LUXHP LuxUrban Hotels Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): December 20, 2024

 

LuxUrban Hotels Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware		001-41473		82-3334945
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

212 Biscayne Blvd, Suite 253, Miami, Florida		33137
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (833) 723-7368

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value per share		LUXH		The Nasdaq Stock Market LLC
13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share		LUXHP		The Nasdaq Stock Market LLC

 

 

 

Item 3.02.

Unregistered Sales of Equity Securities

 

The information set forth in Item 5.02 below is hereby incorporated by reference.

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Brian Ferdinand, Brandon Elster, Alex Moinian, Daniel Shapiro and Bradley Theodore, Appointed as Directors of the Company; Brian Ferdinand Named Interim Chief Executive Officer

 

On and effective December 20, 2024, the board of directors (the “Board”) of LuxUrban Hotels Inc. (the “Company”) appointed each of Brian Ferdinand, Brandon Elster, Alex Moinian, Daniel Shapiro, and Bradley Theodore to fill director vacancies on the Board (see resignations discussion below). The Board determined that each of Messrs. Moinian, Shapiro, and Theodore are independent under the listing rules of the Nasdaq Stock Market, LLC. And each shall serve on the audit committee, compensation committee, nominating and corporate governance committee, and risk, finance and investment committee of the Board. In addition, the Board elected and appointed Mr. Ferdinand to serve as Interim Chief Executive Officer of the Company. A copy of his employment agreement is attached hereto as Exhibit 10.1, which provides for a three year term, an initial salary of $480,000 (subject to annual increases), defined annual equity awards (including an initial equity grant of $250,000 of our common stock (based on the average last sale price of our common stock on the five consecutive trading days prior to the date of execution of the employment agreement) and general employee benefits. Robert Arigo, our current chief executive officer shall become our company’s Chief Operating Officer under the terms of an amendment to his employment agreement (a copy of which is attached hereto as Exhibit 10.2).

 

Brian Ferdinand

 

Mr. Ferdinand has served as Interim Chief Executive Officer and as a member of our Board since December 2024. Previously, Mr. Ferdinand served as Chief Executive Officer and Chairman of the Board of the Company prior to transitioning into a consultant role. Mr. Ferdinand was the Founder and Manager of both Corphousing LLC and SoBeNY Partners LLC prior to their conversions into C corporations in January 2022, and has been the Chief Executive Officer (or Co-Chief Executive Officer) and Chairman of the Board of our company since that date. Prior to founding our company in 2017, Mr. Ferdinand was Chief Operating Officer and a partner at VacationRentals LLC, a provider of loyalty-branded, hotel-alternative accommodations, and prior to that, from 2011 through 2014, Mr. Ferdinand served as a member of the Board of Directors and Head of Corporate Strategy at Liquid Holdings, Inc. (“Liquid”), a designer and operator of fintech-based brokerage order execution platforms and services. Liquid filed for Chapter 11bankruptcy protection in January 2016. From 2002 through 2011, Mr. Ferdinand served as Managing Director and partner at ECHOTrade LLC, a proprietary trading firm, where he oversaw that company’s expansion from 30 to nearly 1000 licensed traders working in offices throughout the United States and internationally in a joint back-office partnership with Merrill Lynch and Bank of America. Mr. Ferdinand entered into an Offer of Settlement with the Securities and Exchange Commission on April 22, 2020, in connection with allegations that he, as a board member of Liquid Holdings Group Inc., (a) reviewed a Form 10-Q and signed a Form 10-K for the fiscal year 2013 that failed to disclose material facts of Liquid’s reliance on a related party entity (a principal customer of Liquid and a company of which Mr. Ferdinand was an owner) and from which Liquid received material subscription fees, and (b) failed to file required Forms 4 and amendments to Schedule 13D to reflect material changes to his ownership in Liquid’s shares of common stock, causing Liquid to violate Section 13(a), 13(d)(2) and 16(a) of the Exchange Act and related rules thereof. Mr. Ferdinand consented, without admitting or denying any findings, to a cease and desist order from any alleged secondary violations of Section 17(a)(2) of the Securities Act and 13(a) of the Exchange Act, which are non-scienter provisions in which negligence is sufficient to establish liability for causing a primary violation; and Section 13(d)(2) and Section 16(a) of the Exchange Act, which are personal security reporting provisions under which strict liability is sufficient to establish a violation. As a result of the settlement, Mr. Ferdinand was also required to pay a fine of $115,000.

