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EXHIBIT 10.2
AMENDMENT AGREEMENT
Amendment Agreement dated as of April 24, 1997, by and between
▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller") and Transworld Home HealthCare, Inc. ("Buyer").
WHEREAS, Buyer and Seller are parties to a certain Stock Purchase
Agreement dated as of June 30, 1994, as amended on June 30, 1994 and May 19,
1995 (the "Agreement"); and
WHEREAS, capitalized terms used herein and not otherwise defined have
the same meaning as set forth in the Agreement; and
WHEREAS, the parties desire to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual agreement set forth
herein, the parties hereto hereby agree as follows:
1. The definition of "Walkaway Date" and "Extended Walkaway Date" are
hereby amended in their entirety to read as follows:
"Walkaway Date" shall mean May 30, 1997 provided, however,
that if the Closing has not occurred by such date for any reason other
than a material breach by Buyer of any of its obligations hereunder,
Buyer shall have the right, in its sole discretion, to extend from time
to time upon notice to the Sellers, the Walkaway Date to a date (the
"Extended Walkaway Date") that is not later than November 28, 1997".
2. Section 1.3 of the Agreement is hereby amended in its entirety to
read as follows:
"1.3. Consideration. subject to the terms and conditions of
this Agreement:
(a) (i) Concurrent with the execution hereof, Buyer shall
deliver to the Escrow Agent (A) the sum of $450,000 and (B) within five business
days following the execution hereof, 145, 455 shares of the Buyer's common stock
(the "Buyer Stock") (clauses (A) and (B) being referred to collectively as the
"Deposit") which Deposit shall be held in escrow pursuant to the Escrow
Agreement in the form of Schedule 1.3(a) hereto.
(ii) At the Closing the Escrow Agent shall deliver
the Deposit to the Seller in accordance with the terms of the Escrow Agreement.
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(b) At the Closing, Buyer shall deliver to the Seller the sum
of $3,550,000 by certified or official bank check drawn on a New York Clearing
House member bank, to the order of Seller or at the option of Seller, by wire
transfer to such accounts as Seller shall advise Buyer of in writing at least
five days prior to the Closing.
3. The form of Employment Agreement attached as Exhibit 6.8 to the
Agreement is hereby superseded in its entirety by the form of Employment
Agreement attached as Exhibit A hereto.
4. Except as amended hereby, the Agreement as heretofore amended or
modified, is hereby ratified, confirmed and approved in all respects.
IN WITNESS WHEREOF, the parties have executed this Amendment
Agreement as of the day and year first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Witness ▇▇▇▇▇▇ ▇▇▇▇▇
Transworld Home HealthCare, Inc.
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Witness
By: /s/ ▇▇▇▇▇▇ ▇. Fine
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Name: ▇▇▇▇▇▇ ▇. Fine
Title: President
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Exhibit A
Schedule 6.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of , 1997, between KWIK
CARE, Ltd., a New York corporation (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Executive")
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to accept such employment, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations and warranties set forth herein, and for other good and valuable
consideration, it is hereby agreed as follows:
1. Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts such employment, upon the terms and
conditions set forth herein.
2. Term. Subject to the provisions of Section 9 hereof, the
Executive's employment under this Agreement shall commence on , 1997 and shall
end on the third anniversary hereof (herein, the "Term").
3. Position and Duties. A. The Executive shall serve as
President of the Company and VIP Health Services, Inc. ("VIP", which together
with the Company, are sometimes referred to herein as the "Companies") and shall
have such other duties, as from time to time may be prescribed by the Chief
Executive Officer, the Chief Operating Officer or the Board of Directors (the
"Board") of Transworld Home HealthCare, Inc. ("Transworld").
B. During the Term, the Executive shall perform and
discharge the duties that may be assigned to him by the Company from time to
time in accordance with this Agreement, and the Executive shall devote his best
talents, efforts and abilities to the performance of his duties hereunder.
