AMENDMENT NUMBER THREE TO STOCK PURCHASE AGREEMENT AND AMENDMENT TO PLEDGE AGREEMENT
Exhibit 2.5
AMENDMENT NUMBER THREE TO
AND AMENDMENT TO PLEDGE AGREEMENT
This Amendment Number Three (“Amendment Number Three”) to that certain Stock Purchase Agreement (the “Agreement”), entered into as of April 30, 2004, by and among Pulse Healthcare Staffing, Inc., a California corporation (the “Company”), ▇▇▇▇ ▇▇▇▇▇▇▇, individually and in his capacity as the Seller Representative (“▇▇. ▇▇▇▇▇▇▇”), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (“▇▇. ▇▇▇▇▇▇▇▇▇”) and ▇▇▇▇▇ ▇▇▇▇▇ (“▇▇. ▇▇▇▇▇” and, together with ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇, the “Sellers”) and World Health Alternatives, Inc., a Florida corporation (“Buyer”) which incorporates an amendment to that certain Pledge Agreement (the “Pledge Amendment”), effective as of May 19, 2004, by and among the Company, the Sellers and Buyer, is made and entered into as of June 22, 2004 by and among the Sellers, as creditors, and Buyer, as debtor.
RECITALS
A. The Company, Sellers, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ and Buyer entered into Amendment Number One to Stock Purchase Agreement, effective as of May 19, 2004 (“Amendment Number One”), which amended the Agreement as of such date in order to adopt a mechanism by which the stock purchase described in the Agreement could be closed in advance of the initially established closing deadline.
B. The Company, Sellers and Buyer subsequently entered into Amendment Number Two to Stock Purchase Agreement, effective as of May 28, 2004 (“Amendment Number Two”), which amended the Agreement as of such date and also amended the Pledge Agreement as of such date.
C. Each of the Company, Sellers and Buyer wishes to further modify certain terms of the Agreement and the Pledge Agreement, as amended by Amendment Numbers One and Two, on the terms and subject to the conditions set forth in this Amendment Number Three, so as to provide Buyer ample time to make payment in full to the Sellers by a date or dates certain, and based on the terms as originally set forth in the Agreement and as modified by Amendments Numbers One and Two and this Amendment Number Three.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements and representations contained in this Amendment Number Three and the Agreement as amended by Amendment Numbers One and Two, and intending to be legally bound, the parties hereto agree as follows:
1. Definitions. Except as may be expressly provided in this Amendment Number Three, all capitalized terms used in this Amendment Number Three which are defined in the Agreement shall have the same meanings in this Amendment Number Three as in the Agreement.
2. Amendment to Section 1.01. Section 1.01 of the Agreement is hereby amended and restated to read in its entirety as follows:
“1.01. Purchase and Sale of Shares held by ▇▇▇▇ ▇▇▇▇▇▇▇.
(a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, ▇▇. ▇▇▇▇▇▇▇ will sell, transfer and deliver to Buyer, and Buyer will purchase and accept from ▇▇. ▇▇▇▇▇▇▇, all of ▇▇. ▇▇▇▇▇▇▇’▇ rights, title and interest in and to the Shares held by ▇▇. ▇▇▇▇▇▇▇ (the “▇▇▇▇▇▇▇ Shares”), free and clear of any Liens; provided, however, that Buyer shall execute and deliver a pledge agreement pledging the Shares as security for the payment of the First and Second Subsequent ▇▇▇▇▇▇▇ Closing Payments (as defined below), the Subsequent Non-Management Shareholders Closing Payment (as defined below) and the Subsequent ▇▇▇▇▇▇▇▇▇ Closing Payment (as defined below) (the “Pledge Agreement”).