 

 

Brandon Elster

 

Mr. Elster currently serves as Chief Development Officer of the Company. Mr. Elster joined the Board in December 2024 and shall maintain his position as Chief Development Officer of the Company. He shall also assume the role of President of our company.

 

Alex Moinian

 

Alexander Moinian joined our board of directors in December 2024. Since March 2016, Mr. Moinian has been a manager and member of The Moinian Group and Moin Development Corp., companies he founded which invest, develop, and convert commercial and residential real estate primarily in the New York City area. From August 2010 to February 2016, he was an Executive Vice President at Everest Abstract Services, a full service title insurance agency providing title insurance for all types of commercial and residential transactions, where he managed the closings of more than $688 million in transactions. From March 2009 to September 2009, Mr. Moinian was Vice President of Sales for HRH Construction, a real estate development and conversion company focused on the New York City market, where he was involved in several large conversion projects, including the conversion of 90 Washington Street (the old Bank of New York headquarters) into hundreds of rental apartments and retail spaces. Mr. Moinian received his BA from Pace University.

 

Daniel Shapiro

 

Daniel Shapiro became a member of our board in December 2024. Mr. Shapiro has more than a decade of commercial real estate transaction experience. Since 2018 he has been a Manager of the DSV Group, a firm he co-founded that is engaged in the syndication and acquisition of commercial real estate in Manhattan and the surrounding boroughs. During this period, he has also served as Sales Manager for Kassin Sabbagh Realty, overseeing the sale and management a variety of hospitality, industrial, and other properties in the United States. From 2012 to 2018, Mr. Shapiro was the Director of Sales for Besen & Associates, a real estate company engaged in the development and investment in hotel, mixed-used and multi-residential properties. During 2012, he was a sales and leasing agent serving various real estate development companies, including Cohen Commercial Properties and Winick Realty Group in the New York City area. He holds his BA from the Eugene Lang College at New School University.

 

Bradley Theodore

 

Bradley Theodore became a member of our board in December 2024. He is a well-known artist and digital media expert who brings to our company a dynamic marketing and branding perspective through an artistic lens. Since 2012, he has been the manager and owner of Bradley Theodor Studios, a digital media and brand collaboration company that has designed and implemented branding and marketing campaigns and art-based gallery exhibitions for numerous major clients, including Rolls Royce, Lego, Puma and others. From 2000 to 2011 he was a Digital Media Consultant at the Arnell Group, a digital media marketing and strategy company, in which role he oversaw projects for numerous major brands, including Pepsi, Reebok and Jose Cuervo. From 1999 to 2002, he was a Digital Media Specialist for Attic Media, a digital media creation firm that designed branding and marketing campaigns across emerging media platforms. Mr. Theodore first gained attention as an artist by transforming the streets of New York with his striking murals of skeletons, each rendering contemporary icons and figures from pop culture and fashion as living, yet skeletal, representations. These bold, chromatic works set him apart and laid the foundation for a global career. Known for colorful and thought-provoking portrayals of modern icons, Mr. Theodore is a multidisciplinary artist whose work has garnered international acclaim. From ten-foot murals in Tokyo, Paris, and Milan to sold-out solo exhibitions in London, New York, and Tokyo, his art speaks to a global audience. Mr. Theodore’s education in the Arts includes study in the Digital Arts & Interactive Programming at the School of Visual Arts (New York) and the Art Institute of Boston.

 

As non-employee directors of the Company, during 2024 Mssrs. Moinian, Shapiro, and Theordore will receive a prorated portion of the compensation provided to all independent directors in accordance with the Company’s policy. In addition, the Company has entered into an indemnification agreement with Mssrs. Moinian, Shapiro, and Theordore, pursuant to which the Company will indemnify and advance related expenses to Mssrs. Moinian, Shapiro and Theordore to the fullest extent permitted by applicable law. None of Mssrs. Moinian, Shapiro, and Theordore have engaged in any transactions with the Company that are required to be reported pursuant to Item 404(a) of Regulation S-K.

 

 

Elan Blutinger, Alex Lombardo, Aimee Nelson, Kimberly Schaefer, and Leonard Toboroff Resign as Directors of the Company

 

Effective December 19, 2024, each of Kimberly Schaefer and Leonard Toboroff notified the Company, that they were resigning from the Company’s Board. Elan Blutinger, Alex Lombardo, and Aimee Nelson, as remaining directors, nominated and elected Brandon Elster, to fill one of the vacancies. On December 20, 2024, Ms. Nelson resigned, and Messrs. Blutinger, Lombardo and Elster, as remaining members, elected each of . Alex Moinian, Daniel Shapiro, and Bradley Theodore to fill the vacancies. On December 20, 2024, Messrs. Blutinger and Lombardo resigned as directors of the Company. Mr. Blutinger also resigned as nonexecutive chairman of the Board. Mr. Blutinger served on the Company’s Nominating and Corporate Governance Committee. Mr. Lombardo served on the Company’s Audit Committee. Ms. Nelson served on the Company’s Audit Committee, Nominating and Corporate Governance Committee, Compensation Committee and Finance, Risk and Investment Committee. Mr. Toboroff served on the Company’s Audit Committee, Nominating and Corporate Governance Committee, Compensation Committee and Finance, Risk and Investment Committee.

