EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BETWEEN
WORLD HEALTH ALTERNATIVES, INC.
AND
CERTAIN INVESTORS
(AS LISTED ON SCHEDULE A)
DATED
DECEMBER 24, 2003
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of 24th day of December, 2003 by and among World Health Alternatives,
Inc., a corporation organized and existing under the laws of the State of
Florida ("WHAI" or the "COMPANY"), certain investors, (hereinafter referred to
collectively as "INVESTOR" or "INVESTORS") as listed on Schedule A herein (each
agreement with an Investor being deemed a separate and independent agreement
between the Company and such Investor) and Olshan Grundman Frome Rosenzweig
(Wolosky, LLP), as escrow agent.
PRELIMINARY STATEMENT:
WHEREAS, the Investors wish to purchase, upon the terms and subject to
the conditions of this Agreement, shares of the Common Stock of the Company and
certain common stock purchase warrants as described herein (each share of Common
Stock and corresponding stock purchase warrants are referred to herein as a
"UNIT") for a purchase price of Three Million Six Hundred Fifty Thousand Dollars
($3,650,000); and
WHEREAS, the parties intend to memorialize the purchase and sale of
such Units;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS
1.1 Incorporation by Reference. The foregoing recitals, Schedule A and the
Exhibits attached hereto and referred to herein, are hereby acknowledged to be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent with
any other instrument or understanding among the parties governing the affairs of
the Company, shall supersede such instrument or understanding to the fullest
extent permitted by law. A copy of this Agreement shall be filed at the
Company's principal office.
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1.3 Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
1.3.1 "1933 ACT" means the Securities Act of 1933, as
amended.
1.3.2 "1934 ACT" means the Securities Exchange Act of 1934,
as amended.
1.3.3 "AFFILIATE" means a Person or Persons directly or
indirectly, through one or more intermediaries, controlling, controlled by or
under common control with the Person(s) in question. The term "control," as used
in the immediately preceding sentence, means, with respect to a Person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50
percent of the voting rights attributable to the shares of such controlled
corporation and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such controlled Person.
1.3.4 "ARTICLES". The Articles of Organization of the
Company, as the same may be amended from time to time.
1.3.5 "CLOSING DATE" means the later of December 31, 2003
or upon the date all of the conditions of Article VIII and Article IX herein are
satisfied, unless extended by the Company in its sole discretion until December
31, 2003.
1.3.6 "COMMON STOCK" means the shares of common stock of
WHAI, par value $0.001 per share.
1.3.7 "ESCROW" means the escrow information provided
herein.
1.3.8 "FLORIDA ACT" means the Florida Business Corporation
Act, as amended.
1.3.9 "MATERIAL ADVERSE EFFECT" shall mean any adverse
effect on the business, operations, properties or financial condition of the
Company that is material and adverse to the Company and its subsidiaries and
affiliates, taken as a whole and/or any condition, circumstance, or situation
that would prohibit or otherwise materially interfere with the ability of the
Company to perform any of its material obligations under this Agreement or the
Registration Rights Agreement; provided, however, that none of the following
shall be deemed, in themselves, either alone or in combination, to constitute a
Material Adverse Effect, and none of the following shall be taken into account
in determining whether there has been or shall be a Material Adverse Effect: (i)
any change in the market price or trading volume of the Common Stock after the
date hereof, (ii) any adverse circumstance, change or effect resulting directly
from conditions affecting the industries in which the Company participates in
their entirety or the U.S. economy as a whole, (iii) any adverse circumstance,
change or effect resulting directly from the announcement or pendency of this
Agreement or (iv) any adverse circumstance, change or effect
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resulting from the taking of any action by the Company which this Agreement or
the Registration Rights Agreement requires the Company to take.
1.3.10 "PERSON" means an individual, partnership, firm,
limited liability company, trust, joint venture, association, corporation, or
any other legal entity.
1.3.11 "PURCHASE PRICE" means the purchase price for the
Units as set forth in Section 2.2 below.
1.3.12 REGISTRATION RIGHTS AGREEMENT" shall mean the
registration rights agreement between the Investors and the Company attached
hereto as Exhibit A.
1.3.13 "REGISTRATION STATEMENT" shall mean the registration
statement under the 1933 Act to be filed with the SEC for the registration of
the Shares pursuant to the Registration Rights Agreement.
1.3.14 "SEC" means the Securities and Exchange Commission.
1.3.15 "SEC DOCUMENTS" shall mean each form, report,
schedule, statement and other document filed or required to be filed by the
Company with the SEC pursuant to the 1934 Act since March 1, 2003 through the
date hereof, including any filed amendment to such document, whether or not such
amendment is required to be so filed.
1.3.16 "SHARES" shall mean, collectively, the shares of
Common Stock of the Company being subscribed for hereunder and those shares of
Common Stock issuable to the Investor upon exercise of the Warrants.
1.3.17 "UNITS" shall mean the Common Stock and the Warrants
collectively.
1.3.18 "WARRANTS" shall mean the Common Stock purchase
warrants in the forms attached hereto Exhibit B, Exhibit C and Exhibit D.
ARTICLE II
SALE AND PURCHASE OF WHAI'S UNITS
AND PURCHASE PRICE
2.1 SALE OF WHAI UNITS Upon the terms and subject to the conditions set
forth herein, and in accordance with applicable law, the Company agrees to sell,
and the Investors, severally and not jointly, agree to purchase, the following
Units for an aggregate purchase price of Three Million Six Hundred Fifty
Thousand Dollars ($3,650,000)(the "PURCHASE PRICE") in accordance with the
commitments set forth on Schedule A attached hereto, on the Closing Date, as
follows:
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2.1.1 COMMON STOCK Upon execution and delivery of this
Agreement and the Company's receipt of the Purchase Price, the Company shall
deliver to the Investors an aggregate total of 2,750,000 shares of Common Stock
at a price of $0.60 per share (for an aggregate purchase price of One Million
Six Hundred Thousand Dollars ($1,650,000)). Each Investor shall pay such amount
and receive such number of shares of Common Stock as shall be set forth on
Schedule A. The Company shall file a registration statement with respect to, and
shall use commercially reasonable efforts to register with the SEC for resale,
the shares of Common Stock acquired hereunder pursuant to the terms and
conditions of the Registration Rights Agreement.
