<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LOGISTICARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4729 13-3765416
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
ONE CROWN CENTER
SUITE 306
1895 PHOENIX BOULEVARD
COLLEGE PARK, GEORGIA 30349
(770) 907-7596
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOHN L. SHERMYEN
ONE CROWN CENTER
SUITE 306
1895 PHOENIX BOULEVARD
COLLEGE PARK, GEORGIA 30349
(770) 907-7596
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES OF COMMUNICATIONS TO:
ROBERT A. CANTONE, ESQ. JEFFREY R. PATT, ESQ.
PROSKAUER ROSE LLP KATTEN MUCHIN & ZAVIS
1585 BROADWAY 525 WEST MONROE STREET
NEW YORK, NEW YORK 10036-8299 CHICAGO, ILLINOIS 60661
(212) 969-3000 (312) 902-5604
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register Additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
REGISTERED BE REGISTERED(1) PER UNIT(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share........ 2,645,000 shares $12.00 $31,740,000 $9,363.30
</TABLE>
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(1) Includes 345,000 shares of Common Stock that the Underwriters have the
option to purchase to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 11, 1998
PROSPECTUS
2,300,000 SHARES
LOGISTICARE, INC.
COMMON STOCK
All of the 2,300,000 shares of Common Stock offered hereby are being sold by
the Company. Prior to this offering, there has been no public market for the
Common Stock of the Company. It is currently estimated that the initial public
offering price will be between $10.00 and $12.00 per share. See "Underwriting"
for a discussion of the factors considered in determining the initial public
offering price. The Common Stock has been approved for quotation on the Nasdaq
Stock Market under the symbol LGTC, subject to official notice of issuance.
--------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 5.
--------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNTS(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share.................................... $ $ $
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Total(3)..................................... $ $ $
</TABLE>
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(1) See "Underwriting" for indemnification arrangements with the several
Underwriters.
(2) Before deducting expenses payable by the Company estimated at $ .
(3) The Selling Stockholders have granted to the Underwriters a 30-day option
to purchase up to 345,000 additional shares of Common Stock solely to cover
over-allotments, if any. If all such shares are purchased, the total Price
to Public, Underwriting Discount, Proceeds to Company and Proceeds to
Selling Stockholders will be $ , $ , $ , and $ , respectively. See
"Underwriting."
--------
The shares of Common Stock are offered by the several Underwriters subject to
prior sale, receipt and acceptance by them and subject to the right of the
Underwriters to reject any order in whole or in part and certain other
conditions. It is expected that certificates for such shares will be available
for delivery on or about , 1998, at the office of the agent of Hambrecht &
Quist LLC in New York, New York.
HAMBRECHT & QUIST EVEREN SECURITIES, INC.
, 1998
<PAGE>
[Diagram]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
LogistiCare(TM), the LogistiCare(TM) logo and RealTime(TM) are trademarks of
the Company.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and Financial Statements and Notes thereto appearing elsewhere in
this Prospectus. The Common Stock offered hereby involves a high degree of
risk. See "Risk Factors." Unless otherwise indicated, all information in this
Prospectus (i) gives effect to the five-for-one stock split of the Common Stock
effected as of March 30, 1998, (ii) gives effect to the two-for-one stock split
of the Common Stock which will occur prior to the effectiveness of the
Registration Statement, (iii) the conversion of each outstanding share of the
Company's preferred stock, par value $.01 (the "Preferred Stock"), into 10
shares of Common Stock which will occur upon the effectiveness of the
Registration Statement and (iv) assumes no exercise of the Underwriters' over-
allotment option. See "Description of Capital Stock," "Underwriting" and Notes
to Financial Statements.
THE COMPANY
LogistiCare, Inc. ("LogistiCare" or the "Company") manages non-emergency
transportation services for government health and human service agencies and
for managed care organizations ("MCOs"). The Company seeks to establish itself
as the central contact for three constituencies: third-party payors,
transportation carriers and individuals eligible for transportation benefits
("Recipients"). The Company believes that its management expertise and
RealTime(TM) software system ("RealTime") enable it to provide sophisticated
and efficient transportation management services. The Company currently
conducts its business through centralized operations centers ("Operations
Centers") in Georgia, Florida and Connecticut, and intends to expand into
selected new regional markets.
The Company's brokerage logistics services, contracted under both capitated
and, to a lesser extent, fee-for-service arrangements, provide third-party
payors with an outsourcing alternative for their transportation requirements.
These services include: processing requests for transportation from Recipients,
determining their eligibility for such services, coordinating and purchasing
transportation, reporting encounter data and performing other logistical and
quality-assurance activities associated with non-emergency transportation. The
Company does not own or operate any vehicles for the transportation of
individuals. Instead, the Company establishes cost-effective networks of
carriers by selecting, negotiating and contracting with qualified
transportation carriers within each region. Such independent transportation
carriers are assisted and evaluated by the Company on an ongoing basis to
ensure conformity with the Company's quality standards.
Currently, in geographic markets in which the Company does not operate, non-
emergency transportation is provided in large measure through a fragmented
delivery system consisting primarily of small transportation companies that
frequently provide only one class of service (i.e., ambulatory, wheelchair or
ambulance). In a typical transaction, an individual schedules a trip with a
transportation carrier who subsequently submits a receipt for the cost of the
trip to a third-party payor for reimbursement. The Company believes that this
system is highly inefficient and provides no incentive to manage utilization or
contain costs, while at the same time providing an opportunity for abuses by
passengers and transportation carriers that the Company believes are difficult
for third-party payors to effectively identify and prevent.
The Company believes that the growing demand for non-emergency
transportation, combined with third-party payors' increasing dissatisfaction
with the fragmented delivery system, has created the need for a more
sophisticated alternative to manage utilization and contain costs while
providing transportation services at or above existing levels of quality. The
Company believes that government agencies, MCOs and other third-party payors
will increasingly turn to third parties, such as the Company, that are not
affiliated with transportation carriers to coordinate and manage all classes of
non-emergency transportation services.
The Company was incorporated in Delaware in March 1994. In January 1996, the
Company acquired all of the outstanding shares of Automated Dispatch Systems,
Inc. ("Systems") and subsequently merged Systems into itself. The Company's
executive offices are located at 1895 Phoenix Boulevard, Suite 306, College
Park, Georgia 30349, and its telephone number is (770) 907-7596.
3
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.... 2,300,000 shares
Common Stock to be outstanding after
the Offering.......................... 11,321,510 shares(1) (2)
Use of proceeds........................ For working capital and general
corporate purposes, including providing
collateral security for performance
bonds in connection with new contracts,
business development, operations
expansion, internal software
development and potential acquisitions.
See "Use of Proceeds."
Proposed Nasdaq National Market symbol. LGTC
</TABLE>
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED
ENDED DECEMBER 31, MARCH 31,
----------------------- ---------------
1995 1996 1997 1997 1998
------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................ $ 392 $3,636 $11,502 $1,362 $11,715
Operating expenses.................. 501 3,722 15,714 1,586 11,494
Income (loss) from operations....... (109) (86) (4,212) (224) 221
Other income (expense), net......... (18) (33) (2) (2) 7
Net income (loss)................... $ (127) $ (119) $(4,214) $ (226) $ 228
Basic net income (loss) per share... $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.03
Weighted average shares outstanding. 5,000 5,550 7,189 5,797 8,047
Diluted net income (loss) per share. $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.02
Weighted average shares and
potentially dilutive shares
outstanding........................ 5,000 5,550 7,189 5,797 10,256
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1998
-----------------------
ACTUAL AS ADJUSTED(2)
------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $ 3,681 $26,460
Working capital...................................... (3,367) 19,412
Total assets......................................... 6,875 29,654
Short-term debt including current portion of long-
term debt........................................... 149 149
Long-term debt, less current maturities.............. 242 242
Total stockholders' equity (deficit)................. (2,450) 20,329
</TABLE>
- --------------------
(1) Based on the number of shares outstanding as of March 31, 1998. Excludes
(i) 1,000,000 shares of Common Stock reserved for issuance under the
Company's 1998 Stock Option Plan and (ii) 1,533,330 shares of Common Stock
reserved for issuance under the Company's 1995 Stock Option Plan and
subject to outstanding options as of March 31, 1998 at a weighted average
exercise price of $0.93 per share. See "Capitalization," "Management--Stock
Option Plans" and Note 7 of Notes to Financial Statements.
(2) As adjusted to reflect the sale of shares of Common Stock offered hereby at
an assumed public offering price of $11.00 per share and the receipt of the
estimated proceeds therefrom as if such transactions had occurred on March
31, 1998. See "Use of Proceeds" and "Capitalization."
4
<PAGE>
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree of
risk. Prospective investors should carefully consider the following risk
factors, in addition to the other information contained in this Prospectus,
before purchasing the securities offered hereby. This Prospectus contains
forward-looking statements. Discussions containing such forward-looking
statements may be found in the material set forth below and under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," as well as in the Prospectus generally.
Prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties.
Actual events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including, without
limitation, the risk factors set forth below and the matters set forth in this
Prospectus generally.
Limited Operating History; History of Operating Losses. The Company was
formed in 1994 and, therefore, has had a limited operating history upon which
an evaluation of the Company and its prospects can be based. From its
inception to July 1997, the Company executed five contracts with MCOs and
three contracts with transportation carriers. Since July 1997, the Company has
also executed three contracts with government agencies and entered into
another contract with respect to which the approval of the Office of the
Connecticut Attorney General is currently pending. The Company has had limited
experience in managing these contracts. The Company's prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and evolving markets. There can be no assurance that the
Company will be successful in addressing such risks. The Company has incurred
net losses since inception, including losses of $4.2 million in the year ended
December 31, 1997. Although the Company has experienced revenue growth in
recent periods, such growth rates may not be sustainable and are not
indicative of future operating results.
Dependence on Limited Number of Contracts. In July 1997, the Company
executed three contracts with the Georgia Department of Administrative
Services (on behalf of the Georgia Department of Medical Assistance) ("GDMA"),
pursuant to which the Company manages, on a capitated basis, non-emergency
transportation services to Medicaid beneficiaries in certain regions of
Georgia. The Company entered into one contract with the Connecticut Department
of Social Services ("CDSS"), effective February 1998 with respect to which the
approval of the Office of the Connecticut Attorney General is currently
pending. Under this contract, the Company manages, on a capitated basis, non-
emergency transportation services to Medicaid beneficiaries in certain regions
of Connecticut. The GDMA contracts accounted for approximately 48.4% of the
Company's revenues in 1997 and approximately 78.8% of the Company's revenues
in the first quarter of 1998. The CDSS contract accounted for 12.0% of the
Company's revenues in the first quarter of 1998. The Company anticipates that
these contracts will continue to represent a significant portion of its
revenues in the remainder of 1998 and for the foreseeable future. However, the
capitation rates in effect under the GDMA contracts for service periods
subsequent to June 30, 1998 are 23% to 26% lower than rates in effect for the
period from February 1, 1998 through June 30, 1998. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Overview." Each of the GDMA contracts expires on June 30, 1998 and is subject
to two successive one year options to renew, exercisable solely in the
discretion of GDMA. The GDMA contracts are terminable by the GDMA upon notice
to the Company in certain circumstances, including if the GDMA determines that
such termination is in the best interest of the State of Georgia or that
sufficient funds no longer exist to pay its obligations under such contracts.
The CDSS contract expires on January 31, 1999 and is subject to two successive
one year options to renew, exercisable solely in the discretion of the CDSS.
The CDSS contract is terminable by the CDSS upon 90-days notice to the Company
for any reason, and upon lesser notice to the Company in certain
circumstances, and the CDSS may terminate the contract or reduce the
contracted amount of compensation at any time in the event that sufficient
funds no longer exist to pay its obligations. There can be no assurance that
any of these contracts will be retained, renewed or not terminated. The loss
of any of these contracts would have a material adverse effect on the
Company's business, financial condition and results of operations.
5
<PAGE>
Capitated Nature of Revenue. Approximately 80.4% of the Company's revenues
in 1997 and approximately 97.6% of the Company's revenues in the first quarter
of 1998 relate to capitated contracts, and the Company anticipates that the
revenues received under capitated contracts will continue to represent a
substantial majority of the Company's total revenues as it expands and
implements its business strategies. The Company believes that government
agencies, MCOs and other third-party payors will continue to seek discounted
fee structures and the assumption by providers, through capitation
arrangements, of all or a portion of the financial risks relating to health
care related services, including transportation services. In a capitation
arrangement, the Company makes certain demographic, statistical and other
assumptions concerning anticipated utilization, carrier services and cost
incurred per trip. Such assumptions are based upon the Company's experience,
publicly-available information and information furnished by the party
requesting a bid or proposal from the Company. If the Company secures a
capitated contract, the Company typically agrees, in advance and often for
multi-year periods, to accept a fixed monthly fee for services based upon the
number of eligible Recipients and various transportation-related criteria. The
failure of the Company to make accurate assumptions with respect to a contract
could have a material adverse effect on the Company's business, financial
condition and results of operations. For example, if MCO enrollees covered by
such contracts require more frequent transportation than anticipated by the
Company upon entering into such a contract, there could be a material adverse
effect on the Company. Fees negotiated under such capitated contracts could be
insufficient to cover the costs of the services provided.
The Company's acceptance of risk contracts may entail the business of
insurance, to which state licensure laws apply. If the Company's activities
are deemed to require licensure, the Company may not be able to qualify for
such licensure and may be subject to penalties for its failure to obtain
licensure. If the Company were required to and did obtain licensure, it would
be subject to potentially onerous regulatory requirements. To the extent the
Company accepts capitation and is not regulated as an insurer, regulatory
provisions that might mitigate losses by insurers will not apply to reduce the
Company's risk. See "Business--Government Regulation and Supervision--
Insurance Laws."
Risks Associated with Proposed Growth Strategy. The Company's business
strategy is to expand into new and existing markets either through entering
into new contracts and forming new Operations Centers or acquiring existing
businesses. The Company does not anticipate opening a new Operations Center in
a geographic region unless and until it has one or more contracts in such
region sufficient to support a new Operations Center. There can be no
assurance that the Company will be successful in obtaining new contracts
sufficient to form new Operations Centers. Upon the execution of a contract
requiring the formation of a new Operations Center, it may be necessary for
the Company within a brief time period to lease office space, purchase office
equipment, hire and train sufficient qualified personnel, and negotiate and
execute contracts with transportation carriers in geographic regions in which
the Company has no prior experience. The Company may also be required to
modify its software system to integrate new Operations Centers. There can be
no assurance that the Company will be able to complete such activities within
the time period necessary to perform under the applicable contract. These
activities may also occur prior to the Company's receipt of any payments under
a new contract and the Company may experience a several month lag in the
collection of its accounts receivables. Integrating newly-formed and acquired
business units with the Company's operations, identifying and pursuing
opportunities for expansion, funding the formation of new Operations Centers
and managing growth will require a significant amount of management time and
skill and financial resources. There can be no assurance that the Company will
be successful in achieving and managing growth. The Company currently has no
pending agreements or understandings regarding the acquisition of any business
or the formation of new Operations Centers.
Termination of Significant Contracts. The Company's contracts typically
contain provisions that permit the third-party payor to terminate its contract
with the Company on little or no notice, with or without cause. Termination of
a significant contract between the Company and a third-party payor, whether by
expiration or otherwise, will not only cause a loss of revenue to the Company,
but may also cause the Company to expend significant resources in closing the
applicable Operations Center. Actions necessary to close an Operations
6
<PAGE>
Center may include buying-out office leases, terminating or reassigning
personnel and selling or re-deploying office equipment. Both the loss of
revenue resulting from the termination of a significant contract and the
related costs of closing an Operations Center could have a material adverse
effect on the Company's business, financial condition and results of
operations.
Risks Associated with RFPs. A high percentage of the Company's prospective
clients are state or local government authorities. Effective marketing of the
Company's services to government clients requires the ability to respond to
government requests for proposals ("RFPs"). To succeed in the RFP process, the
Company must estimate its costs for servicing the proposed contract, the time
required to establish operations and the likely terms of the proposals
submitted by competitors. The Company's ability to successfully respond in the
RFP process in the future depends in large measure upon the availability of
sufficient financial and management resources, and will have an important
impact on the Company's business, financial condition and results of
operations. There can be no assurance that the Company will have sufficient
financial and management resources to successfully respond in the RFP process
in the future or that it will secure profitable contracts pursuant to RFPs .
Risks Associated With Government Contracting. In order to establish and
maintain relationships with government agencies, the Company occasionally
engages marketing consultants, including lobbyists. In the event of a
significant political change, such consultants may lose their ability to
effectively assist the Company. The failure of the Company to manage its
relationships effectively with political consultants may have a material
adverse effect on its business, financial condition and results of operations.
No assurance can be given that the Company will be successful in managing such
relationships.
Government contracts generally are subject to audits and investigations by
appropriate government agencies. These audits and investigations involve a
review of the government contractor's performance of its contracts as well as
its compliance with applicable laws, regulations and standards. If improper or
illegal activities are discovered in the course of any audits or
investigations, the contractor may be subject to various civil, criminal and
administrative sanctions, including termination of contracts, forfeiture of
profits, suspension of payments, fines and suspension or disqualification from
doing business with the government. If the Company becomes subject to
sanctions, such sanctions could have a material adverse effect on the
Company's business, financial condition and results of operations.
Risks Associated with the Company's Inability or Failure to Perform Under
Contracts. The Company's inability or failure to satisfy its contractual
obligations in a manner consistent with the terms of a contract could have a
material adverse effect on the Company's business, financial condition and
operating results because the Company is often required to indemnify third-
party payors for its failure to meet performance standards. For example, the
Company's contracts with the GDMA contain liquidated damages provisions and
financial penalties related to performance failures. In addition, in order for
the Company to bid for certain government contracts, the Company has been, and
may continue to be, required to secure its obligations by obtaining a
performance bond from an insurer, posting a cash performance bond or obtaining
a letter of credit from a suitable financial institution. In the event that a
government agency makes a claim against such performance bond or letter of
credit, the premiums demanded by the insurers for such bonds could increase,
thereby limiting the Company's ability to bid for contracts in the future. In
addition, the Company's failure to meet a third-party payor's expectations in
the performance of its contractual obligations could have a material adverse
effect on the Company's reputation, thereby adversely affecting its business,
financial condition and results of operations.
Legislative Change and Political Development. The market for the Company's
services is largely dependent on federal and state legislative programs, any
of which may be modified or terminated by acts of the legislative or executive
branches of federal and state governments. There can be no assurance that such
legislative change will not occur or that the Company will be able to
anticipate and respond in a timely manner to any such legislative change. The
Company's failure to effectively manage its business in light of anticipated
7
<PAGE>
or unanticipated legislative change could have a material adverse effect on
the Company's business, financial condition and results of operations.
Government Regulation. The federal government and all states in which the
Company operates regulate various aspects of the businesses with which the
Company contracts, such as MCOs and transportation carriers, by establishing
licensing requirements and operating standards. Although these regulations do
not currently have a direct impact on the Company's business, changes in these
regulations or their interpretation could affect the Company's business, by,
for example, increasing the cost of transportation carrier services.
Additionally, existing and future federal and state regulation of health care
could have a material adverse effect on the Company's financial condition and
results of operations. While the Company believes that its operations are
conducted in material compliance with applicable laws, the laws applicable to
the Company are subject to evolving interpretations, and therefore there can
be no assurance that a review of the Company's operations by federal or state
judicial or regulatory authorities would not result in a determination that
the Company has violated one or more provisions of federal or state law. Any
such determination could have a material adverse effect on the Company.
Expansion of the Company into, or the continuation of the Company's operations
within, certain jurisdictions may depend on the Company's ability to modify
its operational structure to conform to such jurisdictions' regulatory
framework. Any limitation on the Company's ability to expand could have a
material adverse effect on the Company. See "Business--Government Regulation
and Supervision."
Fraud and Abuse. The anti-kickback provisions of the Social Security Act
prohibit the solicitation, payment, receipt or offering of any direct or
indirect remuneration in return for, or as an inducement for, certain
referrals of patients for items, services or equipment covered by health
benefits programs, including Medicare and Medicaid. In addition to federal
law, anti-kickback laws have been adopted by many states, including the states
in which the Company conducts business. For example, the State of Florida
prohibits kickbacks and states that "[i]t is unlawful for any health care
provider or any provider of health care services to offer, pay, solicit, or
receive a kickback, directly or indirectly, overtly or covertly, in cash or in
kind, for referring or soliciting patients." In addition, federal law and some
state laws impose significant penalties for false and improper billings. These
anti-kickback and false claims laws are commonly referred to as the fraud and
abuse laws. Violations of any of these laws may result in substantial civil or
criminal penalties, and, in the case of violations of federal laws, exclusion
from participation in the Medicare and Medicaid programs. Such exclusion and
penalties, if applied to the Company, would have a material adverse effect on
the Company. Further, the application of these laws is subject to modification
by statutory amendment or promulgation of regulations and any such change
could have a material adverse effect on the Company.
Non-emergency transportation is one of many services identified by states
and the Office of Inspector General ("OIG") of the Department of Health and
Human Services as being a source of fraud and abuse activity in the Medicaid
program. Such allegations of fraud and abuse and the resulting increasing
costs have led members of Congress to consider eliminating non-emergency
transportation as a covered Medicaid service. The elimination of non-emergency
transportation as a covered Medicaid service would have a material adverse
effect on the Company. See "Business--Government Regulation and Supervision--
False and Improper Claims."
Health Care Reform. As a result of the continued escalation of health care
costs and the inability of many individuals to obtain insurance, numerous
proposals have been or may be introduced in Congress and state legislatures
relating to health care reform. There can be no assurance as to the ultimate
content, timing or effect of any health care reform legislation, nor is it
possible at this time to estimate the impact of potential legislation, which
may be material, on the Company. Aspects of certain of these proposals, such
as reduction in funding of Medicaid programs, changes in reimbursement
regulations, and increased pressure by Medicaid and other third-party payors
to contain health care costs, could eliminate or limit the use of
transportation carriers and consequently reduce both the demand for the
Company's services and the amount of funds available for such use. In the
recently enacted Balanced Budget Act of 1997 (the "1997 Budget Bill") and
8
<PAGE>
Health Insurance Portability and Accountability Act of 1996 ("HIPAA"),
Congress has responded to perceived fraud and abuse in the health care
programs. This legislation has fortified the government's enforcement
authority with increased resources and greater civil and criminal penalties
for offenses. The Company anticipates that there will be further restrictive
legislative and regulatory measures to reduce fraud, waste and abuse in the
health care programs. There can be no assurance that any such legislation will
not have a material adverse impact on the Company. See "Business--Government
Regulations and Supervision--Federal and State Initiatives."
Dependence on Software System. The successful operation of the Company's
software system, RealTime, is critical to its ability to manage transportation
services and to secure, and operate profitably under, capitated contracts. The
software industry is characterized by rapid technological changes and advances
which can result in relatively short product lifecycles. The Company's future
success may depend, in large part, on its ability to enhance RealTime and
develop new software that keeps pace with technological developments in the
marketplace. Over the next year, the Company intends to expand RealTime's data
management and interface capabilities. There can be no assurance that the
Company will be successful in developing new software products or product
enhancements, including the proposed enhancements, or that such new products
or enhancements will keep pace with competitive innovations.
Dependence on Third Party Carriers for Transportation. The Company does not
own or operate vehicles and is therefore dependent upon third-party
transportation carriers to fulfill the Company's obligations under its
transportation management contracts. There can be no assurance that the
Company will be able to execute and maintain contracts with third-party
carriers to provide transportation services on behalf of the Company in
accordance with the Company's standards at acceptable prices. The inability of
the Company to enter into satisfactory relationships with third-party carriers
or the failure of such carriers to furnish transportation services according
to the Company's standards at acceptable prices could have a material adverse
effect on the Company's business, financial condition and results of
operations.
Variability of Quarterly Operating Results. Variations in the Company's
revenues and operating results occur from quarter to quarter as a result of a
number of factors, including the progress of contracts, levels of revenues
earned on contracts (including any adjustments in expectations of revenue
recognition on fixed price contracts), the commencement, completion or
termination of contracts during any particular quarter, the schedule of
government agencies for awarding contracts and general economic conditions.
Because a significant portion of the Company's expenses are relatively fixed,
successful contract performance and variation in the volume of activity, as
well as in the number of contracts commenced or completed during any quarter,
may cause significant variations in operating results from quarter to quarter.
Furthermore, the Company has experienced, and anticipates that it may in the
future experience, a pattern in its results of operation in which it incurs
greater operating expenses during the start-up and early stages of significant
contracts.
Competition. The market for transportation management services is new,
highly competitive and rapidly evolving. Increased outsourcing of
transportation services, low barriers to entry and other factors may attract
new entrants into the transportation management industry and result in
increased competition for the Company. Potential competitors include
independent transportation carriers, logistics companies and other companies
who currently provide unrelated services to government agencies and other
third-party payors. Many of the Company's competitors and potential
competitors have significantly greater financial, technological and marketing
resources than the Company. There can be no assurance that the Company will be
able to compete successfully against current and future sources of competition
or that competition will not have a material adverse effect on the Company's
business, financial condition and results of operations.
Reliance on Key Personnel. The success of the Company is highly dependent
upon the efforts, abilities, business generation and project execution
capabilities of certain of its executive officers and other senior employees,
most of whom have worked together for only a short period of time. The loss of
the services of
9
<PAGE>
any of its executive officers or other key employees could have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company maintains a key-man life insurance policy on John L.
Shermyen in the amount of $2,000,000, with the proceeds payable to the
Company.
The Company's future success also depends on its continuing ability to
identify, hire, train and retain other highly qualified technical and
managerial personnel. Competition for such personnel is significant and there
can be no assurance that the Company will be able to attract, assimilate or
retain other highly qualified technical and managerial personnel in the
future. The inability to attract and retain the necessary personnel could have
a material adverse effect upon the Company's business, financial condition and
results of operations.
Adverse Publicity. The Company has received, and expects to continue to
receive, media attention as a result of its contracts with state and local
government authorities. There can be no assurance that the Company will not
receive adverse media attention as the result of the types of services
provided by the Company or the activities of displaced transportation
carriers. Negative coverage relating to the Company could influence government
officials, slow the issuance of RFPs or cause the termination of existing
contracts. In addition, there can be no assurance that media attention focused
on the Company will be accurate or that the Company will be able to anticipate
and respond in a timely manner to all media contacts. Adverse media coverage
or the Company's failure to manage such coverage could have a material adverse
effect on the Company's reputation or the transportation management industry,
thereby adversely affecting the Company's business, financial condition and
results of operations.
Dependence Upon Third-Party Reimbursement. A substantial majority of the
Company's revenues are attributable to reimbursement by third-party payors,
particularly government agencies who administer state Medicaid programs and
MCOs. During the year ended December 31, 1997 and the three months ended March
31, 1998, the Company derived approximately 48.4% and 90.8%, respectively, of
its total revenues from government agencies who administer state Medicaid
programs, and approximately 51.6% and 9.2%, respectively, of its total
revenues from MCOs and other non-governmental third-party payors. The
revenues, cash flows and profitability of the Company, like those of other
companies in the health care industry, are affected by the continuing efforts
of third-party payors to control expenditures for health care. In addition,
reimbursement can be influenced by the financial instability of private third-
party payors and by budget pressures and cost shifting by governmental payors.
Furthermore, any change in reimbursement regulations, policies,
interpretations or statutes could adversely affect the operations of the
Company. The health care industry is experiencing a trend toward cost
containment as third party payors, such as governmental programs (e.g.,
Medicare and Medicaid), private insurance plans and managed care plans, seek
to impose lower reimbursement and utilizations rates and to negotiate reduced
capitated payment schedules with service providers. Further reductions in
payments to health care providers or other changes in reimbursement for health
care services could have material adverse effect on the Company. These
reductions could result from changes in current reimbursement rates. There can
be no assurance that the effect of any or all of these changes in third-party
reimbursement could be offset by the Company through cost reductions,
increased volume, introduction of new services and systems or otherwise.
Risk of Liability Claims. The Company is subject to liability claims in the
event a Recipient fails to receive, or suffers harm in connection with,
transportation arranged through the Company. Even unsuccessful claims could
result in expenditure of funds in litigation, diversion of management time and
resources or damage to the Company's reputation and the marketability of the
Company's services and systems. Although the Company takes contractual steps
to obtain indemnification for certain liabilities and maintains general
commercial liability insurance, there can be no assurance that a successful
claim could not be made against the Company, that the amount of
indemnification payments or insurance would be adequate to cover the costs of
defending against or paying such a claim or that the costs of defending
against such a claim or the payment of damages by the Company would not have a
material adverse effect on the Company.
10
<PAGE>
Broad Discretion Over Use of Proceeds. The principal purposes of the
Offering are to obtain additional capital to support anticipated growth,
expand the public market for the Common Stock, facilitate future access for
the Company to public equity markets and enhance the Company's ability to use
its Common Stock as consideration for potential acquisitions and as a means of
attracting and retaining key employees. The Company expects to use the net
proceeds from the Offering primarily for working capital and general corporate
uses, including providing collateral security for performance bonds in
connection with new contracts, business development, operations expansion,
internal software development and potential acquisitions. The Company has no
current specific plan for the proceeds of the Offering and, as a consequence,
management will have discretion over the use of the proceeds.
No Prior Market; Possible Volatility of Stock Price. Prior to the Offering,
there has been no public market for the Common Stock, and there can be no
assurance that an active public market for the Common Stock will develop or
continue after the Offering. The initial public offering price of the Common
Stock will be determined by negotiation between the Company and the
Underwriters and may not be indicative of the market price for the Common
Stock after the Offering. See "Underwriting" for factors considered in
determining the initial public offering price. From time to time after the
Offering, there may be significant volatility in the market price of the
Common Stock. Deviations in results of operations from estimates of securities
analysts, changes in general conditions in the economy or the health care
industry or other developments affecting the Company or its competitors could
cause the market price of the Common Stock to fluctuate substantially. The
equity markets have, on occasion, experienced significant price and volume
fluctuations that have affected the market prices for many companies'
securities and have often been unrelated to the operating performance of these
companies. Concerns about the potential effects of health care reform measures
has contributed to the volatility of stock prices of companies in health care
and related industries and may similarly affect the price of the Common Stock
following the Offering. Any such fluctuations that occur following the
completion of the Offering may adversely affect the market price of the Common
Stock.
Shares Eligible for Future Sale. Immediately after completion of the
Offering, the Company will have 11,321,510 shares of Common Stock outstanding,
of which the 2,300,000 shares sold pursuant to the Offering will be freely
tradeable without restriction or further registration under the Securities
Act, except those shares acquired by affiliates of the Company. Holders of the
remaining shares will be eligible to sell such shares pursuant to Rule 144
under the Securities Act at prescribed times and subject to the manner of
sale, volume, notice and information restrictions of Rule 144. In addition,
1,533,330 shares of Common Stock are issuable upon the exercise of outstanding
stock options, the issuance of which shares is expected to be registered by
the Company under the Securities Act and become freely tradable without
restriction. The Company and its current stockholders (holding an aggregate of
9,021,510 shares of Common Stock upon the closing of the Offering) have agreed
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock, until 180 days after
the date of this Prospectus, without the prior consent of Hambrecht & Quist
LLC. Sales of substantial amounts of these shares in the public market or the
availability of such shares for future sale could adversely affect the market
price of the shares of Common Stock and the Company's ability to raise
additional capital at a price favorable to the Company. See "Shares Eligible
for Future Sale" and "Underwriting."
Potential Anti-Takeover Effects of Charter and By-laws Provisions. Certain
provisions of the Restated Certificate of Incorporation (the "Certificate of
Incorporation") and the Amended and Restated By-laws (the "By-laws") of the
Company may be deemed to have anti-takeover effects and may delay, deter or
prevent a change in control of the Company that a stockholder might consider
in his/her best interest. These provisions (i) provide that only the Board of
Directors or certain members thereof or officers of the Company may call
special meetings of the stockholders and (ii) authorize the issuance of "blank
check" preferred stock having such designations, rights and preferences as may
be determined from time to time by the Board of Directors. See "Description of
Capital Stock."
11
<PAGE>
Control by Existing Stockholders. Following the completion of the Offering,
the officers and directors of the Company will beneficially own approximately
65.9% of the outstanding shares of Common Stock. Following the offering, such
persons may effectively be able to control the affairs of the Company,
including the ability to delay or prevent a change of control of the Company.
See "Principal and Selling Stockholders."
Immediate and Substantial Dilution. Purchasers of the Common Stock in the
Offering will incur immediate and substantial dilution in the net tangible
book value per share of Common Stock of $9.21 per share. See "Dilution."
12
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,300,000 shares of
Common Stock offered by the Company hereby at an assumed initial public
offering price of $11.00 per share, and after deducting the underwriting
discounts and estimated offering expenses, are estimated to be $22,779,000.
The Company expects to use the net proceeds from the Offering for working
capital and general corporate purposes, including providing collateral
security for performance bonds in connection with new contracts, business
development, operations expansion, internal software development and potential
acquisitions. The Company may use a portion of such net proceeds to acquire
businesses, but the Company does not have any commitments or agreements with
respect to any such transaction. Pending such uses, the net proceeds of the
Offering will be invested in short-term, interest-bearing, investment-grade
securities.
Certain stockholders of the Company (the "Selling Stockholders") have
granted the Underwriters a 30-day option to purchase up to 345,000 additional
shares of Common Stock to cover over-allotments, if any. If the over-allotment
option is exercised, the Company will not receive any proceeds from the sale
of Common Stock by the Selling Stockholders. See "Principal and Selling
Stockholders."
DIVIDEND POLICY
To date, the Company has neither declared nor paid any cash dividends on
shares of its Common Stock. The Company currently intends to retain its
earnings for future growth and, therefore, does not anticipate paying any cash
dividends in the foreseeable future.
13
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1998 (i) on an actual basis, (ii) the pro forma capitalization of the
Company at March 31, 1998 assuming the conversion of the Preferred Stock, and
(iii) as adjusted to give effect to the sale of 2,300,000 shares of Common
Stock offered hereby at an assumed offering price of $11.00 per share and the
application of the net proceeds therefrom. This table should be read in
conjunction with the financial statements of the Company and Notes thereto
included elsewhere in this Prospectus. See "Use of Proceeds."
<TABLE>
<CAPTION>
MARCH 31, 1998
------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
------- ------------ --------------
(UNAUDITED, IN THOUSANDS)
<S> <C> <C> <C>
Short-term obligations, including current
maturities of long-term obligations...... $ 149 $ 149 $ 149
------- ------- -------
Long-term obligations, less current
maturities............................... $ 242 $ 242 $ 242
------- ------- -------
Stockholders' equity (deficit):
Preferred stock, $.01 par value, 100,000
shares authorized; 97,415 issued and
outstanding............................ 1 -- --
Common stock, $.01 par value, 30,000,000
shares authorized; 8,047,360 shares
issued and outstanding actual;
11,321,510 shares issued and
outstanding as adjusted(1)............. 80 90 113
Additional paid-in capital................ 2,285 2,276 25,032
Deferred option plan compensation......... (450) (450) (450)
Retained deficit.......................... (4,366) (4,366) (4,366)
------- ------- -------
Total stockholders' equity (deficit).. (2,450) (2,450) 20,329
------- ------- -------
Total capitalization................ $(2,059) $(2,059) $20,720
======= ======= =======
</TABLE>
- ---------------------
(1) Excludes (i) 1,000,000 shares of Common Stock reserved for issuance under
the Company's 1998 Stock Option Plan and (ii) 1,533,330 shares of Common
Stock reserved for issuance under the Company's 1995 Stock Option Plan and
subject to outstanding options as of March 31, 1998 at a weighted average
exercise price of $0.93 per share. See "Management--Stock Option Plans"
and Note 7 of Notes to Financial Statements.
(2) Gives effect to the conversion of the issued and outstanding shares of
Preferred Stock into 974,150 shares of Common Stock, in the aggregate.
(3) Gives effect to the sale of 2,300,000 shares of Common Stock and the
application of the estimated net proceeds of $22,779,000 (after deducting
underwriting discounts and estimated offering expenses) as set forth in
"Use of Proceeds."
14
<PAGE>
DILUTION
As of March 31, 1998, the Company had pro forma net tangible book value
(deficit) of approximately $(2,513,000), or $(0.28) per share of Common Stock.
Pro forma net tangible book value (deficit) represents the amount of total
tangible assets less total liabilities divided by the number of shares of
Common Stock outstanding. Without taking into account any other changes in the
net tangible book value after March 31, 1998, other than to give effect to the
receipt by the Company of the net proceeds from the sale of the 2,300,000
shares of Common Stock offered by the Company hereby at an assumed initial
public offering price of $11.00 per share (after deducting underwriting
discounts and estimated offering expenses), the pro forma net tangible book
value (deficit) of the Company as of March 31, 1998 would have been
approximately $20,265,000, or $1.79 per share. This represents an immediate
increase in net tangible book value (deficit) of $2.07 per share to existing
stockholders and an immediate dilution of $9.21 per share to new investors.
The following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $11.00
Net tangible book value (deficit) per share before the Of-
fering.................................................... $(0.28)
Increase per share attributable to new investors........... 2.07
------
Pro forma net tangible book value per share after the Offer-
ing......................................................... 1.79
------
Dilution per share to new investors.......................... $ 9.21
======
</TABLE>
The following table summarizes, on a pro forma basis as of March 31, 1998,
the differences between existing stockholders and the new investors with
respect to the number of shares of Common Stock purchased from the Company,
the total consideration paid and the average price per share paid:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------ ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.. 9,021,510 79.68% $ 1,915,648 7.04% $ 0.21
New investors.......... 2,300,000 20.32% $25,300,000 92.96% $11.00
---------- ------ ----------- ------
Total.............. 11,321,510 100.00% $27,215,648 100.00%
========== ====== =========== ======
</TABLE>
Other than as noted above, the foregoing computations assume no exercise of
stock options under the Company's 1998 Stock Option Plan and 1995 Stock Option
Plan after March 31, 1998. As of March 31, 1998, there were no options
outstanding under the 1998 Stock Option Plan and there were options
outstanding to purchase 1,533,330 shares of Common Stock under the 1995 Stock
Option Plan at a weighted average exercise price of $0.93 per share. To the
extent options granted under the Company's 1995 Stock Option Plan are
exercised, there will be further dilution to new investors. See "Management--
Stock Option Plans" and Note 7 of Notes to Financial Statements.
15
<PAGE>
SELECTED FINANCIAL INFORMATION
The following data has been derived from financial statements audited by
Price Waterhouse LLP, independent certified public accountants. Balance sheets
at December 31, 1996 and 1997 and the related statements of operations and of
cash flows for the three years ended December 31, 1997 and Notes thereto
appear elsewhere in this Prospectus. The financial data at March 31, 1998 and
for the three months ended March 31, 1997 and 1998 has been derived from
unaudited financial statements also appearing elsewhere herein and which, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations for the unaudited interim periods. The
historical results are not necessarily indicative of results of any future
period.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- ---------------
1994 1995 1996 1997 1997 1998
------ ------ ------ ------- ------ -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Transportation management
services .................. $ -- $ -- $1,530 $10,768 $ 988 $11,715
Related party............... -- -- 1,668 603 374 --
Other....................... -- 392 438 131 -- --
------ ------ ------ ------- ------ -------
Total revenues............ -- 392 3,636 11,502 1,362 11,715
------ ------ ------ ------- ------ -------
Operating expenses:
Purchased transportation.... -- -- 1,296 11,213 899 9,503
Direct labor................ -- -- 1,178 1,836 369 902
Selling, general and admin-
istrative.................. 126 311 1,043 2,665 318 1,089
Other....................... -- 190 205 -- -- --
------ ------ ------ ------- ------ -------
Total operating expenses.. 126 501 3,722 15,714 1,586 11,494
------ ------ ------ ------- ------ -------
Income (loss) from opera-
tions....................... (126) (109) (86) (4,212) (224) 221
Other income (expense) net... (8) (18) (33) (2) (2) 7
------ ------ ------ ------- ------ -------
Net income (loss)............ $ (134) $ (127) $ (119) $(4,214) $ (226) $ 228
====== ====== ====== ======= ====== =======
Basic net income (loss) per
share...................... $(0.03) $(0.03) $(0.02) $ (0.59) $(0.04) $ 0.03
Weighted average shares out-
standing................... 5,000 5,000 5,550 7,189 5,797 8,047
Diluted net income (loss)
per share.................. $(0.03) $(0.03) $(0.03) $ (0.60) $(0.04) $ 0.02
Weighted average shares and
potentially dilutive shares
outstanding................ 5,000 5,000 5,550 7,189 5,797 10,256
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31
-------------- --------
1996 1997 1998
----- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................... $ 71 $ 640 $ 3,681
Working capital..................................... (427) (3,519) (3,367)
Total assets........................................ 968 2,258 6,875
Long-term debt, less current maturities............. 32 239 242
Total stockholders' deficit......................... (298) (2,678) (2,450)
</TABLE>
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
"Selected Financial Information" and the Company's Financial Statements and
Notes thereto included elsewhere in this Prospectus. Except for the historical
information contained herein, the discussion in this Prospectus contains
certain forward-looking statements that involve risks and uncertainties such
as statements of the Company's plans, objectives, expectations and intentions.
The cautionary statements made in this Prospectus should be read as being
applicable to all related forward-looking statements where they appear in this
Prospectus. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include those discussed in "Risk Factors" as well as those discussed elsewhere
herein.
OVERVIEW
LogistiCare provides non-emergency transportation management services to
government health and human service agencies and MCOs. The Company seeks to
establish itself as the central contact for three constituencies: third-party
payors, transportation carriers and individuals eligible for transportation
benefits ("Recipients"). The Company does not own any transportation carriers
or operate any vehicles for the transportation of individuals. The Company
provides services in which the Company coordinates, and through contracts with
unaffiliated transportation carriers provides, non-emergency transportation
for Recipients who are eligible to receive such transportation pursuant to
agreements with, or plans of, government health and human service agencies and
MCOs ("Brokerage Logistics"). In addition, a small percentage of the Company's
current revenues are generated from services in which the Company manages the
internal logistics requirements of independent transportation carriers and
carrier networks ("Service Bureau Logistics").
The Company was incorporated in March 1994 in Delaware, and subsequently
acquired perpetual and royalty-free rights to use, and exclusive rights to
modify and sublicense, RealTime, a computer-aided dispatch and transportation
logistics software system. During 1995, the Company realized its first
revenues through the performance of transportation management consulting
services and the resale of two-way land mobile radio equipment. In January
1996, the Company purchased all of the outstanding shares of Automated
Dispatch Systems, Inc. ("Systems") for a combination of cash, stock and debt
and subsequently merged Systems into itself. Systems' previous operations have
become the Company's Florida Operations Center. In May 1996, the Company
established its Connecticut Operations Center through which it provides non-
emergency transportation management services to various MCOs. In October 1997,
the Company established its Georgia Operations Center through which it
provides non-emergency transportation management services under three
contracts with the Georgia Department of Medical Assistance ("GDMA") with
respect to approximately 500,000 Medicaid beneficiaries in certain regions of
Georgia. These contracts were awarded in July 1997 pursuant to a competitive
bidding process. In November 1997, the Company was awarded the right, pursuant
to a competitive bidding process, to negotiate with the Connecticut Department
of Social Services ("CDSS") to provide non-emergency transportation management
services with respect to approximately 40,000 beneficiaries in certain regions
of Connecticut, and began providing such services in February 1998 through the
Connecticut Operations Center. The form of the contract between the Company
and the CDSS is currently subject to the approval of the Office of the
Connecticut Attorney General, which management believes will be obtained by
May 31, 1998.
The Company's revenues are generated principally from transportation
management services. The majority of these revenues are generated from
Brokerage Logistics contracts which are structured as capitated arrangements
under which the Company receives a fixed fee per eligible Recipient and, to a
lesser extent, fee-for-service arrangements under which the Company is paid a
predetermined amount per trip which includes the total cost of transportation.
The Company also generates revenues from Service Bureau Logistics contracts
under which the Company is compensated on a fee-for-transaction basis in which
the Company
17
<PAGE>
receives a payment for every transportation event processed. Revenues from
transportation management services accounted for 100% of total revenues in the
quarter ended March 31, 1998 and approximately 93.6% of total revenues in the
year ended December 31, 1997. Revenues under capitated contracts are
recognized over the capitation period, generally one month. Revenues earned
under fee-for-service and fee-for-transaction arrangements are recognized when
the service is provided.
The Company's operations for the three month period ended December 31, 1997
resulted in losses of $3,546,000 on total revenues of $6,789,000. This loss
was primarily the result of costs associated with the contracts between the
Company and the GDMA under which the Company began providing transportation
management services on October 1, 1997. Shortly after the Company began
performing under the GDMA contracts, management realized that the
transportation utilization requirements under these contracts were materially
greater than indicated by the utilization data that was provided to the
Company by the GDMA as part of the competitive bidding process. To address
this issue, the Company conducted a series of negotiations with the GDMA from
October 1997 through February 1998 that resulted in amendments to the original
contracts. The amendments provide for substantial price increases in the
capitated rates received by the Company for the period from February 1, 1998
to June 30, 1998, substantial price increases for each of the two one-year
contract renewal periods, and the modification of certain operating
requirements in favor of the Company.
The capitation rates during the two one-year contract renewal periods, while
substantially higher than the rates in effect from October 1997 through
January 1998, are 23% to 26% lower than the rates in effect for the five-month
period beginning February 1, 1998. As a result, management anticipates that
revenues under the contracts between the Company and the GDMA will be
substantially greater during the three-month periods ended March 31 and June
30, 1998 than any other quarter of the current contract period or the two
subsequent one-year contract renewal periods. The pricing structure negotiated
as part of the amendments to the original contracts was developed with a
higher capitation rate in the initial months to allow, among other things,
Company management the opportunity to implement operational changes to more
aggressively control utilization and negotiate lower prices with
transportation carriers.
The Company's most significant expenses are purchased transportation and
direct labor. Purchased transportation expenses are paid under capitated and
fee-for-service contracts. The Company either purchases transportation on a
per trip basis, or subcontracts with transportation carriers to gain access to
a certain number of vehicles for a fixed fee. Direct labor costs consist of
wages paid by the Company to customer service representatives and other
individuals servicing contracts. The Company's ability to control costs
associated with purchased transportation and direct labor will have the most
direct impact on profitability under current and future capitated and fee-for-
service contracts. The Company is subject to potential cost overruns and there
can be no assurance that the Company will maintain profitability under its
current or future contracts.
18
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected
statement of operations data as a percentage of revenues:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
--------------------- ---------------
1995 1996 1997 1997 1998
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation management services
.................................. -- 42.1% 93.6% 72.5% 100.0%
Related Party...................... -- 45.9% 5.3% 27.5% --
Other.............................. 100.0% 12.0% 1.1% -- --
----- ----- ----- ------ ------
Total revenues................. 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ------ ------
Operating expenses:
Purchased transportation........... -- 35.7% 97.4% 66.0% 81.1%
Direct labor....................... -- 32.4% 16.0% 27.1% 7.7%
Selling, general and
administrative.................... 79.4% 28.7% 23.2% 23.3% 9.3%
Other.............................. 48.5% 5.6% -- -- --
----- ----- ----- ------ ------
Total operating expenses......... 127.9% 102.4% 136.6% 116.4% 98.1%
----- ----- ----- ------ ------
Income (loss) from operations...... (27.9)% (2.4)% (36.6)% (16.4)% 1.9%
Other income (expense):
Interest income.................... -- -- 0.2% -- 0.2%
Interest expense................... (4.5)% (0.9)% (0.2)% (0.2)% (0.2)%
----- ----- ----- ------ ------
Net income (loss).................... (32.4)% (3.3)% (36.6)% (16.6)% 1.9%
===== ===== ===== ====== ======
</TABLE>
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Revenues. Total revenues increased 760.0% to $11,715,000 for the three month
period ended March 31, 1998 as compared to $1,362,000 for the same period for
1997. This increase was primarily a result of (i) revenues of $9,230,000 from
the contracts between the Company and the GDMA, and (ii) revenues of
$1,400,000 from the contract between the Company and the CDSS. Operations
under these contracts began producing revenues for the Company on October 1,
1997 and February 1, 1998, respectively. Total revenues from transportation
management services for the three months ended March 31, 1998 also reflect an
increase in the capitation rates under the GDMA contracts, effective February
1, 1998. After June 30, 1998, the capitation rates in effect under the GDMA
contracts will be 23% to 26% lower than rates in effect for the period prior
to July 1, 1998.
