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EXHIBIT 99(c)
SHARPS COMPLIANCE, INC.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
October 3, 1997
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇
Sharps Compliance, Inc.
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
This letter, when accepted by each of you in the manner as hereinafter
set forth, will evidence an agreement by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇"), ▇▇. ▇▇▇▇ ▇▇▇▇▇, ("▇▇▇▇▇") and
Sharps Compliances, Inc., ("SCI"), in regards to the following terms and
conditions:
1. Issuance of SCI stock to ▇▇▇▇▇▇ and ▇▇▇▇▇▇. - Immediately upon execution of
this letter, SCI shall increase its authorized capital stock from 1,000,000
to 10,000,000 and cause to be issued to ▇▇▇▇▇▇, 1,250,000 shares of common
stock of SCI in consideration of services rendered to SCI ("▇▇▇▇▇▇ Stock"),
750,000 shares of common stock of SCI to be issued to ▇▇▇▇▇▇ in
consideration of certain financial consulting services ("▇▇▇▇▇▇ Stock"),
and ▇▇▇▇▇ shall forward split his 1,000 shares into 3,000,000 shares of
outstanding common stock of SCI. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree to execute
appropriate subscription documents evidencing certain representations in
regards to the issuance of the shares described in this Section 1.
2. Loan by ▇▇▇▇▇▇. - Within thirty (30) days from the date of this letter,
▇▇▇▇▇▇ agrees to loan (the "Loan") to SCI an amount equal to $400,000.00 to
be evidenced by a Promissory Note bearing interest at 8% and, to be payable
upon the sooner of (i) the subsequent completion of a Business Transaction
(as defined in Section 6 below) in which the use of proceeds shall
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provide for such repayment, or (ii) six (6) months from the date ▇▇▇▇▇
shall exercise his option as provided in Section 6 below.
3. Merger of SCI into U.S. Medical Systems, Inc. ("US Medical"). - Immediately
upon execution of this Agreement, SCI agrees to begin negotiations to enter
into a merger agreement with US Medical (the "Merger Agreement") on terms
and conditions which shall be acceptable to SCI and its legal counsel. As a
result of the merger of SCI into U.S. Medical (the "Merger"), all board
members of U.S. Medical shall resign and be replaced with the board of
directors of SCI (which board shall include ▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇). Such
Merger Agreement shall be executed no later than November 15, 1997. The
Merger Agreement shall also provide that as a result of such Merger, ▇▇▇▇▇,
▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall own no less than the following percentages of total
issued and outstanding common stock of SCI/US Medical, 52.6%, 21.9%, and
13.24%, respectively. Additionally, the Merger Agreement shall provide that
▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree to enter into a Lockup Agreement whereby
each of them agree that 90% of their total issued and outstanding shares of
common stock of SCI/US Medical after consummation of the Merger shall not
be sold for eighteen (18) months from the date of effectiveness of a public
offering. There shall be no prohibitions on the remaining ten percent
(10%,) except those which may be imposed by applicable state and federal
securities laws. Such Merger Agreement shall also require ▇▇▇▇ ▇▇▇▇▇ to
enter into an Employment Agreement on terms and conditions mutually
agreeable to the Board of Directors of U.S. Medical/SCI, ▇▇▇▇▇ and his
counsel.
4. Private Equity Funding. - ▇▇▇▇▇▇ agrees to assist SCI/US Medical in raising
a minimum of $2,000,000 of additional equity. Such offering shall be made
only to "accredited investors," as that term is defined by Item 501 of
Regulation D of the Securities and Exchange Commission. As a result of
such equity offering, ▇▇▇▇▇ shall not own less than 44.8% of the total
issued and outstanding stock of SCI/US Medical.
5. U.S. Medical Annual Meeting. - ▇▇▇▇▇▇ agrees to cause U.S. Medical to
complete and file its 10K and Proxy Statement with the Securities and
Exchange Commission no later than November 30, 1997, with the intent that
the annual meeting of U.S. Medical shall be held prior to December 31,
1997. All parties agree that the Merger Agreement shall become effective on
the same day as the annual meeting, and that the private equity funding
provided by ▇▇▇▇▇▇ shall also be completed upon consummation of the Merger
at the annual meeting.
6. Failure to Consummate Merger. - In the event the Merger is not consummated
by December 31, 1997, all parties agree that ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall be
provided an additional three months until March 15, 1998 to complete either
the Merger, or a "business transaction." For purposes of this Agreement,
the term "business transaction" shall mean any sale, merger, acquisition or
series or combinations of transactions, other than in the ordinary course
of trade or business, whereby, directly or indirectly, control of a
material interest in SCI or any of its business or a substantial portion of
its or their respective assets, is transferred for consideration,
including, without limitation, a sale or exchange of capital stock or
assets, a lease of assets with or without a purchase option, a leverage buy
out, the formation of a joint venture, a public offering or any similar
transaction. In the event a "business transaction"
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has not taken place by March 15, 1998, ▇▇▇▇▇ shall have the option of (i)
agreeing to repay the Loan within six (6) months from the date of his
election in equal principal and interest payments, at a rate of 8% per
annum, and repurchase ▇▇▇▇▇▇'▇ Stock for $1,250 and repurchase ▇▇▇▇▇▇ Stock
for $750.00 or (ii) repurchase only 500,000 shares of stock held by ▇▇▇▇▇▇
for the sum of $500.00 ▇▇▇▇▇▇ shall agree to forgive repayment of the Loan
and as a result thereof, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ would each own 750,000 shares of
common stock of SCI. In the event ▇▇▇▇▇ repurchases all of the ▇▇▇▇▇▇ Stock
and ▇▇▇▇▇▇ Stock and the Loan is to be repaid as provided above, ▇▇▇▇▇
shall agree that in the event SCI shall enter into a commitment to
consummate any "business transaction" within six (6) months from the date
thereof, ▇▇▇▇▇ shall offer ▇▇▇▇▇▇ and ▇▇▇▇▇▇ the right to acquire 16 1/2%
each of the outstanding capital stock of SCI immediately prior to the
effectiveness of any such "business transaction" for the aggregate purchase
price of 400,000. Furthermore, the parties agree that if, on March 15, 1998
SCI shall (i) be a party to any "business transaction" which has not been
consummated as of that date, or (ii) have filed with the Securities and
Exchange Commission a registration statement for the registration of shares
of SCI, all parties agree that ▇▇▇▇▇▇ may delay the option discussed
hereinabove for an additional sixty (60) day period, it being the intent of
all parties that any pending transaction must be completed within such time
frame. Failure to complete such transaction by May 15, 1998 shall entitle
▇▇▇▇▇ to exercise one of the above options discussed herein.
While it is not the intention of the parties to discuss all terms and
conditions of the transactions contemplated herein, it is the intent to reach
an understanding of the form by which the parties will go forward to consummate
a transaction. Therefore, if you are in agreement with the terms and conditions
contained herein, please execute in the spaces provided below.
Very truly yours,
SHARPS COMPLIANCE INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, President
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Accepted and Agreed to this
______day of __________, 1997.
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Accepted and Agreed to this
6 day of October , 1997.
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