<PAGE> 1
SCHEDULE 13D
(RULE 13d-101)
Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Superior Consultant Holdings Corporation
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01
--------------------------------------------------------------------------------
(Title of Class of Securities)
868146101
--------------------------------------------------------------------------------
(CUSIP Number)
Susan M. Synor
Superior Consultant Holdings Corporation
4000 Town Center
Suite 1100
Southfield, Michigan 48075
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 31, 2000
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
Check the following box if a fee is being paid with the statement. / /
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 868146101 13D Page 2 of 14 Pages
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1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Ronald V. Aprahamian
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
See Item 2 below (b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
SC, PF
See Item 3 below
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
345,700
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
3,000
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
345,700
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
3,000
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
348,700
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
2
<PAGE> 3
CUSIP NO. 868146101 13D Page 3 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Richard D. Helppie, Jr.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
See Item 2 below (b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
See Item 3 below
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,303,224
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
3,303,224
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,303,224
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
3
<PAGE> 4
CUSIP NO. 868146101 13D Page 4 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
George S. Huntzinger
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
See Item 2 below (b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
SC, PF
See Item 3 below
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
204,200
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
4,700
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
204,200
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
4,700
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
208,900
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
4
<PAGE> 5
CUSIP NO. 868146101 13D Page 5 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Charles O. Bracken
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
See Item 2 below (b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
SC, PF
See Item 3 below
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
433,178
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
433,178
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
433,178
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
5
<PAGE> 6
CUSIP NO. 868146101 13D Page 6 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Steven H. Smith
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
See Item 2 Below (b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
SC, PF
See Item 3 below
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
207,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
207,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
207,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
6
<PAGE> 7
CUSIP No. 868146101 Page 7 of 14 Pages
ITEM 1 - SECURITY AND ISSUER
This Schedule 13D relates to shares of Common Stock, par value $0.01 per share
(the "Common Stock"), of Superior Consultant Holdings Corporation, a Delaware
corporation (the "Issuer"). The principal executive office and mailing address
of the Issuer is 4000 Town Center, Suite 1100, Southfield, Michigan 48075.
ITEM 2 - IDENTITY AND BACKGROUND
This Schedule 13D is being filed by Ronald V. Aprahamian ("Aprahamian"), Richard
D. Helppie, Jr. ("Helppie"), George S. Huntzinger ("Huntzinger"), Charles O.
Bracken ("Bracken") and Steven H. Smith ("Smith", and collectively with Helppie,
Aprahamian, Huntzinger and Bracken, the "Reporting Persons"). The principal
business address for each of the Reporting Persons is c/o Superior Consultant
Holdings Corporation, 4000 Town Center, Suite 1100, Southfield, Michigan 48075.
Aprahamian is a director and is Chairman of the Issuer, Helppie is principally
employed as the Chief Executive Officer and is a director of the Issuer,
Huntzinger is principally employed as President and Chief Operating Officer of
the Issuer, and Bracken is a director of the Issuer and Bracken and Smith are
principally employed as Executive Vice Presidents of the Issuer. Each of the
Reporting Persons is a citizen of the United States.
None of the Reporting Persons has, during the past five years, been convicted of
any criminal proceeding (excluding traffic violations or similar misdemeanors),
nor been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
The Reporting Persons are all either officers and/or directors of the Issuer.
The Reporting Persons have jointly filed this Schedule 13D because they may be
deemed to constitute a "group" within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934 (the "1934 Act") because they have agreed, among
themselves, to purchase additional shares of Common Stock from time to time in
open market transactions. None of the Reporting Persons, however, has any
agreement, arrangement or understanding to act together with respect to the
voting and/or disposition of any shares that any of them now beneficially own or
may hereafter acquire.
ITEM 3 - SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
A substantial majority of the shares currently held by each Reporting Person
were issued to such Reporting Person in connection with his service to the
Issuer. In addition, a substantial majority of the shares held by Helppie and
Bracken were issued to them prior to the time that the Common Stock was
initially registered under the 1934 Act.
Except as described below, all shares beneficially owned by each Reporting
Person were purchased with personal funds of such Reporting Person.
In April 1995, prior to the time that the Common Stock was initially registered
under the 1934 Act, Bracken purchased his shares of Common Stock directly from
the Issuer with the proceeds of a $500,000 loan from the Issuer, evidenced by a
term promissory note bearing interest at
7
<PAGE> 8
CUSIP No. 868146101 Page 8 of 14 Pages
7.71% per annum. The note provides for equal annual payments of principal and
interest of $50,000, payable on December 31 of each year beginning December 31,
1995 with the entire unpaid principal balance due on December 31, 2015. At the
option of the Issuer, the entire outstanding indebtedness under the note may be
accelerated in the event that Bracken's employment with the Issuer is
terminated. The term promissory note is attached hereto as Exhibit A and is
incorporated herein by reference.
Each of Aprahamian, Huntzinger and Smith purchased from the Issuer 200,000
shares of Common Stock (the "Shares") at the price of $1.5377 per share pursuant
to Subscription and Securities Purchase Agreements dated as of October 11, 2000
(the "Purchase Agreement") by and between each of Aprahamian, Huntzinger and
Smith and the Issuer. Of the total purchase price of $307,540 paid by each of
Aprahamian, Huntzinger and Smith, each paid $2,000 in cash from personal funds
and executed and delivered a Promissory Note (the "Promissory Note") to the
Issuer in the principal amount of $305,540, with interest accruing annually at
the rate of 9.5%. The principal and accrued and unpaid interest is payable upon
the first to occur of the following: (i) termination of the borrower's
employment with the Issuer if such termination occurs on or before October 11,
2001; (ii) October 11, 2002; or (iii) a Change of Control of the Issuer, as
defined in the Purchase Agreement. Each Promissory Note is secured by the Shares
under a Pledge Agreement dated as of October 11, 2000 (the "Pledge Agreement")
by and between each of Aprahamian, Huntzinger and Smith and the Issuer.
Under the Purchase Agreement, each of Aprahamian, Huntzinger and Smith may not
sell, transfer, convey, exchange, give, assign, pledge, encumber or otherwise
dispose of all or a portion of any interest in the Shares until the passage of
the time period specified below:
<TABLE>
<CAPTION>
Number of Shares Date Restrictions Lapse
---------------- -----------------------
<S> <C> <C>
50,000 January 11, 2001
50,000 April 11, 2001
50,000 July 11, 2001
50,000 October 11, 2001
</TABLE>
The Purchase Agreement, Promissory Note and Pledge Agreement for each of
Aprahamian, Huntzinger and Smith are attached hereto as Exhibits B - J and are
incorporated herein by reference.
ITEM 4 - PURPOSE OF TRANSACTION
Each Reporting Person has acquired his respective shares of Common Stock of the
Issuer for investment. Each of the Reporting Persons, however, believes that the
Common Stock is currently undervalued in the marketplace. In connection with the
recently announced appointment of Aprahamian as the Chairman of the Board of
Directors and other executive changes at the Issuer, the Reporting Persons have
agreed as of October 31, 2000 to acquire in open market transactions additional
shares of Common Stock from time to time if the per share
8
<PAGE> 9
CUSIP No. 868146101 Page 9 of 14 Pages
price of the Common Stock remains at an attractive price level. Although
additional purchases by the Reporting Persons will be dependent upon market
prices and other factors, the Reporting Persons (based upon the current market
price of the common stock) do not currently intend to acquire additional shares
which would result in the Reporting Persons owning in the aggregate a majority
of the outstanding shares of Common Stock. In this regard, the Reporting Persons
have enlisted a single broker-dealer to effect such purchases from time to time
and to have agreed to allocate any shares purchased among them for their
respective individual accounts in the aggregate based upon the following
approximate percentage allocation: Aprahamian (37%), Helppie (37%), Huntzinger
(8%), Bracken (4%) and Smith (14%). Aprahamian has been authorized by the
Reporting Persons to make the determination whether purchases should be made.
The Reporting Persons, however, do not have any agreement, arrangement or
understanding to act together with respect to the voting and/or disposition of
any shares that any of them beneficially own or may hereafter acquire.
Except as noted above, the Reporting Persons do not have any plans or proposals
which relate to or would result in any extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving the Issuer or any of its
subsidiaries; a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries; any change in the present board of directors or
management of the Issuer; any material change in the present capitalization or
dividend policy of the Issuer; any other material change in the Issuer's
business or corporate structure; changes in the Issuer's charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person; causing the Common Stock of
the Issuer to be delisted from the Nasdaq Stock Market; causing the Common Stock
of the Issuer to become eligible for termination of registration pursuant to
Section 12(g)(4) of the 1934 Act; or any action similar to any of those
enumerated above; but each Reporting Person reserves the right, acting jointly
or individually, to propose or undertake or participate in any of the foregoing
actions in the future.
ITEM 5 - INTEREST IN SECURITIES OF THE ISSUER
(a) According to the Issuer's transfer agent, there were 10,389,846 shares of
Common Stock issued and outstanding as of September 30, 2000. Based on such
information, as of the date hereof, after taking into account the transactions
described in Item 5(c) below, the Reporting Persons beneficially own in the
aggregate 4,501,002 shares of Common Stock which represents approximately 40.1%
of the outstanding shares of Common Stock. Individually, each of the Reporting
Persons beneficially owns the following shares: (i) Aprahamian beneficially owns
348,700 shares, which represent 3.2% of the outstanding shares of Common Stock;
(ii) Helppie beneficially owns 3,303,224 shares, which represent 29.8% of the
outstanding shares of Common Stock; (iii) Huntzinger beneficially owns 208,900
shares, which represent 1.9% of the outstanding shares of Common Stock; (iv)
Bracken beneficially owns 433,178 shares, which represent 3.9% of the
outstanding shares of Common Stock; and (v) Smith beneficially owns 207,000
shares, which represent 1.9% of the outstanding shares of Common Stock. The
number of shares beneficially owned by Helppie includes 110,000 shares issuable
upon exercise of options currently exercisable or exercisable within 60 days
from the date hereof. The number of shares beneficially owned by Bracken
includes 115,000 shares issuable upon exercise of options currently
exercisable or exercisable within 60 days of the date hereof.
9
<PAGE> 10
CUSIP No. 868146101 Page 10 of 14 Pages
(b) Each of Helppie, Bracken and Smith possesses sole voting power and sole
dispositive power with respect to all of their shares. Aprahamian possesses sole
voting power and sole dispositive power with respect to 345,700 shares and
shares voting power and dispositive power with respect to 3,000 shares.
Aprahamian shares voting and dispositive power with respect to 3,000 shares with
his mother, Ms. Polly Mary Aprahamian, for which he serves as a trustee under a
trust established for her benefit. Ms. Aprahamian, who is retired, resides at
6631 Westwood Court, West Bloomfield, Michigan 48322. Huntzinger possesses sole
voting power and sole dispositive power with respect to 204,200 shares and
shares voting power and dispositive power with respect to 4,700 shares.
Huntzinger shares voting and dispositive power with respect to 4,700 shares with
Sherry M. Huntzinger, his wife. Ms. Huntzinger's residential address is RR 4,
Box 610, 42nd St., Dallas, PA 18612. Ms. Huntzinger is self-employed as an
interior designer. Neither Ms. Aprahamian nor Ms. Huntzinger has, during the
past five years, been convicted of any criminal proceeding (excluding traffic
violations or similar misdemeanors), nor been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Both Ms. Aprahamian and Ms. Huntzinger are citizens of the United States.
