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EXHIBIT 10.24
AMENDMENT TO STOCK PURCHASE AGREEMENT
This AMENDMENT TO STOCK PURCHASE AGREEMENT is made the 12th day of August,
1997, with an effective date as described below, by and between UNIVERSAL
DOCUMENT MANAGEMENT SYSTEMS, INC. (formerly "MedPlus Acquisition Corp.") (the
"Purchaser"), an Ohio corporation and a wholly-owned subsidiary of MedPlus, Inc.
("MedPlus"), with its principal offices located at 0000 Xxxxxxxx'x Xxxx Xxxxx,
Xxxxxxxxxx, Xxxx 00000, XXX AND XXXX XXXXXXXXX, individuals residing at 000
Xxxxxx Xx., Xxxxxxxxxx, Xxxx 00000 ("Hilnbrand") and XXXXXX X. XXXXX, an
individual residing at 0000 Xxxxxx, Xxxxxxxxxx, XX 00000 ("Xxxxx") (Hilnbrand
and Xxxxx are collectively referred to as the "Sellers").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Sellers entered into a Stock Purchase
Agreement dated December 29th, 1995 (the "Initial Agreement") pursuant to which
the Sellers sold to the Purchaser and the Purchaser purchased from the Sellers
all of the common stock of HWB, Inc. owned by the Sellers (the "HWB Stock"); and
WHEREAS, the consideration for the HWB Stock, which the parties agree was a
capital asset, was to be paid to the Sellers over a period of three years in the
form of MedPlus common stock and/or cash and was to be calculated based on the
revenues of the Purchaser during such three year period (the "Earn-Out
Consideration"); and
WHEREAS, the Purchaser is planning to combine with certain CAD resellers
and conduct an initial public offering of its common stock (the "IPO") with an
effective date which is on or before December 31, 1997 (the "IPO Date");and
WHEREAS, if the IPO occurs, then following the IPO, MedPlus will no longer
be the sole shareholder of the Purchaser; and
WHEREAS, if the IPO occurs, then as a result of the change in ownership and
structure of the Purchaser following the IPO, the Purchaser and the Sellers
desire to amend the Initial Agreement with respect to the Earn-Out Consideration
to clarify the revenues as to which it applies and to provide for additional
time during which the Earn-Out Consideration may be paid to the Sellers and to
allow a portion of such consideration to be paid in the form of the Purchaser's
common stock instead of MedPlus' common stock; and
WHEREAS, the Purchaser and Sellers agree that this Amendment to Stock
Purchase Agreement shall only become effective in the event of the IPO and on
the IPO Date, if any.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the parties, intending to be legally bound, agree as follows:
On the IPO Date, Schedule 2 to the Initial Agreement shall be amended to
read in its entirety as follows:
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"SCHEDULE 2
STOCK PURCHASE CONSIDERATION
On January 1, 1998, the Purchaser shall pay to the Sellers $390,000 (of which
$311,922 shall be paid to Hilnbrand and $78,078 shall be paid to Xxxxx). So long
as each of Xxx Xxxxxxxxx and Xxxxxx X. Xxxxx remains employed by the Purchaser
until at least December 31, 1998, the following consideration shall be payable
to Sellers no later than March 31, 1999, 2000 and 2001, respectively, as follows
(the 'Earn-Out Consideration'):
If, during any of the three periods described below (the 'Earn-Out Periods'),
the Audited Net Revenue (as defined below) of the Purchaser exceeds a certain
amount, as listed below, with respect to that Earn-Out Period (the 'Earn-Out
Threshold'), then Purchaser shall pay to the Sellers an aggregate amount equal
to 99.9% of the 'Payment Amount' listed below (the 'Annual Payment'). In no
event shall the cumulative aggregate of the Earn-Out Consideration for all three
Earn-Out Periods exceed $2,610,000.
EARN-OUT PERIOD EARN-OUT THRESHOLD PAYMENT AMOUNT*
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The IPO Date through $1,750,000 $1.00 for each dollar of Audited
December 31, 1998 Net Revenue over $1.75 million
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January 1, 1999 through 2,750,000 $1.00 for each dollar of Audited
December 31, 1999 Net Revenue over $2.75 million
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January 1, 2000 through 3,750,000 $1.00 for each dollar of Audited
December 31, 2000 Net Revenue over $3.75 million
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For purposes hereof, 'Audited Net Revenue' of the Purchaser shall mean all the
gross revenues related to the Purchaser's Step2000 software product (including,
but not limited to, licensing and maintenance fees and consulting and
application building fees with respect to Step2000), minus returns and
allowances related to the Purchaser's Step2000 software product and minus the
amount of accounts receivable written off as uncollectible during the period in
question which are related to the Purchaser's Step2000 software product and
which are either over 180 days old or are owed by a debtor which has declared
bankruptcy or has otherwise admitted its insolvency in a public filing. In the
event that the amount of any fees charged by Purchaser to any person who is an
affiliate of Purchaser or MedPlus are less than the ordinary rates charged for
customers who are not affiliates in arms-length transactions, then the amount of
Audited Net Revenues for purposes of calculating the Earn-Out Consideration
shall be increased by the amount by which the ordinary rates exceed the actual
rates charged. All payments of the Earn-Out Consideration shall be made in cash
or, at the election of the Purchaser, in a combination of cash and the
Purchaser's common stock, provided that the common stock component of any
payment of the Earn-Out Consideration shall not
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exceed 50%. To the extent the Purchaser's common stock is used to make any
payment, each share so issued shall be deemed to have a value equal to the
average of the closing price per share of the Purchaser's common stock on the
Nasdaq National Market for each of the 20 trading days preceding the payment
date. Notwithstanding the foregoing, payments may only be made in the form of
the Purchaser's common stock if at the time of issuance thereof there is a
registration statement effective under the Securities Act of 1933 covering a
resale of such shares by Sellers, the cost of which shall not be the
responsibility of Sellers. The term 'Purchaser's common stock' shall not include
any securities of the Purchaser other than its common stock, or any securities
of any successor of the Purchaser.
The percentage of each Annual Payment of Earn-Out Consideration to which each
Seller is entitled is set forth as follows: Hilnbrand, 79.98%; Xxxxx 20.02%."
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Stock Purchase Agreement to be executed as of the day and year first above
written.
UNIVERSAL DOCUMENT
MANAGEMENT SYSTEMS, INC.
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Xxx Xxxxxxxxx
By:
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Xxxx Xxxxxxxxx
Its:
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Xxxxxx X. Xxxxx
