SERVICES AGREEMENT
SERVICES AGREEMENT, dated as of January 1, 1999 (this
"Agreement"), between SYNETIC, INC., a Delaware corporation ("Synetic"), and
SYNETIC HEALTHCARE COMMUNICATIONS, INC., a Delaware corporation (the "Company").
WHEREAS, Synetic, Avicenna Systems Corporation, a
Massachusetts corporation ("Avicenna"), and the Company are parties to a certain
Formation Agreement, dated as of January 1, 1999, pursuant to which Synetic and
Avicenna have transferred (the "Transfer") to the Company, substantially all of
Synetic's and Avicenna's assets and liabilities constituting Synetic's
healthcare communications business (the "Business");
WHEREAS, Synetic is engaged in a variety of businesses and
employs personnel, retains consultants and maintains staff departments to
provide management, operating and administrative services for such businesses;
WHEREAS, prior to the Transfer, the Business has relied on
Synetic and certain of its direct and indirect wholly owned subsidiaries for
certain management, operating and administrative services;
WHEREAS, the Company has requested the continuation of
certain management, operating and administrative services now provided by
Synetic or one of its subsidiaries to the Business; and
WHEREAS, subsequent to the date of this Agreement, Synetic is
willing to provide or cause to be provided to the Company for a limited period
of time certain management, operating and administrative services with respect
to the Business.
NOW THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE SERVICES
SECTION 1.01. Provision of Services. Subject to the terms and
conditions set forth in this Agreement, Synetic shall provide or cause to be
provided the administrative services to the Company currently provided by
Synetic to the Business, or as shall be necessary. Such services may include
payroll, accounting, tax, office, information processing and other similar
services.
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SECTION 1.02. Covered Services. Synetic shall be obligated to
make available the services described in Section 1.01 at the time of execution
and throughout the Term (as hereinafter defined) (such services being referred
to as the "Services").
SECTION 1.03. Term and Termination. Synetic shall continue to
make each Service available through the end of the Term or, if earlier, until
canceled by the Company by written notice to Synetic.
Notwithstanding the foregoing:
(a) this Agreement may be terminated:
(i) by Synetic, at any time, not less than 60 days
after delivery of notice to the Company, in the event that
the Company shall have defaulted on or breached any material
term of this Agreement and shall not have cured such breach
within 15 days after receiving notice from Synetic specifying
the nature of such default or breach; or
(ii) by the Company, at any time, not less than 60
days after delivery of notice to Synetic, in the event that
Synetic shall have defaulted on or breached any material term
of this Agreement and shall not have cured such breach within
15 days after receiving notice from the Company specifying
the nature of such default or breach; or
(iii) by either party, immediately upon delivery of
notice to the other party, in the event that such other party
(x) requires a composition or other similar arrangement with
creditors, files for bankruptcy or is declared bankrupt or
(y) shall have assigned or transferred to any third party any
of its rights or obligations hereunder except in accordance
with Section 4.07; or
(iv) by Synetic, at any time, if Synetic ceases to
own more than 50% of the voting stock of the Company; and
(b) this Agreement shall terminate five years from the date
of this Agreement (the "Term") and thereafter shall be of no further
force and effect, except nothing herein shall relieve either party
hereto from liability for any willful breach hereof.
SECTION 1.04. Reimbursement for Services. (a) In full
compensation for the Services, the Company shall reimburse Synetic for the
actual costs to Synetic of providing such Services quarterly within thirty (30)
days after receipt of Synetic's invoice therefor. Each invoice shall set forth
the calculation of the costs upon which the amount to be reimbursed is based,
broken down by the Services rendered during the quarter to which such invoice
relates. If
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the Company has any objection to the amount of any invoice, it shall
nevertheless pay such invoice in full, but may thereafter cause Synetic's
records with respect thereto to be audited in accordance with this Section.
Synetic shall cooperate fully in such audit by providing all appropriate records
and making its officers, employees, agents and consultants reasonably available
during regular business hours without charge to the Company as may be required
in connection with such audit. Following such audit, the parties shall endeavor
in good faith to resolve any disagreement with respect to charges hereunder.
Upon agreement of the parties, Synetic shall refund promptly to the Company any
amounts paid to Synetic in excess of the amounts required hereunder.
(b) Synetic shall maintain true and complete books of account
containing an accurate record of all data necessary for the proper computation
of all costs to be paid to Synetic by the Company under the terms of this
Agreement.
SECTION 1.05. Employees. From time to time, Synetic shall
designate such of its employees as it sees fit to perform the Services.