(b) In consideration for the sale and delivery to Buyer of the ▇▇▇▇▇▇▇ Shares, Buyer agrees to pay to ▇▇. ▇▇▇▇▇▇▇ an aggregate purchase price of $12,453,000 plus the ▇▇▇▇▇▇▇ Stock Consideration, as the same may be adjusted pursuant to the adjustment procedures described in Section 1.04 and Section 1.05, subject to Buyer’s rights of set-off as described in Article VIII (the “▇▇▇▇▇▇▇ Purchase Price”), due and payable as follows:
(i) at the Closing, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇ $438,000 by wire transfer or other immediately available funds (the “Initial ▇▇▇▇▇▇▇ Closing Payment”);
(ii) as soon as practicable following the Closing and in no event later than June 28, 2004, Buyer will pay $1,350,000 to ▇▇. ▇▇▇▇▇▇▇ by wire transfer or other immediately available funds (the “First Subsequent ▇▇▇▇▇▇▇ Closing Payment”);
(iii) as soon as practicable following the Closing and in no event later than July 12, 2004, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇ $7,715,000 by wire transfer or other immediately available funds (the “Second Subsequent ▇▇▇▇▇▇▇ Closing Payment”);
(iv) upon the payment of the Second Subsequent ▇▇▇▇▇▇▇ Closing Payment, Buyer will deliver $1,250,000 by wire transfer or other immediately available funds (the “Escrow Fund”) to an institutional escrow agent with offices in Pittsburgh, Pennsylvania that is reasonably acceptable to Buyer and the Seller Representative (the “Escrow Agent”) to be held or disbursed in accordance with the terms of an Escrow Agreement, in substantially the form attached hereto as Exhibit B (the “Escrow Agreement”);
2
(v) at the Closing, Buyer will issue to ▇▇. ▇▇▇▇▇▇▇ 100,000 shares of non-registered common stock of Buyer (the “▇▇▇▇▇▇▇ Stock Consideration”) and Buyer will direct its stock transfer agent to deliver to ▇▇. ▇▇▇▇▇▇▇ within five (5) business days of the Closing Date a certificate representing ownership by ▇▇. ▇▇▇▇▇▇▇ of the ▇▇▇▇▇▇▇ Stock Consideration;
(vi) on the date which is six (6) months following the Closing Date, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇ $1,000,000 by wire transfer or other immediately available funds; and
(vii) on the first anniversary after the Closing Date, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇ $1,000,000 by wire transfer or other immediately available funds.”
3. Amendment to Section 1.02. Section 1.02 of the Agreement is hereby amended and restated to read in its entirety as follows:
“1.02. Purchase and Sale of Shares held by Non-Management Shareholders; Additional Consideration.
(a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Non-Management Shareholders will sell, transfer and deliver to Buyer, and Buyer will purchase and accept from the Non-Management Shareholders, all of the Non-Management Shareholders’ rights, title and interest in and to the Shares held by the Non-Management Shareholders (the “Non-Management Shareholders Shares”), free and clear of any Liens other than the lien created under the Pledge Agreement.
(b) In consideration for the sale and delivery to Buyer of the Non-Management Shareholders Shares other than those held by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (“▇▇. ▇▇▇▇▇▇▇▇▇”), at the Closing, Buyer agrees to pay to the Non-Management Shareholders (other than ▇▇. ▇▇▇▇▇▇▇▇▇) an aggregate payment of $512,000 (the “Initial Non-ManagementShareholders Closing Payment”) by wire transfer or other immediately available funds to the Non-Management Shareholders in such amounts as are set forth on Schedule 1.02(b)(i) attached hereto.
(c) In consideration for the sale and delivery to Buyer of the Non-Management Shareholders Shares held by ▇▇. ▇▇▇▇▇▇▇▇▇, at the Closing, Buyer agrees to pay to ▇▇. ▇▇▇▇▇▇▇▇▇ by wire transfer or other immediately available funds an aggregate payment of $50,000 (the “Initial ▇▇▇▇▇▇▇▇▇ Closing Paymentand, together with the Initial ▇▇▇▇▇▇▇ Closing Payment and the Initial Non-Management Shareholders Closing Payment, the “Initial Closing Payment”) and Buyer will issue to ▇▇. ▇▇▇▇▇▇▇▇▇ 100,000 shares of non-registered common stock of Buyer (the “▇▇▇▇▇▇▇▇▇ Stock Consideration” and, together with the ▇▇▇▇▇▇▇ Stock Consideration, the “Restricted Stock
3
Consideration”) and Buyer will direct its stock transfer agent to deliver to ▇▇. ▇▇▇▇▇▇▇▇▇ within five (5) business days of the Closing Date a certificate representing ownership by ▇▇. ▇▇▇▇▇▇▇▇▇ of the ▇▇▇▇▇▇▇▇▇ Stock Consideration.
