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Exhibit 2.1
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ASSET PURCHASE AND SALE AGREEMENT
Between
PATIENT PORTAL TECHNOLOGIES, , INC.
and
WORLDNET COMMUNICATIONS, INC. , d/b/a TMS
This Asset Purchase and Sale Agreement ("Agreement") between Worldnet
Communications, Inc., dba TMS, a New York corporation with an address for
purposes hereof at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxxx, Xxx Xxxx
00000 ("TMS"), and Patient Portal Technologies, Inc., a Delaware corporation
with an address for purposes hereof at 0000 Xxxxxxx Xxxxx, Xxxx Xxxxx Xxxxxxx,
XX, 00000 ("PPTI "), is dated the 25th day of September 2007. TMS and PPTI are
each referred to herein at times as a "Party" and collectively as the "Parties".
WITNESSETH:
WHEREAS, TMS was engaged in the business of providing various patient telephone
and television services to Hospitals and their patients ("Retail Customers"),
and desires to refocus its business activities on providing infrastructure
support and billing services to other services providers that require certain
TMS Services in connection with the service providers customers ("Wholesale
Customers"); and
WHEREAS, PPTI, through its wholly-owned subsidiary Patient Portal Connect
("Patient Portal:"), is engaged in the business of providing various services to
Hospitals, colleges and universities, students and patients;
WHEREAS, TMS and PPTI are affiliated companies and desire to enter into this
Agreement upon terms and conditions that are no more or less favorable than the
terms and conditions that would apply to unaffiliated companies.
WHEREAS, TMS desires to sell and PPTI desires to purchase certain Hospital
Contracts (defined below) upon the terms and conditions set forth herein; and
NOW, FOR AND IN CONSIDERTION OF, the mutual promises and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is agreed by and between TMS and PPTI as
follows:
1. Definitions. Capitalized terms used in this Agreement, and not otherwise
defined herein, shall have the meanings as set forth below.
"Billing and Collection Services" means services provided by TMS for billing and
collecting patient charges for TMS Services and, on behalf of PPTI, for PPTI
Services, pursuant to agreements with local exchange carriers, credit card
companies, direct invoicing and third party billing and collection entities.
"Call-Center Services" means TMS' primary services including Billing Collection
Services, and activation and deactivation of patient televisions and/or
telephones, and other equipment. Call Center Services are provided on a 24x7
basis 365 days per year through live operators that activate and deactivate
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patient telephones and/or televisions, collect billing information and verify
patients home telephone numbers or validate credit card information, dispatch
repair personnel for hospital telephones and/or televisions, and provide a
help-desk and customer services for inquiries by the hospital or patients
following discharge.
"Colleges" means colleges, universities and other educational institutions or
entities that become customers of PPTI, including individual students, faculty
and other personnel.
"Direct Dial Services" are services provided by TMS that allow patients in
Hospitals to make long distance calls directly from their hospital room without
prepayment, dial-around or other inconvenience and/or additional charges through
the TMS Call Center operators.
"HIPAA" means the Administrative Simplification requirements of the Health
Insurance Portability and Accountability Act of 1996, and regulations
promulgated thereunder, including the Standards for Privacy of Individually
Identifiable Health Information at 45 Code of Federal Regulations Parts 160 and
164 commonly referred to as the "Privacy Regulations".
"Hospitals" are public or private health and medical care facilities and
institutions that provide health care and related services to patients,
including but not limited to, hospitals, rehabilitation centers and
institutions, and nursing homes, including Systems (defined below) that are
comprised of one or more such entities.
"Hospital Contracts" means the contracts, agreements, understandings or
arrangements between TMS and its Retail Customers comprised of Hospitals
pursuant to which TMS provides TMS Services and Direct Dial Services.
"Initial Term" has the meaning set forth in paragraph 4.1 below.
"PPTI Customers" means Colleges and Hospitals and any other person or entity
that PPTI provides PPTI Services during the Term of this Agreement.
