Exhibit 10(c)
* Confidential treatment has been requested for certain portions of this
exhibit. Omitted portions have been filed separately with the Commission.
REPURCHASE AGREEMENT dated as
of May 27, 1999, between GHS, INC.,
a Delaware corporation (the
"Company"), and XXXXXX XXXXXXX (the
"Stockholder").
The Stockholder owns 50,000 shares of preferred stock, $0.01 par
value (the "Preferred Stock") of the Company or common stock, $0.01 par value
(the "Common Stock" and together with the Preferred Stock, the "Shares") of the
Company issued upon conversion thereof, which Shares shall pursuant to the terms
of this Agreement, become subject to repurchase by the Company in order provide
an incentive to Xxxxxxx Xxxxxx ("Zanker"), the Stockholder's husband, to
exercise his best efforts on behalf of the Company or any subsidiaries or
affiliates of the Company, subject to the terms and provisions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. PURCHASE OPTION.
(a) The Shares shall be subject to the option (the "Purchase
Option") in the amounts set forth in Section 2(c) herein. In the event Zanker
shall cease to be employed by the Company (including an affiliate or a
subsidiary of the Company) pursuant to any Voluntary Termination, Involuntary
Termination or a Termination for Cause (in each case as defined in the
Employment Agreement dated as of the date hereof (the "Employment Agreement")
between the Company and Zanker) ("Cessation of Employment"), the Company shall
have the right, at any time within 60 days after the date the Zanker ceases to
be so employed, to purchase from the Stockholder or her personal representative,
as the case may be, at the purchase price specified in subsection (b) below (the
"Option Price"), up to but not exceeding the number of Shares specified in
subparagraph (c) below upon the terms hereinafter set forth; PROVIDED, HOWEVER,
that the Shares shall immediately cease to be subject to the Purchase Option (A)
upon the merger or consolidation of the Company into or with another corporation
or other entity, or the sale of all or substantially all the assets or the sale
of all of the outstanding capital stock of the Company (each, a "Sale
Transaction"), in each case under circumstances in which the holders of the
outstanding capital stock of the Company, immediately prior to the Transaction,
own less than a majority in voting power of the outstanding capital stock of the
Company or the surviving or resulting company or acquiror, as the case may be,
immediately following such Sale Transaction or (B) if Zanker is Terminated
Without Cause (as such term is defined in the Employment Agreement).
(b) The Option Price per Share (as constituted on the date
hereof) shall be:
(i) from the date hereof until May 31, 2000, the lesser
of (A) /*/ and (B) /*/ (as hereinafter defined);
(ii) from June 1, 2000 until the May 31, 2001, the
lesser of (A) /*/ and (B) /*/; and
(iii) from June 1, 2001 until May 31, 2002, the lesser
of (A) /*/ and (B) /*/ (as hereinafter defined).
"Fair Value Per Share" shall mean, as of the date the Purchase Option is
exercised, (i) if the Shares are not publicly traded, a price determined in good
faith by the Board of Directors of the Company or (ii) if the Shares are
publicly traded, the average closing price per share of Common Stock as reported
in the over-the-counter market as reported on the Nasdaq National Market System
or on the principal national securities exchange on which it is so traded, as
the case may be, during the ten trading days ending on the trading date
immediately prior to the date the Purchase Option is exercised.
(c) Subject to Section 1(d) hereof and the proviso contained in
Section 1(a) hereof, upon the Cessation of Employment of Zanker during any
period of time specified in the table below, the Company may exercise the
Purchase Option for up to the maximum number of the Shares specified in the
following table for such period:
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NUMBER OF SHARES NUMBER OF SHARES
SUBJECT TO PURCHASE OPTION (IF SUBJECT TO PURCHASE OPTION (IF
IF CESSATION OF PREFERRED SHARES HAVE BEEN CONVERTED PREFERRED SHARES HAVE NOT BEEN
EMPLOYMENT OCCURS INTO COMMON SHARES) CONVERTED INTO COMMON SHARES)
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During the period beginning on the /*/ /*/
date hereof and ending on August
31, 1999
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During the period beginning on /*/ /*/
September 1, 1999 and ending on
November 30, 1999
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During the period beginning on /*/ /*/
December 1, 1999 and ending on
February 28, 2000
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During the period beginning on /*/ /*/
March 1, 2000 and ending on May 31,
2000
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During the period beginning on June /*/ /*/
1, 2000
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and ending on August 31,
2000
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During the period beginning on /*/ /*/
September 1, 2000 and ending on
November 30, 2000
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During the period beginning on /*/ /*/
December 1, 2000 and ending on
February 28, 2001
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During the period beginning on /*/ /*/
March 1, 2001 and ending on May 31,
2001
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During the period beginning on June /*/ /*/
1, 2001 and ending on August 31,
2001
-----------------------------------------------------------------------------------------------------------------
During the period beginning on /*/ /*/
September 1, 2001 and ending on
November 30, 2001
-----------------------------------------------------------------------------------------------------------------
During the period beginning on /*/ /*/
December 1, 2001 and ending on
February 28, 2002
-----------------------------------------------------------------------------------------------------------------
During the period beginning on /*/ /*/
March 1, 2002 and ending on May 31,
2002
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June 1, 2002 0 0
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(d) Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or affiliate or
subsidiary of the Company, to terminate Zanker's employment for any reason, with
or without cause, and without notice.