2.1.2 WARRANTS Upon execution and delivery of this
Agreement and the Company's receipt of the Purchase Price, the Company shall
deliver to the Investors the following Warrants (for an aggregate purchase price
of Two Million Dollars ($2,000,000)):
2.1.2(a) Warrants to purchase Three Million Three Hundred and
Thirty Three Thousand Three Hundred shares of Common Stock (the "FIRST WARRANT
SHARES") to be issued to the Investors pro rata based upon their commitments as
set forth on Schedule A (the "FIRST WARRANTS"). The First Warrants, a form of
which is attached hereto as Exhibit B, shall include, but not be limited to,
such terms and conditions as a exercise price of $0.60 per share (as adjusted
from time to time as provided in the First Warrants) and an expiration date of
five (5) years from the date of issuance. In addition, the First Warrants shall
contain a put provision on behalf of the Company. If at any time during the
period commencing on the Closing Date and ending on the one hundred and
twentieth (120th) day following the Closing Date, the Company enters into a
Definitive Purchase and Sale Agreement (as defined therein) at a purchase price
of less than four (4) times Trailing EBITA with any Target (as defined therein)
having a Trailing EBITA (as defined below) of at least $3,000,000 (a "QUALIFYING
ACQUISITION"), the Company may require the Warrant Holder to exercise the
Warrant (the "PUT RIGHT"). The Company may exercise its Put Right by delivering
written notice thereof to the holder(s) of the First Warrants (the "WARRANT
HOLDERS") at any time after execution of the Definitive Purchase and Sale
Agreement and prior to the date which is not less than fifteen (15) days prior
to the closing date for the Qualifying Acquisition (the "PUT EXERCISE PERIOD").
Within ten (10) days following the receipt of such written notice (the "PUT
EXERCISE NOTICE"), the Warrant Holders shall deposit, pro rata based upon the
First Warrants held by such Warrant Holders, an aggregate amount in immediately
available funds equal to $2,000,000 (representing the aggregate exercise price
for the First Warrants) into the account of the Escrow Agent set forth in
Section 2.2 (the "FIRST WARRANT ESCROW FUNDS") in preparation for the exercise
of the First Warrants. Contemporaneous with the closing of the Qualifying
Acquisition, the Warrant Holders shall exercise the First Warrants, in whole,
and the Escrow Agent shall deliver to the Company the First Warrant Escrow
Funds. In the event that any of the Warrant Holders fails to deposit the
exercise price of the First Warrants held by such Warrant Holder into the escrow
or exercise such Warrants contemporaneous with the closing of the Qualifying
Acquisition, (i) the Warrant
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Holder shall immediately forfeit his or its rights to the First Warrants and any
rights and interests herein or relating hereto; (ii) the Warrant Holder shall
immediately forfeit such Warrant Holders' registration rights contained in the
Registration Rights Agreement; and (iii) the unexercised First Warrants shall be
offered pro rata to all other Warrant Holders who complied with the terms of the
Put Rights. Such other Warrant Holders shall have a period of ten (10) business
days to exercise the unexercised First Warrant after which any or all of the
remaining unexercised First Warrant shall be cancelled by the Company.
Notwithstanding anything contained herein to the contrary, in the event that the
Company does not close the Qualifying Acquisition within sixty (60) days
following the date upon which the First Warrant Escrow Funds have been deposited
with the Escrow Agent, the Warrant Holders may, at their election, either (x)
exercise the First Warrants, in whole or in part, or (y) upon written notice to
the Company and the Escrow Agent, demand the return of the First Warrant Escrow
Funds. If the Warrant Holders provide such written notice in accordance with the
preceding sentence, the Escrow Agent shall immediately return the First Warrant
Escrow Funds to the Warrant Holders.
2.1.2(b) Warrants to purchase One Million shares of Common
Stock (the "SECOND WARRANT SHARES") to be issued to the Investors pro rata based
upon their commitments as set forth on Schedule A (the "SECOND WARRANTS"). The
Second Warrants, a form of which is attached hereto as Exhibit C, shall include,
but not be limited to, such terms and conditions as a exercise price of $1.50
per share (as adjusted from time to time as provided in the Second Warrants) and
an expiration date of five (5) years from the date of issuance. Notwithstanding
anything contained herein to the contrary, the Second Warrants shall contain a
provision on behalf of the Company providing that if (i) the average price of
the Common Stock as listed on the OTC Bulletin Board or other nationally public
securities market is 125% of the exercise price for a period of twenty
consecutive trading days and (ii) the Registration Statement is effective for
such twenty consecutive trading days, the Company may repurchase any or all of
the Second Warrants from the holders thereof for a purchase price of $0.001 per
warrant.
2.1.2(c) Warrants to purchase One Million shares of Common
Stock (the "THIRD WARRANT SHARES") to be issued to the Investors pro rata based
upon their commitments set forth on Schedule A (the "THIRD WARRANTS"). The Third
Warrants, a form of which is attached hereto as Exhibit D, shall include, but
not be limited to, such terms and conditions as a exercise price of $2.00 per
share (as adjusted from time to time as provided in the Warrant) and an
expiration date of five (5) years from the date of issuance. Notwithstanding
anything contained herein to the contrary, the Third Warrants shall contain a
provision on behalf of the Company providing that if (i) the average price of
the Common Stock as listed on the OTC Bulletin Board or other nationally public
securities market is 125% of the exercise price for a period of twenty
consecutive trading days and (ii) the Registration Statement is effective for
such twenty consecutive trading days, the Company may repurchase any or all of
the Third Warrants from holders thereof for a purchase price of $0.001 per
warrant.
