47724/85205 116690 v5 7
STANDBY STOCK PURCHASE AGREEMENT
STANDBY STOCK PURCHASE AGREEMENT, dated as of November 1__, 1996,
by and among the purchasers listed on Schedule 1 attached
hereto and hereby made a part hereof (hereinafter individually a
"Purchaser" and collectively the "Purchasers"), Xxxxxx X. Xxxxxxx
("Xxxxxxx") and Health-Chem Corporation, a Delaware corporation
("Health-Chem").
WHEREAS, Health-Chem has the right to acquire from Xxxxxxx (i)
215,028 shares of common stock, par value $.01 per share Common Stock
("Common Stock"), pursuant to an Option Agreement dated August 30, 1991
and (ii) 102,378 shares of Common Stock pursuant to an Option Agreement
dated July 15, 1994 such shares collectively hereinafter referred to as
the "Option Shares"); and
WHEREAS, Health-Chem is prohibited from directly exercising its
options to acquire the Option Shares by covenants contained in certain
debt instruments to which Health-Chem is bound and by the terms of said
Option Agreements; and
WHEREAS, the Option Shares, together with approximately 1,000,000
additional shares of Common Stock had been included in a Subscription
Rights Offering made by Health-Chem to its stockholders of record as of
August 2, 1996 (the "Subscription Offering") which expired on September
16, 1996; and
WHEREAS, the Purchasers have offered to purchase that number of
shares of common stock (the "Shares") equal to the total number of
Option Shares, at the same price per share as the subscription exercise
price in the Subscription Offering provided that such sale of Option
Shares is registered under the Securities Act of 1933, as amended (the
"Securities Act"); and
WHEREAS, Health-Chem believes that the sale of the Shares to the
Purchasers would be entirely consistent with and would advance the
corporate purposes for which the Subscription Offering was undertaken,
namely, to increase the float of Common Stock without increasing the
number of shares of Common Stock outstanding, while at the same time
providing to Health-
Chem substantially the equivalent benefit of the exercise of its
options to acquire the Option Shares; and
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Registration of Shares. The Shares of Common Stock shall be
registered pursuant to a registration statement (the "Registration
Statement") on Form S-3 filed with the Securities and Exchange
Commission (the "SEC") under the Securities Act. Health-Chem, Xxxxxxx
and the Purchasers shall use their best efforts to cooperate in
order that the Registration Statement be declared effective as soon as
practicable following the filing thereof.
2. Purchase of the Shares. On the first business day following
the effectiveness of the Registration Statement, or such later date,
not later than December 15, 1996, as the parties may agree to in
writing (the "Closing Date"), provided that all other conditions to
closing have been satisfied or waived and that no "stop-order" has been
issued by the SEC in respect of the Registration Statement, each
Purchaser shall purchase the number of Shares set forth opposite its
name on Schedule 1 at $1.10 per share (the "Purchase Price") for an
aggregate purchase price of $349,146.60. The Purchasers' obligation
hereunder is joint and several, and in the event a Purchaser fails to
purchase the number of shares set forth on Schedule 1 the other
Purchasers shall be obligated to purchase such shares and perform all
other obligations of the defaulting Purchaser. At the Closing, each
Purchaser shall receive one or more certificates for the Shares
purchased by it duly executed and registered in its name as set
forth on Schedule 1. All such Shares shall be duly authorized and issued,
validly paid and non-assessable Shares of Common Stock of Health-Chem.
3. Exercise of Option. On the Closing Date, Health-Chem shall
exercise its repurchase rights under the Option Agreements and
repurchase the Option Shares from Xxxxxxx at a per share price equal to
the weighted average exercise price for all of the Option Shares (the
"Average Option Price") under the Option Agreements. The aggregate
exercise price for the
Option Shares shall be paid to Xxxxxxx from the proceeds of the sale of
the Shares to the Buyer. The difference, if any, between the aggregate
Purchase Price and the aggregate exercise price for the Option Shares
shall be applied by Health-Chem to defray a portion of the costs
associated with the Registration Statement.
