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EXHIBIT 2.5
D. XXXXXXX XXXXX
000 XXXXXXXXXX
XXXXXXX XXXX, XXXXX XXXXXXXX 00000
January 15, 1999
Xxxx X. Xxxx
Xxxx Xxxxxxxx
Res-Care, Inc.
00000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
RE: COMMUNICATIONS NETWORK CONSULTANTS, INC. - AMENDMENTS
Gentlemen:
Reference is hereby made to the Stock Purchase Agreement dated as of
July 31, 1997 between (i) Res-Care, Inc., and (ii) D. Xxxxxxx Xxxxx, Xxxxxx X.
Xxxxx and Xxxxxx Xxxxx Xxxxxx, as amended by letter agreements dated July 31,
1997 and July 30, 1998 (the "Agreement"). Except as otherwise provided herein,
all capitalized terms in this letter agreement shall have the meanings given to
them in the Agreement.
The purpose of this letter agreement is to amend the Agreement in
certain respects, including to provide for (i) acceleration of certain payments
under the First Note, (ii) the termination of Buyer's obligations under Section
1.3(b)(iii) of the Agreement and the Second Note in consideration for certain
payments and other agreements as provided herein, and (iii) the transfer of
certain assets from the Company to Sellers and to provide for the termination of
the Sellers' Employment Agreements.
Each of Buyer, the Company and the Sellers hereby agree as follows:
1. The closing of the transactions contemplated herein (the "1999
Closing") shall take place at the offices of the Company at 000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000 on or before January 31, 1999, at 9:00
a.m., EST (the "1999 Closing Date").
2. At the 1999 Closing, Buyer shall pay an aggregate amount of $867,568
to the Sellers as consideration for the termination and full satisfaction of all
of the obligations of Buyer and the Company under and pursuant to Section
1.3(b)(iii) of the Agreement and the Second Note. It is acknowledged that
$46,265 of such payment represents the additional balance due and payable to
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Res-Care, Inc.
January 15, 1999
Page 2
Sellers with respect to the installment for the First Measurement Period and
that $821,303 of such payment represents a payment in termination of Sellers'
rights under Section 1.3(b)(iii) of the Agreement and the Second Note. At the
1999 Closing, Sellers shall deliver to Buyer the original of the Second Note
marked "paid in full." Upon the payments described in this paragraph 2, neither
Buyer nor Company shall have any further obligation under Section 1.3(b)(iii) of
the Agreement or the Second Note.
3. At the 1999 Closing, Buyer shall also pay to Sellers an aggregate
amount equal to (i) $1,250,000 (representing the second annual installment of
principal due under the First Note), plus (ii) accrued interest on such
installment from July 31, 1998 to the 1999 Closing Date. At the 1999 Closing,
Sellers will deliver to Buyer the original of the First Note, marked "paid in
full." Upon the payments described in this paragraph 3, neither Buyer nor
Company shall have any further obligation under the First Note.
4. The payments described in paragraphs 2 and 3 hereof shall be made by
Buyer by wire transfer of immediately available federal funds to an account or
accounts designated by Sellers.
5. At the 1999 Closing, the Company shall by appropriate transfer
documents transfer and assign to D. Xxxxxxx Xxxxx the 1997 Mercedes Benz S320
automobile owned by the Company and used by him in connection with his
employment by the Company, in consideration for the sum of $25,000, payable at
the 1999 Closing by D. Xxxxxxx Xxxxx to the Company by personal check. After the
1999 Closing, the Company shall have no further obligation with respect to such
automobile, including but not limited to any obligation to maintain any
insurance coverage thereon.
6. At the 1999 Closing, the Company shall by appropriate transfer
documents transfer and assign to Camelot Golf Center, LLC that certain 1995
Dodge dump truck owned by the Company, having a current book value of $7,119.36.
After the 1999 Closing, the Company shall have no further obligation with
respect to such dump truck, including but not limited to any obligation to
maintain any insurance coverage thereon.
