. seq.), the Florida Private Sector Whistleblower Act (Fla. Stat. § 448.101-.105), including any claim for wrongful and retaliatory termination in violation of Section 448.103, Florida Statutes, Section 448.08, Florida Statutes, Florida’s Wage Rate Provisions, Section 448.07, Florida Statutes, the Florida Minimum Wage Law, the Florida Equal Pay Act, Section 725.07, Florida Statutes, or the Florida Constitution, each as amended, and all other state and local statutes, ordinances, executive orders and regulations governing employment or prohibiting discrimination or retaliation upon the basis of age, race, sex, national origin, religion, disability or other unlawful factor.
Notwithstanding the generality of the foregoing, the Claims released shall not include (i) any claim or right to vested Executive welfare or retirement benefits, (ii) the undersigned’s rights under the Stock Option Agreement (as amended from time to time, the “Equity Agreements”), and any claims the undersigned may have for breach of any of the Equity Agreements; (iii) any claim or right that may not be released by private agreement, including without limitation, any claim for unemployment insurance benefits, any workers’ compensation claim and any claim for indemnification under California Labor Code Sections 2800 or 2802, the Company and/or its parents, subsidiaries or affiliate’s bylaws, articles or insurance policies, (iv) any rights the undersigned may have to be indemnified by the Company or any of its affiliates by operation of law or pursuant to the organizational agreements of the Company and/or its affiliates; or (v) the undersigned’s right to any amount owing to the undersigned pursuant to Section 4 of the Employment Agreement dated as of _______________________, 2022, by and between the undersigned and Corphousing Group Inc.
THE UNDERSIGNED ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF THE LAWS REGARDING RELEASES IN CALIFORNIA AND THE STATE OF THE UNDERSIGNED’S RESIDENCE. THE UNDERSIGNED, BEING AWARE OF SAID LAWS, HEREBY EXPRESSLY WAIVES ANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(1) EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(2) EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
(3) EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
The undersigned agrees that if Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.
The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by Executive with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts.
The undersigned reaffirms Executive’s obligations under Section 5 of the Employment Agreement. The undersigned acknowledges and agrees that the amounts that become payable after the date hereof pursuant to Sections 2 and 4 of the Employment Agreement shall be subject to the undersigned’s continued compliance with Section 5 of the Employment Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Release this __________________________________________. 20_______.
Exhibit 10.8
SENIOR SECURED PROMISSORY NOTE
$2,000,000.00 | Nassau County, New York |
October 15, 2021 |
FOR VALUE RECEIVED, Corphousing LLC, and its successors and assigns (hereinafter called the "Maker"), unconditionally promises to pay to THA Family II Limited Liability Company and any successor thereto (hereinafter the "Holder"), the principal sum of Two Million Dollars ($2,000,000.00), together with any accrued and unpaid interest on the principal balance hereof from time to time outstanding, when and as set forth below:
1. The principal amount outstanding under this Note shall bear interest at the rate per annum equal to 6%, payable monthly in arrears.
2. The prescribed interest shall be charged on the principal balance hereof from time to time outstanding and shall be calculated on the basis of the actual number of days elapsed over a 365 day year.
3. Payments of principal and interest hereunder shall be payable in lawful money of the United States, by wire transfer, as and when due, to the account of the Holder which the Holder shall designate in writing to the Maker from time to time.
4. If not accelerated or prepaid prior thereto in accordance with the terms hereof, the full principal balance of this Note and all accrued and unpaid interest thereon shall be due and payable on April 15, 2023 (the "Maturity Date").
5. The Maker waives presentment, demand, protest and notice of protest and all requirements necessary to hold it liable as the Maker. Any failure of the Holder to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time and from time to time thereafter.
6. This Note (a) may be prepaid in full or in part at the election of Maker and without notice to Holder at any time and (b) must be prepaid in full as prescribed by Section 7, below; provided, that a premium of 20% of the amount of the principal being prepaid shall apply and be due at the time of such prepayment; and provided further that any and all prepayments shall be applied first to any costs and expenses then due to the Holder, then to accrued and unpaid interest, and then to outstanding principal payments due, in the order of maturity.
7. The Maker shall be required to prepay this Note in full on the earlier of (a) the date of consummation of a sale of substantially all of the assets or any material portion of the assets of the Maker, (b) the date of a Change of Control of the Maker and ( c) the date of consummation of a Qualified Offering. "Change of Control" shall mean a transaction or series of transactions resulting in more than 50% of the outstanding equity of the Maker being owned by persons other than those persons owning the outstanding equity of the Maker as of the date of this Note. " Qualified Offering" shall mean any registered or unregistered sale of the equity of the Maker for gross proceeds of at least $10 million.