 

The resignations of the directors named above were not due to any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

 

Item 7.01

Regulation FD Disclosure

 

The Company has determined that it will not proceed at this time with the previously announced potential joint venture under the nonbinding letter of intent with Lockwood Development Partners LLC and others.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit		Description
10.1		Ferdinand Employment Agreement
10.2		Form of Amendment to Arigo Employment Agreement
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: December 20, 2024	LUXURBAN HOTELS INC.
	By:	/s/ Michael James
		Name: Michael James
		Title: Chief Financial Officer

 

 

Exhibit 10.1

 

LUXURBAN HOTELS INC.

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between LuxUrban Hotels Inc., a Delaware corporation (the “Company”), and Brian Ferdinand (the “Executive”), effective as of December 20, 2024 (the “Effective Date”).

 

WHEREAS, the Company desires to employ the Executive as interim Chief Executive Officer to Chief Executive Officer as set forth herein.

 

WHEREAS, the Executive desires to be employed by the Company in the role as interim Chief Executive Officer as set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:

 

1. Employment and Duties.

 

(a) General. The Executive shall serve as the interim Chief Executive Officer of the Company (and Chairman of the Board), reporting to the Board. The Executive is allowed to work remotely (the “Remote Location”) and as needed travel for the benefit of the Company. The Executive shall have such duties and responsibilities, commensurate with the Executive’s positions, as may be reasonably assigned to the Executive from time to time by the Company. The Executive shall perform his duties and responsibilities hereunder to the best of his abilities and in a diligent, trustworthy, business-like and efficient manner. In addition to such other duties customarily overseen by the Chief Executive Officer, the Executive shall (a) provide strategic direction, operational recommendations, and plans to enhance the Company’s overall financial and operational performance; (b) suggest adjustments to financial policies, strategies, or initiatives as deemed necessary, subject to the approval and implementation of the Chief Financial Officer and Chief Development Officer (collectively, the “Financial Executives”), and (c) collaborate with the Financial Executives to ensure alignment between financial operations and broader Company goals and objectives.

 

(b) Exclusive Services. For so long as the Executive is employed by the Company, the Executive shall devote the Executive’s full business attention to the Executive’s duties hereunder, shall faithfully serve the Company, shall in all respects conform to and comply with the lawful and good faith directions and instructions given to the Executive by the Company, and shall use the Executive’s best efforts to promote and serve the interests of the Company. Further, unless the Company consents in writing, the Executive shall not, directly or indirectly, render services to any other person or organization or otherwise engage in activities that would interfere significantly with the Executive’s faithful performance of the Executive’s duties hereunder. Notwithstanding the foregoing, the Executive may (i) serve on one corporate board, provided the Executive receives prior permission from the Board of Directors of the Company (the “Board”); and (ii) serve on corporate, civic, children sports organization or charitable boards or engage in charitable activities without remuneration therefor, provided that such activity does not contravene the first sentence of this Section 1(b).

 

(c) Dodd-Frank Act, Sarbanes-Oxley and Other Applicable Law Requirements. The Executive agrees (i) to abide by any compensation recovery, recoupment, anti-hedging, anti-pledging, stock ownership, or other policy applicable to executives of the Company and its affiliates that is hereafter adopted by the Board or a duly authorized committee thereof; (ii) that any such cash-or equity-based incentive compensation granted on or after the Effective Date will be subject to any compensation recovery or recoupment policy applicable to executives of the Company and its affiliates that is hereafter adopted by the Board or a duly authorized committee thereof to adhere to the intent of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), or other applicable law, as advised to the Board in a written opinion (including via e-mail correspondence) of the Company’s legal counsel; and (iii) that the terms and conditions of this Agreement shall be deemed automatically and unilaterally amended to the minimum extent necessary to ensure compliance by the Executive and this Agreement with such policies, the Dodd-Frank Act, Sarbanes-Oxley, and any other applicable law.