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2.2 PURCHASE PRICE. The purchase price to be paid by each Investor on the
Closing Date for the Units, payable by each Investor in United States Dollars in
accordance with the information listed on SCHEDULE A. Payment to the Company of
the Purchase Price shall be made on the date hereof to the escrow agent, Olshan
Grundman Frome Rosenzweig & Wolosky ("Escrow Agent") by wire transfer of funds
to the account as follows:
FLEET BANK
1133 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
FOR THE BENEFIT OF:
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
ABA #021200339
ACCT #2592-52-1891
ATTN: SCOTT VANDERWALL
On the Closing Date, the escrow agent shall transfer the Purchase Price to the
Company.
2.3 ACCEPTANCE. Each potential Investor acknowledges that the Company
shall, in its sole discretion, have the right to accept or reject their
subscription for Units, in whole or in part, for any reason or for no reason.
ARTICLE II
CLOSING DATE AND DELIVERIES AT CLOSING
3.1 CLOSING DATE The closing of the transactions contemplated by this
Agreement (the "CLOSING"), unless expressly determined herein, shall be held at
the offices of the Company, at 300 Penn Center Boulevard, Suite 201, Pittsburgh,
Pennsylvania 15235 at 5:00 P.M. local time, on the Closing Date or on such other
date and at such other place as may be mutually agreed by the parties, including
closing by facsimile with originals to follow.
3.2 DELIVERIES BY THE COMPANY. In connection with the Closing, the Company
agrees to deliver, or cause to be delivered, to the Investors, the following:
(a) Within seven (7) business days following the Closing
Date, Certificates representing WHAI Shares, which
certificates shall be duly endorsed to the Investor
and shall contain the restrictive legends set forth
in Section 7.3 below;
(b) At or prior to Closing, an Agreement executed by the
Company;
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(c) At or prior to Closing, Warrants in the name of the
Investors in the form attached hereto as Exhibit B,
Exhibit C, and Exhibit D executed by the Company;
(d) At or prior to Closing, a Registration Rights
Agreement executed by the Company; and
(e) At or prior to Closing, confirmation that the
provisions of Paragraph 6.6 herein have been
satisfied or commenced, as appropriate.
3.3 DELIVERIES BY INVESTOR. In connection with the Closing, each Investor
agrees to deliver, or cause to be delivered, to the Company, as appropriate, the
following:
(a) At or prior to Closing, the Purchase Price;
(b) At or prior to Closing, an Agreement executed by the
Investor; and
(c) At or prior to Closing, a Registration Rights
Agreement executed by the Investor.
In the event any document provided to the other party in Paragraphs 3.2 and 3.3
herein are provided by facsimile, the party shall forward an original document
to the other party within seven (7) business days.
3.4 FURTHER ASSURANCES. The Company and each Investor shall, upon request,
on or after the Closing Date, cooperate with each other (specifically, the
Company shall cooperate with the Investors, the Investors shall cooperate with
the Company, but does not require any Investor to cooperate with any other
Investor) by furnishing any additional information, executing and delivering any
additional documents and/or other instruments and doing any and all such things
as may be reasonably required by the parties or their counsel to consummate or
otherwise implement the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WHAI
WHAI represents and warrants to the Investors as of the date hereof as
follows:
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4.1 ORGANIZATION AND QUALIFICATION. WHAI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida,
and has the requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as it is now being conducted and is
duly qualified to do business in any other jurisdiction by virtue of the nature
of the businesses conducted by it or the ownership or leasing of its properties,
except where the failure to be so qualified will not, when taken together with
all other such failures, have a Material Adverse Effect on WHAI and its
subsidiaries taken as a whole.
4.2 ARTICLES OF INCORPORATION AND BY-LAWS. The complete and correct copies
of WHAI's Articles of Incorporation and By-Laws, as amended or restated to date
which have been filed with the Securities and Exchange Commission are a complete
and correct copy of such document as in effect on the date hereof and as of the
Closing Date.
4.3 CAPITALIZATION.
4.3.1 As of the date hereof, the authorized
capital stock of WHAI consists of 200,000,000 shares of Common Stock, par value
$0.0001 per share and 100,000,000 shares of Preferred Stock, par value $0.0001
per share. As of the date hereof, there were (i) 24,575,400 shares of Common
Stock issued and outstanding, (ii) 16,000,000 shares in treasury and (iii) no
shares of Preferred Stock issued or outstanding. All shares of capital stock
have been duly authorized and are validly issued, and are fully paid and no
assessable, and free of preemptive rights.
4.3.2 Except pursuant to this Agreement or as
otherwise set forth in WHAI's SEC Documents, as of the date hereof, there are no
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of WHAI, or
agreements, understandings or arrangements to which WHAI is a party, or by which
WHAI is or may be bound, to issue additional shares of its capital stock or
options, warrants, scrip or rights to subscribe for, calls or commitment of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, any shares of any class of its capital stock. The Company
agrees to inform the Investors in writing of any additional warrants granted
prior to the Closing Date.
4.3.3 The Company on the Closing Date (i) will
have full right, power, and authority to sell, assign, transfer, and deliver, by
reason of record and beneficial ownership, to each Investor, WHAI Shares
hereunder, free and clear of all liens, charges, claims, options, pledges,
restrictions, and encumbrances whatsoever; and (ii) upon delivery of and payment
by each Investor of the Purchase Price to the Company, such Investor will
acquire good and marketable title to such Company Stock, free and clear of all
liens, charges, claims, options, pledges, restrictions, and encumbrances
whatsoever, except in each of the case of (i) and (ii),
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such liens, charges, claims, options, pledges, restrictions and encumbrances as
may be (x) imposed under federal or state securities laws, (y) set forth in this
Agreement or the Registration Rights Agreement or (z) imposed through the
actions of the Investors.
