MEMORANDUM OF AGREEMENT
between
HEALTH STRATEGIES LIMITED
00 Xxxx Xx
Xx.Xxxxxx
Xxxxxx
Xxxxxxx Xxxxxxx
(herein called "HSL")
of the one part
and
UNILABS GROUP LIMITED
Road Town
Pasea Estate
P.O. Box 3149 TORTOLA
British Virgin Islands
(herein called "UGL")
of the other part
Whereas
(A) HSL is engaged in the health services industry and has acquired the
European copyright and other intellectual property rights described in
Part I of the First Schedule to this Agreement (herein called "the
Rights") in a software package and related know-how described in Part II
of the First Schedule to this Agreement (herein called "the Product").
(B) HSL wishes to introduce and distribute the Product in Europe.
(C) UGL is experienced in the health services industry in Europe and wishes
to participate in the introduction and distribution of the Product in
Europe.
THE PARTIES HAVE AGREED AS FOLLOWS:
I.
To incorporate a company with the characteristics more particularly set forth in
the Second Schedule hereto (herein called "the Company") as soon as possible
after signature of this Agreement but in any event at the latest on the 15th of
September 1995.
II.
To pay in United States dollars upon incorporation the following amounts to the
Company (or to such account for the Company as HSL may direct in writing in the
form of paid in capital and surplus:-
capital surplus
HSL $2'500 nil
UGL $5'000 $2'000'000
III.
In addition UGL undertakes to pay in United States dollars the following further
amounts to the Company (or to such account for the Company as HSL may direct in
writing)in the form of paid in surplus no later than the date set next to each
amount:
surplus date of payment
UGL $500'000 15 September 1996
UGL $500'000 15 September 1997
IV.
Subject to II above and within 10 days of 15 September 1995, or such other date
as each of the parties to this Agreement may agree, HSL will procure that the
Rights are transferred to the Company in exchange for a cash payment by the
Company to HSL or its nominee of US$1'500'000.
V.
Commencing 1st October 1995, HSL or its nominee will develop for the Company a
marketing plan for the Product for which HSL or its nominee will be remunerated
by the Company in United States dollars as follows:
Date of Payment Amount
1st October 1995 $500'000
1st October 1996 $500'000
1st October 1997 $500'000
The parties will procure that the Company enters into an agreement for the
development of a marketing plan with HSL or its nominee which agreement will
comply with the terms set forth in the Third Schedule hereto and shall contain
no more onerous provisions as regards HSL without its prior agreement.
VI.
All other matters required to make the Company a going concern will be
determined by the Company by its directors and where required its shareholders
after incorporation. Each party undertakes to use its best endeavours for and on
behalf of the Company to successfully introduce and distribute the Product in
Europe.
Each of HSL and UGL agree and undertake not to compete directly or indirectly
with the business of the Company within the territory of Europe such obligation
not including but not being limited to refraining from (directly or indirectly)
investing, controlling, entering into an employment, consulting or other
relationship with competing companies or businesses and not soliciting any
clients or employees of the Company. This undertaking shall continue for so long
as the Company has not been liquidated.
VII.
Each party may assign its rights and obligations under this Agreement to a
company or person of its choosing after obtaining the prior written consent of
the other party and subject to the condition (which the assignor and the
assignee must accept in writing addressed to the other party to this Agreement)
that the assignor party to this Agreement
and the assignee are jointly and severally liable for all obligations of the
assignor under or connected with this Agreement.
The parties hereto hereby agree that in the event of nonperformance of any
assignee (including non-payment of any payment required under Articles II and
III above) the assignor party to this Agreement and the assignee will be jointly
and severally liable to remedy the default (including pay any unpaid amount) to
the Company.
VIII.
UGL hereby irrevocably agrees that the capital to be paid by it pursuant to
Article II above is to be used by the Company to pay the British Virgin Islands
Government taxes and registered office fees and the surplus amounts to be paid
by it pursuant to Articles II and III above are to be paid by the Company to HSL
or its nominee in pursuance of Articles IV and V above and are not to be used
for any other purpose. UGL will exercise any and all of its rights in the
Company (including procuring that its representative on the Board of Directors
approves all such action) to obtain that the Company enters into the agreements
for transfer of the Rights and for development of a marketing plan contemplated
under Articles IV and V hereof and UGL hereby irrevocably and unconditionally
guarantees all payments to be made to HSL or its nominee pursuant to this
Agreement and such further agreements as are made between the Company and HSL or
its nominee.
Other financing requirements of the Company will be met by agreement between the
parties, either by further capital contributions or by third party financing.
IX.
In the event that, for any reason whatsoever, the Company is not incorporated or
the proposed marketing plan is not required or continued with after
incorporation of the Company, or in the event of breach of its non-compete
obligation or breach of its secrecy undertaking, UGL hereby unconditionally and
irrevocably agrees to pay HSL or its nominee US$3'000'000 as liquidated damages
provided that the liquidated damages of US$3'000'000 shall be reduced by any
amounts already paid to HSL or its nominee by the Company in accordance with
Articles IV and V above.
X.
Both parties hereby agree to sign a complete secrecy undertaking with respect to
the Rights and the Product and the business affairs of the Company.
XI.
This Agreement shall be governed by and construed in accordance with the laws of
Switzerland and the parties hereby agree to submit any disputes arising with
respect to or in connection with this Agreement to be finally decided by one or
more arbitrators in accordance with the Rules of Arbitration of the Chamber of
Commerce and Industry of Geneva. The arbitration proceedings shall be conducted
in English and the arbitration shall take place in Geneva.
Made in Jersey , on 14 September 1995
In two original copies
/s/
SIGNED SEALED AND DELIVERED BY
HEALTH STRATEGIES LIMITED
/s/
SIGNED SEALED AND DELIVERED BY
UNILABS GROUP LIMITED
THE FIRST SCHEDULE
Part I. "the Rights"
Name of Software Software known as "MDM" as
developed by Medical Diagnostic Management
Inc.
Description of Understanding of how ancillary services
Know-How (such as clinical laboratory testing,
radiology services, physical therapy, medical
equipment rental, and chiropractic services)
are provided to the out patient market,
particularly, how to organize such services
in an efficient and cost effective network,
saving costs to the payor whilst maintaining
delivery to the patient and doctor.
Part II. "the Product"
A software package known as "MDM" which operates as a sophisticated payments
system for health insurance companies. The package and related know-how permits
processing of payments by the relevant insurance company and through a
networking system also checks claims for tests provided at the relevant doctor's
request against industry averages thereby identifying test service providers who
deviate from the industry norm.
Health insurance companies who use the system will pay a service fee per
transaction to the Company.
[END OF FIRST SCHEDULE]
THE SECOND SCHEDULE
("the Company")
1. JURISDICTION : British Virgin Islands.
AND TYPE An International Buisness Company incorporated
under the International Buisness Companies
Ordinance, 1984 (hereinafter "the Ordinance").
2. NAME : Medical Insurance Services (Europe)S.A. or MISE S.A.
or available alternative.
3. OBJECT : To acquire the Rights to the Product (both
described in the First Schedule), to develop a
complete marketing plan in at least three European
jurisdictions for the Product and to commence
marketing the Product by 1st October 1997 and for
this purpose the Company should have the widest
objects clause permitted under the Ordinance.
4. AUTHORISED : US$50'000.
CAPITAL
5. SHARES : Two classes of shares of one series comprising 100
Class A ordinary shares without par value and 100
Class B ordinary shares without par value.
The shares will be registered only.
The Class A shares will have the following rights
attached:
1. Four votes per share.
2. The right to appoint two
directors.
3. A first right of refusal over any
Class B shares that a Class B
shareholder wishes to transfer at a
price equal to the proportion of
the net asset value of the Company
represented by the paid in amount
(capital and surplus) on the shares to
be transferred as determined
by an independent accountant in the
absence of agreement with the
disposing Class B shareholder.
The Class B shares will have the following
rights attached:
1. One vote per share.
2. The right to appoint one director.
3. A first right of refusal over any
Class A shares that the Class A
shareholder wishes to transfer at a
price equal to the proportion of the
net asset value of the Company
represented by the paid in amount
(capital and surplus) on the shares to
be transferred as determined by an
independent accountant in the absence
of agreement with the disposing Class
A shareholder.
A positive vote of each Class of shares shall
be required to modify any of the above
rights, to elect more than three directors,
to create a new Class or Classes, to modify
the Memorandum and Articles of Association
and to liquidate the Company.
In all other matters, the A and B shares
shall be voted as one class, decisions being
taken by an absolute majority of the number
of votes represented by the shares present
and voting.
6. ISSUED CAPITAL : Health Strategies Limited - 25 Class A
ordinary shares without par value for a
consideration designated as capital by the
directors of $100 per share.
Unilabs Group Limited - 50 Class B ordinary
shares without par value for a consideration
designated as capital by the directors of
$100 per share and surplus $40'000 per share.
7. DIRECTORS : Minimum of two and maximum of five, the first
directors to be:
1. Representative of Class A Shareholder:
2. Representative of Class B Shareholder:
[END OF SECOND SCHEDULE]
THE THIRD SCHEDULE
Marketing Plan Agreement
PARTIES: The Company of the one part and HSL or its nominee of the
other part.
COMMENCEMENT: 1st October 1995.
DURATION: Two years ending on 1st October 1997.
UNDERTAKINGS: (1) The Company shall pay the remuneration specified in
Article V of the Memorandum of Agreement in accordance
with the terms thereof.
(2) HSL or its nominee shall:
(a) Prepare a preliminary report for the directors
of the Company of the potential for application
of the Product in Germany, France, Switzerland
and the United Kingdom.
(b) For any two of the territories included in the
preliminary report designated by the board of
directors of th Company, do the following in each
territory:
(i) establish a network of providers of
ancillary services;
(ii) negotiate initial contracts with an
insurance health care payor;
(iii) identify personnel requirements of the
Company and select candidates for available
posts;
(iv) select possible office premises and when
premises have been rented by the Company,
set up the EDP systems; and
(v) prepare a business plan for the period to
1st October 1997 and a budget projection
for three years thereafter.
[END OF THIRD SCHEDULE]