Purchased Transportation. The cost of purchased transportation increased
957.7% to $9,503,000 for the three month period ended March 31, 1998 as
compared to $899,000 for the same period for 1997. This increase was primarily
a result of the purchase by the Company of additional transportation services
as required to meet the Company's obligations under the GDMA and CDSS
contracts. As a percentage of revenues, purchased transportation increased to
81.1% for the three month period ended March 31, 1998 from 66.0% for the same
period in 1997 due, in large part, to the Company's increase in Brokerage
Logistics contracts.
Direct Labor. The cost of direct labor increased 144.1% to $902,000 for the
three months ended March 31, 1998 as compared to $369,000 for the same period
for 1997. This increase was primarily a result of the additional direct labor
required to meet the Company's obligations under the GDMA and DDSS contracts.
As a percentage of revenues, direct labor decreased to 7.7% for the three
month period ended March 31, 1998 from 27.1% for the same period in 1997 due,
in large part, to a change in product mix. The direct labor component required
under the GDMA and CDSS contracts is a smaller cost component as a percentage
of sales than contracts historically operated by the Company.
19
<PAGE>
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 242.1% to $1,089,000 for the three months
ended March 31, 1998 as compared to $318,000 for the same period for 1997.
This increase was primarily a result of the additional selling, general and
administrative expenses required to meet the Company's obligations under the
GDMA and CDSS contracts and increased marketing efforts. As a percentage of
revenues, selling, general and administrative expenses decreased to 9.3% for
the three month period ended March 31, 1998 from 23.3% for the same period in
1997, due to the Company's ability to support its growth without a
proportionate increase in associated costs.
COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1996
Revenues. Total revenues increased 216.3% to $11,502,000 for the year ended
December 31, 1997 as compared to $3,636,000 for the same period for 1996. This
increase was primarily a result of revenues of $5,272,000 from the contracts
between the Company and the GDMA. Operations under the GDMA contracts began
producing revenues for the Company in October 1997. Total revenues from the
sale of communications equipment decreased 100% for the year ended December
31, 1997 as compared to $226,000 for the same period for 1996. This decrease
resulted from the Company's decision in June 1997 to no longer engage in the
sale of communications equipment.
Purchased Transportation. The cost of purchased transportation increased
765.0% to $11,213,000 for the year ended December 31, 1997 as compared to
$1,296,000 for the same period for 1996. This increase was primarily a result
of the purchase by the Company of additional transportation services as
required to meet the Company's obligations under the GDMA contract. As a
percentage of revenues, purchased transportation increased to 97.5% for the
year ended December 31, 1997 from 35.7% for the same period in 1996 due, in
large part, to a change in a change in product mix. Further, the purchased
transportation required under the contracts between the Company and the GDMA
was significantly greater than indicated by the statistical data used to
develop the contract pricing. The Company conducted a series of negotiations
with the GDMA from October 1997 through February 1998 which resulted in an
increase in the pricing under the contracts beginning February 1, 1998 which
more closely reflects the demographic makeup of the Recipient population.
Direct Labor. The cost of direct labor increased 55.8% to $1,836,000 on for
the year ended December 31, 1997 as compared to $1,178,000 for the same period
for 1996. This increase was primarily a result of the additional direct labor
required to meet the Company's obligations under the GDMA contracts. As a
percentage of revenues, direct labor decreased to 16.0% for the year ended
December 31, 1997 from 32.4% for the same period in 1996 due, in large part,
to the Company's increase in Brokerage Logistics contracts. The direct labor
component required under the GDMA contracts is a smaller cost component as a
percentage of sales than contracts historically operated by the Company.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 155.6% to $2,665,000 for the year ended
December 31, 1997 as compared to $1,043,000 for the same period for 1996. This
increase was primarily a result of the additional selling, general and
administrative expenses, such as hiring additional employees, required to meet
the Company's obligations under the GDMA contracts and increased marketing
efforts. As a percentage of revenues, selling, general and administrative
expenses decreased to 23.1% for 1997 from 28.7% for the same period in 1996,
due to the Company's ability to support its growth without a proportionate
increase in associated costs and the Company's increase in Brokerage Logistics
contracts.
20
<PAGE>
SELECTED QUARTERLY RESULTS OF OPERATIONS
Set forth below are selected quarterly statement of operations data for the
five fiscal quarters ended March 31, 1998. This information is derived from
unaudited quarterly financial data which include, in the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of operating results for such periods. This
information should be read in conjunction with the Financial Statements and
related Notes thereto contained elsewhere in this Prospectus. Results of
operations for any quarter are not necessarily indicative of results for any
future period.
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31,
1997 1997 1997 1997 1998
--------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation
management services.. $ 987,519 $1,250,896 $1,740,561 $ 6,789,264 $11,714,962
Related Party......... 374,744 227,991 -- -- --
Other................. -- 131,000 -- -- --
--------- ---------- ---------- ----------- -----------
Total revenues....... 1,362,263 1,609,887 1,740,561 6,789,264 11,714,962
--------- ---------- ---------- ----------- -----------
Operating expenses:
Purchased
transportation....... 898,526 1,051,528 969,972 8,293,379 9,503,377
Direct labor.......... 369,471 374,879 413,322 677,833 901,837
Selling, general and
administrative....... 318,339 372,204 611,164 1,363,740 1,088,916
--------- ---------- ---------- ----------- -----------
Total operating
expenses............ 1,586,336 1,798,611 1,994,458 10,334,952 11,494,130
--------- ---------- ---------- ----------- -----------
Income (loss) from
operations.......... (224,073) (188,724) (253,897) (3,545,688) 220,832
Other income (expense):
Interest income....... -- 268 7,242 18,419 26,822
Interest expense...... (1,493) (5,540) (1,198) (19,306) (20,113)
--------- ---------- ---------- ----------- -----------
Net income (loss) ...... $(225,566) $ (193,996) $ (247,853) $(3,545,688) $ 227,541
========= ========== ========== =========== ===========
Revenues:
Transportation
management services.. 72.5% 77.7% 100.0% 100.0% 100.0%
Related Party......... 27.5% 14.2% -- -- --
Other................. -- 8.1% -- -- --
--------- ---------- ---------- ----------- -----------
Total revenues....... 100.0% 100.0% 100.0% 100.0% 100.0%
--------- ---------- ---------- ----------- -----------
Operating expenses:
Purchased
transportation....... 66.0% 65.3% 55.7% 122.1% 81.1%
Direct labor.......... 27.1% 23.3% 23.7% 10.0% 7.7%
Selling, general and
administrative....... 23.3% 23.1% 35.2% 20.1% 9.3%
--------- ---------- ---------- ----------- -----------
Total operating
expenses............ 116.4% 111.7% 114.6% 152.2% 98.1%
--------- ---------- ---------- ----------- -----------
Income (loss) from
operations (16.4)% (11.7)% (14.6)% (52.2)% 1.9%
Other income (expense):
Interest income....... -- % -- % 0.4% 0.3% 0.2%
Interest expense...... (0.1)% (0.3)% (0.1)% (0.3)% (0.2)%
--------- ---------- ---------- ----------- -----------
Net income (loss) ...... (16.6)% (12.1)% (14.2)% (52.2)% 1.9%
========= ========== ========== =========== ===========
</TABLE>
21
<PAGE>
The Company's revenues and operating results are subject to significant
variation from quarter to quarter depending on a number of factors, including
the commencement and completion of contracts during any particular quarter,
schedules of the customers awarding the contracts, and period to period
changes in contract pricing. See "Risk Factors."
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, and the years ended December 31, 1997 and 1996 the
Company had $3,681,000, $640,000 and $71,000 respectively, in cash and cash
equivalents. The Company's principal sources of liquidity as of March 31,
1998, and the years ended December 31, 1997 and 1996 consisted of cash and
cash equivalents and net accounts receivable of $5,686,000, $1,155,000 and
$536,000, respectively.
The Company's working capital deficit as of March 31, 1998 and December 31,
1997 was $3,367,000 and $3,519,000, respectively, and the ratio of current
assets to current liabilities was 0.63:1 and 0.25:1 on such dates,
respectively. The working capital deficit at both dates related to the
Company's contracts to provide Brokerage Logistics services to the GDMA. As of
March 31, 1998 and December 31, 1997, the Company had $4,229,000 and
$1,250,000, respectively, of deferred revenue in respect of such contracts.
The Company recognized $2,256,927 as revenue in respect of such amounts in the
first quarter of 1998 and expects to recognize the balance thereof in the
second quarter of 1998. The working capital deficit as of December 31, 1997
was also due to expenses incurred in the quarter then ended as the Company
commenced the performance of services under the GDMA contracts.
Cash provided by operating activities for the three months ended March 31,
1998 was $3,148,000 which primarily reflects net income for the quarter and
deferred revenue of $3,209,000. Cash used in operating activities of $213,000
for the year end December 31, 1997 was affected by increased deferred revenue
of $1,119,000, a net loss, and non-cash items.
The Company has financed its growth, capital expenditures and working
capital needs since inception through a combination of private placements of
capital stock, short-term borrowing from stockholders, and issuance of
promissory notes. The Company anticipates obtaining a $1 million revolving
line of credit with a bank in the near term.
The Company's principal commitments as of March 31, 1998 were leases on its
facilities. The Company's principal capital needs are for working capital and
the expansion of its business. The Company believes that the net proceeds from
the sale of Common Stock offered hereby, together with funds generated by
operations, will provide adequate cash to fund its operations for at least the
next 18 months, which may include start-up costs associated with new contract
awards, obtaining additional office space, establishing new offices, expanding
marketing efforts, purchasing computer and telephone equipment, developing
software enhancements and providing collateral security for performance bonds
in connection with new contracts.
REIMBURSEMENT RATES
The health care industry is experiencing a trend toward cost containment as
third-party payors seek to obtain lower reimbursement and utilization rates
with health care providers. Further reductions in payments to health care
providers or other changes in reimbursement for health care services could
adversely affect the Company's business and results of operations.
YEAR 2000 COMPLIANCE
The Company believes that its computer systems are currently Year 2000
compliant. The Company does not anticipate any material disruption in its
operations as a result of any failure by the Company to be in compliance. The
Company does not have any information concerning the Year 2000 compliance
status of its clients or the transportation carriers with whom it contracts.
22
<PAGE>
BUSINESS
LogistiCare manages non-emergency transportation services for government
health and human service agencies and managed care organizations ("MCOs"). The
Company seeks to establish itself as the central contact for three
constituencies: third-party payors, transportation carriers and individuals
eligible for transportation benefits ("Recipients"). The Company believes that
its management expertise and RealTime software system enable it to provide
sophisticated and efficient transportation management services. The Company
currently conducts its business through centralized Operations Centers in
Georgia, Florida and Connecticut, and intends to expand into selected new
regional markets.
The Company's Brokerage Logistics services, contracted under both capitated
and, to a lesser extent, fee-for-service arrangements, provide third-party
payors with an outsourcing alternative for their transportation requirements.
These services include: processing requests for transportation from
Recipients, determining their eligibility for such services, coordinating and
purchasing transportation, reporting encounter data and performing other
logistical and quality-assurance activities associated with non-emergency
transportation. The Company does not own or operate any vehicles for the
transportation of individuals. Instead, the Company establishes cost-effective
networks of carriers by selecting and negotiating with qualified
transportation carriers within each region under contract. Such independent
transportation carriers are assisted and evaluated by the Company on an
ongoing basis to ensure conformity with the Company's quality standards.
INDUSTRY OVERVIEW
The provision of non-emergency transportation to the poor, elderly,
handicapped and other Recipients among residences, nursing homes, hospitals,
workplaces, retail outlets and other sites is subsidized by third-party payors
in certain circumstances. Third-party payors include both government entities,
such as state agencies that administer Medicaid programs, programs that
provide transportation mandated by the Americans with Disabilities Act,
programs that implement welfare-to-work initiatives and private payors, such
as MCOs, that provide non-emergency transportation benefits to commercial and
Medicare beneficiaries.
Currently, in geographic markets in which the Company does not operate, non-
emergency transportation is provided in large measure through a fragmented
delivery system consisting primarily of small transportation companies that
frequently provide only one class of service (e.g., ambulatory, wheelchair or
ambulance) to local markets. In a typical transaction, an individual schedules
a trip with a transportation carrier who subsequently submits a receipt for
the cost of the trip to a third-party payor for reimbursement. The Company
believes that this system is highly inefficient and provides no incentive to
manage utilization or contain costs, while at the same time providing an
opportunity for abuses by passengers and transportation carriers that the
Company believes are difficult for third-party payors to effectively identify
and prevent.
The Company believes that the growing demand for non-emergency
transportation, combined with third-party payors' increasing dissatisfaction
with the current system, has created the need for a more sophisticated
alternative to manage utilization and contain costs while providing
transportation services at or above existing levels of quality. The Company
believes that government agencies, MCOs and other third-party payors will
increasingly turn to third parties, such as the Company, that are independent
of transportation carriers to coordinate and manage all classes of non-
emergency transportation services.
STRATEGY
The Company's goal is to become the nation's leading provider of non-
emergency transportation management services to government agencies, MCOs and
other third-party payors by establishing itself as the
23
<PAGE>
central contact for three constituencies: third-party payors, transportation
carriers and Recipients. Key components of the Company's strategy for
achieving these objectives include:
Build Recurring Revenue. The Company seeks to generate recurring revenue by
entering into long-term arrangements with third-party payors, including
government agencies and MCOs, to provide transportation management services.
The Company believes that the quality of its services and advanced software
system will enable it to attract such payors, and that there are opportunities
to acquire from transportation carriers existing management service contracts
with other payors. Once the Company has entered into such arrangements or
acquired such contracts, these factors, combined with the inherent costs of
switching to another organization, will enable it to retain these clients.
Expand Within New and Existing Regional Markets. Through the establishment
of additional Operations Centers, the Company can efficiently expand its
capabilities within existing markets as well as enter new regional markets.
The Company has developed an implementation program that allows it to quickly
and inexpensively establish Operations Centers. As a result, the Company is
able to negotiate and execute a contract in a new market before it begins
incurring the costs of operating a center in that market. The Company has
demonstrated the ability to open new Operations Centers in less than 45 days
for a cost of under $400,000 per center.
Pursue Long-Term Capitated Contracts. The Company believes that government
agencies, MCOs and other third-party payors are increasingly looking to
outsource transportation management services on a capitated basis to third
parties, such as the Company, who are independent of transportation carriers.
The Company believes that its advanced software system, management expertise
and access to a substantial Recipient database enable it to accurately assess
and profitably manage these contracts.
Create Networks of Transportation Carriers. The Company coordinates and
manages transportation services through a network of unaffiliated
transportation carriers. The Company's contracts with government agencies and
MCOs enable it to gain financial control over purchasing transportation
services from local transportation carriers. As a result, the Company can
negotiate favorable long-term arrangements with the carriers it selects and
establish cost-effective networks of carriers in each region. This also
enables the Company to more effectively manage the quality and cost of
services provided to Recipients.
Realize Operational Efficiencies. As part of opening each new Operations
Center, the Company undergoes an extensive training program with its customer
service representatives and transportation carriers, which allows the Company
to recognize operational efficiencies over time. For example, a new customer
service representative can typically process 70 requests for transportation
per day. After 90 days of employment, the same customer service representative
is typically able to process 130 requests for transportation per day.
Similarly, the Company is able to use the initial results from an Operations
Center to refine its Recipient utilization database and provide more cost-
effective services. The Company believes that these efforts allow it to
provide high-quality services, to better leverage its personnel,
transportation carrier network and database resources and to improve
profitability.
TRANSPORTATION MANAGEMENT SERVICES
The Company believes that it has been a pioneer in offering government
agencies and MCOs an outsourcing alternative for managing transportation
services on a capitated basis. The Company believes that its current clients
benefit from, and its prospective clients will be attracted by, the following
strengths and differentiating characteristics:
. Capitation Contracts. The Company believes that by offering services on
a capitated basis, it allows clients to contain costs and minimize risks
associated with fluctuation in volume of transportation requests.
. Centralized Function. The Company serves as a central contact for third-
party payors, transportation carriers and Recipients. The Company
contracts with both third-party payors that have transportation-related
needs and with a selected network of transportation carriers that will
24
<PAGE>
service such needs. The geographic area covered by the third-party payor
contract is generally larger than most transportation carriers could
service individually. The Company coordinates the provision of such
services to the Recipients in a cost-effective and efficient manner.
. Quality Assurance Services. The Company provides services such as driver
and attendant training, vehicle mechanical and safety maintenance
monitoring, utilization reporting for program assessment, and federal
and state reporting compliance assessment to ensure that the highest
quality of service is furnished by transportation carriers and that
third-party payors receive the maximum benefit.
. Enhanced Perception of Health Care Services. The Company believes that a
Recipient's perception of the health care services that he or she
receives is enhanced by the Company's provision of reliable, courteous
and appropriate transportation to and from medical appointments, which
reduces defections by Recipients to other MCO plans and contributes to
an MCO's ability to attract enrollees.
. Technical Resources and Expertise. The Company believes it has the
technical resources and expertise necessary to manage large and complex
transportation programs efficiently while controlling costs. In
addition, the Company believes that its software system, RealTime,
allows it to more efficiently process and effectively analyze data and,
therefore, to provide more sophisticated transportation management
services than independent transportation carriers.
The Company provides two principal types of transportation management
services: (i) Brokerage Logistics and (ii) Service Bureau Logistics.
Brokerage Logistics
The Company principally offers non-emergency transportation management
services to government agencies, MCOs and other third-party payors in which the
Company coordinates and purchases transportation for Recipients. The Company's
broad range of services includes: processing requests for transportation from
Recipients, determining their eligibility for such services, coordinating and
purchasing transportation, reporting encounter data and performing other
logistical and quality assurance services associated with non-emergency
transportation. Transportation is furnished to Recipients pursuant to contracts
between the Company and independent transportation carriers that are selected,
assisted and evaluated on an ongoing basis. The Company does not own any
transportation carriers or operate any vehicles itself. The Company is
compensated for these services primarily on a capitated basis and, to a lesser
extent, on a fee-for-service basis.
The Company uses RealTime to monitor and analyze Recipient usage within the
service limitation parameters, which allows the Company to quickly identify and
prevent unauthorized travel. The Company's projection of the costs to be
incurred in servicing a contract is based upon, among other considerations,
relevant demographic information relating to the covered population, including
number of potential Recipients, age, residence distance from medical facilities
and information derived from their collective medical histories, as well as the
contractual conditions that restrict actual travel. Through use of its
proprietary database and independent research of publicly-available resources,
the Company believes that it can properly analyze the cost implications of the
various demographic considerations and contractual conditions applicable to
capitated contracts. Certain demographic information relating to the covered
population and used by the Company in its analysis of projected costs generally
is made available to the Company by the government agency or MCO that is
soliciting proposals.
Currently, the Company has eight contracts to provide Brokerage Logistics for
government agencies and MCOs covering approximately 700,000 persons who are
eligible under certain circumstances for some type of transportation benefits.
Three of the Company's largest contracts by revenue are with the Georgia
Department of Medical Assistance ("GDMA"). Under these contracts, the Company
coordinates and administers non-emergency transportation services with respect
to approximately 500,000 individuals in the Central, Southwest and East
25
<PAGE>
regions of Georgia who are eligible for such services under the Georgia
Medical Assistance Program (Medicaid). To ensure that transportation resources
are used in conformance with Medicaid guidelines, each contract contains
specific service parameters and Recipient eligibility criteria. The Company is
compensated for these services on a monthly basis based on negotiated
capitated rates. Each of these contracts expires on June 30, 1998 and is
subject to two successive one year options to renew, exercisable solely by the
GDMA in its discretion. Following June 30, 1998, capitation rates under the
GDMA contracts will be 23% to 26% lower than the rates in effect from February
1, 1998 through June 30, 1998. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation--Overview." The GDMA may
terminate these contracts in certain circumstances, including if it determines
that such termination is in the State of Georgia's best interest or that
sufficient funds no longer exist to pay its obligations under such contracts.
The Company also has entered into one contract with the Connecticut
Department of Social Services ("CDSS"), the form of which is currently subject
to approval of the Office of the Connecticut Attorney General. Under this
contract, the Company coordinates and administers non-emergency transportation
services with respect to approximately 40,000 individuals in the South West
and South Central regions of Connecticut who are eligible for such services
under the Connecticut Medicaid and General Assistance Programs and who are not
enrolled in a Medicaid Managed Care plan. To ensure that transportation
resources are used in conformance with Medicaid guidelines, this contract
contains specific service parameters and Recipient eligibility criteria. The
Company is compensated for these services on a monthly basis based on
capitated rates resulting from the RFP bidding process and the CDSS' estimate
of monthly enrollment and transportation costs that would otherwise be
incurred on a fee-for-service basis. The CDSS contract expires on January 31,
1999 and is subject to two successive one year options to renew, exercisable
solely in the discretion of the CDSS. The CDSS contract is terminable by the
CDSS upon 90-days notice to the Company for any reason, and upon lesser notice
to the Company in certain circumstances, and the CDSS may terminate the
contract or reduce the contracted amount of compensation at any time in the
event that sufficient funds no longer exist to pay its obligations.
Service Bureau Logistics
The Company also offers transportation management services directly to
independent transportation carriers and carrier networks where the Company
manages the internal logistics requirements of the carrier or carrier network.
The Company is compensated for these services on a fee-for- transaction basis
(i.e., based on a fixed fee for each trip administered by the Company).
Currently, the Company provides Service Bureau Logistics only through its
Florida Operations Center. The Company has three contracts under which it
manages and administers the order entry, radio dispatching, routing,
accounting, billing and other internal logistics and quality-assurance
activities for local transportation carriers that furnish non-emergency
transportation to Medicaid beneficiaries and MCO members. During 1997, the
Company managed approximately 1,300,000 trips for these clients, which
generated approximately $18,000,000 in revenues for such clients.
INFORMATION TECHNOLOGY
The Company uses a proprietary software system, RealTime, to assist in the
management of transportation services. RealTime contains the program modules
necessary for the Company to integrate, and provide the services associated
with, each element of its transportation management services. These modules
are as follows: order entry, dispatch, routing, operations control and
analysis, graphical mapping, mobile data control and external interface
facility.
Currently, RealTime processes approximately 18,000 calls from Recipients per
day through the Company's three Operations Centers. RealTime performs all of
the operation functions associated with the delivery of non-emergency
transportation services on a demand basis and, in the past, has been used by
the
26
<PAGE>
Florida Operations Center to manage ambulance services. However, the Company
intends to limit its application primarily to services relating to the
transportation of individuals in connection with their receipt of non-
emergency medical care. The Company believes that RealTime's sophistication
and focus on services relating to the transportation of Recipients gives the
Company a competitive advantage in this market.
The Company intends to expand RealTime's capability to (i) establish
telephonic interface, thereby improving customer service representative
efficiency, (ii) enhance internet integration, better enabling transportation
providers and Recipients to access scheduling and other information, and
better enabling client payors to access the Company's utilization and customer
service data regarding relevant Recipients, and (iii) enlarge its database
capacity to provide greater data management and analysis capabilities.
RealTime was developed under the supervision of the Company's President,
John Shermyen, prior to his employment with the Company. In 1994, the Company
acquired perpetual and royalty-free rights to use, and exclusive rights to
modify and sublicense, RealTime from the developer of the software system. The
developer has no right to further license RealTime for any purpose. RealTime
has been licensed to a limited number of transportation providers and others
for single site usage, without rights of modification or sublicense. A former
affiliate of TGIS Partners holds 28 end-user licenses of RealTime and has the
right to resell these licenses. See "Certain Transactions."
PRINCIPAL MARKETS SERVED
Medicaid
Medicaid, which is jointly funded by federal and state governments and
administered by state governments, represents the largest program providing
health care related services to poor residents of the United States. Most
state Medicaid programs provide beneficiaries with transportation to and from
medically necessary appointments. In 1995, the Medicaid beneficiary population
was 32.6 million. It is estimated that Medicaid outlays by the Federal and
state governments in 1995 totaled $155.1 billion, of which the Company
estimates 1.5%, or $2.3 billion, was expended for transportation and
transportation management services.
MCOs
MCOs are managed health care companies that typically provide a
comprehensive range of health care services to individuals, employers and
association groups. Many MCO plans include some level of non-emergency
transportation services to medical facilities as a benefit for its enrolled
members. The Company believes that MCOs increasingly view transportation as an
attractive enrollment incentive for Medicare beneficiaries who are not
otherwise entitled to such services under Medicare. To control the increasing
costs of Medicare, the Federal government has encouraged, but not required,
Medicare beneficiaries to enroll in MCO plans. The MCOs compete for Medicare
enrollees on the basis of many factors, including their reputation for quality
services, reduced co-payments and availability of greater benefits, such as
transportation to and from medical facilities. The Company believes that, by
offering transportation management services on a capitated basis, it is well-
positioned to support the marketing efforts of MCOs and provide a cost-
effective outsourcing alternative for the management of transportation
services.
Carrier and Carrier Networks
The Company believes that its management expertise, advanced software system
and its ability to leverage these resources presents a cost-effective
alternative to transportation carriers and carrier networks to outsource
transportation management services. Once the Company has established an
Operations Center in a regional market, local carriers and carrier networks
may elect to utilize the Company's Service Bureau Logistics to manage their
internal logistics requirements. This represents an attractive opportunity for
the Company to expand its Service Bureau Logistics business without incurring
significant fixed costs and with little incremental operating expenses.
27
<PAGE>
Carrier and carrier networks who are potential clients of the Company's
Service Bureau Logistics business include taxi, limousine, ambulance,
ambulette and coach operators. The International Taxi Livery Association
reports that the U.S. market for taxi and limousine services is approximately
$4.5 billion annually. The American Ambulance Association estimates that the
U.S. market for ambulance and ambulette services is approximately $7.0 billion
annually. The Company believes that transportation logistics for both of these
markets accounts for 10% of the total market, or approximately $1.2 billion,
annually.
SALES AND MARKETING
Government Agencies
The Company pursues contracts from state and local authorities by responding
to RFPs issued by such authorities. Whenever possible, prior to the issuance
of an RFP, the Company's senior executives meet with senior government
representatives, such as heads of health and human service agencies, to
encourage them to outsource their transportation-related service requirements.
When an RFP is issued by a government agency, the agency ordinarily seeks
comments on the RFP from potential service providers. The Company usually
participates in the comment process, taking the opportunity to demonstrate its
knowledge and understanding of the market to help shape the RFP. Following the
comment period, the RFP is reissued in modified form. In all cases in which
the Company has responded to an RFP, the contracting government agencies have
advised the Company that they gave greater weight to factors, such as the
experience and technical qualifications of the proposed service providers,
than to comparative costs.
MCOs
The Company pursues contracts with MCOs through direct contact by senior
executives of the Company with the marketing and member services personnel of
such organizations. Prospective client MCOs are identified by the Company on
the basis of total number and concentration of enrolled members in a
geographic area. The Company obtains from prospective client MCOs data that
helps it to make a detailed proposal directed to the cost-savings and
marketing opportunities represented by the Company's Brokerage Logistics
Services and capitated contract approach.
OPERATIONS CENTERS
The Company's centralized Operations Centers are designed to maximize
efficiency, reliability and effectiveness. In each Operations Center, incoming
calls from Recipients requesting transportation services are routed through an
automatic call director that optimizes call queuing and records all
communications with digital taping equipment to create a verbal record for the
purposes of accountability and message verification. Customer service
representatives convert requests for transportation into orders that they
enter, through a computer keyboard at each work station, into the RealTime
system to maintain a computerized record of all transportation-related
activities managed by the Operations Center. Requests requiring immediate
attention are automatically routed to the dispatch area or to mobile data
terminals, as appropriate. Reservations for next-day or later transportation
are analyzed for optimal routing, stored, and electronically transferred to
transportation carriers daily to create vehicle manifests for the following
day.
The following table sets forth the location of the Company's primary
Operations Centers and the type of services provided by the Company, the basis
for compensation for such services, the approximate number of eligible
Recipients serviced and the approximate number of trips processed per month
through each Operations Center.
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
NUMBER OF NUMBER OF
TYPE OF SERVICE COMPENSATION ELIGIBLE TRIPS PROCESSED
OPERATIONS CENTER PROVIDED BASIS RECIPIENTS PER MONTH
----------------- ------------------------ ------------------- ----------- ---------------
<S> <C> <C> <C> <C>
College Park, Georgia Brokerage Logistics Capitation 500,000 165,000
Yalesville, Connecticut Brokerage Logistics Capitation, 200,000 50,000
Fee-for-Service
Miami, Florida Service Bureau Logistics Fee-per-Transaction N/A 110,000
</TABLE>
28
<PAGE>
POTENTIAL NEW MARKETS
In addition to its current markets, the Company believes that there is
significant potential presented by the Americans with Disabilities Act (the
"ADA") and recent "welfare-to-work" initiatives.
Americans with Disabilities Act. The ADA requires municipalities to give
disabled persons equal access to public transportation or provide
complementary paratransit services. Under the ADA, those communities that
offer public transportation must furnish handicapped-accessible transportation
to all individuals who are eligible under ADA guidelines and who live within
3/4 mile of a public transit route. The Company believes that a number of
municipalities will comply with this law by contracting with the private
sector for carrier service and related transportation logistics. In 1995,
approximately 25 million people were eligible for assistance under the ADA.
The Company estimates that expenditures in that year for ADA-related
transportation totaled $1.1 billion and will increase substantially as
additional municipalities come into compliance. The Company intends to
capitalize on this market by contracting with municipalities to provide
Brokerage Logistics and Service Bureau Logistics for the transportation of ADA
eligible individuals.
Welfare-to-Work Initiatives. Legislation also has been adopted or is
proposed in a number of states to compel welfare recipients to work as a
condition of their receiving continuing benefits. Government furnished or
subsidized transportation to and from the workplace is an element of some of
this legislation. The Company intends to capitalize on this market by
contracting with states to provide services as contemplated by such
legislation on a fee-for-service basis.
GOVERNMENT REGULATION AND SUPERVISION
The delivery of health care services is regulated at both the federal and
state levels. As a participant in the health care industry and as a result of
its involvement with Medicare, Medicaid and other third party payors, the
Company's operations and relationships are subject to extensive and increasing
regulation by a number of governmental entities at the federal, state and
local levels. The laws applicable to the Company are subject to evolving
interpretations, and therefore there can be no assurance that a review of the
Company's operations by federal or state judicial or regulatory authorities
would not result in a determination that the Company has violated one or more
provisions of federal or state law. Any such determination could have a
material adverse effect on the Company.
False and Improper Claims. Under numerous federal laws, including the
Federal False Claims Act (the "False Claims Act"), the federal government is
authorized to impose criminal, civil and administrative penalties on any
health care provider that files a false claim for reimbursement from a federal
health care program. A "federal health care program" is any plan or program
that provides health benefits, whether directly, through insurance, or
otherwise, which is funded directly, in whole or in part, by the United States
Government (e.g., Medicare, Medicaid, and CHAMPUS). Excluded from the
definition of federal health care program is the Federal Employee Health
Benefits Program. The False Claims Act provides for a civil penalty of not
less than $5,000 and not more than $10,000 per false claim and between two or
three times the amount of damages depending on the facts and circumstances.
Recently enacted federal legislation also imposes federal criminal penalties
on persons who file false or fraudulent claims with private insurers. While
the criminal statutes are generally reserved for instances of fraud, the civil
and administrative penalty statutes are being applied by the government in an
increasingly broad range of circumstances. Civil sanctions may be imposed if
the claimant knew or should have known that billing was improper. The
government also has taken the position that claiming reimbursement for
services that are substandard is a violation of these false claims statutes if
the claimant knew or should have known that the care was substandard or
rendered under improper circumstances. Private persons may also bring civil
actions to enforce the False Claims Act under a qui tam or "whistle-blower"
action. If successful, the qui tam plaintiff may receive a percentage of the
government's recovery thereby increasing the incentive for such suits. Under
certain lower court decisions, claims derived from a violation of the Anti-
Kickback Statute (as defined herein) have been deemed to be, or may under
certain circumstances be construed to be, false claims.
29
<PAGE>
The risk of exposure to civil actions under the False Claims Act exists
whether the contractual arrangement is fee-for-service or capitated. In a fee-
for-service system, the government has and continues to prosecute health care
providers alleging that health care providers overutilized the services and
committed fraudulent activities which include, but are not limited to, billing
for services never rendered, fictitious enrollment and illegal solicitations
and remunerations. While utilizing a managed care capitated payment system may
reduce the risks of overutilization and certain fraudulent activities, the
government is similarly active in prosecuting providers who are providing
services through a capitated arrangement and alleging claims of
underutilization and other types of fraudulent activities, including
fraudulent subcontracts and kickbacks. Furthermore, under federal law, an
entity which is found to submit requests for payment for claims which involve
excessive charges or unnecessary services or which fails to furnish medically
necessary services may be excluded from participating in a federal health care
program.
Non-emergency transportation is one of many services identified by states
and the Office of Inspector General ("OIG") as being a source of fraud and
abuse activity in the Medicaid program. Several states have reported a variety
of fraudulent activities which include billing Medicaid for more miles than
actually provided, billing Medicaid for trips never provided, and billing for
Medicaid covered transportation when the beneficiaries had other means of
transportation. Because these states concluded that such activities result in
increasing non-emergency transportation costs, the Health Care Financing
Administration ("HCFA") created a Medicaid Transportation Technical Advisory
Group to study how such services can be provided more efficiently and the
states themselves are intensifying their scrutiny of non-emergency
transportation claims. Such allegations of fraud and abuse and the resulting
increasing costs have led members of Congress to consider eliminating non-
emergency transportation as a covered Medicaid service. The OIG has
recommended that states use brokers, such as the Company, where appropriate to
help manage non-emergency transportation.
Federal Anti-Kickback Statute. A federal law commonly known as the "Anti-
Kickback Statute" prohibits the offer, solicitation, payment or receipt of
anything of value (direct or indirect, overt or covert, in cash or in kind)
which is intended to induce business for which payment may be made under a
federal health care program. The type of remuneration covered by the Anti-
Kickback Statute is very broad. It includes not only kickbacks, bribes and
rebates, but also proscribes any such remuneration, whether made directly or
indirectly, overtly or covertly, in cash or in kind. Moreover, prohibited
conduct includes not only remuneration intended to induce referrals, but also
remuneration intended to induce the purchasing, leasing, arranging or ordering
of any goods, facilities, services, or items paid for by a federal health care
program. The Anti-Kickback Statute has been interpreted broadly by a number of
courts to prohibit remuneration that is offered or paid for otherwise
legitimate purposes if one purpose of the payment is to induce referrals.
Payments in return for participating in a network may, under certain
circumstances, be deemed to violate the Anti-Kickback Statute. Many states,
including those in which the Company does business, have adopted similar
prohibitions against payments intended to induce referrals of Medicaid and
other third-party payor patients.
In part to address concerns regarding the implementation of the Anti-
Kickback Statute, the federal government has published regulations that
provide exceptions or "safe harbors" for certain transactions that are deemed
not to violate the Anti-Kickback Statute. Among the safe harbors included in
the regulations are transactions involving discounts offered to health plans
by providers, such as ambulance companies. Congress recently added a
significant new statutory exception related to "remuneration between an
organization and an individual or entity" if the organization is a Medicare
risk contracting organization or if the remuneration is provided pursuant to a
written agreement that places the individual or entity at substantial
financial risk for the cost or utilization of services. Regulations
implementing the foregoing statute have not yet been adopted, but are expected
to be enacted soon. Based on the Company's relationship with providers, the
Company may not satisfy all the requirements necessary to qualify for
protection under the safe harbor regulations described above. The failure of
an activity to qualify under a safe harbor provision, while potentially
leading to greater regulatory scrutiny, does not render the activity
automatically illegal under the Anti-Kickback Statute. Conduct falling outside
the safe harbors will be judged by government regulators on a case-by-case
basis based on the specific facts and circumstances.
30
<PAGE>
To the extent the Company is deemed to be a referral source, the financial
arrangements under such agreements could be subject to scrutiny and
prosecution under the Anti-Kickback Statute. Each offense under the Anti-
Kickback Statute is classified as a felony and is punishable by a criminal
fine of up to twenty-five thousand dollars ($25,000) and/or imprisonment of up
to five (5) years; a civil money penalty of fifty thousand dollars ($50,000)
for each violation and/or civil damages of not more than three times the total
amount of remuneration offered, paid, solicited or received may be imposed
without regard to whether any portion of such remuneration was for a lawful
purpose. Both the offeror and the recipient of the illegal remuneration are
potentially liable. In addition, violators are subject to exclusion from
participation in the federal health care programs, regardless of whether they
also have been convicted under the criminal penalty provisions or have been
found liable under the civil monetary penalty provisions of the Anti-Kickback
Statute. Also, there is a risk that, in a civil lawsuit to enforce a contract
that contains a structure in violation of the Anti-Kickback Statute, a court
might conclude that the contract is unenforceable as against public policy.
There are several aspects of the Company's arrangements to which the Anti-
Kickback Statute may be relevant. For example, the government may construe
some of the Company's managed care contracting activities as arranging for the
referral of patients to the entities with whom the Company is providing non-
emergency transportation management services.
As a component of the recently enacted HIPAA, Congress directed the
Secretary of the U.S. Department of Health and Human Services to issue
advisory opinions regarding compliance with the Anti-Kickback Statute. The
advisory opinion mechanism is authorized for a trial period, beginning six
months after the date of enactment, August 21, 1996. Advisory opinions are
available concerning what constitutes prohibited remuneration within the
meaning of the Anti-Kickback Statute, whether an arrangement satisfies the
statutory exceptions to the Anti-Kickback Statute, whether an arrangement
meets a safe harbor, what constitutes an illegal inducement to reduce or limit
services to individuals entitled to benefits covered by the Anti-Kickback
Statute, and whether an activity constitutes grounds for the imposition of a
civil or criminal penalty under the applicable exclusion, civil money penalty
and criminal provisions. Advisory opinions, however, will not assess fair
market value for any goods, services or property or determine whether an
individual is a bona fide employee within the meaning of the Internal Revenue
Code. The statutory language makes clear that advisory opinions are available
for both proposed and existing arrangements. The failure of a party to seek an
advisory opinion, however, may not be introduced into evidence to prove that
the party intended to violate the Anti-Kickback Statute. The Company has not
sought, and has no present intention to seek, an advisory opinion regarding
any aspect of its current operations or arrangements and physicians.
State Fraud and Abuse Laws. Numerous states have adopted laws that are
substantially similar to the federal Anti-Kickback Statute, and a few have
enacted laws similar to the False Claims Act. Virtually all states prohibit
false claims and fraudulent billing practices connected with insurance
payments, and impose substantial penalties for such insurance fraud.
Insurance Laws. Laws in all states regulate the business of insurance and
the operation of MCOs. Many states also regulate the establishment and
operation of networks of health care providers as well as utilization review
and claims adjudication activities. While these laws do not generally apply to
companies that provide management services to government agencies, MCOs and
transportation carriers, they have been construed in some states to apply to
companies which provide management services to physician networks,
particularly if there is an assumption of risk for the provision of services,
and there can be no assurance that regulatory authorities of the states in
which the Company operates would not apply these laws to require licensure of
the Company's operations as an insurer, as an MCO, as a provider network or
other regulated entity. The Company believes that its proposed operations are
in compliance with these laws in the states which it currently does business,
but there can be no assurance that future interpretations of insurance and
health care network laws by regulatory authorities in these states or in the
states into which the Company may expand will not require licensure or a
restructuring of some or all of the Company's operations.
The National Association of Insurance Commissioners ("NAIC"), a non-binding
advisory group, in 1995 endorsed a policy proposing the state regulation of
risk assumption by providers and opined that certain risk-
31
<PAGE>
transferring arrangements may entail the business of insurance, to which state
licensure laws apply, but that licensure laws should not apply where an
unlicensed entity contracts to assume "downstream risk" from a duly licensed
health insurer or MCO for health care provided to that carrier's enrollees.
The policy proposes prohibiting providers from entering into capitated payment
or other risk sharing contracts except through MCOs, insurance companies or
other regulated entities. Several states have adopted legislation or
regulations implementing the NAIC policy in some form. In some states where
such legislation or regulations have been adopted, health care providers are
precluded from entering into capitated contracts directly with employers,
individuals and benefit plans unless they qualify to do business as MCOs or
insurance companies. The Company may not be deemed a health care provider, in
which case it may still be subject to licensure as an insurance company but
may be able to accept downstream risk from other entities, such as state
government agencies.
FEDERAL AND STATE INITIATIVES
Fraud and Abuse. In the recently enacted 1997 Budget Bill and HIPAA,
Congress has responded to perceived fraud and abuse in the Medicare and
Medicaid programs. Such legislation has fortified the government's enforcement
authority with increased resources and greater civil and criminal penalties
for offenses. The Company anticipates that there will be further restrictive
legislative and regulatory measures to reduce fraud, waste and abuse in the
Medicare and Medicaid programs. Due to uncertainties regarding the ultimate
features of reform initiatives and their enactment and implementation, the
Company cannot predict which, if any, of such reform proposals will be
adopted, when they may be adopted or what impact they may have on the Company.
Numerous Reform Initiatives. The Company anticipates that Congress and state
legislatures will continue to review and assess alternative health care
delivery and payment systems. In addition to extensive government health care
regulations, there are numerous initiatives on the federal and state levels
for comprehensive reforms affecting the payment for, and availability of,
health care services. These initiatives include reductions in Medicare and
Medicaid payments, trends in adopting managed care for Medicare, Medicaid and
workers' compensation patients, and regulation of entities that provide
managed care.
FACILITIES
The Company's headquarters are located in College Park, Georgia in a 2,075
square foot suite leased by the Company in an office building. The Company
conducts its operations from three leased Operations Centers in College Park,
Georgia, Yalesville, Connecticut and Miami, Florida, totaling 11,545 square
feet. The Company also utilizes two leased field offices in Savannah and
Albany, Georgia to support the Georgia Operations Center, totaling 3,700
square feet. The lease terms vary from 1 to 5 years, with options to renew,
and are at market rates. The Company intends to lease an additional space in
College Park, Georgia for its operations. The Company believes that its
facilities are well-maintained and in good operating condition and, together
with such additional space in College Park, Georgia, are adequate for their
present level of operations.
EMPLOYEES
As of March 31, 1998, the Company had 140 full-time employees. None of the
Company's employees are represented by a union. The Company considers its
employee relations to be good.
LEGAL PROCEEDINGS
The Company is a defendant in two pending legal proceedings which management
believes are incidental to the Company's business. The Company does not
believe that either of these actions will have a material adverse effect on
the Company's financial position or results of operations.
32
<PAGE>
MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES
Executive officers, directors and key employees of the Company and their
ages are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
William Weksel (1)...... 61 Chairman of the Board of Directors and Director
John L. Shermyen........ 44 President, Chief Executive Officer and Director
Michael E. Weksel....... 34 Vice President, Chief Financial Officer and Director
Albert Cortina.......... 34 Corporate Controller
William C. Walter, Jr... 37 Implementation Director
Andrew Winner........... 38 Senior Software Engineer
John Pappajohn (1)(2)... 69 Director
Derace L. Schaffer, M.D.
(1)(2)................. 50 Director
</TABLE>
- ----------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
William Weksel is one of the founders of the Company and is the managing
partner of TGIS Partners, a New York general partnership and the controlling
stockholder of the Company. He has been the Chairman of the Board of Directors
of the Company since 1994. From 1992 to 1997, he was Chairman and Chief
Executive Officer of E.F. Johnson Company, a manufacturer of mobile radio
communications equipment. Mr. Weksel received a B.A. from Queens College and a
Ph.D. in communications from the University of Illinois, and was a National
Science Foundation Post Doctoral Fellow at the Massachusetts Institute of
Technology. William Weksel is the father of Michael Weksel.
John L. Shermyen is one of the founders of the Company's business and has
been the President and Chief Executive Officer of the Company since 1994. From
1987 to 1995, he was President and Chief Executive Officer of Automated
Dispatch Services, Inc. He assisted in the design and development of RealTime
prior to his employment with the Company. Mr. Shermyen received a B.A. and a
Master of Science degree in geography and geographic information systems from
the University of Florida.
Michael E. Weksel is one of the founders of the Company and has been its
Vice President and Chief Financial Officer since 1994. From 1993 to 1994, he
was Vice President of Viking Mobile Communications, Inc., a radio spectrum
development and trading company. From 1992 to 1993, he provided consulting
services to E.F. Johnson, directing the implementation of a closed loop MRII
enterprise computing system. From 1991 to 1992, he worked as a self-employed
financial and computer consultant. Mr. Weksel received a B.S. in computer
science from the State University of New York in Albany and an M.B.A. from
Columbia University Business School. Michael Weksel is the son of William
Weksel.
Albert Cortina has been the Corporate Controller of the Company since
November 1997. Prior to joining the Company, he worked for five years in
various executive positions at Premier Practice Management, a physician
practice management organization, and its successor, Caremark/MedPartners
Physicians Services, Inc. He received his B.S. from Florida State University
and is a certified public accountant.
William C. Walter, Jr. has been the Implementation Director of the Company
since September 1997. Prior to joining the Company, he served for five years
as Director of Communications at AMR West, a transportation services company,
where he developed and implemented a regional call center for emergency and
non-emergency transportation services and managed multiple operational units
in California.
Andrew Winner has been the Senior Software Engineer of the Company since
1996. From 1994 to 1996, he worked as a computer programmer at The Arbitrage
Group, L.P. Prior to 1994, he worked for five years as a software engineer at
Automated Dispatch Services, Inc., where he assisted in the design and
development
33
<PAGE>
of RealTime. He received a B.S.E. in computer and information sciences and an
M.E. in computer software engineering from the University of Florida.
John Pappajohn has been a Director of the Company since March 1997. He is,
and has been for the past 28 years, the owner of Pappajohn Capital Resources,
a venture capital fund, and the President of Equity Dynamics Inc., a private
investment vehicle. He presently serves on the board of directors of The Care
Group, Core Inc., HealthDesk Corp., PACE Health Systems Inc., Patient
Infosystems, Inc., and OncorMed, Inc. Mr. Pappajohn received a B.A. from the
University of Iowa.
Derace L. Schaffer, M.D. has been a Director of the Company since March
1997. He is also President of The Lan Group, a venture capital firm
specializing in health care investments, and The Ide Imaging Group, P.C., a
large multispecialty medical practice. Dr. Schaffer presently serves on the
board of directors of American Physician Partners, Inc., The Care Group, Inc.
and Oncor, Inc., and he is the Chairman of Patient InfoSystems, Inc. He
received his postgraduate radiology training at the Harvard Medical School and
Massachusetts General Hospital, where he was Chief Resident. Dr. Schaffer is a
member of Alpha Omega Alpha, the national medical honor society, and is
Clinical Professor of Radiology at the University of Rochester School of
Medicine.
DIRECTORS COMPENSATION AND COMMITTEES
The Board of Directors has five directors, two of whom--John L. Shermyen and
Michael E. Weksel--are also officers of the Company and three of whom--William
Weksel, John Pappajohn and Derace L. Schaffer--are not officers of the
Company.
The directors currently receive no annual compensation for their service on
the Board of Directors. Following completion of the Offering, the Company will
pay its directors $500 for each directors' meeting attended (plus
reimbursement for out-of-pocket expenses). Under the Company's 1998 Stock
Option Plan, future non-employee directors will automatically be granted
options to purchase 10,000 shares of Common Stock at the commencement of their
service on the Board of Directors and options to purchase 7,500 shares of
Common Stock on the first and second anniversaries of the commencement of
their service on the Board of Directors, subject to certain terms regarding
vesting, exercisability and other material terms. Future non-employee
directors are not eligible to receive any awards under the 1998 Stock Option
Plan other than the automatic grants of stock options. Current non-employee
directors are not eligible to receive any awards under the Company's 1998
Stock Option Plan. In 1997, the Company granted options under the 1995 Stock
Option Plan (i) to John L. Shermyen to purchase 200,000 shares of Common Stock
at an exercise price of $0.26 per share, (ii) to Michael E. Weksel to purchase
93,330 shares of Common Stock at an exercise price of $0.26 per share, (iii)
to John Pappajohn to purchase 80,000 shares of Common Stock at an exercise
price of $2.50 per share, (iv) to Derace L. Schaffer to purchase 80,000 shares
of Common Stock at an exercise price of $2.50 per share and (v) to William
Weksel to purchase 80,000 shares of Common Stock at an exercise price of $2.50
per share. See "--Stock Option Plans."