4.3.4 On the Closing Date, Richard E. McDonald,
President, Principal Financial Officer, Principal Accounting Officer and
Chairman of the Board of Directors of the Company, shall beneficially own
greater than five percent (5%) of the issued and outstanding shares of Common
Stock and Marc D. Roup, Chief Executive Officer and a Director of the Company,
shall beneficially own greater than five percent (5%) of the issued and
outstanding shares of Common Stock.
4.4 AUTHORITY. WHAI has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by WHAI and the consummation by WHAI of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of WHAI and no other corporate proceedings on the part of WHAI is
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby except as disclosed in this Agreement. This Agreement and
the Registration Rights Agreement have been duly executed and delivered by WHAI
and constitute valid and binding obligations of WHAI, enforceable against WHAI
in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or other similar laws relating to, affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principals
of general application.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution and delivery
of this Agreement by WHAI does not, and the performance by WHAI of its
obligations hereunder will not: (i) conflict with or violate the Articles or
By-Laws of WHAI; (ii) conflict with, breach or violate any federal, state,
foreign or local law, statute, ordinance, rule, regulation, order, judgment or
decree (collectively, "LAWS") in effect as of the date of this Agreement and
applicable to WHAI; or (iii) result in any breach of, constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, give to any other entity any right of termination, amendment,
acceleration or cancellation of, require payment under, or result in the
creation of a lien or encumbrance on any of the properties or assets of WHAI
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which WHAI is a
party or by WHAI or any of its properties or assets is bound, except in each of
the cases of (i) through (iii) for any violations, conflicts, breaches,
defaults, terminations, accelerations, creations of liens, or incumbency that
would not, in the aggregate, have a Material Adverse Effect on WHAI.
4.6 REPORT AND FINANCIAL STATEMENTS. The audited financial statements of
Better Solutions,
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Inc. ("BETTER SOLUTIONS") for the year ended December 31, 2002 are included in
WHAI's Registration Statement on Form SB-2, as amended (the "FINANCIAL
STATEMENTS"). Each of the balance sheets contained in the Financial Statements
(including the related notes and schedules thereto) fairly presented the
financial position of Better Solutions as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Financial Statements (including any related notes
and schedules thereto) fairly presents the results of operations, changes in
stockholders' equity and changes in cash flows, as the case may be, of Better
Solutions for the periods to which they relate, in each case in accordance with
United States generally accepted accounting principles ("U.S. GAAP")
consistently applied during the periods involved, except in each case as may be
noted therein, subject to normal year-end audit adjustments and other
adjustments described therein in the case of unaudited statements. The books and
records of Better Solutions have been, and are being, maintained in all material
respects in accordance with U.S. GAAP and any other applicable legal and
accounting requirements and reflect only actual transaction.
4.7 COMPLIANCE WITH APPLICABLE LAWS. WHAI is not in violation of, or, to
the knowledge of WHAI is under investigation with respect to or has been given
notice or has been charged with the violation of any Law of a governmental
agency, except for violations which individually or in the aggregate do not have
a Material Adverse Effect on WHAI.
4.8 BROKERS. Except for Summit Financial Partners, LLC and Monarch Capital
Group, LLC, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
WHAI.
4.9 SEC DOCUMENTS. WHAI acknowledges that WHAI is a publicly held company
and has made available to the Investors after demand true and complete copies of
any requested SEC Documents. The Company has registered its Common Stock
pursuant to the 1934 Act, and the Common Stock is listed and traded on the OTC
Bulletin Board Market of the National Association of Securities Dealers, Inc.
The Company has received no notice, either oral or written, from the National
Association of Securities Dealers, Inc. (the "NASD") stating that WHAI has
failed to comply with any listing standards of the OTC Bulletin Board Market,
and the Company has maintained all requirements for the continuation of listing
thereon. As of their respective dates (or if amended or superceded, as of the
date of the last amendment or superceding report filed prior to the date
hereof), the SEC Documents complied in all material respects with the
requirements of the 1934 Act, and rules and regulations of the SEC promulgated
thereunder and the SEC Documents did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
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4.10 LITIGATION. Except as set forth in Section 4.10 of the Disclosure
Letter delivered to the Investors as of the date hereof, to the knowledge of
WHAI, no litigation, claim, or other proceeding before any court or governmental
agency is pending or threatened against WHAI.
4.11 EXEMPTION FROM REGISTRATION. Subject to the accuracy of the Investors'
representations in Article V, the sale of the Units will be exempt from the
registration requirements of Section 5 of the 1933 Act and/or any applicable
state securities law. When validly converted in accordance with the terms of the
Warrants, the Shares underlying the Warrants will be duly and validly issued,
fully paid, and non-assessable. The Company is issuing the Units in accordance
with and in reliance upon the exemption from securities registration afforded,
inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the
1933, and/or Section 4(2) of the 1933 Act.
4.12 NO MATERIAL ADVERSE CHANGE. Since December 31, 2002 until the date
hereof, no Material Adverse Effect has occurred or exists with respect to the
Company that has not been disclosed in the SEC Documents. No material supplier
has given notice, oral or written, that it intends to cease or reduce the volume
of its business with the Company from historical levels. Since December 31, 2002
until the date hereof, no event or circumstance has occurred or exists with
respect to the Company or its businesses, properties, operations or financial
condition, that, under any applicable law, rule or regulation applicable to the
Company, requires public disclosure or announcement prior to the date hereof by
the Company but which has not been so publicly announced or disclosed in writing
to the Investors.
