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EXHIBIT 10(s)
VALLEY FORGE DENTAL ASSOCIATES, INC.
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
December 31, 1995
Mr. W. Xxxx Xxxxxxx
Vice President of Finance
Valley Forge Dental Associates, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Dear Xxxx:
The undersigned, Valley Forge Dental Associates, Inc., a Delaware
corporation (the "Company"), and you (the "Purchaser"), hereby agree as follows:
1. Authorization and Sale of the Shares. The Company has
authorized the issuance to the Purchaser of and proposes to sell to the
Purchaser pursuant hereto an aggregate of 2,500 shares (collectively the
"Shares" and individually a "Share") of its common stock, $.01 par value (the
"Common Stock"), at a price of $.10 per Share.
2. Purchase of the Shares by the Purchaser. Subject to the terms
and conditions hereof, the Purchaser hereby agrees to purchase the Shares from
the Company in reliance upon its representations and warranties herein
contained, and the Company hereby agrees to sell the Shares to the Purchaser in
reliance upon his representations and warranties herein contained, at an
aggregate purchase price (the "Purchase Price") of $250, in cash.
3. Representations, Warranties, and Agreements of the Company.
The Company represents and warrants to, and agrees with, the Purchaser as
follows:
(a) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
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(b) The Company has duly authorized the execution and delivery of
this Agreement and the issuance and delivery of the Shares and this Agreement
constitutes a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, or other laws affecting generally the enforceability of
creditors' rights and by limitations on the availability of equitable remedies.
The Shares, when issued and delivered in accordance with this Agreement, shall
have been duly issued and shall be validly outstanding, fully paid and
nonassessable shares of the Common Stock.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein shall violate any provision
of the Certificate of Incorporation or By-laws of the Company or any statute,
ordinance, regulation, order, judgment or decree of any court or governmental
agency, or conflict with or result in any breach of any of the terms of,
constitute a default under, or result in the termination of or the creation of
any lien pursuant to the terms of, any contract or agreement to which the
Company is a party or by which the Company or any of its assets is bound.
4. Representations, Warranties, and Agreements of the Purchaser.
The Purchaser hereby represents and warrants to, and agrees with, the Company as
follows:
(a) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein shall conflict with or
result in any breach of any of the terms of, constitute a default under, or
result in the termination of or the creation of any lien pursuant to the terms
of, any contract or agreement to which the Purchaser is a party or by which he
or any of his assets is bound.
(b) (i) The Purchaser understands that by the terms of this
Agreement he is purchasing shares of Common Stock issued and delivered by the
Company without compliance with the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act") or the securities laws of any
state, under and in reliance on exemptions from the registration requirements of
the Securities Act and such laws, and without the approval, disapproval, or
passing on the merits by any regulatory authority; that for purposes of such
exemptions, the Company will rely upon the representations, warranties and
agreements of the Purchaser contained herein; and that such non-compliance with
registration requirements is not permissible unless such
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representations and warranties are correct and such agreements performed.
(ii) The Purchaser understands that the Company is under no
obligation to effect a registration under the Securities Act of the Shares to be
purchased by him hereunder. The Purchaser understands that, under existing rules
of the Securities and Exchange Commission (the "Commission"), he may be unable
to sell any of the Shares except to the extent that the Shares may be sold (A)
in a bona fide private placement to a purchaser who shall be subject to the same
restrictions on sale or (B) subject to the restrictions contained in Rule 144
under the Securities Act.
(iii) As a Vice President of Finance of the Company, the Purchaser
is fully familiar with the business, properties and financial condition of the
Company, and acknowledges that he has been afforded access to such additional
information concerning the Company as he considers necessary or appropriate to
make an informed investment decision. The Purchaser is an "accredited investor"
as such term is defined in Rule 501 under the Securities Act.
(iv) The Purchaser is a sophisticated investor familiar with the
type of risks inherent in the acquisition of securities such as the Common
Stock, and his financial position is such that he can afford to retain the
Shares for an indefinite period of time without realizing any direct or indirect
cash return on his investment.