(e) For purposes of this Agreement, the following terms shall
have the following respective meanings:
2. EXERCISE OF PURCHASE OPTION. The Purchase Option shall be
exercised by written notice signed by an officer of the Company (the "Purchase
Notice") and delivered or mailed as provided in Section 9 indicating (i) that
the Company is exercising the Purchase Option, (ii) specifying a place and date
not earlier than five (5) days from the date of delivery of the Purchase Notice
for the closing of such purchase (the "Option Closing Date"), (iii) Option Price
to be paid hereunder and (iv) instructing that the Escrow Agent deliver out of
the Escrow Fund to the Company the number of shares held by the Escrow Agent
being purchased by the Company on the Option Closing Date. The Option Price
shall be payable, at the option of the Company in cash (by check) or by wire
transfer of funds.
3. ADJUSTMENTS, ETC. If, from time to time during the term of the
Purchase Option, there is:
(a) any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company; or
(b) any consolidation, merger or sale of all, or substantially
all, of the assets of the Company, other than a Sale Transaction;
then, in such event, any and all new, substituted or additional securities or
other property to which Stockholder is entitled by reason of his ownership of
the Shares (the "Substituted Property") to the Purchase Option and shall be
included in the term "Shares" for all purposes of the Purchase Option with the
same force and effect as the Shares subject to the Purchase Option under the
terms of Section 1. While the total Option Price shall remain the same after
each such event, the Option Price per Company Share upon exercise of the
Purchase Option shall be appropriately adjusted.
4. RESTRICTIONS ON TRANSFER. Stockholder shall not sell or in any
other way directly or indirectly transfer, assign, pledge, distribute, bequeath,
devise, encumber or otherwise dispose of, either voluntarily or involuntarily,
with or without consideration (each, a "Sale") any of the Shares subject to the
Purchase Option.
5. LEGENDS. All certificates representing any of the Shares subject
to the provisions of this Agreement shall have endorsed thereon the following
legend
"THESE SECURITIES ARE SUBJECT TO THE TERMS, CONDITIONS AND PROVISIONS, INCLUDING
A PURCHASE OPTION AND A RIGHT OF FIRST REFUSAL, CONTAINED IN A CERTAIN AGREEMENT
BETWEEN THE RECORD HOLDER HEREOF AND THE COMPANY. A COPY OF SUCH AGREEMENT IS
AVAILABLE FOR INSPECTION AT THE COMPANY'S OFFICES."
6. ESCROW ARRANGEMENTS. As security for her faithful performance of
the terms of this Agreement and to insure that the Shares will be available for
delivery upon exercise of the Purchase Option as herein provided, Stockholder
agrees to deliver to and deposit with State Street Bank and Trust Company, or
any successor thereto, or any other escrow agent mutually agreeable to the
Company and the Stockholder (the "Escrow Agent"), as Escrow Agent in this
transaction, two Stock Assignments, duly endorsed (with date and number of
shares blank) in the forms attached hereto as Exhibit 1, together with the
certificate or certificates evidencing the Shares. Said documents are to be held
by the Escrow Agent and delivered by the Escrow Agent
pursuant to the Escrow Agreement dated as of the date hereof among the Escrow
Agent, the Company and the Stockholder and incorporated by this reference. The
escrow arrangements set forth in this Section 6 with respect to the Shares shall
not survive a Sale Transaction, and upon the consummation of any Sale
Transaction the certificates evidencing the Shares and the Stock Assignments
related thereto shall be delivered by the Escrow Agent to the registered holders
thereof; PROVIDED, that the escrow arrangements set forth in this Section 6 with
respect to the Shares shall survive any consolidation, merger or sale of the
assets or capital stock of the Company which is not a Sale Transaction and shall
remain in full force and effect with respect to the Substituted Property.
7. RIGHTS AS A STOCKHOLDER. The Company shall not be required (i) to
transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement or
(ii) to treat as the owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares shall have been
so transferred. Subject to the provisions of Section 6 above, Stockholder shall,
during the term of this Agreement, exercise all rights and privileges of a
stockholder of the Company with respect to the Shares deposited in said escrow.
8. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be wholly performed in such State (without regard to principles of
conflicts of laws).
9. NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally, by
telecopier sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address:
(i) If to Stockholder, to:
Xxxxxxx Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier: (914) ________
(ii) If to the Company, to:
GHS, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Telecopier: (000) 000-0000
with copies to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or communication shall be deemed to be delivered and received (A) in
the case of personal delivery or delivery by telecopier, when delivered,(B) in
the case of nationally-recognized overnight courier, on next business day after
the date when sent and(C) in the case of mailing, on the third business day
following that on which the piece of mail containing such communication is
posted. As used in this Section 9, "business day" shall mean any day other than
a date in which banking institutions in the State of New York are legally closed
for business.
10. ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the Company's successors and
permitted assigns.
11. MISCELLANEOUS.
(a) Each of the parties hereto shall hereafter, at the request of
any party hereto, execute and deliver such further documents and agreements, and
do such further acts and things as may be necessary or expedient to carry out
the provisions of this Agreement.
(b) The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
(c) This Agreement constitutes a complete statement of all of the
arrangements between the parties as of the date hereof with respect to the
transactions contemplated hereby and supersedes all prior agreements and
understandings between such parties. No amendment, alteration or modification of
this Agreement shall be valid unless in each instance such amendment, alteration
or modification is in a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
GHS, INC.
By: /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: President
STOCKHOLDER
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
EXHIBIT 1 to Repurchase Agreement
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, _____________________ hereby sells, assigns
and transfers unto GHS, INC. __________________ shares of preferred stock, $0.01
par value, of GHS, INC., a Delaware corporation, or common stock issued upon
conversion thereof, standing in the undersigned's name on the books of said
Company represented by Certificate No. ___________, and does hereby irrevocably
constitute and appoint ______________________ attorney to transfer the said
shares on the books of the said Company with full power of substitution in the
premises.
Dated:
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Signature:
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