EXHIBIT 10.2
AGREEMENT AND
AMENDMENT TO CAPITAL STOCK PURCHASE AGREEMENT
This AGREEMENT AND AMENDMENT TO CAPITAL STOCK PURCHASE AGREEMENT is
made and entered into this ___ day of March 2000 by and among CORE, INC., a
Massachusetts corporation ("CORE"), DISABILITY REINSURANCE MANAGEMENT SERVICES,
INC., a Delaware corporation ("DRMS"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇. ▇▇▇▇ (each a "Stockholder" and
collectively the "Stockholders").
WHEREAS, CORE, DRMS and the Stockholders are the parties to a certain
Capital Stock Purchase Agreements dated as of August 31, 1998 pursuant to which
CORE purchased all of the issued and outstanding shares of capital stock of DRMS
from the Stockholders (the "DRMS Stock Purchase Agreement"); and
WHEREAS, in connection with the DRMS Stock Purchase Agreement, each of
the Stockholders entered into a separate Employment Agreement with DRMS as of
August 31, 1998 (each an "Employment Agreement" and collectively, the
"Employment Agreements"), providing for, subject to the terms and conditions set
forth therein, the continued employment of each Stockholder for a certain Term
(as defined therein); and
WHEREAS, under Section 1.2(a)(ii) of the DRMS Stock Purchase Agreement,
the Stockholders were to receive certain Additional Consideration (consisting of
up to Three Hundred Seventy-Five Thousand (375,000) shares of Core Common
Stock), in the event DRMS was able to meet certain earnings levels for a
Measuring Period equal to the twelve (12) consecutive quarters following CORE's
purchase of the DRMS capital stock from the Stockholders (as described in
EXHIBIT A to the DRMS Stock Purchase Agreement); and
WHEREAS, in recognition of DRMS' favorable earnings performance to
date, the Stockholders' contribution to that performance and the willingness of
certain of the Stockholders to take on additional responsibilities under the
Employment Agreements, CORE is willing to pay the full Additional Consideration
to all the Stockholders prior to the end of the Measuring Period, subject to the
restrictions on transfer and other provisions hereof.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt of which is
hereby acknowledged by all parties hereto, the parties hereto hereby agree as
follows:
1. PAYMENT OF ADDITIONAL CONSIDERATION IN FULL. Notwithstanding the provisions
of EXHIBIT A to the DRMS Stock Purchase Agreement, on April 1, 2000, CORE
shall pay to the Stockholders the full Additional Consideration of Three
Hundred Seventy-Five Thousand (375,000) shares of CORE Common Stock by
issuing said shares to the Stockholders in accordance with the allocation
set forth on SCHEDULE A hereto.
2. AMENDMENT OF EMPLOYMENT AGREEMENTS. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, each agree to execute and deliver an amendment to his
or her Employment Agreement substantially in the form of EXHIBIT I hereto
expanding his or her duties thereunder.
3. STOCKHOLDER REPRESENTATIONS AND WARRANTIES. Each Stockholder acknowledges
that he or she made certain representations and warranties with respect to
the DRMS Stock Purchase Agreement and each is willing to make substantially
similar representations and warranties with respect to this Agreement.
Accordingly, each Stockholder represents and warrants (with respect to
himself or herself and not with respect to the other Stockholders) that:
(a) Such Stockholder is an individual whose residential
address is set forth on SCHEDULE A hereto. None of the
Stockholders are corporations, partnerships or any other type
of entity.
(b) Such Stockholder has full power and authority to execute
and deliver this Agreement and to perform his or her
obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of such Stockholder,
enforceable in accordance with its terms and conditions. Such
Stockholder need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(c) Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court
to which such Stockholder is subject, or (ii) conflict with,
result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which such Stockholder is
a party or by which he or she is bound or to which any of his
or her assets is subject.
(d) Such Stockholder (i) understands that the shares of CORE
Common Stock to be issued to him or her as provided in this
Agreement have not been, and will not be, registered under the
Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering,
(ii) is acquiring such CORE Common Stock solely for his or her
own account for investment purposes, and not with a view to
the distribution thereof, (iii) is a sophisticated investor
with knowledge and experience in business and financial
matters who is capable of evaluating the merits and risks of
owning CORE Common Stock), (iv) has had the opportunity to
obtain information concerning CORE as desired, including the
opportunity to ask questions of CORE's management in order to
evaluate the merits and the risks inherent in holding CORE
Common Stock, (v) is able to bear the economic risk and lack
of liquidity inherent in holding CORE Common Stock, (vi)
understands that no federal or state agency has passed upon
the shares of CORE Common Stock to be issued as provided in
this Agreement or made any
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finding or determination as to the fairness of this
transaction, (vii) understands that there are substantial
risks incident to an investment in CORE Common Stock,
including, without limitation, those set forth in the document
entitled "CORE, Inc. Risk Factors" provided to each
Stockholder in August 1998 in connection with the DRMS Stock
Purchase Agreement, (viii) understands that the holders of
CORE Common Stock, including the Stockholders (as defined in
this Agreement) are not assured of any return on an investment
in CORE Common Stock, and (ix) is not relying on CORE with
respect to individual tax or other economic considerations
involved in this transaction.