The Board of Directors currently includes a Compensation Committee and an
Audit Committee. The Compensation Committee is composed of three directors,
Messrs. William Weksel, Pappajohn and Schaffer, and it determines compensation
for executive officers of the Company and administers the Company's Stock
Option Plans. The Audit Committee is composed of two directors, Messrs.
Pappajohn and Schaffer, and it reviews the scope and results of audits and
internal accounting controls and all other tasks performed by independent
public accountants of the Company.
34
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid to the Company's President and Chief Executive Officer and
the Company's Vice-President and Chief Financial Officer during the fiscal
years ended December 31, 1995, 1996 and 1997. No other executive officer
received a salary exceeding $100,000 in any such fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------
1997 ANNUAL COMPENSATION(1) AWARDS PAYOUTS
------------------------------------ ---------- -------
NAME AND OTHER ANNUAL SECURITIES LTIP ALL OTHER
PRINCIPAL FISCAL COMPENSATION UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($)(3) ($) OPTIONS ($) ($)
--------- ------ ---------- ------------ ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John L. Shermyen........ 1997 155,630 -- -- 200,000 -- --
President and Chief 1996 140,000 -- -- -- -- --
Executive Officer 1995 110,000 -- -- 1,000,000 -- --
Michael E. Weksel (2)... 1997 140,000 -- -- 93,330 -- --
Vice-President and 1996 110,000 -- -- -- -- --
Chief Financial Officer 1995 110,000 -- -- 200,000 -- --
</TABLE>
- ---------------------
(1) The compensation described in this table does not include medical, dental
or other benefits generally available to all salaried employees of the
Company, as well as certain perquisites and other personal benefits, the
value of which does not exceed the lesser of $50,000 or 10% of the named
executive officers total salary and bonus reported in this table.
(2) During fiscal 1995 and 1996 and the period from January 1, 1997 to June
15, 1997, the salary for Mr. Weksel was paid by an affiliate of the
Company's controlling stockholder.
(3) This does not include bonuses of $50,000 and $45,000 granted by the
Company to Messrs. Shermyen and Weksel, respectively, in March 1998, which
are payable by the Company in December 1998.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME OPTIONS GRANTED 1997 PER SHARE DATE
- ---- --------------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
John L. Shermyen..... 200,000 27.6% $0.26 2007
Michael E. Weksel.... 93,330 12.9% $0.26 2007
</TABLE>
1997 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED ON VALUE ---------------------------------- -------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John L. Shermyen........ 400,000 $999,400 200,000 600,000 $499,700 $1,447,800
Michael E. Weksel....... 80,000 $199,840 40,000 173,330 $ 99,920 $ 409,179
</TABLE>
- --------
(1)Based upon a value of $2.50 per share, the fair market value determined by
the Company's Board of Directors with respect to the exercise price of
employee stock options granted in November 1997.
35
<PAGE>
STOCK OPTION PLANS
1998 Stock Option Plan. In June 1998, the Board of Directors of the Company
approved the establishment of the Company's 1998 Stock Option Plan, which was
approved by the stockholders of the Company on the same date. Under the 1998
Plan, the Company provides for the granting of options to key employees, non-
employee directors, consultants and independent contractors who provide
services to the Company to purchase not more than an aggregate of 1,000,000
shares of Common Stock, subject to adjustment under certain circumstances. The
1998 Stock Option Plan is divided into two components: (i) a discretionary
option grant program and (ii) an automatic option grant program.
Under the discretionary option grant program, both "incentive stock options"
within the meaning of section 422 of the Internal Revenue Code of 1986 and
non-qualified stock options to purchase shares of the Common Stock may be
granted to employees, consultants and independent contractors, although
"incentive stock options" may only be granted to employees. The Compensation
Committee will, with regard to each option, determine the number of shares
subject to the option, the term of the option (which shall not exceed ten
years), the exercise price per share of stock subject to the option, the
vesting schedule and other material terms of the option. The vesting period
for an option will automatically accelerate upon the acquisition of the
Company as a result of a stockholder-approved merger or asset sale, subject to
certain conditions. In addition, the 1998 Stock Option Plan authorizes the
Compensation Committee to automatically accelerate the vesting of an option in
connection with a change in control of the Company or the optionholder's
grant. The 1998 Stock Option Plan authorizes the Compensation Committee to
grant to eligible officers limited stock appreciation rights which allow them
to surrender outstanding options, to the extent those options are exercisable
for vested shares of Common stock, in the event of a hostile takeover. For
each option surrendered, such officer will receive a payment in cash in an
amount equal to the excess of the take-over price of the vested shares subject
to the surrendered option over the aggregate exercise price payable for such
vested shares.
Under the automatic grant program, future non-employee directors will
automatically be granted options to purchase 10,000 shares of Common Stock at
the commencement of the term of their service on the Board of Directors and
options to purchase 7,500 shares of Common Stock on the first and second
anniversaries of the commencement of their service on the Board of Directors.
The exercise price shall be the fair market value of the Common Stock on the
date that the option is granted and each option fully vests on the first
anniversary of the date of its grant. Future non-employee directors are not
eligible to receive any awards under the 1998 Stock Option Plan other than the
automatic grants of stock options. Current non-employee directors are not
eligible to receive any awards under the 1998 Stock Option Plan. However, the
shares subject to each option will vest immediately during the non-employee
director's service on the Board of Directors of the Company upon the
acquisition of the Company as a result of a stockholder-approved merger or
asset sale or a change in control. Each option has a maximum term of ten years
from the date of its grant. Upon cessation of a non-employee director's
service on the Board of Directors for any reason, the option granted to such
non-employee directors will remain exercisable for a twelve-month period and,
during such period, such option may only be exercised for the number of shares
vested at the time of the non-employee's cessation of service. Under the 1998
Stock Option Plan, each non-employee director has limited stock appreciation
rights pursuant to which such non-employee director has a thirty-day period
upon the successful completion of a hostile tender offer for more than 50% of
the outstanding voting securities of the Company in which to surrender such
non-employee director's option. For each option surrendered, such non-employee
director will receive a payment in cash in an amount equal to the excess of
the tender offer price of the shares subject to the surrendered option over
the aggregate exercise price payable for such vested shares.
1995 Incentive Stock Option Plan. The Company's 1995 Incentive Stock Option
Plan, as amended (the "1995 Stock Option Plan" and, together with the 1998
Stock Option Plan, the "Stock Option Plans"), provides for the granting of
options to key employees and non-employee directors to purchase not more than
an aggregate of 2,166,670 shares of Common Stock, subject to adjustment under
certain circumstances. Some or all of the options granted to key employees
under the 1995 Stock Option Plan are "incentive stock options"
36
<PAGE>
within the meaning of section 422 of the Internal Revenue Code of 1986, and
the options granted to non-employee directors are non-qualified stock options.
No option is exercisable until the first to occur of (i) any Sale Transaction
(as defined in the 1995 Stock Option Plan) and (ii) the first date on or after
which the Company becomes subject to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended. Notwithstanding the
foregoing, options vested prior to June 2, 1997 are exercisable at any time
after June 2, 1997 and prior to the tenth anniversary of the date of their
grant. Each option expires ten years after the date of its grant or, if
granted to a Substantial Stockholder (as defined in the 1995 Stock Option
Plan), 5 years from such date.
Grants of options under the Stock Option Plans and all questions of
interpretation with respect to the Stock Option Plans are determined by the
Board of Directors of the Company. The Board of Directors has appointed the
Compensation Committee to administer matters under the 1998 Stock Option Plan
and the 1995 Stock Option Plan relating to key employees. As of the date of
this Prospectus, no options to purchase shares of Common Stock have been
granted under the 1998 Stock Option Plan, and options to purchase 2,013,330
shares of Common Stock have been granted under the 1995 Stock Option Plan.
Although options under the 1995 Stock Option Plan to purchase 153,340 shares
of Common Stock are still available, no further grants will be made pursuant
to the 1995 Stock Option Plan.
SEVERANCE AND NON-COMPETITION AGREEMENTS
The Company entered into a Severance Agreement, dated March 9, 1995, with
Mr. Shermyen pursuant to which the Company agreed to pay Mr. Shermyen
severance compensation in an amount equal to his annual salary, payable in
equal monthly installments for twelve months if he is terminated without
cause, resigns following a change in control of the Company or is
constructively discharged. If Mr. Shermyen is terminated for cause or he dies,
becomes disabled or retires, he is not entitled to receive any severance
compensation. In connection with this agreement, Mr. Shermyen executed a Non-
Competition Agreement pursuant to which he is prohibited from competing with
the Company, soliciting any employees of the Company or disclosing any of the
Company's confidential information during his employment and for a period of
one year thereafter. This agreement also provides that all designs, inventions
and improvements that Mr. Shermyen develops during his employment and for one
year thereafter which relate to the Company's business belong solely to the
Company. The Company intends to enter into similar arrangements with Mr.
Weksel and other key employees prior to the completion of the Offering.
37
<PAGE>
CERTAIN TRANSACTIONS
From March 1994 to August 1995, TGIS Partners loaned the Company an
aggregate amount of $270,000, evidenced by a promissory note bearing interest
at a rate of 7% per annum and maturing on January 31, 2002. In March 1997,
TGIS Partners canceled the note and contributed the remaining principal
balance and accrued interest to the Company.
In 1995, the Company entered into an agreement (the "Software Agreement")
with an affiliate of TGIS Partners, under which the Company received $150,000
for 15 end-user licenses of RealTime and future sales and marketing services
to be provided by the Company. In June 1997, the Company and such affiliate
mutually terminated the Software Agreement in accordance with its terms. In
connection with such termination, the Company provided such affiliate with an
additional 13 end-user licenses of RealTime. These licenses are perpetual and
royalty-free.
To raise additional working capital, the Company entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") in March 1997 with John
Pappajohn and Derace L. Schaffer, M.D. (the "Purchasers") pursuant to which
the Company sold an aggregate of 1,948,300 shares of Common Stock to certain
investors, including Messrs. Pappajohn and Schaffer. Such investors paid an
aggregate purchase price of $500,000 for the shares. Under the Stock Purchase
Agreement, the Purchasers also agreed to purchase an aggregate of 97,415
shares of Preferred Stock. Certain provisions of the Stock Purchase Agreement
permitted the Company and the Purchasers to designate substitute purchasers
for some or all of the Preferred Stock. In June 1997, the Company and the
Purchasers designated certain investors, including Messrs. Pappajohn and
Shermyen, to purchase the 97,415 shares of Preferred Stock. Such investors
paid an aggregate purchase price of $1,000,000 for the shares.
In March 1997, the Company issued 16,250 shares of Common Stock to Mr.
Shermyen for a purchase price of $4,170.
38
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of March 31, 1998 and as
adjusted to reflect the sale of the shares of Common Stock offered hereby with
respect to (i) each person known by the Company to own beneficially more than
5% of the outstanding shares of Common Stock, (ii) each of the Company's
directors, (iii) each Selling Stockholder, and (iv) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
NUMBER BENEFICIAL OWNERSHIP
OF SHARES --------------------------------
BENEFICIALLY BEFORE AFTER
BENEFICIAL OWNER(1) OWNED OFFERING(2)(3) OFFERING(2)(4)(5)
- ------------------- ------------ -------------- -----------------
<S> <C> <C> <C>
TGIS Partners (6)................ 4,463,330 49.5% 39.4%
William Weksel (7)............... 4,543,330 49.9% 39.8%
Robert H. Davies (8)............. 4,463,330 49.5% 39.4%
John Pappajohn (9)............... 1,030,360 11.3% 9.0%
Derace L. Schaffer, M.D. (10).... 1,004,150 11.0% 8.8%
John L. Shermyen (11)............ 723,370 7.8% 6.3%
Michael E. Weksel (12)........... 514,706 5.7% 4.5%
Directors and Executive Officers
as Group (five persons)......... 7,815,916 81.8% 65.9%
Edgewater Private Equity Fund II,
L.P. (13)....................... 705,910 7.8% 6.2%
Edward Steinberg (14)............ 265,960 2.9% 2.3%
Martin Zilber.................... 232,880 2.6% 2.1%
Halkis, Ltd. (15)................ 100,000 1.1% *
Thebes, Ltd. (16)................ 100,000 1.1% *
Goldfield Partners............... 50,000 * *
Steven B. Pilavin (17)........... 48,710 * *
Scott J. Weinstein (18).......... 48,710 * *
David Weksel (19)................ 32,000 * *
Robert S. Hirsch (20)............ 28,350 * *
James W. Manzari (21)............ 13,740 * *
Lenor Firstenberg................ 11,000 * *
Henry Hardy...................... 10,000 * *
Bertrand H. Weidberg............. 7,000 * *
Leonard Levine................... 6,000 * *
Joseph Handy..................... 4,000 * *
Charles P. Krokel................ 4,000 * *
Deanna G. Weksel (22)............ 4,000 * *
Gregory A. Weksel (23)........... 4,000 * *
Francis M. Sassano............... 4,000 * *
William B. McLiverty............. 4,000 * *
</TABLE>
- ---------------------
* Less than 1%.
(1) Unless otherwise indicated, the address for each stockholder is c/o
LogistiCare, Inc., One Crown Center, 1895 Phoenix Boulevard, Suite 306,
College Park, Georgia 30349.
(2) The persons and entities named in the table have sole voting and
investment powers with respect to all of the Common Stock shown as
beneficially owned by them, except as noted below.
(3) The 9,590,176 shares of Common Stock deemed outstanding prior to the
Offering include:
(a) 8,047,360 shares of Common Stock outstanding;
(b) 974,150 shares issuable upon completion of the Offering pursuant to
the conversion of 97,415 issued and outstanding shares of Preferred
Stock; and
(c) 568,666 shares of Common Stock issuable pursuant to the exercise of
options held by the respective person or group, which may be exercised
within 60 days after the date of this Prospectus.
39
<PAGE>
(4) The 11,890,176 shares of Common Stock deemed outstanding after the
Offering includes:
(a) an additional 2,300,000 shares of Common Stock which are being offered
for sale by the Company in the Offering and assumes no exercise of the
over-allotment option;
(b) 974,150 shares issued upon completion of the Offering pursuant to the
conversion of 97,415 issued and outstanding shares of Preferred Stock;
and
(c) 568,666 shares of Common stock issuable pursuant to the exercise of
options held by the respective person or group, which may be exercised
within 60 days after the date of this Prospectus.
(5) This assumes that the Underwriters do not exercise the over-allotment
option. If the Underwriters do exercise the over-allotment option in
full, up to an additional 345,000 shares of Common Stock may be sold as
follows: TGIS Partners-- shares; Edgewater Private Equity Fund II,
L.P.-- shares; John L. Shermyen-- shares; Michael E. Weksel--
shares; John Pappajohn-- shares; Derace L. Schaffer, M.D.-- shares;
Robert S. Hirsch-- shares; James W. Manzari-- shares; Steven B.
Pilavin-- shares; Edward Steinberg-- shares; Scott J. Weinstein--
shares; Martin Zilber-- shares; Halkis, Ltd.-- shares; Thebes, Ltd.--
shares; Joseph Handy-- shares; Charles P. Krokel-- shares; David
Weksel-- shares; Deanna G. Weksel-- shares; Gregory A. Weksel--
shares; Bertrand H. Weidberg-- shares; Henry Hardy-- shares; Lenor
Firstenberg-- shares; Leonard Levine-- shares; Francis M. Sassano--
shares; and William B. McLiverty-- shares.
(6) Includes 80,000 shares for which TGIS Partners has the power to vote as
nominee pursuant to agreements with certain persons who are the direct
beneficial owners of such shares.
(7) William Weksel, the Chairman of the Board of Directors of the Company and
the father of Michael Weksel, is a General Partner of TGIS Partners.
4,383,330 of the shares indicated as owned by Mr. Weksel are owned
beneficially by TGIS Partners and are included because of the affiliation
of Mr. Weksel with such partnership. Includes 80,000 shares issuable
pursuant to stock options held by Mr. Weksel.
(8) Robert Davies is a General Partner of TGIS Partners. All of the shares
indicated as owned by Mr. Davies are owned beneficially by TGIS Partners
and are included because of the affiliation of Mr. Davies with such
partnership.
(9) Includes:
(a) 624,150 shares for which Mr. Pappajohn is the direct beneficial owner;
(b) 80,000 shares issuable pursuant to the exercise of stock options held
by Mr. Pappajohn;
(c) 126,210 shares issuable upon completion of the Offering pursuant to
the conversion of 12,621 shares of Preferred Stock owned by Mr.
Pappajohn; and
(d) 100,000 shares of Common Stock held by Halkis, Ltd., of which Mr.
Pappajohn is the sole stockholder, and Thebes, Ltd., of which Mr.
Pappajohn's wife is the sole stockholder. Mr. Pappajohn disclaims
beneficial ownership of these shares.
(10) Includes 80,000 shares issuable pursuant to the exercise of stock options
held by Dr. Schaffer.
(11) Includes:
(a) 240,000 shares issuable upon the exercise of stock options held by Mr.
Shermyen; and
(b) 8,120 shares issuable upon completion of the Offering pursuant to the
conversion of 812 shares of Preferred Stock owned by Mr. Shermyen.
(12) Includes 58,666 shares issuable pursuant to the exercise of stock options
held by Mr. Weksel. Mr. Weksel is the Vice President, Chief Financial
Officer and a director of the Company, and the son of William Weksel, the
Chairman of the Board of Directors of the Company.
(13) Includes 681,910 shares issuable upon completion of the Offering pursuant
to the conversion of 68,191 shares of Preferred Stock owned by Edgewater
Private Equity Fund II, L.P.
(14) Includes 26,400 shares issuable upon completion of the Offering pursuant
to the conversion of 2,640 shares of Preferred Stock owned by Mr.
Steinberg.
(15) Halkis, Ltd. is wholly-owned by Mr. Pappajohn, a director of the Company.
(16) Thebes, Ltd. is wholly-owned by the wife of Mr. Pappajohn, a director of
the Company.
(17) These shares are issuable upon completion of the Offering pursuant to the
conversion of 4,871 shares of Preferred Stock owned by Mr. Pilvan.
40
<PAGE>
(18) These shares issuable upon completion of the Offering pursuant to the
conversion of 4,871 shares of Preferred Stock owned by Mr. Weinstein.
(19) David Weksel is the son of William Weksel, the Chairman of the Board of
Directors of the Company, and the brother of Michael Weksel, the Vice
President, Chief Financial Officer and a director of the Company.
(20) Includes 24,350 shares issuable upon completion of the Offering pursuant
to the conversion of 2,435 shares of Preferred Stock owned by Mr. Hirsch.
(21) Includes 9,740 shares issuable upon completion of the Offering pursuant
to the conversion of 974 shares of Preferred Stock owned by Mr. Manzari.
(22) Deanna G. Weksel is the wife of William Weksel, the Chairman of the Board
of Directors of the Company, and step-mother of Michael Weksel, the Vice
President, Chief Financial Officer and a director of the Company.
(23) Gregory A. Weksel is the son of William Weksel, the Chairman of the Board
of Directors of the Company, and the brother of Michael Weksel, the Vice
President, Chief Financial Officer and a director of the Company.
41
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Upon consummation of the Offering, the Company's authorized capital stock
will consist of 30,000,000 shares of Common Stock, par value $.01 per share,
and 100,000 shares of Preferred Stock, par value $.01 per share, which are
subject to future issuance as determined by the Board of Directors of the
Company.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by stockholders and are entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor. Upon liquidation or
dissolution of the Company, the holders of Common Stock are entitled to
receive all assets available for distribution, subject to any preferential or
other rights of holders of Preferred Stock. The Common Stock has no preemptive
or other subscription rights, except as set forth below in "Certain Provisions
Affecting Stockholders," and there are no conversion rights or redemption or
sinking fund provisions with respect to such shares. The holders of Common
Stock do not have cumulative voting rights in the election of directors, which
means that the holders of more than 50% of the shares of Common Stock voting
for the election of directors can elect all of the directors of the Company if
they choose to do so. All shares of Common Stock are, and the shares of Common
Stock in the Offering will be, when issued, validly issued, fully paid and
non-assessable.
PREFERRED STOCK
The Company is authorized to issue up to 100,000 shares of Preferred Stock.
Upon the effectiveness of the Registration Statement, the 97,415 shares of
Preferred Stock outstanding will be converted into 974,150 shares of Common
Stock. The Board of Directors may, without future action of the stockholders
of the Company, issue the remaining 2,585 shares of the Preferred Stock in one
or more classes or series and fix the rights and preferences thereof,
including the dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption (including sinking fund provisions), redemption
price or prices, liquidation preferences and the number of shares constituting
any class or series, and the designations of such class or series.
The voting and other rights of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of Preferred Stock that may be
issued in the future. Issuances of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from acquiring, a majority of the
outstanding voting stock of the Company. The Company has no present plans to
reissue shares of Preferred Stock.
CERTAIN PROVISIONS OF DELAWARE LAW
Section 203 of the Delaware General Corporation Law ("DGCL") prohibits a
Delaware corporation from engaging in a wide range of specified transactions
with any interested stockholder, which is defined to include, among others,
any person or entity who in the last three years obtained 15% or more of any
class or series of stock entitled to vote in the election of directors,
unless, among other exceptions, the transaction is approved by (i) the Board
of Directors prior to the date the interested stockholder obtained such status
or (ii) the holders of two-thirds of the outstanding shares of each class or
series of stock entitled to vote generally in the election of directors, not
including those shares owned by the interested stockholder. Because the
Company did not elect out of the statute's provisions, this statute applies to
the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BYLAWS
Upon completion of the Offering, the Company's Restated Bylaws will provide
that special meetings of stockholders of the Company may be called only by the
Board of Directors, the Chairman of the Board of Directors or the Chief
Executive Officer. This provision could have the effect of delaying, until the
next annual stockholders meeting, holder actions that are favored by the
holders of a majority of the outstanding voting securities of the Company.
42
<PAGE>
The foregoing provisions could have the effect of making it more difficult
for a third party to acquire, or of discouraging a third party from acquiring,
control of the Company.
LIMITATION OF LIABILITY
The Amended and Restated Certificate of Incorporation contains provisions
that eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty other than liability for
breaches of the duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, violations under
Section 174 of the DGCL or any transaction from which the director derived an
improper personal benefit. The Company's Restated Bylaws contain provisions
requiring the indemnification of the Company's directors and officers to the
fullest extent permitted by Section 145 of the DGCL.
43
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
After giving effect to the shares of Common Stock offered hereby, the
Company will have outstanding 11,321,510 shares of Common Stock. Of these
shares, all of the shares of Common Stock sold in the Offering will be freely
tradeable without restriction under the Securities Act, except for any shares
purchased by "affiliates," as that term is defined under the Securities Act,
of the Company. The remaining 9,021,550 shares are "restricted securities"
within the meaning of Rule 144. Of such shares, will become eligible for
resale under Rule 144 during various times in , subject to the lockup
arrangement described in the following paragraph.
The Company and certain existing stockholders of the Company, including the
Company's directors and executive officers, have agreed that it/he/she will
not, subject to certain specified exceptions, without the prior written
consent of Hambrecht & Quist LLC, for a period of 180 days from the date of
this Prospectus, directly or indirectly, (i) sell, offer, contract to sell,
make any short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any rights
to purchase or acquire Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. Hambrecht & Quist LLC
may, in its sole discretion, release any of the shares to lock-up agreements
at any time, without prior notice.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including any person who may be deemed to be an
"affiliate" of the Company, is entitled to sell within any three-month period
"restricted" shares beneficially owned by him or her in an amount that does
not exceed the greater of (i) 1% of the then outstanding shares of Common
Stock or (ii) the average weekly trading volume in shares of Common Stock
during the four calendar weeks preceding such sale, provided that at least one
year has elapsed since such shares were acquired from the Company or an
affiliate of the Company. Sales are also subject to certain requirements as to
the manner of sale, notice and the availability of current public information
regarding the Company. However, a person who has not been an "affiliate" of
the Company at any time within three months prior to the sale is entitled to
sell his or her shares without regard to the volume limitations or other
requirements of Rule 144, provided that at least two years have elapsed since
such shares were acquired from the Company or an affiliate of the Company.
In general, under Rule 701 as currently in effect, any employee, officer,
director, consultant or advisor of the Company who purchased shares from the
Company pursuant to a written compensatory benefit plan or written contract
relating to compensation is eligible to resell such shares 90 days after the
effective date of the Offering. Shares of Common Stock obtained pursuant to
Rule 701 may be sold by non-affiliates without regard to the holding period,
volume limitations, or information or notice requirements of Rule 144, and by
affiliates without regard to the holding period requirements.
The Company intends to file a registration statement on Form S-8 under the
Securities Act to register all shares of Common Stock issuable under its Stock
Option Plans, as well as certain of the shares of Common Stock previously
issued under its Stock Option Plans. This registration statement is expected
to be filed as soon as practicable after the date of this Prospectus and is
expected to become effective immediately upon filing. Shares of Common Stock
covered by this registration statement will be eligible for sale in the public
market after the effective date of such registration statement, subject to
Rule 144 limitations applicable to affiliates of the Company. See
"Management--Stock Option Plans."
Prior to the Offering, there has been no public market for the Common Stock
and it is impossible to predict with certainty the effect, if any, that market
sales of shares or the availability of such shares for sale will have on the
market price of the Common Stock. Nevertheless, sales of substantial amounts
of Common Stock in the public market may have an adverse impact on such market
price and could impair the Company's ability to raise capital through the sale
of its equity securities.
44
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters") through their representatives
Hambrecht & Quist LLC and EVEREN Securities, Inc. (the "Representatives"),
have severally agreed to purchase from the Company the following respective
numbers of shares of Common Stock set forth opposite the name of each such
Underwriter below at the initial public offering price less the underwriting
discounts set forth on the cover page of this Prospectus:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Hambrecht & Quist LLC............................................
EVEREN Securities, Inc...........................................
---
Total............................................................
===
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent, including the absence of any
material adverse change in the Company's business and the receipt of certain
certificates, opinions and letters from the Company, its counsel and the
Company's independent auditors. The nature of the Underwriters' obligation is
such that they are committed to purchase all shares of Common Stock offered
hereby if any such shares are purchased.
The Underwriters propose to offer the shares of Common Stock to the public
at the initial public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.
The Representatives have advised the Company that the Underwriters do not
intend to confirm discretionary sales in excess of 5% of the shares of Common
Stock offered hereby. After the initial public offering of the shares, the
offering price and other selling terms may be changed by the Representatives
of the Underwriters.
The Selling Stockholders have granted to the Underwriters an option,
exercisable no later than 30 days after the date of this Prospectus, to
purchase up to 345,000 additional shares of Common Stock at the initial public
offering price, less the underwriting discounts set forth on the cover page of
this Prospectus. To the extent the Underwriters exercise this option, each of
the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof which the number of shares of Common Stock to be
purchased by it shown in the above table bears to the total number of shares
of Common Stock offered hereby. The Selling Stockholders will be obligated,
pursuant to the option, to sell shares to the Underwriters to the extent the
option is exercised. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of Common Stock offered
hereby.
The offering of the shares is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the Offering without notice. The Underwriters reserve the
right to reject an order for the purchase of shares in whole or in part.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments the Underwriters may be required
to make in respect thereof.
45
<PAGE>
The Company and certain existing stockholders of the Company, including the
Company's directors and executive officers, have agreed that it/he/she will
not, subject to certain specified exceptions, without the prior written
consent of Hambrecht & Quist LLC, for a period of 180 days from the date of
this Prospectus, directly or indirectly, (i) sell, offer, contract to sell,
make any short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any rights
to purchase or acquire Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. Hambrecht & Quist LLC
may, in its sole discretion, release any of the shares to lock-up agreements
at any time, without prior notice.
Prior to this Offering, there has been no public market for the Common
Stock. The initial public offering price for the Common Stock has been
determined by negotiation among the Company and the Representatives. Among the
factors considered in determining the initial public offering price were
prevailing market and economic conditions, revenues and earnings of the
Company, market valuations of other companies engaged in activities similar to
those of the Company, estimates of the business potential and prospects of the
Company, the present state of the Company's business operations, the Company's
management and other factors deemed relevant.
Certain persons participating in the Offering may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of
the Common Stock at levels above those which might otherwise prevail in the
open market, including by entering stabilizing bids, effecting syndicate
covering transactions or imposing penalty bids. A stabilizing bid means
placing of any bid or effecting of any purchase, for the purpose of pegging,
fixing or maintaining the price of the Common Stock. A syndicate covering
transaction means the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short position created
in connection with the Offering. A penalty bid means an arrangement that
permits the Underwriters to reclaim a selling concession from a syndicate
member in connection with the Offering when shares of Common Stock sold by the
syndicate member are purchased in syndicate covering transactions. Such
transaction may be effected on the Nasdaq Stock Market, in the over-the-
counter market, or otherwise. Such stabilizing, if commenced, may be
discontinued at any time.
Hambrecht & Quist California, a wholly-owned subsidiary of Hambrecht & Quist
LLC ("H&Q California"), and certain employees and spouses of employees of the
Representatives own an aggregate of 190,000 shares of Common Stock, which
shares were purchased on April 22, 1998 from a general partner of an affiliate
of the Company in a privately-negotiated arm's-length transaction. None of the
shares of Common Stock held by H&Q California or the employees and spouses of
employees of the Representatives are being offered hereby.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
Proskauer Rose, LLP, New York, New York. Certain legal matters will be passed
upon for the Underwriters by Katten Muchin & Zavis, Chicago, Illinois.
EXPERTS
The financial statements as of December 31, 1996 and 1997 and for each of
the three years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance upon the report of Price
Waterhouse LLP, independent certified public accountants, given on the
authority of such firm as experts in auditing and accounting.
46
<PAGE>
ADDITIONAL INFORMATION
A Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended (the "Securities Act"), including amendments thereto, relating to the
Common Stock offered hereby has been filed by the Company with the Securities
and Exchange Commission (the "Commission"). This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to such
Registration Statement and exhibits and schedules filed as a part thereof. A
copy of the Registration Statement may be inspected by anyone without charge
at the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of all or any portion of the
Registration Statement may be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment
of prescribed fees. The Commission maintains a WorldWide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy and information statements and other information may be found
on the Commission's site address, http://www.sec.gov. Copies of such material
also can be obtained from the Company upon request.
Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
As a result of the Offering, the Company will become subject to the
information and periodic reporting requirements of the Securities Exchange
Act, as amended, and, in accordance therewith, will file periodic reports,
proxy statements and other information with the Commission. Such periodic
reports, proxy statements and other information will be available for
inspection and copying at the public reference facilities, regional offices
and Web site referred to above.
47
<PAGE>
INDEX TO FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<S> <C>
Report of Independent Certified Public Accountants......................... F-2
Balance Sheets as of December 31, 1996, 1997 and March 31, 1998 (Unau-
dited).................................................................... F-3
Statements of Operations for each of the years ended December 31, 1995,
1996, and 1997, and the three month periods ended March 31, 1997 and 1998
(Unaudited)............................................................... F-4
Statement of Changes in Stockholders' Deficit for the three years ended De-
cember 31, 1997, and the three month period ended March 31, 1998 (Unau-
dited).................................................................... F-5
Statements of Cash Flows for each of the years ended December 31, 1995,
1996 and 1997, and the three month periods ended March 31, 1997 and 1998
(Unaudited)............................................................... F-6
Notes to Financial Statements.............................................. F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of LogistiCare, Inc.
The common stock split described in Notes 1 and 10 to the financial
statements has not been consummated at May 7, 1998. When it has been
consummated, we will be in the position to furnish the following report:
"In our opinion, the accompanying balance sheets and the related statements
of operations, of changes in stockholders' deficit and of cash flows
present fairly, in all material respects, the financial position of
LogistiCare, Inc. (formerly Automated Dispatch Solutions, Inc.) at December
31, 1996 and 1997, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above."
PRICE WATERHOUSE LLP
Ft. Lauderdale, Florida
May 7, 1998
F-2
<PAGE>
LOGISTICARE, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, 1998
----------------------- ------------------------
1996 1997 HISTORICAL PRO FORMA
---------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents. $ 70,704 $ 639,598 $ 3,680,573 $ 3,680,573
Accounts receivable, net
of allowance of $17,000
and $95,000 at December
31, 1996 and 1997,
respectively............. 464,811 515,495 2,005,649 2,005,649
Prepaid expenses and other
current assets........... 2,300 22,282 30,003 30,003
---------- ----------- ----------- -----------
Total current assets.... 537,815 1,177,375 5,716,225 5,716,225
Property and equipment, net. 301,883 849,732 933,396 933,396
Proprietary software, net of
accumulated amortization of
$140,000 and $176,666 at
December 31, 1996 and 1997,
respectively............... 110,472 73,806 63,249 63,249
Other assets................ 18,154 156,593 161,935 161,935
---------- ----------- ----------- -----------
$ 968,324 $ 2,257,506 $ 6,874,805 $ 6,874,805
========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......... $ 584,433 $ 3,216,819 $ 4,459,430 $ 4,459,430
Accrued expenses.......... 92,040 94,554 245,084 245,084
Notes payable............. 50,524 -- -- --
Notes payable to stock-
holders and officers..... 100,000 -- -- --
Current portion of
obligations under capital
leases................... 6,350 134,927 149,340 149,340
Deferred revenue.......... 131,000 1,250,000 4,229,406 4,229,406
---------- ----------- ----------- -----------
Total current liabili-
ties................... 964,347 4,696,300 9,083,260 9,083,260
Long term note payable to
principal stockholder...... 270,000 -- -- --
Obligations under capital
leases, net of current
portion.................... 32,369 238,880 241,678 241,678
---------- ----------- ----------- -----------
Total liabilities....... 1,266,716 4,935,180 9,324,938 9,324,938
---------- ----------- ----------- -----------
Commitments and contingen-
cies (Note 10)
Stockholders' deficit:
Series A preferred stock,
$.01 par value, 100,000
shares authorized; 97,415
shares issued and
outstanding at December
31, 1997................. -- 974 974 --
Common stock, $.01 par
value, 30,000,000 shares
authorized; 5,550,000 and
8,047,360 shares issued
and outstanding at
December 31, 1996 and
1997, respectively....... 55,500 80,474 80,474 90,215
Additional paid in capi-
tal...................... 25,440 1,834,200 2,284,200 2,275,433
Deferred option plan com-
pensation................ -- -- (450,000) (450,000)
Retained deficit.......... (379,332) (4,593,322) (4,365,781) (4,365,781)
---------- ----------- ----------- -----------
Total stockholders' def-
icit................... (298,392) (2,677,674) (2,450,133) (2,450,133)
---------- ----------- ----------- -----------
$ 968,324 $ 2,257,506 $ 6,874,805 $ 6,874,805
========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
LOGISTICARE, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Transportation manage-
ment services........ -- $1,529,817 $10,768,239 $987,519 $11,714,962
Related party......... -- 1,667,683 602,735 374,744 --
Other................. $391,702 438,602 131,000 -- --
---------- ---------- ----------- --------- -----------
391,702 3,636,102 11,501,975 1,362,263 11,714,962
---------- ---------- ----------- --------- -----------
Operating expenses:
Purchased transporta-
tion................. -- 1,296,334 11,213,405 898,526 9,503,377
Direct labor.......... 1,177,805 1,835,505 369,471 901,837
Selling, general and
administrative....... 311,061 1,042,670 2,665,447 318,339 1,088,916
Other................. 189,814 205,379 -- -- --
---------- ---------- ----------- --------- -----------
500,875 3,722,188 15,714,357 1,586,336 11,494,130
---------- ---------- ----------- --------- -----------
Income (loss) from op-
erations............. (109,173) (86,086) (4,212,382) (224,073) 220,832
Other income (expense):
Interest income....... -- 585 25,929 -- 26,822
Interest expense...... (17,735) (33,289) (27,537) (1,493) (20,113)
---------- ---------- ----------- --------- -----------
Net income (loss)..... $ (126,908) $ (118,790) $(4,213,990) $(225,566) $ 227,541
========== ========== =========== ========= ===========
Basic net income
(loss) per share..... $ (0.03) $ (0.02) $ (0.59) $ (0.04) $ 0.03
========== ========== =========== ========= ===========
Weighted average
shares outstanding... 5,000,000 5,550,000 7,188,589 5,796,566 8,047,360
========== ========== =========== ========= ===========
Diluted net income
(loss) per share..... $ (0.03) $ (0.02) $ (0.59) $ (0.04) $ 0.02
========== ========== =========== ========= ===========
Weighted average
shares and
potentially dilutive
shares outstanding... 5,000,000 5,550,000 7,188,589 5,796,566 10,256,459
========== ========== =========== ========= ===========
Unaudited pro forma
basic net income per
share................ $ 0.03
===========
Unaudited pro forma
weighted average
shares outstanding... 9,021,510
===========
Unaudited pro forma
diluted net income
per share............ $ 0.02
===========
Unaudited pro forma
weighted average
shares and
potentially dilutive
shares outstanding... 10,256,459
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
LOGISTICARE, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL DEFERRED
---------------- ----------------- PAID OPTION PLAN RETAINED
SHARES AMOUNT SHARES AMOUNT IN CAPITAL COMPENSATION DEFICIT TOTAL
-------- ------- --------- ------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1995................... -- -- 5,000,000 $50,000 $ (45,000) -- $ (133,634) $ (128,634)
Net loss................ -- -- -- -- -- -- (126,908) (126,908)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance December 31,
1995................... -- -- 5,000,000 50,000 (45,000) -- (260,542) (255,542)
Acquisition of Automated
Dispatch Systems, Inc.. -- -- 550,000 5,500 18,440 -- -- 23,940
Management services
contributed by
principal stockholder.. -- -- -- -- 52,000 -- -- 52,000
Net loss................ -- -- -- -- -- -- (118,790) (118,790)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, December 31,
1996................... -- -- 5,550,000 55,500 25,440 -- (379,332) (298,392)
Issuance of common
stock.................. -- -- 2,017,360 20,174 497,550 -- -- 517,724
Note contributed by
stockholder............ -- -- -- -- 316,024 -- -- 316,024
Issuance of preferred
stock.................. 97,415 $ 974 -- -- 999,026 -- -- 1,000,000
Issuance of common stock
under option plan...... -- -- 480,000 4,800 (3,840) -- -- 960
Net loss................ -- -- -- -- -- -- (4,213,990) (4,213,990)
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, December 31,
1997................... 97,415 974 8,047,360 80,474 1,834,200 -- (4,593,322) (2,677,674)
Options granted under
stock option plan...... -- -- -- -- 450,000 (450,000) -- --
Net income.............. -- -- -- -- -- -- 227,541 227,541
-------- ------ --------- ------- ---------- --------- ----------- -----------
Balance, March 31, 1998
(unaudited)............ 97,415 $ 974 8,047,360 $80,474 $2,284,200 $(450,000) $(4,365,781) $(2,450,133)
======== ====== ========= ======= ========== ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
LOGISTICARE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31
--------------------------------- ----------------------
1995 1996 1997 1997 1998
--------- --------- ----------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss)..... $(126,908) $(118,790) $(4,213,990) $(225,566) $ 227,541
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization......... 51,154 96,958 154,126 29,367 51,231
Loss on disposal of
property and
equipment............ -- -- 45,088 -- --
Management services
contributed by
principal
shareholder.......... -- 52,000 -- --
Changes in assets and
liabilities:
Increase in accounts
receivable.......... -- (433,164) (50,684) (113,883) (1,490,154)
(Increase) decrease
in prepaid expenses
and other current
assets.............. (17,000) 11,700 (19,982) -- (7,721)
Increase in other
assets.............. -- (3,279) (138,438) -- (5,342)
Increase in accounts
payable............. 13,386 556,196 2,632,386 83,539 1,012,587
Increase (decrease)
in accrued expenses. 26,198 (4,231) 48,537 13,118 150,530
Decrease in due to
affiliate........... (34,000) -- -- -- --
Increase (decrease)
in deferred revenue. 140,000 (9,000) 1,119,000 -- 3,209,430
--------- --------- ----------- --------- -----------
Net cash provided by
(used in) operating
activities......... 52,830 148,390 (423,957) (213,425) 3,148,102
--------- --------- ----------- --------- -----------
Cash flows from
investing activities:
Purchases of property
and equipment........ (5,769) (111,190) (329,141) (48,516) (80,939)
Purchase of Automated
Dispatch Systems,
Inc., net of cash
acquired............. -- 5,148 -- -- --
--------- --------- ----------- --------- -----------
Net cash used in
investing
activities......... (5,769) (106,042) (329,141) (48,516) (80,939)
--------- --------- ----------- --------- -----------
Cash flows from
financing activities:
Repayments on notes
payable.............. -- (161,222) (145,524) (25,524) --
Repayment of
obligations under
capital leases....... -- (2,112) (46,168) (2,882) (26,188)
Proceeds from line of
credit............... -- 25,000 -- -- --
Proceeds from issuance
of notes payable to
officer.............. -- 50,000 -- -- --
Proceeds from issuance
of note payable to
principal
stockholder.......... 25,000 -- -- -- --
Proceeds from sale of
common stock......... -- -- 512,724 517,724 --
Proceeds from sale of
preferred stock...... -- -- 1,000,000 -- --
Proceeds from exercise
of stock options..... -- -- 960 -- --
--------- --------- ----------- --------- -----------
Net cash (used in)
provided by
financing
activities......... 25,000 (88,334) 1,321,992 489,318 (26,188)
--------- --------- ----------- --------- -----------
Net (decrease) increase
in cash............... 72,061 (45,986) 568,894 227,377 3,040,975
Cash and cash
equivalents, beginning
of period............. 44,629 116,690 70,704 70,704 639,598
--------- --------- ----------- --------- -----------
Cash and cash
equivalents, end of
period................ $ 116,690 $ 70,704 $ 639,598 $ 298,081 $ 3,680,573
========= ========= =========== ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
LOGISTICARE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31
------------------------ -------------------
1995 1996 1997 1997 1998
------- ------- -------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Supplemental disclosure of cash
flow information:
Cash paid during the year for
interest.......................... $ -- $14,389 $ 69,183 $ 1,548 $ 20,113
======= ======= ======== ========= ========
Supplemental disclosure of noncash
investing and financing
activities:
Note payable issued in connection
with acquisition of Automated
Dispatch Systems, Inc............. $ -- $50,000 $ -- $ -- $ --
======= ======= ======== ========= ========
Common stock issued in connection
with acquisition of Automated
Dispatch Systems, Inc............. $ -- $23,940 $ -- $ -- $ --
======= ======= ======== ========= ========
Contribution of note payable and
accrued interest to additional
paid in capital................... $ -- $ -- $316,024 $ 316,024 $ --
======= ======= ======== ========= ========
Property and equipment acquired un-
der capital leases................ $ -- $40,831 $385,803 $ 33,376 $ 43,399
======= ======= ======== ========= ========
Exchange of note payable for common
stock............................. $ -- $ -- $ 5,000 $ -- $ --
======= ======= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1996 AND 1997
1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
LogistiCare, Inc. (the "Company" or "LogistiCare," formerly known as
Automated Dispatch Solutions, Inc.) was organized in March 1994 as a Delaware
corporation. On January 1, 1996, LogistiCare acquired 100% of the outstanding
common stock of Automated Dispatch Systems, Inc. ("Systems"). LogistiCare and
Systems were merged into a single legal entity on December 31, 1996. The
financial statements presented for 1995 and 1996 are consolidated to include
the accounts of LogistiCare and Systems. All significant intercompany
transactions and balances have been eliminated in the consolidated financial
statements for 1995 and 1996.
The Company provides transportation management services: brokerage logistics
and service bureau logistics. Brokerage logistics consists of non-emergency
transportation management services to government agencies and managed health
care organizations ("MCOs") where the Company coordinates and, through
contracts with unaffiliated transportation carriers provides, non-emergency
transportation for individuals eligible for transportation benefits
("Recipients"). Transportation of Recipients is furnished pursuant to
contracts between the Company and independent transportation carriers. The
Company is compensated for these services primarily on a capitated basis and,
to a lesser extent, on a fee-for-service basis. Service bureau logistics are
offered directly to independent transportation carriers and carrier networks
where the Company manages the carrier's or the network's internal logistics
requirements. The Company is compensated for these services on a fee-for-
transaction basis.
A summary of the significant accounting policies followed in the preparation
of the accompanying financial statements is presented below.
INTERIM FINANCIAL STATEMENTS (UNAUDITED)
The interim financial data as of March 31, 1998 and for the three months
ended March 31, 1997 and March 31, 1998 is unaudited; however, in the opinion
of the Company, the interim data includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results
for the interim periods. The results of operations for the three month periods
are not necessarily indicative of the results for the full year.
REVENUE RECOGNITION
Revenues under capitation contracts are recognized over the capitation
period, generally one month. Revenues earned under fee-for-service and fee-
for-transaction contracts are recognized when the related service is provided.
STARTUP COSTS FOR OPERATIONS CENTERS
The Company recognizes costs associated with the startup of its operations
centers as such costs are incurred. The Company generally negotiates fees to
enable it to open new operations centers when such centers are required by the
terms of contracts with its customers. The Company recognizes the fees as
earned in accordance with contract terms. The Company recognized $600,000 of
fees in 1997 which are included in brokerage logistics revenues.
CASH AND CASH EQUIVALENTS
The Company considers those short term, highly liquid investments with
original maturities of three months or less as cash and cash equivalents.
F-8
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation.
Expenditures for replacements and betterment are capitalized while maintenance
and repairs are charged to expense as incurred. Depreciation is provided using
the straight line and declining balance methods over estimated useful lives of
five to seven years. Equipment held under capital lease obligations is
amortized using the straight-line method over the shorter of the lease term or
estimated life of the asset.
PROPRIETARY SOFTWARE
Proprietary software represents the purchase of RealTime(TM) ("RealTime"), a
computer aided vehicle dispatch system, for non-emergency transportation
management services. The software is stated at cost less accumulated
amortization. Amortization is provided using the straight line method over an
estimated useful life of 68 months. During 1996, the Company changed its
estimate of the remaining useful life of the software from 36 months to 68
months. As a result, the Company prospectively adjusted its amortization
expense in connection with the software. The effect was to reduce the
amortization from $50,000 in 1995 to $36,666 in 1996 and 1997.
In connection with its acquisition of Systems in January 1996 (see Note 2),
the Company allocated approximately $80,000 of its acquisition price to
proprietary software related to the rights obtained in the acquisition to use
RealTime in Dade, Broward, Palm Beach and Monroe counties in Florida.
USE OF ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
STOCK BASED COMPENSATION
The Company accounts for stock based compensation using the intrinsic value
method and discloses certain fair market value information with respect to its
stock option activity in the notes to the financial statements (see Note 7).
In cases where the exercise price of stock options issued to employees is less
than the estimated fair market value of the underlying shares at the date of
grant, compensation expense is recognized over the vesting period.
PER SHARE DATA
Basic net income (loss) per share is computed by dividing net income (loss)
by the weighted average number of shares of common stock outstanding during
each period. Diluted net income per share is computed by dividing net income
by the weighted average number of shares of common stock and potentially
dilutive securities outstanding during each period. All per share data have
been adjusted to reflect the Company's 5-for-1 and 2-for-1 common stock splits
(see Note 10).
Potentially dilutive shares in the amount of 500,000, 1,153,846, and
1,641,789 for the years ended December 31, 1995, 1996 and 1997, respectively,
have been excluded from the computation of diluted earnings per share as the
effect of their inclusion is antidilutive. For the three months ended March
31, 1998, 1,234,949 and 974,150 potentially dilutive shares, representing
stock options and convertible preferred stock, respectively, have been added
to the weighted average shares outstanding to compute diluted net income per
share.
F-9
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
INCOME TAXES
The Company provides income taxes using the liability method under which
deferred tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between the financial statement and
income tax bases of the Company's assets and liabilities. An allowance is
recorded, based upon currently available information, when it is more likely
than not that any or all of a deferred tax asset will not be realized. The
provision for income taxes includes taxes currently payable, if any, plus the
net change during the year in deferred tax assets and liabilities recorded by
the Company.
FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The carrying value of the Company's financial instruments, including cash
and cash equivalents, accounts receivable, accounts payable, accrued expenses
and notes payable approximated fair value because of the short maturity of
these instruments. Accounts receivable result from contracts with a limited
number of customers in Georgia, Connecticut and Florida. At December 31, 1996
and 1997, contracts with two customers accounted for approximately 29.0% and
40.1%, respectively, of accounts receivable, and approximately 54.2% and
20.8%, respectively, of consolidated revenues. Additionally, a third customer
accounted for approximately 48.4% of consolidated revenues in 1997. The
Company routinely assesses the financial strength of its customers and records
an allowance for doubtful accounts when it determines that collection of a
particular amount is unlikely.
UNAUDITED PRO FORMA BALANCE SHEET AT MARCH 31, 1998
Upon completion of the offering, the Company will convert its preferred
stock into 974,150 shares of common stock. The unaudited pro forma balance
sheet information is presented as if such conversions had occurred as of March
31, 1998.
UNAUDITED PRO FORMA NET INCOME PER SHARE FOR THE THREE MONTHS ENDED MARCH 31,
1998
Unaudited pro forma basic net income per share for the three months ended
March 31, 1998 is computed by dividing net income by the weighted average
number of shares of common stock outstanding plus 974,150 shares of common
stock which, on a pro forma basis, are assumed to have been converted from
preferred stock during the period. Unaudited pro forma diluted net income per
share for the three months ended March 31, 1998 is computed by dividing net
income by the weighted average number of shares of common stock plus 974,150
shares of common stock which, on a pro forma basis, are assumed to have been
converted from preferred stock during the period plus 1,234,949 potentially
dilutive shares representing common stock options.
RECAPITALIZATION AND COMMON STOCK SPLIT
In connection with the contemplated initial public offering of the Company's
common stock as described in Note 10, the Company's Board of Directors
approved an increase in authorized common shares to 30,000,000 and authorized
a 2-for-1 common stock split to be distributed prior to the completion of the
initial public offering. All share and per share data have been adjusted to
reflect the common stock split.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued FAS
("Financial Accounting Standard") No. 130, "Reporting Comprehensive Income,"
("FAS 130") and FAS No. 131 "Disclosures About Segments of an Enterprise and
Related Information," ("FAS 131"). FAS 130 requires an additional statement
presenting certain adjustments to equity. FAS 131 established standards for
related disclosures about products and services, geographic locations and
major customers. The Company will adopt FAS 130 and FAS 131, effective
F-10
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
December 31, 1998. The Company believes that the adoption of these standards
will not have a material impact on the disclosure of net income (loss) per
share or on the disclosures in the Company's financial statements.
2. PURCHASE OF SUBSIDIARY
On January 1, 1996, LogistiCare acquired 100% of the outstanding common
stock of Systems in exchange for $50,000 in cash, promissory notes totaling
$50,000 and 55,000 shares of the Company's common stock. The acquisition was
accounted for as a purchase and, accordingly, the results of operations of
Systems are included in the accompanying statements of operations from January
1, 1996. The following unaudited pro forma statement of operations data for
the year ended December 31, 1995 gives effect to the acquisition as if it had
occurred on January 1, 1995:
<TABLE>
<S> <C>
Revenues.......................................................... $1,822,081
Loss from operations.............................................. $ (12,089)
Net loss.......................................................... $ (45,648)
Loss per share.................................................... $ (0.01)
</TABLE>
3. RELATED PARTY TRANSACTIONS
The Company provides dispatch services to an entity (the "Client") which was
controlled by certain of the Company's minority stockholders until such
minority stockholders sold their entire interest in the Client to an unrelated
entity in May 1997. Dispatch services were provided pursuant to an agreement
with the Client in connection with a transportation contract the Client has
with a municipality in South Florida (the "Florida Contract"). Under the terms
of the agreement, the Company earned $2.65 per trip processed on behalf of the
Client under the Florida Contract. In a related agreement, the Company paid to
the principal stockholders of the Client a fee of $1.00 for each trip
processed by the Company under the Florida Contract. Effective May 31, 1997,
the Company, the Client and the principal stockholders of the Client agreed to
amend the terms of the previously described agreements. Under the revised
terms beginning in June 1997, the Company earns $1.65 per trip processed on
behalf of the Client and pays no fees to the Client or the principal
stockholders of the Client. Under the agreements the Company recorded gross
revenues from the Client of approximately $1,925,000 and $553,000 in 1996 and
1997, respectively, and paid fees to the principal stockholders of the Client
of approximately $726,000 and $211,000 in 1996 and 1997, respectively. Such
fees have been recorded as a reduction of revenues under the Florida Contract.
The Company provides dispatch services to another entity (Health Trans)
which was controlled by certain of the minority stockholders until such
minority stockholders sold their entire interest in Health Trans to an
unrelated entity in May 1997. The agreement with Health Trans expires in
December 2025. Under the terms of the agreement, the Company earns $125 per
week for each of Health Trans' vehicles for which the Company provides
dispatch services. During 1996 and 1997, the Company recorded revenues of
approximately $200,000 and $271,000, respectively in connection with this
agreement.
During 1995, the Company entered into an agreement (the "Sales and Software
Agreement") with an affiliate of the Company's principal stockholder under
which the Company received $150,000 for 15 end-user licenses to the Company's
RealTime software, and future sales and marketing services to be provided by
the Company. In June 1997, the Company and its affiliate terminated all
commitments under the Sales and Software Agreement in accordance with its
terms. In connection with the termination, the Company made available to its
affiliate rights to an additional 13 end-user licenses of RealTime and
recognized approximately $131,000 in income during 1997 which had been
recorded as deferred revenue in the Company's balance sheet at December 31,
1996.
F-11
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
During 1995, 1996 and 1997, the Company recorded administrative charges of
$44,000, $66,000 and $0, respectively, for services provided by an affiliate
of the Company's principal stockholder. Such services were primarily
management services provided by the Company's current Chief Financial Officer
whose salary was paid by such affiliate during those years. Of the total
administrative charge of $144,000, including $34,000 in administrative charges
recorded in 1994, the Company paid $92,000 while the remainder was recorded as
a capital contribution during 1996.
During 1995, the Company paid Systems $42,000 for the rental of certain
office facilities.
During the period from March 1994 to August 1995, the Company's principal
stockholder loaned the Company a total of $270,000, evidenced by a promissory
note with interest at 7%, principal and interest due on January 31, 2002. In
March 1997, the shareholder canceled the note and contributed the principal
balance and accrued interest of $46,024 to the Company. The Company recorded
the contribution of the note as additional paid in capital.
4. PROPERTY AND EQUIPMENT, NET
At December 31, the Company's property and equipment consists of the
following:
<TABLE>
<CAPTION>
1996 1997
-------- ---------
<S> <C> <C>
Computer equipment...................................... $298,086 $ 450,771
Office furniture and fixtures........................... 7,654 43,212
Leasehold improvements.................................. 16,471 32,181
Equipment under capital lease (see Note 9).............. 40,831 426,635
-------- ---------
363,042 952,799
Less accumulated depreciation........................... (61,159) (103,067)
-------- ---------
$301,883 $ 849,732
======== =========
</TABLE>
During 1995, 1996 and 1997, the Company recorded depreciation expense
related to its property and equipment of $1,154, $60,292 and $117,458,
respectively.
5. DEFERRED REVENUE
At December 31, 1997, the $1,250,000 deferred revenue represents an interim
payment from a customer under a memorandum of understanding in connection with
the Company's claims that the data provided by such customer relating to a
transportation brokerage contract understated the number of passengers to be
transported under such contract. The payment is to be reconciled after a
reevaluation by the customer of the data provided. In event it is determined
that the payment was not due the Company, the payment will be deducted from
future amounts due under the contract.
In March 1998, the Company received an additional payment from the customer
of $5,236,333. Based on the increased capitation rates, effective February 1,
1998, included in the amended contract with the customer (see Note 10), the
Company recognized $2,256,927 of the payment from the customer as revenue in
the first quarter of 1998.
F-12
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
6. NOTES PAYABLE
At December 31, 1996 notes payable were as follows:
<TABLE>
<CAPTION>
NON-
AFFILIATED STOCKHOLDERS
ENTITIES AND OFFICERS
---------- ------------
<S> <C> <C>
Unsecured notes payable to officer of $25,000 each,
interest at 10% and 15%, no stated repayment terms. $ -- $ 50,000
Unsecured notes payable to minority shareholders
(former shareholders of Systems), interest at 9%
per annum, repayable in five equal monthly
installments beginning January 1, 1997............. -- 50,000
Revolving credit facility with bank, maximum amount
of $50,000 payable on demand, interest at the
bank's prime lending rate plus 2 1/2% per annum due
monthly, secured by substantially all assets of the
Company............................................ 25,000 --
Other unsecured note payable, interest at 9% per
annum, repayable in monthly installments of $12,889
including interest through February 1997........... 25,524 --
------- --------
$50,524 $100,000
======= ========
</TABLE>
During 1997, the Company paid $145,524 of notes payable outstanding at
December 31, 1996 which included $95,000 paid to stockholders and officers.
Also during 1997 a stockholder exchanged a $5,000 note payable for common
stock.
7. CAPITAL STOCK
Series A Preferred Stock
In March 1997, the Company's Board of Directors authorized the issuance of
100,000 shares of Series A Preferred Stock, $.01 par value (the "Preferred
Stock"). The Preferred Stock has no stated rate; however, the Board may
declare dividends on the Preferred Stock and, if declared, no dividends or
redemptions on common or other stock that is ranking junior to the Preferred
Stock may be made until the declared dividends on the Preferred Stock are
paid.
The Preferred Stock is automatically converted to common stock if the
Company undertakes an initial public offering. The conversion rate is the
greater of one share of common stock per share of Preferred Stock or a rate
based on various formulae depending on the timing and offering price of the
initial public offering. The preferred shareholders may also elect to convert
their shares into common stock at the conversion price, as defined.
The preferred stockholders have voting rights equal to one vote for each
share of common stock into which the Preferred Stock would be convertible on
the record date of the stockholder vote. In addition, a majority of the
preferred stockholders must approve certain corporate actions such as the
authorization of any class of stock that would be on a par or senior to the
Preferred Stock as to dividends, any increase in authorized shares of the
Preferred Stock, or any amendment of the Certificate of Incorporation that
would adversely affect the rights of the preferred stockholders.
F-13
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
Common Stock
In March 1997, the Company increased the number of authorized shares of
common stock from 1,000,000 to 1,500,000. In March 1998, the Company increased
the number of authorized shares of common stock from 1,500,000 to 7,500,000
(see Note 10). On May 6, 1998, the Company increased the number of authorized
shares of common stock from 7,500,000 to 30,000,000 (see Note 10).
Stock Option Plan
The 1995 Incentive Stock Option Plan (the "Plan") provides for the granting
of incentive and nonqualified stock options to key employee and nonemployee
directors, respectively, to purchase shares of the Company's common stock. The
Plan authorizes the issuance of options to purchase up to an aggregate of
2,166,670 shares. Incentive stock options generally vest at an annual rate of
20% starting at the grant date or one year thereafter. Nonqualified options
are fully vested at the grant date. At December 31, 1997, 243,340 shares of
common stock were reserved and available for future grants under the Plan.
Stock option activity and information about stock options is summarized in
the following tables:
<TABLE>
<CAPTION>
FAIR MARKET
AVERAGE EXERCISE VALUE AT GRANT
SHARES PRICE DATE
--------- ---------------- --------------
<S> <C> <C> <C>
Balance, January 1, 1995............. --
Granted.............................. 1,200,000 $0.01 $0.01
Exercised............................ --
---------
Balance, December 31, 1995........... 1,200,000 0.01
Granted.............................. --
Exercised............................ --
---------
Balance, December 31, 1996........... 1,200,000 0.01
Granted.............................. 723,330 1.59 1.59
Exercised............................ (480,000) 0.01
---------
Balance, December 31, 1997........... 1,443,330 $1.07
=========
</TABLE>
<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
------------------------------- ----------------
AVERAGE AVERAGE
EXERCISE EXERCISE
EXERCISE PRICE RANGE SHARES AVERAGE LIFE PRICE SHARES PRICE
-------------------- --------- ------------ -------- ------- --------
<S> <C> <C> <C> <C> <C>
$0.01--$0.25................ 1,013,330 5.3 years $0.08 -- --
$2.50 and above............. 430,000 9.6 years 2.50 270,000 $2.50
--------- -------
1,443,330 270,000
========= =======
</TABLE>
F-14
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
The Company uses the intrinsic value method of accounting for stock-based
compensation. Had the fair value based method been used to account for such
compensation, the effect would not have been significant in 1995 and 1996. The
net loss per share for 1997 would have been increased to the pro forma amounts
indicated below:
<TABLE>
<S> <C>
Net loss:
As reported.................................................. $(4,213,990)
Pro forma.................................................... (4,387,385)
Net loss per share (basic and diluted):
As reported.................................................. $ (1.17)
Pro forma.................................................... (1.22)
</TABLE>
Fair market value information for the Company's stock options for 1995, 1996
and 1997 was estimated using the Black-Scholes option pricing model assuming
risk free rates of 5.75% to 6.10%, no dividend yield, and expected terms of 2
to 4 years.
8. INCOME TAXES
During 1997, the Company changed its basis of accounting for income tax
purposes from a modified cash basis to the accrual basis. As a result, the
Company reversed approximately $173,000 of net deductible temporary
differences through its 1997 current income tax provision.
Additionally, during 1997 the Company changed its estimated tax rate from
approximately 19% to 38% as a result of the use of graduated tax rates in
1996. The effect of such change was an increase in net deferred tax assets of
approximately $51,000, prior to a corresponding increase in the valuation
allowance.
At December 31, 1996 and 1997, the Company had temporary differences between
the financial statement bases and the income tax bases of certain of its
assets and liabilities, resulting primarily from the use of the modified cash
basis of accounting for income tax purposes. Additionally, at December 31,
1996 and 1997, the Company had net operating loss carryforwards of
approximately $168,000 and $3,181,000, respectively, to offset future taxable
income. The significant components of the Company's deferred tax assets
(liabilities) are as follows:
<TABLE>
<CAPTION>
1996 1997
-------- -----------
<S> <C> <C>
Loss carryforwards................................... $ 28,926 $ 1,208,598
Effect of use of modified cash basis of accounting
for income tax purposes............................. 33,242 --
Depreciation and amortization........................ (9,666) (45,119)
Allowance for doubtful accounts...................... -- 36,100
Deferred revenue..................................... -- 475,000
Other................................................ -- 16,745
-------- -----------
Net deferred tax assets............................ 52,502 1,691,324
Valuation allowance.................................. (52,502) (1,691,324)
-------- -----------
$ -- $ --
======== ===========
</TABLE>
The Company's net operating losses at December 31, 1997 expire through 2017.
F-15
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
Presented below is a reconciliation between the Company's income tax
provision and the income tax provision which would result from applying the
federal statutory tax rate to the Company's loss before income taxes:
<TABLE>
<CAPTION>
1995 1996 1997
-------- -------- -----------
<S> <C> <C> <C>
Statutory tax benefit...................... $(19,036) $(17,818) $(1,432,757)
State and local income tax benefit......... (5,394) (5,049) (168,559)
Non-deductible contributed services........ -- 10,010 --
Other non-deductible expenses.............. 4,216 4,767 13,632
Change in valuation allowance.............. 20,214 8,090 1,587,684
-------- -------- -----------
Provision for income taxes................. $ -- $ -- $ --
======== ======== ===========
</TABLE>
9. COMMITMENTS AND CONTINGENCIES
The Company leases office space and equipment under noncancellable operating
leases with terms of two to five years. Rent expense for the years ended
December 31, 1995, 1996, and 1997 totaled $44,000, $167,000, and $287,000.
The Company leases computer and office equipment and a telephone system
under noncancellable leases classified as capital leases. The fair value of
the equipment was $40,831 and $385,803 for leases starting in 1996 and 1997,
respectively. The economic useful life of the equipment is five years.
<TABLE>
<CAPTION>
OPERATING CAPITAL
--------- --------
<S> <C> <C>
1998..................................................... $331,088 $164,280
1999..................................................... 342,932 161,072
2000..................................................... 276,233 123,999
2001..................................................... -- 6,776
-------- --------
Total minimum lease obligations.......................... 950,253 456,127
Less: imputed interest................................. -- (82,320)
-------- --------
Present value of net minimum lease obligations........... 950,253 373,807
Less: current maturities............................... -- 134,927
-------- --------
Capital lease obligations, net........................... $950,253 $238,880
======== ========
</TABLE>
The Company is a defendant in two pending legal proceedings which management
believes are incidental to the Company's business. The Company does not
believe that either of these actions will have a material adverse effect on
the Company's financial position or results of operations.
10. SUBSEQUENT EVENTS
In February 1998 the Company began operations under a memorandum of
understanding with the Connecticut Department of Social Services (the "CDSS")
to provide transportation logistics and brokerage services for approximately
40,000 Medicaid recipients. The memorandum of understanding was executed
pending a final contract to be signed covering the services being provided.
The pending contract is the result of an award pursuant to the Company's
response to a request for proposal issued by the CDSS.
In March 1998, the Company amended its contracts with the Georgia Department
of Medical Assistance ( the "GDMA") for the provision of transportation
logistics and brokerage services. The amendments included provisions which
increased the capitation rate paid and modified certain operational
requirements. The amended capitation rates are effective as of February 1,
1998 and cover specific contract service periods.
F-16
<PAGE>
LOGISTICARE, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
Capitation rates in effect for the contract service period from February 1,
1998 through March 31, 1998 resulted in an increase in revenues for the first
quarter of 1998 of approximately $4,200,000 compared to the revenues which
would have been recognized based on the rates in effect immediately prior to
February 1, 1998. Under the amended contract which is subject to renewal by
GDMA, capitation rates in effect for the contract service periods subsequent
to June 30, 1998 are 23% to 26% lower than the rates in effect for the period
before July 1, 1998.
In March 1998, the Company increased the number of authorized shares of
common stock from 1,500,000 to 7,500,000 and simultaneously effected a 5-for-1
stock split. In addition, in connection with the contemplated initial public
offering of the Company's common stock, the board of directors approved an
additional increase in the authorized number of shares of common stock from
7,500,000 to 30,000,000 and authorized a 2-for-1 stock split to be distributed
prior to the completion of the initial public offering. The effect of the 5-
for-1 stock split and the effect of the 2-for-1 stock split have been
reflected for all periods presented. All references to the number of common
shares and per share amounts elsewhere in the financial statements and the
notes thereto have been restated to reflect the effect of the 5-for-1 and 2-
for-1 stock splits for all periods presented.
F-17
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICI-
TATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
-----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................................................... 3
Risk Factors........................................................... 5
Use of Proceeds........................................................ 13
Capitalization......................................................... 14
Selected Financial Information......................................... 16
Management's Discussion and Analysis of Financial Condition and Results
of Operations......................................................... 17
Business............................................................... 23
Management............................................................. 34
Certain Transactions................................................... 39
Principal and Selling Stockholders..................................... 40
Description of Capital Stock........................................... 43
Shares Eligible for Future Sale........................................ 45
Underwriting........................................................... 46
Legal Matters.......................................................... 47
Experts................................................................ 47
Additional Information................................................. 48
Index to Consolidated Financial Statements............................. F-1
</TABLE>
-----------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDI-
TION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UN-
DERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2,300,000 SHARES
LOGISTICARE, INC.
COMMON STOCK
--------------
PROSPECTUS
--------------
HAMBRECHT & QUIST
EVEREN SECURITIES, INC.
, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses and costs (other than
underwriting discounts and commissions) expected to be incurred by the Company
in connection with the issuance and distribution of the securities being
registered under this registration statement. Except for the SEC and NASD
filing fees, all expenses have been estimated and are subject to future
contingencies.
<TABLE>
<S> <C>
SEC registration fee............................................... $ 9,370
NASD fee........................................................... 3,674
Nasdaq Entry Fee...................................................
Federal and State taxes............................................
Legal fees and expenses............................................
Printing and engraving expenses....................................
Accounting fees and expenses.......................................
Blue sky fees and expenses.........................................
Transfer agent and registrar fees and expenses.....................
Miscellaneous......................................................
--------
Total............................................................ $750,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article of the Company's Restated Certificate of Incorporation provides
that the Company shall indemnify and hold harmless, to the fullest extent
authorized by the Delaware General Corporation Law, its officers and directors
against all expenses, liability and loss actually and reasonably incurred in
connection with any civil, criminal, administrative or investigative action,
suit or proceeding. The Certificate of Incorporation also extends
indemnification to those serving at the request of the Company as directors,
officers, employees or agents of other enterprises.
In addition, Article of the Company's Restated Certificate of
Incorporation provides that no director shall be personally liable for any
breach of fiduciary duty. Article does not eliminate a director's liability
(i) for a breach of his or her duty of loyalty to the Company or its
stockholders, (ii) for acts of intentional misconduct, (iii) under Section 174
of the Delaware General Corporation Law for unlawful declarations of dividends
or unlawful stock purchases or redemptions, or (iv) for any transactions from
which the director derived an improper personal benefit.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation to indemnify its directors and officers against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit
or proceeding brought by third parties, if such directors or officers acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reason to believe their conduct was unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably incurred
by directors and officers in connection with the defense or settlement of an
action or suit, and only with respect to a matter as to which they shall have
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interest of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable
to the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
officers or directors are reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a corporation may eliminate or limit the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its
II-1
<PAGE>
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective.
The Underwriting Agreement provides for indemnification of directors and
officers of the Company by the Underwriters against certain liabilities.
Pursuant to Section 145 of the DGCL and the Restated Certificate of
Incorporation and the Amended and Restated By-laws of the Company, the Company
maintains directors' and officers' liability insurance coverage.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1, 1995, the Company has issued unregistered securities in the
transactions described below, all of which were deemed to be exempt from
registration under the Securities Act. All discussions of transactions
occurring after March 30, 1998 in this Item 15 give effect to a 5-for-1 stock
split of Common Stock that was effected in at such time (the "Stock Split").
All references to "Common Shares" refer to shares of the Company's Common
Stock, $.01 par value per share. All references to "Preferred Shares" refer to
shares of the Company's Series A Preferred Stock, $.01 par value per share.
(1) On or about January 1, 1996, the Company issued a total of 275,000
Common Shares to John Shermyen, Edward Steinberg, Sigmund Zilber and
Martin Zilber in connection with the purchase of all the outstanding
shares of Automated Dispatch Systems, Inc.
(2) On or about March 21, 1997, the Company issued 624,150 Common Shares to
John Pappajohn, 100,000 Common Shares to Halkis Ltd., 100,000 Common
Shares to Thebes, Ltd., 50,000 Common Shares to PMA Ltd., and 100,000
Common Shares to the Ann Pappajohn Inter Vivos Trust 1989 for an
aggregate purchase price of $250,000.
(3) On or about March 21, 1997, the Company issued 974,150 Common Shares to
Derace L. Schaffer for an aggregate purchase price of $250,000.
(4) On or about March 21, 1997, the Company issued 16,250 Common Shares to
John Shermyen for an aggregate purchase price of $4,170.
(5) On or about March 21, 1997, the Company issued 52,810 Common Shares to
Ed Steinberg for an aggregate price of $13,553.
(6) On or about June 6, 1997, the Company issued 68,191 Preferred Shares to
Edgewater Private Equity Fund II, L.P. for an aggregate purchase price
of $700,001.
(7) On or about June 6, 1997, the Company issued 12,621 Preferred Shares to
John Pappajohn for an aggregate purchase price of $129,558.
(8) On or about June 6, 1997, the Company issued 4,871 Preferred Shares to
Scott J. Weinstein for an aggregate purchase price of $50,002.
(9) On or about June 6, 1997, the Company issued 4,871 Preferred Shares to
Steven B. Pilavin for an aggregate purchase price of $50,002.
(10) On or about June 6, 1997, the Company issued 2,435 Preferred Shares to
Robert S. Hirsch for an aggregate purchase price of $24,996.
(11) On or about June 6, 1997, the Company issued 974 Preferred Shares to
James Manzari for an aggregate purchase price of $9,998.
(12) On or about June 6, 1997, the Company issued 812 Preferred Shares to
John Shermyen for an aggregate purchase price of $8,340.
(13) On or about June 6, 1997, the Company issued 2,640 Preferred Shares to
Edward Steinberg for an aggregate purchase price of $27,100.
(14) On or about November 18, 1997, the Company issued 400,000 Common
Shares for an aggregate purchase price of $800 to John Shermyen as a
result of his exercise of certain stock options.
(15) On or about November 18, 1997, the Company issued 80,000 Common Shares
for an aggregate purchase price of $160 to Michael Weksel as a result
of his exercise of certain stock options.
II-2
<PAGE>
No underwriters were involved in the foregoing transactions and no
underwriting discounts or commissions were paid in connection therewith. The
issuances of securities sold in the transactions reference above were not
registered under the 1933 Act in reliance on the exemption in Section 4(2) of
the 1933 Act. The Company believes that Common Shares that were issued to
existing shareholders in connection with the Stock Split were, to the extent
that the Securities Act was applicable to such transaction, exempt from
registration under the Securities Act because they involved no "sales" within
the meaning of Section 2(3) of the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement
3.1 Certificate of Incorporation of the Company (including all amendments)
3.2 By-Laws of the Company
3.3* Restated Certificate of Incorporation of the Company, adopted by the
Company on May , 1998
3.4* Amended and Restated By-Laws of the Company, adopted by the Company on
May , 1998
4.1 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of the Company, dated June 6, 1997
5* Opinion of Proskauer Rose LLP re: validity of securities
9.1 Agreement between TGIS Partners, as nominee, and William B. McLiverty,
dated February 16, 1998
9.2 Agreement between TGIS Partners, as nominee, and Joseph Handy, dated
February 16, 1998
9.3 Agreement between TGIS Partners, as nominee, and Charles P. Krokel,
dated February 16, 1998
9.4 Agreement between TGIS Partners, as nominee, and Gregory Weksel, dated
February 16, 1998
9.5 Agreement between TGIS Partners, as nominee, and Leonard Levine, dated
February 16, 1998
9.6 Agreement between TGIS Partners, as nominee, and Bertrand H. Weidberg,
Esq., dated February 16, 1998
9.7 Agreement between TGIS Partners, as nominee, and Francis M. Sassano,
dated February 16, 1998
9.8 Agreement between TGIS Partners, as nominee, and David Weksel, dated
February 16, 1998
9.9 Agreement between TGIS Partners, as nominee, and Deanna Weksel, dated
February 16, 1998
9.10 Agreement between TGIS Partners, as nominee, and Leonor Firstenberg,
dated February 16, 1998
10.1 Severance and Noncompetition Agreement, dated March 9, 1995, between the
Company and John L. Shermyen
10.2 1995 Incentive Stock Option Plan of the Company (including all
amendments)
10.3 Agreement, dated June 20, 1996, between Automated Dispatch Systems, Inc.
and Health Trans, Inc.
10.4 Agreement, dated June 20, 1996, between Automated Dispatch Systems, Inc.
and Health Trans of South Florida, Inc.
10.5 Dispatch Services Agreement, dated June 20, 1996, between Automated
Dispatch Systems, Inc. and Comprehensive Paratransit Services
10.6 Management and Advisory Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and SEM, Inc.
10.7 Agreement, dated June 20, 1996, among Automated Dispatch Systems, Inc.
Comprehensive Paratransit Services and SEM, Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.8* Agreement, dated May 4, 1998, between the Company and the Connecticut
Department of Social Services
10.9 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the Central
region of Georgia
10.10 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the East region
of Georgia
10.11 Contract, dated July 17, 1997, between the Company and the Georgia
Department of Administrative Services with respect to the Southwest
region of Georgia
10.12 Lease Agreement, dated August 27, 1997, between the Company and
Principal Mutual Life Insurance Company (including all amendments)
10.13 Lease Agreement, dated August 7, 1997, between the Company and New
World Partners Joint Venture
10.14 Lease Agreement, dated October 8, 1996, between the Company and Gerald
A. Chase
10.15 License Agreement between Automated Dispatch Systems, Inc. and
Automated Dispatch Services, Inc., dated January 1, 1995
10.16 License Agreement between Automated Dispatch Services, Inc. and
RadioSoft, Inc. dated April 26, 1994 (including all amendments)
10.17* License Agreement between E.F Johnson and RadioSoft, Inc. dated ,
1995
10.18* 1998 Stock Option Plan of the Company
23.1 Consent of Price Waterhouse LLP
23.2* Consent of Proskauer Rose LLP (contained in opinion to be filed as
Exhibit 5)
24.1 Power of Attorney (set forth on page II-22)
27.1 Financial Data Schedule
</TABLE>
- ---------------------
* To be filed by amendment
II-4
<PAGE>
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement (filed herewith as Exhibit
1.1) certificates in such denominations and registered in such names as
required by the Underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE UNDERSIGNED
REGISTRANT CERTIFIES THAT IT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF NEW YORK, STATE OF NEW YORK, ON THE 8TH DAY OF MAY, 1998.
LogistiCare, Inc.
/s/ John L. Shermyen
By: _________________________________
John L. Shermyen
President and Chief Executive
Officer
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose
signature appears below hereby constitutes and appoints John L. Shermyen and
Michael E. Weksel, or either of them, as his true and lawful attorney-in-fact
and agent, with full power of substitution, to sign on his behalf individually
and in any and all capacities (until revoked in writing), any and all
amendments (including post-effective amendments) to this Registration
Statement on Form SB-2, and any registration statement to relating to the same
offering as this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) and the Securities Act of 1933, to file the same with
all exhibits thereto and all other documents in connection therewith with the
Securities and Exchange Commission, granting to such attorneys-in-fact and
agents, and each of them, full power and authority to do all such other acts
and things requisite or necessary to be done, and to execute all such other
documents as they, or either of them, may deem necessary or desirable in
connection with the foregoing, as fully as the undersigned might or could do
in person, hereby ratifying and confirming all that such attorneys-in-fact and
agents, or either of them, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ William Weksel Chairman of the Board May 8, 1998
_________________________
WILLIAM WEKSEL
/s/ John L. Shermyen May 8, 1998
_________________________ President, Chief
JOHN L. SHERMYEN Executive Officer and
Director
/s/ Michael E. Weksel May 8, 1998
_________________________ Vice President, Chief
MICHAEL E. WEKSEL Financial Officer and
Director (Principal
Financial Officer)
Director May 8, 1998
_________________________
JOHN PAPPAJOHN
_________________________
DERACE L. SCHAFFER Director May 8, 1998
/s/ Albert Cortina Corporate Controller May 8, 1998
_________________________ (Controller or Principal
ALBERT CORTINA Accounting Officer)
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.1* Form of Underwriting Agreement
3.1 Certificate of Incorporation of the Company (including all
amendments)
3.2 By-Laws of the Company
3.3* Restated Certificate of Incorporation of the Company, adopted
by the Company on May , 1998
3.4* Amended and Restated By-Laws of the Company, adopted by the
Company on May , 1998
4.1 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of the Company, dated June 6, 1997
5* Opinion of Proskauer Rose LLP re: validity of securities
9.1 Agreement between TGIS Partners, as nominee, and William B.
McLiverty, dated February 16, 1998
9.2 Agreement between TGIS Partners, as nominee, and Joseph Handy,
dated February 16, 1998
9.3 Agreement between TGIS Partners, as nominee, and Charles P.
Krokel, dated February 16, 1998
9.4 Agreement between TGIS Partners, as nominee, and Gregory
Weksel, dated February 16, 1998
9.5 Agreement between TGIS Partners, as nominee, and Leonard
Levine, dated February 16, 1998
9.6 Agreement between TGIS Partners, as nominee, and Bertrand H.
Weidberg, Esq., dated February 16, 1998
9.7 Agreement between TGIS Partners, as nominee, and Francis M.
Sassano, dated February 16, 1998
9.8 Agreement between TGIS Partners, as nominee, and David Weksel,
dated February 16, 1998
9.9 Agreement between TGIS Partners, as nominee, and Deanna Weksel,
dated February 16, 1998
9.10 Agreement between TGIS Partners, as nominee, and Leonor
Firstenberg, dated February 16, 1998
10.1 Severance and Noncompetition Agreement, dated March 9, 1995,
between the Company and John L. Shermyen
10.2 1995 Incentive Stock Option Plan of the Company (including all
amendments)
10.3 Agreement, dated June 20, 1996, between Automated Dispatch
Systems, Inc. and Health Trans, Inc.
10.4 Agreement, dated June 20, 1996, between Automated Dispatch
Systems, Inc. and Health Trans of South Florida, Inc.
10.5 Dispatch Services Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and Comprehensive Paratransit
Services
10.6 Management and Advisory Agreement, dated June 20, 1996, between
Automated Dispatch Systems, Inc. and SEM, Inc.
10.7 Agreement, dated June 20, 1996, among Automated Dispatch
Systems, Inc. Comprehensive Paratransit Services and SEM, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.8* Agreement, dated May 4, 1998, between the Company and the
Connecticut Department of Social Services
10.9 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the Central region of Georgia
10.10 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the East region of Georgia
10.11 Contract, dated July 17, 1997, between the Company and the
Georgia Department of Administrative Services with respect to
the Southwest region of Georgia
10.12 Lease Agreement, dated August 27, 1997, between the Company and
Principal Mutual Life Insurance Company (including all
amendments)
10.13 Lease Agreement, dated August 7, 1997, between the Company and
New World Partners Joint Venture
10.14 Lease Agreement, dated October 8, 1996, between the Company and
Gerald A. Chase
10.15 License Agreement between Automated Dispatch Systems, Inc. and
Automated Dispatch Services, Inc., dated January 1, 1995
10.16 License Agreement between Automated Dispatch Services, Inc. and
RadioSoft, Inc. dated April 26, 1994 (including all amendments)
10.17* License Agreement between E.F Johnson and RadioSoft, Inc. dated
, 1995.
10.18* 1998 Stock Option Plan of the Company
23.1 Consent of Price Waterhouse LLP
23.2* Consent of Proskauer Rose LLP (contained in opinion to be filed
as Exhibit 5)
24.1 Power of Attorney (set forth on page II-22)
27.1 Financial Data Schedule
</TABLE>
- ---------------------
* To be filed by amendment
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
RADIOSOFT, INC.
The undersigned incorporator, for the purpose of forming a corporation
pursuant to the provisions of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
Article I.
NAME
----
The name of the corporation shall be RadioSoft, Inc.
Article II.
PURPOSES
--------
The corporation shall have general business purposes and shall have
authority to engage in and do any act necessary or incidental to the conduct of
any business for which corporations may be organized under the General
Corporation Law of the State of Delaware.
Article III.
PERIOD OF DURATION
------------------
The corporation shall have perpetual existence.
Article IV.
REGISTERED OFFICE
-----------------
The address of the registered office of the corporation in the State of
Delaware is
Page 1 of 7
<PAGE>
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of the corporation's registered agent at such address
is The Corporation Trust Company.
Article V.
INCORPORATOR
------------
The name and mailing address of the incorporator, who is a natural person of
full age, is Scott R. Bocklund, 438 Gateway Boulevard, Burnsville, Minnesota
55337-2564.
Article VI.
CAPITAL
-------
The aggregate number of shares that the corporation shall have authority to
issue is One Million (1,000,000) such shares being common voting shares
designated as "Common Stock" with a par value of one cent ($.01) per share.
Article VII.
DENIAL OF CUMULATIVE VOTING
---------------------------
Voting by stockholders for election of directors shall not be cumulative.
Article VIII.
DENIAL OF PRE-EMPTIVE RIGHTS
----------------------------
The stockholders of the corporation shall have no pre-emptive right to
acquire unissued securities or rights to purchase securities of the corporation,
whether now or hereafter authorized.
Page 2 of 7
<PAGE>
Article IX.
INITIAL BOARD OF DIRECTORS
--------------------------
The name and mailing address of each person who is to serve as a director
until the first annual meeting of the stockholders or until their successor(s)
is elected and qualified is as follows:
William Weksel 438 Gateway Boulevard
Burnsville, MN 55337-2564
Robert H. Davies 438 Gateway Boulevard
Burnsville, MN 55337-2564
Article X.
DIRECTOR LIABILITY
------------------
No director of the corporation shall be personally liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this Article X shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law of the State of Delaware;
(iv) for any transaction from which the director derived an improper personal
benefit; or (v) for any act or omission occurring prior to the date this Article
X becomes effective. If the General Corporation Law of the State of Delaware is
hereafter amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended from time to time.
Page 3 of 7
<PAGE>
Article XI.
ELECTION OF DIRECTORS
---------------------
Election of directors need not be by written
ballot unless the By-Laws of the corporation require otherwise.
Article XII.
AMENDMENT OR REPEAL OF CERTIFICATE OF INCORPORATION
---------------------------------------------------
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
Article XIII.
ADOPTION, AMENDMENT OR REPEAL OF BY-LAWS
----------------------------------------
The power to adopt, amend or repeal the By-Laws
of the corporation is conferred upon the Board of Directors.
Article XIV.
BINDING EFFECT OF JUDICIALLY
----------------------------
SANCTIONED COMPROMISE OR ARRANGEMENT
------------------------------------
Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under(S)
291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers
Page 4 of 7
<PAGE>
appointed for this corporation under (S) 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in
number representing three fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
The above-named incorporator has executed this Certificate of Incorporation as
of March 11, 1994.
INCORPORATOR:
/s/
-------------------------------
Scott R. Bocklund
Sole Incorporator
438 Gateway Boulevard
Burnsville, MN 55337-2564
Subscribed and sworn to
before me this 11th
day of March, 1994.
____________________________________
Notary Public
Page 5 of 7
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LOGISTICARE, INC.
I, Michael E. Weksel, hereby certify that:
1. I am a Vice President of LogistiCare, Inc., a Delaware corporation formerly
known as Automated Dispatch Solutions, Inc. (the "Corporation").
2. Article VI. of the Corporation's Certificate of Incorporation is amended to
read in its entirety as follows:
"The aggregate number of shares which the corporation shall be entitled to
issue is One Million Five Hundred Thousand (1,500,000) shares of Common
Stock, par value $.0l per share, and One Hundred Thousand (100,000) shares
of Preferred Stock, par value $.0l per share."
3. The foregoing amendment of the Corporation's Certificate of Incorporation
has been duly approved by the Board of Directors of the Corporation in
accordance with Section 242 of the General Corporation Law of the State of
Delaware (the "General Corporation Law").
4. The foregoing amendment of the Corporation's Certificate of Incorporation
has been duly approved by Unanimous Consent of the stockholders of the
Corporation, in accordance with Section 228 of the General Corporation Law.
5. I further declare and acknowledge, under penalty of perjury under the laws
of the State of Delaware, that this instrument is my act and deed and that the
facts herein are true of my own knowledge.
Date: March 19, 1997
________________________________________
Michael E. Weksel, Vice President
ATTEST:
________________________________________
William Weksel, Assistant Secretary
Page 6 of 7
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 10/14/1997
971345973 -2387136
STATE of DELAWARE
CERTIFICATE of AMENDMENT of
CERTIFICATE of INCORPORATION
AUTOMATED DISPATCH SOLUTIONS, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
.FIRST: That at a meeting of the Board of Directors of Automated Dispatch
Solutions, Inc. was held on October 1, 1997, at which time resolutions were
duly adopted setting forth a proposed amendment of the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable
and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered "ARTICLE I." so that, as amended,
said Article shall be and read as follows:
"The name of the corporation shall be LOGISTICARE, INC."
.SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation
Law of the State of Delaware at which meeting the necessary number of shares
as required by statute were voted in favor of the amendment.
.THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
.FOURTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.
.IN WITNESS WHEREOF, said corporation, Automated Dispatch Solutions, Inc., has
caused this certificate to be signed by John L. Shermyen, an Authorized
Officer, this 4/th/ day of October, A.D. 1997.
BY:/s/
-------------------------------
Authorized Officer
TITLE OF OFFICER: President
Page 7 of 7
<PAGE>
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
RadioSoft, Inc.
- --------------------------------------------------------------------------------
a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of RadioSoft, Inc. was held
--------------------------
August 1, 1996 and
- --------------------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered " Article I " so that, as amended, said
-----------
Article shall be and read as follows:
The name of the corporation shall be Automated Dispatch Solutions, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and held
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said
-------------------------------------------------------
has caused this certificate to be signed by
Michael E. Weksel , an Authorized Officer,
- --------------------------------------------------------
this 13th day of September , 19 96 .
----------- -------------------- -----
BY: /s/ Michael E. Weksel
------------------------------------
TITLE OF OFFICER: Vice President & CFO
------------------------------------
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM ??/??/1998
941122070 - 2347236
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LOGISTICARE, INC.
I, Michael E. Weksel, hereby certify that:
1. I am a Vice President of LogistiCare, Inc., a Delaware corporation (the
"Corporation").
2. Article VI. of the Corporation's Certificate of Incorporation is amended to
read in its entirety as follows:
"The aggregate number of shares which the corporation shall be entitled
to issue is Seven Million Five Hundred Thousand (7,500,000) shares of
Common Stock, par value $.01 per share, and One Hundred Thousand
(100,000) shares of Preferred Stock, par value $.01 per share."
3. The foregoing amendment of the Corporation's Certificate of Incorporation
has been duly approved by the Board of Directors of the Corporation in
accordance with Section 242 of the General Corporation Law of the State of
Delaware (the "General Corporation Law").
4. The foregoing amendment of the Corporation's Certificate of Incorporation
has been duly approved by the Written Consent of the stockholders of the
Corporation, in accordance with Section 228 of the General Corporation Law.
5. I further declare and acknowledge, under penalty of perjury under the laws
of the State of Delaware, that this instrument is my act and deed and that the
facts herein are true of my own knowledge.
Date: March 15, 1998
/s/ Michael E. Weksel
----------------------------------------
Michael E. Weksel, Vice President
ATTEST:
/s/ [ILLEGIBLE SIGNATURE]
----------------------------------------
<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
RADIOSOFT, INC.
STOCKHOLDERS
------------
Section 1.01 Place of Meetings. Each meeting of the stockholders shall
------------ -----------------
be held at the principal executive office of the Corporation or at such other
place, within or without the State of Delaware, as may be designated by the
Board of Directors or the Chief Executive Officer; provided, however, that any
meeting called by or at the demand of a stockholder or stockholders shall be
held in the county where the principal executive office of the Corporation is
located.
Section 1.02 Annual Meetings. Annual meetings of the stockholders may
------------ ---------------
be held on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if an annual meeting has not been held during
the immediately preceding 15 months, a stockholder or stockholders holding three
(3) percent or more of the voting power of all shares entitled to vote may
demand an annual meeting of stockholders by written demand given to the Chief
Executive Officer or Chief Financial Officer of the Corporation. At each annual
meeting the stockholders shall elect qualified successors for directors who
serve for an indefinite term or whose terms have expired or are due to expire
within six months after the date of the meeting and may transact any other
business; provided, however, that no business with respect to which special
notice is required by law shall be transacted unless such notice shall have been
given.
Section 1.03 Special Meetings. Special meetings of stockholders may be
------------ ----------------
called by the Board of Directors or by the President and shall be called by the
President or the Secretary at the request in writing of a majority of the Board
of Directors or at the request in writing by stockholders owning twenty-five
percent in amount of the outstanding shares entitled to vote at such special
meeting. Such request shall state the purpose or purposes of the proposed
meeting. Business transacted at a special meeting shall be confined to the
purpose or purposes stated in the notice. This By-Law may only be amended or
repealed by vote of the holders of the shares at the time entitled to vote in
the election of any directors.
Section 1.04 Meeting Held Upon Stockholder Demand. Within 30 days
------------ ------------------------------------
after receipt of a demand by the Chief Executive Officer or the Chief Financial
Officer from any stockholder or stockholders entitled to call a meeting of the
stockholders, it shall be the duty of the Board of Directors of the Corporation
to cause a special or annual meeting of stockholders, as the case may be, to be
duly called and held on notice no later than 90 days after receipt of such
demand. If the Board fails to cause such a meeting to be called and held as
required by this Section, the stockholder or stockholders making the demand may
call the meeting by giving notice as provided in Section 1.06 hereof at the
expense of the Corporation.
<PAGE>
Section 1.05 Adjournments. Any meeting of the stockholders may be
------------ ------------
adjourned from time to time to another date, time and place. If any meeting of
the stockholders is so adjourned, no notice as to such adjourned meeting need be
given if the date, time and place at which the meeting will be reconvened are
announced at the time of adjournment.
Section 1.06 Notice of Meetings. Unless otherwise required by law,
------------ ------------------
written notice of each meeting of the stockholders, stating the date, time and
place and, in the case of a special meeting, the purpose or purposes, shall be
given at least 10 days and not more than 60 days prior to the meeting to every
holder of shares entitled to vote at such meeting except as specified in Section
1.05 or as otherwise permitted by law. The business transacted at a special
meeting of stockholders is limited to the purposes stated in the notice of the
meeting. If action is proposed to be taken that might entitle stockholders to
payment for their shares, the notice shall include a statement of that purpose
and to that effect.
Section 1.07 Waiver of Notice. A stockholder may waive notice of the
------------ ----------------
date, time, place and purpose or purposes of a meeting of stockholders. A
waiver of notice by a stockholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance. Attendance by a stockholder at a meeting is a waiver of notice of
that meeting, unless the stockholder objects at the beginning of the meeting to
the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item may
not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.
Section 1.08 Voting Rights. Except as otherwise provided by law or by
------------ -------------
the Certificate of Incorporation:
Subdivision 1. A stockholder shall have one vote for each share held
which is entitled to vote. Except as otherwise required by law, a holder of
shares entitled to vote may vote any portion of the shares in any way the
stockholder chooses. If a stockholder votes without designating the proportion
or number of shares voted in a particular way, the stockholder is deemed to have
voted all of the shares in that way.
Subdivision 2. Corporate action to be taken by stockholder vote,
other than the election of directors, shall be authorized by a majority of the
votes cast at a meeting of stockholders.
Subdivision 3. All elections for directors shall be decided by a
plurality of the votes cast at a meeting of stockholders by the holders of
shares entitled to vote in the election.
Section 1.09 Fixing Record Date. In order that the Corporation may
------------ ------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date for any such determination of stockholders. Such date shall not be more
than 60 nor less than 10 days before the
2
<PAGE>
date of such meeting, nor more than 60 days prior to any other action. If no
record date is fixed it shall be determined in accordance with the provisions of
law.
Section 1.10 Proxies. A stockholder may cast or authorize the casting of
------------ --------
a vote by filing a written appointment of a proxy with an officer of the
Corporation at or before the meeting at which the appointment is to be
effective. The stockholder may sign or authorize the written appointment by
telegram, cablegram or other means of electronic transmission setting forth or
submitted with information sufficient to determine that the stockholder
authorized such transmission. Any copy, facsimile, telecommunication or other
reproduction of the original of either the writing or transmission may be used
in lieu of the original, provided that it is a complete and legible reproduction
of the entire original. No proxy shall be valid after expiration of three years
from the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the stockholder executing it, except as
otherwise provided by law.
Section 1.11 Quorum. Except as otherwise required by law, the
------------ ------
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the Corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders,
provided that when a specified item of business is required to be voted on by a
class or classes, the holders of a majority of the shares of such class or
classes shall constitute a quorum for the transaction of such specified item of
business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any stockholders.
In case a quorum shall not be present at any meeting, a majority in
interest of the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting until the requisite amount of
stock entitled to vote shall be present.
Section 1.12 Acts of Stockholders.
------------ --------------------
Subdivision 1. Except as otherwise required by law or specified in
the Certificate of Incorporation or these By-Laws, the stockholders shall take
action by the affirmative vote of the holders of the greater of (a) a majority
of the voting power of the shares present and entitled to vote on that item of
business or (b) a majority of the voting power of the minimum number of shares
entitled to vote that would constitute a quorum for the transaction of business
at a duly held meeting of stockholders.
Subdivision 2. A stockholder voting by proxy authorized to vote on
less than all items of business considered at the meeting shall be considered to
be present and entitled to vote only with respect to those items of business for
which the proxy has authority to vote. A proxy who is given authority by a
stockholder who abstains with respect to an item of business shall be considered
to have authority to vote on that item of business.
3
<PAGE>
Section 1.13 Action Without a Meeting. Any action required or
------------ ------------------------
permitted to be taken at a meeting of the stockholders of the Corporation may be
taken without a meeting, without prior notice and without a vote, by written
action signed by all of the stockholders entitled to vote on that action. The
written action is effective when it has been signed by all of those
stockholders, unless a different effective time is provided in the written
action.
