1
EXHIBIT 10.13
MANAGEMENT SERVICES AGREEMENT
between
National Medical Systems, Inc.
and
MEDIX, Inc.
2
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT dated effective as of September 1,
1996, is entered into between National Medical Systems, Inc., a Florida
corporation (the "Manager"), and MEDIX, Inc., a New Jersey corporation
("MEDIX").
W I T N E S S E T H:
WHEREAS, MEDIX is engaged in the business of developing, marketing,
installing, maintaining and servicing the "Medical Manager" office practice
management system under the private label "The System by MEDIX"(the "Business");
and
WHEREAS, the Manager, MEDIX and Blue Cross and Blue Shield of New
Jersey, Inc., a New Jersey health service corporation and the indirect parent of
MEDIX ("BCBSNJ"), are entering into an Option Agreement of even date herewith
(the "Option Agreement"), pursuant to which the Manager will have the right,
subject to the terms and conditions set forth in the Option Agreement, to
purchase certain assets of MEDIX used in connection with the Business and to
assume certain related liabilities; and
WHEREAS, MEDIX desires to engage the Manager to manage the Business
pending consummation of the transactions contemplated by the Option Agreement
and the Manager is willing to be so engaged to manage the Business, in
accordance with the terms and conditions set forth in this Agreement;
NOW , THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and in order to permit the
Manager to take over the management of the Business, it is hereby agreed as
follows:
1. Definitions.
a. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Affiliate" of any Person (the "first person") shall mean any Person,
directly or indirectly, controlling, controlled by or under common control with
the first person. As used in the definition of "Affiliate", the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person,
3
whether through ownership of voting securities, by contract or otherwise.
Neither MEDIX nor the Manager is an Affiliate of the other.
"Agreement" shall mean this Management Services Agreement, including
all Schedules hereto, as it may be amended from time to time in accordance with
its terms.
"Arbitrator" shall mean any natural person who is a resident of the
United States and who is not an employee or Affiliate of any of the parties
hereto or of any Person which is an Affiliate of any such party. In the
selection and appointment of Arbitrators the parties each agree to act in good
faith to name persons with experience and expertise in the subject matter
involved.
"Effective Date" shall mean the effective date of this Agreement, set
forth in the introductory paragraph of this Agreement as the date as of which
this Agreement is entered into by the Manager and MEDIX.
"GAAP" shall mean U.S. generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, which are applicable
to the circumstances as of the date of determination. For purposes of this
Agreement, when GAAP permits the use of alternative accounting methods, the
choice of methods acceptable under GAAP shall be applied in a manner consistent
with the historic practices used by the Person to which the term applies.
"Include" and "including" shall mean include or including, as the case
may be, without any implied exclusion of other items.
"Manager" shall have the meaning given to it in the preamble.
"MEDIX" shall have the meaning given to it in the preamble.
"Person" shall mean any natural person, corporation, partnership or
other business structure recognized as a separate legal entity.
"Term" shall mean the period commencing on the Effective Date and
ending on the Termination Date.
"Termination Date" means the date on which this Agreement is terminated
in accordance with its terms.
2
4
2. Appointment. MEDIX hereby appoints and engages the Manager as
MEDIX's sole and exclusive business manager of the Business, and the Manager
accepts such appointment and engagement on and subject to the terms and
conditions set forth in this Agreement. Subject to the limitations and
conditions set forth in this Agreement, the Manager, in such capacity, shall
have the authority and responsibility to direct, supervise and manage the
business operations of the Business on behalf of and for the account of MEDIX
and to take all actions related thereto.
3. Facilities Provided by MEDIX. MEDIX shall obtain and maintain such
facilities and shall provide such equipment and supplies as are reasonably
necessary for the proper and efficient operation of the Business, consistent
with past practice; provided, however, that, among certain other items, any
rental expense and related costs incurred by MEDIX for the office space being
utilized as of the date of this Agreement (and which will continue to be made
available for such use until December 31, 1996) shall not be deemed to be
expenses for purposes of calculating any payments required to be made under
Section 12 except as set forth in and to the extent permitted by Schedule I to
this Agreement. To the extent the Manager determines during the Term that any
additional or different facilities and/or equipment are reasonably necessary for
such purpose, whether or not consistent with past practice, the Manager shall
advise MEDIX in writing of the need for same, whereupon, unless objected to in
writing by MEDIX, MEDIX shall obtain and maintain such additional or different
facilities and/or equipment.
4. Manager's Duties. The Manager shall perform the following duties:
supervise and direct the general operations of the Business; operate the
Business reasonably efficiently and with proper economy; develop policies with
respect to the implementation of new features to the extent that the financial
obligations and resources of MEDIX permit; develop policies with respect to
marketing for the purpose of creating the greatest possible net income for the
Business; and stimulate the general business of the Business. In addition, the
Manager shall: (i) at the expense of MEDIX, arrange for the rental of
facilities, the purchase or leasing of equipment and the purchase of supplies;
at the expense of MEDIX, cause furniture, furnishings and equipment to be kept
in good repair; and, at the expense of MEDIX, arrange for necessary
replacements, improvements and changes to furniture, furnishings and equipment,
in each case as and to the extent contemplated by Section 3; (ii) cause to be
employed by and at the expense of MEDIX such personnel for the Business as are
reasonably determined by the Manager to be necessary for the conduct of the
Business, as and to the extent contemplated by Section 5; (iii) supervise and
arrange such billing and collection services as are reasonably determined by the
Manager to be necessary for the collection by MEDIX of income and other amounts
due in connection with the Business; (iv) supervise and arrange for the payment
by MEDIX of all expenses and other amounts payable by MEDIX in connection with
the Business; (v) supervise the placing of insurance at the expense of MEDIX on
the Business and its assets, as and to the extent contemplated by
Section 13; and (vi)
3
5
perform such other acts as may be necessary and desirable in connection with the
satisfaction of its duties as hereinabove set forth. Anything to the contrary
set forth in this Section 4 notwithstanding, the Manager will not, without
obtaining the prior written consent of MEDIX (i) arrange for any additional
investments in inventory by MEDIX which results in total inventory at any time
in excess of $317,500, other than replacements for new sales, or (ii) arrange
for capital expenditures or commitments for capital expenditures for the account
of or otherwise binding on MEDIX in excess of $20,000 in the aggregate.
5. Employees. All personnel employed to perform services at the MEDIX
facilities, other than employees of the Manager who may visit the facilities of
MEDIX from time to time to provide assistance and other than employees of the
Manager who the Manager may, in its sole discretion, locate at MEDIX's
facilities, shall be the employees or independent contractors of MEDIX but shall
be supervised and/or directed by the Manager. The Manager shall make all hiring
and termination decisions, establish and pay (from MEDIX's funds) all wages,
salaries and compensation, determine staffing levels, individual work hours,
personnel policies and employee benefit programs for all of the MEDIX personnel
engaged in providing services for the Business; provided, however that all such
hiring and termination decisions and all such decisions regarding wages,
salaries and compensation, staffing levels, individual work hours, personnel
policies and employee benefits for MEDIX personnel engaged in providing services
for the Business shall be made in accordance with MEDIX policies, procedures and
programs in effect from time to time.
6. [Intentionally left blank].
7. [Intentionally left blank].
8. [Intentionally left blank].
9. [Intentionally left blank].
10. Bookkeeping and Accounting Services. The Manager shall perform all
bookkeeping and accounting services required for the operation of the Business,
including the maintenance, custody and supervision of the Business's business
records, ledgers and reports; the establishment, administration and
implementation of accounting procedures, controls and systems; the preparation
of the financial and management reports referenced in Section 11; implementation
and management of computer-based management information systems; and
implementation and management of records retrieval and confidentiality systems.
11. Financial and Management Reports. The Manager shall prepare and
furnish to MEDIX the following reports:
4
6
a. Monthly and annual balance sheets and income statements for
MEDIX. All such statements shall be prepared on an accrual basis of accounting
in accordance with GAAP, with such exceptions thereto as are determined by the
Manager to be advisable; and
b. Any additional financial and management reports and
information that the Manager determines would assist MEDIX in evaluating its
productivity and services or are otherwise reasonably requested by MEDIX, but
then only to the extent such reports or information are being prepared regularly
by MEDIX in connection with its operation of the Business immediately prior to
the date of this Agreement.
The tax returns of MEDIX for any period shall be the responsibility of MEDIX,
although the Manager will reasonably cooperate with the person preparing such
returns.
12. Manager's Compensation. The Manager shall be compensated as
provided in this Section 12. In the event that the Adjusted Monthly Income
Statement (as hereinafter defined) for any month during the Term indicates a net
loss for the Business with respect to such month, then, subject to the provisos
contained in Sections 3 and 5, such income statement shall be accompanied by a
payment from the Manager to MEDIX of an amount equal to the amount of such loss.
In the event that the Adjusted Monthly Income Statement for any month during the
Term indicates net income for the Business with respect to such month, then
promptly after its receipt of such income statement, subject to the provisos
contained in the Sections 3 and 5, MEDIX shall pay to the Manager an amount
equal to the amount of such income. Except as otherwise expressly set forth in
this Agreement and particularly as otherwise contemplated by the definition of
Adjusted Monthly Income Statement set forth below in this Section , all
computations made pursuant to this Section 12 shall be made on an accrual basis
in accordance with GAAP. For these purposes, the Adjusted Monthly Income
Statement shall be the monthly income statement prepared and furnished by the
Manager pursuant to Section 11(a), but adjusted to reflect the limitations set
forth on Schedule I to this Agreement.
13. Insurance.
MEDIX shall be responsible for procuring and maintaining
insurance for the Business and shall name the Manager as an additional insured
under all such insurance. Such insurance shall include all insurance customarily
maintained by businesses similarly situated including, without limitation, the
following:
a. Comprehensive general liability insurance and fidelity
bonds (if determined by the Manager to be necessary) in amounts and with
coverages approved by the parties;
5
7
b. Property insurance covering the premises, equipment and
supplies used in the conduct of the Business, in an amount and with coverages
approved by the parties; and
c. Such other insurance coverage as is determined by the
parties to be advisable.
14. [Intentionally left blank.]
15. Events of Default.
The following events shall each be a Default under this Agreement:
a. If either party fails to perform in any material respect
any material obligation required of it hereunder, and such default continues for
thirty (30) days after the giving of written notice by the non-defaulting party,
specifying the nature and extent of such default; provided, however, that if
such default is not cured within thirty (30) days, but is capable of being cured
within a reasonable period of time in excess of thirty (30) days, then a Default
shall not occur if the defaulting party commences the cure of such default
within the first 30-day period and thereafter diligently and in good faith
continues to cure such default until completion.
b. If either party (i) applies for or consents to the
appointment of a receiver, trustee or liquidator of all or a substantial part of
its assets, files a voluntary petition in bankruptcy or consents to an
involuntary petition, makes a general assignment for the benefit of its
creditors, files a petition or answer seeking reorganization or arrangement with
its creditors, or admits in writing its inability to pay its debts when due, or
(ii) suffers any order, judgment or decree to be entered by any court of
competent jurisdiction, adjudicating such party bankrupt or approving a petition
seeking its reorganization or the appointment of a receiver, trustee or
liquidator of such party or of all or a substantial part of its assets, and such
order, judgment or decree continues unstayed and in effect for ninety (90) days
after its entry, then the other party shall be entitled to terminate this
Agreement by delivering written notice of termination to such party.
16. Remedies Upon Default.
a. If MEDIX shall Default under this Agreement and such
Default is not cured by MEDIX as provided in Section 15, then at the option of
the Manager, the Manager shall be entitled to terminate this Agreement.
b. In the event that the Manager shall Default under this
Agreement and such Default shall not be cured as provided in Section 15, then at
the option of MEDIX,
6
8
MEDIX shall be entitled to terminate this Agreement. If MEDIX elects to
terminate this Agreement, MEDIX shall have no further liability to the Manager
hereunder other than the liability to pay for such services rendered to MEDIX by
the Manager prior to the date of such termination.
17. Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated pursuant to the terms hereof, shall continue until the
earlier of (i) December 31, 1996 and (ii) the date, if any, on which the closing
occurs under the Option Agreement. Except for termination upon Default as
described in Section 16 or termination upon expiration of the Term, this
Agreement shall not be terminated by either party for any reason whatsoever.
18. Effect of Termination. Notwithstanding any other provisions of this
Agreement, following the termination of this Agreement, this Agreement shall
remain in full force and effect with respect to events, actions, omissions or
occurrences which occurred prior to the termination of this Agreement. The
provisions of Sections 14, 19 and 21 through 25, and of this Section , shall
survive any such termination and shall not expire.
19. Indemnification.
a. MEDIX shall indemnify and hold harmless the Manager from damages for
injuries to persons or property resulting from any cause whatsoever in
connection with the operation of the Business, and at its own cost and expense,
to defend any action or proceeding against the Manager arising therefrom, except
as to circumstances where such damages are principally a result of the
negligence or malfeasance of the Manager or principally a result of the failure
of the Manager to fully and faithfully perform its duties hereunder. This
indemnification shall include, but not be limited to, all costs in defending
against the suit, attorneys' fees and any eventual settlement or judgment
amount, plus interest.
b. The Manager shall indemnify and hold harmless MEDIX from damages or
injuries to persons or property resulting from the negligence or malfeasance of
the Manager or from the failure of the Manager to fully and faithfully perform
its duties hereunder, and at its own cost and expense, to defend any action or
proceeding against MEDIX arising therefrom, except as to circumstances where
such damages are principally a result of the negligence or malfeasance of MEDIX
or principally a result of the failure of MEDIX to fully and faithfully perform
its duties hereunder. This indemnification shall include, but not be limited to,
all costs in defending against the suit, attorneys' fees and any eventual
judgment or settlement amount, plus interest.
20. Governing Law. This Agreement shall be construed, interpreted and
applied in accordance with the laws of the State of Florida applicable to
contracts entered into and wholly to be performed in Florida by Florida
residents.
7
9
21. Dispute Resolution.
a. The parties desire to resolve disputes arising out of this
Agreement without litigation. Accordingly, except for action seeking temporary
restraining order or injunction related to the purposes of this Agreement, or
suit to compel compliance with this dispute resolution process, the parties
agree to use the following alternative dispute resolution procedure as their
sole remedy with respect to any controversy or claim arising out of or relating
to this Agreement or its breach.
b. At the written request of a party, each party will appoint
a knowledgeable, responsible representative to meet and negotiate in good faith
to resolve any dispute arising under this Agreement. The parties intend that
these negotiations be conducted by non-lawyer, business representatives. The
location, format, frequency, duration and conclusion of these discussions shall
be left to the discretion of the representatives. Upon agreement, the
representatives may utilize other alternative dispute resolution procedures such
as mediation to assist in the negotiations. Discussions and correspondence among
the representatives for purposes of these negotiations shall be treated as
confidential information developed for purposes of settlement, exempt from
discovery and production, which shall not be admissible in the arbitration
described below or in any lawsuit without the concurrence of all parties.
Documents identified in or provided with such communications, which are not
prepared for purposes of the negotiations, are not so exempted and may, if
otherwise admissible, be admitted in evidence in arbitration or lawsuit.
c. If the negotiations do not resolve the disputes within thirty (30)
days of the initial written request, the disputes shall be submitted to binding
arbitration by a single arbitrator pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. A party may demand such arbitration in
accordance with the procedures set out in those rules. Discovery shall be
controlled by the arbitrator and shall be permitted to the extent set out in
this section. Each party may submit in writing to a party, and that party shall
so respond, to a maximum of any combination of thirty-five (none of which may
have subparts) of the following: interrogatories, demands to produce documents,
and requests for admission. Each party is also entitled to take the oral
deposition of one individual of another party. Additional discovery may be
permitted upon mutual agreement of the parties. The arbitration hearing shall
commence within sixty (60) days of the demand for arbitration. The arbitration
shall be held in Newark, New Jersey. The arbitrator shall control the scheduling
so as to process the matter expeditiously. The parties may submit written
briefs. The arbitrator shall rule on the dispute by issuing a written opinion
within thirty days after the close of the hearings. The times specified in this
section may be extended upon mutual agreement of the parties or by the
arbitrator upon a showing of good cause. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction.
8
10
d. Each party shall bear its own costs of these procedures. A
party seeking discovery shall reimburse the responding party for the costs of
production of documents (to include search time and reproduction costs). The
parties shall equally split the fees of the arbitration and the arbitrator.
22. Confidential Information and Records.
a. MEDIX and the Manager agree that each will acquire certain
information and materials that are the confidential and proprietary information
of the other (the "Confidential Information"). MEDIX and the Manager each agree
not to disclose or use the Confidential Information of the other except in the
performance of this Agreement or with the prior, express, written consent of the
other. MEDIX and the Manager each agree to take all actions reasonably necessary
and satisfactory to the other to protect the confidentiality of the Confidential
Information of the other. MEDIX and the Manager each shall assume that all
information and materials exchanged are Confidential Information except that the
following shall not be considered Confidential Information:
(1) Information known to the disclosee prior to the date the
parties first contacted each other.
(2) Information in the public domain, through no act or
omission of the party to this Agreement required to keep such
information confidential.
(3) Information received from a third party with a legal or
contractual right to disclose such information.
(4) Information independently developed by the disclosee
without reference to the Confidential Information.
(5) Information disclosed without restriction pursuant to
judicial action or government regulation; provided, the party
proposing to disclose or use such Confidential Information has
notified the other party prior to such disclosure and
reasonably cooperates with the others in the event the other
party chooses to legally contest and avoid such disclosure.
b. All business records, information, software and systems of
the Manager relating to the provision of its services under this Agreement shall
remain the property of the Manager, and may be removed by the Manager from
supporting the Business upon any termination of this Agreement; provided,
however, that MEDIX shall be entitled upon reasonable written request, to access
such records and make copies or extracts thereof to the
9
11
extent necessary to prosecute or defend against any tax or other liabilities
imposed on MEDIX by any governmental authority or other party.
c. Customer data in usable form and customer records shall
remain the property of MEDIX and shall be delivered by the Manager to MEDIX,
upon request, following any termination of this Agreement, other than
termination in connection with a closing under the Option Agreement.
d. Except as otherwise provided in this Agreement, the parties
shall safeguard all records maintained by them pursuant to this Agreement for a
period of time specified by the parties (no less than three years) from the date
of the last activity recorded in such records and, prior to destruction of any
such records, shall give the other party notice of such destruction and, if the
other party so elects and applicable Law so permits, shall deliver such records
to the other party in lieu of destroying them.
23. Assignment. Except for the Manager ability to assign pursuant to a
merger transaction, neither party shall have the right to assign its rights and
obligations hereunder without the prior written consent of the other party. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, and permitted successors
and assigns.
24. [Intentionally left blank].
25. Miscellaneous.
a. Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by each of the parties hereto.
b. Notices. Any notice, request, instruction or other document
to be given hereunder by a party hereto shall be in writing and shall be deemed
to have been given, (i) when received if given in person or by U.S. mail,
certified or registered mail, return receipt requested, postage prepaid, or (ii)
on the date of acknowledgment of receipt if sent by telex, facsimile or other
wire transmission or by overnight courier.
If to MEDIX, addressed as follows: MEDIX, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
President and CEO
10
12
with a copy to: Blue Cross and Blue Shield of
New Jersey, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
General Counsel
If to the Manager, addressed as follows: National Medical Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, President
with a copy to: Trenam, Kemker, Scharf, Barkin,
Frye, ▇'▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
P. O. Box 1102
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
c. Waivers. The failure of a party hereto at any time or times
to require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same. No waiver by a party of any condition
or of any breach of any term contained in this Agreement shall be effective
unless in writing, and no waiver in any one or more instances shall be deemed to
be a further or continuing waiver of any such condition or breach in other
instances or a waiver of any other condition or breach of any other term.
d. Counterparts. This Agreement may be executed simultaneously
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
e. Headings. The headings preceding the text of Sections of
this Agreement are for convenience only and shall not be deemed part of this
Agreement.
f. Further Assurances. Each party will, at the reasonable
request of any other party hereto, execute and deliver to such other party all
such further instruments,
11
13
assignments, assurances and other documents, and take such actions as such other
party may reasonably request in connection with the carrying out of this
Agreement.
g. Remedies Cumulative. No remedy set forth in this Agreement
or otherwise conferred upon or reserved to any party shall be considered
exclusive of any other remedy available to any party, but the same shall be
distinct, separate and cumulative and may be exercised from time to time as
often as occasion may arise or as may be deemed expedient.
h. Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to its fair meaning. The parties
acknowledge that each party and its counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.
i. Authorized Persons. Whenever any consent, approval or
determination of a party is required pursuant to this Agreement, such consent,
approval or determination shall be rendered on behalf of the party by the person
or persons duly authorized to do so, which the other party shall be justified in
assuming means any officer of the party rendering such consent, approval or
determination, or such party's board of directors.
j. Severability. If any provision of this Agreement is or
becomes invalid. illegal or unenforceable in any respect, the validity, legally
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
k. Entire Understanding. This Agreement, the Option Agreement
and the other agreements between the parties expressly contemplated hereby and
thereby set forth the entire agreement and understanding of the parties hereto
in respect to the transactions contemplated hereby and thereby and supersede all
prior agreements, arrangements and understandings relating to the subject matter
hereof and thereof and is not intended to confer upon any other person any
rights or remedies hereunder or thereunder. There have been no representations
or statements, oral or written, that have been relied on by any party hereto,
except those expressly set forth in this Agreement, the Option Agreement and
such other agreements.
l. Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of both parties and their respective legal
representatives, successors and permitted assigns.
12
14
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
NATIONAL MEDICAL SYSTEMS, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Chief Financial Officer
------------------------------
MEDIX, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: President and Chief Executive Officer
------------------------------
13
15
OPTION AGREEMENT
This OPTION AGREEMENT is executed effective as of the 1st day of
September, 1996, by and between MEDIX, INC., a New Jersey corporation
("Seller"), BLUE CROSS AND BLUE SHIELD OF NEW JERSEY, INC., a New Jersey health
service corporation and the indirect parent of Seller ("BCBSNJ"), and NATIONAL
MEDICAL SYSTEMS, INC., a Florida corporation ("Buyer").
WHEREAS, Seller is the owner and operator of a business engaged in the
development, marketing, installation and servicing of the "Medical Manager"
office practice management system under the private label "The System by MEDIX"
(the "Business"); and
WHEREAS, Seller desires to grant and Buyer desires to acquire an option
to purchase certain of the assets used and useful in the conduct and operation
of the Business on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the above and of the mutual
promises and covenants contained herein, and other good and valuable
consideration, the parties, intending to be legally bound, agree as follows:
SECTION 1. OPTION TO PURCHASE ASSETS
a. In consideration of $100 and other good and valuable
consideration, the sufficiency of which is hereby acknowledged by Seller, Seller
hereby sells and grants to Buyer an exclusive option (the "Option") to purchase
all of the operating assets used by Seller in connection with the Business,
including but not limited to the distribution rights to a private label version
of The Medical Manager with fully paid up perpetual rights to market it under
the name "The System by
16
MEDIX", customer lists, accounts receivable, service contracts, plant, property
and equipment, service department tools, spare parts, inventory, rights to
software programs and documentation including conversion and customized
programs, printed forms, signs, marketing material, rights to existing telephone
numbers, cash (after reflecting all outstanding uncleared items) in the sum of
$80,000 plus the amount of all deposits from customers/clients and/or others,
any other rights arising under deposits from customers/clients and/or others,
patents, patents pending, trade secrets, copyrights, trade names, trademarks,
logos, advertising work, contract rights, drawings, production computer and
related software and documentation, licenses, inventions, processes, books,
records, goodwill and other proprietary rights or tangible or intangible assets
used in connection with the Business (collectively, the "Business Assets"),
certain of which are identified in Exhibit 1.1(a), but excluding assets
identified in Exhibit 1.1(b) (the "Excluded Assets"), subject to the terms and
conditions set forth herein.
1.2 The purchase price for the Business Assets to be acquired
upon exercise, if any, of the Option (the "Purchase Price") shall be Three
Million, Two Hundred Thousand Dollars ($3,200,000).
1.3 The Option granted hereunder shall expire upon termination
of that certain Management Services Agreement of even date herewith (the
"Services Agreement") between Seller and Buyer. Subject to the preceding
sentence, Buyer may exercise the Option at any time on or after the date hereof
by delivering written notice of such exercise (the "Notice of Exercise") to
Buyer as provided in Section 8(e).
1.4 In the event that the Option is exercised as herein
provided, the parties shall, at a time and on a date on or prior to December 31,
1996 specified by Buyer in the Notice of Exercise
2
17
(not less than fifteen (15) nor more than twenty (20) days after the date of the
Notice of Exercise) (the "Closing Date"), take the actions hereinafter specified
to effect the sale by Seller of the Business Assets to Buyer (the "Closing"),
provided, (i) in the case of Buyer, that the conditions precedent to Buyer's
obligations set forth in Schedule 1.4(a) have been satisfied or waived on or
prior to the Closing Date and (ii) in the case of Seller, that the conditions
precedent to Seller's obligations set forth in Schedule 1.4(b) have been
satisfied on or prior to the Closing Date.
1.5 The Closing shall be held at the offices of Trenam,
Kemker, Scharf, Barkin, Frye, ▇'▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇, or at such other place as the parties may agree.
1.6 At the Closing, Seller shall sell, convey, transfer and
deliver the Business Assets to Buyer, accompanied by such bills of sale,
instruments of assignment and other documents as may be necessary to evidence or
give effect to such sale, conveyance, transfer and delivery.
1.7 Subject to Section 2.1, Buyer shall pay to Seller at the
Closing, as partial consideration for the sale, conveyance, transfer and
delivery of the Business Assets, the Purchase Price. At the Closing, as
additional consideration for the sale, conveyance, transfer and delivery of the
Business Assets, Buyer shall assume and become obligated for, commencing and
effective from the Closing Date, the Assumed Liabilities, but shall not and does
not assume any Excluded Liabilities. The Excluded Liabilities shall remain the
sole obligation of Seller. For purposes of this Agreement, the term "Assumed
Liabilities" shall mean only (A) liabilities arising under assigned support and
maintenance agreements as then in effect, other than liabilities (i) existing as
of the Closing Date under such agreements as a result of actions taken or
omitted to be taken by MEDIX in the performance of such agreements (other than
the liability to provide support and maintenance for up
3
18
to 12 months from the date hereof to Rahway Podiatry Group or Westway Podiatry
Group for no additional payment by Rahway Podiatry Group or Westway Podiatry
Group), or (ii) arising or that may arise under such agreements based on actions
taken or events that occurred on or prior to the date of this Agreement, and (B)
customer deposits, and the term "Excluded Liabilities" shall mean all
liabilities and obligations of Seller other than the Assumed Liabilities.
1.8 Buyer and Seller agree that the Purchase Price shall be
allocated among the Business Assets in such manner as the parties shall agree.
Neither party will take a position contrary to the manner so agreed for state or
federal income tax purposes, except to the extent required by Section 1060 of
the Internal Revenue Code of 1986, as amended.
SECTION 2. DEPOSIT
a. Upon the execution of this Agreement, Buyer shall deliver
to Seller $500,000 as a deposit towards the Purchase Price under the Option (the
"Deposit"), and the Deposit will continue to be held by Seller in accordance
with the provisions of this Section 2. Following exercise of the Option, and at
the Closing contemplated by and in accordance with the terms and conditions of
this Agreement, Seller shall be obligated to credit the amount of the Deposit
towards payment of the Purchase Price.
b. In the event that the Option terminates without Buyer
having exercised the Option or that Buyer, having exercised the Option, fails to
consummate the Closing as contemplated by Section 1.4, and provided that (i) the
reason that the Option has terminated is other than as the result of a
termination of the Services Agreement by Buyer following a Default thereunder by
Seller and (ii) all of the conditions precedent to Buyer's obligations set forth
in Schedule 1.4(a) are able to
4
19
be satisfied within fifteen (15) days of such Option termination or on the
Closing Date, as the case may be (in each case, a "Termination Without Cause"),
then Seller shall be entitled to retain the Deposit, together with the
Additional Liquidated Damages Payment provided for in Section 3 hereof, to
compensate Seller for any and all damages arising by reason of Buyer's failure
to exercise the Option or consummate the Closing, as the case may be, it being
impossible to ascertain or accurately estimate the entire or exact cost, damage
or injury which Seller may have sustained by reason of such failure to exercise.
Such sum is agreed upon as liquidated damages for failure to exercise the Option
or consummate the Closing, as the case may be, and not as a penalty. The
retention of the Deposit and the Additional Liquidated Damages Payment shall
fully discharge all obligations of Buyer to Seller under this Agreement, at law,
at equity, or otherwise; and, Buyer shall have no further obligations of any
kind whatsoever to Seller.
c. In the event that the Option terminates or that Buyer,
having exercised the Option, fails to consummate the Closing as contemplated by
Section 1.4, in each case, other than under circumstances constituting a
Termination Without Cause, then Seller shall immediately return the Deposit to
Buyer.
SECTION 3. ADDITIONAL LIQUIDATED DAMAGES PAYMENT
In the event that the Option terminates or that Buyer, having exercised
the Option, fails to consummate the Closing as contemplated by Section 1.4, in
each case, under circumstances constituting a Termination Without Cause, then
Buyer shall pay to Seller and Seller shall be entitled to receive from Buyer, in
addition to the Deposit, an additional payment in the amount of $460,000 (the
"Additional Liquidated Damages Payment").
5
20
SECTION 4. SPECIFIC PERFORMANCE
The parties agree that the Business Assets constitute unique
assets not readily available on the open market. For this reason, Seller
acknowledges that specific performance is an appropriate remedy for Buyer in the
event this Agreement is breached. The parties agree that the rights afforded by
the preceding sentence shall be in addition to any and all rights Buyer may have
at law or equity.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
a. Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of New Jersey.
b. Seller has and will have upon the exercise of the Option
full corporate power and authority to enter into this Option Agreement and to
consummate the transactions contemplated hereby. This Agreement constitutes, and
any other instruments contemplated hereby when executed will constitute, the
legal, valid and binding obligations of Seller, enforceable in accordance with
their terms, except as may be affected by bankruptcy and insolvency laws and
court-applied equitable principles.
c. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, and the compliance with
the terms, conditions and provisions of this Agreement, with or without the
giving of notice or the passage of time, or both, will not: (i) contravene any
provision of Seller's Certificate of Incorporation or By-Laws; or (ii) subject
to receipt
6
21
of any consents that may be necessary in connection with the sale of the
Business Assets and identified on Schedule 5.4(20) (all of which consents Seller
is confident that it will be able to obtain), conflict with or result in a
breach of or constitute a default under (i) any of the terms, conditions or
provisions of any indenture, mortgage, loan or credit agreement or any other
agreement or instrument to which Seller is a party or by which it or any of the
assets of Seller may be bound or affected, other than conflicts, breaches and
defaults which would not, individually or in the aggregate, have a material
adverse effect on the Business or the Business Assets, or (ii) any decree,
judgment or order of any court or governmental department, commission, board,
agency or instrumentality, domestic or foreign, or any applicable law,
ordinance, rule or regulations.
d. The representations and warranties set forth in Schedule
5.4 are true and correct in all material respects on the date hereof.
e. Neither Seller nor BCBSNJ has employed or retained any
broker, finder or agent, nor in any way otherwise become obligated for any
broker's, finder's, agent's or similar fee with respect to the transactions
contemplated by this Agreement.
f. No representation or warranty by Seller in this Agreement
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements contained herein, in light of the
circumstances under which they were made, not misleading.
SECTION 5A. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and BCBSNJ as follows:
7
22
5A.1 Buyer is a corporation duly organized, validly existing
and in active status under the laws of the State of Florida and has the
corporate power and authority to carry on its business as it is now being
conducted.
5A.2 The execution and delivery of this Agreement by Buyer has
been duly authorized by the Board of Directors of Buyer and no further corporate
action is necessary on its part to make this Agreement valid and binding upon
Buyer and enforceable against Buyer in accordance with the terms hereof or to
carry out the actions contemplated hereby.
5A.3 No additional consent, approval or authorization is
required in connection with the execution or delivery of this Agreement by Buyer
or the consummation by Buyer of the transactions contemplated hereby.
5A.4 Buyer has not employed or retained any broker, finder or
agent, nor in any way otherwise become obligated for any broker's, finder's,
agent's or similar fee with respect to the transactions contemplated by this
Agreement.
SECTION 6. COVENANTS OF SELLER
a. Seller will perform all acts necessary to carry out the
transactions contemplated by this Agreement and will not, during the term of
this Agreement (i) create, incur, assume or guarantee any indebtedness,
obligations or liability or make any payments in respect thereto which would
interfere with, or prevent, Seller's transfer of the Business Assets to Buyer as
provided in Section 1.1 hereof; (ii) take any action which causes any of the
representations or warranties of Seller not to be true and complete as of the
Closing Date; (iii) perform or suffer any acts within its control inconsistent
with the grant of the Option to Buyer or the actions contemplated by this
Agreement;
8
23
or (iv) enter into any agreement or grant any person or entity a right to
purchase all or substantially all of the assets of Seller. In furtherance of the
foregoing and by way of explanation and not by way of limitation, the Seller
will use its best efforts to secure all material consents and approvals that may
be necessary to carry out the transactions contemplated by this Agreement. In
this connection, "best efforts" will mean the efforts that a prudent person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible ; provided, however, that
an obligation to use best efforts under this Agreement does not require Seller
to take actions that would result in a materially adverse change in the benefits
to Seller under this Agreement and from the transactions contemplated by this
Agreement and does not require that Seller make any payment to Personalized
Programming, Inc.
b. Seller will notify Buyer promptly of the threat of, or
commencement against itself or BCBSNJ of, any claim, suit, action, arbitration,
legal, administrative or other proceeding, or governmental investigation or tax
audit affecting the Business or Seller and will cooperate fully with Buyer in
taking any and all actions necessary or desirable to the consummation of the
transactions contemplated by this Agreement.
c. During the term of the Option and, assuming the Option is
exercised and the transactions contemplated hereby are consummated, for a period
ending the date which is two years following the date of this Agreement, neither
Seller nor any of its affiliates will (i) compete with Buyer in the sale of any
product or service offered or in development by Seller in connection with the
Business as of the date of this Agreement within a 100 mile radius from the
current offices of Seller or (ii) solicit the clients of Seller for products
and/or services offered by Seller in the Business or solicit the employees of
Seller for other employment opportunities. Whereas "The System by
9
24
MEDIX" is presently a version of Personalized Programming, Inc.'s product widely
known as The Medical Manager, Seller agrees that this covenant shall apply to
The Medical Manager. Anything contained in this Section 6.c. notwithstanding,
any restriction on Seller or any of its affiliates otherwise hereby contemplated
shall be subject to (i) the right of BCBSNJ to continue to develop and implement
a community health information network (currently being developed and
implemented under the name "HANS") and (ii) BCBSNJ's right, through its HANS
line of business or otherwise, to develop and implement strategic initiatives
with EDI-USA and others with respect to electronic claims submissions.
d. In the event this Agreement is terminated as a result of a
breach by Seller, for a period ending two years after the date of this
Agreement, neither Seller nor any of its affiliates will (i) compete with Buyer
in the sale of any product or service offered or in development by Seller in
connection with the Business as of the date of this Agreement within a 100 mile
radius from the current offices of the Buyer (except that notwithstanding the
current offices of the Buyer, the geographical area in which Seller and its
affiliates may not compete shall not extend to any current customer of Seller or
to such area as is within a 200 mile radius from the current offices of Seller)
or (ii) solicit the clients of Buyer or solicit the employees of Buyer for other
employment opportunities. Whereas "The System by MEDIX" is presently a version
of Personalized Programming, Inc.'s product widely known as The Medical Manager,
Seller agrees that this covenant shall apply to The Medical Manager. Anything
contained in this Section 6.d. notwithstanding, any restriction on Seller or any
of its affiliates otherwise hereby contemplated shall be subject to (i) the
right of BCBSNJ to continue to develop and implement a community health
information network (currently being developed and implemented under the name
"HANS"), (ii) BCBSNJ's right, through its HANS line
10
25
of business or otherwise, to develop and implement strategic initiatives with
EDI-USA and others with respect to electronic claims submissions and (iii)
receipt of any consents deemed necessary from Blue Cross Blue Shield of Delaware
("BCBSD") or Anthem Insurance Companies, Inc. ("Anthem") in connection with
transactions currently pending between BCBSNJ, on the one hand, and BCBSD and
Anthem, on the other hand.
e. Seller will cooperate fully with Buyer in taking any and
all actions necessary or desirable to the consummation of the transactions
contemplated by this Agreement.
SECTION 6A. COVENANTS OF BUYER
6A.1 Buyer will perform all acts necessary to carry out the
transactions contemplated by this Agreement.
6A.2 Buyer will cooperate fully with Seller in taking any and
all actions necessary or desirable to the consummation of the transactions
contemplated by this Agreement.
SECTION 7. FINANCIAL STATEMENTS
As a part of Buyer's due diligence, Buyer has determined that it may
need to arrange for (a) an audit of the financial statements of the Seller for
each of the calendar years in the three year period ended December 31, 1995 and
a possible restatement of such statements to assure compliance with generally
accepted accounting principles and Regulation S-X of the Securities and Exchange
Commission; and (b) the preparation of stub period financial statements for
periods from January 1, 1995 and thereafter and from January 1, 1996 and
thereafter which also need to be in compliance with generally accepted
accounting principles and Regulation S-X of the Securities and Exchange
11
26
Commission. In this connection, Seller, at its own expense, agrees to provide
Buyer with such assistance and cooperation as may be reasonably required to
prepare and audit such statements, including without limitation gathering and
securing information that may be required by the auditors, providing access to
books and records and sending out letters to attorneys for audit letter
responses.
SECTION 7A. INDEMNIFICATION
7A.1 Seller agrees to indemnify and hold harmless Buyer in
respect of any and all claims, losses and expenses which may be incurred by
Buyer arising out of:
(i) any material breach by either Seller or the
Stockholder of any of the representations, warranties, covenants or agreements
made by either of them in this Agreement, the exhibits hereto or any document or
paper delivered in connection with the transactions contemplated hereby;
(ii) any attempt (whether or not successful) by any
person to cause or require Buyer to pay or discharge any debt, obligation,
liability or commitment of Seller not expressly assumed by Buyer; and
(iii) any action, suit, proceeding, assessment or
judgment arising out of or incident to any of the matters indemnified against in
this Section 7A.1 or Section 7A.2, including reasonable fees and disbursements
of counsel (before and at trial, in bankruptcy proceedings and in appellate
proceedings).
7A.2 In addition, Seller agrees to indemnify and hold harmless
Buyer in respect of any and all claims, losses and expenses (other than lost
future income) which may be incurred by
12
27
Buyer arising out of the litigation, proceedings and administrative
investigations, whether pending or threatened, listed in Schedule 5.4(8).
7A.3 Buyer agrees to indemnify and hold harmless Seller and
the BCBSNJ in respect of any and all claims, losses and expenses which may be
incurred by Seller or the BCBSNJ arising out of:
(i) any material breach by Buyer of any of the
representations, warranties, covenants or agreements made by Buyer in this
Agreement, the exhibits hereto or any document or paper delivered in connection
with the transactions contemplated hereby;
(ii) any attempt (whether or not successful) by any
person to cause or require Seller or the Stockholder to pay or discharge any
debt, obligation, liability or commitment of Seller expressly assumed by Buyer;
and
(iii) any action, suit, proceeding, assessment or
judgment arising out of or incident to any of the matters indemnified against in
this Section 7A.2, including reasonable fees and disbursements of counsel
(before and at trial, in bankruptcy proceedings and in appellate proceedings).
7A.4 Whenever any claim shall arise for indemnification under
this Section 7A, Buyer, on the one hand, or Seller or the BCBSNJ, on the other
hand (as such the "Indemnified Party"), shall notify the other party or parties
(as such, the "Indemnifying Party") in writing by certified mail of the facts
constituting the basis for such claim. Such notice shall specify all facts known
to the Indemnified Party giving rise to such indemnification right and the
amount or an estimate of the amount of the liability arising therefrom. The
right to indemnification hereunder and the amount or the estimate amount
thereof, as set forth in such notice, shall be deemed agreed to by
13
28
the Indemnifying Party unless, within 15 days after the receipt of such notice,
the Indemnified Party is notified in writing that the Indemnifying Party
disputes the right to indemnification as set forth or estimated in such notice.
7A.5 If the facts giving rise to any such indemnification
right shall involve any actual or threatened claim or demand by any third party
against the Indemnified Party or any possible claim by the Indemnified Party
against any third party, such claim by or against a third party shall be
referred to as a "Third-Party Claim". If the Indemnifying Party gives the
Indemnified Party an agreement in writing, in form and substance reasonably
satisfactory to counsel to the Indemnified Party confirming the agreement to
indemnify and save the Indemnified Party harmless from all costs and liability
arising from any Third-Party Claim, the Indemnifying Party may at its own
expense undertake full responsibility for the defense or prosecution of such
Third-Party Claim any may contest or settle it on such terms as it may choose.
If the Indemnifying Party fails to deliver such an agreement of indemnity to the
Indemnified Party:
(i) the Indemnifying Party at its own expense may
nevertheless participate with the Indemnified Party in the defense or
prosecution of the Third-Party Claim and in any and all settlement negotiations
relating thereto; and
(ii) the Indemnified Party may contest or settle the
Third-Party Claim on such terms as it may choose, although the Indemnified Party
shall not reach a settlement until it has consulted in good faith with the
Indemnifying Party.
Any such participation shall not relieve the Indemnifying Party of its
obligations to indemnify the Indemnified Party under this Section 7A.
14
29
7A.6 If by reason of any Third-Party Claim a lien, attachment,
garnishment or execution is placed upon any of the property or assets of the
Indemnified Party, the Indemnifying Party, if it desires to exercise its right
to defend or prosecute such suit, shall furnish a satisfactory indemnity bond to
obtain the prompt release of such lien, attachment, garnishment or execution.
7A.7 Each party to this Agreement shall provide access to its
counsel, accountants and other representatives during normal business hours to
all properties, personnel, books, tax records, contracts, commitments and such
other business records as may be necessary in connection with the resolution of
any claims or actions subject to this Section 7A and shall furnish to the other
party or parties, as the case may be, copies of all such documents (certified,
if requested) as may reasonably be requested in connection therewith.
7A.8 Buyer shall have the right to offset any amounts due it
from Seller under the provisions of this Section 7A or any other provision of
this Agreement, against any amounts that may be due hereunder or pursuant hereto
to Seller by Buyer.
SECTION 7B. GUARANTY
BCBSNJ absolutely and unconditionally guarantees to Buyer the due and
punctual performance and payment of all monies to be paid and all things to be
performed or observed by Seller pursuant to each and every covenant, condition,
representation and warranty of Seller contained in this Agreement and in any
document or instrument given by Seller in connection therewith.
SECTION 8. MISCELLANEOUS
a. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
15
30
b. No amendment, waiver of compliance with any provision or
condition hereof, or consent pursuant to this Agreement will be effective unless
evidenced by an instrument in writing signed by the parties.
c. The headings are for convenience only and will not control
or affect the meaning or construction of the provisions of this Agreement.
d. The construction and performance of this Agreement will be
governed by the laws of the State of Florida.
e. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing and shall be
deemed to have been duly delivered on the date of personal delivery or the date
of receipt if sent by a private air express service (postage prepaid) or mailed
by registered or certified mail, postage prepaid and return receipt requested,
and shall be deemed to have been received on the date of personal delivery or on
the date set forth on the return receipt, to the following addresses or to such
other address as any party may request, in the case of Seller, by notifying
Buyer, and in the case of Buyer, by notifying Seller:
To Seller: MEDIX, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
President and CEO
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To BCBSNJ: Blue Cross and Blue Shield of New Jersey, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
Senior Vice President - Health Industry Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
16
31
To Buyer: National Medical Systems, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy: 813/289-6420
Telephone: 813/▇▇▇-▇▇▇▇
f. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original but all of which together will
constitute one and the same instrument.
g. Buyer and Seller each agree that they will use their best
efforts to keep confidential (except for such disclosure to attorneys, bankers,
underwriters, investors, etc. as may be appropriate in the furtherance of this
transaction) all information of a confidential nature obtained in connection
with the transactions contemplated by this Agreement, and in the event that such
transactions are not consummated, each party will return to the other party such
documents and other material obtained from the other party in connection
therewith.
h. Buyer and Seller shall jointly prepare, and determine the
timing of, any press release or other announcement to the public relating to the
execution of this Agreement. No party hereto will issue any press release or
make any other public announcement relating to the transactions contemplated
hereby without the prior consent of the other party hereto, except that any
party may make any disclosure required to be made by it under applicable law if
it determines in good faith that it is appropriate to do so and gives prior
notice to the other party.
i. Each party shall bear all costs incurred by it in
connection with the transactions contemplated by this Agreement.
17
32
j. Seller agrees that from the date hereof and during the time
period in which the Option is exercisable hereunder, or if the Option is
exercised, during the period prior to the Closing, it shall not offer or seek to
offer, or entertain or discuss any offer, to sell the Business or the Business
Assets, other than as contemplated under this Agreement, nor shall BCBSNJ offer,
to seek to offer, or entertain or discuss any offer to sell any of the capital
stock of Seller without the written consent of Buyer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
MEDIX, INC. NATIONAL MEDICAL SYSTEMS, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------ -------------------------------
President and Chief CFO
Executive Officer
BLUE CROSS AND BLUE SHIELD OF
NEW JERSEY, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Senior Vice President -
Health Industry Services
18