(d) As soon as practicable following the Closing and in no event later than May 28, 2004, as additional consideration for the Non-Management Shareholders Shares other than those held by ▇▇. ▇▇▇▇▇▇▇▇▇, Buyer will pay to the Non-Management Shareholders (other than ▇▇. ▇▇▇▇▇▇▇▇▇) an aggregate payment of $50,000 by wire transfer or other immediately available funds (the “First Subsequent Non-Management Shareholders Closing Payment”).
(e) As soon as practicable following the Closing and in no event later than May 28, 2004, as additional consideration for the Non-Management Shareholders Shares held by ▇▇. ▇▇▇▇▇▇▇▇▇, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇▇▇ an aggregate payment of $250,000 by wire transfer or other immediately available funds (the “First Subsequent ▇▇▇▇▇▇▇▇▇ Closing Payment”).
(f) On June 25, 2004, or in no event later than June 28, 2004, as additional consideration for the Non-Management Shareholders Shares other than those held by ▇▇. ▇▇▇▇▇▇▇▇▇, Buyer will pay to the Non-Management Shareholders (other than ▇▇. ▇▇▇▇▇▇▇▇▇) an aggregate payment of $250,000 by wire transfer or other immediately available funds (the “Second Subsequent Non-Management Shareholders Closing Payment”).
(g) On June 25, 2004, or in no event later than June 28, 2004, as additional consideration for the Non-Management Shareholders Shares held by ▇▇. ▇▇▇▇▇▇▇▇▇, Buyer will pay to ▇▇. ▇▇▇▇▇▇▇▇▇ an aggregate payment of $450,000 by wire transfer or other immediately available funds (the “Second Subsequent ▇▇▇▇▇▇▇▇▇ Closing Payment” and, together with the Initial Closing Payment, the First and Second Subsequent ▇▇▇▇▇▇▇ Closing Payments, the First Subsequent ▇▇▇▇▇▇▇▇▇ Closing Payment, the First and Second Subsequent Non-Management Shareholders Closing Payment and the Restricted Stock Consideration, the “Purchase Price”).”
4. Deletion of Section 9.07. Section 9.07 of the Agreement is hereby deleted in its entirety.
5. Amendment to Schedule 1.02(b)(i). Schedule 1.02(b)(i) is hereby amended to read in its entirety as follows:
4
Schedule 1.02(b)(i)
| Non-Management Shareholder Name | Amount to be Paid under Section 1.02(b),1.02(d) and 1.02(f) | |
| Initial Non-Management Shareholders Closing Payment | ||
| ▇▇▇▇▇ ▇▇▇▇▇ |
$50,000 | |
| ▇▇▇▇▇ ▇▇▇▇▇ |
$462,000.00 | |
| Total |
$512,000.00 | |
| First and Second Subsequent Non-Management Shareholders Closing Payment | ||
| ▇▇▇▇▇ ▇▇▇▇▇ |
$300,000 | |
| ▇▇▇▇▇ ▇▇▇▇▇ |
$0 | |
| Total |
$300,000 |
6. Payment Delay Penalty.
(a) In the event that the balance of the Purchase Price remains unpaid as of July 12, 2004, Buyer shall pay to the Sellers an amount equal to one half of one percent (0.5%) of the unpaid balance of the Purchase Price as of July 12, 2004 and shall increase the penalty by an equal amount for each subsequent fourteen (14) day period in which any balance of the Purchase Price remains outstanding (the “Payment Delay Penalty”).
(b) Notwithstanding Section 6(a) above, the payments set forth in Sections 1.01(b)(vi) and 1.01(b)(vii) shall not be subject to the Payment Delay Penalty.
(c) In no event shall the Payment Delay Penalty be imposed at a rate in excess of the rate authorized by applicable law.