DIRECTORS
---------
Section 2.01 Number; Qualifications. Except as may otherwise be
------------ ----------------------
provided in the Certificate of Incorporation or by law, the business and affairs
of the Corporation shall be managed by or under the direction of a Board of one
or more directors, the members of which shall be at least 21 years of age.
Directors shall be natural persons. The stockholders at each annual meeting
shall determine the number of directors to constitute the Board, provided that
thereafter the authorized number of directors may be increased by the
stockholders or the Board and decreased by the stockholders. Directors need not
be stockholders.
Section 2.02 Term. Each director shall serve for an indefinite term
------------ ----
that expires at each annual meeting of the stockholders. A director shall hold
office until a successor is elected and has qualified or until the earlier
death, resignation, removal or disqualification of the director.
Section 2.03 Newly Created Directorships and Vacancies. Unless
------------ -----------------------------------------
otherwise provided in the Certificate of Incorporation, any newly created
directorship resulting from an increase in the number of directors and vacancies
occurring on the Board for any reason, except the removal of directors without
cause, may be filled for the unexpired term by a majority vote of the remaining
directors, though less than a quorum, or by a sole remaining director; if there
are no directors then in office due to such a vacancy, the stockholders may
elect a successor who shall hold office for the unexpired term. Vacancies
occurring by reason of the removal of directors without cause shall be filled
for the unexpired term by vote of the stockholders unless otherwise provided in
the Certificate of Incorporation.
Section 2.04 Removal of Directors. Any director or directors may be
------------ --------------------
removed, either with or without cause, at any time by the affirmative vote of
the holders of a majority of all the shares of stock outstanding and entitled to
vote, at a special meeting of the stockholders called for that purpose and the
vacancies thus created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the stockholders
entitled to vote.
Section 2.05 Resignation. Any director may resign at any time. Such
------------ -----------
resignation shall be made in writing, and shall take effect at the time
specified therein, and if no time be specified, at the time of its receipt by
the Board of Directors, President or Secretary. The acceptance of a resignation
shall not be necessary to make it effective.
Section 2.06 Place of Meetings. Each meeting of the Board of
------------ -----------------
Directors shall be held at the principal executive office of the Corporation or
at such other place as may be designated from time to time by a majority of the
members of the Board or by the Chief Executive Officer. A meeting
4
<PAGE>
may be held by conference among the directors using any means of communication
through which the directors may simultaneously hear each other during the
conference.
Section 2.07 Notice of Meetings of the Board. Annual meetings of the
------------ -------------------------------
Board may be held without notice at such places and times as shall be determined
from time to time by resolution of the directors. Special meetings of the Board
shall be held upon notice to the directors and may be called by the President
upon three days' notice to each director either personally or by mail or by
wire; special meetings shall be called by the President or by the Secretary in a
like manner on the written request of any two directors. Notice of a meeting
need not be given to any director who submits a waiver of notice whether before
or after the meeting or who attends the meeting without protesting at the
beginning of the meeting to the transaction of any business because the meeting
was not lawfully called or convened.
Section 2.08 Waiver of Notice; Previously Scheduled Meetings.
------------ -----------------------------------------------
Subdivision 1. A director of the Corporation may waive notice of the
date, time and place of a meeting of the Board. A waiver of notice by a
director entitled to notice is effective whether given before, at or after the
meeting, and whether given in writing, orally or by attendance. Attendance by a
director at a meeting is a waiver of notice of that meeting, unless the director
objects at the beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened and thereafter does not
participate in the meeting.
Subdivision 2. If the day or date, time and place of a Board meeting
have been provided herein or announced at a previous meeting of the Board, no
notice is required. Notice of an adjourned meeting need not be given other than
by announcement at the meeting at which adjournment is taken of the date, time
and place at which the meeting will be reconvened.
Section 2.09 Quorum. The presence in person of a majority of the
------------ ------
directors currently holding office shall be necessary to constitute a quorum for
the transaction of business. In the absence of a quorum, a majority of the
directors present may adjourn a meeting from time to time without further notice
until a quorum is present. If a quorum is present when a duly called or held
meeting is convened, the directors present may continue to transact business
until adjournment, even though the withdrawal of a number of the directors
originally present leaves less than the proportion or number otherwise required
for a quorum.
Section 2.10 Acts of Board. Except as otherwise required by law or
------------ -------------
specified in the Certificate of Incorporation or these By-Laws, the Board shall
take action by the affirmative vote of a majority of the directors present at a
duly held meeting.
Section 2.11 Participation by Electronic Communications. A director
------------ ------------------------------------------
may participate in a Board meeting by any means of communication through which
the director, other directors so participating and all directors physically
present at the meeting may simultaneously hear each other during the meeting. A
director so participating shall be deemed present in person at the meeting.
5
<PAGE>
Section 2.12 Absent Directors. A director of the Corporation may
------------ ----------------
give advance written consent or opposition to a proposal to be acted on at a
Board meeting. If the director is not present at the meeting, consent or
opposition to a proposal does not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as a vote in favor of or against the proposal and shall be entered in
the minutes or other record of action at the meeting, if the proposal acted on
at the meeting is substantially the same or has substantially the same effect
as the proposal to which the director has consented or objected.
Section 2.13 Action Without a Meeting. An action required or
------------ ------------------------
permitted to be taken at a Board meeting may be taken without a meeting by
written action signed by all of the directors. Any action, other than an action
requiring stockholder approval, if the Certificate of Incorporation or these By-
Laws so provide, may be taken by written action signed by the number of
directors that would be required to take the same action at a meeting of the
Board at which all directors were present. The written action is effective when
signed by the required number of directors, unless a different effective time is
provided in the written action.
Section 2.14 Committees.
------------ ----------
Subdivision 1. A resolution approved by the affirmative vote of a
majority of the Board may establish committees having the authority of the Board
in the management of the business of the Corporation only to the extent provided
in the resolution. Committees shall be subject at all times to the direction
and control of the Board, except as provided in Section 2.15.
Subdivision 2. A committee shall consist of one or more natural
persons, one of whom must be a director, appointed by affirmative vote or a
majority of the directors present at a duly held Board meeting.
Subdivision 3. Section 2.06 to 2.13 hereof shall apply to committees
and members of committees to the same extent as those sections apply to the
Board and directors.
Subdivision 4. Minutes, if any, of committee meetings shall be made
available upon request to members of the committee and to any director.
Section 2.15 Special Litigation Committee. Pursuant to the procedure
------------ ----------------------------
set forth in Section 2.14, the Board may establish a committee composed of one
or more independent directors or other independent persons to determine whether
it is in the best interests of the Corporation to pursue a particular legal
right or remedy of the Corporation and whether to cause, to the extent permitted
by law, the dismissal or discontinuance of a particular proceeding that seeks to
assert a right or remedy on behalf of the Corporation. The committee, once
established, is not subject to the direction or control of, or termination by,
the Board. A vacancy on the committee may be filled by a majority vote of the
remaining committee members. The good faith determinations of the committee are
binding upon the Corporation and its directors, officers and stockholders to the
extent permitted by law. The committee terminates when it issues a written
report of its determinations to the Board.
6
<PAGE>
Section 2.16 Compensation. The Board may fix the compensation, if
------------ ------------
any, of directors.
OFFICERS
--------
Section 3.01 Number and Designation. The Corporation shall have one
------------ ----------------------
or more natural persons exercising the functions of the offices of Chief
Executive Officer and Chief Financial Officer. The Board of Directors may elect
or appoint such other officers or agents as it deems necessary for the operation
and management of the Corporation, with such powers, rights, duties and
responsibilities as may be determined by the Board, including, without
limitation, a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall have the powers, rights, duties and
responsibilities set forth in these By-Laws unless otherwise determined by the
Board. Any of the offices or functions of those offices may be held by the same
person, except the officers of President and Secretary.
Section 3.02 Chief Executive Officer. Unless provided otherwise by a
------------ -----------------------
resolution adopted by the Board of Directors, the Chief Executive Officer (a)
shall have general active management of the business of the Corporation; (b)
shall, when present, preside at all meetings of the stockholders and Board; (c)
shall see that all orders and resolutions of the Board are carried into effect;
and (d) may maintain records of and certify proceedings of the Board and
stockholders; and (e) shall perform such other duties as may from time to time
be assigned by the Board.
Section 3.03 Chief Financial Officer. Unless provided otherwise by
------------ -----------------------
resolution adopted by the Board of Directors, the Chief Financial Officer (a)
shall keep accurate financial records for the Corporation; (b) shall deposit all
monies, drafts and checks in the name of and to the credit of the Corporation in
such banks and depositories as the Board shall designate from time to time; (c)
shall endorse for deposit all notes, checks and drafts received by the
Corporation as ordered by the Board, making proper vouchers therefor; (d) shall
disburse corporate funds and issue checks and drafts in the name of the
Corporation, as ordered by the Board; (e) shall render to the Chief Executive
Officer and the Board, whenever requested, an account of all of such officer's
transactions as Chief Financial Officer and of the financial condition of the
Corporation; and (f) shall perform such other duties as may be prescribed by the
Board or the Chief Executive Officer from time to time.
Section 3.04 President. Unless otherwise determined by the Board of
------------ ---------
Directors, the President shall be the Chief Executive Officer of the
Corporation. If an officer other than the President is designated Chief
Executive Officer, the President shall perform such duties as may from time to
time be assigned by the Board.
Section 3.05 Vice Presidents. Any one or more Vice Presidents, if
------------ ---------------
any, may be designated by the Board of Directors as Executive Vice Presidents or
Senior Vice Presidents. During the absence or disability of the President, it
shall be the duty of the highest ranking Executive Vice President, and, in the
absence of any such Vice President, it shall be the duty of the highest ranking
Senior Vice President or other Vice President, who shall be present at the time
and able to act, to perform the duties of the President. The determination of
who is the highest ranking of two or more persons holding the same office shall,
in the absence of specific designation of order of rank by the
7
<PAGE>
Board, be made on the basis of the earliest date of appointment or election, or,
in the event of simultaneous appointment or election, on the basis of the
longest continuous employment by the Corporation.
Section 3.06 Secretary. The Secretary, unless otherwise determined by
------------ ---------
the Board of Directors, shall attend all meetings of the stockholders and all
meetings of the Board, shall record or cause to be recorded all proceedings
thereof in a book to be kept for that purpose, and may certify such proceedings.
Except as otherwise required or permitted by law or by these By-Laws, the
Secretary shall give or cause to be given notice of all meetings of the
stockholders and all meetings of the Board.
Section 3.07 Treasurer. Unless otherwise determined by the Board of
------------ ---------
Directors, the Treasurer shall be the Chief Financial Officer of the
Corporation. If an officer other than the Treasurer is designated Chief
Financial Officer, the Treasurer shall perform such duties as may from time to
time be assigned by the Board.
Section 3.08 Authority and Duties. In addition to the foregoing
------------ --------------------
authority and duties, all officers of the Corporation shall respectively have
such authority and perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board of Directors,
Unless prohibited by a resolution approved by the affirmative vote of a majority
of the directors present, an officer elected or appointed by the Board may,
without the approval of the Board, delegate some or all of the duties and powers
of an office to other persons.
Section 3.09 Term.
------------ ----
Subdivision 1. All officers of the Corporation shall hold office
until their respective successors are chosen and have qualified or until their
earlier death, resignation or removal.
Subdivision 2. An officer may resign at any time by giving written
notice to the Corporation. The resignation is effective without acceptance when
the notice is given to the Corporation, unless a later effective date is
specified in the notice.
Subdivision 3. An officer may be removed at any time, with or without
cause, by a resolution approved by the affirmative vote of a majority of the
directors present at a duly held Board meeting.
Subdivision 4. A vacancy in an office because of death,
resignation, removal, disqualification or other cause may, or in the case of a
vacancy in the office of Chief Executive Officer or Chief Financial Officer
shall, be filled for the unexpired portion of the term by the Board.
Section 3.10 Salaries. The salaries of all officers of the
------------ --------
Corporation shall be fixed by the Board of Directors or by the Chief Executive
Officer if authorized by the Board.
8
<PAGE>
Section 3.11 Shares of Other Corporations. Whenever the Corporation
------------ ----------------------------
is the holder of shares of any other corporation, any or all rights and powers
of the Corporation as such stockholder (including the attendance, acting and
voting at stockholders' meetings, and execution of waivers, consents and
proxies) may be exercised on behalf of the Corporation by the Chairman of the
Board, the President or by such other person as the Board of Directors may
authorize.
INDEMNIFICATION
---------------
Section 4.01 Indemnification. The Corporation shall indemnify its
------------ ---------------
officers and directors for such expenses and liabilities, in such manner, under
such circumstances, and to such extent, as required or permitted by Delaware
Statutes, as amended from time to time, or as required or permitted by other
provisions of law.
Section 4.02 Insurance. The Corporation may purchase and maintain
------------ ---------
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the Corporation would otherwise be required to
indemnify the person against the liability.
SHARES
------
Section 5.01 Certificated and Uncertificated Shares.
------------ --------------------------------------
Subdivision 1. The shares of the Corporation shall be either
certificated shares or uncertificated shares. Each holder of duly issued
certificated shares is entitled to a certificate of shares.
Subdivision 2. Each certificate of shares of the Corporation shall
be signed by the Chief Executive Officer, or the President or any Vice
President, and the Chief Financial Officer, or the Secretary or any Assistant
Secretary, but when a certificate is signed by a transfer agent or a registrar,
the signature of any such officer upon such certificate may be facsimiles,
engraved or printed. If a person signs or has a facsimile signature placed upon
a certificate while an officer, transfer agent or registrar of the Corporation,
the certificate may be issued by the Corporation, even if the person has ceased
to serve in that capacity before the certificate is issued, with the same effect
as if the person had that capacity at the date of its issue.
Subdivision 3. A certificate representing shares issued by the
Corporation shall, if the Corporation is authorized to issue shares of more than
one class or series, set forth upon the face or back of the certificate, or
shall state that the Corporation will furnish to any stockholder upon request
and without charge, a full statement of the designations, preferences,
limitations and relative rights of the shares of each class or series authorized
to be issued, so far as they have been determined, and the authority of the
Board to determine the relative rights and preferences of subsequent classes or
series.
9
<PAGE>
Subdivision 4. A resolution approved by the affirmative vote of a
majority of the directors present at a duly held meeting of the Board may
provide that some or all of any or all classes and series of the shares of the
Corporation will be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until the certificate is surrendered to
the Corporation.
Section 5.02 Declaration of Dividends and Other Distributions. The
------------ ------------------------------------------------
Board of Directors shall have the authority to declare dividends and other
distributions upon the shares of the Corporation to the extent permitted by law
and subject to the provisions of the Certificate of Incorporation.
Section 5.03 Transfer of Shares. Shares of the Corporation may be
------------ ------------------
transferred only on the books of the Corporation by the holder thereof, in
person or by such person's attorney. In the case of certificated shares, shares
shall be transferred only upon surrender and cancellation of certificates for a
like number of shares. The Board of Directors, however, may appoint one or more
transfer agents and registrars to maintain the share records of the Corporation
and to effect transfers of shares.
Section 5.04 Record Date. The Board of Directors may fix a time, not
------------ -----------
exceeding 60 days preceding the date fixed for the payment of any dividend or
other distribution, as a record date for the determination of the stockholders
entitled to receive payment of such dividend or other distribution, and in such
case only stockholders of record on the date so fixed shall be entitled to
receive payment of such dividend or other distribution, notwithstanding any
transfer of any shares on the books of the Corporation after any record date so
fixed.
Section 5.05 Lost or Destroyed Certificates. A new certificate of
------------ ------------------------------
stock may be issued in the place of any certificate theretofore issued by the
Corporation, alleged to have been lost or destroyed, and the directors may, in
their discretion, require the owner of the lost or destroyed certificate, or his
legal representatives, to give the Corporation a bond, in such sum as they may
direct, not exceeding double the value of the stock, to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss of any such certificate, or the issuance of any such new
certificate.
MISCELLANEOUS
-------------
Section 6.01 Execution of Instruments.
------------ ------------------------
Subdivision 1. All deeds, mortgages, bonds, checks, contracts and
other instruments pertaining to the business and affairs of the Corporation
shall be signed on behalf of the Corporation by the Chief Executive Officer, or
the President, or any Vice President, or by such other person or persons as may
be designated from time to time by the Board of Directors.
Subdivision 2. If a document must be executed by persons holding
different offices or functions and one person holds such offices or exercises
such functions, that person may execute the document in more than one capacity
if the document indicates each such capacity.
10
<PAGE>
Section 6.02 Advances. The Corporation may, without a vote of the
------------ --------
directors, advance money to its directors, officers or employees to cover
expenses that can reasonably be anticipated to be incurred by them in the
performance of their duties and for which they would be entitled to
reimbursement in the absence of an advance.
Section 6.03 Corporate Seal. The seal of the Corporation, if any,
------------ --------------
shall be a circular embossed seal having inscribed thereon the name of the
Corporation, the year of its creation and the following words:
"Corporate Seal Delaware"
Section 6.04 Fiscal Year. The fiscal year of the Corporation shall
------------ -----------
be determined by the Board of Directors.
Section 6.05 Amendments. The Board of Directors shall have the
------------ ----------
power to adopt, amend or repeal the By-Laws of the Corporation, subject to the
power of the stockholders to change or repeal the same; provided, however, that
the Board shall not adopt, amend or repeal any By-Law fixing a quorum for
meetings of stockholders of the Board, prescribing procedures for removing
directors or filling vacancies in the Board, or fixing the number of directors
or their classifications, qualifications or terms of office, but may adopt or
amend a By-Law that increases the number of directors.
Section 6.06 References to Certificate of Incorporation. References
------------ ------------------------------------------
to the Certificate of Incorporation in these By-Laws shall include all
amendments thereto or changes thereof unless specifically excepted.
11
<PAGE>
EXHIBIT 4.1
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "AUTOMATED DISPATCH SOLUTIONS, INC.", FILED IN THIS OFFICE ON THE
SIXTH DAY OF JUNE, A.D. 1997, AT 1 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
------------------------------------------
Edward J. Freel, Secretary of State
<PAGE>
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF SERIES A CONVERTIBLE PREFERRED STOCK
OF
AUTOMATED DISPATCH SOLUTIONS, INC.
Pursuant to Section 151 or the General
Corporation Law of the State of Delaware
Automated Dispatch Solutions, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of said corporation, and pursuant to the provisions
of Section 151 of Title 8 of the Delaware Code of 1953, said Board of Directors,
by Unanimous Consent on March 19, 1997, adopted resolutions providing for the
authorization and issuance of a series of 100,000 shares of Preferred Stock,
$.01 par value, designated as Series A Convertible Preferred Stock.
The Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock, including the designations, powers, preferences and
relative, participating, optional and other special rights of the Series A
Convertible Preferred Stock, and the qualifications, limitations and
restrictions thereof, shall read in its entirety as follows (the term
"Certificate of Incorporation of the Company," as used herein shall mean, unless
the context otherwise requires, the Certificate of Incorporation, as amended, of
the Company and any certificate supplemental thereto):
SERIES A CONVERTIBLE PREFERRED STOCK
(1) Designation of Series. There shall be a series of Preferred Stock
---------------------
to be known as "Series A Convertible Preferred Stock" (hereinafter sometimes
referred to as "Series A Preferred Stock") consisting of 100,000 shares of
Preferred Stock.
(2) Dividends.
---------
(a) Payment of Only Declared Dividends. No dividends shall be payable
----------------------------------
or accrue with respect to shares of Series A Preferred Stock unless declared
payable from time to time by the Board of Directors from funds legally available
therefor. When, as and if the Board of Directors shall declare a dividend to be
payable with respect to shares of Series A Preferred Stock, the Board of
Directors shall specify in such declaring resolution the date (a "Dividend
Payment Date"), on which such dividend shall be paid to holders of record as
they appear on the register for such series of Preferred Stock on the first day
of the month in which the applicable Dividend Payment Date occurs.
2
<PAGE>
(b) Non-Payment of Declared Dividends. If dividends on shares of
---------------------------------
Series A Preferred Stock are declared payable, but not paid in full, on any
Dividend Payment Date, then the amount of such unpaid dividends shall accrue and
be aggregated as the "Accumulated Dividend Amount."
(c) Dividend Prohibitions. Unless the Accumulated Dividend Amount
---------------------
shall then equal zero with respect to all shares of Series A Preferred Stock,
(i) no dividend or distribution, whether in cash, stock or property, shall be
paid, declared or set apart for payment in respect or the Company's par value
$.01 per share Common Stock (the "Common Stock") or any other class or series of
the Company's stock ranking junior to the Series A Preferred Stock as to
dividends and (ii) no redemption shall be made or funds set apart to make any
purchase or other acquisition for value by the Company of the Common Stock or
any other class or series of the Company's stock ranking junior to the Series A
Preferred Stock as to dividends. Provided, however, nothing contained in this
-----------------
paragraph (2)(c) shall prohibit the payment of dividends in shares of any class
or series of the Company's stock ranking junior to the Series A Preferred Stock
as to dividends and as to any distribution upon liquidation, dissolution or
winding up of the Company.
(3) Conversion.
----------
(a) Automatic Conversion. All outstanding shares of Series A
--------------------
Preferred Stock shall be automatically converted into shares of Common Stock at
the Conversion Price on the effective date of (i) the first registration
statement filed under the Securities Act of 1933 for the public sale of Common
Stock in which the aggregate net proceeds to the Company equal or exceed
$5,000,000 (the "Initial Public Offering"); (ii) any sale, transfer or other
conveyance (other than to a parent or subsidiary of the Company, whether direct
or indirect) of all or substantially all of the assets of the Company on a
consolidated basis, in one or a series of related transactions; or (iii) when
any "person" or "group" is or becomes, as a result of a merger or consolidation,
a tender or exchange offer, open market or privately negotiated purchases or
otherwise, the "beneficial owner," directly or indirectly, of more than 50% or
the total then outstanding voting stock of the Company or of the entity
surviving the merger or consolidation. (The effective date of such (i)
registration statement, (ii) sale, transfer or conveyance, or, (iii) change in
voting control is herein called the " Automatic Conversion Date.")
The Company shall notify all holders of Series A Preferred Stock of the date on
which (A) the Company files such registration statement, (B) the Company expects
such registration statement to become effective, and (C) such registration
statement actually becomes effective. Upon receipt of such notice containing
the information described in (B) above, each holder of Series A Preferred Stock
shall promptly (I) notify the Company in writing of the name(s) (with addresses)
in which the certificate(s) representing the Common Stock to be issued upon such
conversion shall be issued and (II) present and surrender to the Company, during
regular business hours at the office maintained by the Company for the transfer
of Series A Preferred Stock, the certificate(s) representing all shares of
Series A Preferred Stock held by such holder.
3
<PAGE>
For the purposes of this Section (3), the terms "person," "group" and
"beneficial owner" shall have the respective meanings used in Rules 13d-3 and
13d-5 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"),
whether or not applicable, except that a person shall be deemed to have
"beneficial ownership" of all shares that such person has the right to acquire
whether such right is exercisable immediately, after the passage of time or upon
the occurrence of certain events.
(b) Optional Conversion. Upon the written consent or vote, obtained
-------------------
at a meeting of the holders of shares of Series A Preferred Stock called and
held in accordance with the provisions of Section (6) of this Certificate of
Designations, Preferences and Rights, of holders of two-thirds or more of the
outstanding shares of Series A Preferred Stock, all outstanding shares of Series
A Preferred Stock shall be converted, into shares of Common Stock at the then
effective Conversion Price. In such event, (i) the Company shall notify all
holders of Series A Preferred Stock that the outstanding shares of such class
have been converted into shares of Common Stock and (ii) all holders of shares
of Series A Preferred Stock shall present and surrender to the Company, during
regular business hours at the office maintained by the Company for the transfer
or Series A Preferred Stock, the certificate(s) representing their shares of
Series A Preferred Stock, together with a written notice stating the name(s)
(with addresses) in which the certificate(s) representing the Common Stock to be
issued upon such conversion shall be issued. The date on which such written
consent or vote of the holders of Series A Preferred Stock is obtained is herein
called the "Optional Conversion Date."
(c) Additional Procedures for Conversion. If so required by the
------------------------------------
Company, any certificate for shares of Series A Preferred Stock surrendered for
conversion shall be accompanied by duly executed instruments of transfer in form
satisfactory to the Company. Conversion of shares of Series A Preferred Stock
shall be deemed to have been effected on the Automatic Conversion Date if the
provisions of paragraph (3)(a) apply and on the Optional Conversion Date if the
provisions of paragraph (3)(b) apply, notwithstanding any failure of the holder
or shares of Series A Preferred Stock to present and surrender to the Company
the certificates representing the shares to be converted. After the Automatic
Conversion Date or the Optional Conversion Date, as the case may be, the share
of Series A Preferred Stock to be converted on that date shall no longer be
outstanding and all rights of the holders thereof as holders of shares of Series
A Preferred Stock shall cease, except the right of such holder to (i) receive
certificates for shares of Common Stock upon presentation and surrender to the
Company) of the certificates representing the shares of Series A Preferred Stock
that have been so converted and (ii) register shares of Common Stock for public
distribution as provided in the "Registration Rights Agreement" between such
holder and the Company. As promptly as practical after the presentation and
surrender for conversion of any certificate for shares of Series A Preferred
Stock being converted, the Company shall issue and deliver to or upon the
written order of the holder thereof, certificate(s) for the shares issuable upon
conversion; provided, however, if a transfer of ownership is requested by such
-------- -------
holder in connection with such conversion and a tax is payable in such respect
thereof, the requesting holder shall remit to the Company the amount of such
tax; and provided, further if the Company elects not to issue fractional shares
-------- -------
of Common Stock upon conversion of shares of Series A Preferred Stock, the
4
<PAGE>
Company, shall pay to the holder thereof a cash amount proportionate to the
Conversion Price of such fractional share.
(d) Conversion Price and Adjustment of Conversion Price, Upon Issuance
------------------------------------------------------------------
of Common Stock. Subject to adjustment as hereinafter provided, each share of
- ---------------
Series A Preferred Stock shall be convertible into (I) one (1) fully paid and
nonassessable share of Common Stock; (II) if the Initial Public Offering is
effective prior to December 15, 1997 and the price per share of Common Stock
price (before underwriter's discounts and other expenses relating to such
offering, such price being herein called the "Offering Price") is less than
$15.3976, the number of shares of fully paid and non-assessable Common Stock
obtained by dividing $15.3976 by such Offering Price; or (III) if the Initial
Public Offering is effective on or after December 15, 1997 and the Offering
Price is less than $20.5306, the number of shares of fully paid and non-
assessable Company Stock obtained by dividing $20.5306 by such Offering Price,
whichever of (I), (II) or (III) is greatest. Such conversion price is herein
called the "Initial Conversion Price" and such price as last adjusted in
accordance with subparagraphs (i) through (ix) hereof is herein called the
"Conversion Price". Except as provided in subparagraph (ix) hereof, if and
whenever the Company shall issue or sell or, in accordance with subparagraphs
(ix) through (xi) hereof (other than subparagraph (i), be deemed to have issued
or sold any shares of Common Stock for a consideration per share less than the
Conversion Price in effect immediately prior to the time of such issue or sale,
then, forthwith upon such issue or sale, the Conversion Price shall be reduced
to the price determined by dividing (i) an amount equal to the sum of (A) the
number of shares of Common Stock outstanding immediately prior to such issue or
sale (including as outstanding all shares of Common Stock issuable upon
conversion of outstanding Series A Preferred Stock) multiplied by the then
existing Conversion Price applicable to such Preferred Stock, and (B) the
consideration, if any, received by the Company upon such issue or sale, by (ii)
the total number of shares of Common Stock outstanding immediately after such
issue or sale (including as outstanding all shares of Common Stock issuable upon
conversion of outstanding Series A Preferred Stock).
For purposes of this paragraph (d), the following subparagraphs (i) to (xi)
inclusive shall also be applicable.
(i) Issuance of Rights or Options. In case the Company shall at any
-----------------------------
time hereafter grant (whether directly or by assumption in a merger or
otherwise) any rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities") whether or not such Options, or the right to
convert or exchange any such Convertible Securities art immediately exercisable,
and the price per share for which Common Stock is issuable upon conversion or
exchange of such Convertible Securities (determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of Convertible Securities, the minimum aggregate amount of
additional consideration, if any,
5
<PAGE>
payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options) shall be less than the
Conversion Price applicable to the Series A Preferred Stock in effect
immediately prior to the time of the granting of such Options, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options and thereafter shall be deemed to be outstanding. Except as
otherwise provided in subparagraph (iii), no adjustment of the Conversion Price
applicable to the Series A Preferred Stock shall be made upon the actual issue
of such Common Stock or of such Convertible Securities upon exercise of such
Options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. In case the Company shall,
----------------------------------
in any manner issue (whether directly or by assumption in a merger or otherwise)
of sell any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon, such conversion or exchange (determined by
dividing (i) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (ii) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Conversion Price applicable
to the Series A Preferred Stock in effect immediately prior to the time of such
issue or sale, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of all such Convertible Securities shall be deemed
to have been issued for such price per share as of the date of the issue or sale
of such Convertible Securities and thereafter shall be deemed to be outstanding,
provided that (a) except as otherwise provided in subparagraph (iii) below, no
adjustment of the Conversion Price applicable to the Series A Preferred Stock
shall be made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities and (b) if any such issue or sale of
such Convertible Securities is made upon exercise of any Option to purchase any
such Convertible Securities for which adjustments of such Conversion Price have
been or art to be made pursuant to other provisions of this paragraph (d), no
further adjustment of such Conversion Price shall be made by reason of such
issue or sale.
(iii) Change Option Price or Conversion Rate. Upon the happening of
--------------------------------------
any of the following events, namely, if the purchase price is provided for in
any Option referred to in subparagraph (i), the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities
referred to in subparagraph (i) or (ii), or the rate at which any Convertible
Securities referred to in subparagraph (i) or (ii) are convertible into or
exchangeable for Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution, such as from stock
splits, stock dividends or similar events), the Conversion Price applicable to
the Series A Preferred Stock in effect at the time of such event shall forthwith
be readjusted to the relevant Conversion Price which would have been in effect
at
6
<PAGE>
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or termination of any such right to convert or
exchange such Convertible Securities, the Conversion Price applicable to the
Series A Preferred Stock then in effect hereunder shall forthwith be increased
to the relevant Conversion Price that would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, and the Common Stock issuable thereunder shall no longer be deemed
to be outstanding.
(iv) Stock Dividends. In case the Company shall declare a dividend or
---------------
make any other distribution upon any stock of the Company payable in Common
Stock, Options or Convertible Securities, any Common Stock, options or
Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration.
(v) Consideration for Stock. In case any shares of Common Stock,
-----------------------
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Company therefor, without deduction therefrom of any expenses incurred by or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined in good
faith by the Board of Directors of the Company, without deduction of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. The amount of consideration deemed to
be received by the Company pursuant to the foregoing provisions of this
subparagraph (v) upon any issue or sale, pursuant to an established compensation
plan of the Company to directors, officers or employees of the Company in
connection with their employment, of shares of Common Stock Options or
Convertible Securities shall be increased by the amount of any tax benefit
realized by the Company as a result of such issue or sale, the amount of such
tax benefit being the amount by which the Federal and/or State income or other
tax liability of the Company shall be reduced by reason of any deduction or
credit in respect of such issue or sale. In case any Options shall be issued in
connection with the issue and sale of other securities of the Company, together
comprising one integral transaction in which the specific consideration is
allocated to such Options by the parties thereto, the fair value of such Options
shall be determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall be
issued in connection with any merger or consolidation in which the Company is
the surviving corporation, the amount of consideration therefore shall be deemed
to be the fair value as determined in good faith by the Board of Directors of
the Company of such portion of the assets and business of the non-surviving
corporation as such Board shall determine to be attributable to such Common
Stock, Options or Convertible Securities, as the case may be. In the event of
any consolidation or merger of the Company in which the Company is not the
surviving corporation or in the event of any sale of all or substantially all
the assets of the
7
<PAGE>
Company for stock or other securities of any corporation, the Company shall be
deemed to have issued a number of shares of its Common Stock for stock or
securities of the other corporation computed on the basis of the actual exchange
ratio on which the transaction was predicated and for a consideration equal to
the fair market value on the date of such transaction of such stock or
securities of the other corporation.
(vi) Record Date. In case the company shall take the record of the
-----------
holders or its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, Options or Convertible
Securities, or (ii) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(vii) Treasury Shares. The number of shares of Common Stock outstanding
---------------
at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock for the purposes of this paragraph (d).
(viii) Subdivision or Combination of Stock. In case the Company shall
-----------------------------------
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision for the Series A Preferred Stock shall be proportionately reduced,
and conversely, in case the outstanding shares of Common Stock of the Company
shall be combined into a smaller number of shares, such Conversion Price in
effect immediately prior to such combination shall be proportionately increased.
(ix) Certain Issues of Common Stock Excepted. Anything herein to the
---------------------------------------
contrary notwithstanding, the Company shall not be required to make any
adjustment of the Conversion Price applicable to the Series A Preferred Stock in
the case of (i) the issuance of shares of Common Stock upon Conversion of shares
of Series A Preferred Stock, or (ii) the issuance of Common Stock reserved for
issuance to employees of the Company.
(x) Reorganization or Reclassification. If any capital reorganization
----------------------------------
or reclassification of the capital stock of the Company shall be effected in
such a way (including, without limitation, by way of consolidation or merger or
a sale of all or substantially all its assets) that holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization or
reclassification, lawful and adequate provisions (in form reasonably
satisfactory to the holders of at least a majority of the outstanding shares of
Series A Preferred Stock, such series voting as a separate class, provided that
the vote or consent of the holders of the Series A Preferred Stock shall not be
required if, as part of any such transaction, all outstanding shares of such
Preferred Stock will be redeemed in full) shall be made whereby each holder of a
share or shares of Series A Preferred Stock shall thereafter have the conditions
specified herein and in lieu of the shares of Common Stock of the Company
immediately theretofore receivable upon the conversion of such
8
<PAGE>
share or shares of Series A Preferred Stock, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore so receivable had such reorganization or
reclassification not taken place, and in such case appropriate provision shall
be made with respect to the rights and interests of such holder to the end that
the provisions hereof (including without limitation provisions for adjustment of
the Conversion Price applicable to the Series A Preferred Stock) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise of such
conversion rights. In the event of a merger or consolidation of the Company as a
result of which a greater or lesser number of shares of common stock of the
surviving corporation are issuable to holders of Common Stock of the Company
outstanding immediately prior to such merger or consolidation, the Conversion
Price applicable to the Series A Preferred Stock in effect immediately prior to
such merger or consolidation shall be adjusted in the same manner as though
there were a subdivision or combination of the outstanding shares of Common
Stock of the Company.
(xi) Partial or Liquidation Distributions. In the event that the
------------------------------------
Company shall make any distribution of its assets upon or with respect to the
Common Stock as a liquidating or partial liquidation dividend, or other than as
a dividend payable out of earnings or any surplus legally available for
dividends under the General Corporation Law of the State of Delaware, the holder
of each outstanding share of Series A Preferred Stock shall, upon the exercise
of his or her right to convert after the record date for such distribution or,
in the absence of a record date, after the date of such distribution, receive,
in addition to the shares subscribed for, the amount of such assets (or, at the
option of the Company, a sum equal to the value thereof at the time of
distribution as determined by the Board of Directors in its sole discretion)
that would have been distributed to such holder if be or she had exercised his
or her right to convert immediately prior to the record date, for such
distribution or, in the absence of a record date, immediately prior to the date
of such distribution.
(e) No Adjustment of Conversion Price in Certain Circumstances.
----------------------------------------------------------
Notwithstanding the foregoing provisions of Section (3)(i) no adjustment in the
number of shares of Common Stock into which any share of Series A Preferred
Stock is convertible shall be required unless such adjustment would require an
increase or decrease in such number of shares of at least 1% and (ii) no
adjustment in the Conversion Price applicable to the Series A Preferred Stock
shall be required unless such adjustment would require an increase or decrease
in such Conversion Price of al least $.01 per share; provided, however, that any
-----------------
adjustments which by reason of this paragraph (f) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section (3) shall be made to the nearest one
hundredth of a dollar or to the nearest 1/1000th of a share, as the case may be.
(f) Notice Regarding Adjustment of Conversion Price. Whenever any
-----------------------------------------------
adjustment is required in the number of shares into which any share of Series A
Preferred Stock is convertible, the Company shall forthwith (i) file with each
office or agency maintained by the Company for the transfer of the Series A
Preferred Stock a statement describing in reasonable
9
<PAGE>
detail the adjustment and the method of calculation used and (ii) cause a notice
of such adjustment, setting forth the adjusted Conversion Price applicable to
the Series A Preferred Stock to be mailed to the holders of record of shares of
such series at their respective addresses as shown on the books of the Company.
(g) Termination of Rights Attendant to Preferred Stock. All shares of
--------------------------------------------------
Series A Preferred Stock that shall have been surrendered for conversion or
deemed to have been converted as herein provide shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall forthwith cease, except only the
right of the holders thereof, subject to the provisions of this Section (3), to
(i) receive shares of Common Stock in exchange therefor and (ii) register shares
of Common Stock for public distribution as provided in the "Registration Rights
Agreement" between each of such holders and the Company.
(h) Effect of Certain Actions By the Company. In the event that
----------------------------------------
the Company shall take action:
(i) to make any distribution (other than cash dividends Payable out
of earned surplus) to the holders of its Common Stock;
(ii) to offer for subscription pro rata to the holders of its Common
--- ----
Stock any securities of any kind;
(iii) to accomplish any capital reorganization, or reclassification
of the capital stock of the Company (other than a subdivision,
split or combination of its Common Stock), or a consolidation or
merger to which the Company is a party and for which approval of
any stockholders of the Company is required, or the sale or
transfer of all or substantially all of the assets of the
Company; or
(iv) looking to a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (A) in case of any such distribution or subscription
rights, at least thirty days prior to the date or expected date on which the
books of the Company shall close or a record shall be taken for the
determination of holders entitled to such distribution or subscription rights,
and (B) in the case of any such reorganization, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, at least thirty
days, prior to the date or expected date when the same shall take place, cause
written notice thereof to be mailed to each holder of shares of Series A
Preferred, Stock at his or her address as shown on the books of the Company.
Such notice in accordance with the foregoing clause (A) shall also specify, in
the case of any such distribution or subscription rights, the date or expected
date on which the holders of Common Stock shall be entitled to receive such
distribution or subscription rights and such notice in accordance with the
foregoing clause (B) shall also specify the date or expected date on
10
<PAGE>
which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, as the case may be.
(i) Special Definition of Common Stock. For the purposes of this
----------------------------------
Section (3), the term "Common Stock" shall mean (i) the class of stock
designated as the Common Stock of the Company on the date of this Certificate or
(ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par value
or from no par value to par value, or from par value to no par value. If at any
time as a result of an adjustment made pursuant to the provisions of paragraph
(d) of this Section (3), the holder of any share of Series A Preferred Stock
thereafter surrendered for conversion shall become entitled to receive any
shares of the Company other than shares of Common Stock, thereafter the number
of such other shares so receivable upon conversion of any share of such
Preferred Stock shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable in paragraph (d) of this Section
(3), and the other provisions of this Section (3) with respect to the Common
Stock shall apply on like terms to any such other shares.
(j) No Fractional Shares. No fractional share of the Common Stock, or
--------------------
scrip representing a fractional share, shall be issued upon the conversion of
any Series A Preferred Stock. If more than one share of Series A Preferred
Stock shall be surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon the
conversion of any shares of Preferred Stock, the Company shall pay in lieu
thereof, in cash the value thereof as of the business day immediately preceding
the date of such commission, as such value shall have been determined in good
faith by the Company's Board of Directors.
(k) Common Stock Reserved For Issuance on Conversion. The Company
------------------------------------------------
shall at all times reserve and keep available, out of its authorized but
unissued capital stock, for the purpose of effecting the conversion of the
shares of Series A Preferred Stock, such number of its duly authorized shares of
Common Stock (or treasury shares as provided below as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock into Common stock at any time, provided, however, that nothing
-----------------
contained herein shall preclude the Company from satisfying its obligations in
respect of the conversion of the shares of Series A Preferred Stock by delivery
of shares of Common Stock that are held in the treasury of the Company. The
Company shall, from time to time and, in accordance with the laws of the State
of Delaware, cause the authorized number of shares of Common Stock to be
increased if the aggregate of the number of authorized shares of Common Stock
remaining unissued and the issued shares of such Common Stock in its treasury
(other than any shares of such Common Stock reserved for issuance for any other
purpose) shall not be sufficient to permit the conversion of all outstanding
shares of Series A Preferred Stock into Common Stock.
11
<PAGE>
(4) Liquidation and Deemed Liquidation. In the event of any
----------------------------------
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of outstanding shares of Series A Preferred, Stock
shall be entitled to receive for each such share payment in cash equal to the
sum of $10.2653 and the Accumulated Dividend Amount as of the date of such final
payment (the "Liquidation Value"). The Liquidation Value applicable to the
Series A Preferred Stock shall be paid to the holders of such Preferred Stock
before any payment or distribution shall be made to the holders of shares of
Common Stock or any other class of stock of the Company ranking junior to the
Series A Preferred Stock as to distribution on liquidation, dissolution or
winding up. In the event the distributable assets are insufficient to make such
payment in full to the holders of all outstanding shares of Series A Preferred
Stock and any other series of Preferred Stock ranking on a parity with such
series as to distribution upon liquidation, dissolution or winding up, such
assets shall be distributed among the holders of outstanding shares of Series A
Preferred Stock and any such other series of Preferred Stock ratably per share
in proportion to the full per share amounts to which they respectively are
entitled. Except as specifically provided in the next paragraph of this Section
(4), the voluntary sale, conveyance, lease, exchange or transfer of all or
substantially all the property or assets of the Company (unless in connection
therewith, the liquidation, dissolution or winding up of the Company is
specifically approved), or the merger or consolidation of the Company into or
with any other corporation, or the merger of any other corporation into it, a
Change of Control, or any purchase or redemption of shares of stock of the
Company of any class or series, shall not be deemed to be a liquidation,
dissolution or winding up of the Company for the purpose of this Section (4).
If at any time prior to the Initial Public Offering, (A) the Company shall merge
or consolidate with or into another corporation, another corporation shall merge
or consolidate with or into the Company, a plan of exchange between the Company
and any other corporation, in any of which transactions any stockholder of the
Company receives a distribution of cash, securities or other property or (B) the
Company shall sell, transfer or otherwise dispose of all or substantially all of
its assets, then, subject to the provisions of this Section (5), any such
transaction shall be deemed, solely for the purposes of determining the amounts
to be received by the holders of the Series A Preferred Stock in such
transaction and the priority of receipt of such amounts as between the holders
of the Series A Preferred Stock and the holders of Common Stock or other class
of stock of the Company ranking junior to the Series A Preferred Stock, to be a
liquidation or dissolution of the Company if the holders of a majority of the
outstanding shares of Series A Preferred Stock so elect by giving written notice
thereof to the Company at least two days before the effective date of such
transaction. If no such notice is timely given, such transaction will not be
deemed a liquidation or dissolution of the Company. If a transaction is deemed
a liquidation or dissolution of the Company pursuant to this paragraph, the
record holders of Series A Preferred Stock on the date of such transaction shall
be entitled to receive from the Company, prior to any distribution to the
holders of Common Stock or any other class of stock of the Company ranking
junior to the Series A Preferred Stock, in addition to the Liquidation Value,
$1.5398 per share of Series A Preferred Stock if such transaction is consummated
prior to June 15, 1998 or $3.0796 per share of Series A Preferred Stock if such
transaction is consummated on or after June 15, 1998. The Company shall give
each holder of record of Series A Preferred
12
<PAGE>
Stock written notice of such impending transaction not later than 14 days prior
to the meeting of the stockholders of the Company called to approve such
transaction or 14 days prior to the closing of such transaction, whichever is
earlier, and shall also notify such holders in writing of the final approval of
such transaction. The first of such notices shall describe the material terms
and conditions of the transaction and the application of this paragraph thereto
(including, without limitation, a description of the value of the consideration,
if any being offered to the holders of the Series A Preferred Stock in the
transaction and the amount to which such holders would be entitled if the
transaction were to be deemed a liquidation or dissolution of the Company). The
Company shall thereafter give such holders prompt notice of any material change
in the terms and conditions of such transaction or the other information
furnished to them in the first notice. The transaction shall in no event be
consummated sooner than 14 days after the mailing of the first notice by the
Company or 10 days after the mailing of a notice of material change, whichever
is later; provided, however, such periods may be reduced, upon the written
-------- -------
consent of the holders of a majority of the shares of Series A Preferred Stock.
(5) Voting.
------
Except as provided in Section (6) or as provided by applicable law,
the holders of the Series A Preferred Stock shall vote with the holders of
Common Stock as a single class and shall be entitled to one vote for each share
of Common Stock into which the shares of Series A Preferred Stock so held would
be convertible on the record date set for such vote of stockholders.
(6) Class Voting In Certain Events.
------------------------------
(a) In addition to such other vote, if any, as may be required by law
or provided by the resolution creating any other series of Preferred Stock, the
affirmative vote or consent of the holders of at least a majority of the shares
of Series A Preferred Stock at the time outstanding, given at a meeting or by
written consent in lieu thereof, at which the holders of such shares shall vote
separately as a class, shall be necessary for effecting or validating each of
the following:
(i) The authorization or creation of any other class of stock if such
class or any series thereof ranks or could rank prior to or on a
parity with the Series A Preferred Stock as to dividends or to
distribution upon liquidation, dissolution or winding up;
(ii) The amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation of the Company so as to affect
adversely the preferences, special rights or powers of the Series
A Preferred Stock or of the securities into which such series of
Preferred Stock is convertible, or the terms or conditions of such
conversion; and
(iii) Any increase in the number of authorized shares of Series A
Preferred Stock.
13
<PAGE>
(b) Notwithstanding Paragraph (a) above, any record holder or holders
owning in the aggregate more than ten percent (10%) of the outstanding shares of
Series A Preferred Stock may request that the Company call a meeting of the
holders of the Series A Preferred Stock for the purposes of compelling the
optional conversion of shares of Series A Preferred Stock into shares of Common
Stock. The holders of Series A Preferred Stock shall vote as a class at such
meeting for such purpose.
The special meeting for such purpose shall be called and held as promptly as
practicable and in any event shall be called within ten days and held within
sixty days after receipt of a written request signed by the holders of record of
at least 10% of the then outstanding shares of Series A Preferred Stock;
provided, however, no such special meeting shall be required to be held during
the sixty-day period preceding the date fixed for the annual meeting of the
Company's stockholders.
Any holder of shares of Series A Preferred Stock shall have access to the stock
record book of the Company for the purpose of calling a special meeting pursuant
to these provisions. The Company shall pay the reasonable expenses of calling
and holding such meeting.
(c) Any special meeting of the holders of shares of Series A Preferred
Stock to vote as a separate class for the purpose of compelling the optional
conversion of shares of Series A Preferred Stock into shares of Common Stock
shall be held in the city in which the next preceding annual meeting of the
Company's stockholders was held or, if no such meeting was held, then in Miami,
Florida. At any meeting for the purpose of compelling the optional conversion
of shares of Series A Preferred Stock into shares of Common Stock, the presence
in person or by proxy of the holders of one-third of the outstanding shares of
such series of Preferred Stock shall constitute a quorum, a majority of the
holders of shares of Series A Preferred Stock present in person or by proxy
shall have the power to adjourn the meeting from time to time without notice,
other than announcement at the meeting, until a quorum shall be present.
(7) Retirement of Shares. Shares of Series A Preferred Stock that are
--------------------
converted into shares of Common Stock or otherwise acquired by the Company shall
be permanently retired and shall not be reissued. The Company shall take such
action as from time to time shall be appropriate to reduce the authorized number
of shares of Series A Preferred Stock accordingly.
(8) Limited Pre-emptive Rights.
