EXHIBIT 99.4
ROSEBUD HOLDINGS, LLC
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
June 11, 1998
Xxxxxxxx Xxxxxxx, Esq.
Menlo Acquisition Corp.
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Re: Letter Agreement Concerning Stock
Dear Xxxxx:
This letter is intended to memorialize our agreement concerning the
transfer of common stock of Menlo Acquisition Corporation ("Menlo") from Rosebud
Holdings, LLC ("Rosebud") to you.
Under the Plan of Reorganization of Menlo dated May 19, 1998 (the "Plan")
presently being considered by the U.S. Bankruptcy Court, Northern District of
California (Case No. 96-41107-N), Rosebud would receive 4,990,000 shares of
Menlo representing 94.8% of the outstanding common stock of Menlo (the "Rosebud
Allotment"). In recognition of your assistance and counsel respecting the Plan
of Reorganization of Menlo and to further induce you to enter into a long term
employment agreement with Menlo, Rosebud has agreed that upon the final
confirmation of the Plan and issuance to Rosebud of the Rosebud Allotment,
Rosebud will transfer to you share certificates representing five percent (5%)
of the Rosebud Allotment or 249,500 shares of Menlo (the "Shares").
Rosebud further agrees to deliver to you share certificates representing an
additional five percent (5%) of the Rosebud Allotment or 249,500 shares of Menlo
(the "Additional Shares"). The transfer of the Additional Shares shall be
governed by the terms of this letter agreement. The Additional Shares shall be
represented by five (5) certificates each in the amount of 49,900 shares of
Menlo and marked with a legend indicating that the transfer of the shares
represented by the certificate is restricted by the terms of this letter
agreement. On each anniversary of your employment with Menlo you shall be
entitled to have the transfer restriction removed from one (1) of the restricted
certificates such that by the fifth anniversary of your employment with Menlo,
all of the Additional Shares shall be unrestricted. In the event you terminate
from employment from Menlo prior to your fifth anniversary of employment with
Menlo, you shall forthwith return to Rosebud share certificates that remain
restricted, duly endorsed for transfer to Rosebud. By way of example, if you
terminate employment with Menlo after 2-1/2 years of employment, you would be
entitled to retain two (2) certificates representing 99,800 of the Additional
Shares and would be obligated to return the three (3) remaining certificates
representing 149,700 of the Additional Shares, duly endorsed for transfer to
Rosebud.
Notwithstanding the foregoing, it shall be a condition to Rosebud's
obligation to deliver the Shares and the Additional Shares, that you deliver to
Rosebud such written representations, acknowledgments, and agreements with
respect to such Shares and Additional Shares in form and substance satisfactory
to Rosebud's counsel, that you are acquiring the Shares and Additional Shares,
for your own account, for investment only and not with a view to distribution
and that you will not make any sale, transfer or other disposition of the Shares
or the Additional Shares, as the case may be, except (i) pursuant to the
registration thereof under the Securities Act of 1933 and applicable blue sky
laws, (ii) pursuant to an opinion of counsel satisfactory in form and substance
to counsel for Rosebud that said sale, transfer or other disposition may be made
without registration, or (iii) pursuant to a "no-action" letter from the
Securities and Exchange Commission and appropriate state securities commission.
You also acknowledge that any transfer of the Shares and Additional Shares may
be restricted by Rule 144 restrictions on insider sales.
We further agree that in the event you violate this letter agreement,
Rosebud shall have the right to have the terms and provisions of this agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach will cause irreparable injury to
Rosebud and that money damages will not provide an adequate remedy to Rosebud.
This letter agreement contains our entire agreement with respect to the
Shares and Additional Shares and shall be governed and continued in accordance
with the laws of the State of New Jersey. This letter agreement is contingent
upon final approval of the Plan in its present form by the Bankruptcy Court.
If you are in agreement with the above terms, I would ask that you sign
below and return a copy of this letter to me.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxxxxx
Agreed and Accepted:
/s/ Xxxxxxxx Xxxxxxx