ARTICLE II
RESPONSIBILITY
SECTION 2.01. Relationship of the Parties. Nothing in this
Agreement shall be construed as (a) an assumption by Synetic of any obligation
to maintain or increase the sales or profits of the Company or otherwise to
assume responsibility for the Company's operations; (b) an assumption by Synetic
of any financial obligation of the Company; (c) the creation of any relationship
of employment or agency between the Company and employees or consultants of
Synetic, its subsidiaries or associated companies; (d) an assumption by Synetic
of any responsibility for the work performed by outside suppliers employed by
the Company at the suggestion or recommendation of Synetic; or (e) the
delegation of any function or authority of the Company to Synetic. In all
matters relating to this Agreement, each party hereto shall be solely
responsible for the acts of its own employees, and employees of one party shall
not be considered employees of the other party. Except as specifically permitted
by this Agreement, no party hereto or any of its employees shall have any
authority to negotiate, enter into any contract or incur any obligation, on
behalf of the other party.
SECTION 2.02. Limitation of Liability. Synetic shall have no
liability for any losses or damages that the Company may incur as a result of
the provision or non-provision of Services except to the extent caused by the
gross negligence or wilful misconduct of such person. In no event shall Synetic,
its officers, directors, employees, agents, independent contractors, affiliates
and stockholders be liable for any consequential or special damages
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suffered by the Company as a result of any representations, actions or inactions
by any person or entity in respect of its obligations hereunder.
ARTICLE III
FORCE MAJEURE
SECTION 3.01. No Default for Event of Force Majeure. Neither
party to this Agreement shall be considered in default in the performance of its
obligations under this Agreement or be liable in damages or otherwise for any
failure or delay in performance which is due to strikes, lockouts, concerted
acts of workers or other industrial disturbances, fires, explosions, floods or
other natural catastrophes, civil disturbance, riots or armed conflict (whether
declared or undeclared), which is beyond the control of the party affected (and
such event or occurrence, an "Event of Force Majeure"). Neither party to this
Agreement shall be required to make any concession or grant any demand or
request to bring to an end any strike or other concerted act of workers.
SECTION 3.02. Written Notice. A party can only claim an Event
of Force Majeure as an excuse from its performance hereunder if such claiming
party has given written notice to the other party of such claim and if the
claiming party makes a continuing and good faith effort to lessen or avoid the
effects of such event of force majeure on the other party. Notwithstanding any
other provision of this Agreement, a claiming party shall be liable for such
failure or delay in the performance of its obligations to the extent that such
failure or delay was caused by the fault or negligence of the claiming party.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
SECTION 4.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by telecopy or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 4.02):
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(a) if to Synetic:
Synetic, Inc.
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx O'M Xxxxxx, Esq.
(b) if to the Company:
c/o Synetic, Inc.
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Telecopy No.: (000) 000 0000
Attention: General Counsel
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx O'M Xxxxxx, Esq.
SECTION 4.03. Public Announcements. Except as required by law,
governmental regulation or by the requirements of any securities exchange on
which the securities of a party hereto are listed, no party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party, and the parties shall cooperate as to the timing and contents of any such
press release or public announcement.
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SECTION 4.04. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 4.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 4.06. Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
with respect to the subject matter hereof.
SECTION 4.07. Assignment. This Agreement shall not be assigned
without the express written consent of the parties (which consent may be granted
or withheld in the sole discretion of any party) except that any party hereto
may assign its rights hereunder to an Affiliate of such party; provided,
however, that any such assignment shall not relieve the assigning party of its
obligations hereunder.
SECTION 4.08. No Third Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 4.09. Relationship of the Parties. The parties hereto are
independent contractors and neither party is an employee, partner or joint
venturer of the other. Under no circumstances shall any of the employees of a
party hereto be deemed to be employees of the other party for any purpose.
Neither party shall have the right to bind the other to any agreement with a
third party nor to represent itself as a partner or joint venturer of the other.
SECTION 4.10. Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each of
the parties.
SECTION 4.11. Governing Law. This Agreement shall be governed
by the laws of the State of New York. All actions and proceedings arising out of
or relating to this Agreement shall be heard and determined in any New York
State or federal court sitting in the
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City of New York, County of Manhattan, and the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of such courts in any such action or
proceeding and irrevocably waive any defense of an inconvenient forum to the
maintenance of any such action or proceeding.
SECTION 4.12. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 4.13. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 4.14. Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or the transactions contemplated hereby
and for any counterclaim therein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective authorized signatory thereunto duly
authorized as of the date first above written.
SYNETIC, INC.
By _____________________________________
Name:
Title:
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By _____________________________________
Name:
Title:
