November 13, 1996
W. Xxxxx Xxxxx
000 0xx Xxxxxx
Xxxx Xxxxx, XX 00000
Dear Xx. Xxxxx:
Reference is made to the Employment Agreement between Health Management,
Inc. ("HMI") and W. Xxxxx Xxxxx ("Xxxxx") entered into as of May 1, 1996 (the
"Employment Agreement").
Reference also is made to the merger (the "Merger") and other transactions
contemplated by (i) the Merger Agreement dated as of the date hereof between
HMI, Transworld Home HealthCare, Inc. ("Transworld") and a wholly-owned
subsidiary of Transworld, (ii) the Stock Purchase Agreement (the "Stock Purchase
Agreement") dated the date hereof between HMI and Transworld and (iii) the Debt
Purchase Agreement dated the date hereof between Transworld and HMI's senior
lenders.
Xxxxx hereby agrees to continue to serve as President and Chief Executive
Officer of HMI through the effective date of the Merger. In consideration
thereof, (i) upon the closing under the Stock Purchase Agreement, HMI shall pay
to Xxxxx $50,000 by check and (ii) assuming consummation of the Merger, on June
30, 1997, HMI shall pay to Xxxxx $50,000 by check. If for any reason Xxxxx'x
employment with HMI is terminated by HMI at any time, either prior to, on or
after the effective date of the Merger, or, if the Merger occurs, and Xxxxx
thereafter voluntarily elects to terminate his employment with HMI at any time
on or after the effective date of the Merger, HMI shall continue to pay Xxxxx an
amount equal to Xxxxx'x base salary through June 30, 1998 (such amounts to be in
lieu of and not in addition to other amounts payable under the Employment
Agreement), payable in periodic installments in accordance with HMI's regular
payroll practices (it being understood that Xxxxx shall have no obligation to
seek or accept other work during this period and his acceptance of other work
shall not cause his payments to be reduced). Any payments to which Xxxxx is
entitled hereunder shall be subject to withholding, social security, payroll and
other applicable taxes and deductions. If the Merger occurs, after termination
of Xxxxx'x employment the provisions of paragraph 18(a)(1) of the Employment
Agreement shall be deemed null and void and shall not be enforceable against
Xxxxx.
The employment situs provisions as set forth in paragraph 3 of the
Employment Agreement shall not be changed. Transworld and HMI shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all
W. Xxxxx Xxxxx Page 2
or substantially all of the business and/or assets of Transworld or HMI to
expressly assume and agree to perform its obligations under this Agreement.
Except as set forth above, the Employment Agreement shall remain in full
force and effect.
Very truly yours,
Health Management, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Chief Operating Officer
Accepted and agreed to:
W. Xxxxx Xxxxx
/s/ W. Xxxxx Xxxxx
W. Xxxxx Xxxxx Page 3
Guaranty
Transworld agrees that if the Merger occurs, Transworld will guarantee the
payment of all monies due or that may become due to Xxxxx from HMI hereunder.
Transworld Home HealthCare, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