8. The proceeds from the issuance of this Note shall be used for general corporate purposes, including fees and expenses for proposed financing transactions being undertaken by the Maker with third parties, as further determined by the Maker. The proceeds of this Note shall not be used at any time to pay indebtedness or to lend money, give credit or make advances to any officers, directors, employees or affiliates of the Maker.
9. In connection with this Note, the Maker shall issue to the Holder concurrently herewith a warrant ("Warrant") to purchase membership interests (of if the Maker is converted into a corporation shares of common stock) equal to 1% of the outstanding equity of Maker on an after issued, fully diluted basis. The Warrant shall be in the form of Exhibit A hereto.
10. The satisfaction of the Obligations (as defined below) under this Note are hereby secured by a first priority lien granted to Holder in all of the assets of the Maker and each of its subsidiaries, whether owned nor or hereafter acquired, including but not limited to all tangible and intangible property, including all contracts, leases, intellectual property, securities (including securities in any subsidiary), real and leased property, fixtures, cash, receivables, insurance proceeds, claims, and any and all rights or proceeds relating to or derived therefrom. Notwithstanding the foregoing, no lien is granted hereby in any collateral of the Maker, its subsidiaries or affiliates that is the subject to any securing interest granted prior to the date hereof to any third party holder of indebtedness of the Maker, its subsidiaries or affiliates. Maker hereby agrees that the Holder shall promptly file a UCC financing statement and such other documents in the applicable jurisdictions as necessary to perfect and record the foregoing security interest.
11. Notwithstanding any provisions to the contrary herein contained, and subject to the limitations relating to the maximum interest allowed to be charged under applicable law set forth herein, during the period that an Event of Default (defined below) shall have occurred and be continuing, at the option of the Holder, the Obligations (as defined below) shall accrue interest at a rate per annum (the "Alternate Rate") equal to the greater of (a) 1.5% per month and (b) the highest rate allowable by law, computed from the date of the occurrence of an Event of Default and continuing until (i) in the event the Holder, in its sole discretion, elects to waive or postpone its right to accelerate the Obligations, such Event of Default is cured to the sole and absolute satisfaction of the Holder, or (ii) in the event the Holder, in its sole discretion, elects to accelerate the Obligations, or any of them, such Obligations are fully paid and performed.
12. As used in this Note, the term "Obligations" shall mean (i) the principal balance of and accrued interest on this Note (or, if an Event of Default has occurred and the Obligations have been accelerated by Holder, the Mandatory Default Amount); and (ii) all other obligations and liabilities arising under this Note. "Mandatory Default Amount" shall be an amount equal to 125% of outstanding principal and accrued and unpaid interest through the date of payment.
13. The following shall constitute an event of default (each an ''Event of Default"):
(a) Any failure to make payment of principal or interest under this Note when due for more than five ( 5) business days after the giving of written notice to the Maker; or
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(b) The Maker shall: (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee, or a substantial part of any of its properties or assets, or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against the Maker in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; or the Maker by any act or omission shall indicate its consent to, approval of or fail to timely object to any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver, or any trustee for the Maker or any substantial part of any of its properties or assets, or shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; (ii) generally not pay its debts as such debts become due or admit in writing its inability to pay its debts as they mature; or (iii) be "insolvent", as such term is defined in the Bankruptcy Code, § 11 U.S.C. § 101(31); or
(c) A material breach or other material violation of the terms of this Note shall occur, and such breach or other violation remains uncured for a period of ten ( 10) business days after the giving of written notice to the Maker.
Upon the occurrence of an Event of Default which shall be continuing, the Holder may take any or all of the following actions: (i) declare the Obligations to be due and payable and (ii) take any and all actions and pursue any and all remedies when and as may be permitted by this Note or by applicable law.
14. EACH OF THE MAKER AND THE HOLDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT IT OR THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS , CROSS-CLAIMS, OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS CONTEMPLATED HEREIN.
The Maker hereby specifically authorizes any action brought upon the enforcement of this Note by the Holder to be instituted and prosecuted in the State or Federal courts located in Fairfield County, Connecticut, at the election of the Holder. The Maker hereby consents and submits to the personal jurisdiction of the State and Federal courts of Connecticut in any action instituted by the Holder arising under or related to this Note.
15. The Maker hereby represents and warrants to the Holder on the date hereof as follows:
(a) The Maker is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its jurisdiction of organization.
(b) The Maker has the power and authority, and the legal right, to execute and deliver this Note and the Warrant and to perform its obligations hereunder and thereunder.