"PPTI Representative" means Xxxxx Xxxxx, or such other person that PPTI notifies
TMS in writing.
"PPTI Services" means any and all services provided by PPTI to PPTI Customers,
including those Hospitals and patients that become PPTI Customers upon closing
of the purchase and sale of the Hospital Contracts under this Agreement.
"Purchase Price" means the total two million five hundred thousand dollars
($2,500,000) to be paid as set forth in Section 2 below.
"Proprietary Information" has the meaning set forth in paragraph 5.1 below.
"Renewal Term" has the meaning set forth in paragraph 4.1 below.
"Systems" means independent hospital networks or XXXx, groups, health systems,
health associations or other organizations comprised of one or more institutions
organized to provide management services to Hospitals, and any person,
organization, entity or Hospital that is affiliated with an entity that owns
and/or controls, Hospitals located in more than one state.
"Term" means the Initial Term and all Renewal Terms as further set forth in
Section 4 below.
"TMS Designated Representative" means Xxxxxxx X. Xxxxx, Xx. or such other person
as TMS notifies PPTI in writing.
"TMS Services" means collectively Call Center Services and Billing and
Collection Services Services.
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"Transaction" means all TMS Services provided to, or on behalf of PPTI provided
per Customer.
"Transaction Fee" means $6.00 to be paid by PPTI to TMS per Transaction
processed for each PPTI Customer for whom TMS provides TMS Services during the
Term..
2. Transfer of Certain Assets
2.1 TMS hereby transfers and forever conveys and assigns any and all of its
rights, title and interest in, and any related intellectual property or other
associated rights, to twenty (18) Hospital Contracts set forth in Exhibit A,
which is attached hereto and incorporated herein by this reference. The Hospital
Contracts constitute substantially all of the Retail Base of TMS.
2.2 In consideration for the acquisition of the assets listed in paragraph 2.1
above, simultaneous with the execution of this Agreement, PPTI shall pay TMS a
total of two million five hundred thousand dollars ($2,500,000) payable as
follows:
A. $1,500,000 in cash at the Closing; and
B. $1,000,000 in shares of PPTI's Series B Preferred Stock.
2.3 Notwithstanding the closing of the purchase and sale of the Hospital
Contracts, TMS or an affiliate agrees to provide Billing and Collection and Call
Center Services for the PPTI if PPTI desires for TMS to do so for a Transaction
Fee per PPTI Customer per service Billed and Collected of $6.00. During the term
of each Hospital Contract for which TMS provides Direct Dial Services at the
time of the sale, TMS agrees to continue to provide such services unless PPTI
notifies TMS to discontinue the Direct Dial Service on a Hospital-by-Hospital
basis, and further provided that PPTI shall indemnify TMS from any claims or
damages by a Hospital or patient for the termination of Direct Dial Services.
2.4 This Agreement and the purchase and sale of the Hospital Contracts is
contingent on: (i) each Party obtaining all necessary corporate and shareholder
approval, (ii) PPTI closing on the financing in connection with its acquisition
of the Hospital Contracts; and (iii) TMS notifying all Hospital customers of the
assignment of their respective Hospital Contracts. Each Party shall notify the
other Party's Designated Representative in writing by email or other electronic
means, when the necessary approvals are obtained, and PPTI shall notify TMS'
Designated Representative when the financing is closed. When the above
contingencies all are satisfied, the Parties will mutually agree on a date for
the closing, which shall be completed by email.
2.5 For the Closing, TMS will confirm in writing that it has assigned the
Hospital Contracts to PPTI and shall state the effective date of the transfer,
which date shall be the same date as PPTI performs the following Closing
obligations: (i) PPTI shall sign a letter to each Hospital agreeing to be bound
by the terms and conditions of the Hospital Contract for the term, and shall
copy TMS on each letter; and (ii) PPTI shall pay the Purchase Price and issue
the Shares.
