Amendment to the Stock Purchase Agreement, dated September 8, 2006
THIS AMENDMENT ("Amendment"), dated as of November 30, 2006 is by and
among (i) Rand Medical Billing, Inc., a California corporation ("Rand"), (ii)
Xxxxxx X. Xxxxxx, M.D., the sole stockholder of Rand ("Retsky") and (iii) Orion
HealthCorp Inc., a Delaware corporation ("Purchaser"), Purchaser, Retsky and
Rand are each a "Party" and are collectively the "Parties"). Capitalized terms
used herein and not defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
RECITALS
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WHEREAS, Rand, Retsky and Purchaser are parties to that certain Stock
Purchase Agreement dated September 8, 2006, ("Purchase Agreement") and
Purchaser, Rand and Retsky desire to amend the Purchase Agreement as set forth
below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree to amend
the Purchase Agreement pursuant to Section 13.2 thereof as follows:
SECTION 1. Section 2.1 (a) of the Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(a) Cash Down. At the Closing Purchaser will pay Retsky, by wire
transfer of immediately available funds to an account specified by Retsky, an
amount equal to Seven Million Two Hundred Thousand Dollars($7,200,000) (the
"Cash Down Payment");"
SECTION 2. Section 2.1 (c) of the Purchase Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) Cash Escrow. At the Closing, Purchaser will deliver to Purchaser's
counsel, Xxxxxxx Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP ("BFCA"), for deposit into the
IOLTA account of BFCA, by wire transfer of immediately available funds, an
amount equal to Two Hundred Thousand Dollars ($200,000) (the "Escrow Amount"),
to be held in trust on behalf of Purchaser and Retsky. Purchaser and Retsky
hereby authorize and instruct BFCA to disburse the Escrow Amount (without
further instructions from Retsky or Purchaser) as promptly as possible following
receipt by BFCA of wire instructions for an interest-bearing escrow account in
the joint name of Orion HealthCorp and Retsky (the "Cash Escrow Account") set up
by City National Bank (the "Escrow Agent") to Escrow Agent for deposit into the
Cash Escrow Account, by wire transfer of immediately available funds, to be held
pursuant to the terms of an Escrow Agreement between Retsky, Purchaser and
Escrow Agent (the "Escrow Agreement"). Purchaser and Retsky hereby release BFCA
from all liability associated with holding of the Escrow Amount other than
claims arising as a result of BFCA's willful misconduct and will jointly and
severally indemnify BFCA from any and all liability associated with holding of
the Escrow Amount. Purchaser and Retsky acknowledge that BFCA is an intended
third party beneficiary of this Agreement for the purpose of enforcing the
release and indemnity provisions of this section."
SECTION 3. Notwithstanding anything to the contrary contained in
Sections 2.3 or 2.4 of the Purchase Agreement to the contrary, in the event that
the earn-out formula set forth therein does not result in a payment being due
from Purchaser to Retsky, or results in a payment being due that is less than
Four Hundred Thousand Dollars ($400,000), then Retsky shall within five (5) days
of final determination of such earn-out calculation transfer to Purchaser, via
wire transfer of immediately available U.S. funds to an account specified by
Purchaser for such purpose, an amount equal to the difference between Four
Hundred Thousand Dollars ($400,000) and the amount of the earn-out actually due
Retsky. Retsky acknowledges that his obligation to refund all or a portion of
the Four Hundred Thousand Dollars ($400,000) specified in this Section 3 of this
Amendment falls outside of the remedy limitations otherwise set forth in the
Purchase Agreement and that Purchaser may, in its sole discretion, seek to
pursue a cause of action for breach of contract against Purchaser for recovery
of such amounts. Any amount repaid by Retsky to Purchaser pursuant to this
Section 3 of this Amendment shall be treated, to the extent permitted by law, as
an adjustment to the Purchase Price.
SECTION 4. Notwithstanding anything to the contrary contained in the
Purchase Agreement, neither Rand nor Retsky shall be required to pay-off or
terminate the capital lease obligation of Rand to Bank of the West (Xxxxxxxxx)
in the amount of approximately $5,600 and Purchaser hereby waives any closing
condition to the contrary.
SECTION 5. Section 2.6 of the Purchase Agreement is hereby deleted in
its entirety. Schedule 2.6 of the Purchase Agreement is hereby deleted in its
entirety.
SECTION 6. Section 4.33 of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"4.33 Cash. At the close of business on the first business day
following the Closing, the cash of Rand net of outstanding checks and deposits
will be no less than One Hundred Fifty Three Thousand Four Hundred Dollars
($153,400) ("Closing Date Cash Amount"). To the best knowledge of Retsky, the
Closing Date Cash Amount is adequate to cover the accrued payroll of Rand and
the accounts payable of Rand."
SECTION 7. Section 6.10 of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"6.10 Cash At the close of business on the first business day following
the Closing, the cash of Rand net of outstanding checks and deposits will be no
less than One Hundred Fifty Three Thousand Four Hundred Dollars ($153,400)."
SECTION 8. Effect of Amendment. Purchaser, Rand and Retsky agree that
except as specifically amended herein, the Purchase Agreement shall continue in
full force and effect in accordance with its original terms, and reference to
this specific Amendment need not be made in the Purchase Agreement or any other
document executed pursuant to or with respect to the Purchase Agreement, any
reference to the Purchase Agreement in any such document being sufficient to
refer to the Purchase Agreement as amended hereby.
SECTION 9. Counterparts. Purchaser, Rand and Retsky agree that this
Amendment may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
SECTION 10. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California as though made
and to be fully performed in that State without regard to conflicts of laws
principles. This Amendment shall be construed and enforced in accordance with
the terms and provisions of the Purchase Agreement.
[Signature pages follow]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed as of the day and year first above written.
Orion HealthCorp, Inc.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx, CEO
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, M.D.
Rand Medical Billing, Inc.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, M.D.
President and CEO
