CUSIP No. 63888P-10-9 Exhibit C Page 70 of 91 Pages
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Form of Percentages Agreement
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CAPITAL DEVELOPMENT S.A.
0, Xxxxxxxxx Xxxxxxx-Xxxxx
Case Postale 5726
CH-1211 Geneva 11 Switzerland
As of July 23, 1997
Azure Limited Partnership I
00 Xxxxxx Xxxx Xxxxx
XxXxxxxx, XX 00000
Attention: Xxx X. Xxxxx, Xx.
Global Health Alternatives, Inc. ("GHA")
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Dear Sirs:
As you know, the undersigned Capital Development S.A. ("CD") is or was
the holder of 683,366 shares (the "CD Shares") of the Common Stock, par value
$.0001 per share, of GHA ("GHA Common Stock"), and the Azure Limited Partnership
I ("ALP") is or was the holder of 1,384,617 shares (the "ALP Shares") of GHA
Common Stock. Accordingly, the CD Shares represent approximately 33% of the
combined CD Shares/ALP Shares, and the ALP Shares represent approximately 67% of
the combined CD Shares/ALP Shares. This approximately 33%/67% proportion is
hereinafter referred to as the "CD/ALP GHA Shares Proportion". As you also know,
GHA has today entered into and consummated the transactions contemplated by an
Amended and Restated Agreement and Plan of Reorganization, dated as of July 23,
1997 (the "NHTC Agreement"), among Natural Health Trends Corp. ("NHTC"), GHA and
the stockholders of GHA (including CD and ALP). Capitalized terms used and not
defined herein have the respective meanings ascribed to such terms under the
NHTC Agreement.
Under the NHTC Agreement, NHTC has issued or delivered, or may be
obligated to issue and deliver, shares of its Common Stock, par value $.001 per
share, as follows: (i) 5,800,000 shares issuable at the one or more Closings
(the "Firm Shares"); (ii) 800,000 shares contingently issuable promptly after
the 60th day after the end of the First Contingent Shares Measure Period (the
"First Contingent Shares"); and (iii) a presently-undeterminable number of
shares (up to $45,000,000 worth) contingently issuable promptly after the 60th
day after the end of the Second Contingent Shares Measure Period (the "Second
Contingent Shares").
Under the NHTC Agreement, each stockholder of GHA immediately prior to
the initial Closing ("GHA Stockholders") thereunder is entitled to receive a
proportion of the Firm Shares and any First Contingent Shares and Second
Contingent Shares that are issued (collectively, the "NHTC Shares") equal to
such stockholder's "Percentage". For this purpose, Percentage means, with
respect to any GHA Stockholder, the percentage obtained by dividing: (i) the
number of shares of Common Stock of GHA held by such
CUSIP No. 63888P-10-9 Exhibit C Page 71 of 91 Pages
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GHA Stockholder (as indicated opposite such GHA Stockholder's name on
theappropriate "Agreement Signature Page" to the NHTC Agreement), by (ii) the
total number of such shares outstanding on the Closing Date; provided that a GHA
Stockholder's Percentage may be adjusted to the extent that such GHA Stockholder
has acquired or transferred its rights to any of the NHTC Shares from or to any
other GHA Stockholder.
The purpose of this letter is to set forth our agreement with respect
to our respective NHTC Shares, as follows.
1. Ownership of Contingent Shares. It is hereby agreed that, as between
the undersigned CD and ALP (and notwithstanding any inconsistent issuance or
delivery of NHTC Shares by NHTC), CD shall own (or otherwise be entitled to all
the benefits of ownership of) 60%, and ALP shall own (or otherwise be entitled
to all the benefits of ownership of) 40%, of all of the First Contingent Shares
and Second Contingent Shares (collectively, the "Contingent Shares") that may be
issued or delivered to CD and ALP; provided, however, that, in the event that
Xxx Xxxxx Xxxxxxx shall not have remained an officer or director of NHTC
substantially continuously from the date hereof until the end of the Second
Contingent Shares Measure Period, then CD shall own (or otherwise be entitled to
all the benefits of ownership of) 50%, and ALP shall own (or otherwise be
entitled to all the benefits of ownership of) 50%, of all of the Contingent
Shares that may be issued or delivered to CD and ALP. The NHTC Shares that, as a
result of the foregoing agreement, CD shall own (or be entitled to the benefits
of ownership of) in excess of the approximately 33%/67% CD/ALP GHA Shares
Proportion are hereinafter referred to as the "Excess Shares".
