Exhibit 10(c)
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) $6.00 and (B) the Fair Value Per Share (as hereinafter
defined);
(ii) from June 1, 2000 until the May 31, 2001,
the lesser of (A) $9.00 and (B) the Fair Value Per Share; and
(iii) from June 1, 2001 until May 31, 2002, the
lesser of (A) $12.00 and (B) the Fair Value Per Share (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)
----------------------------------------------------------------------------------------------------------------------
During the period beginning on the 500,000 50,000
date hereof and ending on
August 31, 1999
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During the period beginning on 458,333 45,833
September 1, 1999 and ending on
November 30, 1999
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During the period beginning on 416,667 41,667
December 1, 1999 and ending on
February 28, 2000
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During the period beginning on 375,000 37,499
March 1, 2000 and ending on May 31,
2000
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During the period beginning on June 333,333 33,333
1, 2000 and ending on August 31,
2000
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During the period beginning on 291,667 29,167
September 1, 2000 and ending on
November 30, 2000
----------------------------------------------------------------------------------------------------------------------
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During the period beginning on 250,000 24,999
December 1, 2000 and ending on
February 28, 2001
----------------------------------------------------------------------------------------------------------------------
During the period beginning on 208,333 20,833
March 1, 2001 and ending on May
31, 2001
----------------------------------------------------------------------------------------------------------------------
During the period beginning on June 166,667 16,666
1, 2001 and ending on August 31,
2001
----------------------------------------------------------------------------------------------------------------------
During the period beginning on 125,000 12,499
September 1, 2001 and ending on
November 30, 2001
----------------------------------------------------------------------------------------------------------------------
During the period beginning on 83,333 8,333
December 1, 2001 and ending on
February 28, 2002
----------------------------------------------------------------------------------------------------------------------
During the period beginning on 41,667 4,166
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
--------------------------------------------
Name: Xxxx Xxxx
Title: President
STOCKHOLDER
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
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: ____________________
Signature: __________________________________