4.13 INTERNAL CONTROLS AND PROCEDURES. The Company maintains books and
records and internal accounting controls which provide reasonable assurance that
(i) all transactions to which the Company or any subsidiary is a party or by
which its properties are bound are executed with management's authorization;
(ii) the recorded accounting of the Company's consolidated assets is compared
with existing assets at regular intervals; (iii) access to the Company's
consolidated assets is permitted only in accordance with management's
authorization; and (iv) all transactions to which the Company or any subsidiary
is a party or by which its properties are bound are recorded as necessary to
permit preparation of the financial statements of the Company in accordance with
U.S. generally accepted accounting principles.
4.14 FULL DISCLOSURE. No representation or warranty made by WHAI in this
Agreement contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
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Each Investor, severally and not jointly, as to himself or itself and not as to
any other Investor, represents and warrants to the Company with the Company
that:
5.1 ORGANIZATION AND STANDING OF THE INVESTOR. Where the Investor is a
corporation, such Investor is duly incorporated, validly existing and in good
standing under the laws of the state in which it was formed. The state in which
any offer to purchase shares hereunder was made or accepted by such Investor is
the state shown as such Investor's address. If an entity, the Investor was not
formed for the purpose of investing solely in the Units the subject of this
Agreement.
5.2 AUTHORIZATION AND POWER. The Investor has the requisite power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Investor and the consummation by the
Investor of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Investor, where appropriate,
and no other corporate proceedings on the part of the Investor, where
appropriate, is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby except as disclosed in this Agreement. This
Agreement and the Registration Rights Agreement have been duly executed and
delivered by the Investor and constitute valid and binding obligations of the
Investor, enforceable against the Investor in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
5.3 NO CONFLICTS. The execution and performance of this Agreement by the
Investor does not, and the performance by the Investor of its obligations
hereunder will not: (i) conflict with or violate such Investor's charter
documents or bylaws, where applicable, (ii) conflict with, breach or violate any
Laws in effect as of the date of this Agreement and applicable to the Investor;
or (iii) result in any breach of, constitute a default (or an event that with
notice or lapse of time or both would become a default) under, give to any other
entity any right of termination, amendment, acceleration or cancellation of, or
require any payment under, any note, bond, mortgage, indenture, contract,
agreement, lease license, permit, franchise or other instrument or obligation to
which the Investor is a party or by which the Investor or any of its properties
or assets is bound, except in each of cases (i) through (iii) for any
violations, conflicts, breaches, defaults, terminations or accelerations that
would not, in the aggregate, have a Material Adverse Effect on the Investor. The
Investor is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of such Investor's obligations under
this Agreement or to purchase the Units in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, the
Investor is assuming and relying upon the accuracy of the relevant
representations and agreements of WHAI herein.
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 12 OF 23
5.4 FINANCIAL RISKS. The Investor acknowledges that such Investor is able
to bear the financial risks associated with an investment in the Units and that
it has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries as it has
deemed necessary or appropriate to conduct its due diligence investigation. The
Investor is capable of evaluating the risks and merits of an investment in the
Units by virtue of its experience as an investor and its knowledge, experience,
and sophistication in financial and business matters and the Investor is capable
of bearing the entire loss of its investment in the Units.
5.5 ACCREDITED INVESTOR. The Investor is (i) an "accredited investor" as
that term is defined in Rule 501 of Regulation D promulgated under the 1933 Act
by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of
the kind described in this Agreement and the related documents, (iii) able, by
reason of the business and financial experience of its officers (if an entity)
and professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the Units.
5.6 INVESTMENT INTENT. The Investor is purchasing the Units for its own
account as principal, for investment purposes only, and not with a present view
to, or for, resale, distribution or fractionalization thereof, in whole or in
part, within the meaning of the 1933 Act. The Investor understands that its
acquisition of the Units has not been registered under the 1933 Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of such Investor's investment intent as expressed herein. The
Investor shall not, directly or indirectly, offer, sell, pledge, transfer, or
otherwise dispose of (or solicit any offers to buy, purchase, or otherwise
acquire or take a pledge of) any of the Units, except in compliance with the
terms of this Agreement and the registration requirements of the 1933 Act, and
the rules and regulations promulgated thereunder, or an exemption thereunder.
5.7 NO LEGAL, TAX OR INVESTMENT ADVICE. The Investor understands that
nothing in this Agreement or any other materials presented to such Investor in
connection with the purchase of the Units constitutes legal, tax or investment
advice. The Investor has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Units.
5.8 BROKERS. Except for Summit Financial Partners, LLC, and Monarch
Capital Group, LLC, who shall be paid by the Company, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investors.
STOCK PURCHASE AGREEMENT BETWEEN
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5.9 NO SHORT SALES. Prior to the Closing Date, neither the Investor nor
any of the Investor's Affiliates will be in a net short position with regard to
the Common Stock in any accounts directly or indirectly controlled by the
Investor.
5.10 KNOWLEDGE OF COMPANY. Each Investor and such Investor's advisors, if
any, have been, upon request, furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the Units. Each Investor and such Investor's advisors, if any,
have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers to any such inquiries.
5.11 RISK FACTORS Each Investor understands that such Investor's investment
in the Units involves a high degree of risk. Each Investor understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Units.
Each Investors warrants that such Investor is able to bear the complete loss of
such Buyer's investment in the Units.
5.12 FULL DISCLOSURE. No representation or warranty made by the Investor in
this Agreement contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading. Except asset forth or referred to in
this Agreement, Investor does not have any agreement or understanding with any
person relating to acquiring, holding, voting or disposing of any equity
securities of the Company.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1. REGISTRATION RIGHTS. The Company shall cause the Registration Rights
Agreement to remain in full force and effect and the Company shall comply in all
material respects with the terms thereof.
