TRANSITION SERVICES AGREEMENT
Exhibit
10.3
THIS
TRANSITION SERVICES AGREEMENT
(“Agreement”) is made and entered as of the 6th
day of
April, 2006, by and among by and among VHT ACQUISITION COMPANY, a corporation
organized and existing under the laws of the State of Florida (the “Buyer”) and
ZAC CAPITAL PARTNERS, LLC, a limited liability company organized and existing
under the laws of the State of Delaware (“ZAC”). Collectively, ZAC and the Buyer
shall be defined as the “Parties”, and each individually as a
“Party”.
RECITALS:
WHEREAS,
Buyer
and ZAC, inter alia, are parties to that certain Asset Purchase Agreement,
dated
as of even date herewith (“Purchase Agreement”), pursuant to which substantially
all of the assets of VantaHealth Technologies, LLC are being purchased by the
Buyer;
WHEREAS,
in
connection with such purchase, the Buyer wishes to engage ZAC to provide certain
Services (as hereinafter defined);
WHEREAS,
ZAC is
willing to provide the Services in connection with the operation of the Business
(as such term is defined in the Purchase Agreement), to the Buyer, for the
convenience of the Buyer, under the terms and conditions specified herein;
and
WHEREAS,
it is a
condition to the consummation of the transactions contemplated by the Purchase
Agreement that ZAC and the Buyer enter into this Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
SECTION
1
TRANSITION
SERVICES
1.1 Definitions.
Unless
otherwise defined herein, capitalized terms used herein have the meanings
ascribed to such terms in the Purchase Agreement.
“Services”
means
the transition services required by Buyer from ZAC and which ZAC shall provide
from the Closing Date and for a period of 150 days thereafter and shall
including, without limitation, the following transition services: (i) transition
assistance with respect to existing clients of the Seller, (ii) assistance
with
such access to the Seller’s books and records as Buyer may reasonably request,
(iii) introduction of the Buyer’s representatives to the Seller’s existing sales
lead pipeline, (iv) assistance in connection with the collection of existing
accounts receivable, and (vi) such other services as Buyer may reasonably
request be performed in order to diligently pursue a smooth transition of the
Business and its operations to the Buyer and to resolve any issues which may
arise in connection therewith.
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1.2 Agreement
to Provide Services.
Subject
to the terms and conditions hereof, during the Term (as defined in Section
2.1
hereof), the Buyer hereby engages ZAC, and ZAC hereby accepts such engagement,
to provide Services to the Buyer. The Buyer acknowledges and agrees that access
to and use of the Services is provided solely for the use of the Buyer and
solely in connection with the operation of the Business during the
Term.
1.3 Limitations.
ZAC
and/or Buyer agree as follows, as applicable, and the Buyer hereby acknowledges
the following limitations with respect to ZAC’s provision of the
Services:
(a) Manner
of Performance.
ZAC
recognizes that its provision of Services to the Buyer is beneficial to ZAC,
and
agrees that it will endeavor to perform the Services hereunder with the same
degree of care, skill and diligence with which it performs similar services
for
itself, consistent with practices in effect immediately prior to the Closing
in
connection with the operation of the Business, including without limitation,
with respect to the type, quality and timeliness of such services, subject
to
variation in the provision of such Services that may be inherent in the plan
of
Services requested by the Buyer hereunder.
(b) Inability
to Provide Services.
In the
event that ZAC is unable to or have insufficient capacity to meet the Buyer’s
requirements for the Services, then ZAC shall provide prompt notice to Buyer
of
such inability. The Parties shall use their best efforts to consult and
cooperate with each other in order to establish mutually acceptable priorities
for the provision of the Services.
1.4 Mutual
Cooperation
The
Parties and their respective Affiliates shall cooperate with each other in
connection with the performance of the Services hereunder, including producing
on a timely basis all information that is reasonably requested with respect
to
the performance of the Services and the transition at the end of the
Term.
SECTION
2
TERM
OF AGREEMENT; DEFAULT; TERMINATION
2.1 Term
and Termination.
The
term
(“Term”) of this Agreement shall commence on the date hereof and continue until
termination. The Agreement shall terminate upon the earliest to occur of the
following: (a) mutual agreement of the Parties; or (b) September 1,
2006.
2.2 Effect
of Termination. Upon
termination of this Agreement by either Party:
(a) The
Buyer
shall pay all unpaid amounts or charges owed to ZAC as provided in this
Agreement.
(b) Where
Services with a determinable end date have been partially completed, ZAC shall
complete such partially completed Services and shall then cease to provide
such
Services hereunder. Where Services do not have a determinable end date, ZAC
shall cease to provide such Services at a date to be mutually determined by
the
Parties.
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2.3 Default
(a) Either
Party shall be deemed to be in default (such defaults, together with the
defaults described in Section 2.3(b), each a “Default”) hereunder upon the
occurrence of any one or more of the following events with respect to
it:
(i) Failure
to perform or fulfill any material obligation or condition of this Agreement
to
be performed or fulfilled by such Party, if such failure continues for thirty
(30) days (or such longer period of time as is agreed by the Parties to be
reasonably necessary to allow such Party to so perform or observe such
obligation) after written notice thereof is given by the other Party;
or
(ii) The
making of any general assignment or arrangement for the benefit of creditors,
the filing of a voluntary or involuntary petition in bankruptcy by or against
such Party under any bankruptcy or insolvency law or similar proceeding, the
appointment of a trustee or receiver or the commencement of a similar proceeding
to take possession of, or the attachment or other judicial seizure of,
substantially all of such Party’s assets, or the taking by such Party of any
action in furtherance of the foregoing.
(b) The
Buyer
shall be deemed to be in default hereunder if it fails to make any payment
when
due hereunder, if such failure continues for thirty (30) days after such payment
was due, unless such payment is being actively contested in good faith by the
Buyer.
2.4 Survival
Notwithstanding
any termination of this Agreement, (i) Sections 3, 4, and 6.1 and this
Section 2.4 shall survive any such termination; and (ii) any outstanding payment
obligations of the Buyer to ZAC, and all provisions of this Agreement relating
to payment of amounts due, shall survive any such termination, until all such
sums are paid in full.
2.5
Mutual
Cooperation and Additional Assumptions.
Prior
to
the termination of this Agreement, the parties shall reasonably cooperate in
good faith to facilitate an orderly transition of responsibility for the
Services, and each party shall deliver to the other party copies of such
documents, records and information as are reasonably necessary to achieve such
transition. Upon the termination of this Agreement, ZAC promptly shall deliver
to Buyer copies of all remaining documents, records and information in ZAC’s
possession and owned by Buyer or to which Buyer is otherwise entitled pursuant
to the Purchase Agreement that may be reasonably necessary for the other party
to assume complete internal responsibility for all of the Services.
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SECTION
3
FEES,
EXPENSES AND INVOICES
3.1 Fees
In
consideration for its performance of the Services, the Buyer shall pay to ZAC
an
aggregate of $100,000 payable on or prior to April 20, 2006. Payments due on
the
Closing date shall be paid by wire transfer directly to the account previously
specified by ZAC in connection with the Closing.
SECTION
4
INDEMNIFICATION;
REMEDIES
4.1 Buyer’s
Remedies.
Regardless
of the nature of any claim or the form of any action that may be brought against
ZAC by the Buyer as a result of or arising out of actions, errors or omissions
of ZAC in failing to provide the Services in the manner described in Section
1.3(a) (“Defective Service”), the Buyer’s sole remedy in such instance shall be
(i) to demand that ZAC provide the Service in the manner described in Section
1.3(a), whereupon ZAC shall in good faith attempt to provide the Services in
such manner, or, (ii) if such Service cannot, for any reason be provided in
such
manner, ZAC’s reimbursement to the Buyer for any payment made by the Buyer for
Defective Service, or, if such Defective Service has not yet been paid for
by
the Buyer, the cancellation of any obligation of the Buyer to pay the fees
for
such Defective Service and any expenses related thereto (at which time, the
obligation of ZAC to provide such Service shall be cancelled).
4.2 Third
Party Indemnity
This
Agreement is for the sole and exclusive benefit of the Parties, and it shall
not
be deemed to be for the direct or indirect benefit of any other person or
entity, including without limitation either Party’s customers, suppliers or
employees. ZAC shall indemnify and hold harmless the Buyer and its Affiliates,
officers, directors, employees, and agents, against and from any liability,
loss, damage, cost and expense (including attorneys’ fees and costs of
litigation) (collectively, “Losses”) arising out of or in connection with any
claim or action that any person or entity may make or file against the Buyer
or
its Affiliates or any of its officers, directors, employees, or agents in
connection with this Agreement or the Services, regardless of the standard
of
negligence or culpability alleged.
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SECTION
5
INDEPENDENT
CONTRACTOR
In
performing the Services hereunder, ZAC shall operate as and have the status
of
independent contractors, subject only to the general direction of the Buyer
regarding the Services to be rendered, as opposed to the method of performance
of such Services. No Party’s employees shall be considered employees or agents
of the other Party, nor shall the employees of any Party be eligible or entitled
to any benefits, perquisites or privileges given or extended to any of the
other
Party’s employees. Nothing contained in this Agreement shall be deemed or
construed to create a joint venture or partnership between the Parties. No
Party
shall have any power to control the activities and/or operations of the other
Party. No Party shall have any power or authority to bind or commit any other
Party.
SECTION
6
MISCELLANEOUS
6.1 Governing
Law
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Florida without giving effect to any choice or conflict
of
law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of laws of any jurisdiction
other
than those of the State of Florida.
6.2 Submission
to Jurisdiction
Each
Party (a) submits to the exclusive jurisdiction of any state or federal court
sitting in the County of Miami-Dade, State of Florida in any action or
proceeding arising out of or relating to this Agreement, (b) agrees that all
claims in respect of such action or proceeding may be heard and determined
only
in any such court, and (c) agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Each Party waives
any
defense of inconvenient forum to the maintenance of any action or proceeding
so
brought and waives any bond, surety or other security that might be required
of
the other Party with respect thereto.
6.3 Binding
Effect
This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assigns.
6.4 Counterparts
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
agreement.
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6.5 Entire
Agreement
This
Agreement (including the documents referred to herein) constitutes the entire
agreement between the Parties regarding the subject matter hereof. This
Agreement (including the documents referred to herein) supersedes any prior
understandings, agreements, or representations by or between the Parties,
whether written or oral, with respect to the subject matter hereof. No amendment
or modification of this Agreement shall be valid unless the same shall be in
writing and signed by the Parties hereto.
6.6 Waivers
No
waiver
of any provision of this Agreement shall be implied, and no waiver shall be
valid unless it is in writing and signed by the person or Party to be charged.
No waiver of any breach of any of the terms, provisions or conditions of this
Agreement shall be construed as or held to be a waiver of any other breach,
or a
waiver of, acquiescence in, or consent to, any further or succeeding breach
hereof.
6.7 Severability
Any
term
or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of
the
offending term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction declares that any
term or provision hereof is invalid or unenforceable, the Parties agree that
the
body making the determination of invalidity or unenforceability shall have
the
power to reduce the scope, duration or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term
or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
6.8 Headings
The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of the provisions
of this Agreement.
6.9 Amendment
No
modification or amendment of this Agreement will be binding upon either Party
unless in a writing expressly referencing this Agreement and duly executed
by
each Party.
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IN
WITNESS WHEREOF,
the
Parties have executed this Transition Services Agreement as of the date first
above written.
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BUYER:
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VHT
Acquisition Company
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By:
/s/ X. X.
Xxxxxxx
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X.
X. Xxxxxxx
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ZAC
Capital Partners, LLC
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By:
/s/ Xxxxxxx X.
Xxxxxxxxxx
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Xxxxxxx
X. Xxxxxxxxxx, Manager
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