 

 

(d) It is acknowledged and agreed that only the Financial Executives shall have authority to (a) approve and execute financial transactions, including but not limited to payments, contracts, and vendor agreements, (b) manage the Company’s bank accounts, including initiating transfers, overseeing compliance with internal policies, and monitoring cash flow, (c) prepare and present budgets, financial reports, and forecasts for periodic review by the Board of Directors, and (d) negotiate and execute financial agreements necessary for the Company’s operations, within the parameters and guidelines approved by the Board, and that the interim Chief Executive Officers does not possess any authority with respect to the foregoing, unless specifically granted to him in writing by the Board or the Financial Executives.

 

2. Term of Employment. The Executive’s employment shall be covered by the terms of this Agreement, effective as of the Effective Date, and shall continue for a period of three (3) years, unless this Agreement (and the Executive’s employment hereunder) is otherwise terminated as set forth in this Agreement. If not previously terminated, this Agreement shall automatically renew for subsequent periods of one (1) year (the initial term, and the renewal terms, to the extent applicable, being the “Term”), unless either party provides written notice to the other at least sixty (60) days prior to the end of the initial Term (or any renewed Term thereafter) or unless this Agreement (and the Executive’s employment hereunder) is otherwise terminated as set forth in this Agreement.

 

3. Compensation and Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive during the Term as compensation for services rendered hereunder:

 

(a) Base Salary. The Company shall pay to the Executive an annual salary (the “Base Salary”) at the rate of $480,000 during the first twelve month period, $600,000 during the second twelve month period, and $720,000 during the third twelve month period, payable in substantially equal installments at such intervals as may be determined by the Company in accordance with the Company’s then-current ordinary payroll practices as established from time to time. The Base Salary shall be reviewed in good faith by the Compensation Committee of the Board (the “Committee”), or in the absence thereof, the Board, based upon the Executive’s performance, not less often than annually. To the extent Base Salary is increased, then the defined term “Base Salary” shall also be increased by the same amount for all purposes of this Agreement, without the need for an amendment.

 

(b) Equity Award. The Executive shall be granted restricted shares of common stock annually (“Annual Equity Grant”), with the first grant made and deemed vested on the date of this Agreement, and each subsequent grant made and deemed vested on the anniversary date of this Agreement so long as same as in effect, with the number of shares issued for each grant determined by (a) for the initial, first year grant, dividing $250,000 by the average last sale price of a share of common stock as reported by the then principal trading market for the Company’s common stock on the five consecutive trading days ending immediately prior to the date of gran, (b) for second year grant, dividing $500,000 by the average last sale price of a share of common stock as reported by the then principal trading market for the Company’s common stock on the five consecutive trading days ending immediately prior to the date of grant, and (c) for the third year grant, dividing $750,000 by the average last sale price of a share of common stock as reported by the then principal trading market for the Company’s common stock on the five consecutive trading days ending immediately prior to the date of grant.

 

(c) Employee Benefits. The Executive shall be entitled to participate in all employee benefit arrangements that the Company may offer to its executives of like status from time to time, and as may be amended from time to time. The Executive is entitled to three weeks of annual vacation, with three weeks being mandatory for maintaining peek personal performance in the role. It is acknowledged and agreed that the Executive was previously employed by the Company and had accrued retirement and employee benefits including Trust payments and that, to the extent permitted by law and all applicable benefit plans, all such accrued retirement and employee benefits shall be deemed reinstated and brought current to the fullest extent allowed by law and such plans and as reasonably permitted by the resources of the Company and Company shall use commercially reasonable efforts to promptly reinstate same in accordance with the foregoing.

 

(d) Expenses. The Executive shall be entitled to reimbursement of business expenses from the Company that are incurred in the ordinary course of business including travel from the Executive’s Remote Location for Company matters, subject to prior approval by the Chief Financial Officer and submission of reasonable supporting documentation. If possible, the Executive shall stay at Company properties and if travel distances are lengthy the Executive may choose a higher class of services.

 

 

(e) Indemnification. The existing indemnification agreement between the Executive and the Company shall remain in full force and effect and deemed to cover his consultancy and his offices with the Company.

 

4. Rights Upon a Termination of the Executive’s Employment.

 

(a) Termination of Employment by the Company for Cause or by the Executive Without Good Reason. If the Executive’s employment is terminated by the Company for Cause, or the Executive voluntarily terminates the Executive’s employment without Good Reason or upon exercise of Executive’s Replacement Election, of if Executive’s employment is terminated by the Company for any reason after the first anniversary of the date of this Agreement, then the Executive shall receive only the following from the Company: (i) any unpaid Base Salary accrued through the termination date, (ii) a lump sum payment for any accrued but unused vacation pay, (iii) rights to elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and (iv) a lump sum payment for any previously unreimbursed business expenses incurred by the Executive on behalf of the Company during the Term (collectively, such (i) through (iv) being the “Accrued Rights”).