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(c) The execution and delivery of this Note by the Maker and the performance of its obligations hereunder have been duly authorized by all necessary limited liability company action in accordance with all applicable Laws. The Maker has duly executed and delivered this Note and the Warrant.
(d) No other indebtedness of the Maker exists prior to the issuance of this Note except as set forth in the financial statements of the Maker.
(e) No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note or the Warrant.
(t) The execution and delivery of this Note and the Warrant and the consummation by the Maker of the transactions contemplated hereby and thereby do not and will not (a) violate any provision of the Maker's organizational documents; (b) violate any Law or Order applicable to the Maker or by which any of its properties or assets may be bound; or ( c) constitute a default under any material agreement or contract by which the Maker may be bound.
(g) Each of the Note and the Warrant is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its terms.
16. Until all amounts outstanding under this Note have been paid in full, the Maker shall:
(a) Not create, incur, assume or otherwise become liable with respect to any indebtedness, except for any indebtedness existing as of the date hereof and set forth on Exhibit C or approved by the Holder or any indebtedness existing or arising under this Note; and shall take all commercially reasonable steps required to ensure that this Note shall rank senior to any and all other indebtedness of the Maker (except indebtedness existing as of the date hereof and set forth on Exhibit C), unless the Maker receives the consent of the Holder to otherwise incur indebtedness senior to or on parity with this Note;
(b) Not guarantee to debt of any subsidiary, affiliate, officer, director, employee or any other person;
(c) Not grant any security interest in assets of the Maker or its subsidiaries;
(d) Not enter into or be a party to any transaction with any affiliate of the Maker unless such transaction is (i) related to the issuance hereby of this Note and its use of proceeds or (ii) approved by the Holder or (iii) in the ordinary course of business or (iv) on fair and reasonable terms no less favorable to the Maker than those that could have been obtained in a comparable transaction on an arm's length basis from an unrelated person;
(e) Not declare or pay any dividend on or set apart assets for the purchase, redemption, defeasance, retirement or other acquisition of any equity interests of the Maker or any subsidiary or affiliate, unless approved by the Holder; and
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(f) Deliver to the Holder monthly financials of the Maker and its operating companies (collectively, "Corphousing") and provide the Holder reasonable access to books and records of Corphousing and the management team of the Maker.
17. This Note is to be construed and enforced according to the internal law of the State of Delaware, without giving effect to principles of conflict of laws.
18. Each provision of this Note is intended to be severable and the invalidity or illegality of any portion of this Note shall not affect the validity or legality of the remainder hereof.
19. This Note is not assignable or otherwise transferable by the Maker nor are its obligations hereunder assumable without the prior consent of the Holder, unless the Maker agrees to remain liable for all the Obligations. This Note is non-negotiable and may not be assigned or otherwise transferred by the Holder without the prior consent of the Maker, except to a bank or other financial institution as collateral or, in the case of a Holder that is a natural person, the transfer of this Note by such Holder made for bona fide estate planning purposes, either during his or her lifetime or on death by will or intestate to his or her spouse, child (natural or adopted) or any other direct lineal descendent of such Holder or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by such Holder and/or any such family members.
MAKER: | ||
CORPHOUSING LLC | ||
By: | /s/ Brian L Ferdinand | |
Name: | Brian L Ferdinand | |
Title: | CEO |
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Exhibit A
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Exhibit 10.9
SENIOR PROMISSORY NOTE
$500,000 | Nassau County, New York |
November 24, 2021 |
FOR VALUE RECEIVED, Corphousing LLC, and its successors and assigns (hereinafter called the “Maker”), unconditionally promises to pay to EBOL Holdings LLC and any successor thereto (hereinafter the “Holder”), the principal sum of Five Hundred Thousand Dollars ($500,000.00), together with any accrued and unpaid interest on the principal balance hereof from time to time outstanding, when and as set forth below:
1. The principal amount outstanding under this Note shall bear interest at the rate per annum equal to 6%, payable monthly in arrears.
2. The prescribed interest shall be charged on the principal balance hereof from time to time outstanding and shall be calculated on the basis of the actual number of days elapsed over a 365 day year.
3. Payments of principal and interest hereunder shall be payable in lawful money of the United States, by wire transfer, as and when due, to the account of the Holder which the Holder shall designate in writing to the Maker from time to time.
4. If not accelerated or prepaid prior thereto in accordance with the terms hereof, the full principal balance of this Note and all accrued and unpaid interest thereon shall be due and payable on May 15, 2023 (the “Maturity Date”).
