THIS
STOCK SALE AGREEMENT (this “ Agreement ”), dated
as of August 19, 2009, is by and between AVASTRAUSA, INC., a
Delaware corporation (“ Seller ”), AVASTRA SLEEP
CENTRES LIMITED ABN 47 094 446 803 (“Parent”) and SDC
HOLDINGS, LLC, an Oklahoma limited liability company (“
Buyer ”).
A. Seller
owns all of the issued and outstanding capital stock of somniTech,
Inc., a Kansas corporation, and somniCare, Inc., a Kansas
corporation (the “ Somni Stock ”).
B. Seller
owns all of the issued and outstanding capital stock of Avastra
Eastern Sleep Centers, Inc., a New York corporation (the “
Eastern Stock ”).
C. Seller
desires to sell, and Buyer desires to purchase, the Somni Stock and
the Eastern Stock on the terms set forth in this
Agreement.
In
consideration of the premises, and the mutual representations,
warranties, covenants and agreements hereinafter set forth, the
parties agree as follows.
On
the terms and subject to the conditions set forth in this
Agreement, Seller shall sell, assign, transfer, and deliver the
Somni Stock and the Eastern Stock to Buyer free and clear of all
liens and encumbrances.
(a) The
closing of the acquisition of the Somni Stock shall take place at
the offices of McAfee & Taft A Professional Corporation at 211
N. Robinson, 10 th
Floor, Two
Leadership Square, Oklahoma City, Oklahoma 73102 (the “
Closing Location ”), at 10:00 a.m. CDT on
August 24, 2009 or such other time and place as mutually
agreed to by the parties.
(b) The
closing of the sale of the Eastern Interests shall take place at
the Closing Location at 10:00 a.m. CDT on September 30,
2009 or such other time and place as mutually agreed to by the
parties.
(a)
Somni Stock . The total consideration for the Somni Stock is
US$6,000,000, payable by the Buyer as follows:
(i)
an amount represented by Buyer assuming liability from Parent for
the earnout obligations of Parent under the Merger Agreement, dated
May 4, 2007, pursuant to which Seller acquired the Somni Stock
and in respect of which Buyer must make payment to Pamela R Gillis
Revocable Trust before 5:00 p.m. CDT on August 24,
2009;
(ii)
an amount representing the accrued liability of Parent in respect
of the convertible note obligations of Parent paid to an account
nominated by Parent to be held of the benefit of note holders
pending redemption of the notes by Parent; and
(iii)
an amount representing the remaining consideration after deduction
the amounts paid under (i) and (ii) to be paid via
electronic funds transfer or telegraphic transfer to or at the
direction of Parent.
(b)
Eastern Stock . The consideration for the Eastern Stock is
payable by Buyer as follows:
(i)
an amount represented by Buyer assuming liability from Parent for
the earnout obligations of Parent under the Asset Purchase
Agreement dated October 10, 2007;
(ii)
US$1,000,000 in cash to be paid at the direction of Seller to
Parent in four equal installments of US$250,000 at closing and on
January 31, May 31 and September 30, 2010;
and
(iii)
an amount of US$1,500,000 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.
The
common stock issued as considerati
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