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C. During the Term, the Executive shall perform such
duties on a full-time basis and the Executive shall have no other employment and
no other related outside business activities whatsoever; provided, however, that
the Executive shall not be precluded from devoting such time to such personal
affairs as shall not materially interfere with the performance of his duties
hereunder. The Company acknowledges that the Executive is a member of the
Orthodox Jewish Faith and that religious observance will require him to leave
early on many Fridays and to absent himself from the office on certain Jewish
holidays.
4. Compensation. A. For the Executive's services hereunder,
the Company shall pay the Executive annual salary (the "Base Salary") of
$300,000 in year one of the Term; $330,000 during year two of the Term; and
$363,000 during year three of the Term payable in accordance with the customary
payroll practices of the Company.
B. Provided Executive is an employee of the Company,
in addition to the Base Salary, the Executive shall be entitled to a bonus equal
to 50% of the average combined Companies' Pretax Earnings in excess of
$2,250,000 of such Earnings during each year of the Term. By way of
illustration, if the combined excess Pretax Earnings are $250,000 in year one,
$100,000 in year two and $175,000 in year three, then Executive shall be
entitled to a bonus in each year equal to 50% of $175,000, or $87,500. For
purposes hereof, "Pretax Earnings" shall mean income before provision for income
taxes, as reflected on the Companies' statements of income prepared by the
Companies independent certified public accountants in accordance with GAAP
during such periods, but excluding therefrom any extraordinary income or expense
items (determined in accordance with GAAP) and corporate overhead charges from
Transworld and after deducting therefrom amounts paid or accrued with respect to
any Base Salary paid to Executive. In addition, for purposes hereof, in the
event that during any year of the Term, there is a special charge to the income
of the Companies on account of adjustments made by third party payors with
respect to periods prior to the date hereof, such charges shall also be deemed
extraordinary items, and shall not affect the calculation of Pretax Earnings. In
the event that during any year of the Term, there is a rate adjustment with
respect to the Companies' third-party payor billing rates for periods prior to
the date hereof which rates were preliminary at such time and have become final
during the Term and such adjustments result in an increase in Pretax Earnings
during the Term, then the amount of any such increases shall not be deemed an
extraordinary item and shall be included in Pretax Earnings in the year in which
such adjustment was added to the Companies' pretax income. Any bonus to which
Executive shall be entitled shall be paid within 90 days following the
calculation thereof. With respect to the first and second years of the Term, in
the event that as a result of averaging the second and third years an increase
or decrease is required to be made to any bonus paid for the first or second
years, such increase or decrease shall be settled in the second or third years
as the case may be.
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5. Benefit Plans. During the Term, the Company shall provide
to the Executive all fringe benefits then provided, as well as those which the
Company may generally make available to its senior executive employees,
including, without limitation, benefits provided under the Company's pension and
profit-sharing plans (if any), health benefit plans (such as medical and
hospitalization coverage), and insurance plans (such as life, supplemental life,
disability, business travel, accident and accidental death and dismemberment)
(collectively, the "Benefit Plans").
6. Automobile. During the Term, the Company shall provide the
Executive with an automobile allowance of $650 per month in connection with the
use of his automobile in the performance of his duties hereunder.
7. Reimbursement of Expenses. During the Term, the Company
shall pay or reimburse the Executive for all reasonable travel, entertainment
and other business expenses actually incurred or paid by the Executive in the
performance of his duties hereunder upon presentation of expense statements or
vouchers or such other supporting information as the Company may reasonably
require of the Executive.
8. Vacations. The Executive shall be entitled to no less than
four weeks of paid vacation during each year of the Term.
9. Termination. The employment of the Executive may be
terminated prior to the expiration of the Term in the manner described in this
Section 9.
A. Termination by the Company for Good Cause. The
Company shall have the right to terminate the employment of the Executive for
Good Cause (as such term is defined herein) by written notice to the Executive
specifying the particulars of the conduct of the Executive forming the basis for
such termination.
B. Termination by the Executive for Good Reason. The
Executive shall have the right to terminate his employment hereunder for Good
Reason (as such term is defined herein) by written notice to the Company
specifying the grounds constituting such Good Reason.
C. Termination upon Death. The employment of the
Executive hereunder shall terminate immediately upon his death.
D. The Company's Options upon Disability. If the
Executive becomes physically or mentally disabled during the Term so that he is
unable to perform the services required of him pursuant to this Agreement for a
period of three successive months, or an aggregate of three months in any
six-month
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period (the "Disability Period"), the Company shall have the option, in its
discretion, by giving written notice thereof, either to (A) terminate the
Executive's employment hereunder; or (B) continue the employment of the
Executive hereunder upon all the terms and conditions set forth herein except
that for the balance of the Term the Executive shall receive a Base Salary equal
to 50% of the Base Salary then in effect. Regardless of which option the Company
exercises or shall be deemed to have exercised, during the Disability Period,
the Executive shall continue to receive his full compensation and other benefits
provided herein net of any payments received under any disability policy or
program of which the Executive is a beneficiary or recipient.
E. Termination for any other Reason. Any party
purporting to terminate the employment of the Executive hereunder for any reason
not specified in the foregoing provisions of this Section 9 shall give the other
party notice of such termination in writing and shall specify in such notice the
reasons for such termination.
F. Termination Date. Any notice of termination given
pursuant to the provisions of this Agreement shall specify therein the effective
date of such termination (the "Termination Date").
G. Certain Definitions. For purposes of this
Agreement, the following terms shall have the following meanings:
(1) "Good Cause" shall exist if, and only
if, the Executive (a) wilfully or repeatedly fails to perform his obligations
hereunder as provided herein, provided that such Good Cause shall not exist
unless the Company shall first have provided the Executive with written notice
specifying in reasonable detail the factors constituting such failure and such
failure shall not have been cured by the Executive within 30 days after such
notice or such longer period as may reasonably be necessary to accomplish the
cure; (b) has been convicted of any crime which constitutes a felony or
misdemeanor under applicable law or has entered a plea of guilty or NOLO
CONTENDERE with respect thereto; (c) has committed any act which constitutes
fraud or gross negligence under applicable law; (d) is determined by the Board
to be dependant upon alcohol or drugs; and (e) or during the Term, Executive is
determined by the Board to be in violation of the provisions of Section 11 or 12
hereof.
(2) "Good Reason" means the occurrence of
any of the following events:
(a) the assignment to the Executive
of any duties inconsistent in any material respect with the Executive's then
position (including status, offices, titles and reporting relationships),
authority, duties or responsibilities or any other action by the Company which
results in a significant
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diminution in the Executive's position, authority, duties or responsibilities in
either case taken as a whole, excluding for this purpose any isolated,
immaterial and inadvertent action not taken in bad faith and which is remedied
by the Company promptly after receipt of notice thereof given by the Executive;
or
(b) the Company requiring the
Executive to be based at any location other than within 50 miles of the current
executive offices of the Company, except for requirements of temporary travel on
the Company's business;
(3) "Person" means any individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, court or government (or political
subdivision or agency thereof).
10. Obligations of Company on Termination. The Company's
obligations on termination of the Executive's employment shall be as described
in this Section 10.
A. Amount of Severance Payment in Certain Events.
Upon termination of the Executive's employment pursuant to Sections 9(B), the
Company shall pay the Executive any accrued and unpaid bonuses (computed with
respect to the actual period Executive was employed) and unreimbursed expenses
together with a severance payment ("Severance Payment") equal to the product of
(a) the Base Salary then in effect, and (b) the number of years (or portion of a
year, as the case may be) then remaining under this Agreement.