6.2. RESERVATION OF COMMON STOCK. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to issue the shares of Common Stock underlying the
Warrants.
6.3. LISTING OF COMMON STOCK. The Company hereby agrees to maintain the
listing of the Common Stock on the OTC Bulletin Board or another publicly
trading market. The Company will take all action to continue the listing and
trading of its Common Stock on the OTC Bulletin Board or another publicly traded
market and will comply in all respects with the Company's reporting, filing and
other obligations under the bylaws or rules of such publicly traded market.
STOCK PURCHASE AGREEMENT BETWEEN
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6.4. EXCHANGE ACT REGISTRATION. The Company will cause its Common Stock to
continue to be registered the 1934 Act, will use commercially reasonable efforts
to comply in all respects with its reporting and filing obligations under the
1934 Act, and will not take any action or file any document (whether or not
permitted by the 1934 Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under the 1934 until the Investors have disposed of all of their Shares or the
shares of Common Stock underlying the Warrants.
6.5. CORPORATE EXISTENCE; CONFLICTING AGREEMENTS. From the date hereof
until the Closing Date, (i) the Company will take all steps necessary to
preserve and continue the corporate existence of the Company and (ii) the
Company shall not enter into any agreement, the terms of which agreement would
restrict or impair the right or ability of the Company to perform any of its
obligations under this Agreement or any of the other agreements attached as
exhibits hereto.
6.6 INDEPENDENT DIRECTORS Within sixty days following the Closing, the
Company will cause the appointment of at least two "independent" directors (as
defined in Rule 4200(a)(15) of the NASD listing standards). If no such directors
are appointed with such sixty day period following Closing, the Company shall
pay to the Investors, pro rata, as liquidated damages and not as a penalty, an
amount equal to twelve percent (12%) of the Purchase Price, per annum, payable
monthly until such time as such directors have been appointed. The parties agree
that the only damages payable for a violation of the terms of this Agreement
with respect to which liquidated damages are expressly provided shall be such
liquidated damages. Nothing shall preclude the Investor from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement. The parties hereto agree that the liquidated damages provided for in
this Section 6.6 shall constitute a reasonable estimate of the damages that may
be incurred by the Investor by reason of the failure of the company to appoint
at least two such independent directors in accordance with the provisions
hereof.
6.7 USE OF PROCEEDS. The Company will use the proceeds from the sale of
the Units (excluding amounts paid by the Company for legal and administrative
fees in connection with the sale of the Units) for as follows: approximately
$150,000 for legal and administrative expenses in connection with the sale of
the Units; approximately $1,500,000 for general business purposes and debt
restructuring; and approximately $2,000,000 for an acquisition or similar
business transaction.
6.8 REDEMPTION OF SHARES. Within seven (7) days following the Closing
Date, the Company shall redeem 1,375,000 shares of Common Stock held by Richard
McDonald and 1,375,000 shares of Common Stock held by Mark Roup, each for no
consideration or compensation. Within seven (7) days following the exercise in
full of the First Warrants (or, to the extent partially exercised, within seven
(7) days following each partial exercise thereof), the Company shall redeem the
Redemption Amount (as defined below) from Richard McDonald and the Redemption
Amount from Marc Roup each for no additional consideration or compensation;
STOCK PURCHASE AGREEMENT BETWEEN
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PAGE 15 OF 23
provided, that the maximum number of shares to be redeemed pursuant to this
sentence shall not exceed 1,250,000 for Richard McDonald or Marc Roup,
individually, or 2,500,000, in the aggregate. For purposes of this Section 6.8,
the "REDEMPTION AMOUNT" shall mean, a number of shares of Common Stock equal to
the product of (x) 1,250,000 multiplied by (y) a fraction, the numerator of
which shall be the number of shares issued upon the exercise of the First
Warrants and the denominator shall be 2,500,000.
6.9 TERMINATION OF COVENANTS. The provisions contained in this Article VI
shall terminate upon the earlier to occur of: (i) the second anniversary of the
Closing Date, (ii) such date on which the Investors own less than 10% of the
shares of the Common Stock purchased hereunder.
ARTICLE VII
COVENANTS OF THE INVESTORS
7.1 COMPLIANCE WITH LAW. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and rules and
regulations of any public market on which the Company's Common Stock is listed.
7.2 TRANSFER RESTRICTIONS. The Investor's acknowledge that (1) the Shares,
Warrants and shares underlying the Warrants have not been registered under the
provisions of the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Investor's shall have delivered to the Company
an opinion of counsel, reasonably satisfactory in form, scope and substance to
the Company, to the effect that the Shares, Warrants and shares underlying the
Warrants to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; and (2) any sale of the Shares, Warrants and
shares underlying the Warrants made in reliance on Rule 144 promulgated under
the 1933 Act may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, any resale of such Securities under
circumstances in which the seller, or the person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder.
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7.3 RESTRICTIVE LEGEND. The Investor's acknowledge and agree that the
Shares, the Warrants and the shares underlying the Warrants and, until such time
as the Shares, the Warrants and the shares underlying the Warrants have been
registered under the 1933 Act and sold in accordance with an effective
Registration Statement, certificates and other instruments representing any of
the Shares, the Warrants and the shares underlying the Warrants shall bear the
following restrictive legends:
(i) "THE [SHARES OF COMMON STOCK][WARRANTS] REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
[SHARES][WARRANTS] NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) THE INVESTOR'S SHALL HAVE DELIVERED TO THE COMPANY AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE
COMPANY, TO THE EFFECT THAT THE [SHARES OF COMMON STOCK][WARRANTS] TO BE SOLD OR
TRANSFERRED MAY BE SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION."
(ii) Any legend required by the blue sky or securities laws of any
state or jurisdiction to the extent such laws are applicable to the shares
represented by the certificate so legended.