 

(i) For purposes of this Agreement, the term “Cause” shall mean a termination by the Company of the Executive’s employment because of: (A) any act or omission that constitutes a material breach by the Executive of any of his obligations under his Employment Agreement; (B) the Executive’s conviction of, or plea of nolo contendere to, (1) any felony or (2) another crime involving dishonesty or moral turpitude or which could reflect negatively upon the Company or otherwise impair or impede its operations; (C) the Executive engaging in any misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is materially injurious to the Company; (D) the Executive’s willful and repeated refusal to follow the lawful directions of the Board; or (E) any other willful misconduct by the Executive which is materially injurious to the financial condition or business reputation of the Company. No event or condition described in Sections (A), (C), (D) or (E) shall constitute Cause unless (x) within 90 days from the Board first acquiring actual knowledge of the existence of the Cause condition, the Board provides the Executive written notice of its intention to terminate his employment for Cause and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Executive within 20 business days of his receipt of such notice (or, in the event that such grounds cannot be corrected within such 20 business-day period, the Executive has not taken all reasonable steps within such 20 business-day period to correct such grounds as promptly as practicable thereafter); and (z) the Board terminates the Executive’s employment with the Company immediately following expiration of such 20 business-day period. Any attempt by the Executive to correct a stated Cause condition shall not be deemed an admission by the Executive that the Board’s assertion of Cause is valid.

 

(ii) For purposes of this Agreement, the term “Good Reason” shall mean a voluntary termination by the Executive of the Executive’s employment because of: (A) a material diminution in the Executive’s Annual Base Salary or a failure by the Company to pay material compensation due and payable to the Executive in connection with his employment; (B) a material diminution in the nature or scope of the Executive’s authority, duties, or responsibilities from those applicable to him as of the Effective Date (provided that his replacement as Chief Financial Officer by a new hire by the Company shall not constitute Good Reason); (C) the Company requiring the Executive to be based at any office or location more than 20 miles from the Remote Location; or (D) a material breach by the Company of any term or provision of this Agreement. No event or condition described in this Section shall constitute Good Reason unless, (x) within 90 days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section, the Executive provides the Board written notice of his intention to terminate his employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Board within 20-business days of the Board’s receipt of such notice (or, in the event that such grounds cannot be corrected within such 20 business-day period, the Board has not taken all reasonable steps within such 20 business-day period to correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates his employment with the Company immediately following expiration of such 20-day period. For purposes of this Section, any attempt by the Board to correct a stated Good Reason shall not be deemed an admission by the Board that the Executive’s assertion of Good Reason is valid.

 

 

(iii) “Replacement Election” shall mean the Executive’s election to resign as interim Chief Executive Officer which may be effected at any time upon written notice to the Board provided that prior to the date of such termination a suitable Chief Executive Officer ready and willing to serve on a non-interim basis has been identified, vetted and reasonably approved by the Board.

 

(b) Termination of Employment by the Company without Cause or by the Executive for Good Reason. If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason prior to eh first anniversary of the date of this Agreement, then the Executive shall receive the following from the Company: (i) the Accrued Rights, (ii) an aggregate amount equal to twelve (12) months the Executive’s then Base Salary payable in equal installments across the Company’s then normal payroll schedule, and (iii) twelve (12) months of the monthly premium payment to continue the Executive’s (and the Executive’s family’s) existing group health, dental coverage and vision, calculated under the applicable provisions of COBRA, and calculated without regard to whether the Executive actually elects such continuation coverage (the “COBRA Benefits”) (collectively, (i) through (iii) being the “Involuntary Termination Severance Benefits”).

 

(c) No Continued Benefits Following Termination. Unless otherwise specifically provided in this Agreement or contemplated by another agreement between the Executive and the Company, or as otherwise required by law, all compensation, equity plans, and benefits payable to the Executive under this Agreement shall terminate on the date of termination of the Executive’s employment with the Company under the terms of this Agreement.

 

(d) Resignation from Directorships, Offices and Fiduciary Titles. The termination of the Executive’s employment for any reason shall constitute the Executive’s immediate resignation from (i) any officer or employee position the Executive has with the Company, unless mutually agreed upon by the Executive and the Board; (ii) any position on the Board; and (iii) all fiduciary positions (including as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company. The Executive agrees that this Agreement shall serve as written notice of resignation in this circumstance.