--------------------------
(a) To the extent that adjustments to the Conversion Price, as
provided herein, do not permit the holders of shares of Series A Preferred Stock
to maintain their relative position in the total equity of the Company and the
Company issues any equity securities prior to the Initial Public Offering, the
holders of shares of Series A Preferred Stock shall have pre-emptive rights to
purchase a pro rata share of such equity securities, at the same prices, terms
and conditions as shall be fixed by the Company for such issuance; provided,
---------
however, that no such
- -------
14
<PAGE>
equity securities issued (i) for sale in the Initial Public Offering, (ii) to
employees of the Company or any of its subsidiaries as performance incentives,
(iii) in connection with any rights granted by the Company or its predecessor
prior to the date of this Certificate of Designations, Preferences and Rights,
or (iv) in exchange for the stock or other ownership interest in, or pursuant to
a merger of the Company with, another company if the Company receives fair value
for such stock or ownership interest under the terms of such exchange.
(b) The pro rata share provided for in paragraph (a) above shall be in
the same proportion as the number of shares of Common Stock then issuable upon
conversion of the shares of Series A Preferred Stock held by the holder
exercising his rights under this Section (8) bears to the sum of (i) the number
of shares of Common Stock then outstanding and (ii) the number of shares of
Common Stock issuable upon conversion of all then outstanding shares of Series A
Preferred Stock.
(c) The Company shall give the holders of Series A Preferred Stock (or
their respective successors) written notice (the "Pre-emptive Notice") of any
prospective issuance of equity securities of the Company to which rights granted
under this Section (8) apply, on or before execution of the agreement pursuant
to which such equity securities are to be issued. The Pre-emptive Notice shall
be accompanied by a copy of such agreement. The holders of shares of Series A
Preferred Stock shall give the Company written notice by registered or certified
mail of their intention to exercise such pre-emptive rights within 15 days after
receipt of the Pre-emptive Notice; a holder's failure to give such notice timely
shall result in the expiration of such rights with respect to such Pre-emptive
Notice. If the prospective issuance of equity securities giving rise to the
Pre-emptive Notice does not occur within 90 days after the date of the Pre-
emptive Notice, the pre-emptive rights granted by this Section (8) to holders of
Series A Preferred Stock shall again apply to such prospective issuance without
regard, to whether or how such holder responded to such Pre-emptive Notice.
IN WITNESS WHEREOF, the Company has caused this Certificate of Designations
Preferences and Rights of Series A Preferred Stock of the Company to be duly
executed this 6/th/ day of June, 1997.
Automated Dispatch Solutions, Inc.
----------------------------------
Michael E. Weksel, Vice President
Attest
- ---------------------
(Corporate Seal)
Elisa Pugliese
Secretary
15
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCl Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, , as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement: and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
---------------------------------------
William Weksel, General Partner
/s/ William B. McLiverty
- -----------------------------------------
William B. McLiverty ("Beneficial Owner")
(Social Security No. ###-##-####)
2812 Eastridge Court
Farmington, NM 87401
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ William B. McLiverty
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, , as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
----------------------------------
William Weksel, General Partner
/s/ Joseph Handy
- ------------------------------------
Joseph Handy ("Beneficial Owner")
(Social Security No. ###-##-####)
2050 Northeast 121 Road
North Miami, FL 33181
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Joseph Handy
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, ,as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
-------------------------------------
William Weksel, General Partner
/s/ Charles P. Krokel
- ---------------------------------------
Charles P. Krokel ("Beneficial Owner")
(Social Security No. ###-##-####)
PSC 473
Box 16
FPO AP JAPAN 96439
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Charles P. Krokel
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, ,as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGlS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
----------------------------------
William Weksel, General Partner
/s/ Gregory Weksel
- ------------------------------------
Gregory Weksel ("Beneficial Owner")
(Social Security No. ###-##-####)
49 Brayton Street
Englewood, NJ 07631
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Gregory Weskel
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, , as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
--------------------------------
William Weksel, General Partner
/s/ Leonard Levine
- ----------------------------------
Leonard Levine ("Beneficial Owner")
(Social Security No. ###-##-####)
2136 Ford Parkway #360
St. Paul, MN 55116
No. of Shares: 3000
Total Purchase Price: $ 7500.
Administration Costs: 300.
-------
Amount of Check $ 7800.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Leonard Levine
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, ,as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations warranties, covenants and agreements contained in this
Agreement shall be binding upon and inure to the benefit of their respective
successors and assigns of the parties hereto, whether or not so expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
--------------------------------------
William Weksel, General Partner
/s/ Bertrand H. Weidberg
- ----------------------------------------
Bertrand H. Weidberg ("Beneficial Owner")
(Social Security No. ###-##-####)
33 Silver Crescent
Irvine, CA 92612
No. of Shares: 3500
Total Purchase Price: $ 8750.
Administration Cost: 350.
-------
Amount of Check $ 9100.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Bertrand H. Weidberg
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, , as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto shall,
unless otherwise stated, be in writing and shall be sent by national overnight
courier service or certified mail, return receipt requested, with postage
prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
------------------------------------
William Weksel, General Partner
/s/ Francis M. Sassano
- --------------------------------------
Francis M. Sassano ("Beneficial Owner")
(Social Security No. ###-##-####)
39 Acorn Road
Brewster, NY 10509
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Francis M. Sassano
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, , as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations warranties, covenants and agreements contained in this
Agreement shall be binding upon and inure to the benefit of their respective
successors and assigns of the parties hereto, whether or not so expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
---------------------------------
William Weksel, General Partner
/s/ David Weksel
- -----------------------------------
David Weksel ("Beneficial Owner")
(Social Security No. ###-##-####)
215 Walnut Court
Highland Park, NJ 08904
No. of Shares: 16,000
Total Purchase Price: $ 40,000.
Administration Costs: $ 1,600.
---------
Amount of Check $ 41,600.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ David Weskel
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, ,as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
----------------------------------
William Weksel, General Partner
/s/ Deanna Weksel
- ------------------------------------
Deanna Weksel ("Beneficial Owner")
(Social Security No. ###-##-####)
49 Brayton Street
Englewood, NJ 07631
No. of Shares: 2000
Total Purchase Price: $ 5000.
Administration Cost:: 200.
-------
Amount of Check $ 5200.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Deanna Weskel
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
AGREEMENT
This Agreement, dated as of February 16, 1998 (the "Agreement"), is made by and
between TGIS Partners ("TGIS" or "Nominee" in TGIS's capacity as the nominee and
agent of the Beneficial Owner as set forth in this Agreement), a New York
General Partnership, whose address for the purposes of this Agreement is c/o
Bertrand H. Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92612-3611 and the
person identified on the signature page of this Agreement as the "Beneficial
Owner."
WHEREAS, Robert H. Davies ("Davies") (i) is a partner in TGIS and consequently
owns beneficially shares of LogistiCare, Inc. ("LCI," previously known as
Automated Dispatch Solutions, Inc.) Common Stock, par value $.01 per share
("Common Stock"*) held of record by TGIS; (ii) will receive from TGIS a capital
distribution of certain shares of Common Stock); and (iii) has decided to sell
to the Beneficial Owner the number of shares of Common Stock identified on the
signature page of this Agreement and hereinafter referred to as the "Shares"* at
a price of $2.50 per share ("Per Share Price").
WHEREAS, Beneficial Owner desires to have Nominee act on behalf of Beneficial
Owner to purchase from Davies and hold the Shares for the exclusive benefit of
Beneficial Owner; and
WHEREAS, Nominee is willing to act on behalf of Beneficial Owner in connection
with the activities described in the preceding premise and related matters.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1.(a) Beneficial Owner hereby appoints Nominee to act as Beneficial Owner's
nominee and agent in connection with the activities described in this Agreement.
(b) Nominee hereby accepts such appointment and shall execute its duties
hereunder, as the nominee and agent of Beneficial Owner, in good faith and to
the best of its ability.
2.(a) Beneficial Owner hereby authorizes and directs Nominee, on behalf of
Beneficial Owner, to enter into a Stock Purchase Agreement in substantially the
form of Exhibit I attached to this Agreement ("Stock Purchase Agreement") and to
purchase the Shares for the sole benefit of Beneficial Owner.
(b) Beneficial Owner hereby confirms, for the benefit of the Nominee, that the
representations, warranties and acknowledgments of the "Purchaser" in the Stock
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock,
$.01 par value per share, after giving effect to the 5 for 1 split of Common
Stock and the change in par value (back to $.01 after the split) approved by the
LCI Board of Directors on August 13, 1997.
1
<PAGE>
Purchase Agreement are true and correct as applied to the Beneficial Owner, as
if Beneficial Owner were the "Purchaser" thereunder with respect to the Shares.
Beneficial Owner shall indemnify and hold harmless Nominee and its present and
former partners, agents, employees and counsel (each, an "Indemnified Party")
from all claims, losses and damages incurred by an Indemnified Parity by reason
(i) of the fact that any such representations, warranties and acknowledgments of
the "Purchaser" in the Stock Purchase Agreement are not true and correct or (ii)
the Nominee's acting on behalf of the Beneficial Owner pursuant to this
Agreement, except for any act or omission of Nominee that constitutes willful
misconduct or gross negligence.
(c) Beneficial Owner herewith delivers to Nominee a check ("Check") payable to
the order of "TGIS Partners, as Nominee" in an amount equal to the sum of (i)
(A) the Per Share Price multiplied by (B) the number of Shares ("Total Purchase
Price") and (ii) (A) $.10 multiplied by (B) the number of Shares
("Administration Costs"). The Total Purchase Price, the Administration Costs
(which are intended reflect Nominee's administrative and legal costs relating to
its performing the services contemplated by this Agreement) and the amount of
the Check are set forth on the signature page to this Agreement.
(d) If the sale of the Shares is canceled by Davies, as permitted by the Stock
Purchase Agreement, Nominee shall immediately upon the occurrence of such event
either (i) return the Check to Beneficial Owner or (ii) deliver to Beneficial
Owner a check payable to the order of Beneficial Owner in an amount equal to the
amount of the Check.
3. Nominee will, ,as the nominee of Beneficial Owner, as soon as practicable
after the "Closing Date" as defined in the Stock Purchase Agreement and at no
cost to Beneficial Owner
(a) execute and deliver to Davies the Stock Purchase Agreement and pay to Davies
the Total Purchase Price, against receipt by Nominee of the Stock Purchase
Agreement and a blank stock transfer power ("Davies Stock Power") relating to
the Shares, both duly signed by Davies;
(b) deliver to LCI stock certificates, registered in the name of TGIS,
representing a number of shares of Common Stock at least equal to the number of
Shares, together with (i) a blank stock transfer power from TGIS and
instructions to transfer a number of shares of Common Stock equal to the number
of Shares from TGIS into the name of "Davies" and (ii) a blank stock transfer
power from Davies and instructions (A) to transfer a number of shares of Common
Stock equal to the number of Shares from Davies into the name of "TGIS Partners,
as Nominee" and (B) to deliver to Nominee a stock certificate evidencing the
Shares (as described in subparagraph (b)(ii)(A) above); and
(c) confirm to Beneficial Owner when Nominee has received a stock certificate
evidencing the Shares, as contemplated by subparagraphs (b)(ii)(A) and (B)
above.
2
<PAGE>
4. Nominee will, at no cost to Beneficial Owner, hold the Shares (including any
distributions, dividends, cash or securities made or given in respect of or in
exchange for the Shares) for the sole benefit of Beneficial Owner; provided,
however, Nominee will deliver to Beneficial Owner, immediately upon Nominee's
receipt thereof, all cash and cash equivalents received by Nominee in respect of
or in exchange for the Shares.
5. Nominee shall, at no cost to Beneficial Owner, assign, transfer and deliver
to Beneficial Owner, free of all claims, liens and encumbrances (but subject, if
applicable, a legend reflecting the investment intentions of the Beneficial
Owner as contemplated by the Stock Purchase Agreement) (a) the stock certificate
evidencing the Shares, (b) a blank stock transfer power from Nominee, and (c)
any distribution, dividend or securities received by Nominee pursuant to
paragraph 4. above and not previously delivered to Beneficial Owner, as soon as
practicable after the date (the "Release Date") of the earliest to occur of any
of the following events:
(i) the decision of the Nominee to transfer record ownership of the Shares
to the Beneficial Owner,
(ii) the expiration of any "lock up" period required by the underwriters
in LCI's initial public offering,
(iii) the registration of all or any portion of the Shares under the
Securities Act of 1933, as amended, or
(iv) the first anniversary of this Agreement.
Nothing in this Agreement is intended or shall operate to restrict the right of
Beneficial Owner to transfer the Shares, provided the transferee agrees to
appoint Nominee as such transferee's nominee and agent pursuant to an agreement
of like tenor to this Agreement.
6. Beneficial Owner hereby gives to Nominee an irrevocable proxy to vote the
Shares, in such manner and for such purposes as Nominee deems advisable until
the Release Date; provided, however, Nominee shall vote the Shares in the same
manner as TGIS votes its shares of Common Stock.
7.(a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices and other communications hereunder or pursuant hereto
shall, unless otherwise stated, be in writing and shall be sent by national
overnight courier service or certified mail, return receipt requested, with
postage prepaid and addressed as follows:
(i) if to Nominee, at Nominees' address indicated at the beginning of this
Agreement; and
(ii) if to Beneficial Owner, at his address set forth beneath his
signature below; or
(iii) to such other address as shall have been furnished in writing by
such party to the other parties.
3
<PAGE>
(c) This Agreement shall be governed in accordance with the laws of the State of
New Jersey, as a contract executed, delivered and fully performed therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all prior
communications, agreements and representations between, the parties with respect
to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or succeeding breach or right under this Agreement. This Agreement
may not be modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
TGIS Partners ("TGIS" or "Nominee")
By /s/ William Weksel
-------------------------------------
William Weksel, General Partner
/s/ Leonor Firstenberg
- ---------------------------------------
Leonor Firstenberg ("Beneficial Owner")
(Social Security No. ###-##-####)
15 W. 75th Street
New York, NY 10023
No. of Shares: 5500
Total Purchase Price: $ 13,750.
Administration Costs: $ 550.
---------
Amount of Check: $ 14,300.
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of February 16, 1998 (the "Agreement"),
is made by and between Robert H. Davies (the "Seller"), c/o Bertrand H.
Weidberg, Esq., 33 Silver Crescent, Irvine, CA 92611-3611 and the person whose
name and address appears on the signature page of this Agreement (the
"Purchaser").
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to buy from
Seller, the number of (post-5 for 1 split) shares (the "Shares"*) of the $.01
par value common stock ("Common Stock"*) of LogistiCare, Inc. ("LCI", which was
previously known as Automated Dispatch Solutions, Inc.) set forth on the
signature page of this Agreement, at a price of $2.50 per share. The total
purchase price (the "Total Purchase Price") of the Shares is also set forth on
the signature page of this Agreement.
NOW THEREFORE, in consideration of the premises and the promises of the parties
set forth herein, Seller and Purchaser hereby agree as follows:
1. On the "Closing Date" (as defined in paragraph 4. below), (a) Purchaser will
purchase and accept from Seller and (b) Seller will (subject to Seller's right
of cancellation set forth in paragraph 3. below and receipt by Seller not later
than February 27, 1998, of both (i) a signed copy of this Agreement and (ii) the
Total Purchase Price) sell, assign, transfer and deliver to Purchaser, the
Shares and all rights pertaining thereto to Purchaser.
2. Purchaser will purchase the Shares by delivering to Seller not later than
February 27, 1998 a check payable to Seller's order in the amount of the Total
Purchase Price. In addition, Purchaser will remit to Seller at his request the
amount of any stock transfer or similar tax or levy, if any, that may be imposed
by a government authority in respect of the purchase, sale, transfer or delivery
of the Purchased Shares. (The amount of the Total Purchase Price and other funds
remitted by Purchaser to Seller pursuant to this Agreement is herein sometimes
called the "Remitted Funds.")
3. Notwithstanding anything herein or elsewhere to the contrary, Seller may
cancel the sale of the Shares to Purchaser on or before the Closing Date (as
defined in paragraph 4. below), if Seller (a) promptly gives notice of such
cancellation to Purchaser and (b) delivers to Purchaser, not later than five
days after Seller's notice
- ----------
* As used herein "Common Stock" and "Shares" refer only to LCI Common Stock $.01
par value per share, after giving effect to the 5 for 1 split of Common Stock
and the change in par value (back to $.01 after the split) approved by the LCI
Board of Directors on August 13, 1997.
<PAGE>
to Purchaser canceling the sale of the Shares, Purchaser's checks(s) delivered
to Seller pursuant to this Agreement or a check payable to Purchaser's order in
an amount equal to the Remitted Funds. In the event that the sale of the Shares
to Purchaser is canceled, Purchaser's only right shall be to obtain a refund of
the Remitted Funds.
4. The Closing Date for the sale and purchase of the Shares shall occur on
February 27, 1998 or on such other date not later than March 15, 1998 as to
which Seller shall advise Purchaser in writing, unless the sale of the Shares is
canceled as provided in paragraph 3. above.
5. As soon as practical after the Closing Date, Seller will deliver or cause to
be delivered to Purchaser at his address shown below a share certificate,
registered in Purchaser's name and evidencing the Shares.
6. Seller represents and warrants to Purchaser that (a) until the Closing Date
or the earlier cancellation of the sale of the Shares as provided in paragraph
3. above, Seller will hold all Remitted Funds in a segregated bank account; (b)
if Seller cancels the sale of the Shares as permitted by this Agreement, Seller
will deliver to Purchaser, not later than five days after Seller's notice to
Purchaser canceling the sale, Purchaser's checks(s) delivered to Seller pursuant
to this Agreement or a check payable to Purchaser's order in an amount equal to
the Remitted Funds; (c) on the Closing Date Seller will give to Purchaser good
title to the Shares, free of all claims, liens and encumbrances; and (d) the
Shares are fully paid and non-assessable.
7. Purchaser hereby represents and warrants to Seller that, as of the date of
this Agreement and the Closing Date:
(a) Purchaser is acquiring the Shares for his own account for the purposes
of investment and not with a view to, or for sale in connection with, any
distribution thereof;
(b) Purchaser's investment in the Shares is reasonable in relation to his
net worth and Purchaser (i) has all funds necessary and the financial ability to
pay the Total Purchase Price, (ii) is able to bear the economic risk of an
investment in the Shares, and (iii) is able to provide for the current needs and
personal contingencies of himself and his family, all without experiencing any
undue hardship;
(c) Purchaser has been given the opportunity (i) to obtain and review any
and all information, documents, agreements and data which Purchaser deems
relevant to his decision to purchase the Shares and to make an investment in the
Shares and (ii) to ask and receive answers to any and all questions that
Purchaser considers appropriate in connection with his purchase of and
investment in the Shares;
(d) Purchaser has received all information that he requires with respect
to the financial and business condition, plans and prospects of LCI;
(e) Purchaser (i) is an experienced investor and has previously purchased
minority interests in closely held corporations, (ii) personally has the
requisite business knowledge to assess the relative merits and risks in
purchasing the Shares, and (iii) has made an informed decision to purchase the
Shares pursuant to
<PAGE>
this Agreement based upon his complete understanding of the risks, financial
and business condition, plans and prospects of LCI;
(f) Purchaser is relying exclusively on his own business judgment in
making an investment in the Shares; and
(g) Purchaser will notify Seller in writing immediately if there is any
material change in the information represented by Purchaser in this paragraph 7.
8. Purchaser acknowledges that
(a) Seller is partner in TGIS Partners, which has or may be deemed to have
a controlling interest in LCI;
(b) LCI has within the past year sold shares of Common Stock at prices
less than $2.50 per share with the result that the book value of the Shares is
diluted to an amount below the Total Purchase Price;
(c) the Shares have not been and may not ever be registered under the
Securities Act;
(d) the Shares must be held by Purchaser indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act of 1933 or is exempt
from such registration;
(e) the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares only in limited
amounts and under certain conditions; and
(f) the certificate evidencing the Shares will bear a legend, and LCI will
make a notation on its transfer books, to reflect Purchaser's investment
intention, the unregistered status of the Shares and related matters.
9. (a) All representations, warranties, covenants and agreements contained in
this Agreement shall be binding upon and inure to the benefit of their
respective successors and assigns of the parties hereto, whether or not so
expressed.
(b) All notices, remittances and other communications hereunder or
pursuant hereto shall, unless otherwise stated, be in writing and shall be sent
by national overnight courier service or certified mail, return receipt
requested, with postage prepaid and addressed as follows:
(i) if to Seller, at Seller's address indicated at the beginning of
this Agreement; and
(ii) if to Purchaser, at his address set forth beneath his signature
below; or
(iii) to such other address as shall have been furnished in writing
by such party to the other parties.
(c) This Agreement shall be governed in accordance with the laws of the
State of Delaware, as a contract executed, delivered and fully performed
therein.
(d) This Agreement constitutes the entire agreement of, and supersedes all
prior communications, agreements and representations between, the parties with
respect to the subject matter hereof.
(e) The failure of any party to this Agreement at any time to require
performance by the other parties to this Agreement of any provision of this
Agreement shall not (i) affect the right of such party to require future
performance of that or any other provision or (ii) be construed as a waiver of a
continuing or
<PAGE>
succeeding breach or right under this Agreement. This Agreement may not be
modified or amended except in writing signed by both parties.
(f) If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect any other provision of this Agreement which shall remain in full
force and effect.
(g) The parties to this Agreement hereby each knowingly, voluntarily and
intentionally waive any right it may have to a trial by jury in respect to any
litigation based on, arising out of, under or in connection with this Agreement
or in furtherance of its objectives, any course of conduct or dealing,
statements (verbal or written) or actions of any party.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original of this Agreement.
This Agreement is made and delivered as of the date first above written.
- ---------------------------------
Robert H. Davies ("Seller")
/s/ Leonor Firstenberg
- ---------------------------------
("Purchaser")
Number of Shares:
Total Purchase Price: $
<PAGE>
EXHIBIT 10.1
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT is made and entered into as of this 9/th/ day of
March, 1995 between RadioSoft, Inc., a Delaware corporation (the "Company") and
John L. Shermyen, an individual residing at 58 Alachua Highlands, Alachua,
Florida 32615 (the "Employee").
WHEREAS, the Company employs Employee as President and Chief Executive
Officer of the Company;
WHEREAS, the Company wishes to continue to employ Employee, and Employee
wishes to continue employment by the Company; and
WHEREAS, the Company wishes to provide Employee with severance compensation
in the event Employee's employment by the Company is terminated under certain
conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises contained herein, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following capitalized
-----------
terms shall have
the meanings set forth below and shall include the plural as well as the
singular:
(a) "Affiliate" shall mean any Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, any other Person.
(b) "Annual Salary" shall mean the highest annual rate of Employee's base
rate of pay (without any payroll deductions required by law or agreement with
Employee) in effect at any time from the date immediately prior to a Change in
Control or Constructive Discharge to the date of termination.
(c) "Change of Control" shall be deemed to occur upon:
(i) 50% or more of the outstanding voting stock of the Company is acquired
or beneficially acquired (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, or any successor rule thereto) by any
Person (other than TGIS Partners, the Company or an Affiliate of either),
in a transaction other than a public offering of the voting stock of the
Company;
<PAGE>
(ii) the Company is merged or consolidated with or into another corporation
(other than in a merger or consolidation with or into an Affiliate of the
Company) and the holders of outstanding voting stock of the Company
immediately prior to the merger or consolidation hold less than a majority
of the voting stock of the surviving entity or its parent corporation
immediately after the merger or consolidation; or
(iii) all or substantially all of the assets of the Company are sold or
otherwise transferred to any person other than an Affiliate of the Company
(in one transaction or a series of transactions).
(d) "Constructive Discharge" shall mean a reduction in Employee's Annual
Salary other than as part of a general reduction in the Annual Salaries of the
officers of the Company in which Employee's Annual Salary is reduced
proportionately with such general reduction.
(e) "Cause" shall mean the termination of Employee by the Company for any
of the reasons or causes set forth below:
(i) gross misconduct by Employee in the performance of Employee's duties;
(ii) theft or embezzlement by Employee from, or fraud committed by Employee
against, the Company;
(iii) conviction of Employee of any crime under federal or state law
involving moral turpitude (for the purpose hereof, traffic violations and
misdemeanors shall not be deemed to be a crime); or
(iv) willful refusal by Employee to perform any material duties reasonably
required to be performed in the course of Employee's employment with the
Company.
(f) "Person" shall mean any individual, partnership, firm, trust,
corporation or other similar entity. When two or more Persons act as a
partnership, limited partnership, syndicate, or other group for the purpose of
acquiring, holding or disposing of securities of the Company, such syndicate or
group shall be deemed a "Person" for the purposes of this Agreement.
2. TERMINATION.
-----------
(a) Termination. Subject to the other subsections of this Section 2,
-----------
Employee's employment by the Company may be terminated by the Company at any
time for any reason or no reason upon notice to Employee (termination of
employment for any reason following the bankruptcy, insolvency, receivership or
any similar proceeding of or relating to the Company shall be deemed to be
termination by the Company for purposes of this Agreement).
2
<PAGE>
(b) Severance Compensation. If Employee's employment is terminated by the
----------------------
Company for reasons other than for Cause, or if Employee resigns following a
Change in Control or Constructive Discharge, then the Company will pay to
Employee an amount equal to Employee's Annual Salary (less appropriate payroll
deductions, if any). Such amount shall be paid in substantially equal
installments over a twelve-month period commencing on the date of termination.
(c) Termination For Cause. If the Company terminates Employee's employment
---------------------
for Cause, then all obligations of the Company under this Agreement shall
thereupon cease and Employee shall not be entitled to receive any severance
compensation hereunder.
(d) Death, Disability or Retirement. For purposes of this Agreement,
-------------------------------
Employee's employment will not be considered to have been terminated by the
Company if Employee's employment is terminated because of Employee's death,
disability or retirement.
3. TRANSITION PERIOD. Notwithstanding anything herein to the contrary, if
-----------------
following a Change in Control, Employee wishes to resign from the Company with
effect prior to six (6) months after the date on which the Change in Control
occurs, Employee shall:
(a) first ask the then Board of Directors of the Company whether it wishes
Employee to remain employed by the Company in Employee's then current position;
and
(b) if the Board of Directors responds in the affirmative, then Employee
shall continue and dutifully execute his or her responsibilities as an employee
of the Company in such position for six (6) months after the date on which the
Change in Control occurred and shall be entitled, upon (i) the release of
Employee by the Company upon or prior to the expiration of such period, or (ii)
the termination of Employee's employment by the Company other than for Cause, to
receive the payments contemplated by Section 2(b). If Employee does not execute
his or her responsibilities as an employee of the Company for such six (6) month
period, then Employee shall not be entitled to receive any severance
compensation hereunder.
4. NO OTHER SEVERANCE. Employee acknowledges and agrees that the severance
------------------
compensation provided under this Agreement shall be in lieu of any other
severance benefit provided by the Company to which Employee may otherwise be
entitled.
5. GENERAL RELEASE OF THE COMPANY. In consideration of the payments and other
------------------------------
undertakings set forth herein, Employee will sign a separate Non-Competition
Agreement attached hereto as Exhibit A, and at the time Employee's employment is
terminated other than for Cause, sign a separate Release of the Company in
substantially the form attached hereto as Exhibit B.
6. TERM. The term of this Agreement shall commence upon the date hereof and
----
shall continue until the termination of Employee's employment.
3
<PAGE>
7. MISCELLANEOUS.
-------------
(a) Assignment. Employee may not anticipate, encumber or dispose of any
----------
payment under this Agreement, which payments and the rights to such payments are
expressly declared nonassignable and nontransferable, except as otherwise
specifically provided in this Agreement.
(b) Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding upon the parties hereto and their respective successors, assigns, heirs,
distributees and representatives.
(c) Severability. If any provision of this Agreement is held to be
------------
invalid, illegal, or unenforceable, in whole or in part, such invalidity shall
not affect any otherwise valid provision, and all other valid provisions shall
remain in full force and effect.
(d) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and all of which
together will constitute one document.
(e) Titles. The titles and headings preceding the text of the paragraphs
------
and subparagraphs of this Agreement have been inserted solely for convenience of
reference and do not constitute a part of this Agreement or affect its meaning,
interpretation or effect.
(f) Waiver. The failure of either party to insist in any one or more
------
instances upon performance of any terms or conditions of this Agreement will not
be construed as a waiver of future performance of any such term, covenant, or
condition and the obligations of either party with respect to such term,
covenant or condition will continue in full force and effect.
(g) Notices. All notices required or permitted to be given under this
-------
Agreement will be given in writing and will be deemed sufficiently given if
delivered by hand or mailed, postage prepaid, by registered mail, return receipt
requested, to Employee's address set forth at the beginning of this Agreement
and to the Company's Chairman at the Company's principal executive offices.
Either party may, by giving notice to the other party in accordance with this
paragraph, change the address at which it is to receive notices hereunder.
(h) Entire Agreement; Modification. This Agreement supersedes all previous
------------------------------
agreements, negotiations, or communications between Employee and the Company and
contains the complete and exclusive expression of the understanding between the
parties concerning the subject matter covered herein. This Agreement cannot be
amended, modified, or supplemented in any respect except by a subsequent written
agreement entered into by both parties.
4
<PAGE>
(i) Governing Law. This Agreement will be construed and enforced in
-------------
accordance with the laws of the State of Delaware without giving effect to its
principles on the conflict of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
RadioSoft, Inc.
/s/
---------------------
By: William Weksel
Its Chairman
EMPLOYEE
/s/
----------------------
By: John L. Shermyen
5
<PAGE>
EXHIBIT A
NON-COMPETITION AGREEMENT
-------------------------
John L. Shermyen ("Employee"), for good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged by Employee, hereby agrees
with RadioSoft, Inc. (the "Company") as follows:
A. Confidential Information. Employee shall not, directly or indirectly,
------------------------
either during his employment by the Company or at any time thereafter up to and
including the period ending one year after such employment terminates (the
"Restrictive Period"), disclose to anyone or use (except as authorized in the
regular course of the Company's business) any information acquired by him during
his employment or thereafter with respect to any of the Company's trade secrets
or other confidential information (including information relating to the
identity of customers, prospective customers or suppliers, price lists and terms
of dealings with customers, confidential or secret processes or formulas,
manufacturing techniques and know how, product specifications, and any other
information that is not then generally available to the public, all of which
Employee acknowledges to be confidential).
B. Covenant Not To Compete. Employee shall not, at any time during the
-----------------------
Restrictive Period, directly or indirectly, any place within the United States,
engage or become interested in (as owner, stockholder, partner director,
officer, employee, consultant, agent or otherwise) any business competitive with
the business conducted by the Company. Employee acknowledges that this
provision is necessary for the Company's protection and is reasonable, since he
is able to obtain employment with companies whose businesses are not competitive
with those of the Company and with companies in other areas. If, however, any
provision of this paragraph is held to be unenforceable because of the duration,
geographical area of scope of the restriction, the court making that
determination shall modify that provision only to the extent necessary to make
it valid. Ownership of less than 5% of the securities of any class of a
corporation registered under section 12 (b) or 12 (g) of the Securities Exchange
Act of 1934 shall not be considered a violation of the provisions of this
paragraph.
C. Non Solicitation of Employees. Employee shall not, during the
-----------------------------
Restrictive Period, directly or indirectly employ or retain, solicit the
employment or retention of, or be associated with any entity that employs or
retains or solicits the employment or retention of, any person who was an
employee of the Company at any time during the twelve months preceding the
termination of Employee's employment or during the Restrictive Period.
D. Inventions. Any discovery, design, invention or improvement
----------
(whether or not patentable) that the Employee develops during his employment or
during the Restrictive Period (whether or not during his regular working hours
or on the Company's premises) and that is related to the Company's business or
research activities as then conducted or contemplated, shall belong to the
Company and shall be promptly disclosed to the Company. During his
<PAGE>
employment and thereafter Employee shall, without additional compensation,
execute and deliver to the Company any instruments of transfer and take any
other action that the Company may request to carry out the provisions of this
paragraph, including executing and filing, a the Company's expense, patent or
copyright applications and assigning the applications to the Company.
E. Injunctive Relief. Since a breach by Employee of the provisions of
-----------------
paragraph A, B or C of this Agreement would injure the Company in a way that
could not be adequately compensated for by damages, in addition to any other
remedies available to it, the Company may obtain an injunction restraining any
such breach, without the necessity of showing actual damage and without any bond
or other security being required.
F. Non-Exclusivity. The rights and remedies of the Company hereunder
---------------
are not exclusive of, or limited by, or in limitation of, any other rights or
remedies which it may have, whether at law, in equity, by contract or otherwise,
all of which shall be cumulative.
G. Severability. Should any provision of this Agreement or part thereof
------------
be held under any circumstances in any jurisdiction to be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision or other part of such provision, or of
such provision or part thereof under any other circumstances or in any other
jurisdiction.
H. Waiver. The rights of each party hereunder may be waived only by a
------
writing signed by the waiving party giving such waiver expressly setting forth
the rights so waived and the matters as to which they are so waived, and any
such waiver shall be limited to the matters expressly set forth in such writing.
No failure or delay of the Company in enforcing any of its rights hereunder at
any time shall constitute or evidence any waiver of such rights.
I. Miscellaneous. This Agreement shall inure to the benefit of the
-------------
Company its successors and assigns. It is expressly acknowledged that this
Agreement and the rights of the Company hereunder may be assigned, without the
consent of Employee, by the Company to any purchaser or other transferee of all
or substantially all of the assets of the Company. The captions of this
Agreement are for convenience of reference only and shall not affect in any
manner any of the terms, covenants or conditions hereof. This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
IN WITNESS WHEREOF, Employee has signed the Agreement this 9th day of
March, 1995.
/s/
- ------------------------------
John L. Shermyen, Employee
<PAGE>
EXHIBIT B
GENERAL RELEASE
BY
John L. Shermyen
DEFINITIONS. All the words used in this General Release have their plain
meanings in ordinary English. Specific terms used in this General Release have
the following meanings:
A. Words such as I and MY include both me and anyone who has or obtains any
legal rights or claims through me.
B. "The Company" means RadioSoft, Inc., a Delaware corporation
("RadioSoft"), any company related to RadioSoft in the past or present,
including without limitation RadioSoft's predecessors, successors and
affiliates, representatives and employees of Radiosoft, any company
providing insurance to RadioSoft in the past or present, and/or any
person who acted on behalf of RadioSoft or on instructions from
RadioSoft.
MY CLAIMS. The claims I am releasing include all of my rights to any relief of
any kind from the Company, including, without limitation:
1. All claims I have now, whether or not I know about the claims including,
without limitation, all claims arising out of or relating to my past
employment with the Company or the termination of that employment
including, but not limited to, breach of contract; violation of the Fair
Labor Standards Act, 29 U.S.C. (S) 201, et seq.; the Age Discrimination
-- ---
in Employment Act, as amended, 29 U. S.C. (S) 621, et seq.; ("ADEA");
-- ---
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. (S)
2000, et seq.; the Civil Rights Act of 1866, 42 U.S.C. (S) 1981; the
-- ---
National Labor Relations Act, 29 U.S.C. (S) 151, et seq.(1976); the
-- ---
Minnesota Human Rights Act; the Americans with Disabilities Act; the
Employee Retirement Income Security Act; and/or any other federal, state
or local statute, law, ordinance, regulation or order;
2. All claims I have now, whether or not I now know about the claims, for
any type of relief from the Company including, without limitation, all
claims for back pay, lost benefits, reinstatement, liquidated damages,
punitive damages, and damages on account of any alleged personal injury;
and
3. All claims for attorneys' fees and costs.
<PAGE>
AGREEMENT TO RELEASE MY CLAIMS. In exchange for the payment of severance
compensation pursuant to the Severance Agreement between the Company and me,
which includes all amounts for damages of any kind and attorneys' fees, I agree
to give up all My Claims against the Company as described above. I will not
bring any lawsuits or make any other demands against the Company relating to the
claims that I have released. The payment described is a full and fair compromise
payment for the release of My Claims. I agree and understand that I will not be
entitled to receive any such payment until twenty (20) calendar days after I
sign this General Release. I also agree and understand that this payment will be
made over a twelve-month period commencing upon the date of termination.
ADDITIONAL AGREEMENTS AND UNDERSTANDINGS. Even though the Company will pay me
to settle and release My Claims, the Company does not admit that it is
responsible or legally obligated to me. In fact, the Company denies that it is
responsible or legally obligated for My Claims.
ADVICE TO CONSULT WITH AN ATTORNEY. I understand and acknowledge that I am
hereby being advised to consult with an attorney prior to signing this General
Release. My decision to sign or not to sign this General Release is my own
voluntary decision made with full knowledge that I have been advised to consult
with an attorney.
FORTY-FIVE DAY PERIOD TO CONSIDER THE AGREEMENT. I understand that I may have
forty-five (45) calendar days from the day that I receive this General Release,
not counting the day upon which I receive it, to consider whether I wish to sign
this General Release. If I cannot make up my mind in that period of time, the
Company may or may not allow more time.
MY RIGHT TO REVOKE OR RESCIND THIS GENERAL RELEASE. I understand that I may
revoke or rescind this General Release at any time within fifteen (15) calendar
days after I sign it, not counting the day upon which I sign it. This General
Release shall not become effective or enforceable until the fifteen (15)
calendar day period has expired. I understand that I will not receive any
payments under this General Release if I revoke or rescind it.
If I want to revoke or rescind this General Release, I will deliver a written
notice of revocation or rescission to the Company's General Counsel within the
fifteen (15) calendar day period. If delivered by mail, the revocation or
rescission must be postmarked within the fifteen (15) calendar day period, must
be properly addressed to the Company's General Counsel at the Company's
principal executive offices and must be sent by certified mail, return receipt
requested.
PROCEDURE FOR ACCEPTING THE GENERAL RELEASE. To accept the terms of this
General Release, I must deliver the General Release, after it has been signed
and dated by me (and also signed by two witnesses to my signature on the
signature lines designated in the General Release) to the Company's General
Counsel by hand or by mail within the forty-five (45) calendar day consideration
period.
<PAGE>
If I choose to deliver my acceptance by mail, it must be postmarked within the
forty-five (45) calendar day period stated above, must be addressed to the
Company's General Counsel at the Company's principal executive offices and must
be sent by certified mail, return receipt requested.
CONFIDENTIALITY. I agree that I will not disclose or reveal the fact of this
General Release or any of its terms to any individual other than my attorney, or
any other individual, corporation, or entity, except as required by law.
MY REPRESENTATIONS. I am old enough to sign this General Release and to be
legally bound by the agreements that I am making. I represent that I have not
filed or been involved in any pending personal bankruptcy proceeding between any
accrual of My Claims and the date of my signature below. I am legally able and
entitled to receive the sums of money being paid to me by the Company in
settlement of My Claims. I have read this General Release carefully. I
understand all of its terms. In agreeing to sign this General Release, I have
not relied on any statements or explanations made by the Company or its
attorneys, except as specifically set forth in this General Release. I am
voluntarily releasing My Claims against the Company.
I understand and agree that this General Release contains all the agreements
between the Company and me relating to this settlement.
Dated: ______________, _______
-----------------------------
Employee's Signature
Witnesses:
- -------------------------------
Name:
- -------------------------------
Name:
<PAGE>
EXHIBIT 10.2
RADIOSOFT, INC.
1995 INCENTIVE STOCK OPTION PLAN
1. PURPOSES OF THE PLAN
--------------------
The purposes of this RadioSoft, Inc. 1995 Incentive Stock Option Plan are to
enable the Company to attract, retain and motivate Key Employees and to create a
long-term mutuality of interest between Key Employees and the stockholders of
the Company by granting Options to Key Employees.
2. DEFINITIONS
-----------
As used herein, the following terms shall have the respective meanings specified
therefor below:
(a) "Acquisition Transaction" means any of (i) a merger or consolidation in
which the Company shall not be the surviving entity, (ii) any transaction
resulting in the acquisition of substantially all of the Company's
outstanding voting capital stock by a single person or entity, or by a
group of persons and/or entities acting in concert, or (iii) the sale or
transfer of substantially all of the Company's assets.
(b) "Board" means the Board of Directors of the Company.
(c) "Change of Control" means, for any time when the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act:
(i) the occurrence of any event which would be required to be reported
in response to Item 6(e) of schedule 14A of Regulation 14A promulgated
under the Exchange Act;
(ii) any person (or group of persons acting in concert) becoming the
beneficial owner of 30% or more of the Company's outstanding voting
securities or securities convertible into such amount of voting securities;
or
(iii) within two years after a tender offer or exchange offer, or
as the result of a merger, consolidation, sale of substantially all of the
Company's assets or a contested election of the Board of Directors, or any
combination of such transactions, the failure of the persons who were
directors of the Company prior to such transaction to constitute a majority
of the Board or the board of directors of its successor;
<PAGE>
provided, however, that no transaction shall be deemed a Change of Control
-------- -------
if such transaction is approved by two-thirds vote of (i) the members of
the Board in office immediately prior to such event voting together with
(ii) their successors elected by a majority vote of such prior Board
members.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee, if any, appointed by the Board to
administer the Plan or, at any time when such a committee shall not be
constituted, the Board.
(f) "Common Stock" means common stock, par value $.01 per share, of the
Company and any common stock resulting from any reclassification thereof.
(g) "Company" means RadioSoft, Inc. a Delaware corporation.
(h) "Disability" means permanent and total disability, as determined by the
Committee in its sole discretion, but consistent with the meaning of
"permanent and total disability" under Section 22(e) (3) of the Code. A
Disability shall be deemed to occur at the time of determination thereof by
the Committee.
(i) "Effective Date" has the meaning set forth in Section 4.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" means, for any date of determination, the value of
a Share on such date, determined as follows:
(i) if such Share shall be listed on such date on a national
securities exchange or quoted on the National Market System of the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ"), the closing sales price on such date of such Share on such
exchange or on such National Market System, as the case may be, or if
no sales shall be reported on such date, the mean between the bid and
asked prices reported on such date on such exchange or National Market
System, as the case may be;
(ii) if such Share is not listed or quoted as described in the
preceding clause, but bid and asked prices are quoted through NASDAQ,
the mean between the bid and asked prices as quoted through NASDAQ on
such date;
(iii) if pursuant to the foregoing the Fair Market Value of such
Share is to be determined based upon the mean of the bid and asked
prices and the Committee determines that such mean does not properly
reflect the Fair Market Value, by such other method as the Committee
determines to be reasonable and consistent with applicable law; or
2
<PAGE>
(iv) if (or the extent) such Share is not listed or quoted as
described above, such amount as shall be determined by the Committee
in good faith.
(l) "Incentive Stock Option" means any Option which is intended to qualify
as an "incentive stock option" as defined in Section 422 of the Code.
(m) "Key Employee" means any person who is a director, executive officer or
other valuable staff, managerial, professional or technical employee of the
Company or any Subsidiary, as determined by the Committee.
(n) "Option" means the right to purchase a Share granted under, and subject
to the terms and provisions of the Plan and the relevant Option Agreement.
An Option may be either an Incentive Stock Option or a non-qualified
option.
(o) "Option Agreement" means an agreement among the Company and a
Participant, in such form not inconsistent with the Plan as the Committee
shall approve from time to time, pursuant to which one or more Options
shall be granted.
(p) "Participant" means a Key Employee of the Company or any Subsidiary who
is granted Options under the Plan.
(q) "Plan" means this RadioSoft, Inc. 1995 Incentive Stock Option Plan, as
amended from time to time.
(r) "Purchase Price" means the purchase price per Share payable to the
Company pursuant to the relevant Option Agreement upon exercise of an
Option.
(s) "Rule 701 " means Rule 701 promulgated under the Securities Act.
(t) "Sale Transaction" shall mean any transaction, or series of related
transactions, pursuant to which TGIS Partners shall directly or indirectly
sell to one or more purchasers which are not affiliates of it in excess of
50% of the shares of capital stock of the Company held by it from time to
time. As used herein, an "affiliate" of TGIS Partners shall mean any
person or entity directly or indirectly controlling, controlled by or under
common control with TGIS Partners.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Share" means, with respect to an Option at any time, the share of
Common Stock or other securities or other property of any kind (if an
adjustment shall have been made pursuant to Section 6) for which an Option
may be exercisable at such time.
(w) "Subsidiary" means any "subsidiary corporation" of the Company within
the meaning of Section 424(f) of the Code. An entity shall be deemed a
Subsidiary of the
3
<PAGE>
Company only for such periods as the requisite ownership relationship
thereunder shall be maintained.
(x) "Substantial Stockholder" means any Participant who, at the time of
grant, owns directly, or is deemed to own by reason of the attribution
rules set forth in Section 424 (d) of the Code, shares possessing more than
10% of the total combined outstanding voting power of all classes of stock
of the Company.
(y) "Termination of Employment" means the termination for any reason of an
individual's employment by the Company and/or its Subsidiaries, whether by
death or retirement or otherwise and whether or not for cause. In the
event an entity shall cease to be a Subsidiary of the Company or any other
Subsidiary, a Termination of Employment shall be deemed to have occurred
with respect to any individual who is not otherwise an employee of the
Company or another Subsidiary at the time such entity ceases to be a
Subsidiary. A leave of absence approved by the Committee shall not
constitute a Termination of Employment.
3. LIMITATIONS ON SHARES ISSUABLE AND OPTIONS GRANTED UNDER THE PLAN
-----------------------------------------------------------------
(a) Total Number of Shares Issuable. The total number of shares of Common
-------------------------------
Stock for which Options may be granted under the Plan is 166,667, subject
to adjustment as contemplated by Section 6. If any Option expires
unexercised or is canceled, terminated or forfeited in any manner without
having been exercised, the Share for which such Option was exercisable
shall remain available for issuance pursuant to another Option granted
under the Plan.
(b) Limitation on Granting of Options. No Option shall be granted at any
---------------------------------
time when both:
(i) the aggregate offering price of the securities of the Company for
which such Option is exercisable and all other securities of the
Company subject to outstanding offers made in reliance on Rule 701
plus the aggregate sales price of all securities of the Company sold
----
in the preceding twelve months in reliance on Rule 701 exceeds the
greater of:
(1) $500,000; and
(2) 15 percent of the total assets of the Company measured at the
end of the Company's most recent fiscal year; and
(ii) the number of securities of the Company for which such Option is
exercisable plus the number of securities of the Company subject to
----
outstanding offers made in reliance on Rule 701 plus the number of
----
securities of the Company sold in the preceding twelve months in
reliance on Rule 701 exceeds
4
<PAGE>
15 percent of the outstanding number of securities of the class of
securities for which such Option is exercisable;
In addition, in no event shall any Option be granted at any time when the
aggregate offering price of securities of the Company subject to outstanding
offers made in reliance on Rule 701 plus the aggregate sales prices of
----
securities of the Company sold in the preceding twelve months in reliance on
Rule 701 exceeds $5,000,000.
For purposes of this Section 3(b), the outstanding securities of a class shall
include securities of such class issuable pursuant to the exercise of all
outstanding options (including all Options), warrants rights of conversion or
convertible securities unless such options, warrants, rights of conversion or
convertible securities were issued under Rule 701. If the Company shall have
offered or sold any convertible securities in reliance on Rule 701, the number
of securities subject to outstanding offers and sold, for purposes of Section
3(b)(ii), shall be deemed the number of shares of the securities into which such
securities are convertible.
Except as the Committee shall otherwise determine, the granting of Options and
the offering and sale of Shares under the Plan are intended to be made in
reliance upon Rule 701 and the provisions of this Section 3(b) may be amended at
any time as the Committee shall deem appropriate in order that the exemption
provided by Rule 701 shall continue to be available to such grantings and such
offers and sales.
4. EFFECTIVENESS OF THE PLAN/GRANTING OF INCENTIVE STOCK OPTIONS
-------------------------------------------------------------
The Plan shall become effective upon its adoption by the Board and its approval
by the stockholders of the Company entitled to vote thereon (the "Effective
Date"). No Incentive Stock Option shall be granted under the Plan on or after
the tenth anniversary of the Effective Date, although the Plan shall otherwise
continue to be effective after such date and Incentive Stock Options previously
granted may extend beyond such date in accordance with the terms upon which such
Options were granted.