The certificates representing the Common Stock and the Warrants shall
be subject to a stop transfer order with WHAI's transfer agent that restricts
the transfer of such shares or warrants except in compliance herewith.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date, of the following conditions:
8.1 NO TERMINATION. This Agreement shall not have been terminated pursuant
to Article X hereof.
8.2 REPRESENTATIONS TRUE AND CORRECT. The representations and warranties
of the Investors contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as if made on as of the Closing Date.
8.3 COMPLIANCE WITH COVENANTS. The Investors shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied by it prior to or at the
Closing Date.
8.4 NO ADVERSE PROCEEDINGS. On the Closing Date, no action or proceeding
shall be pending by any public authority or individual or entity before any
court or administrative body to restrain, enjoin, or otherwise prevent the
consummation of this Agreement or the transactions
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
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contemplated hereby or to recover any damages or obtain other relief as a result
of the transactions proposed hereby.
ARTICLE IX
CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS
The obligation of the Investors to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date unless specified otherwise, of the following conditions:
9.1 NO TERMINATION. This Agreement shall not have been terminated pursuant
to Article X hereof.
9.2 REPRESENTATIONS TRUE AND CORRECT. The representations and warranties
of WHAI contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if made
on as of the Closing Date.
9.3 COMPLIANCE WITH COVENANTS . WHAI shall have performed and complied in
all material respects with all covenants, agreements, and conditions required by
this Agreement to be performed or complied by it prior to or at the Closing
Date.
9.4 COMPLETION OF TRANSACTION. WHAI shall have closed the transaction with
Superior Acquisition, Inc. at a purchase price of less than four (4) times
Trailing EBITA prior to or at the Closing Date.
9.5 NO ADVERSE PROCEEDINGS. On the Closing Date, no action or proceeding
shall be pending by any public authority or individual or entity before any
court or administrative body to restrain, enjoin, or otherwise prevent the
consummation of this Agreement or the transactions contemplated hereby or to
recover any damages or obtain other relief as a result of the transactions
proposed hereby.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time:
STOCK PURCHASE AGREEMENT BETWEEN
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10.1.1 by mutual written consent of the Investors and the
Company;
10.1.2 by the Investors, on the one hand, or the Company, on
the other, if: (A) the Closing shall not have occurred on or before December 31,
2003 (or such later date as may be agreed upon in writing by the parties hereto
(the "TERMINATION DATE")); provided, however, that the right to terminate this
Agreement under this Section 10.1.2 shall not be available to any party whose
willful failure to fulfill any obligation hereunder has been the cause of, or
resulted in, the failure of the Closing to occur on or before the Termination
Date, (B) there shall be a final nonappealable order of a federal, state or
foreign court in effect preventing consummation of the transactions contemplated
by this Agreement, or (C) there shall be any governmental rule or governmental
order applicable to the transactions contemplated by this Agreement by any
governmental entity that would make the consummation of the transactions
contemplated by this Agreement illegal;
10.1.3 by the Investors, if the Company has breached any of
its representations or warranties or failed to perform any of its obligations
hereunder and as a result of such breach or failure the conditions set forth in
Sections 9.2 or 9.3, as the case may be, would not then be satisfied; provided,
however, that if such breach is curable by the Company within thirty (30) days
through the exercise of its commercially reasonable efforts, then for so long as
the Company shall continue to exercise its commercially reasonable efforts the
Investors may not terminate this Agreement under this Section 10.1.3 unless such
breach has not been cured within thirty (30) days (but no cure period shall be
required for a breach which by its nature cannot be cured); or
10.1.4 by the Company, if the Investors have breached any of
their respective representations or warranties or failed to perform any of their
respective obligations hereunder and as a result of such breach or failure the
conditions set forth in Sections 8.2 or 8.3, as the case may be, would not then
be satisfied; provided, however, that if such breach is curable by the Investors
within thirty (30) days through the exercise of its commercially reasonable
efforts, then for so long as the Investors shall continue to exercise its
commercially reasonable efforts the Company may not terminate this Agreement
under this Section 10.1.4 unless such breach has not been cured within thirty
(30) days (but no cure period shall be required for a breach which by its nature
cannot be cured).
10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Paragraph 10.1 hereof, there shall be no liability on the
party of WHAI or the Investors or any of their respective officers, directors,
agents or other representatives and all rights and obligations of any party
hereto shall cease, except as set forth in Section 11.1.
10.3 AMENDMENT. This Agreement may be amended by the parties hereto any
time prior to the Closing Date by an instrument in writing signed by the parties
hereto.
STOCK PURCHASE AGREEMENT BETWEEN
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10.4 WAIVER. At any time prior to the Closing Date, WHAI or each Investor,
as appropriate, may: (a) extend the time for the performance of any of the
obligations or other acts of other party or; (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto which have been made to it or them; or (c) waive compliance with
any of the agreements or conditions contained herein for its or their benefit.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound hereby.
ARTICLE XI
GENERAL PROVISIONS
11.1 TRANSACTION COSTS. Except as otherwise provided herein, each of the
parties shall pay all of his or its costs and expenses (including attorney fees
and other legal costs and expenses and accountants' fees and other accounting
costs and expenses) incurred by that party in connection with this Agreement.
11.2 INDEMNIFICATION.
11.2.1 Each Investor, severally and not jointly agrees to defend and
hold the Company (following the Closing Date) and its officers and directors
harmless against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of this Agreement by such Investor or
failure by such Investors to perform with respect to any of its representations,
warranties or covenants contained in this Agreement. The Company agrees to
defend and hold the Investors harmless against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities or damages,
including interest, penalties and reasonable attorney's fees, that they shall
incur or suffer, which arise out of, result from or relate to any breach of this
Agreement or failure by the Company to perform with respect to any of its
representations, warranties or covenants contained in this Agreement.