3. Indemnification; Liability.
3.1 Nothing in this Agreement is to be construed to constitute the Parties as
employer/employee, franchisor/franchisee, partners, joint venturers, co-owners,
or otherwise as participants in a joint or common undertaking. Employees of one
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Party are not entitled to benefits of any nature whatsoever provided by the
other Party to its employees. Neither Party shall have any right, power or
authority to act or create any obligation, express or implied, on behalf of the
Party.
3.2 Indemnification. Each Party shall defend and indemnify the other Party and
their respective officers, directors, shareholders, and employees) from and
against all claims, taxes, penalties, interest, costs, expenses, damages,
lawsuits, or other liabilities (including without limitation, reasonable
attorneys' fees and court costs) relating to or arising out of acts or omissions
by the Party that result in monetary damages to the other Party.
3.3 NO WARRANTIES. EACH PARTY HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES
WITH RESPECT TO ITS SERVICES, FACILITIES OR EQUIPMENT, INCLUDING WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
3.4 LIMITATION ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER, THEIR RESPECTIVE AFFILIATED ENTITIES AND/OR CUSTOMERS, OR ANY THIRD PARTY
OR ENTITY FOR SPECIAL, PUNITIVE, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES
UNDER THIS AGREEMENT OR OTHERWISE.
4. Term and Termination.
4.1 The term of this Agreement shall commence upon execution of this Agreement
by both Parties and shall expire on the sooner of the Closing or three months
from the date first set forth above, unless otherwise extended by a writing
signed by both Parties.
4.2 This Agreement shall automatically be terminated without further act or
document upon the filing for bankruptcy protection by either Party. It also
shall be automatically terminated without further act or document upon any
breach of a material provision of this Agreement, which is not cured within
thirty days following written notice from the non-defaulting Party.
4.3 Upon any termination of this Agreement, TMS shall continue to own and be
required to perform all the obligations under the Hospital Contracts, and PPTI
shall have no interest in the Hospital Contracts, or any right to purchase the
same.
4.4 The provision governing "Indemnification and Limitation of Liability" set
forth in Section 3 above, and the provisions governing "Confidentiality" set
forth in Section 5 below shall survive the termination of this Agreement for a
period of three years following the date of termination.
5. Confidentiality.
5.1 Proprietary Information. All information furnished to either Party by or on
behalf of the other Party is proprietary and confidential (the "Proprietary
Information"), and shall be treated in a confidential manner as provided herein
and remain the sole and exclusive property of the disclosing Party. The terms of
this Agreement are deemed Proprietary Information. Without limitation, all
Hospital related information, sales and marketing techniques and information,
proposals, Hospital Contracts, information set forth in completed
questionnaires, and literature and materials is deemed Proprietary Information
of the disclosing Party. Proprietary Information may only be used by the other
Party to market or provide services to the extent authorized under this
Agreement, or in connection with financing activities by either Party.
Proprietary Information may not be directly or indirectly disclosed to any third
party without the prior written consent of the disclosing Party Company (which
consent may be given or withheld at the sole discretion of the disclosing
Party).
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5.2 Each Party acknowledges that (i) the Proprietary Information of the other
Party is a valuable asset of that Party, (ii) any disclosure or unauthorized use
will cause irreparable harm and loss, and (iii) monetary damages may not be
sufficient to compensate the disclosing Party or the Hospitals so that
injunctive relief is an appropriate remedy to prevent any actual or threatened
unauthorized use or disclosure of the Proprietary Information.
5.3 Notwithstanding anything to the contrary in this Agreement, each Party shall
be entitled to disclose Proprietary Information of the disclosing Party to third
parties in connection with financing and billing and collection activities, its
provision of Services, its compliance with the terms and conditions of any
Hospital Contracts or any federal, state or local laws, rules and regulations,
and in connection with the payment of any Commissions to the other Party.
