EXHIBIT 10.21
OPERATING AGREEMENT
FOR
INDIANA MEDICAL COMMUNICATION NETWORK
LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT ("Agreement") is made and entered into as of April
30, 1993, by and between METHODIST HOSPITAL OF INDIANA, INC., an Indiana
corporation ("MHI") and INTEGRATED MEDICAL SYSTEMS INC., a Colorado corporation
("IMS"). The parties hereto are sometimes hereafter individually referred to as
"Member" and collectively referred to as "Members", which terms shall include
any other person or entity from time to time admitted to the Company, as
hereafter defined, in accordance with the terms and conditions of this
Agreement.
THIS AGREEMENT is made and entered into with reference to the following
facts:
A. IMS has developed and owns proprietary computer software operating on
various types of computers that supports the transmission of, text, voice,
graphics, images and other data, as hereafter defined, and has developed
business plans, concepts and other proprietary ideas and technology for the
operation of medical communication networks using IMS computer software.
B. IMS has formed Indiana Medical Communication Network Limited Liability
Company ("Company"), a limited liability company formed under the laws of
Colorado and authorized to conduct business in Indiana, and has granted an
exclusive license to Company for use of its proprietary business rights and
related computer software in the Exclusive Territory, as hereafter defined.
D. MHI is a major provider to and is familiar with the Indiana healthcare
market and knows of or has developed relationships with healthcare consumers,
other hospitals, physicians, employers, insurance companies and other healthcare
related entities.
E. IMS and MHI, in exchange for their respective good and valuable
considerations to each other as hereafter defined, wish to enter into a joint
venture to develop, own and operate Company as a for-profit medical
communication network business in the Exclusive Territory.
F. MHI and IMS desire to set forth their intentions and agreements with
respect to the development, ownership and operation of Company as a joint
venture between the Members.
NOW, THEREFORE, in consideration of the recitals, covenants, conditions and
agreements contained herein, the parties agree as follows:
1. Definitions. For purposes of this Agreement and in addition to the
-----------
terms otherwise defined herein, the following terms shall have the meanings as
set forth below:
1
1.1. ComCenter(TM) Hardware. "ComCenter (Communications Center) Hardware"
----------------------
refers to the message switching computer(s) on which the ComCenter Software
runs. Such hardware is part of the Digital Equipment Corporation ("DEC") VAX
family of computers.
1.2. ComCenter Software. "ComCenter Software" shall mean the computer
------------------
software developed and owned by IMS that supports and facilitates the
transmission of data, text, voice, graphics, images and other data, and which
resides on and is operated on the ComCenter hardware.
1.3. ComCenter System. "ComCenter System" refers to the ComCenter
----------------
Software and ComCenter Hardware together.
1.4. Company. "Company" refers to "Indiana Medical Communication Network
-------
Limited Liability Company", a limited liability company formed under the laws of
Colorado and registered to conduct business in Indiana, to be developed, owned
and operated by the Members as a joint venture between the Members.
1.5. Exclusive Territory. "Exclusive Territory" shall mean all of the
-------------------
state of Indiana except Lake and ▇▇▇▇▇▇ Counties.
1.6. IMS-Net(TM) Software. The "IMS--Net Software" shall mean the
--------------------
computer software developed and owned by IMS which includes the PC-Com Software,
RELAY Software, ComCenter Software and other software, which interact with the
ComCenter Hardware and remotely located computers and their operating systems to
form a complete and functioning network by which medical and other information
and data, text, voice, graphics and images can be transmitted, shared, stored
and accessed.
1.7. Licensed SoftWare. "Licensed Software" shall mean the IMS-Net
-----------------
Software and that portion of the Synergy Series Software owned outright by IMS,
together with any and all subsequent modifications, revisions, improvements,
enhancements or updates made by IMS in such software, and all of which has been
licensed to Company by IMS through the Software License Agreement referred to
herein.
1.8. Local Sponsor. "Local Sponsor" shall mean any individual or entity
-------------
desiring to use a Network to receive and/or disseminate information from or to a
particular group of Network users and who or which agrees to pay fees to a
Network for the right to use a Network.
1.9. National Sponsor. "National Sponsor" shall mean any individual or
----------------
entity desiring to use a Network, and any other networks operated by IMS or an
affiliate of IMS, to receive and/or disseminate information from or to network
users and who or which agrees to pay fees for the right to use the networks.
2
1.10. Network. "Network" shall mean one or more electronic medical
-------
communication networks to be owned and operated in the Exclusive Territory by
the Company, which utilizes IMS-Net software to permit text, voice, graphics,
images and other data to be transmitted between and among physicians, hospitals,
clinical laboratories, pharmacies, managed care organizations, insurance
companies, other payors, employers and other individuals or entities.
1.11. PC-Com(TM) Software. "PC-Com Software" shall mean the computer
-------------------
software developed and owned by IMS which supports and facilitates the
transmission of text, voice, graphics, images and other data from (or to) a
Network user's computer to (or from) the ComCenter System, and which acts as a
user interface between a Network user and a Network, and which operates on a
user's International Business Machines ("IBM") or compatible personal computer
("PC") or other computer.
1.12. RELAY(TM) Software. "RELAY Software" shall mean the computer
------------------
software developed and owned by IMS which supports and facilitates the
transmission of text, voice, graphics, images and other data from a host
computer system to the ComCenter System, and which acts as an automatic
interface between a host computer system and a Network, and which operates on
PCs or other computers.
1.13. Subscriber or Network Subscriber. "Subscriber" or "Network
--------------------------------
Subscriber" shall mean physicians and other members of the healthcare community
who use a Network and with whom Local and National Sponsors pay to communicate
over one or more networks.
1.14. Synergy Series(TM) Software. The "Synergy Series Software" shall
---------------------------
mean the computer software, portions of which were developed and are owned by
IMS, and portions of which IMS possesses and uses pursuant to one or more
perpetual licenses under which IMS has the right to use and to sub-license,
which includes practice support software intended primarily for use by persons
or entities who use a Network, and which includes such capabilities as "Word-
Pro(TM)" word processing, "Clinical Manager(TM)" clinical data management, "RX-
Manager(TM)" drug therapy management and "CME-Manager(TM)" continuing medical
education management.
2. Business and Purpose of Company.
-------------------------------
2.1. Purpose. The purpose of Company is to establish and operate, and
-------
facilitate the rapid growth of, one or more for-profit Networks in the Exclusive
Territory, with the intent that such Networks shall become the recognized
standard for medical communication in the Exclusive Territory, to improve the
efficiency and effectiveness of communication related to health care delivery
among all hospitals, labs, pharmacies, payors, managed care and other medical
facilities and physicians, and other licensed health care professionals with
privileges to utilize such facilities, and other providers, payors, individuals
and entities with a bona fide interest in communicating with such other
participants, including MHI.
3
2.2. Scope of Powers. Company shall be engaged in all such activities
---------------
related to its purpose, including marketing, sales, administration, Network
operations and management, consulting, and installation, education, training,
service and support of Local Sponsors, National Sponsors and Subscribers. In
furtherance of its business, Company shall have and may exercise all the powers
now or hereafter conferred by applicable law, and shall do any and all things
related or incidental to its business as fully as natural persons might or could
do by applicable law.
3. Formation of Company, Members.
-----------------------------
3.1. Formation and Controlling Law. IMS certifies that on February 26,
-----------------------------
1993, Articles of Organization of Company as a wholly owned affiliate of IMS, a
copy of which is attached as Exhibit A-1 hereto and hereby incorporated herein,
-----------
were executed and, on March 1, 1993, filed with the office of the Colorado
Secretary of State under the provisions of the Colorado Limited Liability
Company Act (C.R.S. 7-80-101, et seq.), as amended, which, in conjunction with
------
Colorado case law relating thereto, shall be the controlling law for purposes of
this Agreement and shall be utilized in this or any other jurisdiction for
purposes of construing the terms and conditions contained herein.
3.1.1. This Agreement shall be the Operating Agreement of Company,
as may be amended from time to time upon the agreement of the Members, and
as referenced in the Articles of Organization, and hereby replaces the
interim Operating Agreement established by Company on April 1, 1993, a
copy of which is attached as Exhibit A-2 hereto.
------------------
3.2. Authority in Indiana. IMS certifies that on March 29, 1993, an
--------------------
Application For Registration As A Foreign Limited Liability Company, a copy of
which is attached as Exhibit A-3 hereto, was executed and submitted to the
-----------
office of the Indiana Secretary of State under the provisions of Indiana Code
23-16-10.1. IMS further acknowledges that on March 29, 1993, a Certificate of
Assumed Business Name, a copy of which is attached as Exhibit A-4 hereto, was
-----------
executed and submitted to the office of the Indiana Secretary of State under the
provisions of Indiana Code 23-15-1-1.
3.3. Future Reorganization in Indiana. If and when Indiana law has been
--------------------------------
enacted to authorize the formation of limited liability companies, and Indiana
has received U.S. Internal Revenue Service recognition and approval of such
limited liability companies, then Company, at its expense, shall be reorganized
as a limited liability company under the provisions of such law, and the
controlling law for the purposes of this Agreement shall then become the laws of
the state of Indiana, provided that there are no adverse tax or other
consequences to Company or any of its Members.
3.4. Filing of Certificates. IMS shall file and publish all such
----------------------
certificates, notices, statements or other instruments required by law for the
formation and
4
operation of a limited liability company in all jurisdictions where Company may
elect to do business.
3.5. Duration of Company. The duration of Company shall be the maximum
-------------------
allowed by law, which is thirty (30) years from its date of organization, unless
dissolved earlier in accordance with the provisions of this Agreement and
applicable law.
3.6. Fiscal Year. Except for the Company's first and last fiscal years,
-----------
the fiscal year of the Company shall start on January 1 and end on December 31.
3.7. Name of Company. The name of Company shall be "Indiana Medical
---------------
Communication Network Limited Liability Company", d/b/a "Indiana Medical
Communication Network", d/b/a "Indiana MedNet", or such other name as the
Members may from time to time designate. The Members shall cause to be filed,
on behalf of Company, such certificates of assumed or fictitious names as may
from time to time be required by law.
3.8. Place of Business of Company. The principal place of business of
----------------------------
Company shall be at an Indianapolis location consistent with the purpose and
business activities of Company, said location to be selected promptly upon
execution of this Agreement, and until such time the business of Company shall
be conducted from the addresses of the Members.
3.9. Members Names and Addresses. The names and addresses of the Members,
---------------------------
along with the titles of the persons to whom notices should be sent, are:
Integrated Medical Systems, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President and CFO
and
Methodist Hospital of Indiana, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and CIO
(second copy to Senior VP and General Counsel)
3.10. Members Rights. Members shall have all of the rights granted under
--------------
the Colorado Limited Liability Company Act, subject to the provisions of this
Agreement.
3.11. Transfer of Interest. Except for the transfer of ownership interest
--------------------
between IMS and MHI described in Section 4, no Member may sell, exchange,
encumber, hypothecate, assign, transfer or otherwise dispose of any portion of
its
5
ownership interest in Company, or its right to receive any share of
distributions as described herein, without the unanimous consent of the Members.
3.12. Additional Members. No additional Member may be added to Company
------------------
without the unanimous consent of the Members.
4. Contributions, Purchases, Ownership of Members.
----------------------------------------------
4.1. IMS Contribution to and Interest in Company. IMS and Company have
-------------------------------------------
executed the Software License Agreement, a copy of which is attached as Exhibit
-------
B hereto and hereby made a part of this Agreement, which provides to Company an
-
exclusive and perpetual license in the Exclusive Territory to IMS' proprietary
concepts, trade secrets, techniques, business plans and other acumen developed
by IMS for the purpose of commercializing medical communication networks, and to
the Licensed Software, and including the escrow of said software which provides
for the survival of Company's licensed rights in the event of IMS' bankruptcy,
non-performance or substantial discontinuance of business, as more fully set
forth in Exhibit B hereto. Upon the execution of this Agreement and pursuant to
---------
Section 4.2 herein, IMS shall then have a fifty-one percent (51%) ownership
interest in Company.
4.2. MHI Purchase of Interest in Company. MHI is hereby purchasing, from
-----------------------------------
IMS, a forty-nine percent (49%) ownership interest in Company for $1,715,000,
payable in three installments as follows:
(i) $500,000 shall be paid, by check to IMS, at the closing and upon
the execution of this Agreement, at which time a certificate representing
MHI's ownership interest in Company shall be provided to MHI.
(ii) $600,000 shall be paid, by check to IMS, upon the completion of
registration of Company to conduct business in Indiana; approval, selection
of and acceptance of employment by the CEO of Company; and approval,
selection of and acceptance of Company's officers and Board of Managers
("Board"), as hereafter defined, said approvals to be made unanimously by
the Members.
(iii) $615,000 shall be paid, by check to IMS, upon completion of
Company's first year business plan and budget with revenue and cost
projections, occupation of its Indianapolis place of business, commencement
of operation of the ComCenter System, and operation of the Network among
six MHI departments and twenty physicians according to the Network Services
Agreement to be executed between IMS and MHI, a copy of which is attached
as Exhibit E hereto for reference only.
---------
4.2.1. MHI and IMS hereby agree that time is of the essence in
completing these conditions for payment, and will mutually take all
6
reasonable actions to complete these conditions as promptly as reasonably
possible.
4.2.2. In the event that these conditions cannot be completed due to
non-performance by IMS, its products or services, or other circumstances
within the control of IMS, then MHI shall have the right to terminate this
Agreement, and IMS shall then, within ninety (90) days of receiving written
notice from MHI and provided IMS cannot within that time remedy the
completion of said conditions, return any payments made to IMS under this
Agreement. MHI shall then have no portion of ownership interest in Company,
and shall promptly return its ownership certificate in Company to IMS.
4.2.3. In the event that these conditions cannot be completed due to
non-performance by MHI, or other circumstances within the control of MHI,
then IMS shall have the right to terminate this Agreement and, provided
that MHI cannot remedy the completion of said conditions within ninety (90)
days of receiving written notice of termination from IMS, retain the first
payment as liquidated damages and return any other payments made to IMS
under this Agreement. MHI shall then have no portion of ownership interest
in Company, and shall promptly return its ownership certificate in Company
to IMS.
5. Capital Contributions and Sources of Funds.
------------------------------------------
5.1. Capital Contributions of MHI. MHI shall have no obligation to make
----------------------------
any capital contributions to Company at any time.
5.2. Capital Contributions of IMS. IMS shall have no obligation to make
----------------------------
any capital contributions to Company at any time.
5.3. Sources of Funds. It is the intent of the Members that adequate
----------------
funding of the financial requirements of Company shall be derived from Local
Sponsor and National Sponsor fees, the first source of which shall be from MHI
as the charter Local Sponsor of the Network under the terms and conditions of
the Network Services Agreement to be executed between MHI and IMS. The Members
shall direct Company, through the Board, to manage and grow Company in a manner
consistent with this intent.
5.3.1. Notwithstanding the above, IMS hereby agrees that, in the
event at any time that sufficient funds are not available from Network
fees, IMS shall loan Company non-interest bearing funds, not to exceed a
cumulative balance of $100,000 at any one time.
5.3.2. In addition, in the event that the outstanding loan balance
of Section 5.3.1 is at its maximum, and as necessary and upon the approval
of the Board, or as stated in the Company budget or business plan approved
7
by the Board, additional funding shall be provided by loans secured by
Local and National Sponsor contracts and provided by IMS or a third party,
in a manner so as not to impair ongoing or future operations or expose
Company to undue risk, including the premature distribution of any profits
of Company. Such loans, if provided by IMS, shall be provided at an
interest rate not to exceed the interest rate incurred by IMS in securing
such loans.
5.3.3. MHI hereby acknowledges that, coincident with the execution of
this Agreement, IMS has separately provided MHI with evidence demonstrating
IMS' ability to secure and loan such funds.
5.4. Additional Contributions. Additional contributions shall be made
------------------------
only with the consent of the Members.
5.5. No Dilution of Equity. No Member's portion of its ownership interest
---------------------
in Company shall be diluted by virtue of any financial provisions as described
in this Section 5.
6. Consolidation and Allocation of Profits and Losses.
--------------------------------------------------
6.1. Consolidation of Results. IMS shall be entitled to consolidate the
------------------------
financial results of Company by virtue of its fifty-one percent (51%) ownership
interest in Company.
6.2. Profits and Losses. All Company profits and losses shall be
------------------
determined using generally accepted accounting principles, consistently applied.
All Company losses shall be allocated fifty-one percent (51%) to IMS and
forty-nine percent (49%) to MHI. All Company profits, following the recovery of
cumulative net losses, shall be allocated fifty-one percent (51%) to IMS and
forty-nine percent (49%) to MHI.
6.3. Federal Tax Allocation. Except as otherwise required hereunder or as
----------------------
otherwise provided by the Code and the rules and Treasury Regulations, for
federal income tax purposes, each item of income, gain or credit, and each item
of loss or deduction entering into the computation of the Members' taxable
income shall be allocated to the Members on the same basis as profits and losses
are allocated to the Members for book purposes.
6.4. Allocations Respecting Contributed Assets. In accordance with Code
-----------------------------------------
Section 704(c) and the Treasury Regulations thereunder, income gain, credit,
loss and deduction with respect to any asset contributed to the capital of
Company shall, /solely for tax purposes, be allocated among the Members so as to
take account of any variation between the adjusted basis of such property to
Company for federal income tax purposes and its initial Adjusted Asset Value.
In the event the Adjusted Asset Value of any Company asset is adjusted pursuant
to the terms of this Agreement, subsequent allocations of income, gain, credit,
loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis
8
of such asset for federal income tax purposes and its Adjusted Asset Value in
the same manner as under Code Section 704(c) and the Treasury Regulations
thereunder.
6.5. Capital Accounts and Balances. A separate capital account shall be
-----------------------------
maintained for each Member. Each Member's capital account shall be zero at the
commencement of this Agreement and after completion of the transactions
described in Sections 4.1 and 4.2. The capital accounts are to be maintained in
a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv). In the
case of the distribution of property which is subject to any special allocation,
the credit or debit to the capital account shall occur as if the property had
been sold for its then fair market value. No Member shall be entitled to
receive interest on its capital account, and none shall be paid.
6.5.1. Each Member's capital account shall be credited with:
(i) any contributions of cash to the capital of Company;
(ii) its allocable share of Company profits determined as set forth
in Section 6.2;
(iii) additional capital contributions made by it, if any; and
(iv) the amount of any Company liabilities that are assumed by it or
that are secured by any Company property distributed to it.
6.5.2. Each Member's capital account shall be debited with:
(i) its allocable share, if any, of Company losses;
(ii) the amount of any withdrawals by or distributions to it by
Company; and
(iii) the amount of any of its liabilities that are assumed by
Company or that are secured by any property contributed by it to
Company.
6.6. Distributions of Available Cash. The Company shall make cash
-------------------------------
distributions to Members only out of profits as determined and allocated under
Section 6.2. Distributions, if available, shall be made within 60 days following
the end of each calendar year. It is the intent of the Members to make such
distributions, if available, at least equal to the current year's taxes on the
previous year's allocated net income from Company operations. The Board may
authorize such other cash distributions from time to time, if available and as
agreed to, and consistent with cash needs for the on-going operation and growth
of Company.
9
6.7. General. The respective interests of the Members in the profits and
-------
losses of Company shall remain as set forth above unless changed by amendment
to this Agreement or by approval of the Board.
7. IMS Services on Behalf of Company.
---------------------------------
7.1. IMS Services. IMS shall provide certain services on behalf of
------------
Company regarding the general business, affairs and certain management of
Company. IMS shall serve, with the powers described below, until it resigns or
is replaced pursuant to the agreement of the Board or other provisions herein.
7.2. Services Agreement. The duties, rights, responsibilities,
------------------
obligations and authority of IMS and Company regarding the provision of certain
services by IMS on behalf of Company shall be as set forth in the Services
Agreement executed between IMS and Company, a copy of which is attached as
Exhibit C hereto and hereby incorporated into this Agreement.
---------
7.3. Approval of Certain Actions. Notwithstanding the foregoing, the
---------------------------
authority of IMS to provide certain services on behalf of Company shall be
subject to the approval of the Board in certain matters which are described in
this Agreement and in the Services Agreement, and, in addition or including, the
following matters:
(a) Actions with respect to the purchase, sale or lease of real
estate and other significant assets on behalf of Company;
(b) Payment of fees or other compensation to employees, officers or
directors of Members, or other persons, which compensation is not
contemplated by the budget of Company or is not fair value for services
actually provided to Company;
(c) Distribution of dividends or surplus by Company to the Members or
other distributions or payments of cash other than in accordance with this
Agreement or the Services Agreement;
(d) Participation in any business venture not contemplated by this
Agreement, or any extraordinary expense or purchase of capital items
exceeding $50,000 in any 12 month period, which expense or purchase is not
contemplated by the Board-approved budget of Company; and
(e) Payment by Company to IMS or any affiliate or subsidiary thereof
of a management fee, home office fee, or any extraordinary fee not
specifically provided in this Agreement or contemplated by the
Board-approved budget of Company;
(f) Termination and dissolution of Company, except as otherwise
provided herein.
10
(g) Approval of Company's annual budget.
(h) Timing of the marketing of Network to hospitals in the Exclusive
Territory, said timing to be based on a three phase approach whereby (i)
the Network will be marketed to hospitals identified by MHI as positive
with respect to MHI's strategic plan; (ii) the Network will be marketed to
hospitals identified by MHI as neutral with respect to MHI's strategic
plan; and (iii) the Network will be marketed to other hospitals. IMS hereby
acknowledges receipt and acceptance of a separate list of said hospitals
and phases, and agrees not to market to or permit the use of Network by
hospitals not on the list without the written consent of MHI.
Notwithstanding the foregoing, MHI hereby agrees that, should a third party
payor wish to use the Network as a Local or National Sponsor, said payor
shall not be prohibited from communication via the Network with any
hospital in the Exclusive Territory to provide the Network functions needed
to transact that third party payor's business on the Network. The
provisions of this Section 7.3 (h) shall survive any termination of this
Agreement and shall remain in full force and effect until termination of
the Network Services Agreement described in Section 9.1.
8. Board of Managers, Officers, Decisions.
--------------------------------------
8.1. Board of Managers. The business and affairs of Company shall be
-----------------
directed by its Board of Managers, and the Members of Company hereby authorize
the Board to act on their behalf and represent their interests with respect to
this Agreement and the Company, except as otherwise may be provided herein.
8.1.1. Number, Tenure, Voting Privileges. There shall be four (4)
---------------------------------
voting members of the Board, of which two shall be appointed by MHI and two
shall be appointed by IMS. Each such member of the board shall have an equal
vote in the voting on or transaction of issues pertaining to Company. Each
Member hereby agrees to accept the other Member's appointments. Each such member
of the Board shall serve until his/her resignation or until his/her successor
shall have been appointed by the respective Member. Vacancies of such members
shall be filled by notice, to the Board, by the respective Member. The Board may
choose to appoint the President and Chief Executive Officer ("President") of
Company as a fifth member of the Board, which member shall not have voting
privileges unless approved by the Board. The number, tenure and voting
privileges of the Board may not be modified without the unanimous written
consent of the Members.
8.1.2. Initial Board. Prior to the execution of this Agreement, the
-------------
initial Board consisted of:
11
1. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Upon the execution of this Agreement and personal acceptance by each individual
named below, the Board shall consist of:
1. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, IMS appointee
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, IMS appointee
3. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, MHI appointee
4. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, MHI appointee
The Members shall have such rights and perform such duties as are contemplated
for the Board until such time as the individual members of the Board have
accepted their appointment.
8.1.3. Regular Meetings. The first meeting of the Board shall take place
----------------
within thirty (30) days of execution of this Agreement. An annual meeting of the
Board shall take place each year no later than April 30 of each year. The Board
shall provide, by resolution, the time and place for the holding of such other
regular meetings as they decide upon without other notice than such resolution.
8.1.4. Special Meetings. Special meetings of the Board may be called by
----------------
or at the request of any member of the Board or the President.
8.1.5. Governance at Meetings. In addition to the provisions of voting
----------------------
and other provisions of this Agreement, provisions of the Colorado Limited
Liability Company Act shall govern actions taken in the conduct of any meeting.
8.1.6. Telephone Participation at Meetings. One or more members of Board,
-----------------------------------
or other designated persons, may participate in a meeting by means of conference
telephone or similar equipment by which all persons participating in the meeting
can hear each other at the same time. Such participation shall constitute
presence in person at the meeting.
8.1.7. Notice of Meeting. Notice of any special meeting shall be given at
-----------------
least two (2) days previous thereto by written notice delivered personally,
mailed, faxed, or otherwise delivered to each Board member at his or her
business address. Any Board member may waive notice of any meeting whether
before, at or after the meeting.
12
8.1.8. Quorum, Manner of Acting. At least one member of Board appointed
------------------------
by each Member must be present at a meeting and, in such cases where a majority
of the members fixed by Section 8.1.1 are present, shall constitute a quorum for
the transaction of or voting on issues pertaining to Company. An act of the
majority of the voting members present at a meeting at which a quorum is present
shall be an act of the Board. Any member of Board may delay an action to vote if
all voting members are not present at a meeting, provided however, that such
delay shall not exceed thirty (30) days from the date of said meeting without
the unanimous written consent of the Members.
8.1.9. Presumption of Assent. A voting member who is present at a meeting
---------------------
at which action on any matter is taken is deemed to have assented to the action
taken unless (a) he/she objects at the beginning of such meeting to the holding
of the meeting or the transacting of business at the meeting; (b) he/she
contemporaneously requests that his/her dissent from the action be entered in
the minutes of the meeting; or (c) he/she gives written notice of his/her
dissent to the presiding officer of the meeting before its adjournment or to the
Secretary of Company immediately after adjournment of the meeting. The right of
dissent as to a specific action taken in a meeting is not available to a voting
member who votes in favor of such action.
8.1.10. Informal Action by Members of Board. Any action required or
-----------------------------------
permitted to be taken at a meeting may be taken without a meeting if the action
is evidenced by one or more written consents describing the action taken, signed
by each voting member of the Board, and delivered to the Secretary of Company
for inclusion in the minutes or for filing with Company's records. Action thus
taken is effective when all voting members have signed the consent, unless the
consent specifies a different effective date. Such consent has the same force
and effect as a unanimous vote of the Board and may be stated as such in any
document.
8.1.11. Compensation of Board. Except for the payment of expenses, if
---------------------
any, of attendance at each meeting, there shall be no other compensation to the
members of the Board. Notwithstanding the foregoing, no member is precluded from
serving the Company in any other capacity and receiving compensation therefor.
8.1.12. Chairman of Board. One member of the Board shall be appointed
-----------------
annually by the Board as its Chairman, provided such appointment shall alternate
each year between appointees of each Member, unless this provision is waived by
the Board. The Chairman, when present, shall preside at all meetings of the
Board and shall perform all duties as may be prescribed by the Board from time
to time.
13
8.2. Officers of Company. The Board shall appoint officers of Company
-------------------
which shall consist of at least a President, Secretary and Treasurer. The
offices of Treasurer and Secretary may be held by one person. The officers of
Company shall be appointed annually at the annual meeting. Each officer shall
hold office until his/her successor shall have been duly elected or until death,
resignation or removal in the manner hereafter provided. The officers of Company
shall perform all duties as are contemplated in the performance of the Services
Agreement and in general perform all of the duties incident to their offices and
other such duties as from time to time may be assigned by the Board.
8.2.1. Initial Officers. Prior to the execution of this Agreement,
----------------
the initial officers were:
President: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Upon execution of this Agreement, all positions of officers of Company
shall be vacant. The Board shall then take such steps as appropriate to
appoint officers of Company, and shall have such rights and perform such
duties as are contemplated for the officers of Company until such time as
the officers are appointed.
8.2.2. Removal, Vacancies. Any officer may be removed by the Board
------------------
whenever in its judgment the best interests of Company would be served
thereby. A vacancy in any office may be filled, under the provisions
herein, for the unexpired portion of the term.
8.2.3. President. The President shall be the chief executive
---------
officer of Company and, subject to the Board, shall in general supervise
and control all business and affairs of Company according to the Services
Agreement. The President shall, when present, preside at any meeting of the
Board in the absence of the Chairman.
8.2.4. Employment, Compensation. Compensation of the President,
------------------------
although anticipated to be provided by IMS and charged under the Services
Agreement, shall be subject to the approval of the Board. Other officers,
who are employees of a Member and whose duties to Company are on an
occasional basis, shall not be directly compensated for their duties by
Company, but such Member shall be reimbursed by Company for the services of
such employees under allocated charges, whether or not specifically covered
under the Services Agreement, provided if such reimbursement has not been
contemplated by the Board-approved budget, it shall be subject to Board
approval.
8.3. Inspection. The books, accounts and records of Company shall be open
----------
to inspection by any member of the Board at all times.
14
8.4. Personal Liability. Unless specifically undertaken or required by
------------------
the Colorado Limited Liability Company Act, or other applicable law, no Member,
member of the Board or officer of Company shall have personal liability for the
debts and obligations of Company.
9. Miscellaneous Responsibilities of the Members.
---------------------------------------------
9.1. Network Services Agreement. Coincident with the execution of this
--------------------------
Agreement, IMS and MHI shall execute the Network Services Agreement, and MHI
shall make payment, by check made out to Company ("Indiana Medical Communication
Network LLC") in the amount of $62,500, for its first quarterly portion of the
Annual Network Fee thereunder.
9.2. Assignment of Network Services Agreement. Coincident with the
----------------------------------------
execution of this Agreement, IMS and Company shall execute an Assignment
Agreement, a copy of which is attached as Exhibit D hereto and hereby made a
part hereof, assigning to Company IMS' Network Services Agreement with MHI.
9.3. National Sponsor Expenses and Revenues. IMS shall be solely
--------------------------------------
responsible for funding all expenses associated with the national marketing,
servicing and billing of National Sponsors. IMS shall receive all Network
revenues from National Sponsors and, after deducting twenty-five percent (25%)
of such revenue as its compensation, shall promptly transmit the balance to
Company. Notwithstanding the foregoing, IMS shall promptly pay, from its twenty-
five percent (25%) direct allocation, directly to MHI or to its designated
affiliate, ten percent (10%) of total network revenue received by IMS on a
national basis from any National Sponsor which is primarily domiciled in and
directed from within the Exclusive Territory, at such time as and provided (i)
MHI played a substantial and significant role in recruiting such National
Sponsor and (ii) such National Sponsor is also a Local Sponsor. In the event of
any dispute between IMS and MHI regarding the substance and significance of
MHI's role in recruiting such National Sponsors, the dispute will be brought to
the Board for resolution. MHI shall use its best efforts to assist IMS and
Company in recruiting such National Sponsors which may exist within the
Exclusive Territory.
9.4. Improvements by IMS. IMS shall make available to Company, at no
-------------------
cost, any improvements in the technology or business practices developed by IMS,
or reasonably available to IMS through its affiliated entities, which would
improve the operation of Company or Network.
9.5. Improvements by Company. Any improvements in technology developed by
-----------------------
Company at its expense shall be owned by Company, provided that IMS shall have a
perpetual nonexclusive license authorizing IMS to incorporate such improvements
into IMS software marketed or licensed outside the Exclusive Territory, at
reasonable agreed upon terms, conditions and fees as approved by the Board.
15
9.6. Improvements bv MHI. Any improvements in technology or other
-------------------
technology owned or developed by MHI and provided to Company at MHI's expense
shall be owned by MHI, provided that Company and IMS shall have the right to
negotiate in good faith with MHI to obtain nonexclusive licenses authorizing
Company and IMS to incorporate such improvements or other technology into IMS
software marketed or licensed within and outside the Exclusive Territory, at
reasonable agreed upon terms, conditions and fees as approved by the Board and
IMS.
9.7. Network Pricing. IMS, by virtue of the Services Agreement, its
---------------
business expertise in the affairs of Company, its reasonable need for
consistency among its owned or affiliated networks outside the Exclusive
Territory, and its contractual obligations in certain cases to maintain certain
minimum pricing, shall provide guidelines to Company for setting the prices of
standard Network services and products to be offered by Company, said standard
services being the same that IMS or its affiliated networks provide outside the
Exclusive Territory. Notwithstanding the foregoing, Company, through the Board,
shall have the right to approve or modify such pricing charged by Company,
provided that Company shall take no action that would violate certain minimum
pricing obligations of IMS based on evidence provided by IMS. Company, through
the Board, shall be responsible for setting the prices of non-standard Network
services and products, if any, that may be developed and offered by Company in
the Exclusive Territory.
9.8. Member Liabilities to Company and Each Other. No Member, including
--------------------------------------------
any of its employees, officers or directors serving as a member of the Board or
officer of Company, shall be liable to any other Member or the Company because
any taxing authorities disallow or adjust any deductions or credits in Company
income tax returns. In addition, the doing of any act or the omission to do any
act by any Member, the effect of which may cause or result in loss or damage to
Company or a Member, if done in good faith and otherwise in accordance with the
terms of this Agreement, shall not subject such Member to any liability. Company
will indemnify and hold harmless each Member and its successors and assigns from
any claim, loss, expense, liability, action or damage resulting from any act or
omission in connection with Company including, without limitation, reasonable
costs and expenses of litigation, except where the same is due to or arising out
of the fraud, bad faith or negligence of the indemnified Member.
9.9. IMS Repurchase of MHI's Ownership Interest. In the event that, as a
------------------------------------------
condition for IMS becoming a public company or being acquired by or merging with
a public company, it is necessary that IMS re-acquire MHI's ownership interest
in Company as part of a re-acquisition of all minority interests in its
affiliated network businesses, MHI and IMS hereby agree to negotiate in good
faith to permit the repurchase of MHI's ownership interest in Company, payable
in cash, marketable securities or other forms of payment, in an amount and under
terms and conditions that are acceptable to MHI and IMS.
16
9.10. Other. Additional responsibilities or duties of IMS or MHI, other
-----
than as described in this Agreement, shall be subject to the approval of the
Members.
10. Dissolution and Liquidation.
---------------------------
10.1. Events of Dissolution.
---------------------
10.1.1. The Company shall be terminated and dissolved upon the
earlier to occur of the following:
(i) in the event a Member shall be in material breach of this
Agreement, in addition to such other remedies as may be available to the
non-defaulting Member under law, upon the election of such non-defaulting
Member after written notice of said material breach to the breaching
Member, which breach remains uncured for sixty (60) days after written
notice of such breach;
(ii) upon the dissolution and commencement of winding up of either
Member, or upon either an adjudication of either Member or Company as
bankrupt or insolvent, or upon the filing by either Member or Company of
any petition under any chapter of the United States Bankruptcy Code or any
other present or future applicable federal, state or other statute or law
regarding bankruptcy, insolvency or other relief for debtors, or either
Member's or Company's seeking, or consenting to, or acquiescing in, the
appointment of any trustee, receiver or liquidator of itself or of all, or
any substantial portion of, its property or, in the case of a Member, its
interest in Company, subject to the provisions of Section 10.2;
(iii) upon the unanimous consent of the Members;
(iv) the expiration of the term of Company, which is thirty (30)
years from the date of organization of Company; or
(v) any other act causing a dissolution under the appropriate state
Limited Liability Company Act.
10.1.2. Dissolution of Company shall be effective on the day on
which the event occurs giving rise to the dissolution, but Company shall
not terminate until the assets of Company shall have been distributed as
provided herein. Notwithstanding the dissolution of Company, prior to the
termination of Company as aforesaid, the business of Company and the
affairs of the Members, as such, shall continue to be governed by this
Agreement.
17
10.2. Continuation of Business of Company.
-----------------------------------
10.2.1. In the event of a threat of, or actual, bankruptcy or other
insolvency of Company as described in Section 10.1.1 (ii), and if both
Members elect not to do so collectively, then either Member may elect to
take such actions as may be appropriate to cure the conditions causing said
event.
10.2.2. Notwithstanding anything to the contrary in this Agreement,
upon any dissolution under either Section 10.1.1 (ii) or (v), MHI may, at
its sole election, unless MHI is then insolvent, elect, in writing within
sixty (60) days of the event, to acquire and continue the business of
Company. Upon such election, MHI shall assume control of Company, shall
within thirty (30) days replace IMS under the Services Agreement, and
within 180 days after such date shall pay to IMS all amounts to which IMS
would have been entitled had the parties agreed to liquidate Company and
had disposed of its assets and its business at fair market value.
10.2.3. Any disputes under this Section 10.2 shall be resolved by
binding arbitration under terms and conditions acceptable to IMS and MHI.
10.3. Liquidation of Assets. Upon dissolution, the Board shall liquidate
---------------------
the assets of Company, and apply and distribute the proceeds thereof as
contemplated by this Agreement.
10.4. Distributions Upon Liquidation.
------------------------------
10.4.1. After payment of liabilities owing to creditors, the Board
shall set up such reserves as it deems reasonably necessary for any
contingent or unforeseen liabilities or obligations of Company. Said
reserves may be paid over by Board to a bank, to be held in escrow for the
purpose of paying any such contingent or unforseen liabilities or
obligations and, at the expiration of such period as the Board may deem
advisable, such reserves shall be distributed to the Members or their
assigns in the manner set forth below.
10.4.2. After paying such liabilities and providing for such
reserves, the Board shall cause the remaining net assets of Company to be
distributed to the Members in respect of the positive balances in their
capital accounts in compliance with Treasury Regulations Section 1.704-
1(b)(2)(ii)(b)(2), and if any Member's capital account has a deficit
balance (after giving effect to all contributions, distributions and
allocations for all taxable years, including the year in which such
liquidation occurs), such Member shall contribute to the capital of Company
the amount necessary to restore such deficit balance to zero in compliance
with Treasury Regulations Section 1.701(b)(2)(ii)-(b)(3).
18
10.5. Valuations. For the purposes of valuing the assets of
----------
Company for distribution as contemplated herein, Company's assets shall be
deemed to be sold at their fair market value and the resulting profits and
losses shall be allocated to the Members capital accounts in accordance
with Section 6 hereof.
10.6. No Recourse. No Member shall have recourse against another
-----------
if the assets of Company or the proceeds received by Company upon
liquidation are insufficient to return the positive balance in their
capital account, except as is provided in Section 9.8 herein.
10.7. Information Concerning Liquidation. Each Member shall be
----------------------------------
furnished with a statement prepared by the Board setting forth the assets
and liabilities of Company on the date of complete liquidation. Members
shall cease to be such, and the Board shall cause to be executed,
acknowledged and filed, in duplicate, with the appropriate Secretary of
State, a Certificate of Cancellation of Company.
11. Representations and Warranties. MHI and IMS each, for itself alone,
------------------------------
warrants and represents that:
11.1. Content of Agreement. Each has carefully read and
--------------------
understands the content of this Agreement.
11.2. Financial Risks. Each understands the financial risks
---------------
involved in this investment, which could result in a substantial or
complete loss of its investment. Each can assume a high degree of risk in
making such an investment and can afford the loss of its entire investment.
11.3. Reliance on Own Counsel. Each, in evaluating the merits of
-----------------------
an investment in Company has performed its own due diligence and has
relied, to the extent each deems necessary, on the advice of its own
personal accountant and tax and legal counsel. Each acknowledges that
neither Company nor its counsel has provided any tax opinion or other legal
advice in connection with this offering.
11.4. Business and Financial Experience. Each, by reason of their
---------------------------------
business and financial experience or the business and financial experience
of their professional advisors who are unaffiliated with Company, believe
that they have the capacity to protect their own interests in connection
with this offering.
11.5. Due Organization and Authority. Each is duly organized,
------------------------------
validly existing and in good standing in the state of its incorporation and
possesses all necessary powers and authority to enter into this Agreement.
12. Payment of Certain Expenses.
---------------------------
12.1. Reimbursable Expenses. MHI and IMS agree to cause Company
---------------------
either to pay or reimburse MHI or IMS, as the case may be, only for such
filing
19
fees, costs, prepaid franchise taxes or other expenses directly incurred in
organizing and registering Company as a limited liability company in good
standing with the states of Colorado and Indiana, and any county or local
government department or agency necessary or convenient to the operation of
Company as contemplated by this Agreement.
12.2. Nonreimbursable Expenses. MHI and IMS agree that any and all
------------------------
other expenses incurred by MHI and IMS in organizing Company other than as
is expressly set forth above and in the Services Agreement shall not be
reimbursable by Company and shall be paid solely by the party incurring
such expenses. Without limiting the generality of the foregoing, each party
shall bear its own legal and accounting fees, travel, lodging, telephone
and other out-of-pocket expenses involved in the negotiation, organization
and formation of Company.
13. Confidentiality.
---------------
13.1. Confidentiality. The parties acknowledge that after execution
---------------
of this Agreement, MHI and IMS will each have access to certain
confidential information and trade secrets which are proprietary to IMS or
MHI. Each party to this Agreement acknowledges that the unauthorized use of
such information or the disclosure of any such information of the other
party, or the disclosure of any such information, any part thereof
belonging to the other party, to any unauthorized third party shall be
injurious to the party whose confidential information and trade secrets are
disclosed. Each party to this Agreement, on its own behalf and on behalf of
its officers, directors and employees, by becoming a party to this
Agreement, covenants and agrees that, except as authorized hereunder, they
will not use or disclose to any unauthorized third party, information
related to technology, clients, marketing, research and development or
other trade secrets or proprietary confidential information of the other
party. Further, both IMS and MHI agree to treat as confidential the terms
and conditions of this Agreement. Further, both IMS and MHI agree to treat
as confidential all Company information such as client lists, pricing
information and related data and both acknowledge that unauthorized use of
any such information would cause irreparable damage to Company.
13.2. Enforcement by Injunction. The parties agree and acknowledge
-------------------------
that irrevocable harm and damage will be sustained by the party to whom the
proprietary information and trade secrets belongs in the event that the
other party or its officers, directors or employees violate or threatened
to violate the provisions of this Section. In the event of such a breach or
threatened breach, the party seeking to enforce this Section shall be
entitled to have an injunction issued by any court of competent
jurisdiction enjoining and restraining such breach. The seeking of an
injunction shall not preclude such party from seeking such other remedies
as may be available, including monetary damages.
20
13.3. Enforcement by Injunction by Company. The parties further
------------------------------------
agree and acknowledge that irrevocable harm and damage would be sustained
by Company in the event that either MHI or IMS, their officers, directors
or affiliates violate the provisions of this Section. In the event of a
breach or threatened breach by either MHI or IMS, or both, then either
Member, acting in the name and place of Company shall be entitled to have
an injunction issued by any court of competent jurisdiction enjoining and
restraining such breach. The seeking of an injunction shall not preclude
IMS or MHI from seeking such other remedies as are available, including
monetary damages.
14. Intent Not to Compete. It is the intent of IMS and MHI to use their
---------------------
respective best efforts and good faith to position Company as the preferred
entity for the use and sale of medical information network technology, services
and arrangements within the Exclusive Territory, to provide access by Company to
related technology which may be made available to IMS or MHI through
acquisitions of or other relationships with other companies, and to wherever
possible and reasonable provide Company with the opportunity to propose, develop
and offer, or join with others in proposing, developing and offering, existing
or new medical information network technology and services to healthcare persons
and entities within the Exclusive Territory, in keeping with the purpose of
Company and its business and marketing plans. Nothing in the foregoing shall
deny either IMS or MHI the right to independently or jointly make use of other
medical information network technology, services and arrangements for their own
enjoyment or requirements if it is in their respective best interests to do so,
or, in the case of MHI, to pursue the same if it is not in the scope of
Company's or IMS' business to provide the same.
15. Disputes. In the event of any unresolvable dispute between the
--------
Members, or deadlocked vote by the Board, the Members may, in addition to any
other remedies available, elect to choose one of any of the following methods of
resolution, said method to then be the deciding method for resolution in that
instance.
15.1. President as Voting Board Member. If agreed to by the Members,
--------------------------------
and in the event of a deadlocked vote by the Board, the Members may direct
the Board to authorize the President as a fifth voting member of the Board,
if such authorization is not already in effect.
15.2. Binding Arbitration. The Members may agree to submit a dispute
-------------------
to binding arbitration, the terms and conditions of which shall be agreed
to in advance by the Members.
15.3. Buy/Sell Agreement.
------------------
l5.3.1. Offerer's Right. At any time after the first twelve
---------------
months of this Agreement, a Member ("Offerer") may offer to purchase
from the other Member ("Offeree"), all of the Offeree's ownership
interest in Company at a price to be specified as an amount in dollars
per one percent (1%) ownership interest. Such offer shall be in
writing, and shall offer to pay to the Offeree the total amount then
due
21
in cash within thirty (30) days of acceptance by the Offeree and shall
further provide that the Offeree shall have at least sixty (60) days
to consider the offer.
15.3.2. Offeree's Right. Within the period of the offer, the
---------------
Offeree shall have the right to elect either (i) to sell all of its
ownership interest to the Offerer or (ii) to purchase from the Offerer
all of the Offerer's ownership interest in Company at a purchase price
equivalent to the Offerer's offer on a per one percent (1%) basis. On
or before the expiration of the Offerer's offer, the Offeree shall
indicate in writing whether it elects to sell all of its ownership
interest in Company or to buy the ownership interest in Company owned
by Offerer.
15.3.3. Closing of Buy/Sell Transaction. The closing of a
-------------------------------
buy/sell transaction as described herein shall occur within thirty
(30) days after the expiration of the Offerer's offer. The purchaser
in the transaction shall pay to the seller at the closing an amount in
cash equal to the purchase price per one percent (1%) ownership
interest first specified in the Offerer's offer times the total
percent ownership interest of the seller. Upon such payment, all
interest in and to Company and its business and assets shall be owned
by the purchaser and the seller shall have no further interest in any
aspect of Company's business. If MHI is the purchaser under this
provision, then either MHI or IMS shall have the right to terminate
the Services Agreement between Company and IMS.
16. Miscellaneous.
-------------
16.1. Time of Essence. The Members acknowledge and agree that time
---------------
is of the essence in this Agreement.
16.2. Confirmation by Company. The Members agree to take all action
-----------------------
necessary and convenient to cause each member of the Board to confirm in
writing that he/she has read and understood this Agreement, and that each
member shall take appropriate action to cause the Company to comply with
all of the relevant provisions of this Agreement.
16.3. Notices. All notices required to be given hereunder shall be
-------
given in writing and shall be personally delivered or deemed delivered if
dispatched by certified mail, return receipt requested, postage prepaid,
addressed to the Members as set forth in Section 3.9. A notice shall be
deemed given on the date it is deposited in the mail in accordance with the
foregoing. Any party may change the address to which to send notices by
notifying the other party of such change of address in writing in
accordance with the foregoing.
16.4. Governing Law. This Agreement and all rights, duties and
-------------
obligations hereunder shall be construed and interpreted in accordance with
the laws of Colorado.
22
16.5. Waiver. No waiver of any term, covenant or condition contained
------
in this Agreement or failure to exercise a right or remedy shall be deemed
to imply a further waiver of such term, covenant, right or remedy.
16.6. Severability. Nothing contained in this Agreement shall be
------------
construed so as to require the commission of an act contrary to law and
whenever there is any conflict between any provision of this Agreement and
any present statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, the latter shall prevail, but in
such event, the provisions of this Agreement affected shall be curtailed
and limited only to the extent necessary to bring it within the
requirements of the law and to carry out the purposes of this Agreement.
16.7. Binding Agreement. Subject to the restrictions on transfer
-----------------
and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon MHI and IMS and their respective legal
representatives, successors, transferees, and assigns. Whenever a reference
is herein made to any party such reference shall be deemed to include a
reference to the legal representatives, successors, transferees, and
assigns of such party.
16.8. Assignment. This Agreement shall not be assigned by either MHI
----------
or IMS without the express prior written consent of the other party, except
that MHI may assign this Agreement to any MHI wholly owned affiliate.
16.9. Headings. All headings and captions used herein are for
--------
convenience of reference only, and shall not be a part or affect the
interpretation of this Agreement.
16.10. Modification. This Agreement may be modified only upon
------------
execution of a written agreement signed by the Members.
16.11. Entire Agreement. This Agreement and any exhibits
----------------
specifically made a part hereof or referred to herein supersede all prior
oral and written understandings and agreements between the parties. The
parties acknowledge and agree that this Agreement and any exhibits
specifically made a part hereof or referred to herein contain the entire
agreement between the parties. No representations, promises, conditions or
warranties with reference to the execution of this Agreement have been made
or entered into between the parties other than as expressly stated herein.
In the event of a conflict, the provisions of this Agreement will govern.
16.12. Attorneys Fees. In the event of any suit under this
--------------
Agreement, reasonable attorneys' fees and costs shall be awarded by the
court to the prevailing party, to be included in any judgment recovered. In
addition, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs incurred in enforcing any judgment arising from a
suit under this Agreement. This postjudgment attorneys' fees and costs
provision shall be severable from the other
23
provisions of this Agreement and shall survive any judgment on such suit
and is not to be deemed merged into the judgment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
Integrated Medical Systems, Inc. Methodist Hospital of Indiana, Inc.
By /s/ (Signature Appears Here) By /s/ (Signature Appears Here)
--------------------------------- ----------------------------------
Its Senior Vice President Its Executive V.P.
-------------------------------- ---------------------------------
24