(c) During the past 60 days, the Reporting Persons purchased the following
shares of Common Stock from the Issuer:
<TABLE>
<CAPTION>
Reporting Person Purchase Date Shares Price per Share
<S> <C> <C> <C>
Aprahamian 10/11/00 200,000 $1.5377
Huntzinger 10/11/00 200,000 $1.5377
Smith 10/11/00 200,000 $1.5377
</TABLE>
During the past 60 days, the Reporting Persons purchased the following shares of
Common Stock in the open market:
<TABLE>
<CAPTION>
Reporting Person Purchase Date Shares Price per Share
<S> <C> <C> <C>
Aprahamian 10/31/00 1,400 $1.8750
10/31/00 4,000 $1.9688
10/31/00 400 $1.9688
10/31/00 2,000 $2.0000
11/1/00 800 $2.1250
11/1/00 2,000 $2.4375
11/1/00 3,600 $2.4375
11/1/00 1,400 $2.5000
11/8/00 2,500 $3.5000
Helppie 10/31/00 1,400 $1.8750
10/31/00 4,000 $1.9688
10/31/00 400 $1.9688
10/31/00 2,000 $2.0000
11/1/00 800 $2.1250
</TABLE>
10
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CUSIP No. 868146101 Page 11 of 14 Pages
<TABLE>
<S> <C> <C> <C>
11/1/00 2,000 $2.4375
11/1/00 3,600 $2.4375
11/1/00 1,400 $2.5000
11/8/00 2,500 $3.5000
Huntzinger 10/31/00 269 $1.8750
10/31/00 769 $1.9688
10/31/00 77 $1.9688
10/31/00 385 $2.0000
11/1/00 154 $2.1250
11/1/00 385 $2.4375
11/1/00 692 $2.4375
11/1/00 269 $2.5000
11/8/00 1,000 $3.5000
Bracken 10/31/00 162 $1.8750
10/31/00 462 $1.9688
10/31/00 46 $1.9688
10/31/00 230 $2.0000
11/1/00 92 $2.1250
11/1/00 230 $2.4375
11/1/00 416 $2.4375
11/1/00 162 $2.5000
Smith 10/31/00 269 $1.8750
10/31/00 769 $1.9688
10/31/00 77 $1.9688
10/31/00 385 $2.0000
11/1/00 154 $2.1250
11/1/00 385 $2.4375
11/1/00 692 $2.4375
11/1/00 269 $2.5000
11/8/00 4,000 $3.5000
</TABLE>
In addition, on September 6, 2000, September 11, 2000, September 12, 2000,
September 14, 2000, September 15, 2000, September 15, 2000, September 18, 2000,
September 19, 2000, and September 20, 2000, respectively, Aprahamian sold in
open market transactions 2,200 shares, 11,000 shares, 13,700 shares, 2,100
shares, 10,000 shares, 1,000 shares, 5,600 shares, 9,400 shares, and 11,100
shares, at prices per share of $3.00, $2.50, $2.50, $2.50, $2.28, $2.37, $2.37,
$2.23 and $2.16, respectively. Additionally, on September 14, 2000, Aprahamian
sold 1,000 shares on behalf of his mother, Ms. Polly Mary Aprahamian, at $2.50
per share.
(d) and (e) are not applicable.
ITEM 6 - CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Helppie and Bracken hold stock options granted under the Issuer's Long Term
Incentive Compensation Plan and Non-Statutory Stock Option Plan. Each of Helppie
and Bracken holds vested options to purchase 60,000 shares of Common Stock.
Helppie holds unvested options to
11
<PAGE> 12
CUSIP No. 868146101 Page 12 of 14 Pages
purchase 60,000 shares of Common Stock, of which options to purchase 50,000
shares of Common Stock will vest within 60 days of the date hereof. Bracken
holds unvested options to purchase 65,000 shares of Common Stock, of which
options to purchase 55,000 shares of Common Stock will vest within 60 days of
the date hereof. The Issuer's Long Term Incentive Compensation Plan and
amendments thereto are attached hereto as Exhibits K, L and M and are
incorporated herein by reference. The Issuer's Non-Statutory Stock Option Plan
has substantially the same form, terms and substance as the Issuer's Long Term
Incentive Compensation Plan, except that grants issued under the Non-Statutory
Stock Option Plan will not qualify as "incentive stock options" for tax
purposes, and directors and executive officers of the Issuer are not eligible to
receive grants under the Non-Statutory Stock Option Plan.
Prior to his employment with the Issuer, Huntzinger was granted stock options
under the Issuer's Non-Statutory Stock Option Plan. Huntzinger holds options to
purchase 10,000 shares of Common Stock at a purchase price of $3.19 per share.
These options vest in increments of 1,250 shares each quarter for two years
beginning on October 1, 2001.
See Item 3 for a description of the Purchase Agreement and Pledge Agreement by
and between each of Aprahamian, Huntzinger and Smith and the Issuer.
12
<PAGE> 13
CUSIP No. 868146101 Page 13 of 14 Pages
ITEM 7 - MATERIALS TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
Exhibit A Promissory Note executed by Bracken in favor of
Issuer (1)
Exhibit B Aprahamian Purchase Agreement
Exhibit C Aprahamian Promissory Note
Exhibit D Aprahamian Pledge Agreement
Exhibit E Huntzinger Purchase Agreement
Exhibit F Huntzinger Promissory Note
Exhibit G Huntzinger Pledge Agreement
Exhibit H Smith Purchase Agreement
Exhibit I Smith Promissory Note
Exhibit J Smith Pledge Agreement
Exhibit K Form of Long-Term Incentive Compensation Plan (2)
Exhibit L Amendment to Long-Term Incentive Plan (3)
Exhibit M Second Amendment to Long-Term Incentive Plan (4)
Exhibit N Joint Filing Undertaking
</TABLE>
(1) Incorporated by reference from the Issuer's Amendment No. 1 to Form S-1
Registration Statement No. 333-10213 as filed on September 20, 1996.
(2) Incorporated by reference from the Issuer's Form S-1 Registration
Statement No. 333-10213 as filed on August 15, 1996.
(3) Incorporated by reference from the Issuer's Information Statement on
Form 14C as filed on November 7, 1997.
(4) Incorporated by reference from the Issuer's Information Statement on
Form 14A as filed April 9, 1999.
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CUSIP No. 868146101 Page 14 of 14 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: November 13, 2000
<TABLE>
<S> <C>
/s/ Ronald V. Aprahamian /s/ Richard D. Helppie, Jr.
---------------------------------- --------------------------------------------
Signature Signature
Ronald V. Aprahamian, Chairman Richard D. Helppie, Jr., CEO and Director
---------------------------------- --------------------------------------------
Name/Title Name/Title
/s/ George S. Huntzinger /s/ Charles O. Bracken
---------------------------------- --------------------------------------------
Signature Signature
George S. Huntzinger, President and COO Charles O. Bracken, Executive Vice President
---------------------------------- and Director
Name/Title --------------------------------------------
Name/Title
/s/ Steven H. Smith
----------------------------------
Signature
Steven H. Smith, Executive Vice President
----------------------------------
Name/Title
</TABLE>
14
<PAGE> 15
EXHIBIT B
SUBSCRIPTION AND SECURITIES
PURCHASE AGREEMENT
THIS SUBSCRIPTION AND SECURITIES PURCHASE AGREEMENT is made effective
this 11th day of October, 2000 (the "EFFECTIVE DATE") by and between Superior
Consultant Holdings Corporation, a Delaware corporation (the "COMPANY"), and
Ronald V. Aprahamian (the "INDIVIDUAL").
WHEREAS, the Company and the Individual desire to enter into an
agreement pursuant to which the Individual will purchase and the Company will
sell to the Individual shares of the Company's common stock (the "SHARES").
WHEREAS, the Company and the Individual desire to establish certain
restrictions regarding the ownership of, and transfer of, the Shares.
NOW, THEREFORE, in consideration of the following covenants and for
other good and valuable consideration, the parties agree as follows:
1. PURCHASE OF SHARES
As of the Effective Date, the Individual will purchase and the Company
will sell to Individual Two Hundred Thousand (200,000) Shares on the
terms and conditions and subject to all of the limitations set forth
herein.
2. PURCHASE PRICE
The purchase price of the Shares shall be $1.5377 per share, the fair
market value of the Shares, calculated based upon the average closing
sales price of common stock of the Company as reported by NASDAQ on
each of the five (5) trading days prior to the Effective Date. The
Individual shall be permitted to make an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to recognize income
at the date of the purchase of the Shares. The Individual will pay
$2,000, the par value of the Shares, in cash or by check, and will pay
the remainder of the purchase price through delivery of a promissory
note in the amount of $305,540, dated as of even date herewith and in
the form attached hereto as Exhibit A (the "PROMISSORY NOTE"). The
Promissory Note shall be secured by a pledge of the Shares pursuant to
the Pledge Agreement dated as of even date herewith in the form
attached hereto as Exhibit B (the "PLEDGE AGREEMENT").
<PAGE> 16
3. CERTIFICATES AND SHAREHOLDER RIGHTS
The Company's Transfer Agent and Registrar shall prepare and issue a
stock certificate representing the Shares that the Individual has
purchased, which certificate shall be held by the Corporate Secretary
of the Company pursuant to the terms of this Agreement.
4. RESTRICTIONS AND VESTING
a) Until the passage of the time periods specified in Paragraph 4(b)
or the occurrence of either of the events specified in Paragraph
4(c) below, the Individual shall not sell, transfer, convey,
exchange, give, assign, pledge, encumber, or otherwise dispose of
all or a portion of any interest in the Shares. Any attempted
transfer shall be void and shall not transfer ownership in, title
to, or any rights respecting the Shares.
b) Subject to this Agreement, the time period restrictions hereunder
shall lapse for the number of Shares and on the dates specified
below, provided that the Individual is an employee of the Company
or Chairman of the Company's Board of Directors at each such date.
<TABLE>
<CAPTION>
Number of Shares Date Restrictions Lapse
---------------- -----------------------
<S> <C>
50,000 January 11, 2001
50,000 April 11, 2001
50,000 July 11, 2001
50,000 October 11, 2001
</TABLE>
c) Notwithstanding the provisions of Paragraph 4(b), the restrictions
hereunder shall lapse immediately upon a Change of Control. A
"CHANGE OF CONTROL" shall be deemed to occur on the earliest of
(a) the acquisition by any entity, person, or group of beneficial
ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 50% of the
outstanding capital stock of the Company entitled to vote for the
election of directors ("VOTING STOCK"); (b) the completion by any
entity, person, or group (other than the Company or a subsidiary
of the Company) of a tender offer or an exchange offer for (and
consummation of the resulting purchase of) more than 50% of the
outstanding Voting Stock of the Company; (c) the effective time of
(1) a merger or consolidation of the Company with one or more
corporations as a result of which the holders of the outstanding
Voting Stock of the Company immediately prior to such merger hold
less than 80% of the Voting Stock of the surviving or resulting
corporation or (2) a transfer of substantially all of the property
or
2
<PAGE> 17
assets of the Company other than to an entity of which the Company
owns at least 80% of the Voting Stock; or (d) the election to the
Board of Directors of the Company, without the recommendation or
approval of the incumbent Board of Directors of the Company, of
directors constituting a majority of the number of directors of
the Company then in office.
d) Any Shares the restrictions on which have not lapsed upon the
Individual's termination of employment or termination of service
as Chairman of the Company's Board of Directors shall be
repurchased by the Company in exchange for the reduction in the
amount of the Promissory Note by an amount equal to the lesser of
(i) $1.5377 per share, or (ii) the Fair Market Value per share
(such price being the average closing market price of the Common
Stock as reported by NASDAQ on each of the five (5) consecutive
trading days ending on the day immediately preceding the date of
repurchase, or if the Company's Common Stock is not then publicly
traded, the Fair Market Value as determined by the Board of
Directors in good faith) multiplied by the number of Shares
repurchased.
5. REPRESENTATIONS AND COVENANTS OF INDIVIDUAL
a) In connection with the purchase of the Shares hereunder, the
Individual represents and warrants to the Company that:
i) The Shares to be acquired by the Individual pursuant to this
Agreement shall be acquired for his own account and not with
a view to, or present intention of, distribution in
violation of the Securities Act of 1933 (the "1933 ACT") or
any applicable state securities laws, and the Shares will
not be disposed of in contravention of the 1933 Act or any
applicable state securities laws.
ii) The Individual is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in
the Shares.
iii) The Individual acknowledges that he is able to bear the
economic risk of his investment in the Shares for an
indefinite period of time, because the Shares have not been
registered under the 1933 Act and, therefore, cannot be
resold unless subsequently registered under the 1933 Act or
an exemption from such registration is available.
iv) The Individual has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
offering of the Shares and has had full access to such
information concerning the Company as he has requested.
3
<PAGE> 18
v) The Individual has the full right, power and authority to
execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement, the Promissory Note
and the Pledge Agreement constitute the legal, valid and
binding obligations of the Individual enforceable against
him in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally,
now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable
remedies.
vi) The Individual is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body
which would prevent the execution or delivery of this
Agreement by him or the consummation of the transactions
contemplated hereby.
b) As an inducement to the Company to issue the Shares, and as a
condition thereto, the Individual acknowledges and agrees that
neither the issuance of the Shares to him nor any provision
contained herein shall entitle the Individual to remain in the
service of the Company or affect the Company's right to terminate
the Individual's employment or the Board of Director's right to
terminate Individual's status as Chairman of the Board at any time
for any or no reason.
6. REGISTRATION
The Individual understands that the Shares are not currently being
registered under the 1933 Act by reason of their contemplated issuance
in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. The
Individual further agrees that he will not sell or otherwise dispose of
the Shares unless such sale or other disposition has been registered or
is exempt from registration under the 1933 Act and has been registered
or qualified or is exempt from registration or qualification under
applicable securities laws of any state. The Individual understands
that a restrictive legend consistent with the foregoing, and as set
forth in Paragraph 8, will be placed on the certificates evidencing the
Shares, and related stop transfer instructions will be noted in the
stock transfer records of the Company and/or its stock transfer agent
for the Shares.
4
<PAGE> 19
7. WITHHOLDING
The Company shall have the power and right to deduct or withhold, or
require the Individual to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes required by law to be withheld
with respect to any purchase made under or as a result of this
Agreement. In the alternative, upon any taxable event hereunder, the
Individual may elect, subject to Company approval, to satisfy the
withholding requirement in whole or in part, by having the Company
withhold Shares that would otherwise be transferred to the Individual
having a fair market value, on the date the tax is to be determined,
equal to the minimum marginal tax that could be imposed on the
transaction. All elections shall be made in writing and signed by the
Individual.
8. LEGEND
The Individual shall be bound by the provisions of the following legend
(or similar legend) which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to the purchase hereunder.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT
OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ALL
OF THE TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS SET
FORTH IN THE AGREEMENT PURSUANT TO WHICH THE SHARES HAVE BEEN
PURCHASED. ALL TERMS, CONDITIONS, LIMITATIONS, AND
RESTRICTIONS OF THE FOREGOING AGREEMENT ARE FULLY BINDING UPON
THE HOLDER OF THIS CERTIFICATE, HIS SUCCESSORS, ESTATE, HEIRS,
ASSIGNS, PERSONAL REPRESENTATIVE, ADMINISTRATOR, EXECUTOR OR
GUARDIAN AS THE CASE MAY BE, FOR ALL PURPOSES UNTIL SUCH TIME
AS ALL TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS OF THE
AGREEMENTS ARE REMOVED, WAIVED, OR OTHERWISE VACATED IN A
MANNER EXPRESSLY AUTHORIZED THEREUNDER."
5
<PAGE> 20
9. RELEASE OF RESTRICTIONS
At such time as the restrictions on the Shares lapse, as set forth in
Paragraph 4(b) or 4(c), and the Promissory Note is paid in full (or as
soon thereafter as may be practicable), the certificate or certificates
shall be transferred by the Corporate Secretary of the Company to the
Individual.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If the outstanding Shares of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization,
merger, or consolidation, or if a change is made to the common stock of
the Company by reason of any recapitalization, reclassification, change
in par value, stock split, reverse stock split, combination of shares
or dividends payable in capital stock, or the like, the Company shall
make adjustments to the Shares issued to the Individual as it may
determine to be appropriate under the circumstances.
11. NOTICES
Any notice provided for in this Agreement must be in writing and must
be either (i) personally delivered, (ii) mailed by registered or
certified first class mail, prepaid, with return receipt requested, or
(iii) sent by recognized overnight courier service, to the recipient at
the address indicated below:
To the Individual: Ronald V. Aprahamian
9311 Cornwell Farm Rd.
Great Falls, Virginia 22006
To the Company: Superior Consultant Holdings Corporation
4000 Town Center
Suite 1100
Southfield, Michigan 48075
or to the attention of such other person as the recipient party shall
specify by prior written notice to the sending party. Any notice under
this Agreement will be deemed to have been given (i) on the date such
notice is personally delivered, (ii) three days after the date of
mailing if sent by certified or registered mail, or (iii) one day after
the date such notice is delivered to the overnight courier if sent by
overnight courier.
6
<PAGE> 21
12. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but
if any provision of this Agreement is held to be invalid, illegal, or
unenforceable, in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been
contained herein.
13. ENTIRE AGREEMENT
This Agreement and any other agreement referred to herein constitutes
the complete agreement and understanding between the parties and
supersedes and preempts any and all prior understandings, agreements or
representations by or between the parties, written or oral, which may
be related to the subject matter hereof in any way.
14. COUNTERPARTS
This Agreement may be executed in two or more substantially identical
counterparts, each of which shall be deemed to be an original document
as to the person or persons signing it, and all of which when taken
together shall constitute one and the same binding agreement.
15. SUCCESSORS AND ASSIGNS
This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Individual and the Company, and their respective
successors and permitted assigns, but will not be delegable or
assignable by the Individual without written consent of the Company.
16. AMENDMENTS
Any provision of this Agreement may be amended or waived only with the
prior written consent of the Company and the Individual.
7
<PAGE> 22
17. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Agreement shall be governed by, the laws of the
State of Delaware, without giving effect to provisions thereof
regarding conflicts of law.
IN WITNESS WHEREOF, the Company and Individual have caused this
Agreement to be executed on its and his behalf on the day and year first above
written.
SUPERIOR CONSULTANT HOLDINGS INDIVIDUAL
CORPORATION
By: /s/ Richard D. Helppie /s/ Ronald V. Aprahamian
----------------------------- ------------------------------------
Its: Chief Executive Officer
----------------------------
8
<PAGE> 23
EXHIBIT C
PROMISSORY NOTE
Effective as of October 11, 2000 $305,540.00
For value received, Ronald V. Aprahamian (the "BORROWER") promises to
pay to the order of Superior Consultant Holdings Corporation, a Delaware
corporation, with its principal place of business at 4000 Town Center, Suite
1100, Southfield, Michigan 48075 (the "LENDER"), the principal amount of Three
Hundred Five Thousand Five Hundred Forty Dollars ($305,540) due as set forth
below. The unpaid principal amount of this Note outstanding from time to time
shall bear interest annually at the rate of 9.5% interest, computed on the basis
of a 360-day year of twelve thirty-day months, which interest shall be due and
owing as set forth below.
I. Reference to Subscription and Securities Purchase Agreement. This Note
is delivered pursuant and subject to that certain Subscription and
Securities Purchase Agreement, as executed by and between the Lender
and the Borrower, dated as of October 11, 2000 (the "SUBSCRIPTION AND
SECURITIES PURCHASE AGREEMENT"), the terms and conditions of which are,
by this reference, incorporated herein and made a part hereof.
II. Payment.
A. Principal and accrued and unpaid interest under this Note shall be
due and payable on demand after the first to occur of the
following: (i) the termination of Borrower's employment or service
as Chairman of the Board with the Company or an affiliate of the
Company if such termination occurs on or prior to October 11,
2001; (ii) October 11, 2002; or (iii) upon a Change of Control, as
defined in the Subscription and Securities Purchase Agreement.
B. Payment of any principal and interest amount stated above shall be
made to the Lender at its principal offices at 4000 Town Center,
Suite 1100, Southfield, Michigan 48075, or at such other place as
the Lender may designate to the Borrower. Receipt by the Lender of
a check of the Borrower in the amount of any payment due and owing
shall be deemed to constitute payment hereunder, provided that
such check is processed and paid in full by the institution
against which the check is drawn within a commercially reasonable
and customary time.
III. Prepayment. The unpaid principal balance of this Note and interest
accrued thereon may be prepaid by the Borrower at any time, in whole or
in part, without premium or penalty, in minimum increments of not less
than Five Thousand Dollars ($5,000).
<PAGE> 24
IV. Default. If (i) the Borrower shall fail to promptly pay to the Lender
all sums when due hereunder or (ii) an event of default shall occur
under the Pledge Agreement described in Section V below or under any
other agreement, instrument or document heretofore, now or at any time
hereafter delivered to the Lender by or for the benefit of the
Borrower, which default or event of default is not cured within the
time, if any, specified therefor in such agreement, instrument or
document, then the Lender may declare all sums owed by the Borrower
hereunder immediately due and payable, without notice unless otherwise
required by applicable statute, and may take any action at law or in
equity to collect the amounts due and owing hereunder, or to request
any other available remedy, together with any damages resulting from
such nonpayment.
V. Security. In accordance with that certain Pledge Agreement by and
between the Borrower and the Lender effective as of even date herewith,
the obligation of the Borrower under this Note shall be secured by the
Borrower's interest in those certain interests constituting Collateral
(as defined in the Pledge Agreement). The Borrower covenants and agrees
that he shall not, without the consent of the Lender, pledge or
otherwise encumber or grant a security interest in such Collateral to
any party while the indebtedness represented by this Note remains
unpaid and outstanding.
VI. Governing Laws. This Note is issued in and shall be construed and
governed in accordance with the laws of the State of Delaware. The
Borrower expressly consents to enforcement of the terms hereof in any
court of competent jurisdiction sitting in the State of Delaware. The
Borrower expressly waives presentment of payment, protest, notice of
protest and dishonor as prerequisites to the enforcement hereof.
VII. Assigns. All of the covenants, stipulations, promises and agreements in
this Note shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns.
VIII. Costs. The Borrower promises to pay all costs and collection of every
kind, including, but not limited to, all reasonable attorneys' fees,
court costs and expenses of every kind incurred by the Lender, in
connection with such collection.
IX. Miscellaneous. Failure of the Lender, for any period of time or on one
or more occasions, to exercise its option to accelerate the payment of
this Note pursuant to Section IV above shall not constitute a waiver of
the right to exercise the same at any time thereafter or in the event
of any subsequent default under Section IV above. No act of omission or
commission of the Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver
or release of the same; any such waiver or release is to be effected
only through a written document executed by the Lender, and then only
to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as a waiver or
release of any subsequent event or as a bar to any subsequent exercise
of the Lender's rights or remedies hereunder.
/s/ Ronald V. Aprahamian
---------------------------------
Borrower
2
<PAGE> 25
EXHIBIT D
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "AGREEMENT") is effective as of October 11,
2000, between the undersigned, Ronald V. Aprahamian ("PLEDGOR"), in favor of
Superior Consultant Holdings Corporation, a Delaware corporation ("PLEDGEE").
Pledgor is indebted to Pledgee in the principal amount of not less than
$305,540 as evidenced by a Promissory Note (the "NOTE") made by Pledgor to
Pledgee dated as of even date herewith.
To secure payment of the Note, Pledgee has requested and Pledgor has
agreed that Pledgor execute and deliver this Agreement in favor of the Pledgee.
1. DEFINITIONS AND TERMS
Except as otherwise defined in this Agreement, all words, terms and/or phrases
used herein shall be defined by the applicable definition (if any) in the
Uniform Commercial Code as adopted by the State of Delaware, without regard to
principles of choice of law.
2. COLLATERAL
2.1. To secure the prompt payment to Pledgee of the Note and all
obligations herein and therein, Pledgor grants to Pledgee a security
interest in and to, and pledges and assigns to Pledgee, all of
Pledgor's right, title, and interest in, to and under the common stock
of Pledgee sold to Pledgor as of the date hereof, together with any and
all distributions, whether in cash or in kind, upon or in connection
therewith, whether such distributions or payments are made pursuant to
a redemption of the common stock or are dividends, or in partial or
complete liquidation, or the result of reclassification, readjustment
or other changes in the capital structure of the entity issuing the
same, or otherwise, and any and all subscriptions, warrants, options
and other rights issued upon or in connection therewith (collectively,
the "SECURITIES") and all products and proceeds of the foregoing
(whether in the form of cash, proceeds of insurance policies,
instruments, documents, general intangibles, contract rights, accounts,
chattel paper, inventory equipment, goods or otherwise). All of the
foregoing is referred to herein individually and/or collectively as the
"COLLATERAL."
2.2. Simultaneous with the execution of this Agreement, Pledgor is
hereby delivering to Pledgee the certificates representing the
Securities, with irrevocable powers or assignments relating thereto
endorsed in blank by Pledgor, to be held by Pledgee until the Note is
paid in full.
2.3. That portion of the Securities consisting of non-cash
distributions and payments upon or in connection therewith, whether
such non-cash distributions or payments are made pursuant to a
redemption of the Securities or are dividends, or in partial or
complete
<PAGE> 26
liquidation, or the result of reclassification, readjustment or other
changes in the capital structure of the "Persons" (meaning any
individual(s) or entity or entities of a private or public nature)
issuing the same or otherwise, shall be forthwith delivered by Pledgor
to Pledgee in the form in which that distribution or payment is
received by Pledgor, and thereupon, Pledgee shall hold any such
distribution or payment as additional Collateral to secure the Note.
Any securities or evidence of indebtedness so distributed to Pledgor
shall be delivered to Pledgee accompanied with irrevocable powers or
assignments relating thereto or assignments thereof duly signed by
Pledgor in form acceptable to Pledgee and duly endorsed in blank by
Pledgor.
3. DEFAULT
3.1. The occurrence of any one of the following events shall
constitute a default by Pledgor (an "EVENT OF DEFAULT") under this
Agreement: (a) if Pledgor fails or neglects to perform, keep or observe
any material term, provision, condition, covenant, warranty or
representation contained in this Agreement which is required to be
performed, kept or observed by Pledgor; (b) occurrence of a default
under the Note; (c) a notice of lien, levy, attachment or assessment is
filed or recorded with respect to the Collateral; or (d) Pledgor's
insolvency, inability to pay debts as they mature, appointment of a
receiver for any part of his property, or assignment for the benefit of
creditors, or the commencement of any proceedings under any bankruptcy
or insolvency laws by or against Pledgor.
3.2. All of Pledgee's rights and remedies under this Agreement are
cumulative and non-exclusive.
3.3. Upon an Event of Default described in Section 3.1, if same
shall continue unremedied for a period of thirty (30) days following
written notice thereof, the Note shall be due and payable and
enforceable against Pledgor, at Pledgee's principal place of business.
