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EXHIBIT 10.2
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of March 5,
2001, by and between InfoCure Corporation, a Delaware corporation ("InfoCure"),
and PracticeWorks, Inc., a Delaware corporation ("PracticeWorks").
WHEREAS, PracticeWorks is an indirect wholly owned subsidiary of
InfoCure;
WHEREAS, after giving effect to the transactions contemplated by the
Distribution Agreement (as defined herein), PracticeWorks Systems, LLC, a
Georgia limited liability company ("PracticeWorks Systems"), will be a wholly
owned subsidiary of PracticeWorks;
WHEREAS, InfoCure and PracticeWorks have entered into an Agreement and
Plan of Distribution, dated as of February 21, 2001 (the "Distribution
Agreement"), pursuant to which InfoCure will transfer certain assets to
PracticeWorks Systems and PracticeWorks will assume certain liabilities of
InfoCure;
WHEREAS, in connection with the transactions contemplated by the
Distribution Agreement, InfoCure and PracticeWorks wish to enter into this
Agreement;
WHEREAS, by this Agreement, the parties desire to confirm their
agreement with respect to services to be provided to each other commencing on
the Distribution Date, and to set forth the basis for the provision of further
services of the type referred to herein;
WHEREAS, PracticeWorks is able and willing to provide the specified
services to InfoCure, and InfoCure desires to engage PracticeWorks as an
independent contractor to provide the same in accordance with the terms set
forth herein; and
WHEREAS, InfoCure is able and willing to provide the specified services
to PracticeWorks, and PracticeWorks desires to engage InfoCure as an independent
contractor to provide the same in accordance with the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, provisions and covenants contained herein, and for other good and
valuable consideration, the receipt and legal sufficiency whereof are hereby
acknowledged, the parties hereto further agree as follows:
ARTICLE I.
DEFINITIONS
"Additional Services" shall have the meaning set forth in Article III
of this Agreement.
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"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Agreement Disputes" shall have the meaning set forth in Section 11.1
of this Agreement.
"Affiliate" shall have the meaning assigned to it in the Distribution
Agreement.
"Applicable Rate" shall mean the rate of interest per annum announced
from time to time by SunTrust Bank, N.A. as its prime lending rate.
"Bankruptcy Event" with respect to a party shall mean the filing of an
involuntary petition in bankruptcy or similar proceeding against such party
seeking its reorganization, liquidation or the appointment of a receiver,
trustee or liquidator for it or for all or substantially all of its assets,
whereupon such petition shall not be dismissed within sixty (60) days after the
filing thereof, or if such party shall (i) apply for or consent in writing to
the appointment of a receiver, trustee or liquidator of all or substantially all
of its assets, (ii) file a voluntary petition or admit in writing its inability
to pay its debts as they become due, (iii) make a general assignment for the
benefit of creditors, (iv) file a petition or an answer seeking reorganization
or an arrangement with its creditors or take advantage of any insolvency law
with respect to itself as debtor, or (v) file an answer admitting the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency proceedings or any similar proceedings;
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banking institutions in Atlanta, Georgia are authorized
or obligated by law or executive order to close.
"Change in Control" of a party shall mean (i) a change in the
composition of the board of directors of such party (other than a change due to
the death or disability of a member of the board of directors) such that at the
end of any period of twelve (12) consecutive months a majority of the persons
constituting such board of directors were not directors at the start of such
period and were not elected by vote of a majority of the directors who were
directors at the start of such period, (ii) the sale or other disposition by
such party of all or substantially all of the assets of such party (other than a
bona fide pledge in connection with a financing), or (iii) a merger,
consolidation or other business combination involving such party, which results
in the stockholders of such party immediately prior to such event owning less
than 50% of the capital stock of the surviving entity;
"Charges" shall have the meaning set forth in Section 4.1 of this
Agreement.
"Distribution" shall mean the distribution of the outstanding common
stock of PracticeWorks to the stockholders of InfoCure.
"Distribution Agreement" shall have the meaning set forth in the
recitals to this Agreement.
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"Distribution Date" shall mean such date as may be determined by the
Board of Directors of InfoCure, or such committee of such Board of Directors as
shall be designated by the Board of Directors of InfoCure, as the date as of
which the Distribution shall be effected.
"Employee Benefits and Compensation Allocation Agreement" shall mean
the Employee Benefits and Compensation Allocation Agreement by and between
InfoCure and PracticeWorks, which agreement shall be entered into prior to or on
the Distribution Date in the form attached as Exhibit B to the Distribution
Agreement.
"Fees" shall mean, collectively, the Charges and Fixed Fees.
"Fixed Fees" shall mean the PracticeWorks Fixed Fees and the InfoCure
Fixed Fees.
"Indemnifying Party" shall have the meaning set forth in Section 7.3(a)
of this Agreement.
"Indemnitee" shall have the meaning set forth in Section 7.3(a) of this
Agreement.
"InfoCure" shall have the meaning set forth in the preamble to this
Agreement.
"InfoCure Fees" shall mean the InfoCure Fixed Fees.
"InfoCure Fixed Fees" shall have the meaning set forth in Section 4.3.2
of this Agreement.
"InfoCure Indemnities" shall have the meaning assigned to it in the
Distribution Agreement.
"InfoCure Services" shall have the meaning set forth in Section 2.2 of
this Agreement.
"Loss" shall mean any damage, claim, loss, charge, action, suit,
proceeding, deficiency, tax, interest, penalty and reasonable costs and expenses
(including reasonable attorneys' fees).
"Management Services" shall mean the PracticeWorks Services and the
InfoCure Services.
"Person" shall mean any natural person, corporation, business trust,
limited liability company, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"PracticeWorks" shall have the meaning set forth in the preamble to
this Agreement.
"PracticeWorks Fees" shall mean the PracticeWorks Fixed Fees.
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"PracticeWorks Fixed Fees shall have the meaning set forth in Section
4.2.1 of this Agreement.
"PracticeWorks Indemnities" shall have the meaning assigned to it in
the Distribution Agreement.
"PracticeWorks Services" shall have the meaning set forth in Section
2.1 of this Agreement.
"Reimbursed Party" shall have the meaning set forth in Section 4.1 of
this Agreement.
"Reimbursing Party" shall have the meaning set forth in Section 4.1 of
this Agreement.
"Rules" shall have the meaning set forth in Section 11.3 of this
Agreement.
"Services" shall mean, collectively, the Management Services and, if
agreed to provide the Additional Services, the Additional Services.
"Tax Disaffiliation Agreement" shall mean the Tax Disaffiliation
Agreement by and between InfoCure and PracticeWorks, which agreement shall be
entered into prior to or on the Distribution Date in the form attached as
Exhibit C to the Distribution Agreement.
"Third Party Claim" shall have the meaning set forth in Section 7.3(a)
of this Agreement.
ARTICLE II.
MANAGEMENT SERVICES
SECTION 2.1 PROVISION OF SERVICES BY PRACTICEWORKS. Commencing on the
Distribution Date, InfoCure hereby engages and retains PracticeWorks to provide
or otherwise make available to InfoCure the services described in this Section
2.1 (collectively, the "PracticeWorks Services"), and PracticeWorks hereby
accepts and agrees to provide the PracticeWorks Services to InfoCure, for the
term and consideration as specified herein. The fee payable for the
PracticeWorks Services shall be determined in accordance with Article IV of this
Agreement.
SECTION 2.1.1 TAX SERVICES. Subject to the applicable
provisions of the Tax Disaffiliation Agreement, PracticeWorks shall
provide InfoCure with the following tax services: preparation of
federal income tax returns; preparation of state and local tax returns
(including, but not limited to, income tax returns, franchise tax
returns, sales and use tax returns, any and all federal, state and
local tax returns required to be filed); business license registrations
and renewals; preparation of financial statement disclosures and
calculation of tax provisions for financial statement purposes;
conducting
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negotiations with tax authorities as necessary; and providing tax
research and planning and assistance with respect to federal, state and
local audits initiated during the term of this Agreement. Copies of any
and all returns shall be delivered to InfoCure upon request. The tax
services described in this Section 2.1.1 shall be provided by
PracticeWorks until terminated pursuant to the provisions of Article IX
hereof. Upon termination of such services for any reason, PracticeWorks
shall provide to InfoCure copies of its records relating to federal,
state and local tax returns filed by or on behalf of InfoCure, and all
other correspondence and documentation reasonably required by InfoCure
relating to payment of its taxes.
SECTION 2.1.2 ACCOUNTING SERVICES, INCLUDING ACCOUNTS
PAYABLE. PracticeWorks shall provide InfoCure with the following
accounting services: recording and maintaining InfoCure's business
transactions in a separate general ledger and associated subsidiary
ledgers, including, but not limited to, accounts payable, accounts
receivable, inventory and fixed assets, all in accordance with
generally accepted accounting principles; any account reconciliations,
financial statements, and analyses required for internal and/or
external reporting; gathering Form 1099 information; and
employee-incurred expense reimbursement services. Such services shall
also include mailing and distribution services, information system
support, including, but not limited to, account maintenance, and
reporting and general support of SofTrax (or its equivalent), access to
the on-line intranet reporting tools, access to SofTrax (or its
equivalent), access to sales commission database software services and
sales commission database support, and continued remote access
availability to PracticeWorks' corporate databases. At the request of
InfoCure, PracticeWorks shall provide similar services in connection
with InfoCure's preparation of financial statements and any required
filings with the Securities and Exchange Commission pursuant to federal
securities laws. The services described in this Section 2.1.2 shall be
provided by PracticeWorks until terminated pursuant to the provisions
of Article IX hereof.
SECTION 2.1.3 CORPORATE RECORD-KEEPING SERVICES.
PracticeWorks shall maintain all historical tax, accounting and payroll
records relating to InfoCure, until such time as such records shall be
disposed of in accordance with applicable legal requirements and
PracticeWorks' normal record disposition policies. PracticeWorks shall
give InfoCure thirty (30) days' prior written notice of its intention
to dispose of such records and shall provide InfoCure with the
opportunity to retain the same.
SECTION 2.1.4 PAYROLL SERVICES. Until terminated pursuant to
the provisions of Article IX hereof, PracticeWorks shall provide
InfoCure with payroll services, including, but not limited to, payment
processing and payroll tax filings by ADP or another outside vendor
acceptable to InfoCure; payroll distribution; Form W-2 preparation;
assistance with any required regulatory compliance in connection with
any payroll services provided pursuant to this Section 2.1.4;
administration of American Express corporate cards; and maintenance of
the InfoCure employee database. Upon
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termination of such services, PracticeWorks shall provide InfoCure with
all payroll records for InfoCure employees, including, but not limited
to, information for calendar year 2001.
SECTION 2.2 PROVISION OF SERVICES BY INFOCURE. Commencing on the
Distribution Date, PracticeWorks hereby engages and retains InfoCure to provide
or otherwise make available to PracticeWorks the services described in this
Section 2.2 (collectively, the "InfoCure Services"), and InfoCure hereby accepts
and agrees to provide the InfoCure Services to PracticeWorks, for the term and
consideration as specified herein. The fee payable for the InfoCure Services
shall be determined in accordance with Article IV of this Agreement.
SECTION 2.2.1 INSURANCE SERVICES. InfoCure shall from and
after the Distribution Date and until no later than fifteen (15)
business days thereafter, continue in force the then existing
liability, property, casualty, indemnity and other business insurance
policies applicable to PracticeWorks as a division or subsidiary of
InfoCure. All of such insurance coverage shall be maintained by
InfoCure until the respective termination dates of the current policies
in effect with respect thereto. Thereafter, until terminated pursuant
to Article IX of this Agreement, InfoCure shall provide or cause to be
provided to PracticeWorks insurance in such amount and on such terms as
are customary for businesses such as PracticeWorks.
SECTION 2.2.2 EMPLOYEE BENEFITS SERVICES. Subject to the
applicable provisions of the Employee Benefits and Compensation
Allocation Agreement, from and after the Distribution Date until
terminated pursuant to the provisions of Article IX hereof, InfoCure
shall provide administrative services with respect to the following
benefit plans: medical, dental, vision, life, accidental death and
dismemberment and long-term disability insurance programs. Upon
termination of the administrative services provided under this Section
2.2.2, InfoCure shall provide PracticeWorks with such information and
records as are reasonably requested by PracticeWorks to enable it to
administer the benefit plans in which its employees are enrolled from
and after the Distribution Date.
ARTICLE III.
ADDITIONAL SERVICES
SECTION 3.1 ADDITIONAL SERVICES GENERALLY. Beginning on such date or
dates subsequent to the Distribution Date as are mutually agreed to in writing
by the parties, InfoCure and its corporate staff, or PracticeWorks and its
corporate staff, will provide or otherwise make available to the other party to
this Agreement, such services in addition to those described in Article II
hereof as are reasonably requested by PracticeWorks or InfoCure, subject in each
case to the parties' agreement to financial consideration and other terms (the
"Additional Services"). In the event that either party desires to avail itself
of any of such Additional Services, the parties shall negotiate in good faith to
reach agreement on the scope and term of
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such services. When and if an agreement is reached, the parties shall prepare an
appropriate schedule or addendum to this Agreement, in which the nature, scope
and quality of such services is described in detail. Each such addendum shall be
executed on behalf of each party hereto, shall be effective as of its date and
shall, upon the Distribution Date, be incorporated into and made an integral
part of this Agreement.
SECTION 3.2 PracticeWorks and its staff shall, until April 15, 2001,
allow InfoCure's staff access to the T-1 equipment and circuits located at The
Exchange, Atlanta, Georgia, that serve the InfoCure office locations. Except for
emergencies, such access shall be limited to regular business hours.
ARTICLE IV.
REIMBURSEMENT OF EXPENSES
SECTION 4.1 REIMBURSEMENT GENERALLY. In connection with the Management
Services pursuant to Article II hereof and Additional Services pursuant to
Section 3.1 hereof, each party hereto (the "Reimbursing Party") shall reimburse
the other party hereto (the "Reimbursed Party") for any and all reasonable,
ordinary and necessary out-of-pocket expenses or costs (collectively, the
"Charges") incurred or paid by the Reimbursed Party on behalf of the Reimbursing
Party in the performance of any of its responsibilities under this Agreement;
provided, however, that any Charge in excess of $1,000.00 shall require the
prior written approval of the Reimbursing Party.
SECTION 4.2 [INTENTIONALLY DELETED.]
SECTION 4.3 FIXED FEES.
SECTION 4.3.1 PRACTICEWORKS FIXED FEES. Unless PracticeWorks
and InfoCure shall agree in writing to a different arrangement,
InfoCure shall pay to PracticeWorks a monthly fee(s) (collectively, the
"PracticeWorks Fixed Fees") for the PracticeWorks Services described in
Section 2.1 of this Agreement in an amount that is fixed for each
calendar year prior to January 1 of that year. The Fixed Fees for 2001
shall be as set forth on Schedule A attached hereto. The Fixed Fees
shall be based on an estimate of the overall amount of expenses and
costs attributable to PracticeWorks' provision of such services to
InfoCure.
SECTION 4.3.2 INFOCURE FIXED FEES. Unless InfoCure and
PracticeWorks shall agree in writing to a different arrangement,
PracticeWorks shall pay to InfoCure a monthly fee(s) (collectively, the
"InfoCure Fixed Fees") for the InfoCure Services described in Section
2.2 of this Agreement in an amount that is fixed for each calendar year
prior to January 1 of that year. The Fixed Fees for 2001 shall be as
set forth on Schedule A attached hereto. The Fixed Fees shall be based
on an estimate of the
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overall amount of expenses and costs attributable to InfoCure's
provision of such services to PracticeWorks.
SECTION 4.4 TAXES. InfoCure shall pay any applicable sales or use taxes
payable with respect to the PracticeWorks Fees and PracticeWorks shall pay any
applicable sales or use taxes payable with respect to the InfoCure Fees.
SECTION 4.5 PREPARATION OF REPORTS. Each of PracticeWorks and InfoCure
shall, as and when necessary, prepare all applications, reports, statements and
other documents showing the Fees paid by PracticeWorks or InfoCure, as the case
may be, in the performance of any of their respective responsibilities under
this Agreement.
SECTION 4.6 PAYMENT GENERALLY. If either party is billed by outside
providers for services performed, or lease or rental payments in whole or in
part, for the other party other than Fees, the party receiving the xxxx may pay
the xxxx and charge the other party the amount of the xxxx or applicable portion
thereof or forward the xxxx to the other party for payment by such other party.
Payment shall be made within ten (10) business days after receipt of the xxxx.
SECTION 4.7 TIME OF PAYMENT. Amounts payable by either party for
services provided under this Agreement shall be payable from and after the first
day of the month following the month in which the Distribution Date occurs.
Fixed Fees shall be due on the first day of every month.
ARTICLE V.
DISCLAIMER; LIMITED LIABILITY
SECTION 5.1 DISCLAIMER. Each party shall provide the Management
Services (and, if it agrees to provide the Additional Services, the Additional
Services) with the same degree of care as it employs in making the same services
available for its own operations, but not less than the degree of care of normal
and customary prudent business practices, including, but not limited to, making
all necessary and required reportings and filings in a timely manner; provided,
however, that neither party shall be liable to the other party or any other
person for any loss, damage or expense which may result therefrom or from any
change in the manner in which such party renders such services, so long as such
party deems such change necessary or desirable in the conduct of its own
operations; provided, such change is not less than the degree of care of normal
and customary prudent business practices, including, but not limited to, making
all necessary and required reportings and filings on a timely manner.
SECTION 5.2 LIMITED LIABILITY. Neither InfoCure nor any of its
officers, directors or agents who provide services to PracticeWorks shall be
liable to PracticeWorks or to any third party, including any governmental agency
or PracticeWorks' stockholders, for any claims, damages or expenses relating to
the InfoCure Services (and, if it agrees to provide the Additional Services,
Additional Services) provided pursuant to this Agreement, except for
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willful malfeasance, bad faith or gross negligence in the performance of their
duties or reckless disregard of their obligations and duties under the terms of
this Agreement. Neither PracticeWorks nor any of its officers, directors or
agents who provide services to InfoCure shall be liable to InfoCure or to any
third party, including any governmental agency or InfoCure's stockholders, for
any claims, damages or expenses relating to the PracticeWorks Services (and, if
it agrees to provide the Additional Services, Additional Services) provided
pursuant to this Agreement, except for willful malfeasance, bad faith or gross
negligence in the performance of their duties or reckless disregard of their
obligations and duties under the terms of this Agreement.
ARTICLE VI.
LICENSES AND PERMITS.
Each party warrants and covenants that all duties and obligations
(including all Services) to be performed hereunder shall be performed in
compliance with all material applicable federal, state, provincial and local
laws, rules and regulations. Each party shall obtain and maintain all material
permits, approvals and licenses necessary or appropriate to perform its duties
and obligations (including all Services) hereunder and shall at all times comply
with the terms and conditions of such permits, approvals and licenses.
ARTICLE VII.
INDEMNIFICATION.
SECTION 7.1 INDEMNIFICATION BY PRACTICEWORKS. PracticeWorks agrees to
indemnify, defend and hold the InfoCure Indemnitees harmless from and against
any Loss to which any InfoCure Indemnitees may become subject arising out of, by
reason of or otherwise in connection with the provision hereunder by InfoCure of
the InfoCure Services, other than Losses resulting from any InfoCure
Indemnitee's willful malfeasance, bad faith or gross negligence in the
performance of their duties or reckless disregard of their obligations and
duties under the terms of this Agreement. PracticeWorks further agrees to
indemnify, defend and hold the InfoCure Indemnitees harmless from and against
any Loss to which any InfoCure Indemnitees may become subject arising out of,
reason of or otherwise in connection with the provision hereunder by
PracticeWorks of PracticeWorks Services to InfoCure where such Losses resulted
from PracticeWorks' willful malfeasance, bad faith or gross negligence in the
performance of their duties or reckless disregard of their obligations and
duties under the terms of this Agreement. Notwithstanding any provision in this
Agreement to the contrary, PracticeWorks shall not be liable under this Section
7.1 for any consequential, special or punitive damages (including but not
limited to lost profits), except to the extent that such consequential, special
or punitive damages relate to a Loss resulting from a Third Party Claim (as
defined below).
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SECTION 7.2 INDEMNIFICATION BY INFOCURE. InfoCure agrees to indemnify,
defend and hold the PracticeWorks Indemnitees harmless from and against any Loss
to which any PracticeWorks Indemnitee may become subject arising out of, by
reason of or otherwise in connection with the provision hereunder by
PracticeWorks of the PracticeWorks Services, other than Losses resulting from
any PracticeWorks Indemnitee's willful malfeasance, bad faith or gross
negligence in the performance of their duties or reckless disregard of their
obligations and duties under the terms of this Agreement. InfoCure further
agrees to indemnify, defend and hold any PracticeWorks Indemnitees harmless from
and against any Loss to which any PracticeWorks Indemnitees may become subject
arising out of, reason of or otherwise in connection with the provision
hereunder by InfoCure of InfoCure Services to PracticeWorks where such Losses
resulted from InfoCure's willful malfeasance, bad faith or gross negligence in
the performance of their duties or reckless disregard of their obligations and
duties under the terms of this Agreement. Notwithstanding any provision in this
Agreement to the contrary, InfoCure shall not be liable under this Section 7.2
for any consequential, special or punitive damages (including but not limited to
lost profits), except to the extent that such consequential, special or punitive
damages relate to a Loss resulting from a Third Party Claim (as defined below).
SECTION 7.3 THIRD PARTY CLAIMS.
(a) If a claim or demand is made against a PracticeWorks
Indemnitee or an InfoCure Indemnitee (each, an "Indemnitee") by any Person who
is not a party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement, such
Indemnitee shall notify the party which is or may be required pursuant to
Section 7.1 or Section 7.2 hereof to make such indemnification (the
"Indemnifying Party") in writing, and in reasonable detail, of the Third Party
Claim promptly (and in any event within fifteen (15) Business Days) after
receipt by such Indemnitee of written notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure (except that the
Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Indemnitee failed to give such notice). Thereafter, the
Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event
within ten (10) Business Days) after the Indemnitee's receipt thereof, copies of
all notices and documents (including court papers) received by the Indemnitee
relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges in writing its obligation to indemnify the
Indemnitee therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall, within thirty (30) days (or
sooner if the nature of the Third Party Claim so requires), notify the
Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter
not be liable to the Indemnitee for legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof; provided,
that
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such Indemnitee shall have the right to employ counsel to represent such
Indemnitee if, in such Indemnitee's reasonable judgment, a conflict of interest
between such Indemnitee and such Indemnifying Party exists in respect of such
claim which would make representation of both such parties by one counsel
inappropriate, and in such event the fees and expenses of such separate counsel
shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in the defense
thereof and to employ counsel, subject to the proviso of the preceding sentence,
at its own expense, separate from the counsel employed by the Indemnifying
Party, it being understood that the Indemnifying Party shall control such
defense. The Indemnifying Party shall be liable for the fees and expenses of
counsel employed by the Indemnitee for any period during which the Indemnifying
Party has failed to assume the defense thereof (other than during the period
prior to the time the Indemnitee shall have given notice of the Third Party
Claim as provided above). If the Indemnifying Party so elects to assume the
defense of any Third Party Claim, all of the Indemnitees shall cooperate with
the Indemnifying Party in the defense or prosecution thereof, including by
providing or causing to be provided agreements, documents, books, records, files
and witnesses as soon as reasonably practicable after receiving any request
therefor from or on behalf of the Indemnifying Party.
(c) If the Indemnifying Party acknowledges in writing
responsibility under this Section 7.3 for a Third Party Claim, then in no event
will the Indemnitee admit any liability with respect to, or settle, compromise
or discharge, any Third Party Claim without the Indemnifying Party's prior
written consent; provided, however, that the Indemnitee shall have the right to
settle, compromise or discharge such Third Party Claim without the consent of
the Indemnifying Party if the Indemnitee releases the Indemnifying Party from
its indemnification obligation hereunder with respect to such Third Party Claim
and such settlement, compromise or discharge would not otherwise adversely
affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settlement,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim and releases
the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee. If an Indemnifying Party
elects not to assume the defense of a Third Party Claim, or fails to notify an
Indemnitee of its election to do so as provided herein, such Indemnitee may
compromise, settle or defend such Third Party Claim.
(d) Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense of any Third Party Claim (and shall be
liable for the fees and expenses of counsel incurred by the Indemnitee in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnitee which the Indemnitee reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of the Third
Party Claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to money
damages.
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(e) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third-Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third-Party Claim against any claimant or plaintiff
asserting such Third-Party Claim. Such Indemnitee shall cooperate with such
Indemnifying Party in a reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or claim.
(f) The remedies provided in this Section 7.3 shall be cumulative
and shall not preclude assertion by any Indemnitee of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
SECTION 7.4 INDEMNIFICATION PAYMENTS.
(a) Indemnification required by this Article VII shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or any Loss is incurred. If the
Indemnifying Party fails to make an indemnification payment required by this
Section 7.4 within thirty (30) days after receipt of a xxxx therefore or notice
that a loss, liability, claim, damage or expense has been incurred, the
Indemnifying Party shall also be required to pay interest on the amount of such
indemnification payment, from the date of receipt of the xxxx or notice of the
Loss to, but not including the date of payment, at the Applicable Rate.
(b) The amount of any claim by an Indemnitee under this Agreement
shall be reduced to reflect any actual tax savings received by any Indemnitee
that result from the Indemnifiable Losses that gave rise to such indemnity.
SECTION 7.5 SURVIVAL. The parties' obligations under this Article VII
shall survive the termination of this Agreement.
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ARTICLE VIII.
CONFIDENTIALITY
The provisions of Section 6.4 of the Distribution Agreement are
incorporated herein by reference and shall apply in relevant part to this
Agreement. The covenants in this Article VIII shall survive any termination of
this Agreement for a period of three (3) years from the date such termination
becomes effective.
ARTICLE IX.
TERM AND TERMINATION
SECTION 9.1 TERM. Except as expressly provided in this Article IX, the
initial term of this Agreement shall commence on the Distribution Date and
continue through the end of December 31, 2001. This Agreement shall
automatically expire at the end of the initial term unless extended in
accordance with Section 9.2 hereof.
SECTION 9.2 EXTENSION. This Agreement may be extended at any time upon
mutual written consent by the parties.
SECTION 9.3 TERMINATION OF SPECIFIC SERVICES. Any Management Service
specified in Article II hereof may be terminated by the party receiving the
Management Service at any time on 30 days' prior written notice to the other
party. In the event the date of termination is not the last day of the month,
the party receiving the Management Service shall pay a pro rata portion of the
Fees for such Management Service. Specific services provided hereunder may be
terminated, or shall expire, as described in Article II hereof or in any
schedule or addendum hereto. Notwithstanding anything herein to the contrary,
PracticeWorks shall be allowed to terminate Insurance Services provided pursuant
to Section 2.2.1 of this Agreement upon five (5) business days written notice.
SECTION 9.4 EARLY TERMINATION BY INFOCURE. InfoCure may terminate this
Agreement by giving written notice to PracticeWorks under the following
circumstances:
(a) if PracticeWorks shall default in the performance of
any of its material obligations under, or breach any of its warranties
set forth in, this Agreement, and such default or breach shall continue
and not be remedied for a period of five (5) Business Days with respect
to any payment obligations hereunder (including without limitation any
payment obligations pursuant to Article IV) or a period of thirty (30)
days with respect to any other obligations hereunder, after InfoCure
has given written notice to PracticeWorks specifying such default or
breach and requiring it to be remedied;
(b) if a Bankruptcy Event has occurred with respect to
PracticeWorks;
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(c) upon the occurrence of a Change in Control of
PracticeWorks; or
(d) if PracticeWorks should assign or subcontract, or
attempt to assign or subcontract, any interest in all or any part of
this Agreement without the prior written consent of InfoCure, except as
set forth in Section 12.13.
SECTION 9.5 EARLY TERMINATION BY PRACTICEWORKS. PracticeWorks may
terminate this Agreement by giving written notice to InfoCure under the
following circumstances:
(a) if InfoCure shall default in the performance of any of its
material obligations under, or breach any of its warranties set forth
in, this Agreement, and such default or breach shall continue and not
be remedied for a period of five (5) Business Days with respect to any
payment obligations hereunder (including without limitation any payment
obligations pursuant to Article IV) or a period of thirty (30) days
with respect to any other obligations hereunder, after PracticeWorks
has given written notice to InfoCure specifying such default or breach
and requiring it to be remedied;
(b) if a Bankruptcy Event has occurred with respect to
InfoCure;
(c) upon the occurrence of a Change in Control of
InfoCure; or
(d) if InfoCure should assign or subcontract, or attempt
to assign or subcontract, any interest in all or any part of this
Agreement without prior written consent of PracticeWorks, except as set
forth in Section 12.13.
SECTION 9.6 POST-TERMINATION SERVICES. In the event of termination of
this Agreement, or a service provided hereunder, pursuant to Section 9.3 hereof,
the party providing the service shall be required at the other parties' option
to continue to provide the terminated services of the type then being provided
during the 30-day period referred to in Section 9.3 hereof and, whether or not
the other party requests continuation of such services, it shall continue to pay
the party providing the service the costs of such services for such 30-day
period. Subsequent to such 30-day period, or in the event of termination of this
Agreement pursuant to Section 9.4 or 9.5, Management Services shall continue to
be provided on an as-requested basis, in which event the party receiving the
services shall be charged by the other party a fee equal to the market rate for
comparable services charged by third-party vendors. Such fee will be charged
quarterly and payable within thirty (30) days. The obligations set forth in this
Section 9.6 shall survive the termination of this Agreement.
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ARTICLE X.
RECORDS.
Each of the parties shall create and maintain full and accurate books
in connection with the provision of the Services, and all other records relevant
to this Agreement, and upon reasonable notice from the other party shall make
available for inspection and copy by such other party's agents such records
during reasonable business hours.
ARTICLE XI.
DISPUTE RESOLUTION.
SECTION 11.1 NEGOTIATION. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement or otherwise
arising out of, or in any way related to this Agreement or the transactions
contemplated hereby, including, without limitation, any claim based on contract,
tort, statute or constitution (but excluding any controversy, dispute or claim
arising out of any agreement relating to the use or lease of real property if
any Third Party is a party to such controversy, dispute or claim) (collectively,
"Agreement Disputes"), the management of the parties shall negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute, provided
such reasonable period shall not, unless otherwise agreed by the parties in
writing, exceed thirty (30) days from the time the parties began such
negotiations; provided, further, that in the event of any mediation or
arbitration in accordance with Sections 11.2 and 11.3 hereof, the parties shall
not assert the defenses of statute of limitations and laches arising for the
period beginning after the date the parties began negotiations hereunder, and
any contractual time period or deadline under this Agreement or any Ancillary
Agreement to which such Agreement Dispute relates shall not be deemed to have
passed until such Agreement Dispute has been resolved.
SECTION 11.2 MEDIATION. If after such reasonable period such management
are unable to settle such Agreement Dispute (and in any event, unless otherwise
agreed in writing by the parties, after sixty (60) days have elapsed from the
time the parties began such negotiations) and the Agreement Dispute involves a
controversy, dispute or claim of less than $500,000, such Agreement Dispute
shall be determined, at the request of any party, by mediation conducted in
Wilmington, Delaware or at another location which the parties mutually select,
before a retired judge sitting on the panel of Judicial Arbitration & Mediation
Services, Inc. The mediation process shall continue as the exclusive method of
resolving the Agreement Dispute (other than negotiation between the parties)
until the earlier of the Agreement Dispute being resolved and the mediator
finding in good faith that all settlement possibilities have been exhausted and
that the matter is not resolvable through mediation. If the mediator makes such
a finding, at the request of any party, the Agreement Dispute shall then be
determined by binding arbitration in accordance with Section 11.3 hereof.
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SECTION 11.3 ARBITRATION. If after such reasonable period such
management are unable to settle such Agreement Dispute (and in any event, unless
otherwise agreed in writing by the parties, after sixty (60) days have elapsed
from the time the parties began such negotiations) and the Agreement Dispute
involves a controversy, dispute or claim of $500,000 or more, or if the parties
are unable to settle such Agreement Dispute pursuant to Section 11.2 hereof with
respect to a controversy, dispute or claim of less than $500,000, such Agreement
Dispute shall be determined, at the request of any party, by binding arbitration
conducted in Wilmington, Delaware or at another location which the parties
mutually select, before and in accordance with the then-existing Arbitration
Rules of the American Arbitration Association (the "Rules"). In any dispute
between the parties hereto, the numbers of arbitrators shall be three. Any
judgment or award rendered by the arbitrator shall be final, binding and
nonappealable (except upon grounds specified in 9 U.S.C. Section 10(a) as in
effect on the date hereof). If the parties are unable to agree on an arbitrator
or arbitrators, the arbitrator or arbitrators shall be selected in accordance
with the Rules. Any controversy concerning whether an Agreement Dispute is an
arbitrable Agreement Dispute, whether arbitration has been waived, whether an
assignee of this Agreement is bound to arbitrate, or as to the interpretation of
enforceability of this Article XI shall be determined by the arbitrator or
arbitrators. In resolving any dispute, the parties intend that the arbitrator or
arbitrators apply the substantive laws of the State of Delaware, without regard
to the choice of law principles thereof. The parties intend that the provisions
to arbitrate set forth herein be valid, enforceable and irrevocable. The parties
agree to comply with any award made in any such arbitration proceedings that has
become final in accordance with the Rules and agree to enforcement of or entry
of judgment upon such award, by any court of competent jurisdiction, including
(a) the state courts of the State of Delaware, located in the City of
Wilmington, or (b) the United States District Court for the District of
Delaware, in accordance with Section 12.15 hereof. The arbitrator or arbitrators
shall be entitled, if appropriate, to award any remedy in such proceedings,
including, without limitation, monetary damages, specific performance and all
other forms of legal and equitable relief; provided, however, the arbitrator or
arbitrators shall not be entitled to award punitive damages. Without limiting
the provisions of the Rules, unless otherwise agreed in writing by or among the
parties or permitted by this Agreement, the undersigned shall keep confidential
all matters relating to the arbitration or the award, provided such matters may
be disclosed (i) to the extent reasonably necessary in any proceeding brought to
enforce the award or for entry of a judgment upon the award and (ii) to the
extent otherwise required by Law. Nothing contained herein is intended to or
shall be construed to prevent any party, in accordance with Article 22(3) of the
Rules or otherwise, from applying to any court of competent jurisdiction for
interim measures or other provisional relief in connection with the subject
matter of any Agreement Disputes.
SECTION 11.4 CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during the
course of dispute resolution pursuant to the provisions of this Article XI with
respect to all matters not subject to such dispute, controversy or claim.
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SECTION 11.5 OTHER REMEDIES. Nothing in this Article XI shall limit the
right that any party may otherwise have to seek to obtain (a) preliminary
injunctive relief in order to preserve the status quo pending the resolution of
a dispute or (b) temporary or permanent injunctive relief from any breach of any
provisions of this Agreement.
ARTICLE XII.
MISCELLANEOUS.
SECTION 12.1 STATUS OF THE PARTIES. PracticeWorks shall be deemed to be
an independent contractor and, except as expressly provided or authorized in
this Agreement, shall have no authority to act for or represent InfoCure.
InfoCure shall be deemed to be an independent contractor and, except as
expressly provided or authorized in this Agreement, shall have no authority to
act for or represent PracticeWorks.
SECTION 12.2 OTHER ACTIVITIES. Each party hereby recognizes that the
other party now renders and may continue to render management and other services
to other companies that may or may not have policies and conduct activities
similar to those of such party. Each party hereto shall be free to render such
advice and other services, and the other party hereby consents thereto.
SECTION 12.3 NOTICES. All notices and other communications hereunder
shall be in writing, shall reference this Agreement and shall be hand delivered
or mailed by registered or certified mail (return receipt requested) sent by
facsimile or by any other means of electronic message transmission with delivery
confirmed (in writing or by electronic transmission) to the parties at the
following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which
confirmation of delivery of such notice is received:
If to InfoCure:
InfoCure Corporation.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To PracticeWorks:
0000 Xxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Attention: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 12.4 FORCE MAJEURE. Neither party hereto shall be in default of
this Agreement or liable to the other party for any delay or default in
performance where occasioned by any cause of any kind or extent beyond its
control, including but not limited to, armed conflict or economic dislocation
resulting therefrom; embargoes; shortages of labor, raw materials, production
facilities or transportation; labor difficulties; civil disorders of any kind;
action of any civil or military authorities (including priorities and
allocations); fires; floods; and accidents. The dates on which the obligations
of a party are to be fulfilled shall be extended for a period equal to the time
lost by reason of any delay arising directly or indirectly from:
(a) Any of the foregoing causes, or
(b) Inability of that party, as a result of causes beyond
its reasonable control, to obtain instruction or information from the
other party in time to perform its obligations by such dates.
SECTION 12.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof and
all prior agreements or understandings shall be deemed merged herein. No
representations, warranties and certifications, express or implied, shall exist
as between the parties except as stated herein.
SECTION 12.6 WAIVERS, MODIFICATIONS, AMENDMENTS. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by PracticeWorks, on the one
hand, and InfoCure, on the other hand, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and in addition to
other or further remedies provided by law or equity.
SECTION 12.7 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person,
corporation, partnership or other entity or any circumstance, is invalid and
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, corporations, partnerships or other entities or circumstances shall not
be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any jurisdiction.
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SECTION 12.8 HEADINGS. The heading references herein are for
convenience purposes only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof.
SECTION 12.9 BINDING EFFECT. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns, if any,
and except as provided herein, shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns, if any.
SECTION 12.10 NO AGENCY OR PARTNERSHIP. Nothing in this Agreement will
create, or will be deemed to create, a partnership or the relationship of
principal and agent or of employer and employee between the parties.
SECTION 12.11 PROVISIONS UNAFFECTED. Nothing contained in this
Agreement shall affect the rights and obligations of InfoCure and PracticeWorks
pursuant to the Distribution Agreement.
SECTION 12.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute this Agreement.
SECTION 12.13 SUCCESSORS AND ASSIGNS. Except as set forth in Section
12.17 hereto, neither InfoCure nor PracticeWorks may, directly or indirectly,
assign or subcontract, or attempt to assign or subcontract, any of its rights or
obligations under this Agreement, in whole or in part, by operation of law or
otherwise, except with the prior written consent of the other party; it being
understood that such consent shall not be unreasonably withheld if PracticeWorks
or InfoCure assigns this Agreement to one of its affiliates with the financial
and other resources and expertise to perform all of the obligations of such
party hereunder. Any attempted assignment or delegation not in compliance with
the forgoing shall be null and void and of no effect.
SECTION 12.14 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware and of the United
States.
SECTION 12.15 CONSENT TO JURISDICTION. Without limiting the provisions
of Article XI hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the state courts of the State of Delaware, located in the
City of Wilmington, and (b) the United States District Court for the District of
Delaware, for the purposes of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby. Each of the parties
agrees to commence any action, suit or proceeding relating hereto either in the
United States District Court for the District of Delaware or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the state courts of the State of Delaware, located in the City of
Wilmington. Each of the parties further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in
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Delaware with respect to any matters to which it has submitted to jurisdiction
in this Section 12.15. Each of the parties irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in (i) the
state courts of the State of Delaware, located in the City of Wilmington, or
(ii) the United States District Court for the District of Delaware, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 12.16 NO THIRD-PARTY BENEFICIARIES. Except as set forth in
Section 12.17 hereto, this Agreement is solely for the benefit of the parties
hereto and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
SECTION 12.17 COLLATERAL ASSIGNMENT TO FINOVA. Notwithstanding Sections
12.13 and 12.16 above, (i) in connection with the closing of the transactions
contemplated by the Loan Agreement dated as of March 5, 2001 (as amended,
modified, supplemented or restated from time to time, the "PW Loan Agreement")
by and between PracticeWorks and FINOVA Capital Corporation (together with its
successors and assigns, "FINOVA"), PracticeWorks agrees that it shall assign
this Agreement and its rights, interests and benefits hereunder to FINOVA
pursuant to, among other things, the Collateral Assignment of Distribution
Transaction Documents dated the date of the PW Loan Agreement executed by
PracticeWorks in favor of FINOVA, whereupon FINOVA shall be permitted to
exercise any remedy, claim of action or other right afforded to PracticeWorks
hereunder and (ii) in connection with the closing of the transactions
contemplated by the Second Amendment to Loan Agreement and Other Loan Documents
dated as of March 5, 2001 (as amended, modified, supplemented or restated from
time to time, the "InfoCure Loan Agreement") by and between InfoCure and FINOVA,
InfoCure agrees that it shall assign this Agreement and its rights, interests
and benefits hereunder to FINOVA pursuant to, among other things, the Collateral
Assignment of Distribution Transaction Documents dated the date of the InfoCure
Loan Agreement executed by InfoCure in favor of FINOVA, whereupon FINOVA shall
be permitted to exercise any remedy, claim of action or other right afforded to
InfoCure hereunder.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the day and year first above written.
INFOCURE CORPORATION
By: /s/ Xxxxxxxxx X. Fine
-----------------------------------
Xxxxxxxxx X. Fine
Chief Executive Officer
PRACTICEWORKS, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
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