2. Transfer; Further Assurances. In order to implement the foregoing
agreements, ALP hereby: (i) TRANSFERS, ASSIGNS AND CONVEYS to CD, and its
successors and assigns forever, all the rights, title and interests that ALP may
now have or in the future may obtain in, to and under the Excess Shares, and
(ii) AGREES that it will, at any time and from time to time after the date
hereof, do, execute, acknowledge and deliver (or cause to be done, executed,
acknowledged or delivered) all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and/or assurances as may be reasonably requested
by CD for the better transferring, assigning, conveying, assuring and confirming
to CD (or for the aiding and assisting in the collection of or reducing to
possession by CD) of the Excess Shares, or to vest in CD all of ALP's rights,
title and interests in, to and under the Excess Shares, or to otherwise enable
CD to realize upon or otherwise enjoy all the benefits of the Excess Shares. The
obligations of ALP under the foregoing clause (ii) may be discharged by ALP's
actual transferring and assigning over to CD the NHTC Shares that represent any
Excess Shares issued or transferred to ALP.
3. Firm Shares Unaffected. As a result of the initial Closing under the
NHTC Agreement, ALP has been issued 1,662,767 Firm Shares and CD has been issued
820,645 Firm Shares. Nothing herein set forth shall be deemed to affect the
rights, title or interests of ALP and CD in, to or under any such Firm Shares;
ALP and CD shall maintain their relative ownership interests in the Firm Shares
in the approximately 33%/67% CD/ALP GHA Shares Proportion.
CUSIP No. 63888P-10-9 Exhibit C Page 72 of 91 Pages
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4. Effect on Percentages. Inasmuch as on the date hereof GHA has
outstanding 4,829,768 shares of Common Stock, the Percentages of ALP and CD (as
to the Firm Shares and, before giving effect to the agreements set forth herein,
the Contingent Shares) are approximately 28.668396% and 14.149044%, respectively
(or approximately 42.81744% in the aggregate. It is acknowledged and agreed
that, as a result of the agreements of the parties hereunder, their respective
Percentages are being adjusted with respect to the Contingent Shares (and not
any Firm Shares) so as to be: (i) in the event that Xxx Xxxxx Xxxxxxx shall have
remained an officer or director of NHTC substantially continuously from the date
hereof until the end of the Second Contingent Shares Measure Period,
approximately 17.126976% for ALP and 25.690464% for CD, and (ii) in the event
that Xxx Xxxxx Xxxxxxx shall not have remained an officer or director of NHTC
substantially continuously from the date hereof until the end of the Second
Contingent Shares Measure Period, approximately 21.40872% for ALP and 21.40872%
for CD.
5. Prior Agreement Superseded. This agreement is intended to supersede
and entirely replace the letter agreement (captioned as above), dated June ___,
1997, between the parties hereto with respect to NHTC Shares, the parties having
determined that such agreement has been rendered obsolete due to changes in
circumstances with respect to the Agreement and Plan of Reorganization with GHA
and NHTC. Accordingly, such prior letter agreement is hereby terminated by
mutual agreement of the parties thereto.
6. Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of New York, excluding the choice of
law or conflicts of law principles thereof.
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CUSIP No. 63888P-10-9 Exhibit C Page 73 of 91 Pages
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If the foregoing accurately sets forth our understanding, kindly
execute a copy of this letter in the space provided and return it to the
undersigned, whereupon it will become a binding agreement between us.
Very truly yours,
CAPITAL DEVELOPMENT S.A.
By:
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Name:
Title:
Accepted:
AZURE LIMITED PARTNERSHIP I
By:
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Xxxxxxx X. Xxxx
General Partner
By:
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Xxxxxx X. Xxxx
General Partner
By:
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Xxxxxx X. Xxxxx
General Partner