(d) Sellers shall be entitled to retain any Payment Delay Penalty paid or accrued under Amendment Number Two prior to the effective date of this Amendment Number Three.
7. Amendment to Section 3 of Pledge Agreement. Section 3 of the Pledge Agreement is hereby amended and restated to read in its entirety as follows:
“3. The Indebtedness consists of (i) Debtor’s obligation to deliver and pay to Creditors, no later than July 12, 2004, the full amount described as the First and Second Subsequent ▇▇▇▇▇▇▇ Closing Payments, the Second Subsequent Non-Management Shareholders Closing Payment and the Second Subsequent ▇▇▇▇▇▇▇▇▇ Closing Payment (collectively, the “Subsequent Closing Payments”) in that Amendment Number Three to Stock Purchase Agreement, by and among Pulse Healthcare Staffing, Inc., a California corporation, Creditors and Debtor, dated as of May 28, 2004 (the “Purchase Agreement”) and (ii) all of Debtor’s obligations under this Pledge Agreement.
5
8. Employment Matters.
a. Extension of Employment Benefits for ▇▇. ▇▇▇▇▇▇▇▇▇. Buyer shall extend any insurance coverage or other non-salary employment benefits for ▇▇. ▇▇▇▇▇▇▇▇▇, as they were in effect immediately prior to the Closing Date, through December 31, 2004. Such benefits shall be provided at Buyer’s expense, and shall not be considered an offset or reduction to any escrow amount or other payment that is payable to ▇▇. ▇▇▇▇▇▇▇ or any other employees or Non-Management Shareholders.
b. Waiver of Vesting Conditions on Stock Grants to ▇▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇. Buyer and Pulse hereby agree to waive and release any vesting conditions associated with Buyer’s issuance of 190,000 shares of its non-registered common stock to ▇▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇ under employment and/or services agreements with ▇▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇. The parties, including ▇▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇, agree and acknowledge that 140,000 of such shares are properly issuable to ▇▇. ▇▇▇▇▇ and that 50,000 of such shares are properly issuable to ▇▇. ▇▇▇▇▇▇▇▇▇.
9. Signatories to Amendment Number Three. The parties to this Amendment Number Three agree and acknowledge that all payments due to ▇▇▇▇▇ ▇▇▇▇▇ have been made as of the effective date of this Amendment Number Three, and that this Amendment Number Three shall therefore be effective without the separate signature of ▇▇▇▇▇ ▇▇▇▇▇.
10. Loan Payment to ▇▇. ▇▇▇▇▇▇▇▇▇. On June 25, 2004, or in no event later than June 28, 2004, Buyer shall cause the Company to pay $250,000 to ▇▇. ▇▇▇▇▇▇▇▇▇ in consideration for the cancellation of indebtedness owed by the Company to ▇▇. ▇▇▇▇▇▇▇▇▇, in satisfaction of the Company’s obligations under Section 7.05 of the Agreement.
11. Conflict. In the event of any conflict between the provisions of this Amendment Number Three and the Agreement, as amended by Amendment Numbers One and Two, or the Pledge Agreement, the provisions of this Amendment Number Three shall prevail and the provisions of the Agreement and the Pledge Agreement shall be deemed modified by this Amendment Number Three as necessary to resolve such conflict.
12. Effect of Amendment. Except as expressly amended by this Amendment Number Three, Amendment Numbers One and/or Two, and/or by the preceding sentence, the terms and provisions of the Agreement and the Pledge Agreement shall continue in full force and effect.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO
AND AMENDMENT TO PLEDGE AGREEMENT
IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment Number Three to Stock Purchase Agreement as of the date first set forth above.
| BUYER
WORLD HEALTH ALTERNATIVES, INC., as Buyer and as Debtor under the Pledge Agreement
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Title: President
COMPANY
PULSE HEALTHCARE STAFFING, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Title: President
SELLERS
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, individually as a Seller and in his capacity as the Seller Representative and as a Creditor under the Pledge Agreement
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually as a Seller and as a Creditor under the Pledge Agreement
/s/ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, individually as a Seller and in his capacity as the alternate Seller Representative and as a Creditor under the Pledge Agreement |