B. Manner in which Severance Payment is to be Made.
The Severance Payment shall be payable as follows: (i) a down payment equal to
20% shall be paid within 30 days after the Termination Date and (ii) the balance
of the Severance Payment shall be paid in 12 consecutive equal monthly
installments commencing on the first day of the second calendar month following
the Termination Date. The obligation of the Company to pay such installments
shall be evidenced by a non-interest bearing promissory note of the Company (the
"Note") made payable to the order of the Executive and dated the date on which
the down payment is due. At its option, at any time and from time to time, the
Company may prepay all or any part of the principal balance of such Note in
multiples of $5,000 without premium or penalty. The Note shall also provide that
upon default in the payment of any installment thereunder, which default is not
cured within thirty (30) days after the due date for payment of same, the holder
of the Note shall be entitled to accelerate all payments due thereunder.
C. Payment Obligations of the Company in case of
Termination for Death, Voluntary Resignation or Good Cause. Upon termination of
the Executive's employment upon death, as a result of the voluntary resignation
of the Executive or for Good Cause, the Company shall have no payment
obligations to the
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Executive, except for the payment of any accrued and unpaid compensation or
reimbursement of any unreimbursed expenses. The Executive agrees that in the
event of his voluntary resignation, he shall provide the Company with not less
than 90 days prior written notice thereof.
D. Continued Medical Coverage. Upon the termination
of the Executive's employment, to the extent permitted by applicable law, the
Company shall continue to provide the Executive, at his cost, with medical and
hospitalization insurance coverage for a period of the longer of: (i) 18 months
from the Termination Date; (ii) the period prescribed by applicable law or (iii)
the period set forth in the applicable Benefit Plans.
11. Trade Secrets; Confidentiality. The Executive recognizes
and acknowledges that, in connection with his employment with the Company, he
has had and will continue to have access to valuable trade secrets and
confidential information of the Companies and Transworld and their affiliates
including, but not limited to, customer lists, business methods and processes,
marketing, promotional, pricing, financial information and data relating to
employees and consultants (collectively, "Confidential Information") and that
such Confidential Information is being made available to the Executive only in
connection with the furtherance of his employment with the Company. The
Executive agrees that during the Term and thereafter, the Executive shall not
disclose any of such Confidential Information to any Person, except that
disclosure of Confidential Information will be permitted: (1) to the Company,
its affiliates and their respective advisors; (2) if such Confidential
Information has previously become available to the public through no fault of
the Executive; (3) if required by any court or governmental agency or body or is
otherwise required by law; (4) if necessary to establish or assert the rights of
the Executive hereunder; or (5) if expressly consented to by the Company.
12. Covenants. A. During the Term and for a period of three
(3) years immediately following the termination of the Executive's employment,
the Executive agrees that he will not engage in or have any financial interest
in any business enterprise in competition with the Companies. For purposes of
this Section 12(a):
(1) A business enterprise in competition
with the Companies shall mean any enterprise which engages in any business as
that conducted by Companies, Transworld or any subsidiary or affiliate during
the twelve months preceding the date of Executive's termination of employment
which operates anywhere within a radius of 100 miles of any office maintained by
the Companies or Transworld as of the date of termination of employment; and
(2) The Executive shall be deemed to be
engaged in or to have a financial interest in such business enterprise if he is
an employee, officer,
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director, trustee, agent, consultant or partner of any Person which is engaged
in such business or if he owns, directly or indirectly, stock or securities
convertible into or exchangeable for stock or otherwise has any equity or
beneficial interest in such Person; provided, however, that the ownership of 5%
or less of the outstanding shares of a class of security, which is regularly
traded on a national securities exchange or quoted in an automated inter-dealer
quotation system, shall not be deemed to be engaging or having a financial
interest in the business of such Person.
B. During the Term and for a period of three (3)
years immediately following the termination of the Executive's employment, the
Executive agrees that he will not directly or indirectly solicit any employee of
the Companies or Transworld or any subsidiary or affiliate thereof or who was an
employee of the Companies or Transworld or any subsidiary or affiliate at any
time within the twelve-month period immediately prior thereto or encourage an
employee or agent of the Companies or Transworld or any subsidiary or affiliate
thereof to terminate such employment or agency relationship for the purposes of
accepting employment with any business enterprise which is in competition with
the Companies or Transworld as such term is defined herein.
C. The Executive acknowledges and agrees that the
covenants set forth in this Section 12 (the "Covenants") are reasonable and
valid in geographical and temporal scope and in all other respects. If any court
determines that any of the Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Covenants shall not thereby be affected and
shall be given full force and effect, without regard to the invalid or
unenforceable parts.
D. If any court determines that any of the Covenants,
or any part thereof, is invalid or unenforceable for any reason, such court
shall have the power to modify such Covenant, or any part thereof, and, in its
modified form, such Covenant shall then be valid and enforceable.
13. Equitable Relief. In the event of a breach or threatened
breach by the Executive of any of the covenants contained in Sections 11 and 12
hereof, the Company shall be entitled to a temporary restraining order, a
preliminary injunction and/or a permanent injunction restraining the Executive
from breaching or continuing to breach any of said covenants. Nothing herein
contained shall be construed as prohibiting the Company from pursuing any other
remedies that may be available to it for such breach or threatened breach,
including the recovering of damages.
14. Severability. Should any provision of this Agreement be
held, by a court of competent jurisdiction, to be invalid or unenforceable, such
invalidity or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each individual provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
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▇▇. Successors and Assigns. A. This Agreement and all rights
under this Agreement are personal to the Executive and shall not be assignable
other than by will or the laws of descent. All of the Executive's rights under
the Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
B. This Agreement shall inure to the benefit of and
be binding upon the Company and Executive and their respective successors and
assigns.
16. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
regard to the conflicts of laws rules thereof.
17. Notices. All notices, requests and demands given to or
made upon the respective parties hereto shall be deemed to have been given or
made three (3) business days after the date of mailing when mailed by registered
or certified mail, postage prepaid, or on the date of delivery if delivered by
hand, or one business day after the date of delivery by Federal Express or
similar overnight delivery service, addressed to the parties at their addresses
set forth below or to such other addresses furnished by notice given in
accordance with this Section 17: (a) if to the Company, to Attention: ▇▇▇▇▇▇ ▇.
Fine, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇; and (b) if to the Executive, to
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
18. Withholding. All payments required to be made by the
Company to the Executive under this Agreement shall be subject to withholding
taxes, social security and other payroll deductions in accordance with the
Company's policies applicable to employees of the Company at the Executive's
level and the provisions of the Benefit Plans.
19. Complete Understanding. This Agreement supersedes any
prior contracts, understandings, discussions and agreements relating to
employment between the Executive and the Company and constitutes the complete
understanding between the parties with respect to the subject matter hereof. No
statement, representation, warranty or covenant has been made by either party
with respect to the subject matter hereof except as expressly set forth herein.
20. Modification; Waiver. A. This Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Company and the Executive or in the case of a
waiver, by the party against whom the waiver is to be effective. Any such waiver
shall be effective only to the extent specifically set forth in such writing.
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B. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
21. Mutual Representations. A. The Executive represents and
warrants to the Company that the execution and delivery of this Agreement and
the fulfillment of the terms hereof (i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound and (ii) do not require the consent of any Person.
B. The Company represents and warrants to the
Executive that this Agreement has been duly authorized, executed and delivered
by the Company and that the fulfillment of the terms hereof (i) will not
constitute a default under or conflict with any agreement or other instrument to
which it is a party or by which it is bound and (ii) do not require the consent
of any Person.
C. Each party hereto warrants and represents to the
other that this Agreement constitutes the valid and binding obligation of such
party enforceable against such party in accordance with its terms.
22. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of this Agreement.
23. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed in its corporate name by one of its officers duly authorized to
enter into and execute this Agreement, and the Executive has manually signed his
name hereto, all as of the day and year first above written.
KWIK CARE, LTD.
By:
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Witness
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Witness ▇▇▇▇▇▇ ▇▇▇▇▇
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