5. ADMINISTRATION OF THE PLAN
--------------------------
(a) Duties of the Committee. The Plan shall be administered by the
-----------------------
Committee. The Committee shall have full authority, subject to the terms of
the Plan, to: (i) interpret the Plan and decided all questions and settle
all controversies and disputes that may arise in connection with the Plan;
(ii) establish, amend and rescind rules for carrying out the Plan and
administering the Plan; (iii) select Participants in, and grant Options
under, the Plan; (iv) determine the terms, exercise price and permitted
forms of payment for each Option granted under the Plan and determine which
Options granted under the Plan shall be Incentive Stock Options; (v)
prescribe the form or forms of Option Agreements and any other agreements,
instruments or documents required under the Plan from time to time; (vi)
amend the Plan as permitted thereby; and (vii) make all other
determinations and take all other actions in connection with the Plan and
the
5
<PAGE>
Options as the Committee, in its sole discretion, deems necessary or
desirable. The Committee shall not be bound to any standards of uniformity
or similarity of action, interpretation or conduct in the discharge of its
duties, regardless of the apparent similarity of the matters coming before
it. Any determination or action of the Committee in connection with the
foregoing shall be final and conclusive.
(b) Advisors. The Committee may designate officers or other employees of
--------
the Company or independent advisors and may employ legal counsel and
agents, as it deems appropriate, to assist it in the administration of the
Plan and may grant authority to such persons to execute Option Agreements
or other documents on behalf of the Committee. The Committee may
conclusively rely upon any opinion received from any such counsel or
consultant and any computation received from any such counsel or consultant
and any computation received from any such consultant or agent. All
expenses incurred by the Committee pursuant to the engagement of, or any
services rendered by, any such advisor, counsel or agent shall be paid by
the Company.
(c) Indemnification. No officer of the Company or member or former member
---------------
of the Committee or the Board shall be liable for any action taken or made
in good faith with respect to the Plan or any Option granted thereunder.
To the fullest extent permitted by applicable law, each such person shall
be indemnified and held harmless by the Company against any liability, cost
or expense (including without limitation legal fees and settlement amounts)
incurred by it in relation to the Plan or any action taken or determination
made in connection therewith and shall be advanced all amounts necessary to
pay the foregoing at the earliest time permitted by applicable law. Such
indemnification shall be in addition to any other rights of indemnification
any such person may have under applicable law or under the Articles of
Incorporation or By-Laws of the Company.
(d) Meetings of the Committee. The Committee shall select one of its
-------------------------
members as a Chairman and shall adopt such rules and regulations as it
shall deem appropriate concerning the holding of its meetings and the
transaction of its business. Any member of the Committee may be removed at
any time, either with or without cause, by resolution adopted by the Board
and any vacancy on the Committee may at any time be filled by resolution
adopted by the Board. All determinations by the Committee shall be made by
the affirmative vote of a majority of its members. Any such determination
may be made at a meeting duly called and held at which a majority of the
members of the Committee are in attendance in person or through telephonic
communication. Any determination set forth in writing and signed by all of
the members of the Committee shall be as fully effective as if it had been
made by a majority vote of the members at a meeting duly called and held.
6
<PAGE>
6. SHARES; ADJUSTMENT UPON CERTAIN EVENTS
--------------------------------------
(a) Shares to be Delivered; Fractional Share. Shares of Common Stock or
----------------------------------------
other capital stock of the Company to be issued under the Plan shall be
made available, at the discretion of the Board, either from authorized but
unissued stock or from issued stock held in treasury. No fractional Shares
will be issued or transferred upon the exercise of any Option. In lieu
thereof, the Company shall pay a cash adjustment equal to the same fraction
of the Fair Market Value of such Share on the date of exercise.
(a) Adjustments; Recapitalization, etc. The existence of the Plan and the
-----------------------------------
Options granted hereunder shall not affect in any way the right or power of
the Board or the stockholders of the Company to authorize or effect any
change to the Company's capital structure, any merger or consolidation
involving the Company, any sale or transfer of any of its properties or its
liquidation or dissolution or any other corporate act or proceeding. In
the event the Company shall take any such action, the following provisions
shall govern to the extent applicable:
(i) If and whenever the Company shall effect a stock split, stock
dividend, subdivision, recapitalization or combination or other change
in the Company's capital stock, (x) the Purchase Price per share and
the number and class of Shares for which outstanding Options
thereafter may be exercised and (y) the total number and class or type
of Shares that may be issued under the Plan shall be proportionately
adjusted by the Committee as it shall deem appropriate. The Committee
may also make such other adjustments as it deems necessary to take
into consideration any other event (including, without limitations
accounting changes) if the Committee shall determine that such
adjustment shall be appropriate to the intended operation of the Plan.
(ii) Subject to Section 6(b)(iii), if the Company shall merge or
consolidate with any other entity, then, as of the effective date of
such merger or consolidation, each Participant, upon exercise of
Options theretofore granted, shall be entitled to acquire under each
such Option, in lieu of the Share for which such Option shall have
been exercisable but in all other respects in accordance with the
provision of the relevant Option Agreement, the number, class and type
of securities or other property (including cash), if any to which such
Participant would have been entitled pursuant to the terms of the
relevant agreement of merger or consolidation if, immediately prior to
such merger or consolidation, such Participant had been the holder of
record of the Share receivable upon exercise of such Option (whether
or not the exercisable) had such merger or consolidation not occurred.
(iii) In the event of an Acquisition Transaction or a Change of
Control, the Committee may, in its sole discretion and regardless of
any adverse tax consequence to any Participant, (x) terminate all
outstanding options by
7
<PAGE>
delivering notice of termination to each Participant, provided that
--------
during the twenty day period following the date of delivery of such
notice, each Participant shall have the right to exercise in full all
of such Participant's Options then outstanding (without regard to any
limitations on exercisability otherwise contained in the Option
Agreements) or (y) declare that all outstanding Options shall
immediately become exercisable regardless of any contrary provision of
any applicable Option Agreement. If an Acquisition Transaction or
Change of Control shall occur and outstanding Options are not
terminated pursuant to the preceding sentence, the provisions of
Section 6(b)(ii) shall apply.
(iv) The Committee may grant Options under the Plan in substitution
for stock options held by employees of another corporation who become
Key Employees as the result of a merger or consolidation of such
corporation with the Company or as the result of the acquisition by
the Company of property or stock of such corporation. Such Options
shall be granted on such terms and conditions as the Committee shall
consider appropriate under the circumstances.
(v) Except as expressly provided above, the issuance by the Company of
Shares of capital stock of any class, or securities convertible into
any such shares, for cash property, labor or services, whether upon
direct sale, upon the exercise of rights or warrants to subscribe
therefor or upon conversion of shares or other securities, and in any
case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the Shares
subject to Options theretofore granted or the Purchase Price of any
such Share.
7. AWARDS AND TERMS OF OPTIONS
---------------------------
(a) Grant. The Committee may grant Options, including Options intended to
-----
be Incentive Stock Options, to Key Employees. Each Option shall be
evidenced by an Option Agreement. Each Option which is intended to be an
Incentive Stock Option shall be so designated upon the grant of such
Option.
(b) Purchase Price. The Purchase Price of each Option shall be determined
--------------
by the Committee, provided that the Purchase Price for an Incentive Stock
--------
Option shall not be less than 100% (110% in the case of an Incentive Stock
Option granted to a Substantial Stockholder) of the Fair Market Value of
the relevant Share at the time the Incentive Stock Option is granted.
(c) Number of Shares. Each Option Agreement shall specify the number of
----------------
Options granted to the Participant party thereto and the Purchase Price for
each Share for which such Options are exercisable, as determined by the
Committee in its sole discretion.
8
<PAGE>
(d) Exercisability; Limitations on Exercisability. At the time of grant,
---------------------------------------------
the Committee shall specify when and on what terms Options granted shall be
exercisable, or provisions shall be made therefor in the Option Agreement
relating thereto, as the case may be. In the case of Options not
immediately exercisable in full, the Committee may at any time accelerate
the time at which all or any part of such Options may be exercised.
Notwithstanding the foregoing or any other provision hereof or of any
Option Agreement, (i) no Option shall be exercisable until the first to
occur of (x) any Sale Transaction or (y) the first date on or after which
the Company shall have become subject to the requirements of Section 13 or
15(d) of the Exchange Act, (ii) no Option which is an Incentive Stock
Option shall be exercisable after the expiration of ten years from the date
of grant or, if granted to a Substantial Stockholder, five years from such
date and (iii) each Option granted hereunder shall be subject to earlier
termination as provided in Section 6(b) or Section 8 or otherwise
hereunder.
(e) Special Rule for Incentive Options. As required by Section 422 of the
----------------------------------
Code or any successor provision, if in any calendar year the Incentive
Stock Options theretofore granted to any participant (either hereunder or
under any stock option plan of the Company or any Subsidiary) first become
exercisable for Shares having an aggregate Fair Market Value in excess of
$100,000, such Options shall not be treated as Incentive Stock Options to
the extent of such excess. This Section 7(e) shall in no way be construed
as limiting the exercisability of any Option.
(f) Exercise of Options. Options shall be exercised, and the aggregate
-------------------
Purchase Price for the Shares to be purchased pursuant thereto shall be
paid, by Participants as provided in the relevant Option Agreement.
(g) Listing, Registration and Compliance with laws and Regulations.
--------------------------------------------------------------
(i) In general. Notwithstanding any contrary provision of any Option
----------
Agreement, the Committee may condition the exercisability of any
Option or the sale of any Share thereunder upon the satisfaction or
compliance with any listing, registration, qualification or other
requirement under any state or Federal securities or other law or
regulation, or any order or determination of any governmental
authority, which the Committee shall determine to be applicable to the
exercise of such Options or to such purchase of such Share. Each
holder of an Option shall supply the Company with an certificate or
other instrument or document which the Company shall request, and
shall otherwise cooperate with the Company, in satisfying or complying
with any such law or regulation or order or determination.
(ii) Securities laws. Without limitation of the provisions of Section
---------------
7(g)(i), no Share shall be issued upon the exercise of any Option if
the Committee shall determine that such issuance would not comply with
any applicable Federal or state securities laws. The Committee may in
its sole discretion require as a
9
<PAGE>
condition to exercise of any Option that counsel to the holder thereof
deliver to the Company an opinion that the issuance of Shares upon
exercise thereof shall be exempt from registration under the
Securities Act and applicable "blue sky" laws. In the case of officers
and other persons who become subject to Section 16(b) of the Exchange
Act (in the event the Company shall become subject to the reporting
requirements thereof), the Committee may at any time impose any
limitations (whether by amendment of the Plan or otherwise) upon the
exercise of Options or issuance of Shares pursuant thereto which the
Committee determines are necessary or desirable in order to comply
with such Section 16(b) and the rules and regulations thereunder. If
the Company, as part of an offering of securities or otherwise, finds
it desirable, in consequence of Federal or state regulatory
requirements, to reduce the period during which any Option my be
exercised, the Company may, in its discretion and without the consent
of the holder thereof, reduce the exercise period as it shall
determine on not less than 15 days' written notice.
8. EFFECT OF TERMINATION OF EMPLOYMENT
-----------------------------------
The following provisions shall be applicable upon the Termination of Employment
of any Participant, in each case subject to Section 7(d):
(a) Death of Participant. If such Termination of Employment shall be based
--------------------
upon the death of such Participant, all Options granted to such Participant
and exercisable (by acceleration as provided above or otherwise) as of the
date of such Termination of Employment (x) which are Incentive Stock
Options shall remain exercisable by such Participant's estate, or by his or
her heirs or assigns by will or by operation of law, for a period of one
year from such date and (y) which are not Incentive Stock Options shall
remain exercisable by any such party for a period, which shall be not less
than one year nor more than three years from such date, to be determined by
the Committee in its sold discretion.
(b) Disability of Participant. If such Termination of Employment shall be
-------------------------
based upon the Disability of such Participant, all Options held by such
Participant and exercisable (by acceleration as provided above or
otherwise) as of the date of such Termination of Employment (x) which are
Incentive Stock Options shall remain exercisable for a period of one year
from such date and (y) which are not Incentive Stock Options shall remain
exercisable for a period, which shall be not less than one year nor more
than three years from such date, as determined by' the Committee in its
sold discretion.
(c) Voluntary Termination or Termination for Cause. If (x) such
----------------------------------------------
Termination of Employment shall (1) result from the voluntary resignation
from, or termination of, employment by such Participant before the date on
which the Participant shall be fully eligible for all retirement benefits
from the Company to which it is entitled or (2) be for
10
<PAGE>
Cause (as defined below) or (y) it shall be determined subsequent to any
Termination of Employment that such Participant had engaged in conduct that
would have justified a Termination of Employment for Cause, all unexercised
Options held by such Participant shall immediately be canceled and shall
terminate as of such Termination of Employment. Termination of Employment
of a Participant shall be "for Cause" if (i) such Participant shall have
committed any felony, willful misconduct or any act of disloyalty in
connection with his or her duties as an employee of the Company or any
Subsidiary, (ii) such Participant shall have committed fraud or breach of
trust or confidentiality as to the Company or any Subsidiary or any act
which is intended, or may reasonably be expected, to cause economic or
reputation injury to the Company or any Subsidiary or (iii) such
Termination of Employment is or would be deemed to be for cause under any
employment or other agreement between the Company or any Subsidiary and
such Participant.
(d) Other Termination. If such Termination of Employment shall be based
-----------------
upon any fact or circumstance not contemplated by Sections 8(a), (b) or
(c), all Options held by such Participant and exercisable as of the date of
such Termination (x) which are Incentive Stock Options shall remain
exercisable for a period of three months commencing on such date and (y)
which are not Incentive Stock Options shall remain exercisable for a period
of one year from such date.
9. NON-TRANSFERABILITY
-------------------
No Option shall be transferable by any Participant other than by will or under
applicable laws of descent and distribution and during the lifetime of such
Participant each Option held by such Participant may be exercised only by such
Participant or his or her duly appointed guardian or legal representative. No
Option shall be assigned, negotiated, pledged or hypothecated in any way
(whether by operation of law or otherwise) and no Option shall be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
negotiate, pledge or hypothecate any Option, or in the event any levy upon any
Option by reason of any execution, attachment or similar process contrary to the
provision hereof, such Option shall immediately become null and void.
10. NO RIGHTS AS A STOCKHOLDER
--------------------------
A holder of Options shall have no rights as a stockholder of the Company based
upon such holder's holding of Options or in respect of the Shares for which such
Options are respectively exercisable. No dividends or other distribution or
offerings to shareholders shall be made in respect of any such Option or Share
and, except as provided in Section 6, no adjustment to the number of Shares
purchasable under any Option or the purchase price therefor shall be effected in
consequence of any such offering or distribution or in consequence of any
potentially dilutive action or transaction.
11
<PAGE>
11. DETERMINATIONS
--------------
Each determination, interpretation or other action made or taken pursuant to the
provisions of the Plan by the Conunittee shall be final and binding for all
purposes and upon all persons, including, without limitation, the Company and
its successors, the directors, officers and other employees of the Company and
any Subsidiary and the Participants and their respective heirs, assigns
executors, administrators and personal representatives.
12. TERMINATION AND AMENDMENT
-------------------------
(a) Termination of the Plan. The Plan shall terminate on the first to
-----------------------
occur of (x) the first date on which no Option remains outstanding and
exercisable, or exercisable on a date thereafter, and (y) any earlier date
on which the Committee shall in its sole discretion determine that the Plan
shall terminate. No Option shall be granted under the Plan on or after the
tenth anniversary of the Effective Date, regardless of whether the Plan
shall remain in effect on such date. Termination of the Plan shall not
cause the termination or cancellation of any outstanding Option which by
its terms (but subject in any case to Section 7(d)) continues beyond such
termination of the Plan.
(b) Amendment of the Plan. The Committee may amend and modify the Plan
---------------------
from time to time as it in its sole discretion deems appropriate or
desirable, provided that no such amendment which has the effect of (x)
--------
changing the total number of shares of Common Stock for which Options are
exercisable as set forth in Section 3(a) or (y) modifying the definition
herein of the term "Key Employees" shall be effective unless approved by
the stockholders of the Company entitled to vote thereon.
(c) Amendment of Options. The Committee shall have the right to amend from
--------------------
time to time the terms and conditions on which any outstanding Options
shall have been granted, provided, however, that, subject to the other
-------- -------
provisions hereof, the Committee shall first have obtained the consent of
the holder thereof, so as to reduce the Purchase Price specified for any
Option or to accelerate or extend the time of or for exercisability of any
Option or otherwise, in each case as shall be not inconsistent with the
Plan and as the Committee shall deem appropriate or advisable.
13. NON-EXCLUSIVITY
---------------
Neither the adoption of the Plan by the Board nor the submission of the Plan for
approval by the stockholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting or
issuance of stock options or stock.
12
<PAGE>
14. USE OF PROCEEDS
---------------
The proceeds of the sale of Shares subject to Options under the Plan shall be
used for the Company's general corporate purposes as the Board shall determine.
15. GENERAL PROVISIONS
------------------
(a) Right to Terminate Employment. Neither the adoption of the Plan nor
-----------------------------
the grant of Options shall impose any obligation on the Company or any
Subsidiary to continue the employment of any Participant or on any
Participant to remain in the employment of the Company or any Subsidiary.
(b) Purchase for Investment. Each holder of an Option shall upon request
-----------------------
by the Committee, deliver to the Company upon and as a condition to the
exercise thereof, (i) a certificate or other written instrument duly
executed by such holder or on its behalf, in form satisfactory to the
Company, representing and warranting (x) that such Participant is
purchasing or accepting the Shares then acquired for such Participant's
own account and not with a view to the resale or distribution thereof and
(y) that any subsequent offer for sale or sale of any such Shares shall be
made either to an effective registration statement under the Securities Act
or an exemption from the registration requirement thereof and (z) as to
such other matters as the Committee shall in its sole discretion deem
appropriate and (ii) an opinion of counsel to such holder in a form and as
to such matters as shall be acceptable to the Committee in its sole
discretion.
(c) Trusts, etc. No provision of the Plan and no action taken pursuant to
-----------
the Plan (including, without limitation, the grant of any Option
thereunder) shall create or be deemed to create a trust of any kind, or a
fiduciary relationship between the Company or the Committee and any
participant or holder of any Option. Any reserves that may be established
by the Company in connection with the Plan shall continue to be part of the
general funds of the Company and no individual or entity other than the
Company shall have any interest in such funds until paid to a Participant.
If and to the extent any Participant or Option holder acquires any right to
receive any payment from the Company pursuant to the Plan, such right shall
be no greater than the right of a general unsecured creditor of the
Company.
(d) No tax advice, etc. Each Participant acknowledges that the Federal and
------------------
other tax treatment of the grant of Options to such Participant hereunder,
the issuance of Shares upon exercise thereof and the disposition of such
Shares may be dependent on certain factors which are with in such
Participant's control, including without limitation the period of time
elapsing between such grant and exercise, the period of time for which such
Shares are held and other circumstances relating to the exercise of such
Options or the disposition of Shares. Each Participant acknowledges and
confirms that neither the Company nor the Board or Committee (nor any
member thereof) shall be under any obligation, or have any liability, to
such Participant by virtue of the grant of
13
<PAGE>
Options hereunder or the issuance of Shares upon exercise thereof in
connection with any tax or financial consequences to such participant
relating to such Options or Shares. Each Participant acknowledges and
confirms that neither the Company, the Board nor the Conunittee has
provided, or is subject to any obligation to provide, to such Participant
any tax or financial planning advice as to the consequences of such grant
or exercise of Options or such disposition of Shares and that he or she
shall be solely responsible for such consequences and for the obtaining of
such advice.
(e) Notices. Each Participant and each other Option holder shall provide
-------
the Committee with its current address for all purposes hereunder. All
notices and other written communications or transmissions under or in
connection with the Plan or any Option Agreement shall be deemed delivered
if directed to the person to whom addressed at such address and mailed by
first class mail or by overnight delivery or courier.
(f) Severability of Provision. If any provisions of the Plan shall be held
-------------------------
invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of the Plan and the Plan shall be construed and
enforced as if such provision had not been included.
(g) Payment to Minors, Etc. Any amount payable to or for the benefit of a
-----------------------
minor, an incompetent person or other person incapable of receipt thereof
shall be deemed paid when paid to such person's guardian or to the party
providing or reasonably appearing to provide for the care of such person
and such payment so made shall fully discharge the Company and the
Committee from all obligations with respect thereto.
(h) Descriptive Headings. The descriptive headings contained herein are
--------------------
for convenience of reference and shall in no way affect the meaning or
interpretation of any provision of the Plan.
(i) Controlling Law. The Plan shall be construed and enforced in
---------------
accordance with the laws of the State of Delaware.
16. LEGENDS AND PAYMENT OF EXPENSES
-------------------------------
(a) Legends. Any certificates representing Shares issued upon exercise of
-------
Options shall bear such legends as the Committee shall in its sole
discretion determine to be necessary or appropriate to ensure compliance
with Federal and state securities and other laws and to reflect the
provisions of any agreements between the Company and the Participant
relating to such Shares.
(b) Payment of Expenses. The Company shall pay all issue or transfer taxes
-------------------
and all fees and expenses relating to the issuance or transfer of Shares
and otherwise in connection with the administration of the Plan.
14
<PAGE>
17. WITHHOLDING TAXES
-----------------
The Company shall be entitled to withhold (or secure payment from the
Participant in cash or other property, including Shares already owned by the
participant for six months or more (valued at the Fair Market Value thereof on
the date of delivery)) the amount of any Federal, state or local taxes required
to be withheld by the Company in connection with any Shares or cash payments
deliverable under the Plan and the Company may condition any such delivery on
such satisfaction of any such withholding requirement. The Committee may in its
sole discretion permit any such withholding obligation to be satisfied by
reducing the number of Shares otherwise deliverable.
15
<PAGE>
AMENDMENT (THE "AMENDMENT")
TO
RADIOSOFT, INC.
(Subsequently Known As AUTOMATED DISPATCH SOLUTIONS, INC. and
LOGISTICARE, INC.)
1995 INCENTIVE STOCK OPTION PLAN (THE "PLAN")
The Plan is hereby amended as follows:
The name of the Plan is changed to the LogistiCare, Inc. 1995 Stock Option Plan.
Section 1. of the Plan is amended to expand the purpose of the Plan to include,
in addition to previously stated purposes, that the interests of the Company are
promoted if non-employee members of the Board (or any Subsidiary) are given the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Company as an incentive for them to remain in the
service of the Company (or any Subsidiary.)
Subsection 2.(m) of the Plan is amended to read:
"Key Employee" means any person who is a director, executive officer,
or other valuable staff, managerial, professional or technical
employee of the Company, as determined by the Committee, or a member
of the Board (notwithstanding the fact that such person is not an
employee of the Company or a Subsidiary.)
Subsection 3.(a) of the Plan is amended to increase the total number of shares
of Common Stock for which Options may be granted under the Plan to 216,667
shares.
Subsection 3.(b) of the Plan, as currently stated, is deleted and the following
provision is substituted in place thereof:
"Notwithstanding Subsection 2.(n), each Option granted to a non-
employee member of the Board shall be a non-qualified option."
Section 4. of the Plan is amended to add thereto the following sentences:
"The provisions of this Amendment shall become effective upon its
adoption by the Board and approval by the stockholders of the Company,
if such approval by the stockholders of the Company is
16
<PAGE>
obtained prior to August 13, 1998. No Option granted under the Plan to
non-employee members of the Board shall become exercisable unless and
until this Amendment is approved by the Company's stockholders prior
to August 13, 1998. If such stockholder approval is not obtained by
such date, then all Options granted to non-employee members of the
Board under this Plan shall terminate and cease to remain outstanding.
No Option shall be granted under the Plan to a non-employee member of
the Board, unless the financial interest, if any, of each member of
the Board in such Option shall first be fully disclosed to the Board
and such Option grant is approved by the affirmative vote of a
majority of the Board members who do not have a financial interest in
the Option, even though such disinterested directors constitute less
than a quorum."
Section 5. of the Plan is amended to add thereto a new Subsection 5.(e), as
follows:
"Notwithstanding anything in the Plan to the contrary but subject to
the provisions of Section 4. of the Plan, the Board, and not a
Committee appointed by the Board, shall administer all matters under
the Plan relating to non-employee members of the Board."
Subsection 7.(d) of the Plan is amended to delete therefrom Clause (i), with
effect as of March 9, 1995.
Subsection 7.(d) of the Plan is amended to add thereto a new sentence, as
follows:
"Notwithstanding anything herein or in any option agreement to the
contrary, all Options granted and vested prior to June 2, 1997 may be
exercised in whole or in part at any time after June 2, 1997 and prior
to the tenth (10th) anniversary of the date of grant."
Section 8. of the Plan is amended to add thereto a new Subsection 8.(e), as
follows:
"Notwithstanding anything in the Plan to the contrary, for the
purposes of Subsection 8. of the Plan with respect to any Option
granted to a non-employee member of the Board, (i) "Termination of
Employment" shall mean termination of service as a member of the Board
and (ii) "employment" shall mean service as a member of the Board."
17
<PAGE>
EXHIBIT 10.3
AGREEMENT
---------
THIS AGREEMENT ("Agreement") is entered into as of the 20th day of June,
1996, by and between AUTOMATED DISPATCH SYSTEMS, INC., a Florida corporation
("ADS") and HEALTH TRANS, INC., a Delaware corporation ("HT").
WHEREAS, HT is in the business, together with others through the formation
of limited liability companies ("LLC"), of providing medical transportation
services; and
WHEREAS, HT obligates itself to the LLC to perform certain consulting
services which are more specifically set out in the limited liability company
agreements and consulting agreements ("Consulting Agreement") between HT and the
LLC; and
WHEREAS, HT wishes to hire ADS for the purpose of fulfilling certain
obligations of HT set forth in the Consulting Agreement,
NOW, THEREFORE, in consideration of mutual covenants and promises contained
herein the parties agree as follows:
1. PROVIDING SERVICES. ADS, at HT's request, agrees to provide in a
------------------
businesslike manner to any entity with which HT is associated (i.e., one in
which HT owns a 15% or greater ownership interest) , including, but not limited
to, those LLCs or other entities (i) with which HT enters into a Consulting
Agreement, or (ii) to which an LLC is sold, or (iii) that are the successors
and/or assigns of HT, those services set forth in items #12 through #16 of
Exhibit A of the Consulting Agreement, attached here to as Exhibit 1, as it may
be modified from time to time so long as such modifications do not materially
increase the obligations of ADS. In addition to those obligations set forth in
Exhibit A to Exhibit 1, in the event any LLC (or other entity covered by this
Section) charges its customers on a "capitated" fee basis, ADS shall provide
those additional services necessary to allow the LLC to provide, bill and
collect on a capitated fee basis.
2. Compensation. (a) HT shall cause each LLC to pay ADS for the services
------------
it is providing under this Agreement the sum of $125.00 per week per van,
subject to a minimum weekly payment of $500.00, during the first seven years of
this Agreement; provided, however, that as to new initial contracts entered into
by an LLC after the third anniversary of this Agreement, the LLC shall pay ADS a
minimum of $125.00 per week per van as well as a proportionate increase in such
amount to the extent that the LLC receives more than $1400.00 per week per van
(for example, if the LLC receives $1400 per week per van, ADS receives $125; if
the LLC receives $1600 per week per van, ADS receives approximately $157).
Commencing July 1, 2003, the per year rate shall be equal to that rate then
customarily charged in the industry which will be agreed upon by the parties
hereto. Notwithstanding the foregoing, prior to July 1, 2003, if the LLC
receives an increase over its
<PAGE>
initial contract rate in the per van per week charge it charges its customers,
HT shall provide written notice to ADS of such increase, and increase the fee
paid to ADS hereunder by an amount equal to the percentage increase in the
amount it receives from said customer.
(b) In the event the LLC (or other entity referred to in Section 1) charges
its customer on a capitated fee basis, HT shall (i) consult with ADS before
determining the amount charged by the LLC to such customer, and (ii) in lieu of
the compensation amount set forth in paragraph (a) of this Section 2, cause the
LLC to pay to ADS nine percent (9%) of such capitated fee.
(c) The fees payable to ADS as set forth in paragraphs (a) and (b) of this
Section 2 shall be paid weekly within thirty (30) days from the end of each week
in which such service was rendered. In addition, HT shall reimburse ADS for
reasonable travel expenses incurred by ADS for installation trips by ADS
personnel on HT's behalf and approved in advance by HT, within thirty (30) days
after submission by ADS of receipts or other documentation satisfactory to HT
for such expenses.
3. TERM. This Agreement shall commence on July 1, 1996 and shall continue
----
until December 31, 2011. If during the term either party wishes or purports to
terminate this Agreement as a result of a breach of this Agreement of any sort
by the other party, such first party shall first give the second party written
notice setting forth the alleged breach. After receipt of such written notice,
the second party shall have thirty (30) days to cure such alleged breach. No
such termination of this Agreement shall take place unless the second party
fails to cure such breach within such period.
4. PERSONNEL. ADS shall supply sufficient personnel with adequate
---------
training and skill to perform all tasks required by this Agreement and any
applicable Federal, State or local law, rule or regulation.
5. EQUIPMENT. HT shall require the LLC or other entity (i) to provide
---------
vehicles, (ii) to pay for the first $2000 of dispatch center computer hardware
required by ADS to perform its obligations hereunder, and (iii) to pay for radio
airtime to the extent that the cost of such airtime is in excess of the cost of
airtime for ADS's operations in Miami, Florida. ADS shall provide in-vehicle
radios, dispatch center computer equipment in excess of $2000, and all necessary
software. In addition, ADS shall be responsible for all related variable
telephone utilization costs and for the cost of airtime up to the cost of
airtime for ADS's operations in Miami, Florida.
6. JURISDICTION; VENUE; GOVERNING LAW.
----------------------------------
A. Each party hereby irrevocably submits, in any suit, action or
proceeding against it arising out of or in connection with this Agreement, to
the jurisdiction of the United States District Court for the Southern District
of Florida and the jurisdiction of any
-2-
<PAGE>
court of the State of Florida located in Dade County, and waives any and all
objection to such jurisdiction.
B. Each party also agrees that in the event of any suit, action or
proceeding against it arising out of or in connection with this Agreement, the
proper venue for an action shall be in a United States or a Florida court
sitting in Dade County, Florida.
C. This Agreement shall be governed by and construed and enforced in
accordance with the laws of Delaware without regard to conflicts of laws
provisions.
7. NOTICES.
-------
A. Any notice required by this Agreement shall be effective and deemed
delivered three (3) business days after posting with the United States Postal
Service when mailed by certified mail, return receipt requested, properly
addressed and with the correct postage; or one (1) business day after pickup by
the courier service when sent by overnight courier, properly addressed and
prepaid; or one (1) business day after the date of the sender's electronic
confirmation of receipt when sent by facsimile transmission. Notices shall be
sent to the addresses or FAX numbers set forth below, unless either party
notifies the other in writing of an address or FAX number change.
To HT: Health Trans, Inc.
ATTN: Martin Zilber, President
1995 N.E. 142 Street
Miami, FL 33181
Facsimile No. (305) 354-4958
To ADS: Automated Dispatch Systems, Inc.
ATTN: John Shermyen
8175 N.W. 12th Street
Suite 417
Miami, Florida 33126
Facsimile No. (___) ___-____
Any party may change the address or facsimile number to which notices under
this Agreement are to be sent to it by giving written notice of a change of
address in the manner provided in this Agreement for giving notice.
8. HEADINGS. The descriptive headings contained in this Agreement are for
--------
convenient reference only, and shall not in any way affect the meaning or
interpretation of this Agreement.
9. SEVERABILITY. Each provision hereof is severable from this Agreement
------------
and, if one or more provisions hereof are declared invalid, such provisions
shall be deemed not to
-3-
<PAGE>
have been written, and the remaining provisions shall nevertheless remain in
full force and effect. If any provision of this Agreement is so broad, in scope
or duration or otherwise, as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
10. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon
-----------------------------
and inure to the benefit of the parties and their respective successors and
assigns, but this Agreement may not be assigned by either Party without the
prior written consent of the other party.
11. CONFIDENTIALITY. No party shall disclose or use in competition the
---------------
contents of this Agreement, nor any confidential or proprietary information or
trade secrets communicated to it by the other party, whether before or during
the performance of this Agreement, or of which it otherwise becomes aware,
without obtaining the prior written consent of the other party. All such
information shall be deemed confidential or proprietary unless otherwise
designated and agreed by the parties.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
----------------
Parties with respect to this transaction and supersedes all prior understandings
and agreements of the parties with respect to the subject matter of this
Agreement. This Agreement may be amended only by a writing specifically
referring to this Agreement and executed by the parties. The undersigned
represent that they have the authority to sign this Agreement.
13. CONSTRUCTION. This Agreement has been prepared jointly by, and is the
------------
product of extensive negotiations between, the parties hereto, and, accordingly,
shall not be interpreted more strictly against any one party.
14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND
---------------------
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
ALL PARTIES ENTERING INTO THIS AGREEMENT.
15. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. NON-WAIVER. Any delay in or to failure to enforce at any time any
----------
provision of this Agreement, or to require at any time performance by the other
party of any of the provisions hereof, shall in no way be construed to be a
waiver of such provisions or to affect the validity of this Agreement, or any
part thereof, or the right of either party thereafter
-4-
<PAGE>
to enforce each and every such provision in accordance with the terms of this
Agreement. No waiver of any provision of this Agreement shall be effective
unless in writing and signed by the party against whom such waiver is to be
enforced.
17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and for
----------------------
the benefit of the parties hereto and their successors and assigns.
18. GUARANTEE BY RADIOSOFT. ADS, as of the date hereof, is a wholly owned
-----------------------
subsidiary of RadioSoft, Inc., a Delaware corporation. In the event, for any
reason whatsoever, ADS is unable or unwilling to perform its obligations set
forth herein, RadioSoft agrees it shall perform, or cause to be performed, the
obligations of ADS set forth herein for the compensation to be paid to ADS as
provided in Section 2. Subject to the right of first refusal to purchase ADS
granted by RadioSoft to Health Trans of South Florida, Inc. ("HTSF") in
connection with RadioSoft's guarantee of ADS's obligations under that certain
agreement between ADS and HTSF of even date herewith, upon the sale by RadioSoft
of all of the issued and outstanding stock of ADS, RadioSoft may delegate to the
purchaser of such stock its guarantee obligation hereunder, so long as HT
consents to such delegation, which consent may not unreasonably be withheld if
such purchaser's net worth determined under generally accepted accounting
principles (GAAP) is at least one million dollars ($1,000,000) at the time of
such delegation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
HEALTH TRANS, INC.
By:
------------------------------------
AUTOMATED DISPATCH SYSTEMS, INC.
By:
------------------------------------
RADIOSOFT, INC.
By:
------------------------------------
-5-
<PAGE>
EXHIBIT 1
CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of _____, 1996, by and
between HEALTH TRANS OF KENTUCKY, L.L.C., a Delaware limited liability company
("HTNH"), and HEALTH TRANS, INC., a Delaware corporation ("Consultant").
WHEREAS, Consultant has experience and knowledge in medical
transportation services and the systems and personnel software necessary to
provide routing and scheduling of patients for transportation to and from
medical facilities, and provides certain consulting and management services
based on such experience and knowledge; and
WHEREAS, HTNH is in the business of providing medical transportation
services to the medical community within 20 miles of _________ Kentucky (the
"Territory"); and
WHEREAS, HTNH wishes to hire Consultant to provide such consulting and
management services.
NOW, therefore, in consideration of mutual covenants and promises
contained herein, the parties agree as follows:
1. RECITALS.
--------
The above recitals are true.
2. DUTIES.
------
HTNH hereby engages Consultant to provide those consulting and
management services set forth on Exhibit A to HTNH as necessary to assist it in
providing dispatch services to its customers.
-6-
<PAGE>
3. COMPENSATION.
------------
Throughout the term of this Agreement, HTNH shall pay to Consultant,
as weekly compensation for its services under this Agreement, an amount equal to
the product of (a) Two Hundred Dollars ($200.00) and (b) the number of vehicles
owned or leased by HTNH and used during said week to provide medical
transportation services (such number to be equal to the aggregate number of such
vehicles under HTNH's contracts with its clients). In addition, HTNH shall pay
or reimburse Consultant weekly for all out-of-pocket expenses incurred by
Consultant in providing the services set forth in Exhibit A, such as travel and
lodging, long distance telephone calls, etc.
4. PAYMENT.
-------
HTNH shall pay to Consultant the sums set forth in paragraph 3 on or
before the Wednesday following the week to which such payment relates or in
which such reimbursable expense was incurred.
5. TERM. This Agreement shall commence on March 1, 1996 and shall
-----
continue until December 31, 2020.
6. JURISDICTION; VENUE; GOVERNING LAW.
----------------------------------
a. Each party hereby irrevocably submits, in any suit, action
or proceeding against it arising out of or in connection with this Agreement, to
the jurisdiction of the United States District Court for the Southern District
of Florida and the jurisdiction of any court of the State of Florida located in
Dade County, and waives any and all objection to such jurisdiction.
-7-
<PAGE>
b. Each party also agrees that in the event of any suit, action or
proceeding against it arising out of or in connection with this Agreement, the
proper venue for an action shall be in a United States or a Florida court
sitting in Dade County, Florida.
c. This Agreement shall be governed by and construed and
enforced in accordance with the laws of Delaware without regard to conflicts of
laws provisions.
7. NOTICES.
-------
a. Any notice required by this Agreement shall be effective and
deemed delivered three (3) business days after posting with the United States
Postal Service when mailed by certified mail, return receipt requested, properly
addressed and with the correct postage; or one (1) business day after pickup by
the courier service when sent by overnight courier, properly addressed and
prepaid; or one (1) business day after the date of the sender's electronic
confirmation of receipt when sent by facsimile transmission. Notices shall be
sent to the addresses or FAX numbers set forth below, unless either party
notifies the other in writing of an address or FAX number change
To Consultant: Health Trans, Inc.
ATTN: Martin Zilber, President
1995 N.E. 142 Street
Miami, FL 33181
Facsimile No. (305) 354-4958
To HTNH: Health Trans of Kentucky, L.L.C.
Any party may change the address or facsimile number to which notices
under this Agreement are to be sent to it by giving written notice of a change
of address in the manner provided in this Agreement for giving notice.
-8-
<PAGE>
8. HEADINGS. The descriptive headings contained in this Agreement are
--------
for convenient reference only, and shall not in any way affect the meaning or
interpretation of this Agreement.
9. SEVERABILITY. Each provision hereof is severable from this
------------
Agreement and, if one or more provisions hereof are declared invalid, such
provisions shall be deemed not to have been written, and the remaining
provisions shall nevertheless remain in full force and effect. If any provision
of this Agreement is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.
10. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
------------------------------
upon and inure to the benefit of the parties and their respective successors and
assigns, but this Agreement may not be assigned by either Party without the
prior written consent of the other party.
11. CONFIDENTIALITY. No party shall disclose or use in competition
---------------
the contents of this Agreement, nor any confidential or proprietary information
or trade secrets communicated to it by the other party, whether before or during
the performance of this Agreement, or of which it otherwise becomes aware,
without obtaining the prior written consent of the other party. All such
information shall be deemed confidential and proprietary unless otherwise
designated and agreed by the parties.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement
----------------
of the Parties with respect to this transaction and supersedes all prior
understandings and agreements of the parties with respect to the subject matter
of this Agreement. This Agreement may be
-9-
<PAGE>
amended only by a writing specifically referring to this Agreement and executed
by the parties. The undersigned represent that they have the authority to sign
this Agreement.
13. CONSTRUCTION. This Agreement has been prepared jointly by, and
------------
is the product of extensive negotiations between, the parties hereto, and,
accordingly, shall not be interpreted more strictly against any one party.
14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
--------------------
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
ALL PARTIES ENTERING INTO THIS AGREEMENT.
15. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. NON-WAIVER. Any delay in or to failure to enforce at any time
----------
any provision of this Agreement, or to require at any time performance by the
other party of any of the provisions hereof, shall in no way be construed to be
a waiver of such provisions or to affect the validity of this Agreement, or any
part thereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement. No
-10-
<PAGE>
waiver of any provision of this Agreement shall be effective unless in writing
and signed by the party against whom such waiver is to be enforced.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
HEALTH TRANS, INC.
By:
-------------------------------
Martin Zilber, President
HEALTH TRANS, OF KENTUCKY, L.L.C.
By:
-------------------------------
---------------------------
Authorized Representative
-11-
<PAGE>
EXHIBIT A
(1) Develop and update a business plan.
(2) Provide initial and update training and education to staff.
(3) Provide assistance in the purchasing of equipment and insurance.
(4) Provide customized accounts receivable, payroll and personnel
management software systems.
(5) Assist with permitting and licensing.
(6) Provide marketing and sales support.
(7) Provide standard proposal templates customized to fit client's
need.
(8) Assist in prospective client presentations.
(9) Train sales staff for client presentations and accompany sales
staff when necessary.
(10) Provide patient and cost data for clients.
(11) Accompany staff to meet with medical facility personnel to
establish transportation system.
(12) Complete order taking capability through phone, fax, or modem
line.
(13) Telephone access to client for all incoming service and
information requests.
(14) Routing and scheduling of all patient trips.
(15) Radio dispatching services.
(16) Reconciliation of accurate trip information.
(17) Continuing support materials and training seminars to assist and
update your operation.
-12-
<PAGE>
EXHIBIT 10.4
AGREEMENT
---------
THIS AGREEMENT ("Agreement") is entered into as of the 20th day of
June, 1996, by and between AUTOMATED DISPATCH SYSTEMS, INC., a Florida
corporation ("ADS") and HEALTH TRANS OF SOUTH FLORIDA, INC., a Florida
corporation ("HTSF").
WHEREAS, HTSF is in the business of providing medical transportation
services; and
WHEREAS, HTSF wishes to hire ADS for the purpose of fulfilling certain
obligations of HTSF in providing such medical transportation services;
NOW, THEREFORE, in consideration of mutual covenants and promises
contained therein the parties agree as follows:
1. PROVIDING SERVICES. ADS agrees to provide in a businesslike
------------------
manner to HTSF, those services set forth in items #12 through #16 of Exhibit A
of the Consulting Agreement attached hereto as Exhibit 1, as it may be modified
from time to time so long as such modifications do not materially increase the
obligations of ADS. In addition to those obligations set forth in Exhibit A to
Exhibit 1, in the event HTSF charges its customers on a "capitated" fee basis,
ADS shall provide those additional services necessary to allow HTSF to provide,
bill and collect on a capitated fee basis.
2. COMPENSATION. (a) HTSF shall pay ADS for the services it is
------------
providing under this Agreement the sum of $115.00 per week per van, subject to a
minimum weekly payment of $500.00, during the term of this Agreement; provided,
however, that as to new initial contracts entered into by HTSF after the fifth
anniversary of this Agreement, HTSF shall pay ADS a minimum of $115.00 per week
per van as well as a proportionate increase in such amount to the extent that
HTSF receives more than $1400.00 per week per van (for example, if HTSF receives
$1400.00 per week per van, (for example, if HTSF receives $1400 per week per van
ADS receives $115; if HTSF receives $1600 per week per van, ADS receives $115;
if HTSF receives $1600 per week per van, ADS receives approximately $131).
Notwithstanding the foregoing, if HTSF receives an increase over its initial
contract rate in the per van per week charge it charges its customers, HTSF
shall provide written notice to ADS of such increase, and increase the fee paid
to ADS hereunder by an amount equal to the percentage increase in the amount it
receives from said customer.
(b) In the event HTSF charges its customer on a capitated fee basis,
HTSF shall (i) consult with ADS before determining the amount it charges to such
customer, and (ii) in lieu of the compensation amount set forth in paragraph (a)
of this Section 2, pay to ADS nine percent (9%) of such capitated fee.
<PAGE>
(c) The fees payable to ADS as set forth in paragraphs (a) and (b) of
this Section 2 shall be paid weekly within seven (7) days f rom the end of each
week in which such service was rendered.
(d) Notwithstanding any provisions in this Agreement to the contrary,
if (i) HTSF becomes wholly owned by Health Trans, Inc., or (ii) eighty percent
(80%) or more of the stock of HTSF is sold to a person or persons who were not
previously shareholders or affiliates of HTSF, or (iii) HTSF becomes part of a
public company operating medical transportation services nationally (in any of
these three cases, the owning entity is the "National"), for which or whom ADS
also provides services, ADS Is rate of compensation hereunder for services
related to all initial contracts entered into by HTSF after it becomes owned by
or part of the National shall be equal to the rate of compensation paid to ADS
for such contracts by the National.
3. TERM. This Agreement shall commence on July 1, 1996 and shall
----
continue until December 31, 2025. If during the term either party wishes or
purports to terminate this Agreement as a result of a breach of this Agreement
of any sort by the other party, such first party shall first give the second
party written notice setting forth the alleged breach. After receipt of such
written notice, the second party shall have thirty (30) days to cure such
alleged breach. No such termination of this Agreement shall take place unless
the second party fails to cure such breach within such period.
4. PERSONNEL. ADS shall supply sufficient personnel with adequate
---------
training and skill to perform all tasks required by this Agreement and any
applicable Federal, State or local law, rule or regulation.
5. EQUIPMENT. ADS shall provide, as it has historically, radios in
---------
the vans, radio airtime, all necessary dispatch center and computer hardware,
and all necessary software and shall be responsible for all related variable
telephone utilization costs.
6. EXCLUSIVITY. (a) HTSF is now and shall be ADS's exclusive
-----------
customer in Dade and Broward Counties, Florida (the "Territory") for any
routing, scheduling, call-taking and consulting services (the "Core Services")
related to non-emergency non-governmental medical transportation (the
"Business") ; provided that ADS may provide Core Services related to the
Business to entities other than HTSF in the Territory ("ADS Customers") if (i)
such Core Services are for ADS Customers whose non-emergency medical
transportation business is solely and exclusively the transportation of persons
who require a stretcher for transportation, or (ii) ADS has itself obtained the
Business from medical service providers (e.g., HMOs, PPOs, PHOs, hospitals,
etc.) or medical service payors (e.g., TPAs, insurance companies) and HTSF
---
declines its Right of First Refusal described in paragraph (b) of this Section.
(b) HTSF recognizes that ADS sometimes acts as a general contractor
for medical service payors, and that under such contractual arrangements (the
-2-
<PAGE>
"Contracts") ADS customarily provides certain services, such as dispatch,
directly and sub-contracts for the provision of certain other services, such as
medical transportation. ADS hereby grants to HTSF an exclusive right of first
refusal, subject to the terms and conditions set forth in this paragraph, to
serve as the sole provider of non-emergency medical transportation services (the
"Transportation Services") under any such Contract within the Territory (the
"Right of First Refusal"). Prior to the execution by ADS of any Contract (or
otherwise becoming legally bound and entitled if such Contract is an oral
contract) or upon receipt of such a Contract, ADS shall give HTSF written notice
of its consequent Right of First Refusal to provide Transportation Services,
which written notice shall be accompanied by the financial terms pursuant to
which ADS proposes that HTSF provide such Transportation Services (the "Offer").
HTSF shall have 15 days to accept or reject each Offer. If HTSF rejects an
Offer, ADS may contract with any other person or entity for the Transportation
Services under such Contract; provided, however, that ADS may not so contract
with any such person or entity for such Transportation Services on financial
terms that are more favorable than those contained in the Offer to HTSF without
first making a subsequent Offer ("Subsequent Offer") to HTSF containing those
more favorable terms. HTSF shall have five business days to respond to the
Subsequent offer.
(c) For purposes of this Section 6, (i) "non-governmental medical
transportation" shall mean any transportation service in which a state, federal
or local governmental agency is not the contracting party for the transportation
---
and/or brokerage services; and (ii) "non-emergency medical transportation" shall
mean the transportation of persons requiring medical care or persons being
transported at the request of a medical facility or medical provider or medical
payor other than by ambulance, airplane, helicopter or watercraft.
7. JURISDICTION; VENUE; GOVERNING LAW.
----------------------------------
A. Each party hereby irrevocably submits, in any suit, action
or proceeding against it arising out of or in connection with this Agreement, to
the jurisdiction of the United States District Court for the Southern District
of Florida and the jurisdiction of any court of the State of Florida located in
Dade County, and waives any and all objection to such jurisdiction.
B. Each party also agrees that in the event of any suit, action
or proceeding against it arising out of or in connection with this Agreement,
the proper venue for an action shall be in a United States or a Florida court
sitting in Dade County, Florida.
C. This Agreement shall be governed by and construed and
enforced in accordance with the laws of Delaware without regard to conflicts of
laws provisions.
