1
EXHIBIT 99(F)
AMENDMENT
AMENDMENT, made as of this 31 day of July, 1997, by and among American
HealthChoice, Inc., a New York corporation (the "Company"), Xxxxxxx Financial
Associates, L.L.C., a Delaware limited liability company (the "Investor"), Xx.
X.X. Xxxxxx, Xx. X. Xxxxx, Xx. X. Xxxxxx, Dr. and Xxx. Xxxxx, Dr. Xxxxxxx Xxxx,
and Xx. Xxxxx Xxxxxx (collectively, the "Selling Shareholders") and Xxxxxx
Xxxxxxxxxx L.L.P. ("Escrow Agent").
W I T N E S S E T H :
WHEREAS, the Company, and Investor are parties to an agreement dated
March 19, 1997 ("Investor Agreement"); and
WHEREAS, the parties now wish to amend the Investor Agreement as
hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, including, without limitation the agreement by the
Investor that the Selling Shareholders may dispose of a greater amount of shares
of common stock at the date hereof than originally provided for in the Investor
Agreement, the parties agree as follows:
1. References.
Unless otherwise indicated to the contrary herein, all
capitalized terms contained herein shall have the same meaning as ascribed to
such terms in the Investor Agreement.
2. Release of Option Shares.
Notwithstanding anything to the contrary contained in sections
(a), (b) and (c) of Paragraph "Founder Options" in the Investor Agreement, the
Selling Shareholders and the Investor hereby agree to release from the Investor
Agreement eight hundred thousand (800,000) shares of the Common Stock of the
Company (the "Released Stock"), subject to the following terms and conditions:
1
2
(a) The Released Stock, shall be held in an escrow account (the
"Escrow Account") established and maintained by Xxxxxx Xxxxxxxxxx LLC as Escrow
Agent pursuant to an escrow agreement of even date herewith (the "Escrow
Agreement"), which Escrow Account shall be for the benefit of each of the
Selling Shareholders and the Investor as hereinafter set forth, and shall not,
except as hereinafter provided, be sold or disposed of by the Escrow Agent.
(b) So long as the Released Stock is maintained in the Escrow
Account, the Selling Shareholders shall not subject such Released Stock to any
pledge, lien, restriction or encumbrance.
(c) In the event that the Company institutes any stock split,
dividend, reclassification, readjustment, consolidation, merger, or like event
with respect to its common stock, which create any new or substitute and/or
additional securities with respect to the Released Stock, such securities shall
be immediately remitted to the Escrow Agent to be held by it pursuant to the
Released Stock Escrow Agreement.
(d) The interests of the Selling Shareholders and the Investor in
the Escrow Account (the "Escrow Parties") shall not be transferable or
assignable other than (i) to executors, administrators, legatees, heirs,
successors, or assigns of the Escrow Parties or (ii) in a transaction involving
no change in beneficial ownership. Any transfer pursuant to clause (ii) above
shall be upon prior written notice from any Escrow Party, to the Escrow Agent
and the non-transferring Escrow Parties.
3. Sale of the Released Stock.
(a) Subject to the provisions of the Escrow Agreement and to the
rights of the Investor provided for herein, the Selling Shareholders may,
directly or indirectly, sell, offer for
2
3
sale, transfer, assign, hypothecate, pledge or otherwise dispose of, the
Released Stock, in whole or part, consistent with the applicable Federal and
state securities laws; provided, however, that the Selling Shareholders covenant
and agree not to sell or dispose, without the consent of the Investor, of any
Released Stock other than through Xxxxx, Xxxxxxx Securities, Inc., or other
broker-dealer designated by the Investor.
(b) Any funds realized bu a sale or disposition of Released Stock
by any Selling Shareholders shall be deposited in the escrow fund created
hereunder by the Selling Shareholders or by the broker, for distribution in
accordance with Paragraph 4 hereof.
(c) All Released Stock shall be sold within 5 business days of
delivery to the Escrow Agent.
4. Proceeds of the Sale of Released Stock.
Upon the sale or disposition by, or on behalf of, the Selling
Shareholders of any of the Released Stock pursuant to Paragraph 3 hereof, the
Escrow Agent shall, within three (3) business days of payment of the purchase
price for such Released Stock, distribute the net funds realized by such sale or
disposition to the appropriate selling Shareholders and the Investor, as
follows:
(a) The Selling Shareholders shall receive the sum of $2.125
per share for Released Stock sold; and
(b) The Investor shall receive the balance, of the funds
realized by the sale of the Released Stock.
5. Loan to Company by Selling Shareholders.
Simultaneously with the receipt of proceeds by the Selling
Shareholders from the sale of the Released Stock, the selling Shareholders shall
loan the Company an aggregate of
3
4
$750,000 pursuant to a Promissory Note which shall provide that such loan shall
mature 30 days after the date it is made and shall be interest free until
maturity.