7. At the 1999 Closing, the Company shall transfer and assign, by Xxxx
of Sale, all of the office furniture in each of the Seller's personal offices at
the Company's 000 Xxxxxxxxxx Xxxxxxxxx site to the respective Seller, which in
the case of D. Xxxxxxx Xxxxx shall also include the obsolete fax machine located
in his office at such site.
8. All of the Sellers' Employment Agreements shall be terminated,
effective at the 1999 Closing. At the 1999 Closing, the Company shall pay to
each of the Sellers his or her accrued and
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Res-Care, Inc.
January 15, 1999
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unpaid Base Salary (as defined in the respective Sellers' Employment Agreement)
through the 1999 Closing Date. The parties hereto acknowledge that pursuant to
Section 4(c) of the Sellers' Employment Agreements, each of the Sellers were
granted options to purchase certain shares of Res-Care common stock on September
24, 1998. Under the terms of such Section 4(c) of the Sellers' Employment
Agreements, the following number of such Res-Care common stock options have
vested:
D. Xxxxxxx Xxxxx 3,600
Xxxxxx X. Xxxxx 3,000
Xxxxxx Xxxxx Austin 3,000
The unvested portion of such options granted on September 24, 1998 shall expire
and be forfeited as of the 1999 Closing. Except as provided in this paragraph 8
and except for the Sellers' obligations under Section 7 of the Sellers'
Employment Agreements, neither the Company nor any of the Sellers shall have any
further obligation under the Sellers' Employment Agreements.
9. For one year after the 1999 Closing Date, the Sellers will provide
consulting and advisory services to the Company, consisting of, as requested,
one or more of the Sellers attending regularly scheduled management team and
board meetings of the Company and providing other reasonable consultation
services on an as needed basis. In consideration for such consulting and
advisory services, the Company shall pay to each of the Sellers an annual
consulting and advisory fee of $2,500, which shall be payable by Company check
quarterly in arrears. Upon the mutual written consent of the Company and each of
the Sellers, the respective Seller's consulting arrangement with the Company may
be renewed annually thereafter. The parties hereto acknowledge that the Sellers
shall not be considered to be employees of the Company in connection with the
rendering of any of such consulting and advisory services for any purpose and
the Company shall have no obligation to withhold taxes of any kind with respect
to such consulting and advisory payments. Any final decision with regard to any
matter in connection with the business of the Company, Buyer or its affiliates,
irrespective of whether the advice of any of the Sellers has been solicited or
received, shall rest with the Buyer.
10. Effective as of the 1999 Closing, each of D. Xxxxxxx Xxxxx and
Xxxxxx X. Xxxxx shall resign their positions as directors of the Company and
thereafter neither Buyer nor the Company shall have any further obligation under
Section 1.4(h) of the Agreement.
11. The respective obligations of the parties under each of the
Noncompetition Agreements and the Company Leases shall continue in full force
and effect in accordance with their
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Res-Care, Inc.
January 15, 1999
Page 4
respective terms, unmodified in any respect by the execution of this letter
agreement. Buyer and the Sellers agree to discuss from time to time the
possibility of one or more of the Sellers acting as lessor to Buyer or one or
more of its subsidiaries or affiliates with respect to real property used in
connection with the business of Buyer or such subsidiaries and affiliates. Any
such lease shall be on such terms and conditions as the parties mutually agree.
Except as otherwise specifically provided herein, the Agreement shall
remain in full force and effect in accordance with its terms.
Please indicate your acceptance of the terms of this letter agreement
by signing a facsimile copy thereof in the space provided below and returning by
facsimile a copy to the undersigned. Two executed originals of this letter
agreement will follow via overnight courier, one of which should be fully
executed and returned to the undersigned via overnight courier. This letter
agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.
Very truly yours,
--------------------------------
D. Xxxxxxx Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx Xxxxx Austin
Accepted this ___ day of January, 1999:
RES-CARE, INC.
By: --------------------------------
Xxxx Xxxxxxxx
Vice President-Operations
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January 15, 1999
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Central Region
COMMUNICATIONS NETWORK
CONSULTANTS, INC.
By: -----------------------
Xxxx Xxxxxxxx
Vice President