4. Payment at Closing. All payments at closing of the Purchase
Price and the aggregate exercise price shall be made to Health-Chem
by wire transfer
or in other immediately available funds against delivery of
certificates representing such shares of Common Stock. All shares of
Common Stock provided by Xxxxxxx shall be free and clear of any claims,
liens or encumbrances (other than as may be hereby created in favor of
the Purchasers).
5. Closing. The closing of the sale of the Shares shall be held
at 10:00 a.m. New York Time on the Closing Date at the offices of
Health-Chem, 1212 Avenue of the Americas, New York, New York, or at
such other time or place as the parties may hereafter designate in
writing.
6. Payment of Registration Expenses. At the Closing, each
Purchaser shall also deliver to Health-Chem its check payable to the order
of Health-Chem to the order of Health-Chem in an amount
equal to its proportionate share (based on the number of Shares
purchased by such Purchaser to the total number of Shares) of one-half
(1/2) of the total expenses of the Offering, as set forth in Part II of
the Registration Statement. If the Purchasers terminate this Agreement
pursuant to the provisions of Section 9(a)(i), each Purchaser shall,
within five (5) business days of such termination deliver to Health-
Chem its check payable to the order of
Health-Chem in an amount equal to its proportionate share (based on
the number of Shares set forth opposite its name on Schedule 1) of the
lesser of (i) ten thousand dollars ($10,000.00) or (ii) one-half (1/2)
of the total expenses of the Offering, as set forth in Part II of the
Registration Statement. If Health-Chem or Xxxxxxx terminate this Agreement,
or if the Purchasers terminate this Agreement for
breach of a representation or warranty set forth in Section 7 or 8
hereunder, or pursuant to Section 9 (a)(ii) hereunder, the Purchasers shall
not be required to reimburse Health-
Chem for any expenses of the Offering.
7. Representations and Warranties of Health-Chem. Health-Chem
represents and
warrants to the Purchasers that:
(a) Health-Chem is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware,
with all necessary corporate power and authority, and all required
licenses, permits, certifications, registrations, approvals, consents
and franchises to own or lease and operate its properties and to
conduct its business and to execute, deliver and perform this
Agreement. Health-Chem is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business of Health-Chem.
(b) This Agreement has been duly authorized, executed and
delivered by Health-Chem and constitutes its valid and binding
obligations, enforceable against Health-Chem.
(c) The Shares have been duly authorized and when sold to
the Purchasers in accordance with the terms of this Agreement
shall be validly issued, fully paid and non-assessable shares of Common
Stock. Upon the consummation of the transactions contemplated hereby,
the Shares shall be freely tradable by each Purchaser without further
registration under the Securities Act of 1933.
(d) At the time of the sale to the Purchasers, neither the
Registration Statement nor any information incorporated therein by
reference shall contain any untrue statement of material fact, or omit
any information necessary to make the statements therein not
misleading.
8. Representation and Warranties of Xxxxxxx.
Xxxxxxx represents and warrants to the Purchasers that:
(a) This Agreement has been duly authorized, executed and
delivered by Xxxxxxx and constitutes his valid and binding obligations,
enforceable against Xxxxxxx.
(b) The Option Shares are owned by Xxxxxxx, free and clear
of all liens, encumbrances, and claims other than those arising under
the Option Agreements, all of which shall be satisfied, released, and
terminated on the Closing Date.
9. Right of Termination.
a. Each of Xxxxxxx, Health-Chem and the Purchasers
(collectively) shall have the right to terminate this Agreement upon
notice to the other parties at any time prior to the Closing Date if
any of the following have occurred (whether or not considered "adverse"
to Health-Chem or to the value of the Shares):
i. Since the respective dates as of which information
is given in the Registration Statement, any material change or any
development involving a prospective material change in or affecting the
condition, financial or otherwise, of Health-Chem, or the earnings,
business affairs, management or business prospects of Health-Chem
whether or not arising in the ordinary course of business, or
ii. trading in any securities of Health-Chem shall have
been suspended or halted by the AMEX or the SEC.
b. The Purchaser shall also have the right to terminate this
Agreement upon notice to the other parties at anytime prior to the Closing Date
in the event of a breach of a
representation or warranty hereunder by Health-Chem or Xxxxxxx.
c. If any party elects to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this
Section 9, such party shall notify the other parties thereof promptly
by telephone, telex, telegraph or facsimile, confirmed by letter.
10. Binding Effect. Except as otherwise provided herein, the
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators,
successors, legal representatives and assigns.
11. Entire Agreement; Modification. This Agreement constitutes
the entire agreement among the parties hereto with respect to the
subject matter hereof, and neither this Agreement nor any provisions
hereof shall be waived, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver,
change, discharge or termination is sought.
12. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to be duly given to be
delivered if delivered personally or by a nationally recognized courier
service or on the third business day following deposit with the U.S.
Postal Service as certified or registered mail (return receipt
requested), postage prepaid, and shall be addressed:
If to Xxxxxxx: If to Health-Chem:
Xxxxxx X. Xxxxxxx Health-Chem Corporation
c/o Health-Chem Corporation 1212 Avenue of the Americas
0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000 Attention: Xxxxx X. Xxxxxxx, Esq.
Vice President and Secretary
with a copy to: with a copy to:
Xxxxxx X. Xxxxxxx, Esq. Xxxx Xxxx, Esq.
Vedder, Price, Xxxxxxx Xxxxxxxx, Xxxxx & Xxxxxx
& Kammholz One Financial Center
000 Xxxxx XxXxxxx Xxxxxx Xxxxxx, XX 00000-0000
Xxxxxxx, XX 00000-00000
If to any Purchaser:
x/x Xxxxxxxxx, Xxxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxxx, Managing Director
with a copy to:
Xxxxxxx Xxxxxx, Esq.
Fulbright & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as the parties shall have specified by notice
in writing to the others.
13. Expenses; Further Assurances. Except as may otherwise be
specifically provided herein, each party shall bear its own expenses
associated with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. At the request
of any party, a party will promptly execute and deliver, or cause to
be executed and delivered, all such documents or instruments as may
reasonably be necessary or desirable to carry out or implement any
provision of this Agreement.
14. Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the
laws of the State of New York, excluding its conflict of laws rules.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
HEALTH-CHEM CORPORATION
________________________ By:________________________
Xxxxxx X. Xxxxxxx, individually Xxxxx X.Xxxxxxx , its Vice President
THE PURCHASERS:
CORSAIR CAPITAL PARTNERS L.P.
a Delaware Limited Partnership
By: _______________________
Xxx Xxxxxxxx, its General Partner
CORSAIR CAPITAL PARTNERS II L.P.
a Delaware Limited Partnership
By: CORSAIR MANAGING PARTNERS,
its General Partner, a New York
General Partnership
By:CORSAIR MANAGEMENT
COMPANY, INC.,
_______________________ its
General Partner, a New York
Corporation
By:________________
Xxx Xxxxxxxx, its
President_____________________________
LEVITICUS PARTNERS, L.P.
a Delaware Limited Partnership
By: AMH EQUITIES LTD its
General Partner, a New York
Corporation
By:_______________________
Xxxx X. Xxxx, its President
SCHEDULE 1
ALLOCATED
PERCENTAGE
OF REGISTRATION
BUYER SHARES COSTS
CORSAIR CAPITAL PARTNERS, L.P. 160,000 shares 50%
Xxx Xxxxxxxx, General Partner
x/x Xxxxxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
CORSAIR CAPITAL PARTNERS, II, L.P 40,000 shares 13%
CORSAIR MANAGING PARTNERSHIP, General Partner
x/x Xxxxxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
LEVITICUS PARTNERS, L.P. 117,406 shares 37%
AMH EQUITIES LTD, General Partner
x/x Xxxxxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