6. Participation in 1997 Executive Stock Bonus Plan
Each Selling Shareholder shall have the right, but not the
obligation, to participate in the 1997 Executive Stock Bonus Plan of the Company
(the "Plan") and to purchase his pro rate share of the 260,870 shares of Common
Stock of the Company available under the Plan (the "Plan Shares") at a purchase
price of $2.87499 per share. The pro rata share of a Selling Shareholder shall
be determined by multiplying the 260,870 Plan Shares by a fraction, the
numerator of which shall be the number of shares of Released Stock held by a
Selling Shareholder and the denominator of which shall be the total number of
shares of Released Stock held by all Selling shareholders (the "Pro Rata
Share"). A Selling Shareholder may, at his sole option, elect to pay the
purchase price of his Plan shares by delivering to the Company the Promissory
Note of the Company held by such Selling Shareholder at the maturity thereof. If
a Selling Shareholder makes the payment election set forth in the foregoing
sentence, he must surrender the full Promissory Note of the Company held by such
Selling Shareholder at the maturity thereof. If a Selling Shareholder makes the
payment election set forth in the foregoing sentence, he must surrender the full
Promissory Note as payment for his entire Pro Rata Sarre. The Plan Shares shall
have appropriate restrictive legends. However, if it is legally possible to
include Plan Shares in an S-8 Registration Statement, the Company shall prepare
and file such Registration Statement for all Plan Shares. Each Selling
Shareholder will then have the right, commencing 31 days after the date of
purchase of the Plan Shares ("Purchase Date"), to sell his respective Pro Rata
Share of that number of Plan Shares which will result in aggregate proceeds of
$1,000,000. It is currently estimated that approximately 173,913 Plan Shares
will be sold pursuant to the foregoing
4
5
provision. The balance of Plan Shares, approximately 86,956, will be "locked up"
by the Selling Shareholders as follows: 43,478 will be locked up for a period of
60 days from the Purchase Date and the balance of approximately 43,478 will be
locked up for twelve months from the Purchase Date. The certificates
representing such shares shall be deposited with the Secretary of the Company
until the end of the twelve month lock up period. After the expiration of the
twelve month lockup, the Plan Shares which have not been sold in the manner
provided above shall be delivered to the owners thereof, free of all contractual
restrictions on the sale thereof.
7. Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the law of the State of the New York without regard to its choice of law
principles.
(a) Notice. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
if delivered personally, by overnight courier or by express, registered or
certified mail (postage prepaid, return receipt requested) or by facsimile
transmittal, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
If to the Company or American HealthChoice, Inc.
the Selling Shareholders: 0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xx. X.X. Xxxxxx
Fax: 000-000-0000
If to Investor: Xxxxxxx Financial Associates L.L.C.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
5
6
If to the Escrow Agent: Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X Xxxxxxxxx, Esq.
Fax: 000-000-0000
All such notices and communications shall, when telefaxed, be effective when
telefaxed or if sent by nationally recognized overnight courier service, be
effective one (1) business day after the same has been delivered to such courier
service marked for overnight delivery, or, if mailed, be effective three (3)
days after being mailed by registered or certified mail, return receipt
requested, postage prepaid.
8. Miscellaneous. This Agreement (i) may only be modified by a written
instrument executed by the party to be charged with such modification; (ii) sets
for the entire agreement of the parties hereto with respect to the subject
matter hereof; and (iii) shall inure to the benefit of, and be binding upon, the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
9. Continued Effect of Investor Agreement. Except as amended and
modified by this Agreement, the Investor Agreement (including without limitation
the put contained in subparagraphs (c) (as to 100,000 shares), (d), (e) and (f)
of Paragraph "Founder Options" of the Agreement, all remain in full force and
effect, without any modification.
10. Counterparts. This Amendment may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement, and shall become effective when one or
more counterparts has been signed and the original signature page, or facsimile
thereof, has been delivered to each of the other parties hereto.
6
7
IN WITNESS WHEREOF, the parties hereto have signed this Amendment the
day and year first above written.
AMERICAN HEALTHCHOICE, INC.
By: /s/ X.X. Xxxxxx
-------------------------------------
X.X. Xxxxxx
XXXXXXX FINANCIAL ASSOCIATES, L.L.C.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Selling Shareholders:
/s/ X.X. Xxxxxx
---------------------------------
Xx. X.X. Xxxxxx
/s/ X. Xxxxx
---------------------------------
Xx. X. Xxxxx
/s/ X. Xxxxxx
---------------------------------
Xx. X. Xxxxxx
/s/ Dr. and Xxx. Xxxxx
---------------------------------
Dr. and Xxx. Xxxxx
/s/ Xxxxxxx Xxxx
---------------------------------
Dr. Xxxxxxx Xxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Xx. Xxxxx Xxxxxx
7
8
ESCROW AGENT
Xxxxxx Xxxxxxxxxx LLP
By: /s/ Xxxx Xxxxxxxxx
-----------------------------
Xxxx Xxxxxxxxx, Partner
8