 

(e) Separation Agreement and Release. Notwithstanding any other provisions of this Agreement to the contrary, the Company shall not make or provide the Involuntary Termination Severance Benefits under this Section 4, unless the Executive timely executes and delivers to the Company a general release (which shall be provided by the Company not later than five (5) days from the date on which the Executive’s employment is terminated and be substantially in the form attached hereto as Exhibit A (the “Separation Agreement and Release”), and such Separation Agreement and Release remains in full force and effect, has not been revoked and is no longer subject to revocation, within sixty (60) calendar days after the date of termination. If the requirements of this Section 4(e) are not satisfied by the Executive (or the Executive’s estate or legally appointed personal representative), then no Involuntary Termination Severance Benefits shall be due to the Executive (or the Executive’s estate) pursuant to this Agreement. Notwithstanding anything in this Agreement to the contrary, the Involuntary Termination Severance Benefits shall not be paid until the first scheduled payment date following the date the Separation Agreement and Release is executed and no longer subject to revocation; provided, that if the period during which the Executive has discretion to execute or revoke the Separation Agreement and Release straddles two (2) calendar years, then the Involuntary Termination Severance Benefits shall be paid or commence being paid, as applicable, in the second calendar year, with the first such payment being in an amount equal to the total amount to which the Executive would otherwise have been entitled during the period following the date of termination if such deferral had not been required.

 

(f) Notice of Termination. Any termination of employment by the Company or the Executive shall be communicated by a written “Notice of Termination” to the other party hereto given in accordance with Section 8(l) of this Agreement. In the event of a termination by the Company for Cause or by the Executive for Good Reason, the Notice of Termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specify the date of termination. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

 

5. Confidentiality, Non-Compete and Intellectual Property. The existing confidentiality, noncompete and intellectual property agreement between the Executive and the Company shall remain in full force and effect and deemed to cover his consultancy and his offices with the Company.

 

6. Section 280G Payments. Notwithstanding anything in this Agreement to the contrary, if the Executive is a “disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any other person, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and/or such person(s) will be $1.00 less than three (3) times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better “net after-tax position” to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made applying principles, assumptions and procedures consistent with Section 280G of the Code by an accounting firm or law firm of national reputation that is selected for this purpose by the Company (the “280G Firm”). In order to assess whether payments under this Agreement or otherwise qualify as reasonable compensation that is exempt from being a parachute payment under Section 280G of the Code, the 280G Firm or the Company may retain the services of an independent valuation expert. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds $1.00 less than three (3) times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 6 shall require the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Section 4999 of the Code.

 

7. Section 409A of the Code. This Agreement is intended to either avoid the application of, or comply with, Section 409A of the Code. To that end this Agreement shall at all times be interpreted in a manner that is consistent with Section 409A of the Code. Notwithstanding any other provision in this Agreement to the contrary, the Company shall have the right, in its sole discretion, to adopt such amendments to this Agreement or take such other actions (including amendments and actions with retroactive effect) as it determines is necessary or appropriate for this Agreement to comply with Section 409A of the Code. Further:

 

(a) Any reimbursement of any costs and expenses by the Company to the Executive under this Agreement shall be made by the Company in no event later than the close of the Executive’s taxable year following the taxable year in which the cost or expense is incurred by the Executive. The expenses incurred by the Executive in any calendar year that are eligible for reimbursement under this Agreement shall not affect the expenses incurred by the Executive in any other calendar year that are eligible for reimbursement hereunder and the Executive’s right to receive any reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.

 

(b) Any payment following a separation from service that would be subject to Section 409A(a)(2)(A)(i) of the Code as a distribution following a separation from service of a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code) shall be made on the first to occur of (i) ten (10) days after the expiration of the six-month (6) period following such separation from service, (ii) death, or (iii) such earlier date that complies with Section 409A of the Code.

 

(c) Each payment that the Executive may receive under this Agreement shall be treated as a “separate payment” for purposes of Section 409A of the Code.

 

 

(d) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” or like terms shall mean “separation from service.”

 

8. Miscellaneous.

 

(a) Defense of Claims. The Executive agrees that, during and following the Term, upon request from the Company, the Executive will cooperate with the Company in the defense of any claims or actions that may be made by or against the Company that affect the Executive’s prior areas of responsibility, except if the Executive’s reasonable interests are adverse to the Company in such claim or action. The Company agrees to promptly reimburse the Executive for all of the Executive’s reasonable legal fees, travel and other direct expenses incurred, or to be reasonably incurred – and, if the Executive is no longer employed with the Company, to compensate the Executive (at a pro rata hourly rate calculated based on the Executive’s salary at the time of the Executive’s separation) for the Executive’s time – to comply with the Executive’s obligations under this Section 8(a).