5.4 The confidentiality and non-disclosure obligations set forth in this Section
5 do not apply to any portion of the Proprietary Information (other than
patient-related information) which (i) is or becomes public knowledge through no
fault of the receiving Party or its agents, (ii) is disclosed to the receiving
Party without a restriction on disclosure by a third party which has the lawful
right to disclose the same, or (iii) is required to be disclosed pursuant to a
lawful and formal request or requirement of a governmental or regulatory
authority, provided however, that prior to any required disclosure of
Proprietary Information pursuant to subclause (iii) of this paragraph 5.4, the
receiving Party shall first notify the disclosing Party in writing, and shall
cooperate with any activities by the disclosing Party, in its sole discretion,
to obtain a protective order or limitation or restriction on such disclosure,
and the receiving Party and its Affiliated Entities shall only disclose the
specific Proprietary Information as is required according to written notice from
its legal counsel addressed to the disclosing Party, stating the reasons such
disclosure is required, and describing the specific Proprietary Information to
be disclosed and the party to whom such disclosure shall be made.
5.5 Intellectual Property Prohibition. Except as may otherwise be provided in
this Agreement, neither Party may use the name, logos, trade names, service
marks, trademarks, printed materials, or art work of the other Party, in any
promotional or advertising material, statement, document, press release,
broadcast or other communication without the prior, written consent of the other
Party, which consent may be given or withheld in the sole discretion of such
other Party. Notwithstanding anything to the contrary in this Agreement, each
Party shall be entitled to issue press releases, or post information on its
website describing the general nature of this Agreement and the Parties hereto,
and provide such information as is necessary in connection with providing its
own services or marketing the other Party's services, all without the prior
written consent of the other Party.
6. Miscellaneous.
6.1 Limitation on Assignment. Except as set forth in this paragraph 6.1, neither
Party may assign or transfer their respective rights, benefits or obligations
under this Agreement or this Agreement without the prior written consent of the
other Party, in its sole discretion. This Agreement is binding on the Parties
and their respective successors and permitted assigns. Notwithstanding anything
to the contrary, either Party may assign this Agreement and its rights,
obligations and benefits hereunder to an affiliate, or to a successor of all, or
substantially all the assets, of the transferring Party, whether by merger,
consolidation or otherwise without notice to the other Party. Notwithstanding
anything to the contrary in this Agreement, each Party may assign, pledge,
hypothecate or otherwise encumber Hospital Contracts and any monies or
Commissions due it under any Hospital Contracts in connection with financing the
operating and capital expenditure requirements related to providing the Party's
services or conducting its business.
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6.2 Notices. Any notice, statement, or other report required or permitted by
this Agreement must (i) be in writing and is deemed given when (a) delivered
personally, (b) sent by confirmed facsimile to TMS at (000) 000-0000 or to PPTI
at (561)630 -_7688 (c) 48 hours after deposit in the U.S. mail, mailed by
registered or certified mail, return receipt requested, postage prepaid, (d)
delivered to a public or private express mail service for overnight delivery, or
(e) sent by email to TMS at xxxxxxx.xxxxxx@xxxxxxxxxxx.xxx with a copy to
xxxxx.xxxxx@xxxxxxxxxxx.xxx, and to PPTI by email to
Xxxxx.xxxxx@xxxxxxxxxxxxx.xxx with a copy to xxxxxxxx@xxx.xxx; and (ii)
addressed to the other Party at the address set forth in the opening paragraph
of this Agreement, or at such other address as either Party may designate in
writing from time to time in accordance with this paragraph 6.2.
6.3 HIPAA Representation. Each Party represents and warrants to the other that
it is familiar with the privacy requirements of HIPAA and will comply with those
requirements protecting the privacy of all Hospital and patient information.
Each Party will ensure that it is familiar with the HIPAA privacy requirements
and will comply with those requirements. To the extent that a Party is, or may
be, a Business Associates under the HIPAA rules, the other Party agrees to
execute any applicable documents as may be reasonably necessary for the other
Party to comply with HIPAA and any Hospital rules, policies or regulations
within five business days from the date the Party providing the services submits
any such request by email to the other Party's Designated Representative.