5. The Maker waives presentment, demand, protest and notice of protest and all requirements necessary to hold it liable as the Maker. Any failure of the Holder to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time and from time to time thereafter.
6. This Note (a) may be prepaid in full or in part at the election of Maker and without notice to Holder at any time and (b) must be prepaid in full as prescribed by Section 7, below; provided, that a premium of 20% of the amount of the principal being prepaid shall apply and be due at the time of such prepayment; and provided further that any and all prepayments shall be applied first to any costs and expenses then due to the Holder, then to accrued and unpaid interest, and then to outstanding principal payments due, in the order of maturity.
7. The Maker shall be required to prepay this Note in full on the earlier of (a) the date of consummation of a sale of substantially all of the assets or any material portion of the assets of the Maker, (b) the date of a Change of Control of the Maker and (c) the date of consummation of a Qualified Offering. “Change of Control” shall mean a transaction or series of transactions resulting in more than 50% of the outstanding equity of the Maker being owned by persons other than those persons owning the outstanding equity of the Maker as of the date of this Note. “Qualified Offering” shall mean any registered or unregistered sale of the equity of the Maker for gross proceeds of at least $10 million.
8. The proceeds from the issuance of this Note shall be used for general corporate purposes, including fees and expenses for proposed financing transactions being undertaken by the Maker with third parties, as further determined by the Maker. The proceeds of this Note shall not be used at any time to pay indebtedness or to lend money, give credit or make advances to any officers, directors, employees or affiliates of the Maker.
9. In connection with this Note, the Maker shall issue to the Holder concurrently herewith a warrant (“Warrant”) to purchase membership interests (of if the Maker is converted into a corporation shares of common stock) equal to shares having a value of $500,000 based on the offering price in connection with a Qualified Offering or as otherwise provided in the Warrant. The Warrant shall be in the form of Exhibit A hereto.
10. Notwithstanding any provisions to the contrary herein contained, and subject to the limitations relating to the maximum interest allowed to be charged under applicable law set forth herein, during the period that an Event of Default (defined below) shall have occurred and be continuing, at the option of the Holder, the Obligations (as defined below) shall accrue interest at a rate per annum (the “Alternate Rate”) equal to the greater of (a) 1.5% per month and (b) the highest rate allowable by law, computed from the date of the occurrence of an Event of Default and continuing until (i) in the event the Holder, in its sole discretion, elects to waive or postpone its right to accelerate the Obligations, such Event of Default is cured to the sole and absolute satisfaction of the Holder, or (ii) in the event the Holder, in its sole discretion, elects to accelerate the Obligations, or any of them, such Obligations are fully paid and performed.
11. As used in this Note, the term “Obligations” shall mean (i) the principal balance of and accrued interest on this Note (or, if an Event of Default has occurred and the Obligations have been accelerated by Holder, the Mandatory Default Amount); and (ii) all other obligations and liabilities arising under this Note. “Mandatory Default Amount” shall be an amount equal to 125% of outstanding principal and accrued and unpaid interest through the date of payment.
12. The following shall constitute an event of default (each an “Event of Default”):
(a) Any failure to make payment of principal or interest under this Note when due for more than five (5) business days after the giving of written notice to the Maker; or
(b) The Maker shall: (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee, or a substantial part of any of its properties or assets, or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against the Maker in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; or the Maker by any act or omission shall indicate its consent to, approval of or fail to timely object to any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver, or any trustee for the Maker or any substantial part of any of its properties or assets, or shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; (ii) generally not pay its debts as such debts become due or admit in writing its inability to pay its debts as they mature; or (iii) be “insolvent”, as such term is defined in the Bankruptcy Code, § 11 U.S.C. § 101(31); or
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(c) A material breach or other material violation of the terms of this Note shall occur, and such breach or other violation remains uncured for a period of ten (10) business days after the giving of written notice to the Maker.
Upon the occurrence of an Event of Default which shall be continuing, the Holder may take any or all of the following actions: (i) declare the Obligations to be due and payable and (ii) take any and all actions and pursue any and all remedies when and as may be permitted by this Note or by applicable law.
13. EACH OF THE MAKER AND THE HOLDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT IT OR THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS-CLAIMS, OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS CONTEMPLATED HEREIN.
The Maker hereby specifically authorizes any action brought upon the enforcement of this Note by the Holder to be instituted and prosecuted in the State or Federal courts located in Fairfield County, Connecticut, at the election of the Holder. The Maker hereby consents and submits to the personal jurisdiction of the State and Federal courts of Connecticut in any action instituted by the Holder arising under or related to this Note.