(e) Such Stockholder has carefully reviewed and understands this
Agreement, the DRMS Stock Purchase Agreement and all documents
related thereto or provided in connection therewith
(including, without limitation, the document entitled "CORE,
Inc. Risk Factors").
(f) Such Stockholder is an "Accredited Investor" as such term is
defined under the Securities Act or 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated
thereunder, as he or she falls within at least one of the
following categories:
(i) a natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her
purchase exceeds $1,000,000; or
(ii) a natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint
income with that person's spouse in excess of $300,000 in each
of those years and who has a reasonable expectation of
reaching the same income level in the current year.
4. RESTRICTIONS ON TRANSFER. Each Stockholder further covenants and agrees (with
respect to himself or herself and not with respect to the other Stockholders)
that prior to September 30, 2001, he or she will not (i) directly or indirectly,
offer, sell, assign, transfer, encumber, pledge, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise dispose of, other
than by operation of law, any shares of CORE Common Stock to be issued
hereunder, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the shares of CORE Common Stock to be issued hereunder.
In addition, with respect to the shares of CORE Common Stock to be issued
hereunder, each Stockholder hereby defers, from the date hereof until September
30, 2001, any and all rights that he or she would otherwise have under that
certain Registration Rights Agreement between CORE and the Stockholders dated
August 31, 1998 (the "Registration Rights Agreement"), said Registration Rights
Agreement being, in effect, suspended until September 30, 2001 with respect to
the shares of CORE Common Stock to be issued hereunder. However, there shall be
no suspension or diminution of Stockholders rights under the Registration Rights
Agreement with respect to the shares of CORE Common Stock issued to Stockholders
on August 31, 1998.
The restrictions set forth in the first paragraph of this Section and the waiver
set forth in the preceding paragraph shall be null, void and without effect in
the event there occurs a change in control of CORE prior to September 30, 2001.
For purposes of this Agreement, a "change in control of CORE" shall be deemed to
have occurred if:
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(a) there is a merger or consolidation of CORE in which CORE is
not the continuing or surviving corporation;
(b) CORE sells substantially all of its assets to a single
purchaser or to a group of associated purchasers;
(c) at least two-thirds of the outstanding common stock of CORE is
sold, exchanged or otherwise disposed of in one transaction or
in a series of related transactions;
(d) any person or entity becomes directly or indirectly the owner
or beneficial owner of 50% or more of CORE's outstanding
common stock;
(e) individuals who at the date hereof constitute the Board of
Directors of CORE cease to constitute a majority thereof,
PROVIDED THAT such change is the direct or indirect result of
a proxy fight and contested election for positions on the
Board; or
(f) the Board of Directors of CORE determines in its sole and
absolute discretion that there has been a change in control of
CORE.
4A. Notwithstanding any provision of this Agreement to the contrary, if
otherwise permissible under securities laws and other laws, the provisions of
Section 4 shall not restrict any Stockholder's ability to:
(a) transfer CORE Common Stock to his or her spouse or children or
to a testamentary or INTER VIVOS trust created for the benefit
of his or her spouse, children or other heirs, provided such
transferee shall agree in writing to the restrictions on
transfer set forth in Section 4;
(b) transfer CORE Common Stock after his or her death or
disability;
(c) transfer CORE Common Stock at any time after either CORE or
DRMS terminates the Stockholder's employment other than for
cause;
(d) vote to approve, or dissent from, any merger, consolidation or
substantial sale of assets by CORE;
(e) transfer CORE Common Stock pursuant to any offer by CORE to
redeem CORE Common Stock; or
(f) transfer CORE Common Stock pursuant to any tender offer for
CORE Common Stock subject to Regulations 14D and 14E.
5. AFFECT ON OTHER PROVISIONS OF DRMS STOCK PURCHASE AGREEMENT OR
RELATED AGREEMENTS.
(a) Other than as set forth above, the parties are not amending or
revising any continuing obligations under the DRMS Stock
Purchase Agreement, the
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Employment Agreements, the Registration Rights Agreement or
any other related agreements.
(b) Any capitalized term used but not defined herein shall have
the meaning as set forth in the DRMS Stock Purchase Agreement.
(c) The provisions of Article VI of the DRMS Stock Purchase
Agreement shall govern any and all breaches or violations or
alleged breaches or violations of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as
of the date first above written.
DISABILITY REINSURANCE
MANAGEMENT SERVICES, INC. CORE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇
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Title: Vice President Title: Chairman and Chief
Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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ATTACHMENTS
Schedule A - Allocation of 375,000 shares of CORE Common Stock, including
addresses Exhibit I - Form of Amendment Number 1 to Employment Agreement
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SCHEDULE A
TO AGREEMENT AND AMENDMENT TO CAPITAL STOCK PURCHASE AGREEMENT
ALLOCATION OF 375,000 SHARES OF CORE COMMON STOCK
NAME AND ADDRESSES NUMBER OF SHARES
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 101,250 (27.0%)
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 101,250 (27.0%)
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 101,250 (27.0%)
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 24,375 (6.5%)
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ 46,875 (12.5%)
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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TOTAL: 375,000 (100%)
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