EXHIBIT 10.11
MANAGEMENT SERVICES AGREEMENT
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THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") is made and
entered into this 21st day of July, 1998 (the "Execution Date") to be effective
as of July 1, 1998 (the "Effective Date"), by and between ENDEAVOR TECHNOLOGIES,
INC., a Georgia corporation ("Endeavor"), and MATRIA HEALTHCARE, INC., a
Delaware corporation ("Matria").
BACKGROUND:
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A. Matria is acquiring, effective as of the Effective Date,
substantially all of the assets of Quality Diagnostic Services, Inc. ("QDS") and
Telemedics, Inc. ("Telemedics"), both Georgia corporations and wholly owned
subsidiaries of Endeavor, pursuant to the terms of that certain Asset Purchase
Agreement, dated July 21, 1998, and effective as of the Effective Date (the
"Purchase Agreement"), among Endeavor, QDS, Telemedics and Matria. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement.
B. As a material inducement for Matria to enter into the Purchase
Agreement, Endeavor has agreed to enter into this Agreement.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises, covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. SERVICES. Subject to the terms and conditions set forth in this
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Agreement, Matria hereby retains Endeavor to provide to Matria the management
and transition services more particularly described on Exhibit A attached hereto
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and incorporated herein by this reference (the "Services") to assist with the
transition of the Business to Matria, and Endeavor agrees to render the Services
to Matria.
2. TRANSITION AND CONSULTING EMPLOYEES.
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(a) Subject to the terms and conditions set forth in this
Agreement, Endeavor agrees to make available to Matria the employees listed on
Exhibit B attached hereto and incorporated herein by this reference (the
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"Transition Employees"). Such Transition Employees shall be made available to
Matria, solely to provide the Services, on a full-time basis (approximately 40
hours per week), until the later of (i) three months after the Execution Date,
or (ii) three months after Matria identifies and commences training of current
Matria employees or hires such Transition Employees' replacements, as
applicable, but in no event past the end of the Term ("Transition Part I");
provided, however, that Xxxx Xxxxxx will be available on a full-time basis
throughout the Term unless terminated by Matria as hereinafter provided. After
the end of Transition Part I, Endeavor agrees to make the Transition Employees
available to Matria to provide the Services, on an "as-needed" basis, as
reasonably requested by Matria, until the end of the Term. Endeavor may utilize
the services of the Transition Employees to the extent that such
Transition Employees are not otherwise engaged by Matria to perform the
Services, provided, however, that Endeavor shall in no way interfere with the
Transition Employees' providing of the Services to Matria under this Agreement.
In addition to the above, Endeavor agrees that Matria shall have the right to
terminate Xxxx Xxxxxx'x services pursuant to this Section 2(a), upon 30 days
written notice to Endeavor and Xxxxxx (the "Xxxxxx Termination"), and upon such
Xxxxxx Termination, all of the remaining provisions and terms of this Agreement
shall continue and remain in full force and effect, except as provided in
Section 5(a) below.
(b) Subject to the terms and conditions set forth in this
Agreement, Endeavor agrees to make available to Matria, to provide the Services,
the employees listed on Exhibit C, attached hereto and incorporated herein by
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this reference, on an "as-needed," basis, as reasonably requested by Matria,
until the end of the Term (the "Consulting Employees").
3. RIGHT TO OCCUPY SPACE AND USE EQUIPMENT. Endeavor hereby grants to
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Matria and Matria employees the right, during the Term, to occupy such space
located at the principal office of Endeavor at 400 The Lenox Building, 0000
Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000 (the "Lenox Office"), currently
occupied by Endeavor and QDS in connection with the operation of the Business,
and to use such equipment, currently used by Endeavor and QDS at the Lenox
Office in the operation of the Business (including, without limitation, office
furniture, computers, telephones and fax machines but excluding Endeavor's
executive offices), as is reasonably required for Purchaser to operate the
Business.
4. RECEIVING AND SHIPPING AREA AND BUSINESS OFFICE. Matria, reasonably
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assisted by Endeavor, agrees to move (i) all receiving and shipping functions
from the areas not included in the Licensed Premises Agreement (the "Shipping
Area") and (ii) all billing functions in the area currently used by Endeavor for
such billing functions (the "Business Office") within 60 days after the
Execution Date. If Matria fails to move the receiving and shipping functions out
of the Shipping Area and the billing functions out of the Business Office within
such time period, Matria agrees to pay Endeavor $2.92 per each square foot left
occupied per month (or portion thereof). In no event shall such Shipping Area or
Business Office be occupied past six months from the Execution Date.
5. COMPENSATION AND EXPENSES.
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(a) As consideration for Endeavor's performance of the Services,
and Endeavor making available the Transition Employees and the Consulting
Employees, Matria shall pay to Endeavor on the first day of each month during
the Term of this Agreement a monthly cash fee in the amount of $25,000 (provided
such payments will be prorated for partial months) (the "Management Fee");
provided, however, that upon a Xxxxxx Termination, the Management Fee shall be
reduced by $10,000 per month (or as may be prorated for a partial month), which
Endeavor and Matria hereby agree is the portion of the Management Fee
attributable to the services to be performed by Xxxx Xxxxxx.
(b) Matria shall reimburse the Transition Employees and the
Consulting Employees for all reasonable expenses such employees incur in
performing their duties pursuant
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to this Agreement, at the request or on behalf of Matria, including, without
limitation, travel, lodging, meal and entertainment expenses and long distance
telephone charges; provided, however, that Matria shall have no obligation to
reimburse the Transition Employees or the Consulting Employees for expenses not
approved by Matria.
6. INDEPENDENT CONTRACTOR.
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(a) Endeavor and Matria, in the performance of this Agreement,
will be acting in their own separate capacities and not as agents, employees,
partners, joint venturers or associates of one another. It is expressly
understood and agreed that (i) Endeavor is an independent contractor of Matria
in all manners and respects and Endeavor is not authorized, nor are any of its
employees or agents authorized, to bind Matria to any liability or obligation or
to represent that it has any such authority; and (ii) Matria is not authorized,
nor are any of its employees or agents authorized, to bind Endeavor to any
liability or obligation or to represent that it has any such authority.
(b) The Transition Employees and the Consulting Employees shall
remain employees of Endeavor, and Endeavor shall be solely responsible for all
of its withholding taxes, social security taxes, unemployment taxes, and
workers' compensation insurance premiums with respect to the Transition
Employees and the Consulting Employees.
7. OWNERSHIP OF WORK PRODUCT. All work product, property, data,
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documentation or information or materials conceived, discovered, developed or
created by Endeavor, QDS, the Transition Employees or the Consulting Employees
in performing the Services pursuant to this Agreement (collectively, the "Work
Product") will be owned exclusively by Matria. To the greatest extent possible,
any Work Product will be deemed to be a "work made for hire" (as defined in the
Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned exclusively by
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Matria. Endeavor hereby unconditionally and irrevocably transfers and assigns to
Matria all right, title and interest in and to any Work Product; provided,
however, that "Work Product" shall not include Endeavor 2000 software or any
derivative works thereof.
8. TERM. Unless sooner terminated in accordance with the provisions of
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Section 9 hereof, the term (the "Term") of this Agreement shall commence as of
the Effective Date and shall continue until December 31, 1998.
9. TERMINATION.
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(a) Notwithstanding anything else contained herein to the
contrary, and in addition to any other rights and remedies it may have at law,
in equity or hereunder, either party hereto may cancel and terminate this
Agreement if the other party fails to correct or cure any material breach
hereunder within ten days after receiving written notice thereof from such
party.
(b) Notwithstanding anything else contained herein to the contrary
Matria may cancel and terminate this Agreement at any time (for any reason or
for no reason) upon 30 days written notice to Endeavor.
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10. INDEMNIFICATION. Endeavor hereby indemnifies and agrees to defend
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and hold harmless Matria and its affiliates, employees, officers, agents,
partners and independent contractors from and against any and all damages,
losses, costs (including, without limitation, court costs and attorneys' fees),
settlements, suits, actions, expenses, liabilities and claims of any kind caused
by or resulting from any breach of this Agreement by Endeavor and/or QDS. Matria
hereby indemnifies and agrees to defend and hold harmless Endeavor and its
affiliates, employees, officers, agents, partners and independent contractors
from and against any and all damages, losses, costs (including, without
limitation, court costs and attorneys' fees), settlements, suits, actions,
expenses, liabilities and claims of any kind caused by or resulting from any
breach of this Agreement by Matria.
11. NOTICES.
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(a) All notices provided for or required by this Agreement shall
be in writing and shall be delivered personally to the other designated party,
or mailed by certified or registered mail (return receipt requested) or
delivered by a recognized national overnight courier service, as follows:
If to Endeavor or QDS: Endeavor Technologies, Inc.
000 Xxx Xxxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
If to Matria: Matria Healthcare, Inc.
0000 Xxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
(b) Notices delivered pursuant to Section 11(a) shall be deemed
given: (i) at the time delivered, if personally delivered; (ii) at the time
received, if mailed; and (iii) two business days after timely delivery to an
overnight courier service.
(c) Either party hereto may change the address to which notice is
to be sent by written notice to the other party in accordance with the
provisions of this Section 11.
12. MISCELLANEOUS.
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(a) This Agreement contains the entire agreement and understanding
concerning the subject matter hereof between the parties hereto. No waiver,
termination or discharge of this Agreement, or any of the terms or provisions
hereof, shall be binding upon either party hereto unless confirmed in writing.
This Agreement may not be modified or amended, except by a writing executed by
the parties hereto. No waiver by any party hereto of
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any term or provision of this Agreement or of any default hereunder shall affect
such party's rights thereafter to enforce such term or provision or to exercise
any right or remedy in the event of any other default, whether or not similar.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, without regard to principles
of conflicts of laws.
(c) No party may assign or otherwise transfer this Agreement, in
whole or in part, without the prior written consent of the other parties hereto,
and any attempted assignment not in accordance herewith shall be null and void
and of no force or effect. Matria may assign this Agreement to a wholly-owned
subsidiary of Matria without the consent of the other parties hereto, provided
that Matria shall remain liable for the performance of its obligations
hereunder.
(d) This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
(e) The headings contained herein are for the convenience of the
parties only and shall not be interpreted to limit or affect in any way the
meaning of the language contained in this Agreement.
(f) This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute the same agreement. Any signature page of any such counterpart, or
any electronic facsimile thereof, may be attached or appended to any other
counterpart to complete a fully executed counterpart of this Agreement, and any
telecopy or other facsimile transmission of any signature shall be deemed an
original and shall bind such party.
(g) If any provision of this Agreement shall be held void,
voidable, invalid or inoperative, no other provision of this Agreement shall be
affected as a result thereof, and accordingly, the remaining provisions of this
Agreement shall remain in full force and effect as though such void, voidable,
invalid or inoperative provision had not been contained herein.
(h) This Agreement shall not be construed more strongly against
any party hereto regardless of which party is responsible for its preparation.
(i) Upon the reasonable request of another party, each party
hereto agrees to take any and all actions, including, without limitation, the
execution of certificates, documents or instruments, necessary or appropriate to
give effect to the terms and conditions set forth in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed, or caused their
duly authorized representatives to execute, this Agreement on the Execution
Date, to be effective as of the Effective Date.
"Endeavor"
ENDEAVOR TECHNOLOGIES, INC.
By: /s/ W. Xxxxxxx Xxxxxx
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Title: Chief Operating Officer
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"Matria"
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: Executive Vice President and Chief
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Operating Officer
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AGREED TO AND ACCEPTED BY:
"QDS"
QUALITY DIAGNOSTIC SERVICES, INC.
By: /s/ Xxxxx Xxxxxxx
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Title: President
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EXHIBIT A
MANAGEMENT RESPONSIBILITIES
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The Transition Employees and Consulting Employees will consult with
Matria in the management of the Business and provide any and all reasonable
assistance to facilitate a smooth transition in the change of ownership of the
Business of QDS and the Transition Employees and the following Consulting
Employees: Xxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxx,
Xxxxxxxx Xxxxxx, and Xxxx Xxxxxx, shall provide substantially the same services
and perform substantially the same duties for Matria as such employees provided
and performed for QDS before the Effective Date (collectively, the "Transition
Assistance").
Endeavor agrees, as part of its responsibility to provide the
Transition Assistance, to use its reasonable efforts during the Term:
1. within 60 days of the Execution Date, as to the
Transition Employees, to assist Matria in identifying and training replacements
of the Transition Employees or to assist Matria in training Matria's employees
to take over the roles, duties and obligations of the Transition Employees, as
directed by Matria in consultation with Endeavor;
2. to assist Matria in establishing relationships with all
former sales representatives and employees of QDS;
3. to assist Matria in obtaining an independent
physiological laboratory or independent diagnostic testing facility, as the case
may be, provider identification number;
4. to assist Matria in re-contracting with each payor and
physician with which QDS is under contract to provide services;
5. to assist Matria in establishing relationships with all
former medical directors and consulting physicians of QDS; and
6. to assist Matria in transitioning information systems,
billing and collection functions and financial reporting and record keeping
functions to Matria employees.
EXHIBIT B
TRANSITION EMPLOYEES
Xxxxxxxx, Xxxx
Xxxxxx, Xxxx
Xxxxx, Xxxxxxx X.
Xxxx, Xxxxxx
EXHIBIT C
CONSULTING EMPLOYEES
Xxxxxx, Xxxxxxx X.
Xxxxxxx, T. Xxxxx
Xxxxxxxx, K. Xxxxxx
Xxxxxx, W. Xxxxxxx
Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxx X.
Xxxx, Xxxxxxx
Xxxxxx, Xxxxxxxxxxx
Xxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx
Xxxxxx, Xxxx
Xxxxxx, X. Xxxxx