3.4. Upon an Event of Default, Pledgee, in its sole and absolute
discretion, may exercise any one or more of the following remedies: (a)
if the Note is not paid forthwith by Pledgor to Pledgee at Pledgee's
principal place of business, Pledgee may declare all sums owed by
Pledgor under the Note immediately due and payable and may proceed to
suit against Pledgor; (b) exercise any one or more of the rights and
remedies accruing to a secured party under the Uniform Commercial Code
of the relevant state or states and any other applicable law upon
default by a debtor; and/or (c) sell or cause to be sold the Collateral
or any part thereof and all of Pledgor's right, title and interest
therein at public auction or private sale as Pledgee deems advisable in
accordance with the applicable laws of the United States or of any
state.
3.5. Pledgor agrees that in any sale of the Collateral, Pledgee is
hereby authorized to comply with any limitation or restriction in
connection with such sale as Pledgee may be advised by counsel is
necessary, or advisable in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as
may restrict the
2
<PAGE> 27
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to persons who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of that
portion of the Collateral consisting of the Securities), or in order to
obtain any required approval of the sale or of the purchaser by any
governmental regulatory authority or official, and Pledgor further
agrees that such compliance shall not result in such sale being
considered commercially unreasonable, nor shall Pledgee be liable or
accountable to Pledgor for any discount allowed by reason of the fact
that the Collateral was sold in compliance with any such limitation or
restriction.
3.6. Any sale of the Collateral may be made for cash or credit at
the election of Pledgee and the amounts of any such sale shall be
credited to Pledgor's liabilities and obligations under the Note only
when the proceeds thereof are actually received by Pledgee in
immediately available or collected funds. Pledgee may, if it deems it
reasonable, postpone or adjourn any such sale of the Collateral from
time to time by an announcement at the time and place of sale or by
announcement at the time and place of such postponed or adjourned sale,
without being required to give a new notice of sale.
3.7. Any notice required to be given by Pledgee of a sale, lease or
other intended action by Pledgee, deposited in the United States mail,
postage prepaid and duly addressed to Pledgor at the address specified
in the Subscription and Securities Purchase Agreement of even date
herewith between the Pledgor and the Pledgee, not less than five (5)
calendar days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Pledgor thereof.
3.8. Pledgor agrees that Pledgee has no obligation to preserve
rights against prior parties to the Collateral. Further Pledgor waives
and releases any cause of action and claim against Pledgee as a result
of Pledgee's possession, collection or sale of the Collateral, any
liability or penalty for failure of Pledgee to comply with any
requirement imposed on Pledgee relating to notice of sale, holding of
sale or reporting of sale of the Collateral, and, to the extent
permitted by law, any right of redemption from such sale.
4. REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants as follows:
(a) Pledgor has, and has duly exercised, all requisite capacity,
power and authority to enter into this Agreement, to pledge the
Collateral, and to carry out the transactions contemplated hereby;
and
(b) this Agreement constitutes the legal, valid and binding
obligation of Pledgor, enforceable in accordance with its terms.
3
<PAGE> 28
5. COVENANTS
Pledgor hereby covenants that, until all obligations under the Note have been
paid in full and the Note is terminated:
(a) Pledgor will not sell, convey or otherwise dispose of any
Collateral or any interest therein or create, incur or permit to
exist any pledge, mortgage, lien, charge, security interest or
other encumbrance with respect to the Collateral or the proceeds
thereof, other than that created hereby; and
(b) Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action (excluding
filings or registrations pursuant to federal, state or foreign
securities laws) that may be necessary or desirable, or that
Pledgee may request, in order to perfect and protect any security
interest intended to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
6. VOTING RIGHTS AND DIVIDENDS
So long as no Event of Default shall have occurred and be continuing and
notwithstanding anything to the contrary contained herein:
(a) Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Collateral for any purpose not
inconsistent with the terms of this Agreement or the Note; and
(b) Pledgor shall be entitled to receive any and all cash
distributed in respect of the Collateral, provided, however, that
any securities paid as distributions in respect of the Collateral
shall be delivered to Pledgee, by Pledgor, to be held as
Collateral in the same form as so received, with any necessary
endorsement.
Upon the occurrence and during the continuance of an Event of Default, all
rights of Pledgor to exercise the voting and other consensual rights and to
receive the distributions (other than tax distributions) which he would
otherwise be authorized to exercise, receive and retain pursuant to this Section
6 shall cease, and all such rights shall thereupon become vested in Pledgee,
which shall then have the sole right to exercise such voting and other
consensual rights and to receive and hold as Collateral all dividends and
distributions. Pledgee shall apply any cash so received to the obligations of
Pledgor under the Note. Effective upon the occurrence of an Event of Default,
Pledgor hereby grants to Pledgee an irrevocable proxy coupled with an interest
for the Collateral, pursuant to which proxy Pledgee shall be entitled to vote or
consent with respect to the Collateral in its sole discretion.
7. POWER OF ATTORNEY
Upon the occurrence and during the continuance of an Event of Default, Pledgor
hereby appoints the Pledgee as Pledgor's agent and attorney-in-fact, with full
power and authority in the name, place and stead of Pledgor or otherwise, from
time to time in the Pledgee's discretion, to take any
4
<PAGE> 29
action and to execute any instrument which the Pledgee may deem necessary or
advisable to fulfill Pledgor's obligations hereunder. This appointment is
irrevocable and continuing and is coupled with an interest of Pledgor. Pledgor
hereby ratifies and confirms all that the Pledgee may lawfully do by virtue of
this Power of Attorney.
8. GENERAL
8.1. If any provision of this Agreement or the application thereof to
any person or circumstance is held invalid or unenforceable, the
remainder of this Agreement and the application of such provision to
other persons or circumstances will not be affected thereby, the
provisions of this Agreement being severable in any such instance.
8.2. Pledgee's failure at any time hereafter to require strict
performance by Pledgor of any provision of this Agreement shall not
waive, affect or diminish any right of Pledgee thereafter to demand
strict compliance and performance therewith. Any suspension or waiver
by Pledgee of an Event of Default by Pledgor under this Agreement shall
not suspend, waive or affect any other Event of Default by Pledgor
under this Agreement, whether the same or of a different type. None of
the undertaking, agreements, warranties, covenants and representations
of Pledgor contained in this Agreement shall be deemed to have been
suspended or waived by Pledgee unless such suspension or waiver is by
an instrument in writing signed by an officer of Pledgee and directed
to Pledgor specifying such suspension or waiver.
8.3. This Agreement shall continue in full force and effect until the
Note is fully paid, performed and discharged. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at
any time any payment under the Note is rescinded or must otherwise be
returned by Pledgee upon the insolvency, bankruptcy or reorganization
of Pledgor or otherwise, all as though such payment had not been made.
This Agreement shall be binding upon Pledgor and inure to the benefit
of Pledgee and Pledgor, and their respective heirs, personal
representatives, successors and assigns. Written notice to Pledgor or
Pledgee shall be to the address or addresses specified in the
Subscription and Securities Purchase Agreement of even date herewith
between the Pledgor and the Pledgee.
8.4. No termination of this Agreement, or cancellation of the Note,
shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of Pledgor or Pledgee in any way or respect
relating to (i) any transaction or event occurring prior to such
termination, (ii) any of the Collateral and (iii) any of the
undertakings, agreements, covenants, warranties and representations of
Pledgor contained in this Agreement.
8.5. Pledgor shall, upon demand, pay to the Pledgee any and all
reasonable costs and expenses, including court costs and reasonable
fees of attorneys, experts and agents, which the Pledgee may incur in
connection with (i) the administration of this Agreement or (ii) the
exercise or enforcement of its rights as the Pledgee.
8.6. All covenants, warranties and representations contained herein
shall be true as of the date hereof and shall survive the execution and
delivery of this Agreement.
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<PAGE> 30
8.7. This Pledge Agreement shall be governed by the laws of the State
of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Pledgor in favor of Pledgee as of the day and year first above written.
PLEDGOR:
/s/ Ronald V. Aprahamian
-------------------------------------
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<PAGE> 31
EXHIBIT E
SUBSCRIPTION AND SECURITIES
PURCHASE AGREEMENT
THIS SUBSCRIPTION AND SECURITIES PURCHASE AGREEMENT is made effective
this 11th day of October, 2000 (the "EFFECTIVE DATE") by and between Superior
Consultant Holdings Corporation, a Delaware corporation (the "COMPANY"), and
George S. Huntzinger (the "INDIVIDUAL").
WHEREAS, the Company and the Individual desire to enter into an
agreement pursuant to which the Individual will purchase and the Company will
sell to the Individual shares of the Company's common stock (the "SHARES").
WHEREAS, the Company and the Individual desire to establish certain
restrictions regarding the ownership of, and transfer of, the Shares.
NOW, THEREFORE, in consideration of the following covenants and for
other good and valuable consideration, the parties agree as follows:
1. PURCHASE OF SHARES
As of the Effective Date, the Individual will purchase and the Company
will sell to Individual Two Hundred Thousand (200,000) Shares on the
terms and conditions and subject to all of the limitations set forth
herein.
2. PURCHASE PRICE
The purchase price of the Shares shall be $1.5377 per share, the fair
market value of the Shares, calculated based upon the average closing
sales price of common stock of the Company as reported by NASDAQ on
each of the five (5) trading days prior to the Effective Date. The
Individual shall be permitted to make an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to recognize income
at the date of the purchase of the Shares. The Individual will pay
$2,000, the par value of the Shares, in cash or by check, and will pay
the remainder of the purchase price through delivery of a promissory
note in the amount of $305,540, dated as of even date herewith and in
the form attached hereto as Exhibit A (the "PROMISSORY NOTE"). The
Promissory Note shall be secured by a pledge of the Shares pursuant to
the Pledge Agreement dated as of even date herewith in the form
attached hereto as Exhibit B (the "PLEDGE AGREEMENT").
<PAGE> 32
3. CERTIFICATES AND SHAREHOLDER RIGHTS
The Company's Transfer Agent and Registrar shall prepare and issue a
stock certificate representing the Shares that the Individual has
purchased, which certificate shall be held by the Corporate Secretary
of the Company pursuant to the terms of this Agreement.
4. RESTRICTIONS AND VESTING
a) Until the passage of the time periods specified in Paragraph 4(b)
or the occurrence of either of the events specified in Paragraph
4(c) below, the Individual shall not sell, transfer, convey,
exchange, give, assign, pledge, encumber, or otherwise dispose of
all or a portion of any interest in the Shares. Any attempted
transfer shall be void and shall not transfer ownership in, title
to, or any rights respecting the Shares.
b) Subject to this Agreement, the time period restrictions hereunder
shall lapse for the number of Shares and on the dates specified
below, provided that the Individual is an employee of the Company
or Chairman of the Company's Board of Directors at each such date.
Or, in the event of termination by the Company of Individual's
employment without "cause" as that term is defined in Individual's
Employment Agreement with the Company, the restrictions hereunder
shall continue to lapse in accordance with the schedule below.
Number of Shares Date Restrictions Lapse
---------------- -----------------------
50,000 January 11, 2001
50,000 April 11, 2001
50,000 July 11, 2001
50,000 October 11, 2001
c) Notwithstanding the provisions of Paragraph 4(b), the restrictions
hereunder shall lapse immediately upon a Change of Control. A
"CHANGE OF CONTROL" shall be deemed to occur on the earliest of
(a) the acquisition by any entity, person, or group of beneficial
ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 50% of the
outstanding capital stock of the Company entitled to vote for the
election of directors ("VOTING STOCK"); (b) the completion by any
entity, person, or group (other than the Company or a subsidiary
of the Company) of a tender offer or an exchange offer for (and
consummation of the resulting purchase of) more than 50% of the
outstanding Voting Stock of the Company; (c) the effective time of
(1) a merger or consolidation of the Company with one or more
corporations as a result of which the holders of
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<PAGE> 33
the outstanding Voting Stock of the Company immediately prior to
such merger hold less than 80% of the Voting Stock of the
surviving or resulting corporation or (2) a transfer of
substantially all of the property or assets of the Company other
than to an entity of which the Company owns at least 80% of the
Voting Stock; or (d) the election to the Board of Directors of the
Company, without the recommendation or approval of the incumbent
Board of Directors of the Company, of directors constituting a
majority of the number of directors of the Company then in office.
d) Any Shares the restrictions on which have not lapsed upon the
Individual's termination of employment or termination of service
as Chairman of the Company's Board of Directors shall be
repurchased by the Company in exchange for the reduction in the
amount of the Promissory Note by an amount equal to the lesser of
(i) $1.5377 per share, or (ii) the Fair Market Value per share
(such price being the average closing market price of the Common
Stock as reported by NASDAQ on each of the five (5) consecutive
trading days ending on the day immediately preceding the date of
repurchase, or if the Company's Common Stock is not then publicly
traded, the Fair Market Value as determined by the Board of
Directors in good faith) multiplied by the number of Shares
repurchased.
