SECOND AMENDMENT TO STOCK SALE
AGREEMENT
THIS SECOND
AMENDMENT TO STOCK SALE AGREEMENT (this “ Amendment
”), dated as of September 14, 2009, is by and among
AVASTRA SLEEP CENTRES LIMITED (in liquidation) f/k/a Avastra, Ltd.,
an Australian corporation (“ Parent ”),
AVASTRAUSA, INC., a Delaware corporation (“ Seller
”), and SDC HOLDINGS, LLC, an Oklahoma limited liability
company (“ Buyer ”).
A. Parent,
Seller and Buyer are parties to that certain Stock Sale Agreement,
dated August 19, 2009 (the “ Original Agreement
”).
B. The
parties amended the Original Agreement pursuant to that certain
First Amendment to Stock Sale Agreement dated August 23, 2009,
pursuant to which Buyer acquired the Somni Stock and will acquire
the Eastern Stock (the “ First Amendment ”). The
Original Agreement as amended by the First Amendment is referred to
herein as the “ Agreement ”.
C. The
parties desire to amend the Agreement as set forth in this
Amendment.
D. Capitalized
terms used in this Amendment unless otherwise defined in this
Amendment shall have the meaning given to such terms in the
Agreement.
NOW, THEREFORE, in
consideration of the premises, and the mutual representations,
warranties, covenants and agreements hereinafter set forth, the
parties agree as follows
1.
Section 3(b) of the Agreement. The parties agree
that paragraph (ii) of subsection (b) of Section 3
of the Agreement is hereby deleted in its entirety and replaced by
the following:
“(ii)
US$1,156,000 in cash to be paid at the direction of Seller to
Parent on the closing of the acquisition of the Eastern stock;
and”
2.
Section 3(b) of the Agreement.
(a) The
parties agree that paragraph (iii) of subsection (b) of
Section 3 of the Agreement is hereby deleted in its entirety
and replaced by the following:
“(iii) an
amount of US$1,344,000 to be paid at the direction of Seller to
Parent in the form of common stock of Graymark Healthcare, Inc.
based on the average of the closing NASDAQ sale price for the
common stock for the twenty (20) trading days prior to the
closing on the Eastern Stock.”
(b) The
parties agree that the paragraph immediately following paragraph
(iii) of subsection (b) of Section 3 of the
Agreement is hereby deleted in its entirety and replaced by the
following:
“The
common stock issued as consideration for the Eastern Stock under
(iii) above will be subject to a 12-month lockup agreement
that will prohibit the transfer of the shares for a period of
twelve months, and for the next twelve months, Parent may only
transfer 25% of the shares in any three month period. Graymark will
allow a representative of Parent to be an advisory (non-voting)
member of Graymark’s board of directors (the “
Advisory Director ”) provided, however, that such
representative must be reasonably acceptable to the Chairman of the
Board of Directors of Graymark. Such Advisory Director shall be
entitled to all notices of and written consents in lieu of meetings
and may attend all meetings of directors. All fees, costs and
expenses associated with such Advisory Director’s attendance
at all meetings of directors, including, but not limited to,
roundtrip commercial first class airfare, accommodations at a hotel
of such Advisory Director’s reasonable choosing and
reimbursement for any meals and other transportation expenses
reasonably incurred by the Advisory Director in connection with his
or her attendance at such meetings of directors, shall be paid by
Graymark up to a maximum of US$5,000 per meeting. Parent’s
right to have the Advisory Director shall terminate at such time as
Parent owns less than 100,000 shares of the Graymark
Stock.”
3.
Section 6(a) of the Agreement . The parties
agree that Section 6(a) of the Agreement is replaced in its
entirety by Section 4 of the First Amendment (as amended by
this Amendment) and by Section 5 and Section 6 of this
Amendment.
4.
Section 4 of the First Amendment . The first
four paragraphs (everything before subsection (a) of
Section 4) of the First Amendment are hereby deleted in their
entirety and replaced with the following:
“The
following is a list of assumptions made by Buyer in determining the
Purchase Price for the Somni Entities (collectively, the “
Somni Assumptions ”).”
5.
Assumptions Regarding the Condition of the Eastern
Entity . Except as otherwise set forth on
Parent/Seller’s Disclosure Schedule attached hereto, the
following is a list of assumptions made by Buyer in determining the
Purchase Price for the Eastern Entity (together with the Somni
Assumptions, the “ Assumptions ”).
(a)
Authorization . The execution and delivery of the
Agreement, the performance by Seller and Parent of their
obligations under the Agreement and this Amendment and the
consummation by Seller and Parent of the transactions contemplated
by the Agreement and this Amendment (i) have been duly
authorized by all requisite corporate action on the part of Seller
and Parent, and (ii) do not violate any applicable law.
-2-
(b)
Authority . The Eastern Entity has all necessary
power and authority to own, operate or lease the assets now owned,
operated or leased by it and to carry on its business as it has
been and is currently conducted.
(c)
Subsidiaries . There are no corporations,
partnerships, joint ventures, associations or other entities in
which the Eastern Entity owns, of record or beneficially, any
equity interests.
(d)
Capital Interests . Seller owns all of the issued and
outstanding capital stock of the Eastern Entity free and clear of
all liens and encumbrances (exclusive of any restrictions under
applicable federal or state securities laws or under the Eastern
Entity’s certificate of incorporation or bylaws) and is
transferring all such capital stock to Buyer pursuant to the
Agreement.
(e)
Minute Books . The minute book of the Eastern Entity
contains accurate records of all meetings and accurately reflects
all other actions taken by the holders of capital stock of the
Eastern Entity and the board of directors of such the Eastern
Entity. A complete and accurate copy of such minute book has been
delivered by Seller to Buyer for review.
(f)
Financial Information; Books and Records . Seller
(i) has delivered to Buyer true and complete copies of the
unaudited consolidated balance sheet of Seller for each of the two
fiscal years ended June 30, 2008 and 2009, and the related
unaudited statements of income of Seller, accompanied by the
reports thereon of Seller’s accountants (collectively
referred to herein as the “ Financial Statements
”) and (ii) has delivered to Buyer true and complete
copies of the unaudited balance sheet of the Eastern Entity for the
fiscal years ended June 30, 2008 and 2009 and the related
statements of income for the period then ending (such unaudited
balance sheets and statements of income, collectively the “
Eastern Financial Statements ”). The Financial
Statements and the Eastern Financial Statements (i) were
prepared in accordance with the books of account and other
financial records of Seller and the Eastern Entity, (ii) are
complete and accurate in all material respects, (iii) present
fairly the financial condition and results of operations of Seller
and the Eastern Entity, as of the dates thereof or for the periods
covered thereby, (iv) were prepared in accordance with U.S.
GAAP on a basis consistent with the past practices of Seller and
the Eastern Entity (with the exception that the Eastern Financial
Statements lack certain information and footnote disclosures
normally included in financial statements prepared in accordance
with U.S. GAAP) and (v) include all adjustments (consisting
only of normal recurring accruals) that are necessary to present
fairly in all material respects the financial condition of Seller
and the Eastern Entity and the results of the operations of Seller
and the Eastern Entity as of the dates thereof or for the periods
covered thereby. For purposes of this Amendment, “ 2009
Balance Sheet ” mean the Balance Sheet of the Eastern
Entity as of June 30, 2009 included within the Eastern
Financial Statements.
(g)
Absence of Undisclosed Liabilities . The Eastern
Entity has not incurred any liabilities, other than liabilities
(i) as are reflected or reserved against in the Eastern
Financial Statements (or the notes thereto), (ii) incurred in
the ordinary course of business consistent with past practices
since July
|