(v) The Purchaser is acquiring the Shares pursuant to this
Agreement for his own account and not with a view to or for sale in connection
with the distribution thereof within the meaning of the Securities Act. The
Purchaser shall not effect a distribution of any Shares until either (A) he has
received the opinion of counsel for the Company that registration under the
Securities Act is not required or (B) a registration statement under the
Securities Act covering such Shares and the disposition thereof has become
effective under the Securities Act, and the Purchaser agrees that the
certificates evidencing the Shares may bear a restrictive legend to the
foregoing effect.
5. Restrictions on Transferability of the Shares. The Purchaser
hereby agrees that the Purchaser shall not sell, assign, transfer, gift, devise,
bequeath, deliver, pledge, hypothecate or otherwise dispose of any of the
Shares, except as provided for in this Section 5. Any
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disposition or purported disposition of Shares in violation of this Agreement
shall be null and void and shall not be recorded on the books of the Company.
Notwithstanding the foregoing:
(a) Disposition of Vested Shares and Shares which are not Vested
Shares. Shares which are "vested" in accordance with the following schedule (the
"Vested Shares") may be disposed of in the manner set forth in Subsections (b)
or (d) of this Section 5.
Cumulative percentage of
Shares which are Vested Shares
Prior to October 1,
1996................................................... 0%
October 1, 1996 to
September 30, 1997..................................... 20
October 1, 1997 to
September 30, 1998..................................... 40
October 1, 1998 to
September 30, 1999..................................... 60
October 1, 1999 to
September 30, 2000..................................... 80
After October 1, 2000.................................. 100
Shares which are not Vested Shares (the "Unvested Shares") may be
disposed of only in the manner set forth in Subsections (c) or (d) of this
Section 5.
Notwithstanding the foregoing, all Shares shall become Vested Shares
upon the occurrence of either of the following events:
(i) the Purchaser's completion of one year of continuous
employment as chief financial officer of a portfolio company (the "FMC Portfolio
Company"), other than the Company, established by and capitalized by investment
partnerships managed by Xxxxxx Management Company; or
(ii) termination of the Purchaser's employment by the Company or
the FMC Portfolio Company, if applicable, unless such termination is by the
Company or the FMC Portfolio Company for Due Cause (as hereinafter defined). For
purposes hereof, "Due Cause" shall mean (1) that the Purchaser, in carrying out
the Purchaser's employment
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duties, has been guilty of (A) willful or gross neglect or (B) willful or gross
misconduct, resulting in either case in harm to the Company or the FMC Portfolio
Company, if applicable; or (2) that the Purchaser has been charged with (A) a
felony or (B) any crime or offense involving moral turpitude; or (3) a material
breach by the Purchaser of any non-competition or confidentiality agreements
between the Purchaser and the Company or the FMC Portfolio Company, if
applicable. It is specifically understood that Shares shall not become Vested
Shares pursuant to this clause (ii) if the Purchaser's employment is terminated
by the Company for Due Cause, by reason of the Purchaser's resignation, death or
disability or by reason of the Purchaser's transfer of employment from the
Company to the FMC Portfolio Company.
(b) Vested Shares.
(i) Vested Shares held by the Purchaser may be transferred by the
Purchaser provided that the Purchaser first complies with the right to purchase
set forth in this Subsection (b). The Company shall have a right to purchase any
Vested Shares proposed to be sold by the Purchaser on the terms set forth in
this Subsection (b).
(ii) If the Purchaser wishes to dispose of Vested Shares, the
Purchaser shall first obtain a bona fide written offer (the "Offer") for the
purchase of the Vested Shares which he wishes to dispose of. Such Offer shall be
for cash or promissory notes only. Promptly upon receipt of the Offer, the
Purchaser shall give notice to the Company (the "Offer Notice") of his intent to
dispose of Vested Shares, which Offer Notice shall specify the name of the
proposed purchaser, the number of Vested Shares (the "Offered Securities") the
Purchaser desires to dispose of and the price and terms of payment of such
proposed disposition. Upon receipt of the Offer Notice, the Company shall have
the right to purchase all (but not less than all) of the Offered Securities at
the price and on the terms of the Offer. Such right must be exercised by the
Company by giving notice to that effect to the Purchaser within a period of 20
days after the date of receipt of the Offer Notice (any such notice of the
exercise of such right being herein referred to as an "Acceptance Notice").