 

(b) Non-Disparagement. The Executive agrees that at no time during or after the termination of the Executive’s employment shall the Executive make, or cause or assist any other person to make, any statement or other communication to any third party or in social media which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company or its affiliates or any of its respective directors, officers or employees.

 

(c) Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan or agreement which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made, to assure payment. The Executive shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.

 

(d) Amendment, Waiver. This Agreement may not be modified, amended or waived in any manner, except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

 

(e) Entire Agreement. This Agreement, the Exhibits attached hereto, and the agreements specifically incorporated herein are the entire agreement and understanding of the parties hereto with respect to the matters covered herein and supersedes all prior or contemporaneous negotiations, commitments, agreements and writings with respect to the subject matter hereof, all such other negotiations, commitments, agreements and writings shall have no further force or effect, and the parties to any such other negotiation, commitment, agreement or writing shall have no further rights or obligations thereunder.

 

(f) Governing Law/Venue. This Agreement shall be performable, governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles thereof. Each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts in Delaware, for the purposes of any proceeding arising out of or based upon this Agreement.

 

 

(g) Binding Arbitration. The Executive agrees that any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by binding arbitration to be held in Florida in accordance with the rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company and the Executive shall equally share the legal costs and expenses of such arbitration; provided, however, that the prevailing party shall be entitled to recover from the non-prevailing party all reasonable legal costs and expenses incurred in preparing for and participating in the arbitration, including staff time, court costs, attorney’s fees, and all other related expenses incurred in such arbitration. If there is no prevailing party, each party will pay its own attorneys’ fees, costs, and expenses. Whether a prevailing party exists shall be determined solely by the arbitrator on a claim-by-claim basis, and such arbitrator, in its sole discretion, shall determine the amount of reasonable and necessary attorneys’ fees, costs, and/or expenses, if any, for which a party is entitled. The following guiding principles shall be applied by the arbitrator in any determination of a prevailing party: (i) the intent of the parties is to avoid any arbitration, action, or proceeding arising from a breach of this Agreement, and therefore, the parties will work together to resolve any such dispute; (ii) none of the parties will proceed with an arbitration, action, or proceeding arising from a breach of this Agreement until after exhausting all reasonable efforts to resolve such dispute using best efforts, an impasse has resulted and a satisfactory result cannot be reached without moving forward with such arbitration, action, or proceeding; and (iii) none of the parties will bring any arbitration, action, or proceeding arising from a breach of this Agreement until after such party has fully evaluated the merits of such purported claim or cause of action and made a determination that such party has a good-faith basis to move forward with such arbitration, action, or proceeding.

 

(h) No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(i) Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

(j) No Assignment. Neither this Agreement nor any of the Executive’s rights and duties hereunder, shall be assignable or delegable by the Executive. Any purported assignment or delegation by the Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

 

(k) Successors; Binding Agreement. Upon the death of the Executive, this Agreement shall be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and/or legatees.

 

(l) Notices. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by electronic mail, hand or overnight courier or three (3) days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

If to the Company:

LuxUrban Hotels Inc.

[address]

Attn: CFO

Email:

 

If to the Executive:

Brian Ferdinand

6 Dogwood Hill

Glen Head, NY 11545

Email: blf_ferdinand@yahoo.com

 

(m) Withholding of Taxes. The Company may withhold from any amounts or benefits payable under this Agreement all taxes it may be required to withhold pursuant to any applicable law or regulation.

 

(n) Headings. The section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit or interpret the scope of this Agreement or of any particular section.

 

 

(o) Construction. Whenever the context so requires herein, the masculine shall include the feminine and neuter, and the singular shall include the plural. The words “includes” and “including” as used in this Agreement shall be deemed to be followed by the phrase “without limitation.” The word “or” is not exclusive.

 

(p) Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

(q) Survival. This Agreement shall terminate upon the termination of employment of the Executive; however, the following shall survive the termination of the Executive’s employment and/or the expiration or termination of this Agreement, regardless of the reasons for such expiration or termination, 3(f) (“Indemnification”), Section 4 (“Rights Upon a Termination of the Executive’s Employment”), Section 5 (“Confidentiality, Noncompete and Intellectual Property”), Section 8(a) (“Defense of Claims”), Section 8(b) (“Non-Disparagement”), Section 8(e) (“Entire Agreement”), Section 8(f) (“Governing Law/Venue”), Section 8(g) (“Binding Arbitration/Equitable Remedies”), Section 8(k) (“Successors/Binding Agreement”), and Section 8(l) (“Notices”).

 

 

[SIGNATURES ON NEXT PAGE]

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the Effective Date.

 

	EXECUTIVE:
	/s/ Brian Ferdinand
	BRIAN FERDINAND
	LUXURBAN HOTELS INC.
	By:
	Name:	Michael James
	Title:	Chief Financial Officer

 

Attachments:

 

Exhibit A – SEPARATION AGREEMENT AND RELEASE

 

 

EXHIBIT A

 

FORM OF SEPARATION AGREEMENT

 

 

Exhibit 10.2

 

AMENDEDMENT TO LUXURBAN HOTELS INC.
EXECUTIVE EMPLOYMENT AGREEMENT

 

This Amendment (“Amendment”) is entered into by and between LuxUrban Hotels Inc., a Delaware corporation (the “Company”), and Robert Arigo (the “Executive”), effective as of December 20, 2024 (the “Effective Date”) and amends the Employment Agreement (the “Agreement”) between the Company and Executive dated June 10, 2024

 

WHEREAS, the Company desires to modified by the terms of employment of the Executive as set forth in this Amendment; and

 

WHEREAS, the Executive agrees to such modifications s set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:

 

1.

The Agreement is modified and amended such that all references to Executive as “Chief Executive Officer” shall be deemed modified and changed to “Chief Operating Officer.”

 

2.

The Agreement is modified and amended such that all share number references give effect to any and all stock splits effected by the Company during the Term

 

3.

Section 1(a) of the Agreement is amended and restated in entirety as follows:

 

“(a) General. The Executive shall serve as the Chief Operating Officer of the Company, reporting to the Chief Executive Officer and the Board of Directors. The Executive is allowed to work remotely (the “Remote Location”) and as needed travel for the benefit of the Company. The Executive shall have such duties and responsibilities, commensurate with the Executive’s position, as may be reasonably assigned to the Executive from time to time by the Company. The Executive shall perform his or her duties and responsibilities hereunder to the best of his or her abilities and in a diligent, trustworthy, business-like and efficient manner.

 

4.

Section 1(d) is hereby added to Section 1 of this Agreement:

 

“(d) It is acknowledged and agreed that only the Chief Financial Officer and Chief Development Officer of the Company have authority to (a) approve and execute financial transactions, including but not limited to payments, contracts, and vendor agreements, (b) manage the Company’s bank accounts, including initiating transfers, overseeing compliance with internal policies, and monitoring cash flow, (c) prepare and present budgets, financial reports, and forecasts for periodic review by the Board of Directors, and (d) negotiate and execute financial agreements necessary for the Company’s operations, within the parameters and guidelines approved by the Board, and that the Chief Operating Officer does not possess any authority with respect to the foregoing.

 

5.

Section 3(d) of the Agreement is amended and restated in entirety as follows:

 

“(d) Expenses. As well, the Executive shall be entitled to reimbursement of business expenses from the Company that are incurred in the ordinary course of business including travel from the Executive’s Remote Location for Company matters subject to the prior approval of the Chief Financial Officer and submission of reasonable supporting documentation. If possible, the Executive shall stay at Company properties and if travel distances are lengthy the Executive may choose a higher class of services. The Company shall reimburse the Executive for all cellular phone service costs incurred by him during the Term for business purposes.

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment effective as of the Effective Date.

 

	EXECUTIVE:
	ROBERT ARIGO
	LUXURBAN HOTELS INC.
	By:
	Name:	Michael James
	Title:	Chief Financial Officer

 

v3.24.4

Cover	Dec. 20, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 20, 2024
Entity File Number	001-41473
Entity Registrant Name	LuxUrban Hotels Inc.
Entity Central Index Key	0001893311
Entity Tax Identification Number	82-3334945
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	212 Biscayne Blvd
Entity Address, Address Line Two	Suite 253
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33137
City Area Code	(833)
Local Phone Number	723-7368
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common Stock 0. 00001 Par Value Per Share [Member]
Title of 12(b) Security	Common Stock, $0.00001 par value per share
Trading Symbol	LUXH
Security Exchange Name	NASDAQ
Series A Cumulative Redeemable Preferred [Member]
Title of 12(b) Security	13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share
Trading Symbol	LUXHP
Security Exchange Name	NASDAQ

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