Exhibit 2.1
ASSET PURCHASE AGREEMENT
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THIS AGREEMENT dated the 6th day of June, 2005, by and between INPHYSYS,
INC. (f/k/a INTEGRIMED, INC.), a Nevada corporation with a place of business at
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the "Seller"), and
ECLINICALWEB, LLC, a Massachusetts limited liability company with a place of
business at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Buyer").
The Seller engages in the business of delivering electronic medical
records systems and physician practice management software solutions on an
application service provider and a hosted basis (the "Business") and operates
out of approximately 5,179 square feet of the office suite located at 0000 Xxx
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the "Leased Premises");
The Seller desires to sell and the Buyer desires to purchase
substantially all of the assets of the Business.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Buyer and the Seller represent, warrant, covenant and agree as follows:
SECTION 1
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Purchase and Sale
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1.1 Upon the basis of the representations, warranties and covenants
set forth in this Agreement, and subject to the terms and conditions contained
in this Agreement, the Buyer agrees to buy and the Seller agrees to sell,
assign, transfer, convey and deliver to the Buyer, free of all liens and
encumbrances at the Closing, as defined in Section 4, for the Purchase Price, as
defined in Section 2, the Acquired Assets (as defined in Section 1), as all the
same shall exist as of the Closing Date.
1.2 Acquired Assets. The property to be sold by the Seller to the
Buyer hereunder (hereinafter collectively referred to as the "Acquired Assets")
is:
(a) The machinery, equipment, supplies, materials,
computers, software, software licenses, and other
personal property owned by the Seller and used
exclusively in the operation of the Business, each case
solely to the extent described on Schedule 1.2(a) hereto
(the "Equipment");
(b) The Seller's goodwill and all of the business conducted
under the name "IntegriMED" and "INPHYSYS", sales and
customer lists, account lists, records, manuals,
telephone numbers, used exclusively in the operation of
the Business; and
(c) All of the Seller's rights and interests in all
contracts, open customer purchase orders, quotations or
similar agreements to the extent entered into by the
Seller or assigned to the Seller, in each case solely to
the extent as listed on Schedule 1.2(c).
1.3 Excluded Assets. The following assets of the Seller
(collectively, the "Excluded Assets") shall be retained by the Seller, and are
not being sold or assigned to the Buyer hereunder:
(a) all taxpayer and other identification numbers and minute
books, stock transfer books, tax returns, corporate
seals and all other documents relating to the
organization, maintenance, and existence of the Seller
as a corporation;
(b) the Seller's rights under this Agreement and the
agreements to be executed by the Seller in connection
herewith;
(c) all cash and cash equivalents relating to the Business;
(d) all accounts receivable relating to the Business; and
(e) such other assets of the Seller, tangible or intangible
as are not used exclusively in the Business.
SECTION 2
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Purchase Price
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2.1 Delivery. The Buyer shall issue to the Seller, as the purchase
price for the Acquired Assets (the "Purchase Price") the following: (a) a two
percent (2%) ownership interest in the Buyer (the "Ownership Interest") and (b)
$69,033.90 via certified check or wire transfer at the Closing (the "Cash
Payment"). The Ownership Interest will have identical terms (other than
percentage ownership) to the ownership interest in the Buyer issued to Xxxxxx
Xxxxxx, Xxxxxx Xxxxxx and Xxx Xxxxxxxxxxxx, as described in the Buyer's
Operating Agreement, attached as Exhibit A (the "Operating Agreement"). The
Buyer agrees that additional capital, if any, invested in the Buyer during the
twelve (12) month period following the Closing will not dilute the Ownership
Interest.
2.2 Right of First Refusal. Subject to the terms and conditions
specified in this Section 2.2, and applicable securities laws, if during the
twelve (12) month period following the Closing the Buyer proposes to offer or
sell any additional ownership interest in the Buyer ("New Securities"), the
Buyer shall first make an offering of such New Securities to the Seller as
follows:
(a) The Buyer shall deliver a notice, in accordance with the
provisions of Section 12.5 (the "Offer Notice"), to the
Seller stating (i) its bona fide intention to offer such
New Securities, (ii) the number of such New Securities
to be offered, and (iii) the price and terms, if any,
upon which it proposes to offer such New Securities.
(b) By written notification received by the Buyer, within 20
calendar days after mailing of the Offer Notice, the
Seller may elect to purchase or obtain, at the price and
on the terms specified in the Offer Notice, up to that
portion of such New Securities which equals the
proportion that the Ownership Interest then held by the
Seller bears to the total number of ownership interests
in the Buyer then outstanding.
(c) If all New Securities referred to in the Offer Notice
are not elected to be purchased or obtained as provided
above, the Buyer may, during the 90 day period following
the expiration of the period provided above, offer the
remaining unsubscribed portion of such New Securities
(collectively, the "Refused Securities") to any person
or entity at a price not less than, and upon terms no
more favorable to the offeree than, those specified in
the Offer Notice. If the Buyer does not enter into an
agreement for the sale of the New Securities within such
period, or if such agreement is not consummated within
30 days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such New
Securities shall not be offered unless first reoffered
to the Seller in accordance with this Section. The right
of first offer set forth in this Section 2.2 may be
assigned or transferred to any affiliate of the Seller.
2.3 Allocation of Purchase Price. The Buyer and the Seller shall
agree upon a statement (the "Allocation Statement") setting forth the value of
the Acquired Assets, which shall be used for the allocation of the Purchase
Price (together with the Assumed Liabilities) among the Acquired Assets. The
Seller and the Buyer agree to report an allocation of such Purchase Price among
the Acquired Assets in a manner entirely consistent with the Allocation
Statement and agree to act in accordance with such Allocation Statement in the
preparation of financial statements and filing of all tax returns (including,
without limitation, filing Form 8594 with its federal income tax return for the
taxable year that includes the date of the Closing) and in the course of any Tax
audit, Tax review or Tax litigation relating thereto.
2.4 Definitions.
(a) "Tax" means any federal, state, local or foreign net
income, alternative or add-on minimum, gross income,
gross receipts, sales, use, value-added, ad valorem,
franchise, capital, paid-up capital, profits,
withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or
windfall profit tax, customs duty or other tax,
governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by
any governmental authority (domestic or foreign)
responsible for the imposition of any such tax.
(b) "Tax Return" means any return, declaration, report,
claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
SECTION 3
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Assumption of Liabilities
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3.1 Liabilities Assumed by the Buyer. At the Closing, the Buyer
shall assume and agree to thereafter perform and pay when due all liabilities
related to the Acquired Assets but only to the extent such liabilities arise
from and after the Closing Date (the "Assumed Liabilities").
3.2 Liabilities Not Assumed by the Buyer. Except for the liabilities
and obligations assigned to and assumed by the Buyer as provided for in Section
3.1 above, all commitments, liabilities and obligations of the Business of every
kind or nature whatever, whether known or unknown, liquidated or unliquidated,
fixed or contingent, which in any way relate to the Acquired Assets, the Seller,
or the Business, shall remain the commitments, liabilities and obligations of
the Seller (the "Retained Liabilities"). Although not limited by the following,
the Buyer specifically shall not be deemed by anything contained in this
Agreement to have assumed, and the Seller hereby agrees to indemnify the Buyer
(in the manner provided in Section 10 below) and hold it harmless with respect
to the following Retained Liabilities:
(a) All payables which pertain to the Acquired Assets and
all of the Seller's trade payables which pertain to and
have arisen from the operation of the Business and the
Seller's occupancy of the Leased Premises prior to the
Closing Date;
(b) Any and all liabilities and obligations for Taxes
arising from or with respect to the Acquired Assets or
the Business which are incurred in or attributable to
the operation of the Business on or before the Closing
or the Seller's occupancy of the Leased Premises on or
before the Closing (including any Taxes that arise as a
result of the transactions contemplated by this
Agreement);
(c) Any liability or obligation (contingent or otherwise) of
the Seller arising out of any threatened or pending
litigation and/or arising out of any claim made or which
may hereafter be made for acts which occur prior to the
Closing Date;
(d) Any liability for unpaid wages, accrued vacation or
other benefits due any employees, agents or independent
contractors of the Seller as of the Closing Date;
(e) Any liability or obligation arising out of defects in,
or damages to persons or property arising out of defects
in products sold by the Seller prior to the Closing
Date;
(f) All executory liabilities and obligations of the Seller
under any lease, purchase or sale order, contract,
agreement, indenture or commitment, whether written or
oral, except those assigned to and assumed by the Buyer
as described in Section 1.2(d) above;
(g) Any accrued or other liability for contribution or
payment to be made under any employee benefit plan; and
(h) Any liability for failure of the Seller to comply with
any legal obligation prior to the Closing Date with
respect to the ownership and use of the Acquired Assets
and the operation of the Business.
3.3 Consents; Failure to Obtain Consents. Except for those Contracts
identified on Schedule 8.9, if (i) the sale, assignment, transfer or conveyance
of any of the Contracts which comprise a portion of the Acquired Assets, or any
other property or right included in the Assumed Liabilities or the Acquired
Assets, without approval, consent or waiver of another party thereto would
violate, conflict with, result in a breach or termination of, or constitute a
default or event of default under (or an event which with due notice or lapse of
time, or both, would continue a default, would constitute a default or event of
default under) the terms of such Contracts or result in the creation of any
security interest on any of the Acquired Assets under any such Contracts or
enable another party to such Contracts to terminate the same or impose a penalty
or additional payment obligations or accelerate any obligation of the Seller or
the Buyer under any such Contracts, and (ii) all necessary approvals, consents
and waivers of all parties to such Contracts have not been obtained at or prior
to the Closing, then (A) this Agreement shall not constitute an agreement to
assign or assume such Contracts or, to the extent applicable, other property or
right included in the Assumed Liabilities or the Acquired Assets, and such
Contracts, property or right shall not be assigned to or assumed by the Buyer or
be included in the Acquired Assets or the Assumed Liabilities, (B) the Seller
shall, following the Closing, use all reasonable efforts to assist the Buyer in
attempting to obtain such necessary approvals, consents and waivers, (C) the
Seller and the Buyer shall, following the Closing, promptly execute all
documents necessary to complete the assignment and assumption of such Contracts,
property or right, if such approvals, consents and waivers are obtained, and (D)
unless and until such approvals, consents and waivers are obtained and such
assignment and assumption occurs, the Seller and the Buyer shall cooperate in
entering into any reasonable arrangement designed to obtain for the Buyer all
benefits and privileges of such Contracts, property or right, including the
holding by the Seller of such benefits and privileges in trust for the Buyer,
while protecting the Seller from the obligations of the Seller first accruing
under such Contracts, property or right, after the Closing Date and related to
the period of time after the Closing Date.
SECTION 4
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Closing
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4.1 Time and Place. The closing of the transfer and delivery of all
documents and instruments necessary to consummate the transactions contemplated
by this Agreement (hereinafter sometimes referred to as the "Closing" or the
"Closing Date") shall be held on June 6, 2005 at 9:00 a.m., at the offices of
Xxxxxxxxxx Xxxxxxxx LLP, Suite 2800, 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX
00000-0000, or at such other time and place as the parties may agree, it being
understood and agreed that time is of the essence.
4.2 Transactions at the Closing. At the Closing:
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(a) The Seller shall duly execute and deliver to the Buyer,
such bills of sale, instruments of assignment or
transfer with respect to the Acquired Assets and any
other instrument required by this Agreement as the Buyer
may reasonably request and as may be necessary to vest
in the Buyer good, record and marketable title to all of
the Acquired Assets, free of all liens and encumbrances.
(b) The Buyer shall deliver evidence of issuance of the
Ownership Interest to the Seller and the Seller shall
become a party to the Operating Agreement which shall be
amended to indicate the Seller owns the Ownership
Interest;
(c) The Buyer shall make payment of the Cash Payment to the
Seller via wire transfer or certified bank check;
(d) The Seller shall pay and provide the Buyer with evidence
that all of its outstanding debts, liens, mortgages and
encumbrances with regard to the Business and/or the
Acquired Assets have been discharged; and
(e) The Seller shall terminate the employment of its
employees and pay said employees all outstanding
payroll, and other benefit obligations owing said
employees.
4.3 Further Assurances. The Seller, from time to time after the
Closing and at the Buyer's request, will execute and deliver any such other
instruments of conveyance and transfer and take such other action as the Buyer
reasonably may require more effectively to vest title in the Buyer and to put
the Buyer in possession of the Acquired Assets. Upon the Buyer's written request
setting forth the reasonable need therefore, the Seller agrees to provide the
Buyer with reasonable access to all books, records and accounts, correspondence,
and employment records of the Business at any time during the two-year period
following the Closing Date and further agrees that the Buyer may photocopy the
same or any portion thereof; provided, however, the Buyer's right to such access
shall immediately terminate if the Buyer ceases to operate the Business prior to
the expiration of the two-year period following the Closing.
SECTION 5
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Representations and Warranties of the Seller
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The Seller represents and warrants to the Buyer as follows:
5.1 Organization and Good Standing. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada.
5.2 Authorization, etc. The Seller has full corporate power and
authority to enter into this Agreement, all exhibits and schedules to this
Agreement, and all agreements contemplated in this Agreement (this Agreement and
all such exhibits, schedules, and other agreements being collectively referred
to in this Agreement as the "Acquisition Documents"), to perform its obligations
under the Acquisition Documents, to transfer the Acquired Assets, and to carry
out the transactions contemplated by the Acquisition Documents. The Board of
Directors and shareholders of the Seller have taken, or will take before the
Closing Date, all actions required by law, its Articles of Incorporation, its
By-Laws or otherwise to authorize (a) the execution and delivery of the
Acquisition Documents, and (b) the performance of its obligations under the
Acquisition Documents. This Agreement has been duly executed and delivered by
the Seller and upon the execution and delivery of the remaining Acquisition
Documents by a duly authorized officer of the Seller, the remaining Acquisition
Documents will have been duly executed and delivered by the Seller, and this
Agreement, is and such other Acquisitions Documents will be, upon due execution
and delivery of each, the legal, valid, and binding obligations of the Seller
enforceable according to their terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium, or similar laws now or
later in effect relating to creditors' rights.
5.3 Non-Contravention. Neither the execution and delivery of the
Acquisition Documents by the Seller nor the consummation by the Seller of the
transactions contemplated hereby will constitute a violation of, or be in
conflict with, or constitute or create a default under, or result in the
creation or imposition of any lien or encumbrance upon the Acquired Assets
pursuant to (a) any agreement or commitment to which the Seller is a party or by
which the Seller or the Acquired Assets is bound or to which the Seller or the
Acquired Assets is subject; or (b) any statute or any judgment, decree, order,
regulation or rule of any court or governmental authority.
5.4 Litigation, etc. There is no action, suit, proceeding or
investigation pending or, threatened in writing, relating to or affecting any of
the Acquired Assets or relating to or affecting the Business, nor, to the
knowledge of the Seller, is there any basis for any such action, suit,
proceeding or investigation.
5.5 Taxes.
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(a) The Seller has timely filed all Tax Returns that it was
required to file. All such Tax Returns were correct and
complete in all material respects and were prepared in
substantial compliance with all applicable laws and
regulations. All Taxes owed by the Seller (whether or
not shown or required to be shown on any Tax Return)
have been paid. The Seller is not the beneficiary of any
extension of time within which to file any Tax Return.
No claim has ever been made by an authority in a
jurisdiction where the Seller does not file Tax Returns
that the Seller is or may be subject to taxation by that
jurisdiction. There are no liens on any of the assets of
the Seller that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) The Seller has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts
paid or owing to any employee, stockholder, independent
contractor, creditor or other third party.
(c) No state of facts exists or has existed that would
constitute grounds for the assessment against the Buyer,
whether by reason of transferee liability or otherwise,
of any liability for any tax of anyone other than the
Buyer.
(d) The Seller has timely paid all Taxes, and all penalties
and interest due thereon and payable by it, for the
period prior to the Closing which will have been
required to be paid on or prior to the Closing, the
non-payment of which would result in a lien on any
Acquired Asset, would otherwise adversely affect the
Business or the Leased Premises or would result in the
Buyer becoming liable or responsible therefor.
(e) The Seller has established, in accordance with generally
accepted accounting principles applied on a basis
consistent with that of preceding periods, adequate
reserves for the payment of, and will timely pay, all
Taxes which arise from or with respect to the Acquired
Assets or the operation of the Business and are incurred
in or attributable to the period prior to the Closing,
the non-payment of which would result in a lien on any
Acquired Asset, would otherwise adversely affect the
Business or the Leased Premises or would result in the
Buyer becoming liable therefor.
5.6 Title to Acquired Assets. The Seller is the lawful owner of, has
good and valid record and marketable title to, and has the full right to sell,
convey, transfer, assign and deliver the Acquired Assets, free and clear of all
liens and encumbrances, without any restrictions of any kind whatsoever.
5.7 Disclaimer of Implied Warranties. Except as specifically set
forth to the contrary in this Agreement, all of the Acquired Assets are
purchased in an "AS IS" CONDITION, "WITH ALL FAULTS, INCLUDING BUT NOT LIMITED
TO BOTH LATENT AND PATENT DEFECTS." NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE
BY THE SELLER, AND THE BUYER WAIVES ALL SUCH WARRANTIES, OTHER THAN AS SET FORTH
EXPRESSLY IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The Buyer hereby affirms
that the Seller, its agents, employees and/or attorneys have not made any
representation, warranty or promise with respect to the Acquired Assets or any
other subject matter of this Agreement except as expressly set forth in this
Agreement.
SECTION 6
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Representations and Warranties of the Buyer
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The Buyer represents and warrants to the Seller as follows:
6.1 Organization and Good Standing. The Buyer is a limited liability
company duly organized, validly existing, and in good standing under the laws of
the Commonwealth of Massachusetts.
6.2 Authorization, etc. The Buyer has full power and authority to
enter into the Acquisition Documents, to which it is a party, to perform its
obligations under the Acquisition Documents, to which it is a party, and to
carry out the transactions contemplated by the Acquisition Documents, to which
it is a party. The Members and Managers of the Buyer have taken, or will take
before the Closing Date, all actions required by law, its Certificate of
Organization, its Operating Agreement or otherwise to authorize (a) the
execution and delivery of the Acquisition Documents, to which it is a party, and
(b) the performance of its obligations under the Acquisition Documents, to which
it is a party. This Agreement has been duly executed and delivered by the Buyer
and upon the execution and delivery of the remaining Acquisition Documents, to
which it is a party, by a duly authorized officer of the Buyer, the remaining
Acquisition Documents, to which it is a party, will have been duly executed and
delivered by the Buyer, and this Agreement, is and such other Acquisitions
Documents, to which it is a party, will be, upon due execution and delivery of
each, the legal, valid, and binding obligations of the Buyer enforceable
according to their terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws now or later
in effect relating to creditors' rights.
6.3 Non-Contravention. Neither the execution and delivery of the
Acquisition Documents, to which it is a party, by the Buyer nor the consummation
by the Buyer of the transactions contemplated hereby will constitute a violation
of, or be in conflict with, or constitute or create a default under, or result
in the creation or imposition of any lien or encumbrance upon any property of
the Buyer pursuant to (a) any agreement or commitment to which the Buyer is a
party or by which the Buyer or any of its properties is bound or to which the
Buyer or any of such properties is subject; or (b) any statute or any judgment,
decree, order, regulation or rule of any court or governmental authority.
SECTION 7
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[Reserved]
SECTION 8
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Conditions Precedent to the Buyer's Obligations
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The obligation of the Buyer to consummate the Closing shall be subject
to the satisfaction at or prior to the Closing Date of each of the following
conditions (to the extent noncompliance is not waived in writing by the Buyer):
8.1 Representations and Warranties True at Closing. The
representations and warranties made by the Seller in or pursuant to this
Agreement shall be true and correct at and as of the Closing with the same
effect as though such representations and warranties had been made or given at
and as of the Closing.
8.2 Compliance With Agreement. The Seller shall have performed and
complied with all material obligations under this Agreement to be performed or
complied with by it on or prior to the Closing.
8.3 No Material Change. The Acquired Assets and the Leased Premises
shall not have been, and shall not be threatened to be, adversely affected as a
result of fire, explosion, disaster, accident, or any action by the United
States or any other governmental authority.
8.4 Seller's Certificate. The Seller shall have delivered to the
Buyer in writing, at and as of the Closing, a certificate of its officers in
form and substance satisfactory to the Buyer and the Buyer's counsel, certifying
that the conditions in each of Sections 8.1, 8.2 and 8.3 have been satisfied.
8.5 Certificate of Existence. The Seller shall deliver to the Buyer
a Certificate of Existence from the Secretary of State of the State of Georgia.
8.6 Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and all
certificates and documents delivered to the Buyer in connection with the
transactions contemplated by this Agreement shall be satisfactory in all
respects to the Buyer and the Buyer's counsel.
8.7 Sub-Lease. The Buyer shall have entered into a sub-lease for the
Leased Premises with the Seller's affiliate (who is the current tenant of the
Leased Premises) (the "Sub-Landlord") in the form attached hereto as Exhibit B
(the "New Sub-Lease").
8.8 Due Diligence. The Buyer shall have been afforded reasonable
access to the offices, properties, books and records which pertain to the
Acquired Assets and shall have full access to conduct such due diligence
investigation as it reasonably deems appropriate to verify the Seller's
representations and warranties.
8.9 Consents. The Seller will have obtained the consent of JMJ
Technologies with respect to the Value Added Reseller Agreement described as
item No. 10 on Schedule 1.2(c) and the master landlord with respect to the New
Sub-Lease.
8.11 Employees. The Seller shall have terminated, effective on the
Closing Date, all employees of the Seller set forth on Schedule 8.11 (the
"Employees") and will provide reasonable assistance to the Buyer in employing
all Employees upon such terms and conditions as are reasonably satisfactory to
the Buyer and which are substantially similar to the terms and conditions the
Seller currently provides to such Employees. The Seller or its affiliates shall
continue to provide or cause to be provided health benefits for the Employees as
are currently in place as of the Closing Date. Until the Buyer gives the Seller
thirty (30) days notice that the Buyer will place the Employees on the Buyer's
health plans, on a monthly basis, the Seller shall submit an invoice to the
Buyer for the cost of such benefits, which the Buyer shall pay within thirty
(30) days of receipt of such invoice. The Seller covenants not to interfere with
any such efforts by the Buyer and to use all reasonable efforts to assist the
Buyer in employing such Employees effective as of the Closing.
SECTION 9
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Conditions Precedent to the Seller's Obligations
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The obligation of the Seller to consummate the Closing shall be subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions (to the extent noncompliance is not waived in writing by the Seller):
9.1 Representations and Warranties True at Closing. The
representations and warranties made by the Buyer in or pursuant to this
Agreement shall be true and correct at and as of the Closing with the same
effect as though such representations and warranties had been made or given at
and as of the Closing.
9.2 Compliance with Agreement. The Buyer shall have performed and
complied with all of its material obligations under this Agreement that are to
be performed or complied with by it at or prior to the Closing.
9.3 Buyer's Certificate. The Buyer shall have delivered to the
Seller in writing, at and as of the Closing, a certificate of its officers, in
form and substance satisfactory to the Seller and the Seller's counsel,
certifying that the conditions in each of Sections 9.1 and 9.2 have been
satisfied.
9.4 Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and all
certificates and documents delivered to the Seller in connection with the
transactions contemplated by this Agreement shall be satisfactory in all
respects to the Seller and the Seller's counsel, and the Seller shall have
received the originals or certified or other copies of all such records and
documents as the Seller may reasonably request.
SECTION 10
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Indemnification
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10.1 By the Seller. The Seller agrees to indemnify and hold the Buyer
harmless of and from any and all claims, demands, liabilities, losses, damages,
costs and expenses, including without limitation the reasonable fees and
disbursements of counsel (collectively, "Losses"), related to or arising
directly or indirectly out of any Retained Liabilities, any material
inaccuracies (or series of inaccuracies which taken together are material) in
any representation, covenant or warranty made by the Seller in or pursuant to
this Agreement, including, but not limited to any failure or breach by the
Seller of any covenant, obligation, or undertaking made by the Seller in this
Agreement. The obligation of Seller to indemnify the Buyer hereunder shall be
satisfied first by delivering a portion of the Ownership Interest (as defined
below) pursuant to Section 10.6, then by cash payment promptly upon demand.
10.2 By the Buyer. The Buyer agrees to indemnify and hold the Seller
harmless of and from any and all Losses related to or arising directly or
indirectly out of any Assumed Liabilities, any material inaccuracies (or series
of inaccuracies which taken together are material) in any representation,
covenant or warranty made by the Buyer in or pursuant to this Agreement,
including, but not limited to any failure or breach by the Buyer of any
covenant, obligation, or undertaking made by the Buyer in this Agreement. The
obligation of Buyer to indemnify the Seller hereunder shall be satisfied by cash
payment promptly upon demand.
10.3 Notice of Claims; Assumption of Defense. The indemnified party
shall give prompt notice to the indemnifying party, in accordance with the terms
of Section 12.5, of the assertion of any third party claim, or the commencement
of any suit, action or proceeding in respect of which indemnity may be sought
hereunder, specifying with reasonable particularity the basis therefor and
giving the indemnifying party such information with respect thereto as the
indemnifying party may reasonably request. The indemnifying party may, at its
own expense, (a) participate in and (b) upon notice to the indemnified party and
the indemnifying party's written agreement that the indemnified party is
entitled to indemnification pursuant to Section 10.1 or Section 10.2, assume the
defense thereof. If the indemnifying party assumes such defense, the indemnified
party shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the indemnifying party. Whether or not the indemnifying party
chooses to defend or prosecute any such claim, suit, action or proceeding, all
of the parties hereto shall cooperate in the defense or prosecution thereof. In
the event that the indemnifying party elects not to assume the defense of any
claim, suit, action or proceeding, such election shall not relieve the
indemnifying party of its obligations hereunder. In the event the indemnified
party fails to give timely, complete or accurate notice to the indemnifying
party of a third party claim covered by this Section 10, the indemnifying party
shall be relieved of its obligations under this Section 10 to the extent the
indemnified party's failure to provide notice materially prejudices the
indemnifying party's defense of the third party claim.
10.4 Settlement or Compromise. No party shall settle or compromise
any claim, suit, action or proceeding without the prior written consent of the
other party, which shall not be unreasonably withheld or delayed; provided,
however the indemnifying party shall have the ability to settle or compromise
any claim, suit, action or proceeding, without the consent of the other party if
such settlement or compromise involves only the payment of cash consideration.
10.5 Limitations on Indemnification.
-------------------------------
(a) The indemnified party shall not be entitled to
indemnification under this Section 10 unless and until
the aggregate amount of such Losses to which the
indemnified party is entitled to indemnification under
this Section 10 exceeds $1,000, at which time the
indemnifying party shall indemnify the indemnified party
for the amount of such Losses from the first dollar.
(b) The aggregate liability of the Seller to the Buyer with
respect to claims based on a breach of the
representations or covenants contained in Sections 2.3,
5.5, 11.1, 11.2, and 11.3 shall be unlimited. As to
other matters, the maximum aggregate liability of the
Seller to the Buyer under Section 10.1 is limited to the
greater of (a) $25,000 and (b) the Fair Market Value
(defined below) of the Ownership Interest. The maximum
aggregate liability of the Buyer to the Seller under
Section 10.2 is limited to $25,000.
(c) The amount of the Loss otherwise payable to an
indemnified party hereunder shall be reduced by the
amount of any proceeds received by such indemnified
party as compensation for the Loss from an insurance
carrier or other source of recovery. If any insurance
carrier for either party agrees to defend any third
party claim, such defense shall be tendered to such
insurance carrier and the rights of the parties between
themselves regarding the assumption and control of such
defense shall be subject to the reasonable requirements
of the insurance carrier.
10.6 Satisfaction of Losses by Seller.
---------------------------------
(a) Subject to the limitations on indemnification set forth
in Section 10.5, in the case of a claim for Losses
covered by this Section 10, upon notice to the Seller of
the existence of a claim for Losses by the Buyer, the
Seller shall satisfy such Losses by delivering to the
Buyer a portion of the Ownership Interest calculated at
Fair Market Value (as determined below), where such
delivery of Ownership Interest are equal to the amount
of such Losses. Offsets pursuant to this Section 10.6
shall not constitute a breach of the Operating Agreement
with respect to the Ownership Interest.
(b) After the Closing Date, "Fair Market Value" shall be
determined upon the mutual agreement of the Seller and
the Buyer. If the Seller and the Buyer cannot mutually
agree in good faith, the Seller and the Buyer shall each
select an appraiser experienced in the business of
evaluating or appraising the market value of securities.
The two (2) appraisers so selected (the "Initial
Appraisers") shall, within five (5) days of their
selection, appraise such Ownership Interest as of the
date of such appraisal. If the difference between the
resulting appraisals is not greater than twenty percent
(20%), then the average of the appraisals shall be
deemed the Fair Market Value; otherwise, the Initial
Appraisers shall select an additional appraiser (the
"Additional Appraiser"), who shall be experienced in a
manner similar to the Initial Appraisers. If they fail
to select such Additional Appraiser as provided above,
then the Buyer shall immediately apply, after written
notice to the Seller, to any judge of any court of
general jurisdiction for the appointment of such
Additional Appraiser. The Additional Appraiser shall
then choose from the values determined by the Initial
Appraisers the value that the Additional Appraiser
considers closest to the fair market value, and such
value shall be the Fair Market Value. The Additional
Appraiser shall forthwith give written notice of his
determination to the Seller and the Buyer. Each party
shall pay the expenses and fees of the appraiser
selected by him or it, and, if an Additional Appraiser
is employed, the party who selected the Initial
Appraiser whose value determination was rejected by the
Additional Appraiser shall pay all the expenses and fees
of the Additional Appraiser.
10.7 Exclusive Remedies. The Seller and the Buyer acknowledge and
agree that the foregoing indemnification provisions in this Section 10 shall be
the exclusive remedy of the Buyer and The Seller with respect to the
transactions contemplated by this Agreement except that nothing in this
Agreement shall limit the right of either party to pursue any appropriate remedy
at equity, including specific performance, for the breach of any covenants of
the other party contained herein or any appropriate remedy based upon
allegations of fraud, bad faith or willful misconduct in connection with this
Agreement .
SECTION 11
----------
Tax Matters
-----------
11.1 Tax Cooperation. The Buyer and the Seller agree to furnish or
cause to be furnished to each other, upon request as promptly as practicable,
such information and assistance relating to the Acquired Assets as is reasonably
necessary for the filing of all Tax Returns, and making of any election related
prosecution or defense of any claim, suit or proceeding relating to any Tax
Return. The Seller and the Buyer shall cooperate with each other in the conduct
of any audit or other proceeding related to Taxes involving the Acquired Assets
and each shall execute and deliver such powers of attorney and other documents
as are necessary to carry out the intent of this paragraph.
11.2 Transfer Taxes. Any transfer, documentary, sales, use or other
Taxes assessed upon or with respect to the transfer of the Acquired Assets to
the Buyer and any recording or filing fees with respect thereto shall be paid by
the Seller, and the Seller shall promptly reimburse the Buyer for any such
amounts paid by the Buyer.
11.3 No Inconsistent Tax Treatment. The Buyer and the Seller shall
file all Tax Returns consistent with the Allocation Statement and shall not make
any inconsistent written statements or take any inconsistent position on any Tax
Return, in any refund claim, during the course of any U.S. Internal Revenue
Service ("IRS") audit or other Tax audit, for any financial or regulatory
purpose, in any litigation or investigation or otherwise. Each party shall
notify the other parties if it receives notice that the IRS or other
governmental agency proposes any allocation different than that set forth in the
Allocation Statement.
SECTION 12
----------
General
-------
12.1 Collection of Accounts Receivables. All rights and ownership of
accounts receivable relating to operation of the Business prior to the Closing
shall remain with the Seller; provided, however, as of the Closing, the Seller
will not use any efforts to collect on such accounts receivable and shall not
otherwise attempt to enforce its right to payment on such accounts receivable.
The Buyer will use efforts to collect such accounts receivable in the same
manner it collects its own accounts receivable. If any portion of such accounts
receivable is collected by the Buyer, the Buyer shall immediately remit the same
to the Seller.
12.2 Noncompetition. For a period of five (5) years following the
Closing Date, neither the Seller nor any of its affiliates will engage in any
business directly competitive with the Business within the United States of
America (the "Noncompetition Restriction"); provided, however, the
Noncompetition Restriction shall immediately terminate if the Buyer ceases to
operate a business that is similar to the Business at any time prior to five (5)
years following the Closing Date.
12.3 Signatures by Facsimile. The parties hereby agree that
signatures transmitted and received via facsimile shall be treated for all
purposes of this Agreement as original signatures and shall be deemed valid,
binding and enforceable by and against both parties.
12.4 Expenses. All expenses of the preparation, execution and
consummation of this Agreement and of the transactions contemplated hereby,
including, without limitation, attorneys, accountants and outside advisers fees
and disbursements, shall be borne by the party incurring such expenses.
12.5 Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid, or sent by written telecommunication, as
follows:
If to the Buyer, to:
Xx. Xxxxxx Xxxxxx
Xx. Xxxxxx Xxxxxx
Xx. Xxx Xxxxxxxxxxxx
c/o Xx. Xxxxxx Xxxxxx
eClinicalWeb, LLC
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
With a copy sent contemporaneously to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxx, X'Xxxxxxx, XxXxxxxx & Xxxxxx, LLP
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
If to the Seller, to:
Xx. Xxxxxxxx X. Xxxxx, President and CEO
INPHYSYS, Inc. 0000
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
With a copy sent contemporaneously to:
Xxxxxx X. Silver, Esquire
Xxxxxxxxxx Xxxxxxxx, LLP
Suite 2800
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
12.6 Entire Agreement. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and understandings
relating to the subject matter hereof and shall not be amended except by a
written instrument hereafter signed by all of the parties hereto.
12.7 Governing Law. The validity and construction of this Agreement
shall be governed by the laws of the State of Georgia, without regard to
conflicts of law principles thereunder.
12.8 Sections and Section Headings. All enumerated subdivisions of
this Agreement are herein referred to as "section" or "subsection." The headings
of sections and subsections are for reference only and shall not limit or
control the meaning thereof.
12.9 Survival of Representations; Indemnification. Except for the
representations, warranties, covenants and agreements contained in Sections 2.3,
5.5, 11.1, 11.2 and 11.3, which shall survive until the lapse of relevant
statutes of limitation, each representation, warranty, covenant and agreement of
the Buyer and the Seller set forth in this Agreement shall survive until twelve
(12) months following the Closing.
12.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto, their successors and assigns.
12.12 Confidential Information. In the event that this Agreement is
terminated and the transactions contemplated hereby do not close, both parties
agree that all information exchanged between the parties shall not be disclosed
to any third party and shall remain confidential and all written information
exchanged shall be returned to the originating party (or otherwise destroyed per
the originating party's request).
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered as
an instrument under seal as of the date and year first above written.
BUYER:
ECLINICALWEB, LLC
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxxxx Xxxxxx, VP of Sales
SELLER:
INPHYSYS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxxx X. Xxxxx, President and CEO
Schedule 1.2(a)
IntegriMED Hardware and Software
---------------------------------------------------------------------------------------------
Hardware:
---------------------------------------------------------------------------------------------
TYPE Description PROCESSOR
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx Desktop Dell Precision 470 Xeon 3.2GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx Desktop Dell Dimension L1000R P-3 996MHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx Monitor Dell M992 19" CRT
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx Monitor KDS XX-0X 00" XXX
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx Switch Dell PowerConnect 2216
---------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx Desktop Dell OptiPlex GX270 P-4 2.8GHz
---------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx Monitor Dell E771A 17" CRT
---------------------------------------------------------------------------------------------
Sales Xxxx Xxxxx Tablet Fujitsu 3010D P-4 1.4GHz
---------------------------------------------------------------------------------------------
CoLo Cisco 3750 Switch Cisco 3750
---------------------------------------------------------------------------------------------
CoLo Cisco 3750 Switch Cisco 3750
---------------------------------------------------------------------------------------------
CoLo Cisco Router Router Cisco Router
---------------------------------------------------------------------------------------------
CoLo CLECC01 Server Dell 1550
---------------------------------------------------------------------------------------------
CoLo CLSAM01 Server Dell 1650
---------------------------------------------------------------------------------------------
CoLo CLTS01 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo CLTS02 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo CLTS03 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo CLTS04 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo CONN01 Server Dell 1650
---------------------------------------------------------------------------------------------
Client Services Xxxxx Xxxxxx Xxxxxx Xxxx Xxxxxxxx 0000 P-4 1.6GHz
---------------------------------------------------------------------------------------------
Sales Xxxx Xxxxxxx Laptop Toshiba Satellite A40-S270 P-4 2.8GHz
---------------------------------------------------------------------------------------------
CoLo DMZ01 Server Dell 1650
---------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx Desktop Dell OptiPlex GX280 P-4 3.39GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx Desktop Dell Dimension 2400 P-4 2.53GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx Monitor KDS VS-F14 14" LCD
---------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx Monitor Dell M991 19" CRT
---------------------------------------------------------------------------------------------
CoLo ECW02 Server Dell 2650
---------------------------------------------------------------------------------------------
CoLo ECW03 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo ECW04 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo EX02 Server Dell 2850
---------------------------------------------------------------------------------------------
Sales Xxxxxx Xxxx Tablet Fujitsu 3010D P-M 1.4GHz
---------------------------------------------------------------------------------------------
Sales Xxx Hasbauer Tablet Fujitsu 3010D P-M 1.4GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxx Laptop Toshiba Satellite P-15 P-4 2.8GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxx Hub 3Com SuperStack II
---------------------------------------------------------------------------------------------
Client Services Xxxx Xxxxxxx Laptop Dell Inspiron 1100 P-4 2.2GHz
---------------------------------------------------------------------------------------------
Client Services Xxxxxxx Xxxxxx Laptop Toshiba Satellite A20-S259 P-4 2.66GHz
---------------------------------------------------------------------------------------------
Marketing Xxxxx Xxxxxxx Laptop Toshiba Satellite A20-S259 P-4 2.8GHz
---------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx Tablet Fujitsu 3010D P-M 1.4GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxxxxxxxx Desktop Dell Dimension 2350 P-4 1.8GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxxxxxxxx Monitor Dell M992 19" CRT
---------------------------------------------------------------------------------------------
Client Services Xxxx Xxxxxxxx Laptop Toshiba Satellite PSA60U-01601D P-4 2.8GH
---------------------------------------------------------------------------------------------
CoLo NAS NAS
---------------------------------------------------------------------------------------------
CoLo Net Server Dell 2550
---------------------------------------------------------------------------------------------
CoLo NETSCREEN 1 Firewall
---------------------------------------------------------------------------------------------
CoLo NETSCREEN 2 Firewall
---------------------------------------------------------------------------------------------
Client Services Xxx Xxxxxx Laptop Toshiba Satellite A40-S270 P-4 2.8GHz
---------------------------------------------------------------------------------------------
CoLo SAN SAN Disk
---------------------------------------------------------------------------------------------
Sales Xxxxxxx Xxxx Desktop Dell Dimension L933R P-3 930MHz
---------------------------------------------------------------------------------------------
Sales Xxxxxxx Xxxx Monitor Dell E773c 17" CRT
---------------------------------------------------------------------------------------------
CoLo SQL Server Dell 2550
---------------------------------------------------------------------------------------------
CoLo TAPE UNIT Tape Unit
---------------------------------------------------------------------------------------------
Marketing Xxxxx Detchen Desktop Dell Dimension 4500S P-4 2.0GHz
---------------------------------------------------------------------------------------------
Marketing Xxxxx Detchen Monitor Dell M992 19" CRT
---------------------------------------------------------------------------------------------
CoLo TS01 Server Dell 1650
---------------------------------------------------------------------------------------------
CoLo TS02 Server Dell 1650
---------------------------------------------------------------------------------------------
CoLo TS03 Server Dell 1650
---------------------------------------------------------------------------------------------
CoLo TS04 Server Dell 1650
---------------------------------------------------------------------------------------------
CoLo VM01 Server Dell 2650
---------------------------------------------------------------------------------------------
CoLo VM02 Server Dell 2850
---------------------------------------------------------------------------------------------
CoLo WATCHGUARD Firewall
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Desktop Dell Dimension 4300 P-4 1.6GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Desktop Dell Dimension 4600 P-4 2.8GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Desktop Dell Dimension XPS B866 P-3 864MHZ
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Laptop Toshiba Satellite A20-S259 P-4 2.8GHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Laptop Toshiba Protege 7140 P-3 497MHz
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Monitor Dell M991 19" CRT
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Scanner HP ScanJet 5550C
---------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx Switch Netgear
---------------------------------------------------------------------------------------------
Laser Printer HP LaserJet 5N
---------------------------------------------------------------------------------------------
Subtotal Hardware Replacement Cost
---------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Hard
Cost New Drive Memory Projectors Service tag or SN
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx 6,150.00 74.4GB 1GB Service Tag: GBFGF51
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx 610.00 9.54GB 384MB Service Tag: 5T58Q01 Xxxxx Xxxxxx'x
Old Computer
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx 250.00 S/N: CN04N73647606349B2J7
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx 125.00 S/N: 0492084469
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxxxxxx 50.00 S/N: CN-OK4586-28298-44N-1048
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx 670.00 37.2GB 1.0GB S/N: 53YQN41
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx 180.00 S/N: MY-08J854-46632-1AB-805T
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxx Xxxxx 2,100.00 40GB 512MB Dell 2300MP S/N: R4904037
-----------------------------------------------------------------------------------------------------------------------------------
CoLo Cisco 3750 6,574.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo Cisco 3750 6,574.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo Cisco Router 2,500.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLECC01 6,200.00 Service Tag: JWM5711
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLSAM01 6,200.00 Service Tag: 4YZ1B21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLTS01 7,690.00 Service Tag: GXW7T61
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLTS02 7,690.00 Service Tag: FXW7T61
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLTS03 7,690.00 Service Tag: HXW7T61
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CLTS04 7,690.00 Service Tag: JWX7T61
-----------------------------------------------------------------------------------------------------------------------------------
CoLo CONN01 6,200.00 Service Tag: GCDDR21
-----------------------------------------------------------------------------------------------------------------------------------
Client Services Xxxxx Xxxxxx 1,280.00 30GB 128MB
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxx Xxxxxxx 1,600.00 55.8GB 496MB S/N: 44125906H
-----------------------------------------------------------------------------------------------------------------------------------
CoLo DMZ01 6,200.00 Service Tag: 39P6B21
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx 1,270.00 148GB 1.49GB Service Tag: C4MCS51
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx 530.00 37.2GB 256MB Service Tag: 815S141
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx 300.00 S/N: 1182001709
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxx Xxxxxxx 250.00 S/N: MX-05C544-47801-1BR-H0WU
-----------------------------------------------------------------------------------------------------------------------------------
CoLo ECW02 7,690.00 Service Tag: BSVBY51
-----------------------------------------------------------------------------------------------------------------------------------
CoLo ECW03 7,690.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo ECW04 7,690.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo EX02 7,690.00 Service Tag: 9XNTB51
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxxx Xxxx 2,100.00 19.6GB 504MB Dell 2300MP S/N: R4904044
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxx Hasbauer 2,100.00 19.6GB 504MB Dell 2300MP
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxx 1,600.00 60GB 512MB Service Tag Rubbed Off (Unreadable)
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxx 1,500.00 S/N: 0103 / 7YAF022756
-----------------------------------------------------------------------------------------------------------------------------------
Client Services Xxxx Xxxxxxx 1,050.00 14.6GB 384MB Service Tag: DHVP431
-----------------------------------------------------------------------------------------------------------------------------------
Client Services Xxxxxxx Xxxxxx 1,600.00 37.2GB 224MB S/N: X3154250P
-----------------------------------------------------------------------------------------------------------------------------------
Marketing Xxxxx Xxxxxxx 1,600.00 60GB 512MB S/N: X3040866P
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxx Xxxxx 2,100.00 19.6GB 504MB S/N: R4904038
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxxxxxxxx 610.00 30GB 256MB Service Tag: 3530021
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxx Xxxxxxxxxx 250.00 S/N: CN04N7364760642ABBC6
-----------------------------------------------------------------------------------------------------------------------------------
Client Services Xxxx Xxxxxxxx z 1,600.00 60GB 512MB S/N: 64159397Q
-----------------------------------------------------------------------------------------------------------------------------------
CoLo NAS 2,800.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo Net 5,500.00 Service Tag: DB77T01
-----------------------------------------------------------------------------------------------------------------------------------
CoLo NETSCREEN 1 5,811.00
-----------------------------------------------------------------------------------------------------------------------------------
CoLo NETSCREEN 2 5,811.00
-----------------------------------------------------------------------------------------------------------------------------------
Client Services Xxx Xxxxxx 1,600.00 55.8GB 496MB S/N: 44082696H
-----------------------------------------------------------------------------------------------------------------------------------
CoLo SAN 60,000.00 Serial Number: B000696
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxxxx Xxxx 610.00 18.6GB 256MB Service Tag: HSHKD01
-----------------------------------------------------------------------------------------------------------------------------------
Sales Xxxxxxx Xxxx 180.00 S/N: CN-0P0151-64180-48D-32C8
-----------------------------------------------------------------------------------------------------------------------------------
CoLo SQL 5,500.00 Service Tag: FLKLC21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo TAPE UNIT 8,000.00 Serial Number: 305241
-----------------------------------------------------------------------------------------------------------------------------------
Marketing Xxxxx Detchen 820.00 18.6GB 512MB Service Tag: 6Y07W11
-----------------------------------------------------------------------------------------------------------------------------------
Marketing Xxxxx Detchen 250.00 S/N: MY-04N736-47603-287-BUGA
-----------------------------------------------------------------------------------------------------------------------------------
CoLo TS01 7,500.00 Service Tag: 69P6821
-----------------------------------------------------------------------------------------------------------------------------------
CoLo TS02 7,500.00 Service Tag: 99B6B21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo TS03 7,500.00 Service Tag: DJ4SX21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo TS04 7,500.00 Service Tag: 3B0YL21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo VM01 5,500.00 Service Tag: G14BCC21
-----------------------------------------------------------------------------------------------------------------------------------
CoLo VM02 7,690.00 Service Tag: G20MM41
-----------------------------------------------------------------------------------------------------------------------------------
CoLo WATCHGUARD 3,500.00 Serial Number: 505100980-BA85
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 820.00 46.5GB 1.0GB Service Tag: 172N211
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 820.00 60GB 512MB Service Tag: 6VZ6W21
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 820.00 256MB Service Tag: HM6V101
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 1,600.00 60GB 512MB S/N: 93149654P
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 1,600.00 4.99GB 196KB S/N: 30531806U
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 250.00 S/N: MX-049VVR-47801-0CI-604X
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 500.00 S/N: CN424S7245
-----------------------------------------------------------------------------------------------------------------------------------
Information Systems Xxxxxxx Xxxxxx 100.00 S/N: FS62146CB235238
-----------------------------------------------------------------------------------------------------------------------------------
1,500.00 S/N: USHB016188 Located Outside Xxxxx
and Steve's Offices
-----------------------------------------------------------------------------------------------------------------------------------
Subtotal Hardware Replacement Cost 285,025.00
-----------------------------------------------------------------------------------------------------------------------------------
IntegriMED Hardware and Software
Licenses: Number of licenses Cost New
-----------------------------------------------------------------------------------------------
W2003 Server 15 16,785.00
-----------------------------------------------------------------------------------------------
Citrix 205 61,295.00
-----------------------------------------------------------------------------------------------
WTS Cal 60 7,560.00
-----------------------------------------------------------------------------------------------
Windows CAL 100 4,869.00
-----------------------------------------------------------------------------------------------
XXX 50 7,000.00
-----------------------------------------------------------------------------------------------
Project 2003 2 1,000.00
-----------------------------------------------------------------------------------------------
Visio 2003 1 400.00
-----------------------------------------------------------------------------------------------
Office XP 9 3,825.00
-----------------------------------------------------------------------------------------------
Simplified printing 3 1,000.00
-----------------------------------------------------------------------------------------------
Verisign Xxxxxxxx.xxx 1 1,790.00
-----------------------------------------------------------------------------------------------
Segue Testing Tool 1 23,695.00
-----------------------------------------------------------------------------------------------
Subtotal Software Replacement Cost 129,219.00
-----------------------------------------------------------------------------------------------
Total Hardware and Software Replacement Cost $414,244.00
-----------------------------------------------------------------------------------------------
Schedule 1.2 (c)
----------------
(Contracts)
1. Internap Master Services Agreement between the Seller and
Internap Network Services Corporation dated May 13, 2004.
2. *** TeleVox Software Service Agreement between Pediatric
Physician Alliance, Inc. and TeleVox Software, Inc. ("TeleVox") dated December
1, 2000, as amended by an Amendment to Contract between the Seller and TeleVox
dated January 1, 2003.
3. EDI Reseller Vendor Agreement between the Seller and Proxymed,
Inc. dated December 6, 2002.
4. *** Marketing Agreement between the Seller and Navicure, Inc.
dated September 2, 2004.
5. McKesson Information Solutions Sales Order between the Seller
and McKesson dated September 2004.
6. The following Business Services Agreements:
(a) Xx. X. Xxxxxxx, PC, dated September 30, 2004;
(b) Xxxxx Xxxxx, dated March 15, 2004;
(c) Xx. Xxx Xxxxxx, dated September 28, 2004;
(d) Family Medical Associates, dated August 27, 2003;
(e) Farmington Family Clinic, dated September 1, 2004;
(f) Fayette Surgical & Breast Center, dated October 6, 2003;
(g) Georgia Breast Care, dated September 30, 2004;
(h) X.X. Xxxxxx/Golden Family Care, dated September 29,
2004;
(i) Xxxxx Family Practice, dated December 2, 2003;
(j) Augusta General Surgery, dated May 6, 2004;
(k) Jonesboro Pediatric Clinic, dated April 30, 2002;
(l) Xxxxx Xxxxx, M.D., dated May 12, 2004;
(m) Xxxxxxxx Xxxxxx, M.D., dated November 13, 2003;
(n) Nashville Breast Center, dated March 17, 2004;
(o) North Xxxxxx Rheumatology, dated November 4, 2004;
(p) Paces Ferry Medical Group PC, dated March 4, 2002;
(q) Xxxxxxxx X. Xxxxxx M.D., dated July 12, 2004;
(r) Southeastern Pain Specialists, dated November 1, 2004;
(s) Texas Anesthesia and Pain Management Institute, dated
September 3, 2004
(t) Urology Specialists, dated April 29, 2004; and
(u) Valley View Medical, dated November 11, 2003.
7. The following ASP and Services Agreements:
(a) Advanced Breast Care, dated May 5, 2005;
(b) AGC Pediatrics, dated March 31, 2005;
(c) Atlanta South Gastroenterology, dated April 29, 2005;
(d) Family Primary Care, dated March 9, 2005;
(e) Xxxxxx Xxxxxx, M.D., dated January 25, 2005;
(f) Gulf Breeze Internal Medicine, dated December 29, 2004;
(g) Xx. Xxxxxx Xxxxxxxx, dated March 29, 2005;
(h) Non-Surgical Orthopedics & Spine Center, P.C., dated
March 1, 2005
(i) Partners in Women's Health, LLC, dated March 31, 2005;
(j) Patients First, dated December 22, 2004; and
(k) Dr. Xxx Washaw, dated March 9, 2005.
8. License and Services Agreement between Seller and Macon Medical
Group, dated May 2, 2005.
9. [Agreement] between the Seller and Xxxxx Xxxxxx, M.D., dated
_______, 2004.
10. ***Value Added Reseller Agreement between the Seller and JMJ
Technologies, dated June 7, 2007, and amended to date.
*** Indicates that contract needs third-party's consent to assign.
Schedule 8.11
(Employee List)
Xxxxx, Xxxxx
Xxxxxx, Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxx
Xxxxxx, Xxxxx
Xxxx, Xxxxxxx
Xxxxxx, Xxxxxxx
Xxxxxxxxx, Xxxxxx
Xxxxxxxxxx, Xxxx
Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx
Xxxx, Xxxx
Xxxxx, Xxxxx
Xxxxxx, Xxx
Xxxxxxx, Xxxxx
Xxxxxx, Xxxxxxx
Xxxxxxxx, Xxxx
Xxxxxxxxxx, Aislinn
Swim, Xxxxxxxxx
Xxxxx, Xxxxxxx
Exhibit A
OPERATING AGREEMENT
OF
eClinicalWeb, LLC
This Operating Agreement (this "Agreement") of eClinicalWeb, LLC (the
"Company") is made as of May 26 , 2005, by and among Xxxxxx Xxxxx of Shrewsbury,
Massachusetts, Xxxxxx Xxxxxx of Shrewsbury, Massachusetts and Xxx Xxxxxxxxxxxx,
M.D. of Shrewsbury, Massachusetts as initial members of the Company
(collectively, the "Members").
The Members desire to form a limited liability company pursuant to and
in accordance with the Massachusetts Limited Liability Company Act, ch. 156C of
the Massachusetts General Laws, as amended from time to time (the "Act"), by
entering into this Agreement and filing a Certificate of Formation of the
Company with the office of the Secretary of the Commonwealth of Massachusetts
(the "Certificate").
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
1. Formation.
----------
(a) The Members hereby agree to form the Company as a
limited liability company under and pursuant to the terms of the Act, this
Agreement and the Certificate, and further agree that the rights, duties and
liabilities of the Members and the Managers (as defined in Section 11) shall be
as provided in the Act, except as otherwise provided herein. Upon their
execution of this Agreement, each of the Members shall be admitted to the
Company as a member and shall make a contribution to the capital of the Company
in the amount set forth on Schedule A hereto opposite their names.
(b) Each of Xxxxxx Xxxxx, Xxxxxx Xxxxxx and Xxx
Xxxxxxxxxxxx, M.D. is hereby designated as an authorized person within the
meaning of the Act and is hereby authorized to execute, deliver and file the
Certificate (and any amendments and/or restatements thereof) in the office of
the Secretary of the Commonwealth of Massachusetts and to execute any other
documents necessary to the formation, registration or qualification of the
Company as a limited liability company.
2. Capital Contributions and Voting Rights.
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(a) The name, mailing address, amount contributed to the
capital of the Company and respective limited liability company interests owned
by each of the Members shall be set forth on Schedule A attached hereto. The
Manager shall update Schedule A from time to time as necessary to accurately
reflect the information therein. Any amendment or revision to Schedule A made in
accordance with this Agreement shall not be deemed an amendment to this
Agreement. Any reference in this Agreement to Schedule A shall be deemed to be a
reference to Schedule A as amended and in effect from time to time.
(b) Except as otherwise provided in this Agreement or by
applicable law, no Member shall be required to lend funds to the Company or,
after a Member's capital contributions have been fully paid, to make any
additional contributions to the capital of the Company. A Member may make
additional contributions to the capital of the Company with the written consent
of the Managers, provided; however, that if the Company purchases the
substantially all of the assets of IntegreMED, Inc. within ninety days of the
date of this Agreement, no initial Member may make additional contributions to
capital in the twelve (12) month period following such purchase. No Member shall
have any personal liability for the repayment of any capital contribution of any
other Member.
(c) No Member shall have any right to withdraw or to demand
the return of any or all of his capital contribution, except upon dissolution of
the Company under Section 20, or as otherwise provided in this Agreement or as
approved by the Managers. Notwithstanding the foregoing, no return of a Member's
capital contributions shall be made if such distribution would violate the Act.
Under circumstances requiring a return of any capital contribution, no Member
shall have the right to demand or receive property other than cash, except as
may be specifically provided in this Agreement.
(d) No Member shall receive any interest, salary or drawing
with respect to its capital contributions or its capital account or for services
rendered on behalf of the Company or otherwise in its capacity as a Member,
except as otherwise specifically provided in this Agreement or as approved by
the Managers.
(e) The Members shall look solely to the Company's assets
for the return of their capital contributions, and if the assets of the Company
remaining after payment of or due provision for all debts, liabilities and
obligations of the Company are insufficient to return such capital contributions
in full, the Members shall have no recourse against the Company, the Managers or
any other Member.
(f) The Managers shall maintain capital accounts for the
Members in accordance with Section 704(b) of the Internal Revenue Code of 1986,
as amended (the "Code") and the Treasury Regulations promulgated thereunder. The
Managers may make such adjustments to the Members' capital accounts as they
determine are necessary and in accordance with the Treasury Regulations in
connection with any contribution to or distribution by the Company.
3. Interests in the Company.
-------------------------
(a) A Member's percentage "Interest" in the Company means
the entire vested ownership interest of a Member in the Company at any
particular time, including the right of such Member to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of such Member to comply with all the terms and provisions of this
Agreement. Members will be entitled to vote based on their respective percentage
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Interests in the Company. Unless otherwise provided in this Agreement, the
approval of a majority in Interest of the Members with respect to any matter
requiring the consent or approval of the Members shall be binding on all
Members. Reference to a majority or other specified percentage in Interest of
the Members means Members whose aggregate capital contributions with respect to
their Interests represent over fifty percent (50%), or such specified
percentage, respectively, of the aggregate capital contributions of all Members.
(b) Subject to Section 11, the Managers may from time to
time issue or award additional Interests to, and admit to the Company as
Members, such persons and on such terms and conditions as the Managers determine
to be appropriate.
(c) No Member will have an interest in specific Company
assets.
(d) No Member may pledge, hypothecate or otherwise assign
his Interest as collateral or grant a security interest therein without the
prior consent of the Managers. The assignee under any such transaction shall
only have the rights of an assignee under the Act and subject to this Agreement.
4. Name. The name of the limited liability company formed by this
Agreement is eClinicalWeb, LLC. The business of the Company may be conducted
under any other name designated by the Managers.
5. Term. The term of the Company shall commence on the date the
Certificate is filed in the office of the Secretary of the Commonwealth of
Massachusetts and shall continue until dissolved in accordance with the
provisions of this Agreement.
6. Registered Agent. The name and business address of the
registered agent for service of process is Xxxxxx Xxxxx, 000 Xxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000.
7. Principal Place of Business. The principal place of business of
the Company is 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000.
8. Qualification in Other Jurisdictions. The Managers shall cause
the Company to be qualified, formed or registered under foreign qualification
and, to the extent necessary, assumed or fictitious name statutes or similar
laws in any jurisdiction in which the Company transacts business. The Managers
shall execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in
each jurisdiction in which the Company may wish to conduct business.
9. Purposes. The general character of the business of the Company
is the delivery of management and software solutions for medical practices and
to engage in any and all activities necessary, advisable or incidental thereto
and in any lawful act or activity for which limited liability companies may be
formed under the Act.
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10. Powers. The Company shall have the power and authority to take
any and all actions necessary, appropriate, proper, advisable, incidental or
convenient to or for the furtherance of the purposes set forth in Section 9
above, including, but not limited to, the power and authority to (a) acquire by
purchase, lease, contribution of property or otherwise, own, hold, operate,
maintain, preserve, rehabilitate, renovate, finance, improve, encumber, sell,
convey, lease, transfer or dispose of any real or tangible or intangible
personal property; (b) borrow money and issue evidences of indebtedness and
secure the same by mortgage, pledge or other lien on the assets of the Company;
(c) enter into, perform and carry out contracts of any kind, including, without
limitation, contracts with any person or entity affiliated with any Member or
Manager; (d) employ or otherwise engage employees, Members, Managers,
contractors, advisors, attorneys, and consultants and pay reasonable
compensation for such services; (e) enter into partnerships, limited liability
companies, trusts, associations, corporations or other ventures with other
persons or entities; (f) conduct such other businesses as the Members shall
approve; (g) have and exercise all of the powers and rights conferred upon
limited liability companies formed pursuant to the Act.
11. Management.
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(a) The business and affairs of the Company shall be managed
by one or more Managers (as that term is used in the Act) elected by the
majority vote of the Members (the "Managers"). The Members hereby elect Xxxxxx
Xxxxx, Xxxxxx Xxxxxx and Xxx Xxxxxxxxxxxx, M.D. to be the initial Managers, each
to serve until such time as he fails or ceases to serve, and each of Xxxxxx
Xxxxx, Xxxxxx Xxxxxx and Xxx Xxxxxxxxxxxx, M.D. hereby accepts such appointment
and agrees to be bound by the terms and conditions of this Agreement. A Manager
may resign by giving written notice to the remaining Managers and the Members.
The resignation will be effective upon acceptance by the remaining Managers, or
if none, by Members owning at least two-thirds (2/3) in Interest of the Company,
or if there is no acceptance, then fourteen (14) days after written notice is
given. A Manager may be removed with or without cause by Members owning at least
two-thirds (2/3) in Interest of the Company. Additional Managers may be
appointed at any time by Members owning a majority in Interest of the Company.
Successor Managers may be appointed by Members owning a majority in Interest of
the Company upon a Member's death, disability, resignation or removal, provided
that the Members shall not be required to appoint a successor Manager if at
least one other Manager remains in office. Any additional or successor Manager
shall execute an instrument reasonably satisfactory to the Members accepting and
agreeing to the terms and conditions of this Agreement. Each Manager, to the
extent of his or her powers set forth in this Section 11, is an agent of the
Company for the purpose of the Company's business, and the actions of any
Manager taken in accordance with this Agreement shall bind the Company.
(b) Except as otherwise expressly stated in this Agreement,
the Managers, acting singly, shall have the power to do any and all acts
necessary or convenient to or for the furtherance of the purposes of the Company
described herein. In connection with the foregoing, each Manager is hereby
authorized and empowered to act through any employees and other persons
designated by such Manager in carrying out any and all of the powers and
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authorities that such Manager possesses under this Agreement and to delegate any
and all of the powers and authorities that such Manager possesses under this
Agreement to any other person designated by such Manager. Except or otherwise
provided in this Agreement, the Managers shall act by majority vote. In the
event of a deadlock among the Managers as to a particular matter, the matter
shall be resolved by the written consent of the Members owning a majority in
Interest of the Company.
(c) The Managers, shall have the power to do any and all
acts necessary or convenient to or for the furtherance of the purposes of the
Company described herein, including without limitation, the power to:
(i) sell, purchase, exchange, option, mortgage,
lease and make contracts concerning real and personal property for such
consideration and upon such terms that the Managers consider appropriate; to
sign deeds, mortgages, releases, assignments, discharges, leases and other
instruments of any kind, without liability on the part of any person dealing
with the Managers to see to the application of the proceeds of any transaction;
to foreclose and to purchase at foreclosure sales;
(ii) receive rents or other amounts due from real and
personal property; to maintain, repair, improve and manage such property; to
develop, construct, operate, hold or in any other manner deal with or exercise
powers and privileges with respect to such property; to maintain insurance and
pay taxes and assessments with respect to such property; to abandon all or part
of the property; to adjust boundaries; to grant easements; to dedicate for
public use; to join with co-owners and others in transactions relating to the
property; to partition; to enter party-wall contracts; to insure or perfect
title; to demolish or erect buildings;
(iii) borrow money or guarantee the indebtednesses or
contractual obligations of others, and to pledge and/or mortgage any or all of
the Company's property as security therefore;
(iv) loan money, with or without security, on such
terms as the Managers deem proper;
(v) prepay, in whole or in part, refinance, amend,
modify or extend any mortgages or deeds of trust which may affect any asset of
the Company and, in connection therewith, execute for and on behalf of the
Company any extensions, renewals or modifications of such mortgages or deeds of
trust;
(vi) make any and all expenditures which the
Managers, in their sole discretion, deems necessary or appropriate in connection
with the management of the affairs of the Company and the carrying out of his
obligations and responsibilities under this Agreement, including, without
limitation, all legal, accounting and other related expenses incurred in
connection with the organization, financing and operation of the Company;
(vii) retain indefinitely and without liability any
securities or other property received or acquired as Managers, and to invest and
reinvest in, for cash or other property, stocks, bonds and other securities of
any kind in any state or jurisdiction, and to dispose of any investment from
time to time, all at the sole risk of the Company;
5
(viii) settle, compromise, arbitrate or contest claims
by, against or affecting the Company;
(ix) purchase liability and other insurance to
protect the Company's properties and business;
(x) enter into, execute or modify agreements and
contracts and give receipts, releases and discharges in connection with the
Company's business;
(xi) execute any and all other instruments and
documents which may be necessary or in the opinion of the Managers desirable to
carry out the intent and purpose of this Agreement; and
(xii) enter into any kind of activity necessary to, in
connection with, or incidental to, the accomplishment of the purposes of the
Company.
(d) Notwithstanding the provisions of paragraph (c), the
Managers shall have no power and authority, without the prior written consent of
the Members owning a majority in Interest of the Company or such other
percentage required in this Agreement, to undertake any of the following:
(i) engage in business in any jurisdiction which
does not provide for the registration of limited liability companies;
(ii) admit a person or entity as a Member;
(iii) issue or grant rights to purchase additional
interests in the Company;
(iv) dissolve the Company;
(v) sell, mortgage, pledge, transfer or otherwise
encumber substantially all the assets of the Company or merge the Company with
another business entity;
(vi) amend this Agreement; or
(vii) engage in any other transaction that requires
the prior approval of the Members under this Agreement.
(e) No Member is an agent of the Company solely by virtue of
being a Member, and no Member has authority to act for the Company solely by
virtue of being a Member. Any Member who takes any action or binds the Company
in violation of this Section 11(e) shall be solely responsible for any loss and
expense incurred by the Company as a result of the unauthorized action and shall
indemnify and hold the Company harmless with respect to the loss or expense.
6
(f) No Person dealing with the Company or its assets shall
be required to investigate the authority of a Manager to act on behalf of the
Company or deal with its assets, nor shall any person entering into a contract
with the Company be required to inquire as to whether the prior approval of the
Members has been obtained for any transaction. Any such person may rely, without
further inquiry, upon a certificate of authority or any other material fact
signed by a Manager, or accept any instrument signed by a Manager in the name
and on behalf of the Company or the Managers.
12. Limited Liability. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Managers and the Members shall not be personally liable,
directly or indirectly, including, without limitation, by way of
indemnification, contribution, assessment or otherwise, for any such debt,
obligation or liability of the Company solely by reason of being a Member of the
Company.
13. Allocation of Profits and Losses.
(a) General. Except as otherwise provided in Sections 13(b)
and 13(c), the Company's profits and losses shall be allocated in proportion to
the Interests owned by each of the Members.
(b) Special Allocations. The following special allocations
will be made in the following order:
(i) Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other
provision of this Section 13, if there is a net decrease in Partnership Minimum
Gain during any Allocation Year, each Member shall be specially allocated items
of Company income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Member's share of the
7
net decrease in Partnership Minimum Gain, determined in accordance with Treasury
Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 13(b)(i) is
intended to comply with the minimum gain chargeback requirement in Treasury
Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Partner Minimum Gain Chargeback. Except as
otherwise provided in Treasury Regulations Section 1.704-2(i)(4),
notwithstanding any other provision of this Section 13, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to Partner
Nonrecourse Debt during any Allocation Year, each Member who has a share of the
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5),
shall be specially allocated items of Company income and gain for such
Allocation Year (and, if necessary, subsequent Allocation Years) in an amount
equal to such Member's share in the net decrease in Partner Nonrecourse Debt
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Treasury Regulations Section
1.704-2(i)(4) and 1.704-2(j)(2). This Section 13(b)(ii) is intended to comply
with the minimum gain chargeback requirement in Treasury Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii) Qualified Income Offset. If any Member
unexpectedly receives an adjustment, allocation or distribution that results in
a deficit balance in such Member's capital account, there will be specially
allocated to that Partner, to the extent required and in the manner specified by
Treasury Regulation 1.704-1(b)(2)(ii)(d) items of Company income and gain in an
amount and manner sufficient to eliminate such deficit balance as quickly as
possible, provided that an allocation pursuant to this Section 13(b)(iii) will
be made only if and to the extent that such Member has a deficit capital account
balance after all other allocations provided for in this Section 13 have been
tentatively made as if this Section 13(b)(iii) were not in the Agreement.
(iv) Gross Income Allocation. If any Member has a
deficit balance in such Member's capital account at the end of any fiscal year
which is in excess of (1) the amount the Member is obligated to restore to the
Company under this Agreement, and (2) the amount the Member is deemed to be
obligated to restore under the penultimate sentences of Treasury Regulations
1.704-2(g)(1) and 1.704-2(i)(5), such Member will be specially allocated items
of Company income and gain in the amount of such excess as quickly as possible,
provided that an allocation pursuant to this Section 13(b)(iv) will be made only
and if to the extent that such Member has a deficit capital account balance
after all other allocations provided for in this Section 13 have been
tentatively made as if this Section 13(b)(iv) and Section 13(b)(iii) were not in
the Agreement.
(v) Partner Nonrecourse Deductions. Any Partner
Nonrecourse Deductions for any Allocation Year shall be specially allocated to
the Member who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Treasury Regulations Section 1.704-2(i)(1).
(vi) Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Company asset pursuant to Section
734(b) or Section 743(b) of the Code is required pursuant to Treasury Regulation
1.704-1(b)(2)(iv)(m), to be taken into account in determining capital accounts,
the amount of such adjustment to the capital accounts will be treated as an item
of gain or loss (if the adjustment decreases such basis) and such gain or loss
will be specially allocated to the Members in a manner consistent with the
manner in which their capital accounts are required to be adjusted pursuant to
such Section of the Regulations.
(c) Curative Allocations. The allocations set forth in
Section 13(b) are intended to comply with certain requirements of Treasury
Regulation 1.704-1. It is the intent of the Members that, to the extent
possible, all special allocations made under Section 13(b) will be offset either
8
with other special allocations under such Section or with special allocations of
other items of Company income, gain, loss, or deduction pursuant to this Section
13(c). Therefore, notwithstanding any other provision of this Section 13 (other
than Section 13(b)), the Managers will make such offsetting special allocations
in whatever manner the Managers determine appropriate, so that, after such
offsetting allocations are made, each Member's capital account balance is, to
the extent possible, equal to the capital account balance such Member would have
had if Sections 13(b) and (c) were not part of this Agreement and all Company
items were allocated pursuant to Section 13(a).
(d) Definitions.
------------
(i) "Allocation Year" means (A) any Company fiscal
year, or (B) any portion of a Company fiscal year for which the Company is
required to allocate profits, losses and other items of income, gain, loss, or
deduction pursuant to Section 13.
(ii) "Partner Nonrecourse Debt" has the same meaning
as the term "partner nonrecourse debt" set forth in Treasury Regulations Section
1.704-2(b)(4).
(iii) "Partner Nonrecourse Debt Minimum Gain" means an
amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership
Minimum Gain that would result if such Partner Nonrecourse Debt were treated as
a nonrecourse liability, determined in accordance with Treasury Regulations
Section 1.704-2(i)(3).
(v) "Partner Nonrecourse Deductions" has the same
meaning as the term "partner nonrecourse deductions" as set forth in Treasury
Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).
(vi) "Partnership Minimum Gain" has the meaning set
forth in Treasury Regulations Section 1.704-2(b)(2) and 1.704-2(d).
14. Distributions. Distributions not made as a result of the
dissolution of the Company shall be made to the Members in proportion to their
Interests at such times and in such amounts as shall be determined by the
Managers. Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make a distribution to the Members on account
of their Interests if such distribution would violate the Act or other
applicable law.
15. Exculpation and Indemnification.
--------------------------------
(a) No Member or Manager shall be liable to the Company, any
other Member or Manager, or any other person or entity who has an interest in
the Company for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Member or Manager in good faith on behalf
of the Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Member or Manager by this Agreement, except that a
Member or Manager shall be liable for any such loss, damage or claim incurred by
reason of such Member's or Manager's gross negligence or willful misconduct. To
the full extent permitted by applicable law, a Member or Manager shall be
9
entitled to indemnification from the Company for any loss, damage or claim
incurred by such Member or Manager by reason of any act or omission performed or
omitted by such Member or Manager in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the authority conferred
on such Member or Manager by this Agreement, except that no Member or Manager
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Member or Manager by reason of gross negligence or willful
misconduct with respect to such acts or omissions; provided, however, that any
indemnity under this Section 15 shall be provided out of and to the extent of
Company assets only, and no Member or Manager shall have personal liability on
account thereof.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Member or Manager in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Company prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Company of an undertaking by or on behalf
of the Member or Manager to repay such amount if it shall be determined that the
Manager or Members is not entitled to be indemnified.
16. Transfers.
(a) No Member may transfer all or any portion of its
Interest unless all of the following conditions are satisfied:
(i) the transfer will not result in the termination
of the Company pursuant to Section ss.708 of the Code;
(ii) the transferor first offers its Interest to the
other Members and to the Company to the extent and in the manner required by
Section 17;
(iii) the transferee delivers to the Company a written
agreement to be bound by the terms of this Agreement; and
(iv) the Managers approve such transfer in writing,
which approval may only be withheld if the Managers determine in good faith that
the proposed transferee is, or is an affiliate of, a competitor of the Company.
For purposes of this Agreement, "transfer" means, when used as a noun, any
voluntary sale, hypothecation, pledge, assignment, attachment or other transfer,
and, when used as a verb, means voluntarily to sell, hypothecate, pledge, assign
or otherwise transfer.
(b) If the terms of paragraph (a) are satisfied, then a
Member may transfer all or any portion of its Interest. Unless and until the
transferee of an Interest has been admitted to the Company as a Member, the
transferee will have only the rights of an assignee under the Act and will have
no right to act as an agent of the Company or to exercise any rights other than
those specifically pertaining to the ownership of an economic Interest in the
Company as an assignee.
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(c) Each Member hereby acknowledges the reasonableness of
the prohibition contained in this Section 16 in view of the purposes of the
Company and the relationship of the Members. The transfer of any Interest in
violation of the provisions of this Section 16 shall be deemed invalid, null and
void, and of no force or effect. Any person to whom an Interest is attempted to
be transferred in violation of this Section shall not be entitled to vote on
matters coming before the Members, participate in the management of the Company,
act as an agent of the Company, receive distributions from the Company, or have
any other rights in or with respect to the Company, and neither the Company nor
the non-transferring Members shall incur any liability as a result of refusing
to make distributions to the transferee of any such invalid transfer.
(d) In the case of a transfer or attempted transfer of an
Interest that does not comply with the provisions of paragraph (a), the parties
engaging or attempting to engage in such transfer shall be liable to indemnify
and hold harmless the Company, the Managers and the other Members from all
costs, liabilities and damages that any of such indemnified persons may incur
(including, without limitation, incremental tax liability and lawyers' fees and
expenses) as a result of such transfer or attempted transfer and efforts to
enforce this indemnity.
17. Right of First Refusal.
-----------------------
(a) No Member or his legal representative may transfer all
or any portion of his Interest without first giving written notice to the
Company identifying the proposed transferee and the terms of the proposed
transaction, including price, if any, and offering his Interest to the Company
upon the same terms. Such offer shall remain irrevocable for thirty (30) days.
At any time during this period, the Company may accept the offer by notifying
the offeror in writing that the Company intends to purchase all, but not less
than all, of the Interest so offered on the terms and for the purchase price
specified in the offer.
(b) If the Company does not elect to purchase all of the
Interest specified in the notice within thirty (30) days after receipt of the
notice pursuant to paragraph (a) above, then the offeror will notify the each of
the Members in writing and offer the shares to the Members on the same terms.
Each such offer shall remain irrevocable for thirty (30) days. At any time
during this period, the offerees may accept the offer by notifying the offeror
in writing that the offerees intend to purchase all, but not less than all, of
the Interest so offered on the terms and for the purchase price specified in the
offer. If two (2) or more remaining Members desire to accept the offer, then, in
the absence of an agreement among them, each such remaining Member shall
purchase the offered Interest in the proportion that the purchasing Member's
percentage ownership Interest bears to the total percentage ownership Interests
of all the remaining Members who desire to accept the offer.
(c) If neither the remaining Members nor the Company elect
to purchase all of the Interest offered within thirty (30) days of the receipt
of the notice containing the offer, then the offeror may transfer the offered
Interest within sixty (60) days after the expiration of the applicable
thirty-day period to the proposed transferee upon the price and terms specified
in the notice, provided that simultaneous with the transfer the transferee
agrees to become a party to this Agreement.
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(d) Any attempted transfer that does not comply with the
terms, provisions and conditions of this Section 17 and the other terms,
provisions and conditions of this Agreement shall be null and void and of no
force or effect.
18. Admission of Transferee as Member.
----------------------------------
(a) Notwithstanding anything contained herein to the
contrary, the transferee of all or any portion of a Member's Interest in the
Company shall not be entitled to become a Member or exercise any rights of a
Member unless the Managers and a majority in Interest of the Members (other than
the Transferor) agree in writing to admit the transferee as a Member and the
conditions of Section 16(a) are satisfied. Until admitted as a Member, the
transferee shall be treated as an assignee under the Act and shall be entitled
to receive, to the extent transferred, only the distributions to which the
transferor would be entitled.
(b) If a Member transfers all of its Interest and the
Managers and the Members approve the admission of the transferee as a Member,
the transferee shall be admitted to the Company effective immediately prior to
the effective date of the transfer, and, immediately following such admission,
the transferring Member shall cease to be a Member of the Company.
19. Repurchase Rights Upon a Member's Withdrawal.
---------------------------------------------
(a) The following terms used in this Section 19 have the
following meanings for purposes of this Agreement:
(i) "Bankruptcy" means (i) the filing by a Member of
a voluntary petition under any bankruptcy or insolvency law or a petition for
the appointment of a receiver or the making by a Member of an assignment for the
benefit of creditors, or (ii) the subjecting of the Member involuntarily to such
a petition or assignment or to an attachment of other legal or equitable
interest with respect to his Interest, if such involuntary petition or
assignment or attachment is not discharged within sixty (60) days after its
date.
(ii) "Incapacity" means (a) a total disability as
defined in any disability insurance policy with respect to the disabled Member
acquired by the Company or a Member to fund the Incapacity buyout provisions of
this Agreement or, if none, in any long-term disability insurance policy
provided by the Company to the disabled Member, and which shall have continued
for a sufficient period of time to permit the Company to obtain the benefits
under such policy, or (b) if no such policy is in effect, a permanent mental or
physical impairment of a Member which causes him or her to be unable to
participate actively in the affairs of the Company as an employee or Manager or
results in the appointment of a guardian or conservator for the Member. A mental
or physical impairment will be conclusively deemed to be permanent if it
prevents the Member from actively participating in the affairs of the Company
for any period of nine (9) consecutive months or for any accumulated period of
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eighteen (18) months within any three (3) year period. A determination of total
disability by an insurance company insuring a Member under a disability policy
described above in clause (a) will be conclusive and binding on all parties to
this Agreement. If no such policy is in effect, any determination of incapacity
will be made by the Managers other than the affected Member, if he or she is
also a Manager, based upon such medical advice as they deem necessary, and will
be binding and conclusive for purposes of this Agreement.
(iii) "Involuntary Transfer" means the transfer of a
Member's Interest by operation of law (not involving the death or incapacity of
the Member) or under an agreement made or order of court entered in connection
with proceedings in Bankruptcy, for separation or divorce, or for the
enforcement or collection of a judgment.
(iv) "Retirement" means the total withdrawal by a
Member for any reason, whether voluntary or involuntary, from participation in
the affairs of the Company, as an employee, Manager or Member, and specifically
includes a Member's resignation from the Company.
(v) "Agreed Value" means that dollar amount last
agreed upon in writing by the Members, which agreement shall be dated and filed
among the records of the Company. The initial Agreed Value is set forth as
Schedule A attached hereto. The Managers agree to amend Schedule A to reflect
subsequent adjustments to the Agreed Value. Notwithstanding anything contained
in this Agreement to the contrary, if the date of the most recent determination
of Agreed Value is more than eighteen (18) months prior to the date of the event
giving rise to the purchase and sale of a Member's Interest under this Section
19, then the purchase price shall be the value agreed upon by the parties to the
purchase and sale transaction under this Section 19, or if such parties are
unable to agree on a value within sixty (60) days of receipt of notice of the
event giving rise to the Member's withdrawal, the purchase price shall be equal
to the Appraised Value of the Interest being purchased as determined under
paragraph (vi).
(vi) "Appraised Value" means the value of the
Interests being purchased based on a determination of the fair market value of
the Company's assets less its liabilities, and without taking into account any
discounts for minority interest or lack of marketability determined by the
following appraisal process: The Managers shall appoint an appraiser within
thirty (30) days after the event giving rise to the purchase and sale of the
Member's Interest, the Member whose Interest is being purchased or his legal
representative shall appoint a second appraiser within fifteen (15) days
thereafter, and the two appraisers shall appoint a third appraiser within
fifteen (15) days thereafter, or failing action within such period by any party
or the appraisers, any unappointed appraiser or appraisers shall be appointed by
the American Arbitration Association, Boston, Massachusetts, upon application of
any party or appraiser. The appraisers shall proceed by majority vote to
determine the value of such Interests as of a convenient date selected by them,
and such determination shall be final and binding upon all interested persons.
The Managers shall promptly furnish to the appraisers such information
concerning the Company's financial condition, earnings, capitalization, business
prospects and sales of its Interests as they may reasonably request. The
appraisers shall promptly notify in writing the Managers, the Member whose
13
Interest is being purchased, or his legal representatives, and the remaining
Members of the appraisers' final determination of value. The parties shall each
bear the fees and expenses of the appraiser appointed by or for each of them,
and the fees and expenses of the third appraiser shall be borne one-half by the
Company and one-half by the withdrawing Member or his legal representatives.
(b) Upon the death of a Member who is a natural person, the
Member's legal representative, promptly upon his appointment as such, will give
notice of his appointment to the remaining Members. Upon receipt of the notice,
the remaining Members shall purchase all of the deceased Member's Interest in
the Company in the proportion that each purchasing Member's percentage Interest
in the Company bears to the total percentage ownership interests of all of the
remaining Members or in such other proportions as all of the remaining Members
agree. The purchase price will equal the Agreed Value of the Interest to be sold
and will be paid on the closing date set by the purchasing Members (which shall
be within one hundred twenty (120) days after receipt of the notice from the
deceased Member's legal representative) in cash or (at the election of the
purchasing Members) by delivery of the purchasing Members' promissory note
payable over ten (10) years in equal consecutive monthly installments commencing
at the end of the first full month following the closing and bearing interest at
an annual rate equal to the greater of (i) the prime rate as published in the
Wall Street Journal five (5) business days prior to the closing, or (ii) the
lowest applicable federal rate allowed under Section 1274(d) of the Code on the
closing date. The promissory note will be secured by the Interests purchased and
will provide for prepayment at the option of the Maker at any time without
penalty.
(c) Upon the Bankruptcy, Incapacity or Retirement of a
Member, or upon an Involuntary Transfer, the Member or his legal representative
shall give written notice of such event to the Managers and to each of the other
Members and shall offer for sale to the other Members all Interests in the
Company owned of record or beneficially by the Member.
(d) The offer described in paragraph (c) shall remain
irrevocable for a period of thirty (30) days. At any time during this period, a
remaining Member may accept the offer by notifying the offering Member or his
legal representative in writing that the remaining Member intends to purchase
all, but not less than all, of the Interests offered. If two (2) or more
remaining Members desire to accept the offer, then, in the absence of an
agreement between or among them, each such remaining Member shall purchase the
Interests so offered in the proportion that the purchasing Member's percentage
ownership Interest in the Company bears to the total percentage ownership
Interests of all the remaining Members who desire to accept the offer. If none
of the remaining Members elect to purchase all of the Interests specified in the
notice within thirty (30) days of receipt of the notice, then the offering
Member or his legal representative or transferee, as the case may be, will so
notify the Company and the Company shall have the option to purchase the
Interests upon the same terms. If the Company does not elect to purchase all of
the Interests specified in the notice within thirty (30) days after receipt of
the notice, the Interests will remain subject to the terms of this Agreement.
(e) If one or more remaining Members or the Company accept
the offer, the purchasing Members or the Company shall purchase the Interests so
offered for a price equal to their Agreed Value. The purchase price
14
shall be paid on the closing date (which shall be within one hundred twenty
(120) days after receipt of notice of the offer to purchase) in cash or (at the
election of the purchasers) by delivery of the purchasers' promissory note
payable over ten (10) years in equal consecutive monthly installments commencing
at the end of the first full month following the closing and bearing interest at
an annual rate equal to the greater of (i) the prime rate as published in the
Wall Street Journal five (5) business days prior to the closing, or (ii) the
lowest applicable federal rate allowed under Section 1274(d) of the Code on the
closing date. The promissory note will be secured by the Interests purchased and
will provide for prepayment at the option of the Maker at any time without
penalty.
(f) If none of the remaining Members or the Company accept
the offer, then the offering Member, or such Member's transferee, as the case
may be, upon the expiration of the offer period, thereafter shall be treated as
the unadmitted assignee of a Member.
(g) The repurchase provisions of this Section 19 shall be in
lieu of any rights a withdrawing Member may have under the Act or otherwise both
as to the amount to which the Member is due on withdrawal and the payment of
such amount. Except to the extent provided in this Section, a Member who resigns
as a Member of the Company shall not be entitled to receive (i) any payment in
liquidation of the Member's Interest in the Company, or (ii) the fair value of
the Member's Interest in the Company as of the date of resignation.
20. Dissolution.
------------
(a) The Company shall dissolve, and its affairs shall be
wound up, upon the first to occur of the following:
(i) the written consent of the Managers and
two-thirds in Interest of the Members; or
(ii) the entry of a decree of judicial dissolution
under the Act.
(b) The death, insanity, retirement, withdrawal,
resignation, expulsion, bankruptcy or dissolution of a Member, or the occurrence
of any other event which terminates the continued membership of a Member in the
Company under the Act, shall not dissolve the Company unless, as a result, the
Company shall have no Members.
(c) Upon dissolution of the Company, the Manager shall
promptly notify the Members of the dissolution and shall immediately commence to
wind up the affairs of the Company including, in their discretion, the
liquidation all or any part of the assets of the Company. The proceeds of such
liquidation shall be applied and distributed in the following order of priority:
(i) to (A) creditors of the Company, including
Members who are creditors, to the extent otherwise permitted by law, in
satisfaction of liabilities of the Company (whether by payment or the making of
15
reasonable provision for payment thereof) other than liabilities for which
reasonable provision for payment has been made, and liabilities for
distributions to Members and former Members under Sections 14, and (B) to the
expenses of the liquidation;
(ii) to Members and former Members in satisfaction of
liabilities for distributions owed to them under Section 14; and
(iii) to the Members in accordance with their positive
capital account balances, after giving effect to all capital account adjustments
for the Company's fiscal year in which such distribution occurs (other than
those made pursuant to this paragraph (iii)).
(d) In winding up the affairs of the Company the Managers
shall determine the time, manner and terms of any sale or other disposition of
the Company's assets for the purpose of obtaining, in their opinion, fair value
for such assets. All of the powers of the Manager under this Agreement shall
continue until the affairs of the Company shall have been wound up, including
the power to fulfill or discharge the contracts of the Company, collect its
assets, sell, convey, assign, exchange, transfer, or otherwise dispose of all or
any part of the Company's remaining assets to one or more persons at public or
private sale for consideration which may consist in whole or in part of cash,
securities, or other property of any kind, discharge or pay its liabilities, and
do all other acts appropriate to liquidate its business.
21. Creditor as Member. No creditor of the Company or any Member may
have or acquire, at any time as a result of an unsatisfied obligation of the
Company or any Member, any direct or indirect interest in the profits, capital
or property of the Company, other than as a secured creditor or as a result of
the exercise of the rights thereof or other than as provided in the Act. Such
creditor's rights shall be those of an assignee and not of a Member.
22. Partition. Each Member waives, until termination of the Company,
any and all rights that it may have to maintain an action for partition of the
Company's property
23. Amendment. This Agreement may not be amended without the prior
vote or written consent of the Managers and Members owning at least two-thirds
of the Interests in the Company.
24. Separability of Provisions. Each provision of this Agreement
shall be considered separable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal under any existing
or future law, such invalidity, unenforceability or illegality shall not impair
the operation of or affect those portions of this Agreement which are valid,
enforceable and legal.
25. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
16
26. Integration. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
27. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts
(without regard to conflict of laws principles), all rights and remedies being
governed by said laws.
17
IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date stated above.
MEMBERS:
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
/s/ Xxx Xxxxxxxxxxxx, M.D.
-----------------------------------
Xxx Xxxxxxxxxxxx, M.D.
Agreed to and Accepted:
MANAGERS:
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
/s/ Xxx Xxxxxxxxxxxx, M.D.
-----------------------------------
Xxx Xxxxxxxxxxxx, M.D.
18
SCHEDULE A
to
eClinicalWeb, LLC
------------------------ --------------------------------- --------------------- -------------------- -------------
Name Mailing Address Contribution % Ownership Agreed
to Capital Interests Value
------------------------ --------------------------------- --------------------- -------------------- -------------
Xxxxxx Xxxxxx $100,000 33.33% $100,000
------------------------ --------------------------------- --------------------- -------------------- -------------
Xxxxxx Xxxxxx $100,000 33.33% $100,000
------------------------ --------------------------------- --------------------- -------------------- -------------
Xxx Xxxxxxxxxxxx, M.D. $100,000 33.33% $100,000
------------------------ --------------------------------- --------------------- -------------------- -------------
19
SCHEDULE A
(as amended June 6, 2005)
to
eClinicalWeb, LLC
------------------------ --------------------------------- --------------------- ------------------- --------------
Name Mailing Address Contribution % Ownership Agreed
to Capital Interests Value
------------------------ --------------------------------- --------------------- ------------------- --------------
Xxxxxx Xxxxx $100,000.00 32.67% $100,000
------------------------ --------------------------------- --------------------- ------------------- --------------
Xxxxxx Xxxxxx $100,000.00 32.67% $100,000
------------------------ --------------------------------- --------------------- ------------------- --------------
Xxx Xxxxxxxxxxxx, M.D. $100,000.00 32.67% $100,000
------------------------ --------------------------------- --------------------- ------------------- --------------
INPHYSYS, Inc. $6,122.45 2.00% $6,122.45
------------------------ --------------------------------- --------------------- ------------------- --------------
20
Counterpart Signature Page
to
Operating Agreement
By its execution and delivery of this signature page, the undersigned
hereby joins in and agrees to the terms and conditions of the Operating
Agreement, of eClinicalWeb, LLC originally entered into as of the 26th day of
May, 2005 (the "Operating Agreement") by and among Xxxxxx Xxxxxx, Xxxxxx Xxxxxx
and Xxx Xxxxxxxxxxxx, M.D., and authorizes this signature page to be attached to
the Operating Agreement or counterparts thereof.
INPHYSYS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxx X. Xxxxx
President and CEO
Date: June 7, 2005
21
Exhibit B
SUBLEASE
THIS SUBLEASE is made and entered into this 6th day of June, 2005, by
and between Integrated Physician Solutions, Inc., successor-in-interest to
Pediatric Physician Alliance, Inc. ("Landlord"), and eClinicalWeb, LLC
("Tenant").
1. BASIC LEASE PROVISIONS.
A. Property Address: 0000 Xxx Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxx 00000
B. Tenant's Address: 000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 Attention: Xxxxxx
Xxxxxx, Manager
C. Landlord's Address: 0000 Xxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000
D. Prime Landlord: 0000 XXX XXXXXXX XXXX, LLC
E. Prime Landlord's Address: 0000 Xxx Xxxxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxx
With a copy to: Century 21 Across Atlanta, 0000 Xxx
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxxx Xxxxxxxxxx
F. Identification of Prime Lease and all amendments
thereto: Lease Agreement between Prime Landlord and
Landlord, signed in 2001
G. Sublease Term: A term of approximately twenty-three (23)
months, commencing on the Commencement Date and ending
on April 30, 2007, subject to Section 4 hereof
H. Commencement Date: June 6, 2005
I. Base Rent: Annual rent of $108,000.00 (or $9,000.00 per
month)
J. Payee of Rent: Landlord
K. Address for Payment of Rent: Same as C, above
L. Description of Premises: A portion of Suite 350 located
on the third floor of the building (the "Building")
situated at and a part of the property (the "Property")
known as 0000 Xxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxx. The
Premises include (i) the shaded area shown on the Lease
Plan attached hereto as Exhibit A, (ii) the use of the
main --------- conference room, the copy/fax room, the
break room, the reception area, the restrooms and any
hallways located in Suite 350, all to be in common with
Landlord, and (iii) the right to use, in common with
others entitled thereto, all hallways, stairways,
elevators, driveways, parking areas and walkways located
in the Building and at the Property to the extent
Landlord is entitled to use the same under the Prime
Lease.
M. Tenant's Use: General office
2. PRIME LEASE.
A. Landlord is the tenant under a Prime Lease (the "Prime
Lease") with the Prime Landlord identified in Section l(D), bearing the date
specified in Section 1(F). Landlord represents and warrants to Tenant that (i)
Landlord has delivered to Tenant a true and complete copy of the Prime Lease and
all other agreements between Prime Landlord and Landlord governing the use and
occupancy of the Premises, (ii) the Prime Lease is, as of the date hereof, in
full force and effect, (iii) Landlord's leasehold estate with respect to the
Premises has not been assigned, mortgaged, encumbered or otherwise transferred
or sublet, in whole or in part, (iv) as of the date hereof no default has
occurred by Landlord under the Prime Lease giving rise then, or in the future,
to the right of Prime Landlord to terminate the Prime Lease, and as of the date
hereof Landlord has received no notice of any such default from Prime Landlord,
and (v) as of the date hereof no default has occurred by Prime Landlord under
the Prime Lease giving rise then or in the future, to the right of Landlord to
terminate the Prime Lease.
B. Except as otherwise expressly provided herein, or except
as may be inapplicable or inconsistent with other provisions hereof, all of the
terms and provisions in the Prime Lease are incorporated herein by reference as
if set forth herein in full and shall be applicable to this Sublease with the
same force and effect as if Landlord were the landlord under the Prime Lease and
Tenant were the tenant under the Prime Lease and the Premises were the premises
under the Prime Lease. Except as otherwise expressly provided herein, Landlord
2
covenants to Tenant to perform all of the covenants and obligations to be
performed by Landlord under the Prime Lease (other than those obligations to be
performed by Tenant with respect to the Premises) and to promptly pay when due
all rents and other amounts due to Prime Landlord and to comply with this
Sublease and the applicable provisions of the Prime Lease, as modified by this
Sublease, in all respects. If Landlord shall fail to make any payment or perform
any act required to be made or performed by Landlord under the Prime Lease and
such default is not cured by Landlord after notice from Tenant, Tenant, without
waiving or releasing any obligation or default hereunder, may (but shall be
under no obligation to) make such payment or perform such act for the account
and at the expense of Landlord, and make take any and all such actions as
Tenant, in its reasonable discretion, deems necessary or appropriate to
accomplish such cure. If Tenant shall reasonably incur any expense in remedying
such default, Tenant shall be entitled to recover such sums upon demand from
Landlord or to deduct such sums from Base Rent next due.
C. Subject to Section 27(F), (i) Landlord shall not be
obligated to perform, and shall not be liable for the performance by Prime
Landlord, of any of the obligations of the Prime Landlord under the Prime Lease,
and (ii) in furtherance of the foregoing, Tenant shall not make any claim
against Landlord for any damages which may arise by reason of any act or
omission, whether intentional or negligent, of Prime Landlord.
3. SUBLEASE. Landlord, for and in consideration of the rents herein
reserved and of the covenants and agreements herein contained on the part of the
Tenant to be performed, hereby subleases to the Tenant, and the Tenant accepts
from the Landlord, the Premises as described in Section 1(L).
4. TERM. The term of this Sublease (hereinafter "Term") shall
commence on the date (hereinafter "Commencement Date",) which is the later to
occur of:
A. The date specified in Section 1(H) (the "Scheduled
Commencement Date"); or
B. Full execution of Prime Landlord Consent.
3
The Term shall expire on the earlier to occur of (i) April 30, 2007, or
(ii) the date set forth in a written notice delivered by Tenant to Landlord,
said date to be no sooner than sixty (60) days after the date of Tenant's
notice.
5. POSSESSION. The Premises are to be delivered by Landlord to
Tenant AS IS.
6. EARLY ACCESS. From and after the date of this Sublease, Landlord
shall provide to Tenant access to the Premises to install telecommunications,
data wiring, cabling, systems, the Utility Work, as that term is defined in
Section 17, furniture, alterations, and improvements and otherwise prepare for
use; however, such access shall be subject to all terms and conditions of this
Sublease and the Prime Lease.
7. TENANT'S USE AND ACCESS. The Premises shall be used and occupied
only for the Tenant's Use set forth in Section 1(M). During the Term, Tenant
shall have access to the Property, the Building and the Premises twenty-four
(24) hours per day, seven (7) days per week, fifty-two (52) weeks per year. If
applicable, Landlord shall provide to Tenant access cards for Tenant's
employees' access to the Premises and the Building at least forty-eight (48)
hours prior to the Commencement Date.
8. RENT. Beginning on the Commencement Date, Tenant agrees to pay
the Base Rent set forth in Section 1(I) to the Payee specified in Section 1(J),
at the address specified in Section 1(K), or to such other payee or at such
other address as may be designated by notice in writing from Landlord to Tenant,
without prior demand therefor and without any deduction whatsoever. Base Rent
shall be paid in equal monthly installments in advance on the first business day
of each month of the Term, except that the first installment of Base Rent shall
be paid by Tenant to Landlord upon execution of this Sublease by Tenant. Base
Rent shall be pro rated for partial months at the beginning and end of the Term.
All charges, costs and sums required to be paid by Tenant to Landlord under this
Sublease in addition to Base Rent shall be deemed "Additional Rent", and Base
Rent and Additional Rent shall hereinafter collectively be referred to as
"Rent". If Rent is not paid when due, Tenant shall pay, relative to the
delinquent payment, an amount equal to the sum which would be payable by
Landlord to Prime Landlord for an equivalent default under the Prime Lease.
4
9. UTILITIES AND MAINTENANCE. Notwithstanding any provision of the
Prime Lease to the contrary, Landlord agrees (i) to provide and pay for all
electricity, water, sewer, heating, air conditioning and other utilities used by
Tenant at the Premises and to furnish such cleaning service as is customary in
similar buildings located in the Roswell area, all subject to interruption due
to any accident, to the making of repairs, alterations, or improvements, to
labor difficulties, to obtaining fuel, electricity, service or supplies from the
sources from which they are usually obtained, or to any cause beyond Landlord's
control, provided Landlord uses commercially reasonable efforts to end such
interruption, and (ii) to make such repairs and replacements to the glass,
demising walls, pipes, conduits and wiring, electrical components and systems
and such other items as are reasonably necessary to maintain the Premises in a
safe and tenantable condition suitable for the conduct of Tenant's business
therein.
10. TENANT'S OBLIGATIONS. Tenant shall be responsible for, and shall
pay as Additional Rent, overtime HVAC costs, if applicable, in accordance with
the provisions of the Prime Lease. Tenant shall not be obligated to maintain or
repair the Premises or its equipment.
11. QUIET ENJOYMENT. Landlord represents that it has full power and
authority to enter into this Sublease, subject to the consent of the Prime
Landlord, if required under the Prime Lease. So long as Tenant is not in default
in the performance of its covenants and agreements in this Sublease, Tenant's
quiet and peaceable enjoyment of the Premises shall not be disturbed or
interfered with by Landlord, or by any person claiming by, through, or under
Landlord.
12. TENANT'S INSURANCE. Tenant shall procure and maintain, at its
own cost and expense, such liability insurance as is required to be carried by
Landlord under the Prime Lease, naming Landlord, as well as Prime Landlord, in
the manner required therein and such property insurance as is required to be
carried by Landlord under the Prime Lease to the extent such property insurance
pertains to the Premises. Tenant shall furnish to Landlord a certificate of
Tenant's insurance required hereunder not later than ten (l0) days prior to
Tenant's taking possession of the Premises. In addition to Base Rent, Tenant
shall pay to Landlord within thirty (30) days after receipt of an invoice
therefor, one hundred percent (100%) of the cost of any increase to any
insurance carried by Landlord and covering the Premises leased to Landlord under
5
the Prime Lease occasioned by Tenant's use of the Premises. Landlord agrees that
there shall be no increase associated with Tenant's use of the Premises as a
general office. Each party hereby waives claims against the other for property
damage provided such waiver shall not invalidate the waiving party's property
insurance. Each party shall attempt to obtain from its insurance carrier a
waiver of its right of subrogation. Tenant hereby waives claims against Prime
Landlord and Landlord for property damage to the Premises or its contents if and
to the extent that Landlord waives such claims against Prime Landlord under the
Prime Lease. Tenant agrees to obtain, for the benefit of Prime Landlord and
Landlord, such waivers of subrogation rights from its insurer as are required of
Landlord under the Prime Lease.
13. ASSIGNMENT OR SUBLETTING. Without the prior written consent of
Landlord, Tenant shall not (i) assign, convey, or mortgage this Sublease or any
interest under it, (ii) allow any transfer thereof or any lien upon Tenant's
interest by operation of law, or (iii) further sublet the Premises or any part
thereof (collectively, a "Transfer"). Tenant shall follow the procedures for
requesting Landlord's consent to an assignment as set forth in Section 5.1 of
the Prime Lease for any Transfer, as though Tenant was the tenant thereunder and
Landlord was the Prime Landlord. Landlord's consent to a Transfer may be
withheld in Landlord's sole and absolute discretion, provided, however, Landlord
shall use reasonable efforts to obtain the consent of Prime Landlord if such
consent is required to be obtained under the Prime Lease. In addition to the
costs and expenses to be paid by Tenant to Landlord as part of Tenant's notice
prescribed in Section 5.1 of the Prime Lease by operation of this Section 13,
Tenant shall pay all costs and expenses owed under the Prime Lease for Prime
Landlord's consideration of a proposed Transfer. Notwithstanding the foregoing,
Tenant shall be entitled to engage in a Transfer without Landlord's consent if
said Transfer would not require Prime Landlord's consent under the Prime Lease.
Any assignee or sub-sublessee which claims an interest in this Sublease pursuant
to a Transfer shall be bound by all the terms and conditions of this Sublease.
14. RULES. Tenant agrees to comply with all commercially reasonable
rules and regulations that Prime Landlord has made or may hereafter from time to
time make for the Building. Landlord shall not be liable in any way for damage
caused by the non-observance by any of the other tenants of such similar
covenants in their leases or of such rules and regulations.
6
15. REPAIRS AND COMPLIANCE. Tenant shall, at Tenant's own expense,
comply with all applicable laws and ordinances, and all applicable orders, rules
and regulations of all applicable governmental authorities and of all applicable
insurance bodies and their fire prevention engineers at any time in force,
applicable to the Premises or to Tenant's particular use or manner of use
thereof.
16. FIRE OR CASUALTY OR EMINENT DOMAIN.
A. In the event of a fire or other casualty affecting the
Property, the Building or the Premises, or of a taking of all or a part of the
Property, the Building or the Premises under the power of eminent domain, if
Landlord is entitled, under the Prime Lease, to a rent abatement as a result of
a fire or other casualty or as a result of a taking under the power of eminent
domain, then Tenant shall be entitled to a proportionate abatement of rent
unless the effect on the Premises of such fire or other casualty or such taking
shall be substantially disproportionate to the amount of the abatement, in which
event the parties shall equitably adjust the abatement as between themselves,
based on the relative impact of the fire or other casualty, or the taking, as
the case may be.
B. In the event of the occurrence of any casualty or
eminent domain taking pursuant to which Landlord shall have the right or option
to terminate the Prime Lease under the Prime Lease, Tenant shall have the right
to terminate this Sublease by written notice to Landlord within the applicable
time period set forth in the Prime Lease.
17. ALTERATIONS. Tenant shall not make any alterations in or
additions to the Premises ("Alterations") if to do so would constitute a default
under the Prime Lease. If Tenant's proposed Alterations would not constitute a
default under the Prime Lease, Landlord's consent thereto shall nonetheless be
required, but Landlord's consent to such Alterations shall not be unreasonably
withheld, delayed or conditioned, and if Landlord consents thereto, Landlord
shall use reasonable efforts to obtain the consent of Prime Landlord, if such
consent is required under the Prime Lease. If Alterations by Tenant are
permitted or consented to as aforesaid, Tenant shall comply with all of the
covenants of Landlord contained in the Prime Lease pertaining to the performance
of such Alterations. In addition, Tenant shall indemnify, defend and hold
harmless Landlord against liability, loss, cost, damage, liens and expense
7
imposed on Landlord arising out of the performance of Alterations by Tenant.
Notwithstanding the foregoing to the contrary, Tenant shall have the right
without Landlord's consent to install telecommunications and other data lines in
the Building and the Premises (the "Utility Work"). If the consent of the Prime
Landlord is required to conduct the Utility Work, Landlord shall use reasonable
efforts to obtain the consent of the Prime Landlord.
18. SURRENDER. Upon the expiration of this Sublease, or upon the
termination of the Sublease or of the Tenant's right to possession of the
Premises, Tenant will at once surrender and deliver up the Premises, together
with all improvements thereon, to Landlord in good condition and repair,
reasonable wear and tear, damage by fire, casualty and taking excepted. Any
conditions existing because of Tenant's failure to perform maintenance, repairs
or replacements as required of Tenant under this Sublease shall not be deemed
"reasonable wear and tear." Tenant shall surrender to Landlord all keys to the
Premises and make known to Landlord the explanation of all combination locks
which Tenant is permitted to leave on the Premises. All Alterations in or upon
the Premises made by Tenant shall become a part of and shall remain upon the
Premises upon such termination without compensation, allowance or credit to
Tenant provided, however, that Landlord shall have the right to require Tenant
to remove any Alterations made by Tenant, or portion thereof. Said right shall
be exercisable by Landlord giving written notice thereof to Tenant on or before
thirty (30) days prior to such expiration or on or before twenty (20) days after
such termination. Tenant shall also remove any Alterations made by Tenant, or
portion thereof, which Prime Landlord may require Landlord to remove, pursuant
to the terms of the Prime Lease. In any such event, Tenant shall restore the
Premises to their condition prior to the making of such Alteration, repairing
any damage occasioned by such removal or restoration. If Landlord or Prime
Landlord requires removal of any Alteration made by Tenant, or a portion
thereof, and Tenant does not make such removal in accordance with this Section,
Landlord may remove the same (and repair any damage occasion thereby), and
dispose thereof. Tenant shall pay reasonable costs of such removal, repair, and
disposal on demand. If the term of the Sublease expires at or about the date of
the expiration of the Prime Lease, and if Landlord is required under or pursuant
to the terms of the Prime Lease to remove any Alterations performed prior to the
Commencement Date, Tenant shall permit Landlord to enter the Premises for a
reasonable period of time prior to the expiration of the Sublease for the
purpose of removing its Alterations and restoring the Premises as required. On
or before such expiration or termination, Tenant shall remove its furniture,
machinery, equipment, and other items of personal property in or about the
Premises.
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19. REMOVAL OF TENANT'S PROPERTY. Upon the expiration of this
Sublease, Tenant shall remove Tenant's articles of personal property incident to
Tenant's business ("Trade Fixtures"); provided, however, that Tenant shall
repair any injury or damage to the Premises which may result from such removal,
and shall restore the Premises to the same condition as prior to the
installation thereof. If Tenant does not remove Tenant's Trade Fixtures from the
Premises prior to the expiration or earlier termination of the Term, Landlord
may, at its option, remove the same (and repair any damage, occasioned thereby
and restore the Premises as aforesaid) and dispose thereof, and Tenant shall pay
reasonable costs of such removal, repair, restoration, and disposal to Landlord
on demand, or Landlord may treat said Trade Fixtures as having been conveyed to
Landlord with this Lease as a Xxxx of Sale, without further payment or credit by
Landlord to Tenant.
20. HOLDING OVER. Tenant shall have no right to occupy the Premises
or any portion thereof after the expiration of this Sublease or after
termination of this Sublease or of Tenant's right to possession in consequence
of an Event of Default hereunder. In the event Tenant or any party claiming by,
through or under Tenant holds over, Landlord may exercise any and all remedies
available to it at law or in equity to recover possession of the Premises, and
to recover damages, including without limitation, damages payable by Landlord to
Prime Landlord by reason of such holdover. For each and every month or partial
month that Tenant or any party claiming by, through or under Tenant remains in
occupancy of all or any portion of the Premises after the expiration of this
Sublease or after termination of this Sublease or Tenant's right to possession,
Tenant shall pay, as minimum damages and not as a penalty, monthly rental at a
rate equal to two hundred percent (200%) the rate of Base Rent payable by Tenant
hereunder immediately prior to the expiration or other termination of this
Sublease or of Tenant's right to possession. The acceptance by Landlord of any
lesser sum shall be construed as payment on account and not in satisfaction of
damages for such holding over.
21. ENCUMBERING TITLE. Tenant shall not do any act which shall in
any way encumber the title of Prime Landlord in and to the Building or the
Property, nor shall the interest or estate of Prime Landlord or Landlord be in
9
any way subject to any claim by way of lien or encumbrance, whether by operation
of law by virtue of any express or implied contract by Tenant, or by reason of
any other act or omission of Tenant. Any claim to, or lien upon, the Premises,
the Building or the Property arising from any act or omission of Tenant shall
accrue only against the subleasehold estate of Tenant and shall be subject and
subordinate to the paramount title and rights of Prime Landlord in and to the
Building and the Property and the interest of Landlord in the premises leased
pursuant to the Prime Lease. Without limiting the generality of the foregoing,
Tenant shall not permit the Premises, the Building or the Property to become
subject to any mechanics', laborers', or materialmen's lien on account of labor
or material furnished to Tenant or claimed to have been furnished to Tenant in
connection with work of any character performed or claimed to have been
performed on the Premises by, or at the direction or sufferance of, Tenant,
provided, however, that if so permitted under the Prime Lease, Tenant shall have
the right to contest in good faith and with reasonable diligence, the validity
of any such lien or claimed lien if Tenant shall give to Prime Landlord and
Landlord such security as may be deemed satisfactory to them to assure payment
thereof, and to prevent any sale, foreclosure, or forfeiture of the Premises,
the Building or the Property by reason of non-payment thereof, provided further,
however, that on final determination of the lien or claim of lien, Tenant shall
immediately pay any judgment rendered, with all proper costs and charges, and
shall have the lien released and any judgment satisfied.
22. INDEMNITY.
A. Tenant hereby indemnifies and agrees to defend and hold
Landlord and the Prime Landlord harmless from and against any and all costs,
claims, actions, damages, demands, expenses (including, without limitation,
reasonable attorney's and consultant's fees), injuries, judgments, settlements,
liabilities, penalties, losses and suits individually and collectively suffered,
sustained or incurred by Landlord, its employees, officers, directors, agents or
representatives or Prime Landlord, its employees, officers, directors, agents or
representatives in connection with, or as a result of, any accident, act or
omission, claim, hazard, injury, violation of any environmental, health, fire,
zoning, building or safety codes or applicable laws, death or damage to person
or property arising, directly or indirectly, in whole or in part, from any act
or omission of Tenant, its employees, members, managers, officers, agents or
10
representatives (the "Tenant Parties"), or the breach or default by Tenant or
any of the Tenant Parties of any term, provision, covenant, or condition
contained in the Prime Lease or this Sublease, or from the use by Tenant or any
of the Tenant Parties of the Premises, whether or not in compliance with the
terms of the Sublease. The scope of this indemnification shall, at Landlord's
option, include, but not be limited to, defending or resisting, with all losses,
damages, liabilities and expenses which Landlord may incur, or for attorneys
reasonably satisfactory to Landlord, any action, suit, claim, demand or
proceeding that may be filed, instituted or brought against Landlord or to which
Landlord may be liable to Prime Landlord, arising from the acts or omissions of
Tenant which are the subject matter of any indemnity claim, provided, however,
Tenant gets timely notice of any claim.
B. Landlord agrees to indemnify, defend, save and hold
Tenant free, clear and harmless from any and all liability, loss, costs,
charges, penalties, obligations, expenses, attorneys' fees, litigation,
judgments, damages, claims and demands of any kind whatsoever in connection with
or arising out of or by reason of (i) any injury or damage, however occurring,
to any person or persons whomsoever (including Tenant, its agents, employees,
servants, contractors, sub-subtenants, licensees, concessionaires, customers or
business invitees) or to any property, which injury or damage is caused by the
negligence or willful acts of Landlord or its agents, employees, servants,
contractors, subtenants, licensees, concessionaires, customers or business
invitees, or (ii) any violation of terms of this Sublease by Landlord, or (iii)
provided Tenant is not then in default of its obligations hereunder, Prime
Landlord's termination of the Prime Lease prior to the expiration of this
Sublease due to any act or omission of Landlord or its agents, employees,
servants, sub-subtenants, contractors, licensees, concessionaires, customers or
business invitees.
23. LANDLORD'S RESERVED RIGHTS. Landlord reserves the right, on
reasonable prior notice and in the presence of a representative of Tenant, to
inspect the Premises, or to exhibit the Premises to persons having a legitimate
interest at any time during the Sublease Term. During the last six (6) months of
the term of this Sublease, Landlord may exhibit the Premises to potential
tenants accompanied by a representative of Tenant and with reasonable notice.
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24. DEFAULTS. Tenant further agrees that any one or more of the
following events shall be considered Events of Default as said term is used
herein, that is to say, if:
A. Tenant shall be adjudged an involuntary bankrupt, or a
decree or order approving, as properly filed, a petition or answer filed against
Tenant asking reorganization of Tenant under the Federal bankruptcy laws as now
or hereafter amended, or under the laws of any State, shall be entered, and any
such decree or judgment or order shall not have been vacated or stayed or set
aside within sixty (60) days from the date of the entry or granting thereof; or
B. Tenant shall file, or admit the jurisdiction of the
court and the material allegations contained in, any petition in bankruptcy, or
any petition pursuant or purporting to be pursuant to the Federal bankruptcy
laws now or hereafter amended, or Tenant shall institute any proceedings for
relief of Tenant under any bankruptcy or insolvency laws or any laws relating to
the relief of debtors, readjustment of indebtedness, reorganization,
arrangements, composition or extension; or
C. Tenant shall admit in writing its inability to pay its
debts as they become due; or
D. The Premises are levied on by any revenue officer or
similar officer; or
E. A decree or order appointing a receiver of the property
of Tenant shall be made and such decree or order shall not have been vacated,
stayed or set aside within sixty (60) days from the date of entry or granting
thereof; or
F. Tenant shall default in any payment of Rent required to
be made by Tenant hereunder when due and said payment is not made within seven
(7) days after notice in writing to Tenant; or
G. Tenant shall, by its act or omission to act, cause a
default under the Prime Lease and such default shall not be cured within the
time, if any, permitted for such cure under the Prime Lease; or
H. Tenant shall default in any of the other covenants and
agreements herein contained to be kept, observed and performed by Tenant, and
such default shall continue for thirty (30) days after notice thereof in writing
12
to Tenant or the additional time, if agreed upon in writing, that is reasonably
necessary to promptly and diligently cure the failure, after it receives notice
from Landlord setting forth in reasonable detail the nature and failure and
identifying the applicable Sublease or Prime Lease provisions.
25. REMEDIES. Upon the occurrence of anyone or more Events of
Default, Landlord may exercise any remedy against Tenant which Prime Landlord
may exercise for default by Landlord under the Prime Lease.
26. NOTICES AND CONSENTS. All notices, demands, requests, consents
or approvals which may or are required to be given by either party to the other
shall be in writing and shall be deemed given when received or refused if sent
by United States registered or certified mail, postage prepaid, return receipt
requested or if sent by overnight commercial courier service (i) if to Tenant,
addressed to Tenant at the address specified in Section 1(B) or at such other
place as Tenant may from time to time designate by notice in writing to Landlord
or (ii) if for Landlord, addressed to Landlord at the address specified in
Section 1 (C) or at such other place as Landlord may from time to time designate
by notice in writing to Tenant. Each party agrees promptly to deliver a copy of
each notice, demand, request, consent or approval from such party to Prime
Landlord and promptly to deliver to the other party a copy of any notice,
demand, request, consent or approval received from Prime Landlord. Such copies
shall be delivered by overnight commercial courier.
27. PROVISIONS REGARDING SUBLEASE. This Sublease and all the rights
of parties hereunder are subject and subordinate to the Prime Lease. Each party
agrees that it will not, by its act or omission to act, cause a default under
the Prime Lease. In furtherance of the foregoing, the parties hereby confirm,
each to the other, that it is not practical in this Sublease agreement to
enumerate all of the rights and obligations of the various parties under the
Prime Lease and specifically to allocate those rights and obligations in this
Sublease agreement. Accordingly, in order to afford to Tenant the benefits of
this Sublease and of those provisions of the Prime Lease which by their nature
are intended to benefit the party in possession of the Premises, and in order to
protect Landlord against a default by Tenant which might cause a default or
event of default by Landlord under the Prime Lease:
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A. Provided Tenant shall timely pay all Rent when and as
due under this Sublease, Landlord shall pay, when and as due, all base rent,
additional rent and other charges payable by Landlord to Prime Landlord under
the Prime Lease;
B. Landlord shall perform its covenants and obligations
under the Prime Lease which do not require for their performance possession of
the Premises and which are not otherwise to be performed hereunder by Tenant on
behalf of Landlord.
C. Tenant shall perform all affirmative covenants and shall
refrain from performing any act which is prohibited by the negative covenants of
the Prime Lease, where the obligation to perform or refrain from performing is
by its nature imposed upon the party in possession of the Premises. If
practicable, Tenant shall perform affirmative covenants which are also covenants
of Landlord under the Prime Lease at least five (5) days prior to the date when
Landlord's performance is required under the Prime Lease. Subject to the terms
and conditions of Section 22, Landlord shall have the right to enter the
Premises to cure any default by Tenant under this Section.
D. Landlord shall not agree to an amendment to the Prime
Lease which might have an adverse effect on Tenant's occupancy of the Premises
or its use of the Premises for their intended purpose, unless Landlord shall
first obtain Tenant's prior written approval thereof.
E. Upon the occurrence of any event or circumstance
pursuant to which Landlord shall have the right to elect to terminate the Prime
Lease, Landlord agrees that it shall not exercise any such right to terminate
the Prime Lease without first consulting with and obtaining the approval of
Tenant.
F. Except as otherwise provided herein, Landlord hereby
grants to Tenant the right to receive all of the services and benefits with
respect to the Premises which are to be provided by Prime Landlord under the
Prime Lease. Landlord shall have no duty to perform any obligations of Prime
Landlord which are, by their nature, the obligation of an owner or manager of
real property. For example, Landlord shall not be required to provide the
services or repairs which the Prime Landlord is required to provide under the
Prime Lease. Landlord shall have no responsibility for or be liable to Tenant
for any default, failure or delay on the part of Prime Landlord in the
14
performance or observance by Prime Landlord of any of its obligations under the
Prime Lease, nor shall such default by Prime Landlord affect this Sublease or
waive or defer the performance of any of Tenant's obligations hereunder except
to the extent that such default by Prime Landlord excuses performance by
Landlord, under the Prime Lease. Notwithstanding the foregoing, the parties
contemplate that Prime Landlord shall, in fact, perform its obligations under
the Prime Lease and if the Prime Landlord shall default in or fail to perform
any of its obligations to Landlord with respect to the Premises, Tenant shall be
entitled to participate with Landlord in the enforcement of Tenant's rights
against Prime Landlord. If, after written request from Tenant, Landlord shall
fail or refuse to take appropriate action for the enforcement of Tenant's rights
against Prime Landlord with respect to the Premises, Tenant shall have the right
to either (i) take such action in its own name, including, without limitation,
the right to bring any legal action or proceeding or to take any other steps to
enforce Tenant's rights against Prime Landlord, and for that purpose all of the
rights of Landlord under the Prime Lease hereby are conferred upon and assigned
to Tenant and Tenant is subrogated to such rights to the extent that the same
shall apply to the Premises, or (ii) if any such action against Prime Landlord
in Tenant's name shall be barred by reason of lack of privity,
non-assignability, or otherwise, Tenant make take such action in Landlord's
name.
28. ADDITIONAL SERVICES. Landlord shall cooperate with Tenant to
cause Prime Landlord to provide services required by Tenant in addition to those
otherwise required to be provided by Prime Landlord under the Prime Lease.
Tenant shall pay Prime Landlord's charge for such services promptly after having
been billed therefor by Prime Landlord or by Landlord. If at anytime a charge
for such additional services is attributable to the use of such services both by
Landlord and by Tenant, the cost thereof shall be equitably divided between
Landlord and Tenant.
29. PRIME LANDLORD'S CONSENT. This Sublease and the obligations of
the parties hereunder are expressly conditioned upon Landlord's obtaining prior
written consent hereto by Prime Landlord, if such written consent is required
under the Prime Lease. If Landlord does not obtain such consent from the Prime
Landlord, Tenant shall have the right to terminate this Sublease upon written
notice to Landlord, whereupon this Sublease shall be null and void and of no
further force or effect. Tenant shall promptly deliver to Landlord any
15
information reasonably requested by Prime Landlord (in connection with Prime
Landlord's approval of this Sublease) with respect to the nature and operation
of Tenant's business and/or the financial condition of Tenant. Landlord and
Prime Landlord shall keep such information regarding Tenant confidential and
shall disclose such information only on a need to know basis (and such need to
know basis shall include, but not be limited to, Landlord's right to disclose
such information to Prime Landlord, after first obtaining Prime Landlord's
written assent to the confidentiality provisions of this Section 29). Landlord
and Tenant hereby agree, for the benefit of Prime Landlord, that this Sublease
and Prime Landlord's consent hereto shall not (a) create privity of contract
between Prime Landlord and Tenant; (b) be deemed to have amended the Prime Lease
in any regard (unless Prime Landlord shall have expressly agreed in writing to
such amendment); or (c) be construed as a waiver of Prime Landlord's right to
consent to any assignment of the Prime Lease by Landlord or any further
subletting of premises leased pursuant to the Prime Lease, or as a waiver of
Prime Landlord's right to consent to any assignment by Tenant of this Sublease
or any sub-letting of the Premises or any part thereof. Prime Landlord's consent
shall, however, be deemed to evidence Prime Landlord's agreement that Tenant may
use the Premises for the purpose set forth in Section 1(M) and that Tenant shall
be entitled to any waiver of claims and of the right of subrogation for damage
to Prime Landlord's property if and to the extent that the Prime Lease provides
such waivers for the benefit of Landlord.
30. BROKERAGE. Each party warrants to the other that it has had no
dealings with any broker or agent in connection with this Sublease, and
covenants to hold harmless and indemnify the other party from and against any
and all costs (including reasonable attorneys' fees), expense or liability for
any compensation, commissions and charges claimed by any other broker or other
agent with respect to this Sublease or the negotiation thereof on behalf of such
party.
31. SIGNAGE. Tenant shall have the right, subject to (i) the
provisions of the Prime Lease, and (ii) Landlord's consent which shall not be
unreasonably withheld, delayed or conditioned to install building standard
signage on the lobby entrance of the Building and at Tenant's main entrance to
the Premises.
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32. FURNITURE. Tenant shall have the right to use, at no additional
cost, the existing furniture within the Premises, including the conference room
furniture. All such furniture shall be provided without representation or
warranty as to its fitness for a particular purpose or condition.
33. PARKING RIGHTS. Tenant shall have access to parking spaces on
the Property on a first-come, first-served basis. Tenant's use of such parking
spaces is subject to the conditions imposed on Landlord's use in the Prime
Lease, if any.
34. INTEREST. To the extent that any Base Rent due hereunder is not
paid when due, the past due amount shall accrue interest at the lesser of twelve
percent (12%) per annum or the highest non-usurious amount permitted by law from
the first day the same becomes past due through the date the same is paid in
full together with interest thereon as required hereby. Any payment default
shall not be deemed to have been cured unless and until all accrued and unpaid
interest due thereon is paid in full and together with all outstanding amounts
due hereunder.
35. NON-WAIVER. Failure of Landlord or Tenant to declare any default
immediately upon occurrence thereof, or any delay in taking any action in
connection therewith, shall not waive such action in law or in equity. No waiver
by Landlord of a default by Tenant shall be applied, and no express waiver by
Landlord shall affect any such default other than the default specified in such
waiver and then only for the time and extension therein stated. All rights and
remedies specifically granted to Landlord herein shall be cumulative and not
mutually exclusive, and no waiver shall be enforceable unless signed by the
party against whom enforcement is sought.
36. RECORDING. Tenant shall not record this Sublease or any
memorandum or summary thereof without the prior written consent of Landlord,
which may be withheld in Landlord's sole and absolute discretion.
17
The parties have executed this Sublease the day and year first above
written.
INTEGRATED PHYSICIAN SOLUTIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxxx X. Xxxxx, President and CEO
June 7, 2005
ECLINICALWEB, LLC
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx, VP of Sales
June 7, 2005
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EXHIBIT A
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Floor Plan
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19