(iii) In the event of the exercise by the Company of its right to
purchase pursuant to this Subsection (b), the Acceptance Notice shall specify
the time and date for purchase of the Offered Securities (the "Share Closing")
which shall be not more than 30 days after the expiration of the 20-day period
set forth in clause (b)(ii). The Purchaser shall deliver to the Company at the
Share Closing,
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which shall be held at the business headquarters of the Company, the Offered
Securities in due and proper form for transfer, against payment of the purchase
price by the Company.
(iv) If the Company shall fail or decline to agree to purchase the
Offered Securities within the 20-day period provided for in clause (b)(ii), then
the Purchaser shall have the right and privilege to sell all (but not less than
all) the Offered Securities, within 60 days after the expiration of such 20-day
period, to the bona fide purchaser named in the Offer Notice, at the price and
on terms of payment specified in the Offer. If, for any reason, the Offered
Securities are not sold within such 60-day period, the Offered Securities shall
again become subject to the terms and conditions of this Agreement.
(v) If, as of the Share Closing, any amount of principal of and
interest on any indebtedness of the Purchaser to the Company shall then be
outstanding, payment of the purchase price for the Offered Securities at the
Closing shall be made, at the Company's option, by a credit against such
indebtedness to the extent of the principal thereof and interest thereon then
outstanding (whether or not such principal and interest is then due and
payable).
(vi) The Company's right to purchase set forth in this Subsection
(b) shall terminate upon the occurrence of the closing of the initial sale by
the Company to the public of shares of the Common Stock pursuant to a
registration statement filed under the Securities Act (other than a registration
statement covering securities of the Company to be issued pursuant to an
employee benefit plan).
(c) Termination of the Purchaser's Employment.
(i) Except as provided in the next to last sentence of this clause
(c)(i), if the Purchaser shall cease to be employed by the Company for any
reason whatsoever or shall cease to be employed as Chief Financial Officer of
the FMC Portfolio Company for any reason whatsoever, the Company shall have the
right (but not the obligation) to purchase from the Purchaser all or any portion
of the Unvested Shares owned by the Purchaser at the time the Purchaser ceases
to be employed by the Company or the FMC Portfolio Company, as the case may be.
Such right to purchase shall be exercisable by written notice to that effect
given by the Company to the Purchaser within 60 days after the Purchaser has
ceased to be employed by the Company or the FMC Portfolio Company, as the case
may be, as aforesaid. Upon the giving of such written notice, the Purchaser
shall for
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all purposes cease to be a stockholder of the Company as to the Unvested Shares
covered by such notice and shall have no rights against the Company or any other
person in respect of such Unvested Shares except the right to receive payment
for such Unvested Shares in accordance herewith. The Company's right to purchase
set forth herein shall not apply in the event that (1) the Purchaser shall cease
to be employed by the Company or as Chief Financial Officer of the FMC Portfolio
Company, as the case may be, because his employment has been terminated by the
Company or the FMC Portfolio Company, if applicable, unless such termination is
for Due Cause or (2) the Purchaser shall cease to be employed by the Company due
to his acceptance of a position as Chief Financial Officer of the FMC Portfolio
Company. Notwithstanding the provisions of Subsection (a) of this Section 5,
Unvested Shares not so purchased by the Company shall upon the expiration of
such 60-day period become Vested Shares; provided, however, that if the
Purchaser shall cease to be employed by the Company upon acceptance of a
position as Chief Financial Officer of the FMC Portfolio Company, then the
Unvested Shares shall continue to be Unvested Shares and shall vest in
accordance with Subsection (a) of this Section 5.
(ii) At the time and date specified in the notice given by the
Company referred to in clause (c)(i), which date shall in no event be more than
15 days after the expiration of the 60-day period for the exercise of the right
to purchase set forth therein, the Purchaser shall deliver to the Company, at
the business headquarters of the Company, the Unvested Shares to be sold by the
Purchaser in due and proper form for transfer, against payment by the Company of
the purchase price therefor, as determined in accordance with clause (c)(iv).