14. The Maker hereby represents and warrants to the Holder on the date hereof as follows:
(a) The Maker is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its jurisdiction of organization.
(b) The Maker has the power and authority, and the legal right, to execute and deliver this Note and the Warrant and to perform its obligations hereunder and thereunder.
(c) The execution and delivery of this Note by the Maker and the performance of its obligations hereunder have been duly authorized by all necessary limited liability company action in accordance with all applicable Laws. The Maker has duly executed and delivered this Note and the Warrant.
(d) No other indebtedness of the Maker exists prior to the issuance of this Note except as set forth in the financial statements of the Maker.
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(e) No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note or the Warrant.
(f) The execution and delivery of this Note and the Warrant and the consummation by the Maker of the transactions contemplated hereby and thereby do not and will not (a) violate any provision of the Maker's organizational documents; (b) violate any Law or Order applicable to the Maker or by which any of its properties or assets may be bound; or (c) constitute a default under any material agreement or contract by which the Maker may be bound.
(g) Each of the Note and the Warrant is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its terms.
15. Until all amounts outstanding under this Note have been paid in full, the Maker shall:
(a) Not create, incur, assume or otherwise become liable with respect to any indebtedness, except for any indebtedness existing as of the date hereof and set forth on Exhibit C or approved by the Holder or any indebtedness existing or arising under this Note; and shall take all commercially reasonable steps required to ensure that this Note shall rank senior to any and all other indebtedness of the Maker (except indebtedness existing as of the date hereof and set forth on Exhibit C), unless the Maker receives the consent of the Holder to otherwise incur indebtedness senior to or on parity with this Note;
(b) Not guarantee to debt of any subsidiary, affiliate, officer, director, employee or any other person;
(c) Not grant any security interest in assets of the Maker or its subsidiaries;
(d) Not enter into or be a party to any transaction with any affiliate of the Maker unless such transaction is (i) related to the issuance hereby of this Note and its use of proceeds or (ii) approved by the Holder or (iii) in the ordinary course of business or (iv) on fair and reasonable terms no less favorable to the Maker than those that could have been obtained in a comparable transaction on an arm's length basis from an unrelated person;
(e) Not declare or pay any dividend on or set apart assets for the purchase, redemption, defeasance, retirement or other acquisition of any equity interests of the Maker or any subsidiary or affiliate, unless approved by the Holder; and
(f) Deliver to the Holder monthly financials of the Maker and its operating companies (collectively, “Corphousing”) and provide the Holder reasonable access to books and records of Corphousing and the management team of the Maker.
16. This Note is to be construed and enforced according to the internal law of the State of Delaware, without giving effect to principles of conflict of laws.
17. Each provision of this Note is intended to be severable and the invalidity or illegality of any portion of this Note shall not affect the validity or legality of the remainder hereof.
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18. This Note is not assignable or otherwise transferable by the Maker nor are its obligations hereunder assumable without the prior consent of the Holder, unless the Maker agrees to remain liable for all the Obligations. This Note is non-negotiable and may not be assigned or otherwise transferred by the Holder without the prior consent of the Maker, except to a bank or other financial institution as collateral or, in the case of a Holder that is a natural person, the transfer of this Note by such Holder made for bona fide estate planning purposes, either during his or her lifetime or on death by will or intestate to his or her spouse, child (natural or adopted) or any other direct lineal descendent of such Holder or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by such Holder and/or any such family members.
MAKER:
CORPHOUSING LLC | ||
By: | /s/ Brian L. Ferdinand | |
Name: | Brian L. Ferdinand | |
Title: | CEO |
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EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the inclusion in this Offering Statement on Form S-1 of our report dated December 6, 2021, except for note 15, as to which date is January 11, 2022, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, relating to the consolidated financial statements of Corphousing LLC and Affiliate as of and for the years ended December 31, 2020 and 2019. We also consent to the reference to our firm under the heading "Experts" appearing therein.
Grassi & Co., CPAs, P.C.
Jericho, New York
January 11, 2022
Exhibit 99.1
Consent of Director Nominee
January 10, 2022
CorpHousing Group Inc. (the “Company”) is filing a Registration Statement on Form S-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the initial public offering of shares of common stock and warrants of the Company. In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement, as may be amended from time to time. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
/s/ Aimee J. Nelson | |
Aimee J. Nelson |
Exhibit 99.2
Consent of Director Nominee
January 10, 2022
CorpHousing Group Inc. (the “Company”) is filing a Registration Statement on Form S-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the initial public offering of shares of common stock and warrants of the Company. In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement, as may be amended from time to time. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
/s/ Jeffrey Webb | |
Jeffrey Webb |