AGREEMENT dated as of December 18, 1995 among Medical
Management Sciences, Inc., a Maryland corporation ("MMS"), Managed Imaging,
Inc., a Delaware corporation ("MII"), and Physician Support Systems, Inc., a
Delaware corporation ("PSS").
The parties agree as follows:
1. MMS and PSS hereby terminate, as of the date of this
Agreement, the Letter of Intent dated June 2, 1995 between MMS and PSS and the
Agreement and Plan of Merger dated as of August 1, 1995 among PSS, MMS
Acquisition, Inc. and MMS. MII and PSS hereby terminate, as of the date of this
Agreement, the Agreement and Plan of Merger dated as of August 1, 1995 among
PSS, MII Acquisition, Inc. and MII. In connection with the termination of such
agreements, the parties hereby release each other from any and all liabilities,
obligations or claims that any such party had, has or may have to or against any
other party arising from, by reason of or in connection with such agreements. In
addition, MMS and PSS hereby release each other and any third party from any
provision in any agreement to which each of MMS, PSS and such third party is a
party that restricts in any way such third party from negotiating or
consummating a business combination with MMS or PSS.
2. PSS acknowledges that MMS is engaging in discussions with a
third party concerning a possible transaction involving MMS and such third
party. In connection with such possible transaction, PSS shall cause the
appropriate officer of PSS (the "PSS Officer") to promptly sign and deliver to
D&T such representation letters and other documents (the "Representation
Documents") regarding MMS's and MII's financial statements and condition, as is
reasonably requested by D&T or MMS in connection with D&T rendering its audit
report with respect to such financial statements and releasing the related work
papers to MMS and such third party.
3. The expenses that have been incurred to date (including
expenses that will result from certain services requested by MMS and PSS but not
yet completed) by MMS and PSS in connection with the pursuit of a possible
business combination of MMS, MII and PSS involving an initial public offering of
common stock of the combined entity (an "IPO Transaction") or the sale of the
combined entity (by merger or otherwise) to a third party (a "Sale Transaction")
shall be paid by MMS and PSS in the following manner:
(a) all expenses attributable to one company shall be paid by
such company only, such expenses to include the following:
(i) Xxxxxx, Xxxxx & Xxxxx ("HD&L") fees and
expenses associated with PSS pending
acquisitions, which fees and expenses shall
be paid by PSS,
(ii) Deloitte & Touche LLP ("D&T") fees and
expenses associated with the financial
audits on a company-by-company basis, which
fees and expenses shall be paid by (x) in
the case of the audit of PSS and PSS pending
acquisitions, PSS and (y) in the case of the
audit of MMS and MII, MMS,
(iii) BPI Capital Partners, Inc. ("BPI") fees and
expenses associated with a possible IPO
Transaction and Sale Transaction and with
PSS pending acquisitions, which fees and
expenses shall be paid by PSS, and
(iv) D&T fees and expenses associated with the
coding review on a company-by-company basis,
which fees and expenses shall be paid by (x)
in the case of the coding review of PSS and
PSS pending acquisitions, PSS and (y) in the
case of the coding review of MMS and MII,
MMS, and
(b) all other expenses shall be paid 50% by MMS and 50% by
PSS, such expenses to include the following:
(i) HD&L fees and expenses associated with a
possible IPO Transaction and Sale
Transaction, and
(ii) D&T fees and expenses associated with
consolidating the AMS companies and
structuring a possible IPO Transaction and
Sale Transaction.
Based on an estimate as of November 30, 1995, the agreement to
pay expenses as described above in this Section 3 would result in MMS paying
expenses in an aggregate amount equal to $975,500 and PSS paying expenses in an
aggregate amount equal to $2,551,500. In consideration of, among other things,
PSS's incurrence of certain expenses in connection with the Sale Transaction and
the IPO Transaction, if prior to December 31, 1996 MMS or its stockholders enter
into a definitive agreement to sell MMS (by merger or otherwise) to a third
party, promptly upon the consummation of such sale, MMS shall pay or cause to be
paid to PSS an amount in cash equal to $2,551,500.
4. MMS shall indemnify and hold harmless (i) PSS and the PSS
Officer from and against any and all liabilities, judgments, claims,
settlements, losses, damages, fees, liens, taxes, penalties, obligations and
expenses (including reasonable fees and expenses of counsel) (collectively,
"Losses") incurred or suffered by PSS or the PSS Officer in connection with any
claim by a third party (including D&T) against PSS or the PSS Officer arising
out of or relating to the execution and delivery by PSS or the PSS Officer of
any Representation Document (except to the extent that PSS or the PSS Officer
executed and delivered such Representation Document in bad faith) and (ii) PSS
and its affiliates, stockholders, directors, officers, employees and other
agents and representatives from and against any and all Losses incurred or
suffered by any such person arising out of or relating to the non-fulfillment by
MMS of its agreement to pay expenses as described above in Section 3.
PSS shall indemnify and hold harmless MMS and its affiliates,
stockholders, directors, officers, employees and other agents and
representatives from and against any and all Losses incurred or suffered by any
such person arising out of or relating to the non-fulfillment by PSS of its
agreement to pay expenses as described above in Section 3.
In case any claim or litigation which might give rise to any
obligation of a party under the indemnity and reimbursement provisions of this
Section 4 (each an "Indemnifying") shall come to the attention of the party
seeking indemnification hereunder (the "Indemnified Party"), the Indemnified
Party shall promptly notify in writing the Indemnifying Party of the existence
and amount thereof. Failure to give such notice shall not prejudice the rights
of the Indemnified Party,
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except to the extent that the Indemnifying Party shall have been materially
prejudiced by such failure. The Indemnifying Party shall be entitled to
participate in and, if (i) in the reasonable judgment of the Indemnified Party
such claim can properly be resolved by money damages alone and the Indemnifying
Party has the financial resources to pay such damages and (ii) the Indemnifying
Party admits that this indemnity fully covers the claim or litigation, the
Indemnifying Party shall be entitled to direct the defense of any claim at its
expense, but such defense shall be conducted by legal counsel reasonably
satisfactory to the Indemnified Party. The Indemnifying Party shall not
compromise and settle any such claim or litigation without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld.
5. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement. In case at any
time after the date of this Agreement any further action is necessary or
desirable to carry out the purposes of this Agreement, the parties each agree to
take or cause to be taken all such necessary or desirable action, including the
execution and delivery of such further instruments and documents, as may be
reasonably requested by any other party for such purposes. No modification,
amendment or waiver of any provision of this Agreement, shall be effective,
unless it is in writing and signed by the parties hereto. All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. This Agreement
and the rights and obligations hereunder shall not be assignable by any party
hereto. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflict of laws principles.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties.
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IN WITNESS WHEREOF, each of the parties to this Agreement has
caused this Agreement to be duly executed and delivered as of the day and year
first above written.
MEDICAL MANAGEMENT SCIENCES, INC.
By: /s/ Xxxxx Xxxxxxx
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Title: Chairman
MANAGED IMAGING, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------
Title: Chairman
PHYSICIAN SUPPORT SYSTEMS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx III
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Title: Executive Vice President
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