(iii) If at the time of payment of the purchase price referred to in
clause (c)(ii), any amount of principal of or interest on any indebtedness of
the Purchaser to the Company shall be outstanding, payment of the purchase price
for the Unvested Shares shall be made, at the Company's option, as a credit
against such indebtedness to the extent of the principal thereof and interest
thereon then outstanding (whether or not such principal and interest is then due
and payable).
(iv) The per Share purchase price for the Unvested Shares payable
by the Company pursuant to clause (c)(ii) shall be $.10. The number of Unvested
Shares to be purchased and the per Share purchase price pursuant to this clause
(c)(iv) shall be appropriately adjusted by the Board of Directors of the Company
to reflect any subdivision or
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combination of the Common Stock of the Company or any stock dividend or like
event.
(d) Disposition to Family Members. Shares held by the Purchaser
may be transferred by the Purchaser to or for the benefit of the Purchaser or a
member of his immediate family. For the purpose of this Agreement, the term
"immediate family" of the Purchaser shall mean his spouse and children (and the
direct lineal descendants of his children). It shall be a condition to the
validity of any transfer of Shares permitted by the provisions of this
Subsection (d) that the transferee shall execute a copy of this Agreement, shall
hold such Shares subject to the provisions of this Agreement, and shall make no
further transfer of such Shares, except in compliance with the terms and
conditions of this Agreement.
6. Voting Agreement. (a) Except as hereinafter set forth, the
Purchaser agrees that, subject to the laws of the State of Delaware and the
terms of this Agreement, from the date of this Agreement until December 1, 2005
the Purchaser will vote all shares of Common Stock owned by the Purchaser in
favor of a Board of Directors which shall include Xxxx X. Xxxxxx and such other
persons designated by Xxxx X. Xxxxxx as shall together with Xxxx X. Xxxxxx
constitute a majority of such members.
(b) Notwithstanding any of the other terms or conditions set forth
in this Agreement, the parties hereto agree that in the event that the Company
or any stockholder of the Company shall sell any securities of the Company to
the public in a registered public offering (other than pursuant to a
registration statement on Form S-8) or pursuant to the exemption from
registration contained in Regulation A under the Securities Act, the voting
agreement set forth in this Section 6 shall terminate.
7. Come Along/Take Along.
(a) (i) In the event that Business Development Capital Limited
Partnership-III, a Massachusetts limited partnership ("BDC-III"), Abbingdon
Venture Partners Limited Partnership, a Connecticut limited partnership
("Abbingdon-I"), Abbingdon Venture Partners Limited Partnership-II, a Delaware
limited partnership ("Abbingdon-II") and Abbingdon Venture Partners Limited
Partnership-III, a Delaware limited partnership ("Abbingdon-III" and together
with BDC-III, Abbingdon-I and Abbingdon-II, the "Partnerships"), propose to
transfer substantially all of the shares of the Common Stock held by them (a
"Sale of Securities") other than to the public for
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cash pursuant to a registration statement filed under the Securities Act, then
the following provisions of this Section 7 shall apply.
(ii) The Partnerships shall permit the Purchaser, or cause the
Purchaser to be permitted, to sell the same proportionate number of shares of
the Common Stock held by the Purchaser as the Partnerships shall sell of the
shares of the Common Stock held by the Partnerships, for the same consideration
and otherwise on the same terms and conditions to be received by the
Partnerships in the Sale of Securities.
(iii) The Partnerships shall have the right to request the Purchaser
to sell or cause to be sold the number of shares of the Common Stock held by the
Purchaser which bears the same proportion to the number of shares of the Common
Stock then held by the Purchaser as the number of shares of the Common Stock
being sold by the Partnerships bears to the total number of shares of the Common
Stock owned by the Partnerships (a "Purchaser Request").
(iv) Upon receipt by the Purchaser of a Purchaser Request, the
Purchaser will sell or will cause to be sold the appropriate number of shares of
the Common Stock held by the Purchaser for the consideration and otherwise on
the same terms and conditions received by the Partnerships.
(b) The obligations of the Partnerships under Section 7(a) hereof
to afford the Purchaser, or cause the Purchaser to be afforded, the rights
referred to therein will be discharged if the Purchaser is given written notice
which allows the Purchaser ten business days to exercise such rights (by written
reply addressed to such person as may be designated in the notice, and if
requested in such notice, sent by registered mail, return receipt requested),
and within such ten business day period the Purchaser has not given notice of
exercise of such rights.
