1
AMENDMENT TO REPURCHASE AGREEMENT
THIS AMENDMENT TO REPURCHASE AGREEMENT ("Amendment") is made and
executed this 22 day of August, 1995, by and between MHM Extended Care
Services, Inc., a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxxxxx,
Ph.D. (the "Holder")
W I T N E S S E T H
WHEREAS, the Company and the Holder entered into a certain Repurchase
Agreement dated and effective as of the 7th day of July, 1995 (the "Agreement")
in connection with a Purchase Warrant issued by the Company to the Holder on
the same date (the "Warrant");
WHEREAS, the Company, in reviewing the Agreement, has determined that
the calculation provided in Section 2 of the Agreement that defines the "Fair
Market Price of the Warrant" could lead to potentially inequitable results that
would be detrimental to the Company, and desires to amend the Agreement to
avoid such potentially inequitable results;
WHEREAS, the Holder, acting in good faith and with a desire to deal
fairly with the Company, is willing to amend the Agreement in accordance with
the Company's desires, based on the Holder's belief that if the Holder
determines subsequently that any provision of the Warrant or the Agreement is
susceptible to an interpretation that could lead to potentially inequitable
results detrimental to the Holder, that the Company will reciprocate the
Holder's good faith and fair dealing in entering into this Amendment and will
amend the Warrant and/or the Agreement as necessary to avoid any such inequity;
WHEREAS, the Company acknowledges the Holder's willingness to enter
into this Amendment in accordance with the Company's desires, and agrees that
if the Holder determines subsequently that any provision of the Warrant or the
Agreement is susceptible to an interpretation that could lead to potentially
inequitable results detrimental to the Holder, the Company will reciprocate the
Holder's good faith and fair dealing and will amend the Warrant and/or the
Agreement as necessary to avoid any such inequity; and
NOW, THEREFORE, intending to be legally bound hereby, and in
consideration of the foregoing recitals, the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto and each of them do agree as
follows:
1. Paragraph 2 of the Agreement is hereby amended and restated in
its entirety as follows:
-1-
2
2. Purchase of Warrant at the Option of Holder. If the Holder shall
desire to sell all of the Holder's rights, title and interest in the
Warrant upon the last day of the initial or extended term of the Warrant
(the "Repurchase Date"), then the Holder shall send a notice (in the form
set forth as Exhibit A, attached hereto) to the Company within ninety (90)
days prior to the Repurchase Date, and, if it has received a properly
completed notice, the Company shall, within thirty (30) days following the
Repurchase Date, be obligated to repurchase from the Holder all of the
Holder's rights, title and interest in the Warrant at such time, at a price
equal to the Fair Market Value of the Warrant (as hereinafter defined) on
the Repurchase Date. The purchase price shall be paid in cash within
thirty (30) days after the Repurchase Date. For the purposes of this
Agreement, the "Fair Market Value of the Warrant" shall mean an amount
equal to the product of (a) the Company's net revenues for its most
recently completed fiscal year, (b) divided by the total number of shares
of the Company's Common Stock outstanding on the Repurchase Date, (c)
multiplied by the number of shares of the Company's Common Stock which the
Holder is then entitled to purchase under the terms of the Warrant. For
the purposes of this Agreement, the net revenues of the Company shall be
determined by reference to the Company's income statements, prepared in
accordance with generally accepted accounting principles, applied in a
manner consistent with the Company's prior practices. The right to require
the Company to repurchase the Holder's interest in the Warrant may only be
exercised within the time period set forth above. If this right is not
exercised, it shall immediately expire.
2. In all other respects, except as otherwise provided for herein,
all other terms and conditions of the Agreement shall remain unchanged and in
full force and effect. Any conflict between the terms and conditions of the
Agreement and this Amendment (including the recitals hereto) shall be construed
in favor of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the
date and year first above written.
Corporate Seal MHM Extended Care Services, Inc.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxx President
-2-
3
Attest: /s/ XXXXXXX XXXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxxx, Secretary
/s/ XXXXXX X. XXXXXXXXX
----------------------------- ----------------------------------------
Witness Xxxxxx X. Xxxxxxxxx, Ph.D.
-3-
