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Exhibit 10.3
PUT OPTION AGREEMENT
THIS PUT OPTION AGREEMENT ("Agreement") is made and entered into as
of this 25th day of November, 1997 by and between Young America Corporation, a
Minnesota corporation (the "Company") and ▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual resident
of the State of Florida.
WHEREAS, the Company and ▇▇▇▇▇▇▇ are parties to that certain
Recapitalization Agreement (the "Recapitalization Agreement") of even date
herewith between ▇▇▇ ▇. ▇▇▇▇▇▇▇, the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1995 Irrevocable Trust, the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1995 Irrevocable Trust, the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1997
Irrevocable Trust, the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1997 Irrevocable Trust, the ▇▇▇
▇. ▇▇▇▇▇▇▇ 1997 Irrevocable Annuity Trust, and BT Capital Partners, Inc.; and
WHEREAS, the Company and ▇▇▇▇▇▇▇ are parties to that certain
Stockholders' Agreement of even date herewith relating to the 134,400 shares of
the Class A common stock in the Company owned by ▇▇▇▇▇▇▇ (the "Shares"); and
WHEREAS, the Company and ▇▇▇▇▇▇▇ have agreed that ▇▇▇▇▇▇▇ shall have
the right to cause the Company to redeem all or a portion of the Shares at such
time and under such circumstances as are set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Grant of Put Option. At any time after the fifth anniversary of
date of this Agreement, ▇▇▇▇▇▇▇ shall have the right, subject to the prior
exercise by other stockholders of their rights pursuant to Section 6 of the
Stockholders' Agreement of even date herewith between the Company, ▇▇▇▇▇▇▇ and
certain other persons named therein ("Stockholders' Agreement") exercisable by
written notice delivered to the Company (a "Put Notice") to cause the Company,
subject to state law, to redeem all or any portion of the Shares (the "Put
Shares"). The specific number of Shares that shall constitute the Put Shares
shall be at the sole discretion of ▇▇▇▇▇▇▇, and the Company shall be obligated
to redeem the number of Shares specified in the Put Notice; provided, however,
that the Company shall not be obligated to redeem the Put Shares if the Company
is then in default of a payment obligation under any indebtedness for borrowed
money ("Debt") or if such redemption would result in a default under the Debt,
it being acknowledged that the Company shall redeem the Put Shares to the
maximum extent permitted under the Debt and as soon as possible thereunder.
2. Manner of Exercise. The Put Notice shall state (a) the number of
Shares ▇▇▇▇▇▇▇ proposes to cause the Company to redeem, and (b) the proposed
date of the Put Option closing ("Put Option Closing Date"), which date must be
at least sixty
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(60) days after the date the Put Option Notice is given to the Company ("Put
Option Notice Date").
3. Redemption Price. For a thirty (30) day period after the Put
Option Notice Date, the Company and ▇▇▇▇▇▇▇ shall negotiate in good faith to
determine the redemption price of the Put Shares, which shall equal the Fair
Market Value (as hereinafter defined) of such Shares. During such period, the
Company shall permit ▇▇▇▇▇▇▇ and his representatives to have reasonable access
during normal business hours to the Company's accounting records, including data
and information on which the Company's financial statements, balance sheets and
cash flows are based, and to the Company's employees and/or representative. In
the event the Company and ▇▇▇▇▇▇▇ are unable to agree upon the Fair Market Value
of the Put Shares within such period, either party shall have the right to
retain an independent, nationally recognized appraisal firm agreeable to both
parties ("Appraisal Firm") to determine the Fair Market Value of the Put Shares
as of the Put Option Notice Date. In the event the parties fail to agree upon an
appraisal firm within ninety (90) days of the Put Option Notice Date, either
party shall have the right to bring an action at law to have an independent,
nationally recognized appraisal firm appointed by the court. The Appraisal Firm
shall complete its appraisal and deliver a written report thereof, detailing the
determinations made pursuant to this Agreement, to each of ▇▇▇▇▇▇▇ and the
Company as soon as practicable. The parties hereto acknowledge and agree that
such appraisal shall be binding on the parties hereto and shall conclusively
determine the Fair Market Value of the Put Shares. Seventy-five percent (75%) of
the costs and expenses of such appraisal shall be borne by the party whose
proposed appraisal submitted to the Appraisal Firm was further from the final
appraisal made by such Appraisal Firm and 25% of such costs and expenses shall
be borne by the other party. For the purposes of this Agreement, "Fair Market
Value" shall mean the amount at which the Put Shares would change hands between
a willing buyer and a willing seller, each having reasonable knowledge of all
relevant facts and neither being under any compulsion to act, without regard to
any discount for lack of marketability or minority interest associated with the
Put Shares.
4. Payment Terms. The Fair Market Value of the Put Shares shall be
paid by the Company to ▇▇▇▇▇▇▇ in cash on the earlier of (i) fifteen (15) days
after the parties reach agreement regarding the Fair Market Value, or (ii) three
(3) days after delivery of the Appraisal Firm's report regarding the Fair Market
Value of the Put Shares. The closing of any redemption and sale contemplated by
this Agreement shall take place at the principal office of the Company, or such
other place as may be mutually agreed upon by the parties. At the closing,
▇▇▇▇▇▇▇ shall execute and deliver to the Company the share certificates
evidencing the Put Shares, duly endorsed for transfer to Company or accompanied
by stock powers duly endorsed in blank.
5. Notices. All notices, requests or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
mailed first class certified mail postage prepaid addressed as follows: if to
▇▇▇▇▇▇▇,, to ▇▇▇ ▇. ▇▇▇▇▇▇▇, Pier 66 Resort & Marina, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
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Attn: Starlight F-124 (with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ &
Whitney LLP, Pillsbury Center South, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
55402); if to the Company, to Young America Corporation, c/o BT Capital
Partners, Inc., Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(with a copy to ▇'▇▇▇▇▇▇▇▇, Graev & Karabell, LLP, Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ 10112); or to such other address as
may have been furnished in writing to the party giving the notice by the party
to whom notice is to be given.
6. Waiver. The parties hereto may by written agreement (i) extend
the time for or waive or modify the performance of any of the obligations or
other acts of the parties hereto or (ii) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement.
7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in the State of New York and shall be construed without
regard to (i) any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York and
(ii) any presumption or other rule requiring the construction of an agreement
against the party causing it to be drafted.
8. Assignment. In the event ▇▇▇▇▇▇▇ transfers all or any portion of
the Shares to any Affiliate (or such term as defined in the Stockholders'
Agreement), ▇▇▇▇▇▇▇'▇ rights hereunder shall be assigned to any such Affiliate.
9. Termination. This Agreement shall terminate upon a Qualified
Public Offering (as defined in the Stockholders' Agreement); in which event
▇▇▇▇▇▇▇ shall be granted by the Company on terms and subject to limitations
consistent with those set forth in the Registration Rights Agreement entered
into by the Company on the date hereof, one demand registration right and
unlimited piggyback registration rights.
YOUNG AMERICA CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its President
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/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
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