networm, NYER
My statement was to the best of my recollection. I'm not an expert, but some of the info is in the most recent 10-K. Please tell me if you feel I'm interpreting it incorrectly. I don't have time to look now, but I believe '20%' is somewhere in a filing.
From the 10-K:
<< The Shareholders of D.A.W. have employment agreements which expired in August 2006. Since the agreements expired, these employees had the right to require the Company to purchase all or any portion of their shares of D.A.W.
In August 2006, the Company entered into an Agreement with the Shareholders which stated/accomplished the following:
The Company acknowledges that 100% of the shares of the subsidiaries of the Company (the "Subsidiaries") held by each Shareholder (the "Put Shares") have been offered to the Company for purchase.
The Shareholders agree to refrain from requiring the Company to immediately pay the fair market value of the Put Shares until the earlier of (i) the closing of the transaction(s) among the Company, the Shareholders and the Subsidiaries with respect to the potential purchase by the Company of all
of the shares held by the Shareholders in the Subsidiaries (the "Purchase"), which may be accomplished by payment in full of immediately available funds, and (ii) July 15, 2007.
The Company agrees to pay $16,665 per month in total to the Shareholders from the first business day of August 2006 until the earlier of (i) the closing of the Purchase, and (ii) December 15, 2006; and - $33,335 per month from and after December 16, 2006 - until the closing of the Purchase.
D.A.W. agrees to advance to the Company the amounts necessary to make the monthly payments, which amounts will be repaid by the Company to D.A.W., (with interest at the applicable federal rate), upon the earlier of (i) the closing
of the Purchase, and (ii) July 15, 2007.
The Company pledges 2.5% shares of its holdings in D.A.W. as collateral for the monies advanced to the Company by D.A.W. to make the monthly payments noted above.
The parties to the Forbearance Agreement agreed that the fair market value of all of the shares of the Subsidiaries held by the Shareholders is $4 million.
The arbitration clause of the Forbearance Agreement was deleted in its entirety and replaced with a provision agreeing to jurisdiction and venue in the Business Litigation Session of the Superior Court for the Commonwealth of
Massachusetts.
The Company and the Shareholders are presently attempting to negotiate employment agreements and/or a buy out agreeable to all parties. There is no assurance that the Company will be able to successfully negotiate employment agreements and/or raise the capital necessary to buy out the Shareholders.
Should an agreement not be reached and/or capital not be raised, the Company will be faced with a number of uncertainties: If an agreement has not been finalized by July 15, 2007, the Shareholders could seek employment
elsewhere and this would, in the short run, leave no management team for the pharmacies and cause the Company to have to assemble an entire new management
team.>>
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