Xxxxx, LLC
Interim Part - Time Executive Services Agreement
March 17, 2006
Xxxxx X. Xxxx, MD
Chairman and Chief Executive Officer
InforMedix
Georgetowne Office Park
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Dear Xx. Xxxx:
Xxxxx, LLC ("Xxxxx") understands that InforMedix ("the Company") desires to
engage a partner of Xxxxx to serve as interim part-time chief financial officer.
This Interim Part -Time Executive Services Agreement sets forth the conditions
under which such services will be provided.
Services; Fees
Xxxxx will make available to the Company Xxxxx X. Xxxxx (the "Xxxxx Partner"),
who will serve as chief financial officer of the Company. The Xxxxx Partner will
become an employee and, if applicable, a duly elected or appointed officer of
the Company and subject to the supervision and direction of the CEO of the
Company, the board of directors of the Company, or both. Xxxxx will have no
control or supervision over the Xxxxx Partner.
The Xxxxx Partner will work two (2) days per work week (or 40% of full time
equivalency) for which the Company will pay the Xxxxx Partner directly a salary
of $10,800 per month ("Salary"), so long as the Company utilizes the Xxxxx
Partner for at least three consecutive months under this agreement ("Minimum
Period"). In the event that the Company elects to terminate this agreement prior
to the Minimum Period, than the Company will be obligated to retroactively
adjust the Salary to $12,000 per month, and shall immediately pay the Xxxxx
Partner the "make-up" differential for the relevant short-period for which
services were provided.
In addition, the Company will pay directly to Xxxxx a fee of $2,700 a month
("Fees") as partial compensation for resources provided so long as the Company
utilizes the Xxxxx Partner for at least three consecutive months under this
agreement. In the event that the Company elects to terminate this agreement
prior to the Minimum Period, than the Company will be obligated to retroactively
adjust the Fees to $3,000 per month, and shall immediately pay Xxxxx the
"make-up" differential for the relevant short-period for which services were
provided.
The Company will have no obligation to provide the Xxxxx Partner any health or
major medical benefits, stock, or bonus payments. The Xxxxx Partner will remain
on his or her current medical plan.
Payments; Deposit
Payments to Xxxxx should be made by direct deposit through the Company's
payroll, or by an automated clearing house ("ACH") payment at the same time as
payments are made to the Employee. If such payment method is not available and
payments are made by check, Xxxxx will issue invoices to the Company, and the
Company agrees to pay such invoices no later than ten (10) days after receipt of
invoices.
The Company will reimburse the Xxxxx Partner directly for out-of-pocket expenses
incurred by the Xxxxx Partner in providing services hereunder to the same extent
that the Company is responsible for such expenses of senior managers of the
Company.
Company agrees to pay Xxxxx and to maintain a security deposit of $13,500 for
the Company's future payment obligations to both Xxxxx and the Xxxxx Partner
under this agreement (the "Deposit"). If the Company breaches this agreement and
fails to cure such breach as provided in this agreement, Xxxxx will be entitled
to apply the Deposit to its damages resulting from such breach. Upon termination
or expiration of this agreement, Xxxxx will return to the Company the balance of
the Deposit remaining after application of any amounts to unfulfilled payment
obligations of the Company to Xxxxx or the Xxxxx Partner as provided for in this
agreement.
Converting Interim to Permanent
The Company will have the opportunity to make the Xxxxx Partner a permanent
member of Company management at any time during the term of this agreement by
entering into another form of Xxxxx agreement, the terms of which will be
finalized at such time, but which include the following general terms:
1. The Company will pay Xxxxx a 25% cash fee at the date of such new
agreement, calculated as a percent of 1st year normalized annualized cash
compensation (annual base salary and annual cash bonus potential, both of
which are to be negotiated);
2. The Company will pay Xxxxx $1,000 per month as an additional resource fee,
so long as the Xxxxx Partner is permanently employed and/or paid a monthly
severance amount related to the permanent employment;
3. The Xxxxx Partner will allocate 15%, to Xxxxx on a derivative basis, any
proceeds arriving from any equity instruments issued by the Company to the
Xxxxx Partner as part of his or her permanent compensation agreement.
Hiring Xxxxx Partner Outside of Agreement
During the twelve (12)-month period following termination or expiration of this
agreement, other than in connection with another Xxxxx agreement, the Company
will not employ the Xxxxx Partner, or engage the Xxxxx Partner as an independent
contractor, to render services of substantially the same nature as those to be
performed by the Xxxxx Partner as contemplated by this agreement. The parties
recognize and agree that a breach by the Company of this provision would result
in the loss to Xxxxx of the Xxxxx Partner's valuable expertise and revenue
potential and that such injury will be impossible or very difficult to
ascertain. Therefore, in the event this provision is breached, Xxxxx will be
entitled to receive as liquidated damages an amount equal to forty-five percent
(45%) of the Xxxxx Partner's Annualized Compensation (as defined below), which
amount the parties agree is reasonably proportionate to the probable loss to
Xxxxx and is not intended as a penalty. If, however, a court or arbitrator, as
applicable, determines that liquidated damages are not appropriate for such
breach, Xxxxx will have the right to seek actual damages. The amount will be due
and payable to Xxxxx upon written demand to the Company. For this purpose,
"Annualized Compensation" will mean monthly Salary equivalent to what the Xxxxx
Partner would receive on a full-time basis multiplied by twelve (12), plus the
maximum amount of any bonus for which the Xxxxx Partner was eligible with
respect to the then current bonus year.
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Term & Termination
Effective upon thirty (30) days' advance written notice, either party may
terminate this agreement, such termination to be effective on the date specified
in the notice, provided that such date is no earlier than thirty (30) days after
the date of delivery of the notice. Xxxxx will continue to render services and
will be paid during such notice period.
Xxxxx retains the right to terminate this agreement immediately if (1) the
Company is engaged in or asks the Xxxxx Partner to engage in or to ignore any
illegal or unethical activity, (2) the Xxxxx Partner dies or becomes disabled,
(3) the Xxxxx Partner ceases to be a partner of Xxxxx for any other reason, or
(4) upon written notice by Xxxxx of non-payment by the Company of amounts due
under this agreement. For purposes of this agreement, disability will be as
defined by the applicable policy of disability insurance or, in the absence of
such insurance, by Xxxxx'x management acting in good faith.
In the event that either party commits a breach of this agreement, other than
for reasons described in the above paragraph, and fails to cure the same within
seven (7) days following delivery by the non-breaching party of written notice
specifying the nature of the breach, the non-breaching party will have the right
to terminate this agreement immediately effective upon written notice of such
termination.
Insurance
To the extent the Company has directors' and officers' liability insurance in
effect, the Company will provide such insurance coverage for the Xxxxx Partner,
along with written evidence to Xxxxx or the Xxxxx Partner that the Xxxxx Partner
is covered by such insurance.
Furthermore, the Company will maintain such insurance coverage with respect to
occurrences arising during the term of this agreement, at the same level as
provided for the Directors, including any extended reporting period, or "tail,"
policy.
Disclaimers, Limitations of Liability & Indemnity
Xxxxx assumes no responsibility or liability under this agreement other than to
render the services called for hereunder and will not be responsible for any
action taken by the Company in following or declining to follow any of Xxxxx'x
advice or recommendations. Xxxxx represents to the Company that Xxxxx has
conducted its standard screening and investigation procedures with respect to
the Xxxxx Partner becoming a partner in Xxxxx, and the results of the same were
satisfactory to Xxxxx. Xxxxx disclaims all other warranties, either express or
implied. Without limiting the foregoing, Xxxxx makes no representation or
warranty as to the accuracy or reliability of reports, projections, forecasts,
or any other information derived from use of Xxxxx'x resources, and Xxxxx will
not be liable for any claims of reliance on such reports, projections,
forecasts, or information. Xxxxx will not be liable for any non-compliance of
reports, projections, forecasts, or information or services with federal, state,
or local laws or regulations. Such reports, projections, forecasts, or
information or services are for the sole benefit of the Company and not any
unnamed third parties.
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In the event that any partner of Xxxxx (including without limitation the Xxxxx
Partner to the extent not otherwise entitled in his or her capacity as an
officer of the Company) is subpoenaed or otherwise required to appear as a
witness or to provide evidence in connection with any action, suit, or other
proceeding initiated by a third party or by the Company against a third party,
then the Company shall reimburse Xxxxx for the reasonable costs and expenses
(including reasonable attorneys' fees) actually incurred by Xxxxx or such
partner. Further, the Company shall provide Xxxxx with compensation at Xxxxx'x
customary rates which shall not materially differ from the rates included in
this agreement, prorated, for the time incurred.
The Company agrees that, with respect to any claims the Company may assert
against Xxxxx in connection with this agreement or the relationship arising
hereunder, Xxxxx'x total liability will not exceed two (2) months of Fees.
As a condition for recovery of any liability, the Company must assert any claim
against Xxxxx within three (3) months after discovery or one-hundred eighty
(180) days after the termination or expiration of this agreement, whichever is
earlier.
Xxxxx will not be liable in any event for incidental, consequential, punitive,
or special damages, including without limitation, any interruption of business
or loss of business, profit, or goodwill.
Arbitration
If the parties are unable to resolve any dispute arising out of or in connection
with this agreement, either party may refer the dispute to arbitration by a
single arbitrator selected by the parties according to the rules of the American
Arbitration Association ("AAA"), and the decision of the arbitrator will be
final and binding on both parties. Such arbitration will be conducted by the
Atlanta, Georgia, office of the AAA. In the event that the parties fail to agree
on the selection of the arbitrator within thirty (30) days after either party's
request for arbitration under this paragraph, the arbitrator will be chosen by
AAA. The arbitrator may in his discretion order documentary discovery but shall
not allow depositions without a showing of compelling need. The arbitrator will
render his decision within ninety (90) days after the call for arbitration. The
arbitrator will have no authority to award punitive damages. Judgment on the
award of the arbitrator may be entered in and enforced by any court of competent
jurisdiction. The arbitrator will have no authority to award damages in excess
or in contravention of this agreement and may not amend or disregard any
provision of this agreement, including this paragraph. Notwithstanding the
foregoing, either party may seek appropriate injunctive relief from a court of
competent jurisdiction, and either party may seek injunctive relief in any court
of competent jurisdiction.
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Miscellaneous
Xxxxx will be entitled to receive all reasonable costs and expenses incidental
to the collection of overdue amounts under this Resources Agreement, including
but not limited to attorneys' fees actually incurred.
Neither the Company nor Xxxxx will be deemed to have waived any rights or
remedies accruing under this agreement unless such waiver is in writing and
signed by the party electing to waive the right or remedy. This agreement binds
and benefits the respective successors of Xxxxx and the Company.
Neither party will be liable for any delay or failure to perform under this
agreement (other than with respect to payment obligations) to the extent such
delay or failure is a result of an act of God, war, earthquake, civil
disobedience, court order, labor dispute, or other cause beyond such party's
reasonable control.
The provisions concerning payment of compensation and reimbursement of costs and
expenses, limitation of liability, directors' and officers' insurance, and
arbitration will survive the expiration or any termination of this agreement.
This agreement will be governed by and construed in all respects in accordance
with the laws of the State of Georgia, without giving effect to
conflicts-of-laws principles.
The terms of this agreement are severable and may not be amended except in
writing signed by the party to be bound. If any portion of this agreement is
found to be unenforceable, the rest of the agreement will be enforceable except
to the extent that the severed provision deprives either party of a substantial
benefit of its bargain.
Nothing in this agreement shall confer any rights upon any person or entity
other than the parties hereto and their respective successors and permitted
assigns and the Xxxxx Partner.
Each person signing below is authorized to sign on behalf of the party
indicated, and in each case such signature is the only one necessary.
Bank Lockbox Mailing Address for Deposit and Fees:
Xxxxx, LLC
X.X. Xxx 000000
Xxxxxxx, XX 00000-0000
Electronic Payment Instructions for Deposit and Fees:
Bank Name: Bank of America
Branch: Atlanta
Routing Number: For ACH Payments: 061 000 052
For Wires: 026 009 593
Account Name: Xxxxx, LLC
Account Number: 003 279 247 763
Please reference InforMedix in the body of the wire.
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Please sign below and return a signed copy of this letter to indicate the
Company's agreement with its terms and conditions.
We look forward to serving you.
Sincerely yours,
XXXXX, LLC Acknowledged and agreed by:
InforMedix
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxx
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Signature Signature
Xxxxxx X. Xxxxxxxxx
Area Managing Partner for XXXXX, LLC Xxxxx X. Xxxx, MD
Chairman and CEO
March 17, 2006
----------------------------
(Date)
March 17, 2006
----------------------------
(Date)
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