LETTER OF INTENT
Dr. Xxxx Xxxxxxxx and wife
Xxxxx Xxxxxxxx d/b/a MD PaperFree
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Dear Xxxx & Xxxxx,
This letter is a formal Letter of Intent between Xxxx & Xxxxx Xxxxxxxx (“Xxxxxxxx”) and Link Media Publishing, Ltd., A Nevada Corporation (“Link”), whereby Link intends to acquire ownership of the electronic medical record software product developed by Xxxxxxxx which will be hereafter referred to as “MD PaperFree.” This Letter of Intent is intended to set forth the principal provisions of the parties’ understanding, but is not intended to be all-inclusive; the parties will only be bound to proceed to closing only by a jointly executed agreement in a form acceptable to both parties (the “Definitive Agreement.”) The confidentiality and non-disclosure agreements made in this letter of intent the following are fully binding on both parties.
| 1. | Purchase of Software. For the consideration,
Xxxxxxxx will sell and Link will purchase MD PaperFree outright and free
of any existing liens or encumbrances. Link will acquire legal title to
MD PaperFree and After closing, Link will by separate agreement license
the sole and complete rights to market, distribute and further license
ownership of MD PaperFree to Crown Medical Systems, Inc., a Delaware Corporation
(“Crown.”) Crown, through its license with Link, will thereafter
have the sole, absolute and exclusive rights to all future development,
enhancements, upgrades or derivative products derived from Link, Crown
or Xxxxxxxx’ efforts to improve and upgrade MD PaperFree after the
date of closing. Xxxxxxxx acknowledges that he/they will not have any
retained ownership of MD PaperFree following closing. |
| 2. |
Consideration for purchase. Xxxx agrees to issue a total of 1.5 million shares of Link stock in the name of Xxxxxxxx for MD XxxxxXxxx. Such shares of Link stock will be the same as those presently held by all existing Link shareholders. Shares will be issued, at closing, under the Definitive Agreement upon receipt, by Link, of “fully functional software” for both a remote hosted and on-site installable format as outlined in the Terms and Conditions outlined in the attached Exhibit “A,” made a part of this document. Xxxx agrees to cooperate with Xxxxxxxx in the Definitive Agreement to structure the transaction to minimize total taxes paid by Xxxxxxxx as a result of this transaction. Xxxxxxxx acknowledges that Link is at present, not a publicly registered company. Link has entered an agreement with Crown to merge with
the surviving entity to be known as Crown Medical Systems, Inc., a Nevada
Corporation (“New CMS.”) The merger agreement has not yet been
approved by the stockholders of Link or Crown and substantial compliance
with the rules and regulations governing the issuance and registration
of securities must be complied with prior to the shareholder votes. If
approved, Link stock will be subject to restrictions relative to the securities
registration of New CMS. Link’s obligations to issue stock under
this letter of intent are subject to review and approval of securities
counsel for Link which will be incorporated into the Definitive Agreement,
as applicable. Xxxxxxxx’ obligations under this Letter of Intent
and the Definitive Agreement are conditioned upon successful completion
of the Link/Crown merger. |
| 3. |
Directorship. At closing, subject
to approval of Xxxx’s stockholders, Xxxx agrees to offer a membership
on New CMS’ Board of Directors to Xx. Xxxxxxxx. Xx. Xxxxxxxx will
thereafter be entitled to all compensation and privileges of board membership
including participation in stock issuances to board members which are
anticipated after the merger process is completed. |
| 4. |
Conditions to Link’s obligations.
The obligation of Link to consummate the transaction contemplated by this
Letter of Intent will be subject to the satisfaction of each of the following
conditions to the satisfaction of Link: |
| a. |
Due diligence. The completion
of a satisfactory legal and business investigations and due diligence
review of Xxxxxxxx development, ownership and marketing of MD PaperFree
to ensure Xxxxxxxx has complete, outright and unencumbered ownership of
all aspects of the MD PaperFree software program free and clear of third
party claims. Link has not and will not accept or assume any liabilities
with respect to its purchase of MD PaperFree except that Xxxx agrees to
honor the unexpired term of any license to MD PaperFree previously granted
by Xxxxxxxx, provided that such licenses were granted on terms and conditions
acceptable to Link following its review. Link’s obligations to existing
MD PaperFree customers will extend only to those specific contracts accepted,
assigned and assumed by Link in writing at the time of closing under the
Definitive Agreement. |
|
| b. |
Board Approval. Approval of the
transaction and Definitive Agreement by the Board of Directors of Link. |
|
| c. | Definitive Agreement. The negotiation,
execution, and delivery of the Definitive Agreement on terms and conditions
acceptable to Link. |
|
| 5. | Conditions to Xxxxxxxx’
obligations. The obligation of Xxxxxxxx to consummate the transaction
contemplated by this Letter of Intent will be subject to the negotiation,
execution, and delivery of the Definitive Agreement on terms and conditions
acceptable to Xxxxxxxx. |
|
| 6. |
Agreement regarding future software
development responsibilities. Xxxxxxxx acknowledges that part of the
consideration for the sale and purchase of MD PaperFree will be the obligation
to cooperate with Crown in the further development of MD PaperFree. The
Definitive Agreement will set forth Link, Crown and Xxxxxxxx’ rights,
responsibilities, obligations and penalties with respect to “future
software development responsibilities” as described in the attached
Exhibit “A,” made a part of this document. Xxxxxxxx will receive
no further compensation or consideration for performance of his/their
“future software development responsibilities” except for any
enhancement in the value of Xxxxxxxx’ Link stock as may result from
those efforts. |
| 7. |
Inspection and Access to Information.
In order to permit Link to exercise its due diligence, after the date
of the execution of this Letter of Intent, Xxxxxxxx will permit Link and
its authorized representatives full access to and make available to them
for inspection and review all books, records, agreements and documents
of or relating to Xxxxxxxx and their business relative to ownership, development
or marketing of MD PaperFree which in the opinion of counsel to Link could
impact their sole and unencumbered ownership of MD PaperFree. Xxxxxxxx
agrees to make any consultants, agents, representatives, or attorneys
of Xxxxxxxx available for consultation with Link and its representatives,
if required. Any information reviewed by Link pursuant to this paragraph
will be subject to the terms of the “Confidentiality Agreement”
(as defined in the following). |
| 8. |
Disclosure/Announcements. Except
as otherwise required by applicable law or by court action, all public
communications or other public disclosures relating to the transaction
contemplated hereby will be subject to the joint approval of Link and
Xxxxxxxx. |
| 9. |
Expenses. Each of the parties
agrees pay its own expenses incident to performance of this Letter of
Intent, the negotiation and execution of the Definitive Agreement and
closing of the transactions contemplated by this Letter of Intent (whether
or not consummated), including counsel fees and advisory fees. |
| 10. |
Non-Disclosure of Confidential Information.
Xxxxxxxx and Xxxx recognize and acknowledge in exercise of due diligence
under this Letter of Intent they will have access to confidential information
concerning the structure and conduct of the business of Xxxxxxxx and Link
(including, but not limited to proprietary information, lists of customers
or patients, and costs and financial information) which prior to and after
the consummation of the transaction will be valuable, special and unique
property of Xxxxxxxx and Xxxx, respectively. Xxxxxxxx and Xxxx agree they
will not disclose, and will use their best efforts to prevent disclosure
by any other person of, confidential information to any person, except
to authorized representatives of either Xxxxxxxx or Xxxx. This limitation
applies whether or not the transaction is closed, both before and after
the date specified for closing. Xxxxxxxx and Xxxx recognize and agree
that violation of any of the agreements contained in this paragraph will
cause irreparable damage or injury to the other, the exact amount of which
may be impossible to ascertain, and the affected party will be entitled
to an injunction, without the necessity of posting a bond, restraining
any further violation of the agreements. The affected party’s rights
to an injunction will be in addition to, and not in limitation of, any
other rights and remedies that person may have against the other. |
| 11. |
Miscellaneous. This Letter of
Intent has been prepared and is being executed to serve as an aid to the
negotiation, preparation, and execution of the Definitive Agreement. The
terms described in this Letter of Intent have been proposed without the
benefit of a complete due diligence investigation customary for transactions
of this type, and each party understands that certain terms hereof may
be modified if either party believes that modification is justified based
upon its subsequent investigation. |
| 12. |
Governing Law The laws of the State of Texas will
govern the validity, interpretation, performance and enforcement of this
Letter of Intent. |
| 13. |
Terms of Agreement. Until signed,
This Letter of Intent does not constitute an offer to purchase nor will
it obligate Xxxxxxxx to sell and will not bind either party until it is
fully signed. If signed, this Letter of Intent will become effective as
of the date signed by both parties and will remain in effect until June
30, 20004 or this Letter of Intent will terminate, unless extended by
written agreement of the parties. If terminated, the parties will have
no further obligations with respect to this letter of intent except to
abide by the following confidentiality provisions. |
| Very truly yours, | |
| Xxxxxxx X Xxxxx | |
| President |
ACCEPTED:
Crown Medical Systems, Inc., A Nevada Corporation
| By: ______________________ | Date: January 12, 2004 | |
| Xxxxxxx X Xxxxx | ||
| President | ||
| _________________________ | Date: January 12, 2004 | |
| Xxxx Xxxxxxxx | ||
| _________________________ | Date: | January 12, 2004 |
| Xxxxx Xxxxxxxx | ||
Exhibit "A"
to Link/Xxxxxxxx Letter of Intent
MD PaperFree - Definition of “fully functional software”
The definitions, evaluation and delivery parameters for Link’s sign off of fully functional software are as follows:
| 1. |
Fully functional software
is software in which all known bugs and operational difficulties resulting
in the software crashing or reverting to a state not acceptable by a Link
customer or beta site have been fixed and a subsequent release of updated
software containing such fixes has been completed. |
|
| 2. |
Bugs shall consist of those
that are presently documented in a Known Problem list in the possession
of Xxxxxxxx, as well as those discovered through the efforts of Link/KMS
employees, consultants or agents between November 1, 2003 and March 31,
2004. |
|
| 3. |
Operational difficulties
shall include, but not be limited to: |
|
| a. |
The lack of standardization of button/icon
placement in all screens and forms in the software which must be present
to meet the needs of both Link beta site users and customers. |
|
| b. |
The lack of standardization of color
schemes and to-be-determined graphic presentations of certain screens
and forms which Link marketing has determined are necessary for the final
software to be able to be sold into the medical marketplace. |
|
| c. |
The lack of security within the product
necessary to meet minimum HIPAA requirements. |
|
| d. |
The complete functionality of the existing
HCFA and Drug Interaction databases presently utilized by the software. |
|
| 4. |
Evaluation of software is
defined as those duties performed by Link/KMS sales, marketing, and technical
personnel to determine to the best of their collective abilities that
all fixes implemented in a software release are fully tested in beta site,
inside technical, and sales demonstration environments and that the results
of all testing meet with their respective approval. |
|
| 5. |
Delivery parameters shall
be defined as: |
|
| a. |
A final version of MD XxxxxXxxx delivered
to the Link/KMS that has been certified as completely functional as a
Hosted Solution by all members of the Link/KMS evaluation team. |
|
| b. | A final version of MD PaperFree delivered
to the Link/KMS that is fully installable on any PC which is presently
operating through the use of a Microsoft Windows 98, ME, XP, or 2000 operating
system, and has been certified as completely functional by all members
of the Link/KMS evaluation team. |
Final delivery of the versions of MD XxxxxXxxx outlined in Paragraph 2.5 must be completed prior to March 31, 2004. All internal evaluation documentation attesting to receipt of fully functional software, signed by applicable Link/KMS personnel must be in the possession of the Link Board of Directors by this date.
“Future software development responsibilities” will be as follows:
| 1. |
Xxxxxxxx “Future software development responsibilities” obligations. |
|
| a. |
Immediate focus on adhering to all items
described above regarding “fully functional software” to ensure
that MD PaperFree is delivered to Link prior to March 31, 2004. This includes
adhering to a time line for fixing known bugs and operational difficulties
that will ensure a beta version of MD PaperFree able to be released to
limited sites selected by Link. |
|
| b. |
Immediate assistance to ensure the upgraded
HCFA and drug interaction databases purchased by Link are implemented
into MD PaperFree prior to March 31, 2004. |
|
| c. |
Immediate assistance, as required, to
ensure the total integration of MD PaperFree to all Practice Management/Billing
products owned by Link/KMS as of March 31, 2004. |
|
| d. | Medium and long-term assistance as to future feature
enhancements, as part of the Link product development group. In this capacity,
no feature enhancements will be undertaken by Xxxxxxxx without express
approval by Link management. All future feature enhancements will be collectively
identified, defined and approved by the Link product development group. |
| 2. |
Link “Future software development responsibilities”
obligations. |
|
| a. |
Immediate focus on providing the resources
to support outside consultants (Xxxxx) as well as existing KMS and CMS
programmers to fully test all bug fixes and operational difficulties addressed
by Xxxxxxxx as fixes are identified and fixed and new software versions
submitted. |
|
| b. |
Immediate assignment of preparing an
installable, stand-alone CD based version of MD PaperFree to internal
Link/KMS programmers so as to expedite completion and release to select
Link employees and beta site customers. |
|
| c. |
Immediate assignment of Link resources
to incorporate the MD PaperFree software into existing Link wireless hardware
devices and in-office technology solutions. |
|
| d. |
Immediate assignment of Link resources
to begin preparation of all technical manuals, training modules and manuals,
sales presentation materials, and global marketing materials including
brochures, CD presentations, and Link website enhancement. |
|
| e. |
Immediate assignment of Link resources
to begin upgrading the front-end forms and modules contained in MD PaperFree
from an Access based solution to a solution compatible with existing KMS
software and hardware. f. Immediate assignment of Link/KMS resources to
begin the process of evaluating the Snowmed Clinical Nomenclature database
so as to begin implementation of this database into the fully functional
MD PaperFree product during the first quarter of 2004. |
|
The rights, duties and obligations of Link according to this Exhibit will be assignable to Crown Medical Systems, Inc., a Delaware Corporation (“Crown.”) through its license with Link.
ACCEPTED:
Crown Medical Systems, Inc. [Nevada]
| By: ”Xxxxxxx Xxxxx” | Date: January 12, 2004 |
| Xxxxxxx X. Xxxxx, President | |
| ”Xxxx Xxxxxxxx” | Date: January 12, 2004 |
| Xxxx Xxxxxxxx | |
| ”Xxxxx Xxxxxxxx” | Date: January 12, 2004 |
| Xxxxx Xxxxxxxx |
