PW Management Consulting Inc.
000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX. X0X 0X0
Tel 000 000-0000 fax 000 000-0000
June 02, 2005
MEMORANDUM OF UNDERSTANDING
TotalMed Systems, Inc.
0000 XX Xxxxxxx Xxxx, Xxxxx 000
Xxxx, XX. 00000
Attention: Mr. Xxxxx Xxxxxx, President & CEO
Dear Sir:
Re Territory License for TotalMed West, Inc. (XX Xxxx)
Further to our discussions, this letter sets out the agreement and
terms between the undersigned parties to establish XX Xxxx Inc., as a
Nevada corporation. All funds herein are in US Dollars.
TotalMed Systems, Inc. a Florida corporation ("TM") shall grant a
"License" to XX Xxxx, under the terms and conditions set out herein
this letter.
1. The License shall include the US states of Washington, Oregon,
California, Nevada, and Arizona (the "Territory").
2. The License shall entitle XX Xxxx to 10% of the net income from
all Territory sales revenues attributed and booked to TM. TM
shall conduct its sales and sales booking practices in such a
manner as to reasonably ensure maximum benefit to XX Xxxx. Net
income is defined as Total Revenues less Cost of Sales less
Operating Expenses. The 10% payments shall be advanced to XX
Xxxx on a quarterly basis, commencing at the end of the 1st
quarter after year 1.
3. XX Xxxx (or its shareholders - hereinafter collectively referred
to as "XX Xxxx") shall advance $250,000 to TM on or before
October 15, 2005.
4. TM shall pay a fee of 10% of the $250,000 to PWM for the License
Funding.
5. The Funds shall be advanced by electronic wire transfer to
TotalMed Systems, Inc., at the Bank of America, 0000 X. Xxxxxxx
Xxxxxxx, Xxxxxxxxx, XX 00000, Account # 005503092866 ,
Routing/Transit #000000000 ,Wiring #000000000.
6. TM shall repay to XX Xxxx, $250,000 plus $37,500 in charges (or
if less is received, the proportionate lesser amount), as
follows:
* $18,750 within 180 days
* $9,375 within 270 days
* $259,375 within 365 days
* Furthermore, TM shall establish a sinking fund and allocate
2% of gross sales revenues to ensure the above payments for
XX Xxxx.
7. At the end of 10 years ("Year 10") from the date of the License
issuance, TM shall have the option to acquire the License from XX
Xxxx. The acquisition price shall be the greater of:
* the amount equal to 100% of the total payments paid and or
accrued to XX Xxxx at Year 10, or
* the value of the License as assessed by a mutually agreed
upon certified valuator.
8. PWM (or its appointee) shall administer the corporate functions
of XX Xxxx and attend to its shareholder responsibilities.
TM and PWM (on behalf of the XX Xxxx shareholders) shall formalize and
execute the License agreement between TM and XX Xxxx at the earliest
date possible, and such documentation shall reflect the purpose &
intent, and terms & conditions as set out above.
The undersigned hereby acknowledge and agree to the above terms and
conditions, and have received the necessary corporate authorizations
to enter into this arrangement and to fulfill its respective
obligations herein.
TotalMed Systems, Inc. PW Management
Consulting Inc.
________________________ ______________________
Xxxxx Xxxxxx, President Xxxx Xxxx, President
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