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EXHIBIT 10.7
STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT is entered into as of the 15th day
of January, 1998, by and between Optical Systems, Inc., a Florida corporation
(the "Company"), and Xxxxxxx X. Xxxx ("Xxxx").
RECITALS:
X. Xxxx currently owns 369,557 shares of the Company's common stock,
par value $.001 per share (the "Common Stock") and 811,513 shares of the
Company's Series A Preferred Stock (the "Preferred Stock") which are convertible
into Common Stock, at the rate of one share per share of Common Stock (the
"Conversion Shares").
B. The Company desires to sell to Sery and Sery is willing to purchase
from the Company, upon the terms and subject to the conditions set forth in that
certain Stock Purchase Agreement of even date herewith, 200,000 additional
shares of Preferred Stock which are convertible into 200,000 shares of Common
Stock, provided, however, that the Company agree to repurchase all of the Common
Stock, Preferred Stock and Conversion Shares heretofore issued or to be issued
to Sery as described in these Recitals, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Sery
hereby agree as follows:
1. Company's Obligation to Repurchase. In the event the Company does
not effect an initial public offering of its securities under the Securities Act
of 1933, as amended (the "Securities Act") on or before December 31, 1998,
Sery shall have the right to require the Company to repurchase any or all equity
securities of the Company (including without limitation all shares of Common
Stock, Preferred Stock and Conversion Shares) then owned by him in accordance
with the provisions of this Agreement (collectively, the "Put Shares");
provided, however, the Company shall only be obligated to repurchase that number
of Put Shares which, when taken together with all prior Put Shares repurchased
by the Company, result in an aggregate repurchase price paid to Sery of not more
than $1,200,000 as determined in accordance with Section 3 of this Agreement.
2. Duration of "Put"; Exercise. Subject to the proviso set forth in
Section 1 hereof. Sery shall have the right to require the Company to
repurchase any or all of the Put Shares at any time and from time to time during
the period commencing January 1, 1999 and ending on the date that the Company
becomes a reporting company subject to the periodic reporting requirements under
the Securities Exchange Act of 1934 (such period being herein referred to as the
"Put Period"). Such right may be exercised by delivery of a "Put Notice" to
the Company setting forth the number of Put Shares to be repurchased by the
Company at that time, together with one or more stock certificates representing
the shares to be repurchased, in each case
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endorsed in blank in proper form for transfer. In the event that the
certificates so delivered represent a greater number of shares than the number
to be repurchased at such time, the Put Notice shall direct the Company to cause
the issuance of one or more certificates representing, in the aggregate, the
excess shares not being repurchased by the Company in such denominations and in
such names as Sery shall direct in his Put Notice. Each Put Notice shall contain
a representation and warranty by Sery that the shares surrendered for repurchase
are owned by him, free and clear of all liens, claims and encumbrances of any
nature whatsoever.
3. Redemption Price; Payment. With respect to each Put Notice
delivered to the Company in accordance with this Agreement, the redemption price
payable shall be the average of the closing bid price of the Company's Common
Stock over the 20-trading day period immediately preceding the date of the
applicable Put Notice as reported by the OTC Bulletin Board multiplied by the
number of Put Shares subject to such Put Notice. Subject to the proviso set
forth in Section 1 of this Agreement, payment of the redemption price as so
determined shall be made within 90 days following delivery of the Put Notice by
delivery of a cashier's or bank check in an amount equal to the aggregate
redemption price relating to the applicable Put Notice.
4. Insurance. The Company agrees that until the earlier to occur of (a)
the expiration of the Put Period and (b) the sale by Sery of and/or the
repurchase by the Company of all of the Put Shares the Company will maintain key
man insurance on the life of Xxxxxx Xxxxxxxxx in an amount not less than
$1,200,000. The first use of these insurance proceeds will be the funding of the
Company's obligations in this Agreement.
5. Miscellaneous.
(a) Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be
given under this Agreement shall be in writing and shall be either
delivered personally or by private courier, or sent by registered or
certified mail, return receipt requested, postage prepaid, properly
addressed to the parties at the following addresses:
If to Sery:
Xxxxxxx X. Xxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000)000-0000
If to the Company:
Optical Systems, Inc.
Xxxxxxx Xxxxx XX
Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: President
Telephone: (000)000-0000
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and
Xxxxxxx X. Xxxxxxxx, Esq.
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
or to such other address as any party shall have specified by notice to the
other parties. Notice shall be deemed duly given hereunder when delivered or
three days after the date sent if mailed as provided herein.
(b) Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.
(c) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended except by a writing executed
by each of the parties hereto.
(d) Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the
extent not prohibited herein, their respective heirs, successors,
assigns and representatives. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties
hereto and, as provided above, their respective heirs, successors,
permitted assigns and representatives any rights, remedies, obligations
or liabilities. The rights conferred on Sery pursuant to this Agreement
are personal to him and may not be assigned by him without the
written consent of the Company, which consent may be given or withheld
in the sole discretion of the Company.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the state of
organization of the Company.
(f) Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.
OPTICAL SYSTEMS, INC.
By: /s/ [ILLEGIBLE]
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Its: President
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/s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
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