TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement is entered into this 15th day of
June, 2005, by and between Patient Infosystems, Inc., a Delaware corporation
("Patient Infosystems"), and American Caresource Holdings, Inc., a Delaware
corporation (the "Company").
The Company is a wholly owned subsidiary of Patient Infosystems and has
relied since its inception upon various administrative services provided by
Patient Infosystems. The Company and Patient Infosystems have filed a
Registration Statement on Form SB-2 (the "Registration Statement") with the
Securities and Exchange Commission relating to the distribution by Patient
Infosystems of all of the capital stock of the Company. Upon the effectiveness
of the Registration Statement and the consummation of the transactions
contemplated thereby, Patient Infosystems will initially own approximately 10%
of the outstanding capital stock of the Company.
The Company desires to engage Patient Infosystems to continue to provide
after the date hereof certain administrative services hereinafter described (the
"Services"), and Patient Infosystems desires to provide the Services, on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties hereto agree as follows:
1. Services
1.1 During the term of this Agreement, Patient Infosystems shall
provide the following Services to the Company:
Employee Benefit Services. Patient Infosystems agrees to use its
best efforts to maintain all employee benefit plans (the "Benefit Plans")
identified on Schedule 1 attached hereto and to provide that the employees of
the Company may participate therein. In connection therewith and without
limiting the generality of the preceding sentence, subject to the receipt by
Patient Infosystems of all amounts due in the next following sentence, Patient
Infosystems agrees to pay all premiums and make all contributions required to be
paid or made pursuant to such Benefit Plans ("Benefit Costs") and to otherwise
comply with all of the terms of such Benefit Plans. Patient Infosystems shall
invoice the Company monthly for the direct cost (billed by insurer or benefit
provider) of the Benefit Plans and the Company shall reimburse Patient
Infosystems within ten (10) business days following receipt of such invoice. The
Company shall provide Patient Infosystems timely notification of all employee
additions and deletions to the Benefits Plans to ensure accurate billing.
1.2 Patient Infosystems shall perform the Services in a timely and
efficient manner, in accordance with all applicable laws, regulations and
ordinances, and shall assign to each of the Services substantially the same
priority as assigned to services of like category performed in its own
operations. The Company shall reimburse Patient Infosystems for any out of
pocket costs associated with this support.
1.3 If at any time Patient Infosystems is unable to include the
employees of the Company under the Benefits Plans, or if it derives, in its sole
judgment, to change or terminate any of the Benefit Plans, it will give 30 days
notice to the Company, which may then either continue to participate in the
Benefit Plans or terminate the Agreement. Following such 30 day period, Patient
Infosystems shall have no further obligation to the Company to provide the
Benefit Plan participation provided for herein.
2. Term
2.1 The initial term of this Agreement shall commence as of the date
hereof, and shall continue until December 31, 2005 ("Initial Term"), unless
earlier terminated or extended in accordance with the provisions of this Section
2.
2.2 The term of this Agreement may be extended for up to two
additional one-year periods upon mutual agreement of Patient Infosystems and the
Company.
2.3 This Agreement may be terminated, and any one or more of the
Services may be reduced in scope or eliminated in its entirety, at any time
during the term hereof by either party upon ninety (90) days' prior written
notice.
2.4 Notwithstanding any other provision contained herein, Patient
Infosystems may terminate this Agreement, in whole or in part, if the Benefit
Costs attributable to the Company remain unpaid for more than thirty (30) days,
and the Company does not cure such default within ten (10) days after receiving
written notice thereof from Patient Infosystems.
3. Fees
3.1 In consideration for the Services, the Company shall pay to
Patient Infosystems a transitional services fee (the "Service Fee") in the
amount of $0.00 for the Initial Term, $12,000.00 per annum if the Agreement is
extended for a second term, and, if extended, $24,000.00 per annum for a third
and subsequent term, payable in equal monthly installments within ten (10) days
after the end of each month during the term. Patient Infosystems represents and
warrants to the Company that the Service Fee reflects actual historical
expenditures for like services properly allocated by Patient Infosystems to the
conduct of the business and operations of the Company during the two most recent
fiscal years of the Company and Patient Infosystems (the "Expense Allocation"),
adjusted for the third and fourth years of the term, if extended, to reflect
historical increased in the cost of such services.
3.2 In the event that the Company elects to reduce the scope of one
or more Services or eliminates one or more Services in its entirety, the Service
Fee shall be reduced to reflect the reduction or elimination of those Services,
based upon the corresponding portion or portions of the Expense Allocation
attributable thereto, from and after the effective date thereof.
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4. Obligations and Relationship
Both parties to this Agreement shall at all times act as independent
contractors and, notwithstanding anything contained herein, the relationship
established hereunder between the parties shall not be construed as a
partnership, joint venture or other form of joint enterprise. Except as
expressly authorized by a party hereto, no party shall be authorized to make any
representations or to create or assume any obligation or liability in respect of
or on behalf of the other party.
5. Limited Liability; Indemnification
5.1 Patient Infosystems shall not be liable to the Company for any
loss, claim, expense or damage, including indirect, special, consequential or
exemplary damages, for any act or omission performed or omitted by it hereunder
so long as its act or omission does not constitute fraud, bad faith or gross
negligence. Patient Infosystems shall not be liable to the Company for the
consequences of any failure or delay in performing any Services if the failure
shall be caused by labor disputes, strikes or other events or circumstances
beyond its control and it shall have provided prompt notice to the Company of
its inability to perform Services and the reason therefor.
5.2 In any action, suit or proceeding (other than an action by or in
the right of the Company) to which Patient Infosystems or any agent or employee
of Patient Infosystems performing Services hereunder (an "Indemnitee") was or is
a party by reason of his or its performance or non-performance of Services, the
Company shall indemnify the Indemnitee and hold the Indemnitee harmless from and
against expenses, judgments, fines and amounts paid (with the consent of the
Company) in settlement actually and reasonably incurred by the Indemnitee in
connection therewith if the Indemnitee acted in good faith and provided that the
Indemnitee's conduct does not constitute negligence or misconduct.
6. Confidentiality
Any and all information obtained by Patient Infosystems in connection with
the Services contemplated by this Agreement shall be held in the strictest
confidence and not disclosed to any other person without the prior written
consent of the Company.
7. Notices
All notices and other communications permitted or required hereunder shall
be in writing and shall be deemed given when delivered by hand to an officer of
either party.
8. Binding Effect
This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective successors.
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9. No Third Party Beneficiaries
This Agreement is solely for the benefit of the parties hereto and shall
not confer upon third parties any remedy, claim, cause of action or other right
in addition to those existing without reference to this Agreement.
10. Entire Agreement
This Agreement constitutes the entire agreement between the parties with
respect to the subject matters covered hereby and supersedes any prior agreement
or understanding between the parties with respect to those matters.
11. Assignment; Amendment; Waiver
This Agreement is not assignable. Neither the rights nor the duties
arising hereunder may be assigned or delegated. This Agreement may not be
amended nor may any rights hereunder be waived except by an instrument in
writing signed by the party sought to be charged with the amendment or waiver.
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
12. Governing Law
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York, without giving effect to the provisions, policies
or principles thereof relating to choice or conflict of laws.
13. Headings
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
PATIENT INFOSYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Chief Financial Officer
AMERICAN CARESOURCE HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
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Schedule 1
Benefit Plans
Medical Insurance
Dental Benefits
Short Term Disability
Long Term Disability
401K
Vision
Life Insurance
Other Supplemental Insurances
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