11.2.2 All claims for indemnification under this Section 11.2 must be
made within 12 months following the Closing Date or otherwise shall be
considered null and void.
11.2.3 Neither the Investors, on the one hand, nor the Company, on
the other, shall be required to make any indemnification payments pursuant to
this Section 11.2 unless and until the claims asserted against such party exceed
$25,000 after which such parties shall be entitled to recover for damages in
excess of such amount.
STOCK PURCHASE AGREEMENT BETWEEN
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11.2.4 The maximum liability of the Investors, on the one hand, and
the Company, on the other, shall be the Purchase Price.
11.2.5 The indemnification obligations contained in this Section 11.2
shall be the exclusive remedy available to the parties hereto with respect to
this Agreement.
11.3 HEADINGS. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.4 ENTIRE AGREEMENT. This Agreement (together with the Schedule,
Exhibits, Warrants and documents referred to herein) constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
11.5 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:
If to WHAI:
WORLD HEALTH ALTERNATIVES, INC.
300 Penn Center Boulevard, Suite 201,
Pittsburgh, Pennsylvania 15235
ATTN: Richard E. McDonald
Telephone No.: 412-829-7800
If to the Investors:
To the address listed on Schedule A herein or to the
address provided to the Company by an Investor.
11.6 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 21 OF 23
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
11.7 BINDING EFFECT. All the terms and provisions of this Agreement whether
so expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
11.8 PREPARATION OF AGREEMENT. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its preparation.
The parties acknowledge each contributed and is equally responsible for its
preparation.
11.9 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, without giving
effect to applicable principles of conflicts of law.
11.10 JURISDICTION. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania. If
any action is brought among the parties with respect to this Agreement or
otherwise, by way of a claim or counterclaim, the parties agree that in any such
action, and on all issues, the parties irrevocably waive their right to a trial
by jury. Exclusive jurisdiction and venue for any such action shall be the State
Courts of Pennsylvania.
11.11 PREPARATION AND FILING OF SECURITIES AND EXCHANGE COMMISSION FILINGS.
Each Investor shall reasonably assist and cooperate with the Company in the
preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 FURTHER ASSURANCES, COOPERATION. Each party shall, upon reasonable
request by the other party, execute and deliver any additional documents
necessary or desirable to complete the transactions herein pursuant to and in
the manner contemplated by this Agreement. The parties hereto agree to cooperate
and use their respective best efforts to consummate the transactions
contemplated by this Agreement.
11.13 THIRD PARTIES Except as disclosed in this Agreement, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
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11.14 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of
any party hereto in the exercise of any right hereunder shall impair such right
or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, covenant or agreement herein.
11.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
STOCK PURCHASE AGREEMENT BETWEEN
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IN WITNESS WHEREOF, the Investors and the Company have as of the date
below.
WHAI
WORLD HEALTH ALTERNATIVES, INC. DATE: December 24, 2004
/s/ Richard E. McDonald
- ------------------------
By: Richard E. McDonald
Title: President
INVESTORS
/s/ Michael Potter /s/ Anthony Marchere
- ------------------ ---------------------
Print Name: Michael Potter Print Name: Anthony Marchere
Entity (if appropriate): Entity(if appropriate: Insiders Trend
Fund LP
Northern Valley Partners, LLC Title (if appropriate): General Partner
Title (if appropriate): President
/s/ Peter Siris /s/ Morris Smith and Devora Smith
- ---------------- ----------------------------------
Print Name: Peter Siris Print Name: Morris Smith and Devora
Smith
Entity (if appropriate): Entity(if appropriate):
Guerrilla Partners L.P. Title (if appropriate):
Title (if appropriate): Managing
Director
/s/ Michael H. Weiss /s/ Andrew Worden
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Print Name: Michael H. Weiss Print Name: Andrew Worden
Entity (if appropriate): Entity(if appropriate): Barron Partners,
LP
Title: (if appropriate): Title (if appropriate):
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
SCHEDULE A
COMMON STOCK SHARES OF WARRANT #1
INVESTOR PURCHASE PRICE COMMON STOCK PURCHASE PRICE WARRANT #1 WARRANT #2 WARRANT #3
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Barron Partners L.P. $1,320,000 2,200,000 $1,000,000 2,666,640 800,000 800,000
730 Fifth Avenue, 9th Floor
New York, NY 10019
EIN#: 43-1981699
Guerrilla Partners, L.P. $ 79,002 132,000 $ 96,000 159,998 48,000 48,000
237 Park Avenue, 9th Floor
New York, NY 10017
EIN#: 52-2141646
Insiders Trend Fund L.P. $ 82,500 137,500 $ 100,000 166,665 50,000 50,000
330 Madison Avenue, 36th Floor
New York, NY 10017
EIN#13-3604093
Northern Valley $ 82,500 137,500 $ 100,000 166,665 50,000 50,000
Partners, LLC
30 Madison Avenue, 36th Floor
New York, NY 10017
EIN#: 13-4115160
Mr. Morris & Mrs. Devora $ 50,000 82,500 $ 60,000 99,999 30,000 30,000
Smith
195 Wildacre Avenue
Lawrence, NY 11559
SS#: ###-##-####
Mr. Michael H. Weiss $ 36,000 60,500 $ 44,000 73,333 22,000 22,000
25 Briarwood Lane
Lawrence, NY 11559
SS#: ###-##-####
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$1,650,002 2,750,000 $2,000,000 3,333,300 1,000,000 1,000,000
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
EXHIBIT B
FORM OF FIRST WARRANT
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
EXHIBIT C
FORM OF SECOND WARRANT
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
EXHIBIT D
FORM OF THIRD WARRANT
STOCK PURCHASE AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS