EXHIBIT 10.15
FORBEARANCE AGREEMENT
AGREEMENT (this "Agreement") made as of the Effective Date (as defined in
Section 18) by and among Xxxxxx Xxxxxxxxx, an individual residing in New York,
New York ("Xxxxxxxxx"); Cornell Transcription, Inc., a New York corporation
("CTI"); e-DOCS Health Care Information Services, Inc., a Delaware corporation
formerly known as AVRI Health Care Information Services, Inc. ("HCIS"); and
Applied Voice Recognition, Inc., a Delaware corporation d/b/a x-XXXX.xxx
("E-Docs").
W I T N E S S E T H
WHEREAS, as of December 1, 1998, CTI, Xxxxxxxxx, HCIS and E-Docs executed
an Asset Purchase Agreement (the "Purchase Agreement"), whereby CTI agreed to
sell to HCIS and HCIS agreed to purchase from CTI and Xxxxxxxxx, certain assets
of CTI and certain shares of common stock of CTI's subsidiary, Outsource
Transcription Philippines, Inc., a stock corporation formed under the laws of
the Republic of the Philippines ("OTPI"); and
WHEREAS, a portion of the Purchase Price, as defined in the Purchase
Agreement, included the issuance and delivery on December 31, 1999 by E-Docs to
CTI of 735 shares of convertible Series 1 Preferred Stock of E-Docs ("E-Docs
Preferred Stock"), with an aggregate stated value of $735,000; and
WHEREAS, on or about February 17, 1999, CTI, Xxxxxxxxx, HCIS and E-Docs
entered into the First Amendment to Asset Purchase Agreement ("First
Amendment"), wherein the number of shares of E-Docs Preferred Stock to be issued
to CTI on December 31, 1999 was corrected to 575, with an aggregate stated value
of $575,000; and
WHEREAS, the Certificate of Designation, Preferences, Rights and
Limitations of Series 1 Preferred Stock (the "Certificate of Designation")
describing the shares of E-Docs Preferred Stock provides that each holder of
shares of E-Docs Preferred Stock shall be entitled to cause any and all such
shares to be converted into shares of E-Docs Common Stock ("E-Docs Common
Stock"), which shares of E-Docs Common Stock will have been registered by E-Docs
pursuant to a registration statement filed with the Securities and Exchange
Commission (the "SEC") for public offering and sale of stock, pursuant to the
Securities Act of 1933, as amended, or any similar federal statute, and the
rules and regulations promulgated thereunder, all as the same shall be in effect
at the time (the "1933 Act"); and
WHEREAS, the E-Docs Common Stock has not been registered, as provided for
under the Purchase Agreement and the Certificate of Designation; and
WHEREAS, under the terms of Section 6.5 of the Purchase Agreement, HCIS and
E-Docs are entitled to offset against the shares of E-Docs Preferred Stock to be
delivered to CTI the amount equal of any claims by HCIS resulting from breaches
by CTI or Xxxxxxxxx of any of their respective representations, warranties or
covenants in the Purchase Agreement; and
WHEREAS, pursuant to the terms of the Closing Statement executed by the
parties in connection with the Purchase Agreement and the First Amendment,
Xxxxxxxxx, CTI, E-Docs and HCIS agreed to offset $51,134 against the E-Docs
Preferred Stock to be distributed to CTI in consideration for HCIS' assumption
of a lease with Sterling Bank, which offset is not in dispute among the parties
hereto, and
WHEREAS, HCIS and E-Docs are in the process of determining the amount of
claimed offsets pursuant to such Section 6.5, which amounts include fees and
expenses relating to filing certain corporate and tax reports and returns with
respect to the formation of OTPI, which fees and expenses E-Docs has
preliminarily estimated to be approximately $41,000 (the "Potential Offset
Claims"); and
WHEREAS, on or about February 17, 2000, CTI, Xxxxxxxxx, HCIS and E-Docs
agreed that E-Docs would issue to CTI 448.866 shares of E-Docs Preferred Stock,
such number of shares being determined by reducing the 575 shares of E-Docs
Preferred Stock owed by E-Docs to CTI by (i) 51.134 shares having a stated value
of $51,134 with respect to the Sterling Bank lease obligation, and (ii) 75
shares (the "Disputed Shares") having a stated value of $75,000 as a holdback
for purposes of satisfying the Potential Offset Claims, although the parties did
not agree as to the resolution of the amount of such Potential Offset Claims and
reserved their rights to resolve such claims and offset amounts at a later date;
and
WHEREAS, prior to the issuance of the 448.866 shares of E-Docs Preferred
Stock to CTI, CTI delivered to HCIS and E-Docs (i) a notice of conversion
instructing E-Docs to convert the shares of E-Docs Preferred Stock to be issued
to CTI into unrestricted shares of E-Docs Common Stock, in accordance with the
terms of the Certificate of Designation, and (ii) a corporate resolution
executed by Xxxxxxxxx, in his capacity as the sole director of CTI, and further
executed by Xxxxxxxxx and Xxxxx Xxxxx, in their capacities as the sole
shareholders of CTI, directing that all shares of E-Docs Common Stock to be
issued to CTI should be issued to Xxxxxxxxx individually; and
WHEREAS, on or about February 17, 2000, E-Docs converted the 448.866 shares
of E-Docs Preferred Stock into 1,468,539 restricted shares of E-Docs Common
Stock at a conversion rate of one (1) share of E-Docs Common Stock for each
0.0003056548 of a share of E-Docs Preferred Stock (the "12/31/99 Conversion
Rate"), which rate is the conversion rate determined as of December 31, 1999
pursuant to the terms of the Certificate of Designation; and
WHEREAS, to date, Xxxxxxxxx has sold 167,468 shares of E-Docs Common Stock,
which sale has occurred pursuant to SEC Rule 144; and
WHEREAS, Xxxxxxxxx has demanded that E-Docs issue and deliver duly
registered shares of E-Docs Common Stock in an amount equal to the balance of
1,301,071 restricted shares of E-Docs Common Stock that Xxxxxxxxx presently
holds (the "Xxxxxxxxx Shares"); and
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WHEREAS, E-Docs and HCIS have advised Xxxxxxxxx that they are currently
unable to issue and deliver registered shares of E-Docs Common Stock in the
amount of the Xxxxxxxxx Shares; and
WHEREAS, E-Docs and HCIS have requested that Xxxxxxxxx agree to
forbear from the exercise of certain of Xxxxxxxxx'x rights and remedies under
the Purchase Agreement during the Forbearance Period (as hereinafter defined) in
consideration for the terms, and subject to the conditions, contained in this
Agreement; and
WHEREAS, in addition to the forgoing, a dispute has arisen among
Xxxxxxxxx, Xxxxxx Szpicek ("Szpicek") and Xxxxx Xxxxx ("Dagan") with respect to
Szpicek's and Dagan's respective beneficial ownership interests in and to the
Xxxxxxxxx Shares, if any, and to any other shares of E-Docs Common Stock that
E-Docs is required to issue and deliver to CTI or Xxxxxxxxx in connection with
the Purchase Agreement (the "Share Dispute"); and
WHEREAS, E-Docs and HCIS have received an instrument dated as of March 2,
2000, apparently executed by Xxxxxxxxx and Szpicek (the "March 2 Instrument"),
pursuant to which issues were raised regarding the distribution of the E-Docs
Preferred Stock among Xxxxxxxxx, Szpicek and Dagan (which issues remain
unresolved and the legal effect of which March 2 Instrument remains unclear) and
which March 2 Instrument purports to reflect an agreement among Xxxxxxxxx and
Szpicek that the $575,000 worth of E-Docs Preferred Stock was to be distributed
among Xxxxxxxxx, Szpicek and Dagan as follows:
To be Immediately Distributed:
Xxxxxxxxx $232,116
Szpicek $187,116
Dagan $ 16,000
--------
Total: $435,232
The Amount Remaining From $126,134 Following the Offset of Known and
Potential Claims Under Section 6.5 of the Purchase Agreement ("Remaining
Balance"), which Remaining Balance is to be Distributed to Xxxxxxxxx,
Szpicek and Dagan in the Following Percentages:
Xxxxxxxxx 47.5%
Szpicek 47.5%
Dagan 5.0%
--------
Total: 100.0%
In addition to the amount to be immediately distributed, and the
Remaining Balance, $13,634 is a Reserve Amount (the "Reserve Amount"),
which Reserve Amount is to be distributed in accordance with Section 3 of
this Agreement.
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The totals are: ($435,232 + $126,134 + $13,634 = $575,000);
WHEREAS, E-Docs, HCIS, CTI and Xxxxxxxxx would like to resolve all
disputes among them and the "Share Dispute" to the fullest extent possible; and
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1) Forbearance. During the period commencing as of the Effective Date
and ending on the earlier to occur of (i) the date that E-Docs (A) notifies
Xxxxxxxxx that the Xxxxxxxxx Remaining Shares (as definied in paragraph 5(b)
herein), the Xxxxxxxxx Warrant Shares (as defined in paragraph 5(a) herein), and
the Xxxxxxxxx Interest Shares (as defined in paragraph 5(b) herein), if any,
have been registered pursuant to a registration statement filed with the SEC for
public offering and sale of stock pursuant to the 1933 Act, and (B) has
delivered to Xxxxxxxxx or the Transfer Agent for E-Docs' common stock, as
applicable, such other documents that may be necessary to effectuate the public
sale of the Xxxxxxxxx Remaining Shares, the Xxxxxxxxx Warrant Shares and the
Xxxxxxxxx Interest Shares, if any, pursuant to such registration statement,
including, without limitation, legal opinions of E-Docs' securities counsel with
respect thereto, or (ii) August 15, 2000 (the "Forbearance Period"), Xxxxxxxxx
and CTI agree that they will not exercise any enforcement rights or remedies
under, or otherwise with respect to, the Purchase Agreement, including, without
limitation, asserting or pursuing any claim or commencing any lawsuit or
arbitration under, pursuant to or otherwise in connection with, the Purchase
Agreement. Such forbearance shall not apply to claims for breach of this
Agreement.
2) Confirmation of Agreement and Reaffirmation. Each of E-Docs, HCIS,
CTI and Xxxxxxxxx hereby ratifies and confirms each of their respective
obligations under the Purchase Agreement and confirms and agrees that the
Purchase Agreement remains in full force and effect in accordance with its
terms, without modification or waiver except as modified by this Agreement and
except as previously amended, restated, modified and supplemented from time to
time in accordance with the terms of the Purchase Agreement. Except as expressly
provided to the contrary herein, Xxxxxxxxx, CTI, E-Docs and HCIS each hereby
reserve all of their respective rights and remedies against each other with
respect to, and under the terms of, the Purchase Agreement.
3) Surrender of Stock Certificate(s) by Xxxxxxxxx and Allocation and
Reissuance to Xxxxxxxxx, Szpicek and Dagan. Upon the execution of this Agreement
by Xxxxxxxxx, Xxxxxxxxx will deliver to E-Docs (i) the stock certificate(s)
representing the Xxxxxxxxx Shares; and (ii) written instructions addressed to
E-Docs' Stock Transfer Agent instructing such Stock Transfer Agent to cancel
such stock certificate(s) and to reissue three (3) new certificates to each of
the following recipients in the following number of shares of E-Docs Common
Stock (which includes a distribution of the Reserve Amount in the following
percentages: 47.5% to Xxxxxxxxx; 47.5% to Szpicek and 5% to Dagan):
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# of Shares
Shareholder of E-Docs
Name Common Stock
----------- ------------
Xxxxxxxxx 613,126 (determined by subtracting 167,468 from
759,406 and adding 21,188)
Szpicek 633,369 (determined by adding 21,188 to 612,181)
Dagan 54,576 (determined by adding 2,230 to 52,246)
---------
Total: 1,301,071
The certificate(s) described under subparagraph (i) above and the written
instructions described under subparagraph (ii) above, will be delivered to
E-Docs' counsel by Xxxxxxxxx and CTI by Federal Express delivery to be
transmitted on the same day as the exchange, by Facsimile, by the parties of
duly executed original counterparts of this Agreement. Originals of the duly
executed Agreement shall be exchanged by the Parties by Federal Express delivery
to be transmitted the same day as the Facsimile exchange.
4) Compromise and Settlement of Potential Offset Claims. E-Docs, HCIS,
CTI and Xxxxxxxxx hereby compromise and settle all Potential Offset Claims for
the aggregate amount of $25,000. As a result, E-Docs hereby agrees to issue to
Xxxxxxxxx, Szpicek and Dagan an aggregate of 50 additional shares of E-Docs
Preferred Stock, allocated among, and issued in the form of E-Docs Common Stock
within five (5) days after the Effective Date of this Agreement to, each of
Xxxxxxxxx, Szpicek and Dagan as follows (the "Compromise Shares"):
# of Shares 12/31/99 # of Shares
Shareholder of E-Docs Conversion of E-Docs
Name Preferred Stock Rate Common Stock
-------------- --------------- ----------- ------------
Xxxxxxxxx 23.75 0.3056548 77,702
Szpicek 23.75 0.3056548 77,702
Dagan 2.50 0.3056548 8,179
The Compromise Shares shall be registered by E-Docs in accordance with the same
terms as Section 1 (i) (A) and (B) of this Agreement.
5) Additional Consideration. In consideration for the forbearance of
Xxxxxxxxx and CTI, as described in Section 1 above, E-Docs hereby agrees as
follows:
(a) E-Docs shall grant to Xxxxxxxxx warrants to purchase 118,750 shares
of E-Docs' Common Stock which shares are to be registered on or prior to August
15, 2000 (the "Xxxxxxxxx Warrant Shares"), pursuant to a registration statement
filed with the SEC for public offering and sale of stock pursuant to the 1933
Act. Such warrants shall be issued to Xxxxxxxxx as additional consideration for
the forbearance of Xxxxxxxxx and CTI described in Section 1. Such warrants
shall be evidenced by E-Docs' execution and delivery to Xxxxxxxxx of a Warrant
in the form attached hereto as EXHIBIT "A" (the "Warrant"), which Warrant is
exercisable by Xxxxxxxxx on or
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before December 31, 2000 at a purchase price per share equal to the lower of (i)
$1.75, or (ii) the average closing price for E-Docs' common stock for the 30-day
period immediately prior to the Effective Date of this Agreement (the "30-Day
Average Closing Price"). E-Docs affirms that the registration of the Xxxxxxxxx
Warrant Shares will remain effective continuously from the date of registration
until the end of the exercise period.
(b) E-Docs shall pay interest to Xxxxxxxxx at a rate of 1.00% per month
(12% per annum) for the period commencing on January 1, 2000, through the
expiration of the Forbearance Period, on the cash value of the 690,828 shares of
E-Docs Common Stock owned by Xxxxxxxxx from time to time (and issued to
Xxxxxxxxx by E-Docs pursuant to Section 3 and Section 4 hereof - the "Xxxxxxxxx
Remaining Shares"), which cash value will be calculated by multiplying the
number of Xxxxxxxxx Remaining Shares by the lower of (i) $1.75 per share, or
(ii) the 30-Day Average Closing Price (the "Cash Value"). Such aggregate
interest shall be paid by E-Docs upon the end of the Forbearance Period and
shall be payable in E-Docs' sole discretion either in (a) cash, or (b)
additional shares of E-Docs common stock (the "Xxxxxxxxx Interest Shares") (if
E-Docs utilizes shares of stock to pay such interest, the Xxxxxxxxx Interest
Shares will have been registered on or prior to the expiration of the
Forbearance Period, pursuant to a registration statement filed with the SEC for
public offering and sale of stock pursuant to the 1933 Act). The number of
Xxxxxxxxx Interest Shares to be issued, if E-Docs utilizes shares of stock to
pay such interest, will be determined by dividing the dollar amount of the
aggregate interest due to Xxxxxxxxx by the lower of (i) $1.75 per share, or (ii)
the 30-Day Average Closing Price. Interest is due and payable to Xxxxxxxxx
within five (5) days after the end of the Forbearance Period.
6) Payment of Xxxxxxxxx'x and CTI's Legal Fees. Within two (2) days
after the Effective Date, E-Docs shall pay $35,000 in cash to Blank Rome Xxxxxx
Xxxxxxxxxx LLP in full and complete satisfaction of Xxxxxxxxx'x and CTI's legal
fees and expenses up to, through and including the Effective Date of this
Agreement, with respect to all claims between Xxxxxxxxx and CTI, on the one
hand, and E-Docs and HCIS, on the other hand, under the terms of, or otherwise
in connection with, the Purchase Agreement and the negotiation and execution of
this Agreement. E-Docs shall cause such payment to be transmitted by wire
transfer pursuant to the following wiring instructions:
The Chase Manhattan Bank
ABA number 021-000021
Account Number 114-026602 (account of Blank Rome Xxxxxx Xxxxxxxxxx LLP)
Blank Rome Xxxxxx Xxxxxxxxxx LLP reference number 25182-0002
7) Covenants.
(a) E-Docs and HCIS hereby covenant and agree as follows:
(i) From and after the Effective Date through the expiration of the
Forbearance Period, neither E-Docs nor HCIS shall pay any cash compensation to
Xxxxxxx X. Xxxxxxxx for services rendered to E-Docs or HCIS (although E-Docs and
HCIS shall be entitled to reimburse Xx. Xxxxxxxx for business expenses incurred
by Xx. Xxxxxxxx on behalf of E-Docs
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or HCIS in accordance with E-Docs' expense reimbursement policy), and that any
compensation provided to Xx. Xxxxxxxx during such period shall only be in the
form of shares of E-Docs common stock.
(ii) E-Docs will use its best efforts to cause the registration of the
Xxxxxxxxx Remaining Shares, the Xxxxxxxxx Warrant Shares and the Xxxxxxxxx
Interest Shares, if any, pursuant to a registration statement filed with the SEC
for public offering and sale of stock pursuant to the 1933 Act prior to the
expiration of the Forbearance Period, which efforts shall include, but not be
limited to, hiring appropriate accounting and legal professionals to assist
E-Docs in making the appropriate filings with the SEC.
(iii) E-Docs shall provide Xxxxxxxxx and CTI with a written report on
the fifteenth day of each month following the Effective Date (commencing on May
15, 2000) through the expiration of the Forbearance Period (A) describing the
status of the registration of the Xxxxxxxxx Remaining Shares, the Xxxxxxxxx
Warrant Shares and the Xxxxxxxxx Interest Shares, and (B) certifying to CTI that
no cash compensation has been paid to Xx. Xxxxxxxx since the Effective Date
through the date of such report.
(iv) E-Docs shall take all steps necessary, including, but not limited
to, procuring all necessary opinions of counsel, to enable Xxxxxxxxx to sell the
maximum number of shares of restricted E-Docs Common Stock issued to Xxxxxxxxx
pursuant to the terms of this Agreement from time to time that Xxxxxxxxx may be
entitled to sell from time to time during the Forbearance Period pursuant to SEC
Rule 144 ("Rule 144 Sales"), provided, however, that E-Docs shall only be
required to expend $750 in legal fees to obtain such opinions of counsel. In
the event that it becomes apparent that the opinions of counsel necessary to
effectuate Xxxxxxxxx'x Rule 144 Sales will cost more than $750, then E-Docs
counsel shall contact Xxxxxxxxx'x counsel, before incurring such expense, to
determine how to proceed.
(b) Xxxxxxxxx and CTI hereby covenant and agree, at no cost or expense to
Xxxxxxxxx or CTI, to reasonably cooperate with E-Docs and HCIS in connection
with E-Docs' and HCIS' efforts to correct and cure the filing and reporting
deficiencies in the Philippines with respect to OTPI, which cooperation may
include, without limitation, promptly executing such reasonably necessary
affidavits, certificates, confirmations, reports and applications as E-Docs or
HCIS may request.
8) Representations and Warranties.
(a) E-Docs and HCIS each hereby certify and confirm as of the Effective
Date in favor of Xxxxxxxxx and CTI that all of E-Docs' and HCIS' respective
representations and warranties set forth in the Purchase Agreement are true and
correct as of the Effective Date (each of which representations and warranties
shall survive the execution and delivery hereof).
(b) Xxxxxxxxx and CTI each hereby represent and warrant as of the
Effective Date to E-Docs and HCIS that:
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(i) This Agreement has been duly executed and delivered by Xxxxxxxxx and
CTI, and no further corporate or other action is necessary with respect to
Xxxxxxxxx or CTI to make this Agreement a valid and binding obligation of
Xxxxxxxxx and CTI, enforceable in accordance with its terms. Neither the
execution, delivery nor performance of this Agreement by CTI will result in a
violation or breach of any term or provision under the Articles of Incorporation
or Bylaws or any resolution of the Board of Directors or shareholders of CTI or
constitute a default or breach of, or accelerate the performance required under,
or require the consent of any person or entity under any indenture, mortgage,
deed of trust or other contract or agreement to which Xxxxxxxxx or CTI is a
party or by which they or any of their respective assets are bound, or violate
any order, writ, injunction or decree of any court, administrative agency or
governmental body.
(ii) CTI is a corporation duly organized, validly existing and good
standing under the laws of the State of New York and has all requisite corporate
power to enter into and perform this Agreement.
(c) Each of the persons executing this Agreement hereby certify to each
of the other parties hereto that they are duly authorized representatives of the
respective parties to this Agreement and that they are fully authorized to
execute this Agreement for the purposes stated herein and to effectuate the
mutual agreements set forth herein. They further acknowledge that they have
read and fully understand or have had explained to their satisfaction all of the
terms of this Agreement and are executing this Agreement knowingly and
voluntarily
9) Defaults. E-Docs and HCIS shall be deemed to be in default of the
terms and conditions of this Agreement upon any of the following (an "Event of
Default"):
(a) E-Docs shall fail to (i) complete its obligations under Section 1(i)
(A) and (B) of this Agreement by the end of the Forbearance Period, (ii) cause
to be delivered to Xxxxxxxxx within ten (10) days after the Effective Date (A)
the Xxxxxxxxx Remaining Shares as defined in Paragraph 5(b) herein; and (B) the
Warrant, and (iii) cause to be delivered to Blank Rome Xxxxxx Xxxxxxxxxx LLP
within two (2) days after the Effective Date $35,000 in immediately available
funds in the manner provided in Section 6 of this Agreement.
(b) E-Docs shall fail to perform any of E-Docs' obligations under this
Agreement other than those described in Section 9(a) and such failure shall
continue for ten (10) days after E-Docs' receipt of written notice thereof from
Xxxxxxxxx or CTI.
(c) Any of the representations or warranties made by E-Docs or HCIS
herein is determined to be materially false.
(d) (i) E-Docs shall commence any case, proceeding or other action under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts; or (ii) there shall be commenced against E-Docs any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any
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such adjudication or appointment, or (B) remains undismissed, undischarged or
unbonded for a period of forty-five (45) days; or (iii) there shall be commenced
against E-Docs any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within forty-five (45) days from the entry thereof; or
(iv) E-Docs shall take any action indicating its consent to, approval of, or
acquiescence in any acts set forth in clause (i), (ii), or (iii) above; or (v)
E-Docs shall admit in writing its inability to pay its debts as they become due.
10) Penalties. In addition to Xxxxxxxxx'x and CTI's other remedies
hereunder and under the Purchase Agreement, or otherwise available in law or
equity, in the event that E-Docs fails to register the Xxxxxxxxx Remaining
Shares, the Xxxxxxxxx Warrant Shares and the Xxxxxxxxx Interest Shares, if any,
pursuant to a registration statement filed with the SEC for public offering and
sale of stock pursuant to the 1933 Act by the expiration of the Forbearance
Period, then E-Docs and HCIS hereby agree that commencing on August 16, 2000,
and continuing on each day thereafter until the Xxxxxxxxx Remaining Shares, the
Xxxxxxxxx Warrant Shares and the Xxxxxxxxx Interest Shares, if any, have been
registered pursuant to a registration statement filed with the SEC, the
following shall apply:
(a) E-Docs shall issue to Xxxxxxxxx a warrant per day, for each day in
default, to purchase 1,567 additional shares of E-Docs common stock at a
purchase price per share equal to the lower of (i) $1.75, or (ii) the 30-Day
Average Closing Price. The shares of E-Docs common stock subject to such
warrants shall be registered pursuant to a registration statement filed with the
SEC for public offering of sale of stock pursuant to the 1933 Act at the same
time as, and contemporaneously with, the Xxxxxxxxx Remaining Shares, the
Xxxxxxxxx Warrant Shares and the Xxxxxxxxx Interest Shares, if any.
(b) The interest rate payable by E-Docs on the Cash Value pursuant to
Section 5 shall automatically increase to 1.5% per month (18% per annum) (which
change in rate shall not be applied retroactively).
11) Contingent Release and Waiver of Claims.
(a) In the event that (A) E-Docs and HCIS fully perform their obligations
under Section 1(i)(A) and (B) of this Agreement, (B) E-Docs and HCIS have
performed all of their other material obligations under this Agreement, and (C)
E-Docs and HCIS are not then in default of any of its obligations hereunder,
then:
(i) Xxxxxxxxx and CTI shall automatically be deemed to have released and
discharged E-Docs and HCIS and their respective subsidiaries, affiliates,
shareholders, officers, directors, employees, agents, representatives,
successors, predecessors and assigns (the "E-Docs Released Parties"), from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, attorneys' fees, costs, disbursements, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages (including direct, special, consequential, remote,
foreseeable, unforeseeable, and punitive damages), judgments,
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extents, executions, claims, demands, obligations and liabilities whatsoever, at
law, in equity or otherwise, liquidated, unliquidated, known or unknown,
sounding in tort, in contract or under any other legal theory, or arising by
statute or under any other law or regulation, and whether contingent or matured,
against the E-Docs Released Parties that Xxxxxxxxx or CTI have had, then have or
thereinafter can, shall or may have for, upon, or by reason of any matter,
including, without limitation, with respect to the Purchase Agreement, this
Agreement, the Potential Offset Claims and the prior failure of E-Docs to
register the E-Docs Common Stock, from the beginning of the world through the
date of such registration of the E-Docs Common Stock; except that the parties
agree that neither Szpicek or Dagan is an E-Docs Released Party and that neither
Xxxxxxxxx nor CTI release either Szpicek or Dagan from any claim that Xxxxxxxxx
or CTI may now or in the future have against either Szpicek or Dagan, whether or
not such claim arises out of the subject matter of this Agreement and/or the
Purchase Agreement.
(ii) E-Docs and HCIS shall automatically be deemed to have released and
discharged Xxxxxxxxx and CTI and their respective subsidiaries, affiliates,
shareholders, officers, directors, employees, agents, representatives,
successors, predecessors, heirs, executors, administrators and assigns from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, attorneys' fees, costs, disbursements, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages (including direct, special, consequential, remote,
foreseeable, unforeseeable, and punitive damages), judgments, extents,
executions, claims, demands, obligations and liabilities whatsoever, at law, in
equity or otherwise, liquidated, unliquidated, known or unknown, sounding in
tort, in contract or under any other legal theory, or arising by statute or
under any other law or regulation, and whether contingent or matured against
Xxxxxxxxx or CTI that E-Docs or HCIS have had, then have or thereinafter can,
shall or may have for, upon, or by reason of any matter, including, without
limitation, with respect to the Purchase Agreement, this Agreement and the
Potential Offset Claims, from the beginning of the world to the date of such
registration of the E-Docs Common Stock.
(iii) Notwithstanding the conditional nature of Sections (i) and (ii)
the parties hereby acknowledge and agree that upon Xxxxxxxxx'x receipt of the
certificate representing the Xxxxxxxxx Remaining Shares, the parties shall
automatically be deemed to have released and discharged, and subject to receipt
of such certificate do hereby release and discharge each other and their
respective subsidiaries, affiliates, shareholders, officers, directors,
employees, agents, representatives, successors, predecessors, heirs, executors,
administrators and assigns, from all actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, attorneys' fees, costs,
disbursements, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages (including direct, special,
consequential, remote, foreseeable, unforeseeable, and punitive damages),
judgments, extents, executions, claims, demands, obligations and liabilities
whatsoever, at law, in equity or otherwise, liquidated, unliquidated, known or
unknown, sounding in tort, in contract or under any other legal theory, or
arising by statute or under any other law or regulation, and whether contingent
or matured, against each other that the parties have had, now have or
hereinafter can, shall or may have for, upon, or by reason of E-Docs' prior
issuance of 1,468,539 shares of E-Docs Common Stock to Xxxxxxxxx individually
(the "Initial Issuance"); except that the parties agree that neither Szpicek or
Dagan are included in such release and that neither Xxxxxxxxx nor CTI release
either Szpicek
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or Dagan from any claim that Xxxxxxxxx or CTI may now or in the future have
against either Szpicek or Dagan, whether or not such claim arises out of the
subject matter of this Agreement and/or the Purchase Agreement. This is intended
as a limited release that concerns only the distribution of the shares in the
Initial Issuance, and does not release E-Docs or HCIS from all other claims with
respect to the Initial Issuance, including, but not limited to, the fact that
the shares distributed in the Initial Issuance were not registered, and does not
affect the parties' rights and remedies in any other way except in accordance
with the terms of this Agreement.
(iv) Notwithstanding anything to the contrary in Sections 2 and 12 of
this Agreement, no reservation of rights of the parties hereto shall survive the
conditional releases of Sections 11 (a)(i) and (ii), provided all of the
conditions necessary for those releases to be triggered have been met.
(b) The parties agree that the releases set forth in this Section 11
(a)(i) and (ii) are expressly contingent upon E-Docs and HCIS performing all of
the obligations referenced in Section 1(i) (A) and (B) and 11(a) of this
Agreement by August 15, 2000, and that if they fail to do so, then (i)
Xxxxxxxxx'x and CTI's agreement to forbear from pursuing their respective
rights, claims and remedies against E-Docs or HCIS (which agreement to forbear
is described in Section 1 hereof), and the contingent releases set forth in
Section 11(a)(i) and (ii), shall immediately and automatically become null and
void and of no further force or effect, and (ii) Xxxxxxxxx and CTI shall be
entitled to pursue their respective remedies against E-Docs or HCIS with respect
to the Purchase Agreement and this Agreement and nothing contained in this
Agreement or otherwise shall be deemed to have waived or modified any of
Xxxxxxxxx'x, CTI's, E-Docs' or HCIS' respective rights or remedies under or in
connection with the Purchase Agreement or this Agreement or otherwise in law or
equity.
12) Amendments, Waivers. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters herein contained and any
agreement hereafter made shall be ineffective unless made in writing and signed
by all of the parties hereto. No provision of this Agreement shall be modified,
waived or terminated except by an instrument in writing signed by the party
against whom such modification, waiver or termination is to be enforced. The
failure by Xxxxxxxxx, CTI, E-Docs or HCIS to insist upon the strict performance
of any one of the terms or conditions of this Agreement or to exercise any
right, remedy or election herein contained or permitted by law shall not
constitute or be construed as waiver or relinquishment for the future of that
term, condition, right, remedy or election, which shall continue and remain in
full force and effect.
13) Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of, E-Docs, HCIS, Xxxxxxxxx, and CTI and their respective
heirs, representatives, administrators, successors and assigns, except that none
of the parties hereto may assign, delegate or transfer their rights or
obligations hereunder. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be unenforceable or void,
this Agreement shall continue in full force and effect without such provision to
the maximum extent permitted by law.
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14) Notices and Communications. Notwithstanding anything in the Purchase
Agreement to the contrary, all notices, demands, consents, approvals and other
communications under this Agreement or the Purchase Agreement shall be in
writing and mailed or delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), by hand, by a nationally-recognized
overnight courier or by telecopier (provided that if sent by telecopier,
confirmed by one of the other methods for notice authorized herein):
If to Xxxxxxxxx or CTI to:
Xxxxxx Xxxxxxxxx
c/x Xxxx Enterprises, Inc.
000 00xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
with a copy to:
Blank Rome Xxxxxx Xxxxxxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
If to E-Docs or HCIS to:
Applied Voice Recognition, Inc.
0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address of which Xxxxxxxxx, CTI, E-Docs or HCIS shall have
notified the other parties in writing as aforesaid. All such notices and
communications shall be effective when received at the address specified as
aforesaid.
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15) Governing Law; Conflicts.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
(b) In the event of any conflicts between the provisions of the Purchase
Agreement and the provisions of this Agreement, the provisions of this Agreement
shall control.
16) Counterparts. This Agreement may be executed by the parties hereto
individually or in any combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
Agreement.
17) No Third Party Beneficiaries. No individual or entity shall be a
third party beneficiary of the representations, warranties, covenants and
agreements made by any party hereto.
18) Effective Date. The date on which the parties exchange, by
Facsimile, duly executed original counterparts of this Agreement shall be the
effective date of this Agreement (the "Effective Date").
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
to be effective as of the Effective Date.
CORNELL TRANSCRIPTION, INC., a
New York corporation
Date: April ___, 2000 By:____________________________________
Xxxxxx Xxxxxxxxx, President
XXXXXXXXX:
---------
Date: April ___, 2000 _______________________________________
Xxxxxx Xxxxxxxxx
HCIS:
----
E-DOCS HEALTH CARE INFORMATION
SERVICES, INC., a Delaware corporation
formerly known as AVRI Health Care
Information Services, Inc.
Date: April ___, 2000 By:____________________________________
Name:__________________________________
Title:_________________________________
E-DOCS:
------
APPLIED VOICE RECOGNITION, INC., a
Delaware corporation
Date: April ___, 2000 By:_____________________________________
(the "Effective Date")
Name:___________________________________
Title:__________________________________
Signature Page to
Forbearance Agreement
(Xxxxxx Xxxxxxxxx & Cornell Transcription, Inc.)
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