5. REPRESENTATIONS AND COVENANTS OF INDIVIDUAL
a) In connection with the purchase of the Shares hereunder, the
Individual represents and warrants to the Company that:
i) The Shares to be acquired by the Individual pursuant to this
Agreement shall be acquired for his own account and not with
a view to, or present intention of, distribution in
violation of the Securities Act of 1933 (the "1933 ACT") or
any applicable state securities laws, and the Shares will
not be disposed of in contravention of the 1933 Act or any
applicable state securities laws.
ii) The Individual is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in
the Shares.
iii) The Individual acknowledges that he is able to bear the
economic risk of his investment in the Shares for an
indefinite period of time, because the Shares have not been
registered under the 1933 Act and, therefore, cannot be
resold unless subsequently registered under the 1933 Act or
an exemption from such registration is available.
iv) The Individual has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
offering of the
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<PAGE> 34
Shares and has had full access to such information
concerning the Company as he has requested.
v) The Individual has the full right, power and authority to
execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement, the Promissory Note
and the Pledge Agreement constitute the legal, valid and
binding obligations of the Individual enforceable against
him in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally,
now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable
remedies.
vi) The Individual is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body
which would prevent the execution or delivery of this
Agreement by him or the consummation of the transactions
contemplated hereby.
b) As an inducement to the Company to issue the Shares, and as a
condition thereto, the Individual acknowledges and agrees that
neither the issuance of the Shares to him nor any provision
contained herein shall entitle the Individual to remain in the
service of the Company or affect the Company's right to terminate
the Individual's employment or the Board of Director's right to
terminate Individual's status as Chairman of the Board at any time
for any or no reason.
6. REGISTRATION
The Individual understands that the Shares are not currently being
registered under the 1933 Act by reason of their contemplated issuance
in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. The
Individual further agrees that he will not sell or otherwise dispose of
the Shares unless such sale or other disposition has been registered or
is exempt from registration under the 1933 Act and has been registered
or qualified or is exempt from registration or qualification under
applicable securities laws of any state. The Individual understands
that a restrictive legend consistent with the foregoing, and as set
forth in Paragraph 8, will be placed on the certificates evidencing the
Shares, and related stop transfer instructions will be noted in the
stock transfer records of the Company and/or its stock transfer agent
for the Shares.
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<PAGE> 35
7. WITHHOLDING
The Company shall have the power and right to deduct or withhold, or
require the Individual to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes required by law to be withheld
with respect to any purchase made under or as a result of this
Agreement. In the alternative, upon any taxable event hereunder, the
Individual may elect, subject to Company approval, to satisfy the
withholding requirement in whole or in part, by having the Company
withhold Shares that would otherwise be transferred to the Individual
having a fair market value, on the date the tax is to be determined,
equal to the minimum marginal tax that could be imposed on the
transaction. All elections shall be made in writing and signed by the
Individual.
8. LEGEND
The Individual shall be bound by the provisions of the following legend
(or similar legend) which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to the purchase hereunder.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT
OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ALL
OF THE TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS SET
FORTH IN THE AGREEMENT PURSUANT TO WHICH THE SHARES HAVE BEEN
PURCHASED. ALL TERMS, CONDITIONS, LIMITATIONS, AND
RESTRICTIONS OF THE FOREGOING AGREEMENT ARE FULLY BINDING UPON
THE HOLDER OF THIS CERTIFICATE, HIS SUCCESSORS, ESTATE, HEIRS,
ASSIGNS, PERSONAL REPRESENTATIVE, ADMINISTRATOR, EXECUTOR OR
GUARDIAN AS THE CASE MAY BE, FOR ALL PURPOSES UNTIL SUCH TIME
AS ALL TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS OF THE
AGREEMENTS ARE REMOVED,
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<PAGE> 36
WAIVED, OR OTHERWISE VACATED IN A MANNER EXPRESSLY
AUTHORIZED THEREUNDER."
9. RELEASE OF RESTRICTIONS
At such time as the restrictions on the Shares lapse, as set forth in
Paragraph 4(b) or 4(c), and the Promissory Note is paid in full (or as
soon thereafter as may be practicable), the certificate or certificates
shall be transferred by the Corporate Secretary of the Company to the
Individual.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If the outstanding Shares of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization,
merger, or consolidation, or if a change is made to the common stock of
the Company by reason of any recapitalization, reclassification, change
in par value, stock split, reverse stock split, combination of shares
or dividends payable in capital stock, or the like, the Company shall
make adjustments to the Shares issued to the Individual as it may
determine to be appropriate under the circumstances.
11. NOTICES
Any notice provided for in this Agreement must be in writing and must
be either (i) personally delivered, (ii) mailed by registered or
certified first class mail, prepaid, with return receipt requested, or
(iii) sent by recognized overnight courier service, to the recipient at
the address indicated below:
To the Individual: George S. Huntzinger
RR4, Box 610, 42nd St.
Dallas, Pennsylvania 18612
To the Company: Superior Consultant Holdings Corporation
4000 Town Center
Suite 1100
Southfield, Michigan 48075
or to the attention of such other person as the recipient party shall
specify by prior written notice to the sending party. Any notice under
this Agreement will be deemed to have been given (i) on the date such
notice is personally delivered, (ii) three days after the date of
mailing if sent by certified or registered mail, or (iii) one day after
the date such notice is delivered to the overnight courier if sent by
overnight courier.
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<PAGE> 37
12. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but
if any provision of this Agreement is held to be invalid, illegal, or
unenforceable, in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been
contained herein.
13. ENTIRE AGREEMENT
This Agreement and any other agreement referred to herein constitutes
the complete agreement and understanding between the parties and
supersedes and preempts any and all prior understandings, agreements or
representations by or between the parties, written or oral, which may
be related to the subject matter hereof in any way.
14. COUNTERPARTS
This Agreement may be executed in two or more substantially identical
counterparts, each of which shall be deemed to be an original document
as to the person or persons signing it, and all of which when taken
together shall constitute one and the same binding agreement.
15. SUCCESSORS AND ASSIGNS
This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Individual and the Company, and their respective
successors and permitted assigns, but will not be delegable or
assignable by the Individual without written consent of the Company.
16. AMENDMENTS
Any provision of this Agreement may be amended or waived only with the
prior written consent of the Company and the Individual.
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<PAGE> 38
17. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Agreement shall be governed by, the laws of the
State of Delaware, without giving effect to provisions thereof
regarding conflicts of law.
IN WITNESS WHEREOF, the Company and Individual have caused this
Agreement to be executed on its and his behalf on the day and year first above
written.
SUPERIOR CONSULTANT HOLDINGS INDIVIDUAL
CORPORATION
By: /s/ Richard D. Helppie, Jr. /s/ George S. Huntzinger
---------------------------------------- ---------------------------------
Its: Chief Executive Officer
---------------------------------------
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<PAGE> 39
EXHIBIT F
PROMISSORY NOTE
Effective as of October 11, 2000 $305,540.00
For value received, George S. Huntzinger (the "BORROWER") promises to
pay to the order of Superior Consultant Holdings Corporation, a Delaware
corporation, with its principal place of business at 4000 Town Center, Suite
1100, Southfield, Michigan 48075 (the "LENDER"), the principal amount of Three
Hundred Five Thousand Five Hundred Forty Dollars ($305,540) due as set forth
below. The unpaid principal amount of this Note outstanding from time to time
shall bear interest annually at the rate of 9.5% interest, computed on the basis
of a 360-day year of twelve thirty-day months, which interest shall be due and
owing as set forth below.
I. Reference to Subscription and Securities Purchase Agreement. This Note
is delivered pursuant and subject to that certain Subscription and
Securities Purchase Agreement, as executed by and between the Lender
and the Borrower, dated as of October 11, 2000 (the "SUBSCRIPTION AND
SECURITIES PURCHASE AGREEMENT"), the terms and conditions of which are,
by this reference, incorporated herein and made a part hereof.
II. Payment.
A. Principal and accrued and unpaid interest under this Note shall be
due and payable on demand after the first to occur of the
following: (i) the termination of Borrower's employment or service
as Chairman of the Board with the Company or an affiliate of the
Company if such termination occurs on or prior to October 11, 2001
(except in the event of termination of employment by the Company
without "cause" as that term is defined in Borrower's Employment
Agreement with the Company); (ii) October 11, 2002; or (iii) upon
a Change of Control, as defined in the Subscription and Securities
Purchase Agreement.
B. Payment of any principal and interest amount stated above shall be
made to the Lender at its principal offices at 4000 Town Center,
Suite 1100, Southfield, Michigan 48075, or at such other place as
the Lender may designate to the Borrower. Receipt by the Lender of
a check of the Borrower in the amount of any payment due and owing
shall be deemed to constitute payment hereunder, provided that
such check is processed and paid in full by the institution
against which the check is drawn within a commercially reasonable
and customary time.
III. Prepayment. The unpaid principal balance of this Note and interest
accrued thereon may be prepaid by the Borrower at any time, in whole or
in part, without premium or penalty, in minimum increments of not less
than Five Thousand Dollars ($5,000).
<PAGE> 40
IV. Default. If (i) the Borrower shall fail to promptly pay to the Lender
all sums when due hereunder or (ii) an event of default shall occur
under the Pledge Agreement described in Section V below or under any
other agreement, instrument or document heretofore, now or at any time
hereafter delivered to the Lender by or for the benefit of the
Borrower, which default or event of default is not cured within the
time, if any, specified therefor in such agreement, instrument or
document, then the Lender may declare all sums owed by the Borrower
hereunder immediately due and payable, without notice unless otherwise
required by applicable statute, and may take any action at law or in
equity to collect the amounts due and owing hereunder, or to request
any other available remedy, together with any damages resulting from
such nonpayment.
V. Security. In accordance with that certain Pledge Agreement by and
between the Borrower and the Lender effective as of even date herewith,
the obligation of the Borrower under this Note shall be secured by the
Borrower's interest in those certain interests constituting Collateral
(as defined in the Pledge Agreement). The Borrower covenants and agrees
that he shall not, without the consent of the Lender, pledge or
otherwise encumber or grant a security interest in such Collateral to
any party while the indebtedness represented by this Note remains
unpaid and outstanding.
VI. Governing Laws. This Note is issued in and shall be construed and
governed in accordance with the laws of the State of Delaware. The
Borrower expressly consents to enforcement of the terms hereof in any
court of competent jurisdiction sitting in the State of Delaware. The
Borrower expressly waives presentment of payment, protest, notice of
protest and dishonor as prerequisites to the enforcement hereof.
VII. Assigns. All of the covenants, stipulations, promises and agreements in
this Note shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns.
VIII. Costs. The Borrower promises to pay all costs and collection of every
kind, including, but not limited to, all reasonable attorneys' fees,
court costs and expenses of every kind incurred by the Lender, in
connection with such collection.
IX. Miscellaneous. Failure of the Lender, for any period of time or on one
or more occasions, to exercise its option to accelerate the payment of
this Note pursuant to Section IV above shall not constitute a waiver of
the right to exercise the same at any time thereafter or in the event
of any subsequent default under Section IV above. No act of omission or
commission of the Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver
or release of the same; any such waiver or release is to be effected
only through a written document executed by the Lender, and then only
to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as a waiver or
release of any subsequent event or as a bar to any subsequent exercise
of the Lender's rights or remedies hereunder.
/s/ George S. Huntzinger
---------------------------------
Borrower
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<PAGE> 41
EXHIBIT G
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "AGREEMENT") is effective as of October 11,
2000, between the undersigned, George S. Huntzinger ("PLEDGOR"), in favor of
Superior Consultant Holdings Corporation, a Delaware corporation ("PLEDGEE").
Pledgor is indebted to Pledgee in the principal amount of not less than
$305,540 as evidenced by a Promissory Note (the "NOTE") made by Pledgor to
Pledgee dated as of even date herewith.
To secure payment of the Note, Pledgee has requested and Pledgor has
agreed that Pledgor execute and deliver this Agreement in favor of the Pledgee.
1. DEFINITIONS AND TERMS
Except as otherwise defined in this Agreement, all words, terms and/or phrases
used herein shall be defined by the applicable definition (if any) in the
Uniform Commercial Code as adopted by the State of Delaware, without regard to
principles of choice of law.
2. COLLATERAL
2.1. To secure the prompt payment to Pledgee of the Note and all
obligations herein and therein, Pledgor grants to Pledgee a security
interest in and to, and pledges and assigns to Pledgee, all of
Pledgor's right, title, and interest in, to and under the common stock
of Pledgee sold to Pledgor as of the date hereof, together with any and
all distributions, whether in cash or in kind, upon or in connection
therewith, whether such distributions or payments are made pursuant to
a redemption of the common stock or are dividends, or in partial or
complete liquidation, or the result of reclassification, readjustment
or other changes in the capital structure of the entity issuing the
same, or otherwise, and any and all subscriptions, warrants, options
and other rights issued upon or in connection therewith (collectively,
the "SECURITIES") and all products and proceeds of the foregoing
(whether in the form of cash, proceeds of insurance policies,
instruments, documents, general intangibles, contract rights, accounts,
chattel paper, inventory equipment, goods or otherwise). All of the
foregoing is referred to herein individually and/or collectively as the
"COLLATERAL."
2.2. Simultaneous with the execution of this Agreement, Pledgor is
hereby delivering to Pledgee the certificates representing the
Securities, with irrevocable powers or assignments relating thereto
endorsed in blank by Pledgor, to be held by Pledgee until the Note is
paid in full.
2.3. That portion of the Securities consisting of non-cash
distributions and payments upon or in connection therewith, whether
such non-cash distributions or payments are made pursuant to a
redemption of the Securities or are dividends, or in partial or
complete
<PAGE> 42
liquidation, or the result of reclassification, readjustment or other
changes in the capital structure of the "Persons" (meaning any
individual(s) or entity or entities of a private or public nature)
issuing the same or otherwise, shall be forthwith delivered by Pledgor
to Pledgee in the form in which that distribution or payment is
received by Pledgor, and thereupon, Pledgee shall hold any such
distribution or payment as additional Collateral to secure the Note.
Any securities or evidence of indebtedness so distributed to Pledgor
shall be delivered to Pledgee accompanied with irrevocable powers or
assignments relating thereto or assignments thereof duly signed by
Pledgor in form acceptable to Pledgee and duly endorsed in blank by
Pledgor.
3. DEFAULT
3.1. The occurrence of any one of the following events shall constitute
a default by Pledgor (an "EVENT OF DEFAULT") under this Agreement: (a)
if Pledgor fails or neglects to perform, keep or observe any material
term, provision, condition, covenant, warranty or representation
contained in this Agreement which is required to be performed, kept or
observed by Pledgor; (b) occurrence of a default under the Note; (c) a
notice of lien, levy, attachment or assessment is filed or recorded
with respect to the Collateral; or (d) Pledgor's insolvency, inability
to pay debts as they mature, appointment of a receiver for any part of
his property, or assignment for the benefit of creditors, or the
commencement of any proceedings under any bankruptcy or insolvency laws
by or against Pledgor.
3.2. All of Pledgee's rights and remedies under this Agreement are
cumulative and non-exclusive.
3.3. Upon an Event of Default described in Section 3.1, if same shall
continue unremedied for a period of thirty (30) days following written
notice thereof, the Note shall be due and payable and enforceable
against Pledgor, at Pledgee's principal place of business.
3.4. Upon an Event of Default, Pledgee, in its sole and absolute
discretion, may exercise any one or more of the following remedies: (a)
if the Note is not paid forthwith by Pledgor to Pledgee at Pledgee's
principal place of business, Pledgee may declare all sums owed by
Pledgor under the Note immediately due and payable and may proceed to
suit against Pledgor; (b) exercise any one or more of the rights and
remedies accruing to a secured party under the Uniform Commercial Code
of the relevant state or states and any other applicable law upon
default by a debtor; and/or (c) sell or cause to be sold the Collateral
or any part thereof and all of Pledgor's right, title and interest
therein at public auction or private sale as Pledgee deems advisable in
accordance with the applicable laws of the United States or of any
state.
3.5. Pledgor agrees that in any sale of the Collateral, Pledgee is
hereby authorized to comply with any limitation or restriction in
connection with such sale as Pledgee may be advised by counsel is
necessary, or advisable in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as
may restrict the
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<PAGE> 43
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to persons who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of that
portion of the Collateral consisting of the Securities), or in order to
obtain any required approval of the sale or of the purchaser by any
governmental regulatory authority or official, and Pledgor further
agrees that such compliance shall not result in such sale being
considered commercially unreasonable, nor shall Pledgee be liable or
accountable to Pledgor for any reasonable discount allowed by reason of
the fact that the Collateral was sold in compliance with any such
limitation or restriction.
3.6. Any sale of the Collateral may be made for cash or credit at the
election of Pledgee and the amounts of any such sale shall be credited
to Pledgor's liabilities and obligations under the Note only when the
proceeds thereof are actually received by Pledgee in immediately
available or collected funds. Pledgee may, if it deems it reasonable,
postpone or adjourn any such sale of the Collateral from time to time
by an announcement at the time and place of sale or by announcement at
the time and place of such postponed or adjourned sale, without being
required to give a new notice of sale.
3.7. Any notice required to be given by Pledgee of a sale, lease or
other intended action by Pledgee, deposited in the United States mail,
postage prepaid and duly addressed to Pledgor at the address specified
in the Subscription and Securities Purchase Agreement of even date
herewith between the Pledgor and the Pledgee, not less than five (5)
calendar days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Pledgor thereof.
3.8. Pledgor agrees that Pledgee has no obligation to preserve rights
against prior parties to the Collateral. Further Pledgor waives and
releases any cause of action and claim against Pledgee as a result of
Pledgee's possession, collection or sale of the Collateral, any
liability or penalty for failure of Pledgee to comply with any
requirement imposed on Pledgee relating to notice of sale, holding of
sale or reporting of sale of the Collateral, and, to the extent
permitted by law, any right of redemption from such sale.
4. REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants as follows:
(a) Pledgor has, and has duly exercised, all requisite capacity,
power and authority to enter into this Agreement, to pledge the
Collateral, and to carry out the transactions contemplated hereby;
and
(b) this Agreement constitutes the legal, valid and binding
obligation of Pledgor, enforceable in accordance with its terms.
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<PAGE> 44
5. COVENANTS
Pledgor hereby covenants that, until all obligations under the Note have been
paid in full and the Note is terminated:
(a) Pledgor will not sell, convey or otherwise dispose of any
Collateral or any interest therein or create, incur or permit to
exist any pledge, mortgage, lien, charge, security interest or
other encumbrance with respect to the Collateral or the proceeds
thereof, other than that created hereby; and
(b) Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action (excluding
filings or registrations pursuant to federal, state or foreign
securities laws) that may be necessary or desirable, or that
Pledgee may request, in order to perfect and protect any security
interest intended to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
6. VOTING RIGHTS AND DIVIDENDS
So long as no Event of Default shall have occurred and be continuing and
notwithstanding anything to the contrary contained herein:
(a) Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Collateral for any purpose not
inconsistent with the terms of this Agreement or the Note; and
(b) Pledgor shall be entitled to receive any and all cash
distributed in respect of the Collateral, provided, however, that
any securities paid as distributions in respect of the Collateral
shall be delivered to Pledgee, by Pledgor, to be held as
Collateral in the same form as so received, with any necessary
endorsement.
Upon the occurrence and during the continuance of an Event of Default, all
rights of Pledgor to exercise the voting and other consensual rights and to
receive the distributions (other than tax distributions) which he would
otherwise be authorized to exercise, receive and retain pursuant to this Section
6 shall cease, and all such rights shall thereupon become vested in Pledgee,
which shall then have the sole right to exercise such voting and other
consensual rights and to receive and hold as Collateral all dividends and
distributions. Pledgee shall apply any cash so received to the obligations of
Pledgor under the Note. Effective upon the occurrence of an Event of Default,
Pledgor hereby grants to Pledgee an irrevocable proxy coupled with an interest
for the Collateral, pursuant to which proxy Pledgee shall be entitled to vote or
consent with respect to the Collateral in its sole discretion.
7. POWER OF ATTORNEY
Upon the occurrence and during the continuance of an Event of Default, Pledgor
hereby appoints the Pledgee as Pledgor's agent and attorney-in-fact, with full
power and authority in the name, place and stead of Pledgor or otherwise, from
time to time in the Pledgee's discretion, to take any
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<PAGE> 45
action and to execute any instrument which the Pledgee may deem necessary or
advisable to fulfill Pledgor's obligations hereunder. This appointment is
irrevocable and continuing and is coupled with an interest of Pledgor. Pledgor
hereby ratifies and confirms all that the Pledgee may lawfully do by virtue of
this Power of Attorney.
8. GENERAL
8.1. If any provision of this Agreement or the application thereof to
any person or circumstance is held invalid or unenforceable, the
remainder of this Agreement and the application of such provision to
other persons or circumstances will not be affected thereby, the
provisions of this Agreement being severable in any such instance.
8.2. Pledgee's failure at any time hereafter to require strict
performance by Pledgor of any provision of this Agreement shall not
waive, affect or diminish any right of Pledgee thereafter to demand
strict compliance and performance therewith. Any suspension or waiver
by Pledgee of an Event of Default by Pledgor under this Agreement shall
not suspend, waive or affect any other Event of Default by Pledgor
under this Agreement, whether the same or of a different type. None of
the undertaking, agreements, warranties, covenants and representations
of Pledgor contained in this Agreement shall be deemed to have been
suspended or waived by Pledgee unless such suspension or waiver is by
an instrument in writing signed by an officer of Pledgee and directed
to Pledgor specifying such suspension or waiver.
8.3. This Agreement shall continue in full force and effect until the
Note is fully paid, performed and discharged. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at
any time any payment under the Note is rescinded or must otherwise be
returned by Pledgee upon the insolvency, bankruptcy or reorganization
of Pledgor or otherwise, all as though such payment had not been made.
This Agreement shall be binding upon Pledgor and inure to the benefit
of Pledgee and Pledgor, and their respective heirs, personal
representatives, successors and assigns. Written notice to Pledgor or
Pledgee shall be to the address or addresses specified in the
Subscription and Securities Purchase Agreement of even date herewith
between the Pledgor and the Pledgee.
8.4. No termination of this Agreement, or cancellation of the Note,
shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of Pledgor or Pledgee in any way or respect
relating to (i) any transaction or event occurring prior to such
termination, (ii) any of the Collateral and (iii) any of the
undertakings, agreements, covenants, warranties and representations of
Pledgor contained in this Agreement.
8.5. In the event that either party shall take legal action to enforce
its rights under this agreement, the prevailing party shall be entitled
to recover its actual costs and attorney fees.
8.6. All covenants, warranties and representations contained herein
shall be true as of the date hereof and shall survive the execution and
delivery of this Agreement.
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8.7. This Pledge Agreement shall be governed by the laws of the State
of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Pledgor in favor of Pledgee as of the day and year first above written.
PLEDGOR:
/s/ George S. Huntzinger
-------------------------------------
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<PAGE> 47
EXHIBIT H
SUBSCRIPTION AND SECURITIES
PURCHASE AGREEMENT
THIS SUBSCRIPTION AND SECURITIES PURCHASE AGREEMENT is made effective
this 11th day of October, 2000 (the "EFFECTIVE DATE") by and between Superior
Consultant Holdings Corporation, a Delaware corporation (the "COMPANY"), and
Steven H. Smith (the "INDIVIDUAL").
WHEREAS, the Company and the Individual desire to enter into an
agreement pursuant to which the Individual will purchase and the Company will
sell to the Individual shares of the Company's common stock (the "SHARES").
WHEREAS, the Company and the Individual desire to establish certain
restrictions regarding the ownership of, and transfer of, the Shares.
NOW, THEREFORE, in consideration of the following covenants and for
other good and valuable consideration, the parties agree as follows:
1. PURCHASE OF SHARES
As of the Effective Date, the Individual will purchase and the Company
will sell to Individual Two Hundred Thousand (200,000) Shares on the
terms and conditions and subject to all of the limitations set forth
herein.
2. PURCHASE PRICE
The purchase price of the Shares shall be $1.5377 per share, the fair
market value of the Shares, calculated based upon the average closing
sales price of common stock of the Company as reported by NASDAQ on
each of the five (5) trading days prior to the Effective Date. The
Individual shall be permitted to make an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to recognize income
at the date of the purchase of the Shares. The Individual will pay
$2,000, the par value of the Shares, in cash or by check, and will pay
the remainder of the purchase price through delivery of a promissory
note in the amount of $305,540, dated as of even date herewith and in
the form attached hereto as Exhibit A (the "PROMISSORY NOTE"). The
Promissory Note shall be secured by a pledge of the Shares pursuant to
the Pledge Agreement dated as of even date herewith in the form
attached hereto as Exhibit B (the "PLEDGE AGREEMENT").
<PAGE> 48
3. CERTIFICATES AND SHAREHOLDER RIGHTS
The Company's Transfer Agent and Registrar shall prepare and issue a
stock certificate representing the Shares that the Individual has
purchased, which certificate shall be held by the Corporate Secretary
of the Company pursuant to the terms of this Agreement.
4. RESTRICTIONS AND VESTING
a) Until the passage of the time periods specified in Paragraph 4(b)
or the occurrence of either of the events specified in Paragraph
4(c) below, the Individual shall not sell, transfer, convey,
exchange, give, assign, pledge, encumber, or otherwise dispose of
all or a portion of any interest in the Shares. Any attempted
transfer shall be void and shall not transfer ownership in, title
to, or any rights respecting the Shares.
b) Subject to this Agreement, the time period restrictions hereunder
shall lapse for the number of Shares and on the dates specified
below, provided that the Individual is an employee of the Company
or Chairman of the Company's Board of Directors at each such date.
Or, in the event of termination by the Company of Individual's
employment without "cause" as that term is defined in Individual's
Employment Agreement with the Company, the restrictions hereunder
shall continue to lapse in accordance with the schedule below.
Number of Shares Date Restrictions Lapse
---------------- -----------------------
50,000 January 11, 2001
50,000 April 11, 2001
50,000 July 11, 2001
50,000 October 11, 2001
c) Notwithstanding the provisions of Paragraph 4(b), the restrictions
hereunder shall lapse immediately upon a Change of Control. A
"CHANGE OF CONTROL" shall be deemed to occur on the earliest of
(a) the acquisition by any entity, person, or group of beneficial
ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 50% of the
outstanding capital stock of the Company entitled to vote for the
election of directors ("VOTING STOCK"); (b) the completion by any
entity, person, or group (other than the Company or a subsidiary
of the Company) of a tender offer or an exchange offer for (and
consummation of the resulting purchase of) more than 50% of the
outstanding Voting Stock of the Company; (c) the effective time of
(1) a merger or consolidation of the Company with one or more
corporations as a result of which the holders of
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<PAGE> 49
the outstanding Voting Stock of the Company immediately prior to
such merger hold less than 80% of the Voting Stock of the
surviving or resulting corporation or (2) a transfer of
substantially all of the property or assets of the Company other
than to an entity of which the Company owns at least 80% of the
Voting Stock; or (d) the election to the Board of Directors of the
Company, without the recommendation or approval of the incumbent
Board of Directors of the Company, of directors constituting a
majority of the number of directors of the Company then in office.
d) Any Shares the restrictions on which have not lapsed upon the
Individual's termination of employment or termination of service
as Chairman of the Company's Board of Directors shall be
repurchased by the Company in exchange for the reduction in the
amount of the Promissory Note by an amount equal to the lesser of
(i) $1.5377 per share or (ii) the Fair Market Value per share
(such price being the average closing market price of the Common
Stock as reported by NASDAQ on each of the five (5) consecutive
trading days ending on the day immediately preceding the date of
repurchase, or if the Company's Common Stock is not then publicly
traded, the Fair Market Value as determined by the Board of
Directors in good faith) multiplied by the number of Shares
repurchased.
5. REPRESENTATIONS AND COVENANTS OF INDIVIDUAL
a) In connection with the purchase of the Shares hereunder, the
Individual represents and warrants to the Company that:
i) The Shares to be acquired by the Individual pursuant to this
Agreement shall be acquired for his own account and not with
a view to, or present intention of, distribution in
violation of the Securities Act of 1933 (the "1933 ACT") or
any applicable state securities laws, and the Shares will
not be disposed of in contravention of the 1933 Act or any
applicable state securities laws.
ii) The Individual is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in
the Shares.
iii) The Individual acknowledges that he is able to bear the
economic risk of his investment in the Shares for an
indefinite period of time, because the Shares have not been
registered under the 1933 Act and, therefore, cannot be
resold unless subsequently registered under the 1933 Act or
an exemption from such registration is available.
iv) The Individual has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
offering of the
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<PAGE> 50
Shares and has had full access to such information
concerning the Company as he has requested.
v) The Individual has the full right, power and authority to
execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement, the Promissory Note
and the Pledge Agreement constitute the legal, valid and
binding obligations of the Individual enforceable against
him in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally,
now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable
remedies.
vi) The Individual is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body
which would prevent the execution or delivery of this
Agreement by him or the consummation of the transactions
contemplated hereby.
b) As an inducement to the Company to issue the Shares, and as a
condition thereto, the Individual acknowledges and agrees that
neither the issuance of the Shares to him nor any provision
contained herein shall entitle the Individual to remain in the
service of the Company or affect the Company's right to terminate
the Individual's employment or the Board of Director's right to
terminate Individual's status as Chairman of the Board at any time
for any or no reason.
6. REGISTRATION
The Individual understands that the Shares are not currently being
registered under the 1933 Act by reason of their contemplated issuance
in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. The
Individual further agrees that he will not sell or otherwise dispose of
the Shares unless such sale or other disposition has been registered or
is exempt from registration under the 1933 Act and has been registered
or qualified or is exempt from registration or qualification under
applicable securities laws of any state. The Individual understands
that a restrictive legend consistent with the foregoing, and as set
forth in Paragraph 8, will be placed on the certificates evidencing the
Shares, and related stop transfer instructions will be noted in the
stock transfer records of the Company and/or its stock transfer agent
for the Shares.
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7. WITHHOLDING
The Company shall have the power and right to deduct or withhold, or
require the Individual to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes required by law to be withheld
with respect to any purchase made under or as a result of this
Agreement. In the alternative, upon any taxable event hereunder, the
Individual may elect, subject to Company approval, to satisfy the
withholding requirement in whole or in part, by having the Company
withhold Shares that would otherwise be transferred to the Individual
having a fair market value, on the date the tax is to be determined,
equal to the minimum marginal tax that could be imposed on the
transaction. All elections shall be made in writing and signed by the
Individual.
8. LEGEND
The Individual shall be bound by the provisions of the following legend
(or similar legend) which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to the purchase hereunder.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT
OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ALL
OF THE TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS SET
FORTH IN THE AGREEMENT PURSUANT TO WHICH THE SHARES HAVE BEEN
PURCHASED. ALL TERMS, CONDITIONS, LIMITATIONS, AND
RESTRICTIONS OF THE FOREGOING AGREEMENT ARE FULLY BINDING UPON
THE HOLDER OF THIS CERTIFICATE, HIS SUCCESSORS, ESTATE, HEIRS,
ASSIGNS, PERSONAL REPRESENTATIVE, ADMINISTRATOR, EXECUTOR OR
GUARDIAN AS THE CASE MAY BE, FOR ALL PURPOSES UNTIL SUCH TIME
AS ALL TERMS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS OF THE
AGREEMENTS ARE REMOVED,
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WAIVED, OR OTHERWISE VACATED IN A MANNER EXPRESSLY AUTHORIZED
THEREUNDER."
9. RELEASE OF RESTRICTIONS
At such time as the restrictions on the Shares lapse, as set forth in
Paragraph 4(b) or 4(c), and the Promissory Note is paid in full (or as
soon thereafter as may be practicable), the certificate or certificates
shall be transferred by the Corporate Secretary of the Company to the
Individual.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If the outstanding Shares of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization,
merger, or consolidation, or if a change is made to the common stock of
the Company by reason of any recapitalization, reclassification, change
in par value, stock split, reverse stock split, combination of shares
or dividends payable in capital stock, or the like, the Company shall
make adjustments to the Shares issued to the Individual as it may
determine to be appropriate under the circumstances.
11. NOTICES
Any notice provided for in this Agreement must be in writing and must
be either (i) personally delivered, (ii) mailed by registered or
certified first class mail, prepaid, with return receipt requested, or
(iii) sent by recognized overnight courier service, to the recipient at
the address indicated below:
To the Individual: Steven H. Smith
575 E. Big Beaver Rd., #300
Troy, Michigan 48083
To the Company: Superior Consultant Holdings Corporation
4000 Town Center
Suite 1100
Southfield, Michigan 48075
or to the attention of such other person as the recipient party shall
specify by prior written notice to the sending party. Any notice under
this Agreement will be deemed to have been given (i) on the date such
notice is personally delivered, (ii) three days after the date of
mailing if sent by certified or registered mail, or (iii) one day after
the date such notice is delivered to the overnight courier if sent by
overnight courier.
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<PAGE> 53
12. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but
if any provision of this Agreement is held to be invalid, illegal, or
unenforceable, in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been
contained herein.
13. ENTIRE AGREEMENT
This Agreement and any other agreement referred to herein constitutes
the complete agreement and understanding between the parties and
supersedes and preempts any and all prior understandings, agreements or
representations by or between the parties, written or oral, which may
be related to the subject matter hereof in any way.
14. COUNTERPARTS
This Agreement may be executed in two or more substantially identical
counterparts, each of which shall be deemed to be an original document
as to the person or persons signing it, and all of which when taken
together shall constitute one and the same binding agreement.
15. SUCCESSORS AND ASSIGNS
This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Individual and the Company, and their respective
successors and permitted assigns, but will not be delegable or
assignable by the Individual without written consent of the Company.
16. AMENDMENTS
Any provision of this Agreement may be amended or waived only with the
prior written consent of the Company and the Individual.
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<PAGE> 54
17. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Agreement shall be governed by, the laws of the
State of Delaware, without giving effect to provisions thereof
regarding conflicts of law.
IN WITNESS WHEREOF, the Company and Individual have caused this
Agreement to be executed on its and his behalf on the day and year first above
written.
SUPERIOR CONSULTANT HOLDINGS INDIVIDUAL
CORPORATION
By: /s/ Richard D. Helppie, Jr. /s/ Steven H. Smith
---------------------------------------- --------------------------------
Its: Chief Executive Officer
---------------------------------------
8
<PAGE> 55
EXHIBIT I
PROMISSORY NOTE
Effective as of October 11, 2000 $305,540.00
For value received, Steven H. Smith (the "BORROWER") promises to pay to
the order of Superior Consultant Holdings Corporation, a Delaware corporation,
with its principal place of business at 4000 Town Center, Suite 1100,
Southfield, Michigan 48075 (the "LENDER"), the principal amount of Three Hundred
Five Thousand Five Hundred Forty Dollars ($305,540) due as set forth below. The
unpaid principal amount of this Note outstanding from time to time shall bear
interest annually at the rate of 9.5% interest, computed on the basis of a
360-day year of twelve thirty-day months, which interest shall be due and owing
as set forth below.
I. Reference to Subscription and Securities Purchase Agreement. This Note
is delivered pursuant and subject to that certain Subscription and
Securities Purchase Agreement, as executed by and between the Lender
and the Borrower, dated as of October 11, 2000 (the "SUBSCRIPTION AND
SECURITIES PURCHASE AGREEMENT"), the terms and conditions of which are,
by this reference, incorporated herein and made a part hereof.
II. Payment.
A. Principal and accrued and unpaid interest under this Note shall be
due and payable on demand after the first to occur of the
following: (i) the termination of Borrower's employment or service
as Chairman of the Board with the Company or an affiliate of the
Company if such termination occurs on or prior to October 11, 2001
(except in the event of termination of employment by the Company
without "cause" as that term is defined in Borrower's Employment
Agreement with the Company); (ii) October 11, 2002; or (iii) upon
a Change of Control, as defined in the Subscription and Securities
Purchase Agreement.
B. Payment of any principal and interest amount stated above shall be
made to the Lender at its principal offices at 4000 Town Center,
Suite 1100, Southfield, Michigan 48075, or at such other place as
the Lender may designate to the Borrower. Receipt by the Lender of
a check of the Borrower in the amount of any payment due and owing
shall be deemed to constitute payment hereunder, provided that
such check is processed and paid in full by the institution
against which the check is drawn within a commercially reasonable
and customary time.
III. Prepayment. The unpaid principal balance of this Note and interest
accrued thereon may be prepaid by the Borrower at any time, in whole or
in part, without premium or penalty, in minimum increments of not less
than Five Thousand Dollars ($5,000).
<PAGE> 56
IV. Default. If (i) the Borrower shall fail to promptly pay to the Lender
all sums when due hereunder or (ii) an event of default shall occur
under the Pledge Agreement described in Section V below or under any
other agreement, instrument or document heretofore, now or at any time
hereafter delivered to the Lender by or for the benefit of the
Borrower, which default or event of default is not cured within the
time, if any, specified therefor in such agreement, instrument or
document, then the Lender may declare all sums owed by the Borrower
hereunder immediately due and payable, without notice unless otherwise
required by applicable statute, and may take any action at law or in
equity to collect the amounts due and owing hereunder, or to request
any other available remedy, together with any damages resulting from
such nonpayment.
V. Security. In accordance with that certain Pledge Agreement by and
between the Borrower and the Lender effective as of even date herewith,
the obligation of the Borrower under this Note shall be secured by the
Borrower's interest in those certain interests constituting Collateral
(as defined in the Pledge Agreement). The Borrower covenants and agrees
that he shall not, without the consent of the Lender, pledge or
otherwise encumber or grant a security interest in such Collateral to
any party while the indebtedness represented by this Note remains
unpaid and outstanding.
VI. Governing Laws. This Note is issued in and shall be construed and
governed in accordance with the laws of the State of Delaware. The
Borrower expressly consents to enforcement of the terms hereof in any
court of competent jurisdiction sitting in the State of Delaware. The
Borrower expressly waives presentment of payment, protest, notice of
protest and dishonor as prerequisites to the enforcement hereof.
VII. Assigns. All of the covenants, stipulations, promises and agreements in
this Note shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns.
VIII. Costs. The Borrower promises to pay all costs and collection of every
kind, including, but not limited to, all reasonable attorneys' fees,
court costs and expenses of every kind incurred by the Lender, in
connection with such collection.
IX. Miscellaneous. Failure of the Lender, for any period of time or on one
or more occasions, to exercise its option to accelerate the payment of
this Note pursuant to Section IV above shall not constitute a waiver of
the right to exercise the same at any time thereafter or in the event
of any subsequent default under Section IV above. No act of omission or
commission of the Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver
or release of the same; any such waiver or release is to be effected
only through a written document executed by the Lender, and then only
to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as a waiver or
release of any subsequent event or as a bar to any subsequent exercise
of the Lender's rights or remedies hereunder.
/s/ Steven H. Smith
---------------------------------
Borrower
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<PAGE> 57
EXHIBIT J
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "AGREEMENT") is effective as of October 11,
2000, between the undersigned, Steven H. Smith ("PLEDGOR"), in favor of Superior
Consultant Holdings Corporation, a Delaware corporation ("PLEDGEE").
Pledgor is indebted to Pledgee in the principal amount of not less than
$305,540 as evidenced by a Promissory Note (the "NOTE") made by Pledgor to
Pledgee dated as of even date herewith.
To secure payment of the Note, Pledgee has requested and Pledgor has
agreed that Pledgor execute and deliver this Agreement in favor of the Pledgee.
1. DEFINITIONS AND TERMS
Except as otherwise defined in this Agreement, all words, terms and/or phrases
used herein shall be defined by the applicable definition (if any) in the
Uniform Commercial Code as adopted by the State of Delaware, without regard to
principles of choice of law.
2. COLLATERAL
2.1. To secure the prompt payment to Pledgee of the Note and all
obligations herein and therein, Pledgor grants to Pledgee a security
interest in and to, and pledges and assigns to Pledgee, all of
Pledgor's right, title, and interest in, to and under the common stock
of Pledgee sold to Pledgor as of the date hereof, together with any and
all distributions, whether in cash or in kind, upon or in connection
therewith, whether such distributions or payments are made pursuant to
a redemption of the common stock or are dividends, or in partial or
complete liquidation, or the result of reclassification, readjustment
or other changes in the capital structure of the entity issuing the
same, or otherwise, and any and all subscriptions, warrants, options
and other rights issued upon or in connection therewith (collectively,
the "SECURITIES") and all products and proceeds of the foregoing
(whether in the form of cash, proceeds of insurance policies,
instruments, documents, general intangibles, contract rights, accounts,
chattel paper, inventory equipment, goods or otherwise). All of the
foregoing is referred to herein individually and/or collectively as the
"COLLATERAL."
2.2. Simultaneous with the execution of this Agreement, Pledgor is
hereby delivering to Pledgee the certificates representing the
Securities, with irrevocable powers or assignments relating thereto
endorsed in blank by Pledgor, to be held by Pledgee until the Note is
paid in full.
2.3. That portion of the Securities consisting of non-cash
distributions and payments upon or in connection therewith, whether
such non-cash distributions or payments are made pursuant to a
redemption of the Securities or are dividends, or in partial or
complete
<PAGE> 58
liquidation, or the result of reclassification, readjustment or other
changes in the capital structure of the "Persons" (meaning any
individual(s) or entity or entities of a private or public nature)
issuing the same or otherwise, shall be forthwith delivered by Pledgor
to Pledgee in the form in which that distribution or payment is
received by Pledgor, and thereupon, Pledgee shall hold any such
distribution or payment as additional Collateral to secure the Note.
Any securities or evidence of indebtedness so distributed to Pledgor
shall be delivered to Pledgee accompanied with irrevocable powers or
assignments relating thereto or assignments thereof duly signed by
Pledgor in form acceptable to Pledgee and duly endorsed in blank by
Pledgor.
3. DEFAULT
3.1. The occurrence of any one of the following events shall constitute
a default by Pledgor (an "EVENT OF DEFAULT") under this Agreement: (a)
if Pledgor fails or neglects to perform, keep or observe any material
term, provision, condition, covenant, warranty or representation
contained in this Agreement which is required to be performed, kept or
observed by Pledgor; (b) occurrence of a default under the Note; (c) a
notice of lien, levy, attachment or assessment is filed or recorded
with respect to the Collateral; or (d) Pledgor's insolvency, inability
to pay debts as they mature, appointment of a receiver for any part of
his property, or assignment for the benefit of creditors, or the
commencement of any proceedings under any bankruptcy or insolvency laws
by or against Pledgor.
3.2. All of Pledgee's rights and remedies under this Agreement are
cumulative and non-exclusive.
3.3. Upon an Event of Default described in Section 3.1, if same shall
continue unremedied for a period of thirty (30) days following written
notice thereof, the Note shall be due and payable and enforceable
against Pledgor, at Pledgee's principal place of business.
3.4. Upon an Event of Default, Pledgee, in its sole and absolute
discretion, may exercise any one or more of the following remedies: (a)
if the Note is not paid forthwith by Pledgor to Pledgee at Pledgee's
principal place of business, Pledgee may declare all sums owed by
Pledgor under the Note immediately due and payable and may proceed to
suit against Pledgor; (b) exercise any one or more of the rights and
remedies accruing to a secured party under the Uniform Commercial Code
of the relevant state or states and any other applicable law upon
default by a debtor; and/or (c) sell or cause to be sold the Collateral
or any part thereof and all of Pledgor's right, title and interest
therein at public auction or private sale as Pledgee deems advisable in
accordance with the applicable laws of the United States or of any
state.
3.5. Pledgor agrees that in any sale of the Collateral, Pledgee is
hereby authorized to comply with any limitation or restriction in
connection with such sale as Pledgee may be advised by counsel is
necessary, or advisable in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as
may restrict the
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number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to persons who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of that
portion of the Collateral consisting of the Securities), or in order to
obtain any required approval of the sale or of the purchaser by any
governmental regulatory authority or official, and Pledgor further
agrees that such compliance shall not result in such sale being
considered commercially unreasonable, nor shall Pledgee be liable or
accountable to Pledgor for any reasonable discount allowed by reason of
the fact that the Collateral was sold in compliance with any such
limitation or restriction.
3.6. Any sale of the Collateral may be made for cash or credit at the
election of Pledgee and the amounts of any such sale shall be credited
to Pledgor's liabilities and obligations under the Note only when the
proceeds thereof are actually received by Pledgee in immediately
available or collected funds. Pledgee may, if it deems it reasonable,
postpone or adjourn any such sale of the Collateral from time to time
by an announcement at the time and place of sale or by announcement at
the time and place of such postponed or adjourned sale, without being
required to give a new notice of sale.
3.7. Any notice required to be given by Pledgee of a sale, lease or
other intended action by Pledgee, deposited in the United States mail,
postage prepaid and duly addressed to Pledgor at the address specified
in the Subscription and Securities Purchase Agreement of even date
herewith between the Pledgor and the Pledgee, not less than five (5)
calendar days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Pledgor thereof.
3.8. Pledgor agrees that Pledgee has no obligation to preserve rights
against prior parties to the Collateral. Further Pledgor waives and
releases any cause of action and claim against Pledgee as a result of
Pledgee's possession, collection or sale of the Collateral, any
liability or penalty for failure of Pledgee to comply with any
requirement imposed on Pledgee relating to notice of sale, holding of
sale or reporting of sale of the Collateral, and, to the extent
permitted by law, any right of redemption from such sale.
4. REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants as follows:
(a) Pledgor has, and has duly exercised, all requisite capacity,
power and authority to enter into this Agreement, to pledge the
Collateral, and to carry out the transactions contemplated hereby;
and
(b) this Agreement constitutes the legal, valid and binding
obligation of Pledgor, enforceable in accordance with its terms.
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5. COVENANTS
Pledgor hereby covenants that, until all obligations under the Note have been
paid in full and the Note is terminated:
(a) Pledgor will not sell, convey or otherwise dispose of any
Collateral or any interest therein or create, incur or permit to
exist any pledge, mortgage, lien, charge, security interest or
other encumbrance with respect to the Collateral or the proceeds
thereof, other than that created hereby; and
(b) Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action (excluding
filings or registrations pursuant to federal, state or foreign
securities laws) that may be necessary or desirable, or that
Pledgee may request, in order to perfect and protect any security
interest intended to be granted hereby or to enable Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
6. VOTING RIGHTS AND DIVIDENDS
So long as no Event of Default shall have occurred and be continuing and
notwithstanding anything to the contrary contained herein:
(a) Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Collateral for any purpose not
inconsistent with the terms of this Agreement or the Note; and
(b) Pledgor shall be entitled to receive any and all cash
distributed in respect of the Collateral, provided, however, that
any securities paid as distributions in respect of the Collateral
shall be delivered to Pledgee, by Pledgor, to be held as
Collateral in the same form as so received, with any necessary
endorsement.
Upon the occurrence and during the continuance of an Event of Default, all
rights of Pledgor to exercise the voting and other consensual rights and to
receive the distributions (other than tax distributions) which he would
otherwise be authorized to exercise, receive and retain pursuant to this Section
6 shall cease, and all such rights shall thereupon become vested in Pledgee,
which shall then have the sole right to exercise such voting and other
consensual rights and to receive and hold as Collateral all dividends and
distributions. Pledgee shall apply any cash so received to the obligations of
Pledgor under the Note. Effective upon the occurrence of an Event of Default,
Pledgor hereby grants to Pledgee an irrevocable proxy coupled with an interest
for the Collateral, pursuant to which proxy Pledgee shall be entitled to vote or
consent with respect to the Collateral in its sole discretion.
7. POWER OF ATTORNEY
Upon the occurrence and during the continuance of an Event of Default, Pledgor
hereby appoints the Pledgee as Pledgor's agent and attorney-in-fact, with full
power and authority in the name, place and stead of Pledgor or otherwise, from
time to time in the Pledgee's discretion, to take any
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action and to execute any instrument which the Pledgee may deem necessary or
advisable to fulfill Pledgor's obligations hereunder. This appointment is
irrevocable and continuing and is coupled with an interest of Pledgor. Pledgor
hereby ratifies and confirms all that the Pledgee may lawfully do by virtue of
this Power of Attorney.
8. GENERAL
8.1. If any provision of this Agreement or the application thereof to
any person or circumstance is held invalid or unenforceable, the
remainder of this Agreement and the application of such provision to
other persons or circumstances will not be affected thereby, the
provisions of this Agreement being severable in any such instance.
8.2. Pledgee's failure at any time hereafter to require strict
performance by Pledgor of any provision of this Agreement shall not
waive, affect or diminish any right of Pledgee thereafter to demand
strict compliance and performance therewith. Any suspension or waiver
by Pledgee of an Event of Default by Pledgor under this Agreement shall
not suspend, waive or affect any other Event of Default by Pledgor
under this Agreement, whether the same or of a different type. None of
the undertaking, agreements, warranties, covenants and representations
of Pledgor contained in this Agreement shall be deemed to have been
suspended or waived by Pledgee unless such suspension or waiver is by
an instrument in writing signed by an officer of Pledgee and directed
to Pledgor specifying such suspension or waiver.
8.3. This Agreement shall continue in full force and effect until the
Note is fully paid, performed and discharged. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at
any time any payment under the Note is rescinded or must otherwise be
returned by Pledgee upon the insolvency, bankruptcy or reorganization
of Pledgor or otherwise, all as though such payment had not been made.
This Agreement shall be binding upon Pledgor and inure to the benefit
of Pledgee and Pledgor, and their respective heirs, personal
representatives, successors and assigns. Written notice to Pledgor or
Pledgee shall be to the address or addresses specified in the
Subscription and Securities Purchase Agreement of even date herewith
between the Pledgor and the Pledgee.
8.4. No termination of this Agreement, or cancellation of the Note,
shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of Pledgor or Pledgee in any way or respect
relating to (i) any transaction or event occurring prior to such
termination, (ii) any of the Collateral and (iii) any of the
undertakings, agreements, covenants, warranties and representations of
Pledgor contained in this Agreement.
8.5. In the event that either party shall take legal action to enforce
its rights under this agreement, the prevailing party shall be entitled
to recover its actual costs and attorney fees.
8.6. All covenants, warranties and representations contained herein
shall be true as of the date hereof and shall survive the execution and
delivery of this Agreement.
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8.7. This Pledge Agreement shall be governed by the laws of the State
of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Pledgor in favor of Pledgee as of the day and year first above written.
PLEDGOR:
/s/ Steven H. Smith
-------------------------------------
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EXHIBIT N - JOINT FILING UNDERTAKING
The undersigned hereby execute this agreement as an exhibit to this Schedule 13D
to evidence the agreement of the below-named parties, in accordance with the
rules promulgated pursuant to the Securities Exchange Act of 1934, as amended,
to file this Schedule jointly on behalf of each such party.
Date: November 13, 2000
<TABLE>
<S> <C>
/s/ Ronald V. Aprahamian /s/ Richard D. Helppie, Jr.
---------------------------------------------- ---------------------------------------------------------
Ronald V. Aprahamian Richard D. Helppie, Jr.
/s/ George S. Huntzinger /s/ Charles O. Bracken
---------------------------------------------- ---------------------------------------------------------
George S. Huntzinger Charles O. Bracken
/s/ Steven H. Smith
----------------------------------------------
Steven Smith
</TABLE>
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