(c) All rights and obligations created by this Section 7 shall
terminate upon the earlier to occur of (i) the written agreement of the parties
hereto, or (ii) the date on which a registration statement (other than on Form
S-8 or the successor to such Form) covering an underwritten public offering of
the Company's Common Stock for cash is declared effective by the Commission,
provided that this Agreement shall be reinstated if such public offering is not
consummated within 20 days after such effective date.
8. The Closing. As soon as practicable after the execution and
delivery of this Agreement, the Purchaser
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shall cause to be delivered to the Company a check or checks payable to the
order of the Company in the amount of $250 in payment of the Purchase Price.
Promptly upon receipt of such check or checks, the Company shall deliver to the
Purchaser a stock certificate registered in the name of the Purchaser and
representing the Shares.
9. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase the Shares pursuant hereto are subject,
at his option, to the accuracy of the representations and warranties of the
Company contained in Section 3.
10. Conditions to the Obligations of the Company. The obligations
of the Company to sell the Shares pursuant hereto are subject, at its option, to
the accuracy of the representations and warranties of the Purchaser contained in
Section 4.
11. Expenses. Each of the parties hereto shall pay its own
expenses in connection with the preparation, execution and delivery of this
Agreement.
12. Notice. Any notice under this Agreement shall be in writing
and delivered personally or sent by certified mail, return receipt requested,
addressed, as the case may be, (i) to the Company at its address set forth at
the head of this Agreement or such other address as may hereafter be designated
by the Company by notice to the Purchaser in the manner provided herein; and
(ii) to the Purchaser at his address set forth at the head of this Agreement or
such other address as may hereafter be designated by the Purchaser by notice to
the Company in the manner provided herein. All notices personally delivered
shall be deemed to have been given when delivered and all notices sent by mail
shall be deemed to have been given three business days after mailing.
13. Successors. The terms, covenants and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, legal representatives, successors, permitted
transferees and assigns.
14. Applicable 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 entirely within such State.
15. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto, and no
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modifications of or amendments to this Agreement shall be binding on the parties
hereto unless in writing and signed by them.
16. Integration. This Agreement supersedes all prior
understandings, negotiations, and agreements relating to the subject matter
hereof.
17. Severability. If any provision herein contained shall be held
to be illegal or unenforceable, such holding shall not affect the validity or
enforceability of the other provisions of this Agreement.
18. Reorganization, Etc. The provisions of this Agreement shall
apply mutatis mutandis to any shares or other securities resulting from any
stock split or reverse split, stock dividend, reclassification, subdivision,
consolidation or reorganization of any shares or other securities of the
Company, to any shares or other securities resulting from any recapitalization,
consolidation, merger or reorganization of the Company and to any shares or
other securities of the Company or any successor company or of any parent of
such successor company which may be received by the Purchaser by virtue of his
ownership of any shares of Common Stock of the Company.
19. Captions. The captions appearing herein are for the
convenience of the parties only and shall not be construed to affect the meaning
of the provisions of this Agreement.
* * *
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If you are in agreement with the foregoing, please execute and deliver
to the undersigned the enclosed counterpart of this Agreement, whereupon this
Agreement shall become a binding agreement between us.
Very truly yours,
VALLEY FORGE DENTAL ASSOCIATES, INC.
By /s/ Xxxxxxx X. Xxxx
------------------------------------
Accepted and agreed to as
aforesaid:
/s/ W. Xxxx Xxxxxxx
----------------------------------
W. Xxxx Xxxxxxx
The undersigned are executing
this Agreement to indicate
their agreement to Section 7
hereof:
BUSINESS DEVELOPMENT CAPITAL
LIMITED PARTNERSHIP-III
By: BDC-III Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
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ABBINGDON VENTURE PARTNERS
LIMITED PARTNERSHIP
By: BDC-III Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
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ABBINGDON VENTURE PARTNERS
LIMITED PARTNERSHIP-II
By: Abbingdon-II Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
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ABBINGDON VENTURE PARTNERS
LIMITED PARTNERSHIP-III
By: Abbingdon-II Partners, general
partner
By /s/ Xxxxxxx X. Xxxx
-------------------------------