6.4 Governing Law. This Agreement is governed by the laws of the State of New
York, without giving effect to its choice of law principles to the extent such
principles would result in the application of the laws of any other state. Each
Party (i) agrees that the Courts of New York including state and federal courts
have exclusive jurisdiction and are the exclusive venue for any action arising
under this Agreement, and (ii) submits itself to the exclusive jurisdiction of
said Courts for purposes of any such action. The Parties hereby waive trial by
jury.
6.5 Severability. The illegality or unenforceability of any provision or portion
of this Agreement does not affect the legality or enforceability of any other
provision or portion. If any portion or provision of this Agreement is deemed
illegal or unenforceable for any reason, there will be deemed to be made such
minimum change in such portion or provision as is necessary to make it valid and
enforceable and acceptable to the Parties as so modified.
6.6 Entire Agreement. This Agreement as amended from time to time and any
Authorizations provided under this Agreement contain the entire agreement
between the Parties concerning the subject matter covered under this Agreement,
and any representations or agreements, oral or otherwise, not embodied herein,
are superseded by the terms of this Agreement.
6.7 Amendments, Waivers, Remedies. This Agreement, or any of its provisions, may
not be amended, or modified, and no provision may be waived, unless such
amendment, modification, or waiver is in writing and signed by both Parties. The
waiver of any breach or default under this Agreement does not constitute the
waiver of any other breach or default, whether or not similar, nor any
subsequent breach of the same provision. The election by either Party of any
right or remedy contained in this Agreement is not exclusive of any other rights
or remedies in law or equity other than as may be limited by this Agreement.
6.8 Counterparts. This Agreement may be executed in two or more counterparts,
each of which is an original, but all of which together shall constitute one and
the same instrument. The individuals signing this Agreement represent and
warrant that they are authorized to bind and do so bind the Party on behalf of
which they are executing this Agreement. This Agreement shall be effective upon
successful transmission by facsimile of signed signature pages by both Parties
to each other.
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6.9 Compliance with Laws. During the term of this Agreement, each Party must
comply with all local, state and federal laws and regulations applicable to its
business and the performance of its obligations under this Agreement. 6.10 Force
Majeure. Either Party's delay in, or failure of, performance under this
Agreement is excused, where such delay or failure arises from, relates to, or is
caused by an act of God, fire or other catastrophe, electrical, computer, or
mechanical failure, work stoppage, or acts or omissions of third parties,
government or agencies thereof or other acts, omissions and events outside the
Party's reasonable control.
6.11 Third Parties. The provisions of this Agreement and the rights and
obligations created hereunder are intended for the sole benefit of the Parties
and it does not create any right, claim or benefit on the part of any person not
a Party to this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above to be effective on the 5th day of December upon
transmission by facsimile of signed copies by each Party to the other Party
("Effective Date").
WORLDNET COMMUNICATIONS, INC. PATIENT PORTAL
d/b/a TMS TECHNOLOGIES, INC.
By: ___________________________ By: _______________________________
Name: Xxxxxxx X. Xxxxx, Xx. Name: _______________
Title: President Title: ________________
Facsimile: 315.638.4585 Facsimile: ___.___.___
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EXHIBIT A
HOSPITAL CONTRACTS
HOSPITAL Location
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Greater Southeast Washington DC
University Hospital Syracuse, NY
St. Lukes Memorial Utica, NY
Park Ridge Rochester, NY
Faxton Utica, NY
Mercy Medical Baltimore, MD
Delaware County Drexel Hill, PA
Crozer Upland, PA
Monmouth Long Branch, NJ
Genesys Grand Blanc, MI
Nanticoke Seaford, DE
Raritan Bay Perth Amboy, NJ
RIM Detroit, MI
Monogahela Valley Monongahela, PA
Southampton Southampton, NY
Harrisburg Harrisburg, PA
CGOH Harrisburg, PA
Meadowlands Secaucus, NJ
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