EXHIBIT 10.10
Change of Control Agreement
---------------------------
CHANGE OF CONTROL AGREEMENT
This Agreement dated as of August 25, 1997 is enteredinto by and between
Xxxxxx X. Xxxxx ("Xxxxx") and Avalon Community Services, Inc. ("Avalon")
In consideration of the exchange of (a) all shares of Class B Common Stock of
Avalon held or owned, directly or indirectly, by Xxxxx (the "Class B Common
Stock") and (b) the termination of the Debt Guaranty Agreement dated May 16,
1994, pursuant to which Xxxxx is entitled to receive additional shares of such
Class B Common Stock in connection with the execution of personal guarantees by
Xxxxx on behalf of Avalon (the "Debt Guaranty Agreement") for the promises and
covenants made by Avalon hereby, Xxxxx hereby agrees that all such shares of
Class B Common Stock shall be canceled by Avalon as of the date hereof and that
at the time of such cancellation the Debt Guaranty Agreement shall be terminated
and of no further force and effect.
In connection therewith, Avalon hereby agrees that:
(1) it will take such actions as are necessary to achieve the release of Xxxxx
from all obligations under currently existing guarantees issued by Xxxxx in
connection with the Debt Guaranty Agreement, which action may include the
prepayment or repayment of the indebtedness of Avalon for which such
guarantees were issued;
(2) in the event of a Change of Control (as defined below), Avalon will take
such actions as are necessary to achieve the release of Xxxxx from all
obligations under currently existing guarantees issued by Xxxxx in connection
with the Debt Guaranty Agreement, which action may include the prepayment or
repayment of the indebtedness of Avalon for which such guarantees were issue;
and
(3) Xxxxx shall be indemnified and held harmless by Avalon to the fullest
extent permitted by applicable law, as the same exists or may hereafter be
amended, against all expenses, liability and loss (including reasonable
attorneys' fees, judgments, fines, and amounts paid or to be
paid)(collectively, "Indemnifiable Expenses") actually incurred or suffered by
Xxxxx in connection with any present or future threatened, pending or
contemplated claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (collectively, "Indemnifiable Litigation"), to
which Xxxxx is or was a party or is threatened to be made a party by reason of
the issuance by Xxxxx of existing guarantees pursuant to the Debt Guaranty
Agreement.
For purposes hereof, Change of Control means an event or series of events
[including any tender or exchange offers subject to the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")] as a result of
which (i) any "person" or "group" (as such terms are used in Sections 13(d) or
14(d) of the Exchange Act) acquires "beneficial ownership" (as determined in
accordance with Rule 13d-3 under the Exchange Act), directly or indirectly, of
more than 50% of the total voting power of the outstanding Voting Stock (as
defined below) of Avalon; provided, however, that any such person or group shall
not be deemed to be the beneficial owner of, or to beneficially own, any Voting
Stock tendered in a tender or exchange offer until such Voting Stock is accepted
for purchase or exchange under such tender or exchange offer. For purposes
hereof, Voting Stock means stock of any class or classes (or equivalent
interests) if the holders of the stock of such class or classes (or equivalent
interests) are ordinarily, in the absence of contingencies, entitled to vote for
the election of a majority of the directors (or Persons (as defined herein)
performing similar functions) of the corporation, association or other such
business entity involved, even though the right so to vote has been suspended by
the happening of a contingency. Persons means any individual, corporation,
partnership, trust, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision thereof.
This Agreement and any amendments hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one instrument. This Agreement expresses the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed waived, discharged or terminated
except upon the mutual written agreement of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date set forth above.
AVALON COMMUNITY SERVICES, INC.
\Xxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
\Xxxxxx X. Xxxxx
-------------------------------
XXXXXX X. XXXXX