-3-
<PAGE>
8. NOTICES.
-------
A. Any notice required by this Agreement shall be effective and
deemed delivered three (3) business days after posting with the United States
Postal Service when mailed by certified mail, return receipt requested, properly
addressed and with the correct postage; or one (1) business day after pickup by
the courier service when sent by overnight courier, properly addressed and
prepaid; or one (1) business day after the date of the sender's electronic
confirmation of receipt when sent by facsimile transmission. Notices shall be
sent to the addresses or FAX numbers set forth below, unless either party
notifies the other in writing of an address or FAX number change.
To HTSF: Health Trans of South Florida, Inc.
ATTN: Martin Zilber, President
1995 N.E. 142 Street
Miami, FL 33181
Facsimile No. (305) 354-4958
To ADS: Automated Dispatch Systems, Inc.
ATTN: John Shermyen
8175 N.W. 12th Street
Suite 417
Miami, Florida 33126
Facsimile No. (___) ____-____
Any party may change the address or facsimile number to which notices under this
Agreement are to be sent to it by giving written notice of a change of address
in the manner provided in this Agreement for giving notice.
9. HEADINGS. The descriptive headings contained in this Agreement
--------
are for convenient reference only, and shall not in any way affect the meaning
or interpretation of this Agreement.
10. SEVERABILITY. Each provision hereof is severable from this
------------
Agreement and, if one or more provisions hereof are declared invalid, such
provision(s) shall be deemed not to have been written, and the remaining
provisions shall nevertheless remain in full force and effect. If any provision
of this Agreement is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is en
forceable.
11. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the parties and their respective successors and
assigns, but this Agreement may not be assigned by either Party without the
prior written consent of the other party.
-4-
<PAGE>
12. CONFIDENTIALITY. No party shall disclose or use in competition
---------------
the contents of this Agreement, nor any confidential or proprietary information
or trade secrets communicated to it by the other party, whether before or during
the performance of this Agreement, or of which it otherwise becomes aware,
without obtaining the prior written consent of the other party. All such
information shall be deemed confidential or proprietary unless otherwise
designated and agreed by the parties.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement
----------------
of the Parties with respect to this transaction and supersedes all prior
understandings and agreements of the parties with respect to the subject matter
of this Agreement. This Agreement may be amended only by a writing specifically
referring to this Agreement and executed by the parties. The undersigned
represent that they have the authority to sign this Agreement.
14. CONSTRUCTION. This Agreement has been prepared jointly by, and
------------
is the product of extensive negotiations between, the parties hereto, and,
accordingly, shall not be interpreted more strictly against any one party.
15. WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
--------------------
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
ALL PARTIES ENTERING INTO THIS AGREEMENT.
16. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. NON-WAIVER. Any delay in or to failure to enforce at any time
----------
any provision of this Agreement, or to require at any time performance by the
other party of any of the provisions hereof, shall in no way be construed to be
a waiver of such provisions or to affect the validity of this Agreement, or any
part thereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement. No waiver of any
provision of this Agreement shall be effective unless in writing and signed by
the party against whom such waiver is to be enforced.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
for the benefit of the parties hereto and their successors and assigns.
19. GUARANTEE AND RIGHT OF FIRST REFUSAL BY RADIOSOFT. ADS, as of
-------------------------------------------------
the date hereof, is a wholly owned subsidiary of RadioSoft, Inc., a Delaware
corporation. In the
-5-
<PAGE>
event, for any reason whatsoever, ADS is unable or unwilling to perform its
obligations set forth herein, RadioSoft agrees it shall perform, or cause to be
performed, the obligations of ADS set forth herein for the compensation to be
paid to ADS as provided in section 2. If at any time or from time to time
RadioSoft proposes or purports to assign, sell, pledge or otherwise transfer or
encumber any of its ownership interest in ADS, or consents to the sale by ADS of
all or substantially all of its assets, to a third party (a "Transfer"), HTSF
shall have a right of first refusal to purchase such interest under the terms
set forth in this paragraph. Not less than 45 days prior to any proposed
Transfer, RadioSoft shall give HTSF notice of the terms and conditions of the
proposed Transfer (the "Offer") and the name and address of the proposed
transferee. HTSF may, within 30 days after receipt of such notice, give notice
of its intent to exercise its right to enter into the transaction set forth in
the Offer in place of the proposed transferee. If HTSF fails to accept such
Offer, RadioSoft may thereafter transfer or encumber its interest in ADS on the
terms and conditions set forth in the Offer. Subject to the terms of the right
of first refusal contained in this paragraph, upon the sale by RadioSoft of all
of the issued and outstanding stock (or all of its ownership interest if not
expressed in shares of stock) of ADS, RadioSoft may delegate to the purchaser of
such stock its guarantee obligation hereunder, so long as HTSF consents to such
delegation, which consent may not unreasonably be withheld if such purchaser's
net worth determined under generally accepted accounting principles (GAAP) is at
least one million dollars ($1,000,000) at the time of such delegation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HEALTH TRANS OF SOUTH FLORIDA, INC.
By:
-------------------------------------
AUTOMATED DISPATCH SYSTEMS, INC.
By:
-------------------------------------
RADIOSOFT, INC.
By:
-------------------------------------
-6-
<PAGE>
EXHIBIT I
CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of ____________, 1996, by
and between HEALTH TRANS OF KENTUCKY, L.L.C., a Delaware limited liability
company ("HTNH"), and HEALTH TRANS, INC., a Delaware corporation ("Consultant").
WHEREAS, Consultant has experience and knowledge in medical
transportation services and the systems and personnel software necessary to
provide routing and scheduling of patients for transportation to and from
medical facilities, and provides certain consulting and management services
based on such experience and knowledge; and
WHEREAS, HTNH is in the business of providing medical transportation
services to the medical community within 20 miles of _____________, Kentucky
(the "Territory"); and
WHEREAS, HTNH wishes to hire Consultant to provide such consulting and
management services.
NOW, therefore, in consideration of mutual covenants and promises
contained herein, the parties agree as follows:
1. RECITALS.
--------
The above recitals are true.
2. DUTIES.
------
HTNH hereby engages Consultant to provide those consulting and
management services set forth on Exhibit A to HTNH as necessary to assist it in
providing dispatch services to its customers.
<PAGE>
3. COMPENSATION.
-------------
Throughout the term of this Agreement, HTNH shall pay to Consultant,
as weekly compensation for its services under this Agreement, an amount equal to
the product of (a) Two Hundred Dollars ($200.00) and (b) the number of vehicles
owned or leased by HTNH and used during said week to provide medical
transportation services (such number to be equal to the aggregate number of such
vehicles under HTNH's contracts with its clients). In addition, HTNH shall pay
or reimburse Consultant weekly for all out-of-pocket expenses incurred by
Consultant in providing the services set forth in Exhibit A, such as travel and
lodging, long distance telephone calls, etc.
4. PAYMENT.
-------
HTNH shall pay to Consultant the sums set forth in paragraph 3 on or
before the Wednesday following the week to which such payment relates or in
which such reimbursable expense was incurred.
5. TERM. This Agreement shall commence on March 1, 1996 and shall
----
continue until December 31, 2020.
6. JURISDICTION; VENUE; GOVERNING LAW.
----------------------------------
a. Each party hereby irrevocably submits, in any suit, action
or proceeding against it arising out of or in connection with this Agreement, to
the jurisdiction of the United States District Court for the Southern District
of Florida and the jurisdiction of any court of the State of Florida located in
Dade County, and waives any and all objection to such jurisdiction.
-2-
<PAGE>
b. Each party also agrees that in the event of any suit, action or
proceeding against it arising out of or in connection with this Agreement, the
proper venue for an action shall be in a United States or a Florida court
sitting in Dade County, Florida.
c. This Agreement shall be governed by and construed and enforced in
accordance with the laws of Delaware without regard to conflicts of laws
provisions.
7. NOTICES.
-------
a. Any notice required by this Agreement shall be effective and
deemed delivered three (3) business days after posting with the United States
Postal Service when mailed by certified mail, return receipt requested, properly
addressed and with the correct postage; or one (1) business day after pickup by
the courier service when sent by overnight courier, properly addressed and
prepaid; or one (1) business day after the date of the sender's electronic
confirmation of receipt when sent by facsimile transmission. Notices shall be
sent to the addresses or FAX numbers set forth below, unless either party
notifies the other in writing of an address or FAX number change.
To Consultant: Health Trans, Inc.
ATTN: Martin Zilber, President
1995 N.E. 142 Street
Miami, FL 33181
Facsimile No. (305) 354-4958
To HTNH: Health Trans of Kentucky, L.L.C.
Any party may change the address or facsimile number to which notices
under this Agreement are to be sent to it by giving written notice of a change
of address in the manner provided in this Agreement for giving notice.
-3-
<PAGE>
8. HEADINGS. The descriptive headings contained in this Agreement
--------
are for convenient reference only, and shall not in any way affect the meaning
or interpretation of this Agreement.
9. SEVERABILITY. Each provision hereof is severable from this
------------
Agreement and, if one or more provisions hereof are declared invalid, such
provisions shall be deemed not to have been written, and the remaining
provisions shall nevertheless remain in full force and effect. If any provision
of this Agreement is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.
10.. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the parties and their respective successors and
assigns, but this Agreement may not be assigned by either Party without the
prior written consent of the other party.
11. CONFIDENTIALITY. No party shall disclose or use in competition
---------------
the contents of this Agreement, nor any confidential or proprietary information
or trade secrets communicated to it by the other party, whether before or during
the performance of this Agreement, or of which it otherwise becomes aware,
without obtaining the prior written consent oi the other party. All such
information shall be deemed confidential and proprietary unless otherwise
designated and agreed by the parties.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement
----------------
of the Parties with respect to this transaction and supersedes all prior
understandings and agreements of the parties with respect to the subject matter
of this Agreement. This Agreement may be amended only by a writing specifically
referring to this Agreement and
-4-
<PAGE>
executed by the parties. The undersigned represent that they have the authority
to sign this Agreement.
13. CONSTRUCTION. This Agreement has been prepared jointly by, and
------------
is the product of extensive negotiations between, the parties hereto, and,
accordingly, shall not be interpreted more strictly against any one party.
14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
--------------------
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
ALL PARTIES ENTERING INTO THIS AGREEMENT.
15. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. NON-WAIVER. Any delay in or to failure to enforce at any time
----------
any provision of this Agreement, or to require at any time performance by the
other party of any of the provisions hereof, shall in no way be construed to be
a waiver of such provisions or to affect the validity of this Agreement, or any
part thereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement. No
-5-
<PAGE>
waiver of any provision of this Agreement shall be effective unless in writing
and signed by the party against whom such waiver is to be enforced.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
HEALTH TRANS, INC.
By:
-------------------------------------
Martin Zilber, President
HEALTH TRANS, OF KENTUCKY, L.L.C.
By:
-------------------------------------
-----------------------------
Authorized Representative
-6-
<PAGE>
EXHIBIT A
(1) Develop and update a business plan.
(2) Provide initial and update training and education to staff.
(3) Provide assistance in the purchasing of equipment and insurance.
(4) Provide customized accounts receivable, payroll and personnel
management software systems.
(5) Assist with permitting and licensing.
(6) Provide marketing and sales support.
(7) Provide standard proposal templates customized to fit client's
need.
(8) Assist in prospective client presentations.
(9) Train sales staff for client presentations and accompany sales
staff when necessary.
(10) Provide patient and cost data for clients.
(11) Accompany staff to meet with medical facility personnel to
establish transportation system.
(12) Complete order taking capability through phone, fax, or modem
line.
(13) Telephone access to client for all incoming service and
information requests.
(14) Routing and scheduling of all patient trips.
(15) Radio dispatching services.
(16) Reconciliation of accurate trip information.
(17) Continuing support materials and training seminars to assist and
update your operation.
-7-
<PAGE>
EXHIBIT 10.5
DISPATCH SERVICES AGREEMENT
This Dispatch Services Agreement ("Agreement") is entered into this 20th
day of June, 1996, ("Effective Date") between Automated Dispatch Systems, Inc.,
a Florida corporation ("Seller") and Comprehensive Paratransit Services, a
Florida joint venture ("Buyer").
RECITALS
A. WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller certain fleet dispatch services ("Services" as further defined in
Section 4 below);
B. WHEREAS, Seller and Buyer desire to set forth herein the terms under which
Seller will sell and Buyer will purchase the Services;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto intending to be legally bound agree as follows:
1. Recitals. The foregoing recitals are true and correct.
--------
2. Purchase and Sale of Services. Seller hereby agrees to provide the
-----------------------------
Services in an efficient and professional manner, and Buyer hereby agrees
to purchase the Services from Seller for all transportation performed by
Buyer under the contract between Buyer and the Metro Dade Transit Authority
regarding Medicaid transportation (the "MDTA Contract"), in accordance with
the terms and conditions contained herein.
3. Term of Agreement. This Agreement shall continue for five (5) years
-----------------
following the Effective Date and shall be renewed automatically thereafter
for successive periods of one year each, unless either party hereto
provides the other party with written notice not less than sixty (60) days
prior to the end of the then-current term of its intention not to renew.
This Agreement shall terminate automatically in the event the MDTA Contract
is terminated for any reason and not renewed. Except as otherwise provided
in this paragraph, if either party wishes or purports to terminate this
Agreement as a result of a breach of this Agreement of any sort by the
other party, such first party shall first give the second party written
notice setting forth the alleged breach. After receipt of such written
notice, the second party shall have thirty (30) days to cure such alleged
breach. No such termination of this Agreement shall take place unless the
second party fails to cure such breach within such period.
<PAGE>
4. Services. Seller shall provide to Buyer call taking, trip request
--------
processing, fleet routing, scheduling, and radio dispatching services, on a
24 hour, seven days per week basis. As part of such Services and in
accordance with the terms and conditions contained herein, Seller shall:
(a) Maintain and man a radio communication base station supplied by Buyer.
Such base station shall be capable of communicating with all of Buyer's
mobile twoway radios in the Coverage Area, with which all of Buyer's in-
service vehicles shall be equipped. Buyer shall supply or provide for the
Federal Communications Commission licensed radio frequencies necessary for
operation of the base station and mobile radios.
(b) Provide telephone access to the public in English, Spanish and Haitian
dialect. Seller's telephone system shall be have capacity necessary to
handle all incoming transportation service and information requests in
accordance with the MDTA Contract requirements.
(c) Record all dispatch center radio and telephone communications and
maintain such recordings on file for such time as reasonably required by
Buyer, but in no event less than ninety (90) days, or such additional
period of time as required by applicable federal, state and local
authorities.
(d) Operate and maintain a computer aided dispatch, scheduling, and routing
system with full system redundancy (the "CAD System"). Seller's CAD System
shall contain a geo-base and street rolodex for Dade County, Florida, and
shall provide routing for Buyer's vehicles. Seller shall operate the CAD
System on a 24-hour per day basis.
(e) Seller shall provide dispatchers trained for and acquainted with
emergency and non-emergency medical transportation operations, service area
geography, and emergency and administrative procedures of governmental
jurisdictions within the Coverage Area. Such dispatchers shall be fluent
in English and be knowledgeable in emergency and non-emergency medical
terminology; all dispatchers shall be trained in conformance with
applicable federal, state and local regulations.
(f) Maintain detailed transportation service records, daily operations
logs, and records which are customary to dispatch operations and/or
reasonably required by Buyer, including all reports required by applicable
federal, state and local authorities. All such records and accounts shall
be available to Buyer and Buyer's representatives for examination, audit,
review and duplication upon reasonable notice and for such periods of time
as reasonably requested by Buyer.
(g) Reconcile and provide accurate trip information in a format reasonably
requested by Buyer for all trips process by the dispatch center under this
Agreement.
-2-
<PAGE>
(h) Provide Medicaid trip reconciliation, invoicing and fleet and driver
record keeping.
(i) Provide all other call taking, trip request processing, fleet routing,
scheduling, and radio dispatching services as may be reasonably required
under the MDTA Contract. Buyer agrees that it shall not assume any
additional obligation under the MDTA Contract which would cause Seller to
provide any material additional service under this Section 4(i) without the
consent of Seller.
5. Pricing. Buyer shall pay to Seller Two Dollars and Sixty Five Cents
-------
($2.65) as a transaction fee ("Transaction Fee") for each trip billable
under the MDTA Contract which is processed by the dispatch center on behalf
of Buyer. The Transaction Fee shall be increased on each anniversary of
the Effective date by the percentage, if any, by which the Consumer Price
Index ("CPI") increased in the Miami area during the preceding twelve-month
period; provided, however, such increase shall not exceed on a percentage
basis the CPI adjustment paid to Buyer under the MDTA Contract.
6. Payment Terms. Seller shall invoice Buyer weekly; all invoices are payable
-------------
when presented. A 1.5 % penalty shall be imposed on all payments which are
more than thirty (10) days past due.
7. Personnel. Seller's personnel shall possess adequate training and skill to
---------
perform all duties required under this Agreement and any applicable Florida
State Statues, Florida Administrative Code, Ordinances and Regulations of
Dade County and Federal Standards. Employees of Seller shall be under
Seller's sole direction and shall not under any circumstances be deemed
employees of Buyer.
8. Buyer's Operations and Equipment. At least fifteen (15) days prior to any
--------------------------------
changes in Buyer's operations or equipment which could have a material
effect on Seller's performance or obligations hereunder, Buyer shall
provide to Seller written notice of such changes.
9. Confidentiality. In connection with the negotiation of this Agreement or
---------------
the provision of services hereunder, the parties hereto have or may obtain
non-public information regarding the business and financial condition or
plans of the other party ("Confidential Information"). Seller and Buyer
agree to keep the Confidential Information in strict confidence and shall
not disclose it to any person, firm or corporation, nor use the same for
any purpose other than for fulfilling obligations under this Agreement.
All Confidential Information shall remain the property of the disclosing
party, shall be kept confidential by the receiving party, and shall not be
disclosed to any other person or entity other than officers, employees or
agents of the receiving party who need to know such information in order to
fulfill obligations under this Agreement. Receiving party shall protect
and safeguard the Confidential Information by using the same degree of
care, but no less than a reasonable degree of care, to prevent the
unauthorized use,
-3-
<PAGE>
dissemination or publication of the Confidential Information as receiving
party uses to protect its own confidential or proprietary information of
like nature.
10. Performance Limitation. Notwithstanding any contrary provision contained
----------------------
herein, Seller shall not be liable for damages or delay of the performance
of its duties hereunder due to any circumstance beyond Seller's reasonable
control, including but not limited to (i) acts of God, acts of any local,
state, federal or foreign government, strikes, riots, storms, fires or
explosions; (ii) action or inaction on part of Buyer or Buyer's employees;
and (iii) failure on part of Buyer to maintain Buyer's vehicles, vehicular
equipment or communications equipment.
11. Insurance. Seller shall obtain and maintain the following insurance
---------
throughout the duration of this Agreement:
a. Worker's Compensation Insurance for all employees of Seller as required
by Florida statute.
b. Commercial General Liability Insurance in an amount not less than One
Million Dollars ($1,000,000) which shall include contractual liability
coverage.
12. Indemnification. Buyer shall indemnify and hold harmless Seller from,
---------------
against and in respect to any and all liabilities, damages and claims
against Seller, including without limitation, reasonable fees and
disbursements of counsel, in connection with Seller's performance under
this Agreement, provided, however, that such claims against Seller do not
arise from (i) any breach of this Agreement by Seller; or, (ii) gross
negligence solely on the part of Seller in the performance of Seller's
obligations hereunder. Seller shall indemnify and hold harmless Buyer
from, against and in respect to any and all liabilities, damages and claims
against Buyer, including without limitation, reasonable fees and
disbursements of counsel, in connection with any breach of this Agreement
by Seller or gross negligence solely of Seller hereunder.
13. Notices. Any notice which is required to be given under this Agreement
-------
shall be in writing. All written notices shall be sent prepaid registered
or certified airmail, or commercial courier service, return receipt
requested. All such notices shall be deemed to have been given when
received, addressed in the manner indicated below, or at such other
addresses as the parties may from time to time notify each other of:
-4-
<PAGE>
SELLER BUYER
------ -----
Automated Dispatch Systems, Inc. Comprehensive Paratransit Services
8175 NW 12th Street, Suite 417 11077 N.W. 36th Avenue
Miami, FL 33126 Miami, FL 33167
Attn: John L. Shermyen Attn: Lou Cicerone
14. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Florida. Any action or claim
pursuant to this Agreement shall be maintained only in a court of competent
jurisdiction in Dade County, FL. Seller and Buyer hereby agree to submit
to jurisdiction in any such court in the event of any such claim or action.
15. Other Agreements. This Agreement replaces and supersedes all other
----------------
agreements, written or oral, between the parties regarding the subject
matter covered herein.
16. Headings. The section names and other headings contained in this Agreement
--------
are for reference purposes only and shall not affect the meaning or
interpretation of any or all of the provisions of this Agreement.
17. Binding Effect; Assignment. This Agreement shall be binding upon and shall
--------------------------
inure to the benefit of Seller's and Buyer's allowed successors and
assigns. Buyer may assign its rights hereunder and delegate its duties
hereunder in its sole discretion. Buyer reserves the right to approve
assignment by Seller of this Agreement unless assignee is owned by or under
common ownership with Seller.
18. Entire Agreement. This Agreement, together with the attached exhibits,
----------------
constitutes the entire agreement between the parties with respect to its
subject matter and supersedes all prior agreements, understandings,
negotiations and discussions, both written and oral, between the parties
with respect to such subject matter. Buyer agrees that any terms and
conditions contained in any Buyer purchase order or other ordering document
shall have no binding effect on Seller and will not modify this Agreement
in any way.
19. Amendment. This Agreement may not be amended or modified in any way except
---------
by written instrument executed by all of the parties.
20. Non-waiver. The waiver of any breach or commitment under this Agreement by
----------
either Buyer or Seller shall not constitute the waiver of any other breach
or commitment pursuant to this Agreement.
21. Severability. If any provision of this Agreement is held invalid by law,
------------
rule, order or regulation of any relevant government, or by the final
determination of a court of last resort, such invalidity shall not affect
(a) the other provisions of this Agreement; (b) the application of such
provision to any other circumstance other than that with respect to
-5-
<PAGE>
which this Agreement was found to be unenforceable; or (c) the validity or
enforceability of this Agreement as a whole.
22. RadioSoft Guarantee. Seller, as of the date hereof, is a wholly owned
-------------------
subsidiary of RadioSoft, Inc., a Delaware corporation. In the event, for
any reason whatsoever, Seller is unable or unwilling to perform its
obligations set forth herein, RadioSoft agrees it shall perform, or cause
to be performed, the obligations of Seller set forth herein for the
compensation to be paid to Seller hereunder. Subject to the right of first
refusal to purchase Seller granted by RadioSoft to Health Trans of South
Florida, Inc. ("HTSF") in connection with RadioSoft's guarantee of Seller's
obligations under that certain agreement between Seller and HTSF of even
date herewith, upon the sale by RadioSoft of all of the issued and
outstanding stock of Seller, RadioSoft may delegate to the purchaser of
such stock its guarantee obligation hereunder, so long as Buyer consents to
such delegation, which consent may not unreasonably be withheld if such
purchaser's net worth determined under generally accepted accounting
principles (GAAP) is at least one million dollars ($1,000,000) at the time
of such delegation.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
AUTOMATED DISPATCH SYSTEMS, INC.
By: Attest:
-------------------------------
- -----------------------------
John Shermyen, its President
------------------------------
COMPREHENSIVE PARATRANSIT SERVICES
By: METRO LIMO, INC., Partner
By: Attest:
-------------------------------
- -----------------------------
Martin Zilber, its President
------------------------------
RADIOSOFT, INC.
By: Attest:
-------------------------------
- -----------------------------
John Shermyen, its President
------------------------------
-6-
<PAGE>
EXHIBIT 10.6
MANAGEMENT & ADVISORY AGREEMENT
This Management Agreement ("Agreement") is entered into this 20th day of
June, 1996, ("Effective Date") between Automated Dispatch Systems, Inc., a
Florida corporation ("Client") and SEM, Inc., a Florida corporation ("Advisor").
RECITALS
A. WHEREAS, Advisor desires to sell to Client and Client desires to purchase
from Advisor certain Management & Advisory Services ("Services", as further
defined in Section 4 below);
B. WHEREAS, Advisor and Client desire to set forth herein the terms under
which Advisor will sell and Client will purchase the Services;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto intending to be legally bound agree as follows:
1. Recitals. The foregoing recitals are true and correct.
--------
2. Purchase and Sale of Services. Advisor hereby agrees to provide the
-----------------------------
Services in an efficient and professional manner, and Client hereby agrees
to purchase the Services from Advisor, in accordance with the terms and
conditions contained herein.
3. Term of Agreement. This Agreement shall continue for five (5) years
-----------------
following the Effective Date and shall be renewed automatically thereafter
for successive periods of one year each, unless either party hereto
provides the other party with written notice not less than sixty (60) days
prior to the end of the then-current term of its intention not to renew.
Except as otherwise provided in this paragraph, if either party wishes or
purports to terminate this Agreement as a result of a breach of this
Agreement of any sort by the other party, such first party shall first give
the second party written notice setting forth the alleged breach. After
receipt of such written notice, the second party shall have thirty (30)
days to cure such alleged breach. No such termination of this Agreement
shall take place unless the second party fails to cure such breach within
such period.
<PAGE>
4. Services. Advisor shall provide to Client advice and management expertise
--------
as required by Client in Client's performance of its obligations under the
Dispatch Services Agreement.
5. Pricing. Client shall pay to Advisor One Dollar ($1.00) as an advisory fee
-------
("Advisory Fee") for each trip for which Client receives payment under the
Dispatch Services Agreement. The Advisory Fee shall be increased on each
anniversary of the Effective date by the percentage, if any, by which the
Consumer Price Index increased in the Miami area during the preceding
twelve-month period; provided, however, such increase shall not exceed on a
percentage basis the CPI adjustment paid to Client by CPS under the
Dispatch Services Agreement.
6. Payment Terms. Advisor shall not be required to invoice Client. Client
-------------
shall pay to Advisor the Advisory Fee for each trip for which payment is
received by Client under the Dispatch Services Agreement within two (2)
business days of receipt of payment. A 1.5% penalty shall be imposed on all
payments which are more than thirty (30) days past due.
7. Confidentiality. In connection with the negotiation of this Agreement or
---------------
the provision of services hereunder, the parties hereto have or may obtain
non-public information regarding the business and financial condition or
plans of the other party ("Confidential Information"). Advisor and Client
agree to keep the Confidential Information in strict confidence and shall
not disclose it to any person, firm or corporation, nor use the same for
any purpose other than for fulfilling obligations under this Agreement.
All Confidential Information shall remain the property of the disclosing
party, shall be kept confidential by the receiving party, and shall not be
disclosed to any other person or entity other than officers, employees or
agents of the receiving party who need to know such information in order to
fulfill obligations under this Agreement. Receiving party shall protect
and safeguard the Confidential Information by using the same degree of
care, but no less than a reasonable degree of care, to prevent the
unauthorized use, dissemination or publication of the Confidential
Information as receiving party uses to protect its own confidential or
proprietary information of like nature.
8. Performance Limitations. Notwithstanding any contrary provision contained
-----------------------
herein, Advisor shall not be liable for damages or delay of the performance
of its duties hereunder due to any circumstance beyond Advisor's reasonable
control, including but not limited to (i) acts of God, acts of any local,
state, federal or foreign government, strikes, riots, storms, fires or
explosions; (ii) action or inaction on part of Client or Client's
employees; and (iii) failure on part of Client to maintain Client's
vehicles, vehicular equipment or communications equipment.
9. Indemnification. Client shall indemnify and hold harmless Advisor from,
---------------
against and in respect to any and all liabilities, damages and claims
against Advisor, including without limitation, reasonable fees and
disbursements of counsel, in connection with
-2-
<PAGE>
Advisor's performance under this Agreement, provided, however, that such
claims against Advisor do not arise from (i) any breach of this Agreement
by Advisor; or, (ii) gross negligence solely on the part of Advisor in the
performance of Advisor's obligations hereunder. Advisor shall indemnify and
hold harmless Client from, against and in respect to any and all
liabilities, damages and claims against Client, including without
limitation, reasonable fees and disbursements of counsel, in connection
with any breach of this Agreement by Advisor or gross negligence solely of
Advisor hereunder.
10. Notices. Any notice which is required to be given under this Agreement
-------
shall be in writing. All written notices shall be sent prepaid registered
or certified airmail, or commercial courier service, return receipt
requested. All such notices shall be deemed to have been given when
received, addressed in the manner indicated below, or at such other
addresses as the parties may from time to time notify each other of:
CLIENT ADVISOR
------ -------
Automated Dispatch Systems, Inc. SEM, Inc.
NW 12th Street, Suite 417 1995 N.E. 142 Street
Miami, Florida 33126 North Miami, Florida 33181
Attn: John L. Shermyen Attn:
11. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Florida. Any action or claim
pursuant to this Agreement shall be maintained only in a court of competent
jurisdiction in Dade County, FL. Advisor and Client hereby agree to submit
to jurisdiction in any such court in the event of any such claim or action.
12. Other Agreements. This Agreement replaces and supersedes all other
----------------
agreements, written or oral, between the parties regarding the subject
matter covered herein.
13. Headings. The section names and other headings contained in this Agreement
--------
are for reference purposes only and shall not affect the meaning or
interpretation of any or all of the provisions of this Agreement.
14. Binding Effect; Assignment. This Agreement shall be binding upon and shall
--------------------------
inure to the benefit of Advisor's and Client's allowed successors and
assigns. Client reserves the right to approve assignment by Advisor of
this Agreement unless assignee is owned by or under common ownership with
Advisor.
15. Entire Agreement. This Agreement, together with the attached exhibits,
----------------
constitutes the entire agreement between the parties with respect to its
subject matter and supersedes all prior agreements, understandings,
negotiations and discussions, both written and oral, between the parties
with respect to such subject matter. Client agrees that any terms and
conditions contained in any Client purchase order or other ordering
-3-
<PAGE>
document shall have no binding effect on Advisor and will not modify this
Agreement in any way.
16. Amendment. This Agreement may not be amended or modified in any way except
---------
by written instrument executed by all of the parties.
17. Non-waiver. The waiver of any breach or commitment under this Agreement by
----------
either Client or Advisor shall not constitute the waiver of any other
breach or commitment pursuant to this Agreement.
18. Severability. If any provision of this Agreement is held invalid by law,
------------
rule, order or regulation of any relevant government, or by the final
determination of a court of last resort, such invalidity shall not affect
(a) the other provisions of this Agreement; (b) the application of such
provision to any other circumstance other than that with respect to which
this Agreement was found to be unenforceable; or (c) the validity or
enforceability of this Agreement as a whole.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
AUTOMATED DISPATCH SYSTEMS, INC.
By: Attest:
----------------------------
- -----------------------------
John Shermyen, its President
-----------------------------
SEM, INC.
By: Attest:
----------------------------
- -----------------------------
Martin Zilber, its President
-----------------------------
-4-
<PAGE>
EXHIBIT 10.7
AGREEMENT
This Agreement ("Agreement") is entered into this 20th day of June, 1996,
("Effective Date") between Automated Dispatch Systems, Inc., a Florida
corporation ("ADS"), Comprehensive Paratransit Services, a Florida joint venture
("CPS"), and SEM, Inc., a Florida corporation ("SEM").
RECITALS
A. WHEREAS, ADS and CPS are parties to that certain Dispatch Services
Agreement (the "Dispatch Services Agreement") of even date herewith;
B. WHEREAS, ADS and SEM are parties to that certain Management & Advisory
Agreement (the "Management and Advisory Agreement") of even date herewith;
C. WHEREAS, RadioSoft, Inc., a Delaware corporation ("RadioSoft"), owns all of
the issued and outstanding capital stock of ADS;
D. WHEREAS, ADS, CPS and SEM desire to set forth herein additional terms to
address certain contingencies.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto intending to be legally bound agree as follows:
1. Recitals. The foregoing recitals are true and correct.
--------
2. Management & Advisory Agreement. In the event that RadioSoft files a
-------------------------------
registration statement for any of its securities, the Management and
Advisory Agreement shall be terminated upon the filing of such registration
statement.
3. Dispatch Services Agreement. In the event that (a) RadioSoft files a
---------------------------
registration statement for any of its securities, or (b) RadioSoft sells or
otherwise transfers to a third party that is not an affiliate of RadioSoft
fifty percent or more of the capital stock of ADS, or (c) TGIS, New York
general partnership, and its affiliates no longer collectively own at least
fifty percent (50%) of the issued and outstanding capital stock of
RadioSoft, then the "Transaction Fee" under the Dispatch Services Agreement
shall be reduced to an amount that is equal to sixty-two and one-quarter
percent (62.25%) of the amount of the Transaction Fee prior to such
reduction. Such reduction shall take place upon the filing
<PAGE>
of such registration statement. The remainder of the terms of the Dispatch
Services Agreement shall remain unchanged, including the provisions for
increases in the Transaction Fee; provided, however, that any such future
increases shall be of the Transaction Fee as reduced by this Agreement.
4. Option. Each of CPS and SEM shall have the option, exercisable in its sole
------
discretion upon ten (10) days written notice to each of the other parties
to this agreement, to terminate or cause the termination of the Management
and Advisory Agreement. Upon such a termination, the "Transaction Fee"
under the Dispatch Services Agreement shall be reduced to an amount that is
equal to sixty-two and one-quarter percent (62.25%) of the amount of the
Transaction Fee prior to such reduction. The remainder of the terms of the
Dispatch Services Agreement shall remain unchanged, including the
provisions for increases in the Transaction Fee; provided, however, that
any such future increases shall be of the Transaction Fee as reduced by
this Agreement.
5. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Florida. Any action or claim
pursuant to this Agreement shall be maintained only in a court of competent
jurisdiction in Dade County, Florida. The parties hereby agree to submit
to jurisdiction in any such court in the event of any such claim or action.
6. Amendment. This Agreement may not be amended or modified in any way except
---------
by written instrument executed by all of the parties.
7. Non-waiver. The waiver of any breach or commitment under this Agreement by
----------
any party shall not constitute the waiver of any other breach or commitment
pursuant to this Agreement.
8. Severability. If any provision of this Agreement is held invalid by law,
------------
rule, order or regulation of any relevant government, or by the final
determination of a court of last resort, such invalidity shall not affect
(a) the other provisions of this Agreement; (b) the application of such
provision to any other circumstance other than that with respect to which
this Agreement was found to be unenforceable, or (c) the validity or
enforceability of this Agreement as a whole.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.
AUTOMATED DISPATCH SYSTEMS, INC.
By:_______________________________________
John Shermyen, its President
<PAGE>
COMPREHENSIVE PARATRANSIT SERVICES
By:_______________________________________________
Martin Adler, President of Metro Limo Inc.
SEM, INC.
By:_______________________________________________
Its President
<PAGE>
EXHIBIT 10.9
VENDOR COPY
[Seal] AGENCY CONTRACT - OPEN
NOTICE OF AWARD
STATE OF GEORGIA
DEPARTMENT OF ADMINISTRATIVE SERVICES
PURCHASING & SURPLUS PROPERTY DIVISION
200 PIEDMONT AVENUE, SE, ROOM 1308
ATLANTA, GEORGIA 30335
---------------------------------
DATE: JULY 17, 1997 CONTRACT NO: 401-008-597204-3
---------------------------------
---------------------------------
VENDOR: DATE/NOTICE OF AWARD: 07/17/97
AUTOMATED DISPATCH SOLUTIONS INC. AGENCY CODE: 401
ATTN JOHN SHERMYEN VENDOR ID NO.: 133765416-001
8175 NW 12TH STREET, SUITE 430 G.C.C.: 990-0700
MIAMI FL 33216 GEO. CODE: VARIOUS
BUYER CODE: 9.1
305-471-0441 / FAX 305-471-0443 TYPE OF PURCHASE: 1.2
---------------------------------
AGENCY:
GEORGIA DEPARTMENT OF MEDICAL
ASSISTANCE
RE: CONTRACT #401-008-597204 DMA NET REGION CENTRAL, EAST AND SOUTHWEST
2 PEACHTREE STREET, N.W.
ATLANTA, GA 30303-3159
You are hereby awarded the above contract for the period indicated. The
contract includes the invitation to bid, the attached agency contract terms and
conditions and the attached item schedule.
EFFECTIVE DATE: JULY 17, 1997 See Special Notes, below
----------------------------------------------------------------
EXPIRATION DATE: See Special Notes, below
----------------------------------------------------------------
SPECIAL NOTES: Contract Award effective July 17 with contract performance start
date per contract.
Contract Term and Remuneration Schedule - See Contract.
This Notice of Award is issued to execute the attached Contract. However,
execution of this agreement is contingent upon Contractor compliance with the
following stipulation within fifteen working days of this Notice of Award:
Furnishing Certificates of Insurance and Bonds as required at attached Contract.
The Certificate Holder shall be the GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE, 2
Peachtree Street, Atlanta, Georgia 30303-3159
APPROVED BY David M. Candler
-----------------------------------
State Purchasing Agent
SIGNATURE: /s/ David M. Candler
-----------------------------------
<PAGE>
APPENDIX A
EAST
CONTRACT BETWEEN
THE GEORGIA DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
AND
AUTOMATED DISPATCH SOLUTIONS, INC.
BROKER
FOR THE PROVISION OF NON-EMERGENCY TRANSPORTATION SERVICES
TO MEDICAID RECIPIENTS
IN NET REGION EAST
CONTRACT NO. 419-03-00309
<PAGE>
WHEREAS, the Georgia Department of Administrative Services (DOAS) issued RFP No.
419-03-00309, A-1-which is incorporated herein, for the development and
administration of a broker system for the provision of a non-emergency
transportation system in the East NET Region on behalf of the Georgia Department
of Medical Assistance (DMA); and
WHEREAS, Automated Dispatch Solutions, Inc. (Contractor) submitted a response to
the Request for Proposal (RFP) which is incorporated herein and has been
selected by DOAS and DMA to perform said services.
NOW, therefore, in consideration of the mutual consents and agreements contained
herein, the parties agree as follows:
4.000 GENERAL
The Request for Proposal (RFP), any amendments thereto, and the Contractor's
proposal submitted in response to the RFP, including any best and final offer,
are incorporated in this contract by reference and form an integral part of this
contract. The Contractor shall perform all of the services of a broker, and
shall develop, produce and deliver to DMA all of the deliverables described in
the RFP, and DMA shall make payment therefore as hereinafter described.
In the event of a conflict in language between the various documents
incorporated into this contract, the provisions and requirements set forth in
this contract shall govern. In the event of a conflict between the language of
the RFP, as amended, and the Contractor's proposal, the language in the RFP
shall govern.
This contract shall be construed in accordance with the laws of the state.
Contractor will forthwith pay all taxes lawfully imposed upon it with respect to
this contract or any product delivered in accordance herewith. DMA will
forthwith pay all taxes lawfully imposed upon it with respect to this contract
or any product delivered in accordance herewith. DMA makes no representation
whatsoever as to the liability or exemption from liability of the Contractor to
any tax imposed by any governmental entity.
This contract shall be executed on behalf of the Georgia Department of Medical
Assistance by the Georgia Department of Administrative Services in accordance
with the Purchasing Act (Official Code of Georgia Annotated Title 50, Chapter 5,
Article 3).
4.010 TERM OF THE CONTRACT
This contract shall begin on the date of issuance and shall continue until the
close of the state fiscal year 1998 (June 30, 1998) unless renewed as
hereinafter provided.
DMA is hereby granted two (2) successive options to renew this contract for
additional terms of up to one fiscal year each all upon the same terms,
conditions and price in effect according to the Contractor's price proposal.
Each such option shall be exercisable solely and exclusively by DMA and shall be
APPENDIX A - Contract 3
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effected by the issuance of a Purchase Order Correction no later than June 1 for
all subsequent years. As to each term, the contract shall terminate absolutely
at the close of the then current state fiscal year without further obligation by
DMA.
4.020 COST OR PRICING
The Contractor shall submit or shall require any subcontractors hereunder to
submit cost or pricing data prior to the award of any subcontract.
The Contractor shall certify and shall require subcontractors to certify in a
form satisfactory to DMA that, to the best of their knowledge and belief, the
cost or pricing data submitted under this contract is accurate, complete and
current as of the date of agreement on the negotiated price of the subcontract
or of the contract or subcontract change.
The Contractor shall insert the substance of this subsection, including this
paragraph, in each subcontract hereunder.
If the Contract Administrator determines that any price, including profit or
fee, negotiated in connection with this agreement, or any cost reimbursable
under this agreement was increased by any significant sums because the
Contractor or any subcontractor furnished incomplete or inaccurate cost or
pricing data not current as certified in the Contractor's or subcontractor's
certification of current cost or pricing data, then such price or cost shall be
reduced accordingly and this contract and the subcontract, if applicable, shall
be modified in writing to reflect such reduction.
Since the contract is subject to reduction under this subsection by reason of
defective cost or pricing data submitted in connection with certain
subcontracts, the Contractor shall include a clause in each subcontract
requiring the subcontractor to indemnify the Contractor as appropriate. It is
expected that any subcontractor subject to such indemnification will generally
require substantially similar indemnification for defective cost or pricing data
required to be submitted by its lower tier subcontractors.
4.030 INSPECTION OF WORK PERFORMED
DMA, the U. S. Department of Health and Human Services (HHS), the General
Accounting Office (GAO), the Georgia Public Service Commission (PSC), the
Georgia Office of the Attorney General, and any other federal, state, county or
local agency with appropriate jurisdiction or their authorized representatives
or agent shall, at reasonable times, have the right to enter the Broker's
premises or other such places where duties under the contract are being
performed, to inspect, monitor or otherwise evaluate the work being performed
and all related financial records. The Broker, all subcontractors and
transportation providers must provide reasonable access to all facilities and
cooperate with state and federal representatives conducting inspection, visits,
audits, and investigations.
APPENDIX A - Contract 4
<PAGE>
4.040 SUBCONTRACTS
The Contractor will not subcontract or permit anyone other than Contractor
personnel to perform any of the work, services, or other performance required of
the Contractor under this contract, or assign any of its rights or obligations
hereunder, without the prior written consent of DMA. No subcontract which the
Contractor enters into with respect to the performance under the contract shall
in any way relieve the Contractor of any responsibility for any performance
required of it by this contract.
Service agreements with transportation providers are not considered subcontracts
for the purpose of this contract.
The Contractor shall give DMA immediate notice in writing by registered or
certified mail of any action or suit filed against it by any subcontractor, and
prompt notice of any claim made against the Contractor by any subcontractor or
vendor which in the opinion of the Contractor may result in litigation related
in any way to this contract with the state.
4.045 MINORITY AND SMALL BUSINESS SUBCONTRACTORS
The State encourages offerors to consider the use of certified minority and
small business firms as subcontractors. Offerors who do so are entitled to an
income tax credit under Georgia law (Code Title 48, Chapter 7 Amended, No. 1332
- - House Bill 635).
4.046 DMA Minority and Small Business Liaison Officer
Herbert Weldon, Deputy Commissioner
Georgia Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303-3151
Telephone: (404) 656-4496
FAX: (404) 651-6880
4.050 CONTRACTOR PERSONNEL
The Contractor warrants and represents that all persons including independent
Contractors and consultants (excluding all transportation providers) assigned by
it to the performance of this contract shall be employees of the Contractor and
shall be fully qualified to perform the work required herein. The Contractor
shall include a similar provision in any contract with a subcontractor selected
to perform work hereunder.
DMA shall have the absolute right to approve or disapprove any of the
Contractor's staff as defined in RFP subsection 3.310, et. seq., assigned to
this contract, to approve or disapprove any proposed changes in staff, or to
require the removal or reassignment of any Contractor employee or subcontractor
employee found unacceptable by DMA. The Contractor shall, upon request, provide
DMA with a
APPENDIX A - Contract 5
<PAGE>
resume of any member of its staff including independent Contractors and
consultants or subcontractor's staff assigned to or proposed to be assigned to
any aspect of the performance of this contract.
Personnel commitments made in the Contractor's proposal shall not be changed
except as hereinabove provided, or due to a resignation of any named individual.
Contractor staffing will include the named individuals at the levels of effort
proposed in the Contractor's technical proposal. Replacement of any personnel
will be with personnel of equal ability and qualifications as determined by DMA.
No diversion of staffing will be made by the Contractor, without prior written
consent of DMA.
The Contractor shall provide staff to perform all tasks specified as the
Contractor's responsibilities in this RFP. The staff level must be maintained
at the bid level or as authorized in writing by DMA for the duration of the
contract.
Failure of the Contractor to provide staffing at the bid level or level amended
by contract amendment or to receive DMA written approval for staffing changes
may result in liquidated damages.
All administrative personnel will be committed to this contract by the
Contractor unless DMA exercises its option to have a staff person removed. DMA
will be provided unrestricted access to appropriate Contractor personnel for
discussion of problems or concerns.
4.060 FEDERAL EMPLOYMENT PRACTICES REQUIREMENTS
The Contractor will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin, age, marital
status, political affiliation, or handicap. The Contractor will take equal
opportunity approach to employ and treat employees during employment without
discrimination because of their race, color, religion, sex, national origin,
age, marital status, political affiliation, or handicap. Such action will
include, but will not be limited to the following:
. Employment;
. Upgrade;
. Promotion;
. Demotion;
. Transfer;
. Recruitment;
. Advertisement for Recruitment;
. Layoff;
. Termination;
. Rates of pay or other compensation; and
. Selection for training (including apprenticeship).
The Contractor agrees to post in conspicuous places, available to employees and
applicants for employment, notices setting forth the provision of this
nondiscrimination clause.
APPENDIX A - Contract 6
<PAGE>
The Contractor will in all solicitations or advertisements for employees placed
by or on behalf of the Contractor, state that all qualified applicants will
receive consideration for employment without regard to race, color, religion,
sex, national origin, age, marital status, political affiliation, or handicap
except where it relates to a bona fide occupational qualification.
The Contractor shall comply with the nondiscrimination clause contained in
Federal Executive Order 11246, as amended by Federal Executive Order 11375,
relative to equal employment opportunity for all persons without regard to race,
color, religion, sex, or national origin, and the implementing rules and
regulations prescribed by the Secretary of Labor and with Title 41, Code of
Federal Regulations, Chapter 60. The Contractor and subcontractors shall comply
with related state laws and regulations regarding nondiscrimination.
The Contractor shall comply with regulations issued by the Secretary of Labor of
the United States in Title 48, Code of Federal Regulations, Subpart 22.14,
pursuant to the provisions of Executive Order 11758 and the Federal
Rehabilitation Act of 1973. The Contractor shall be responsible for ensuring
that all subcontractors comply with the above-mentioned regulations.
The Contractor and its subcontractors shall comply, with the Civil Rights Act of
1964, and any amendments thereto, and the rules and regulations thereunder;
Section 504 of Title V of the Federal Rehabilitation Act of 1973 as amended, and
the rules and regulations thereunder; and the Americans with Disabilities Act of
1990 (the ADA), and the rules and regulations thereunder.
The Contractor will furnish all information and reports required by Executive
Order Number 11246 of September 24, 1976, as amended and will permit access to
its books, records, and accounts by the Secretary of Labor or the Commissioner
of DMA or their authorized representatives, for purposes of investigation to
ensure compliance with rules, regulations, orders, and laws.
4.070 RELATIONSHIP OF THE PARTIES
Neither the Contractor nor any of its agents, consultants, servants, employees,
subcontractors or transportation providers with which the Contractor has active
service agreements shall become or be deemed to become agent, servant or
employee of the state or DMA. The Contractor and all such agents, consultants,
servants, employees, subcontractors or transportation providers shall for all
purposes be deemed to be independent contractors, and this contract shall not be
construed so as to create a partnership or joint venture between the Contractor
and DMA or the state.
4.080 DISPUTES
Any disputes concerning a question of fact arising under the contract which is
not disposed of by agreement shall be decided by the Contract Administrator who
shall reduce his decision to writing and mail or otherwise furnish a copy
thereof to the Contractor. The decision of the Contract Administrator shall be
final and conclusive unless within ten (10) calendar days from the date of
receipt of such copy the Contractor mails or otherwise furnishes a written
appeal to the Commissioner of DMA. The decision of the Commissioner or a duly
authorized representative for the determination of such appeals
APPENDIX A - Contract 7
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shall be final and conclusive unless determined by a court of competent
jurisdiction to have been fraudulent, or capricious or arbitrary, or so grossly
erroneous as necessarily to imply bad faith. In connection, with any appeal
proceeding under this clause, the Contractor shall be afforded an opportunity to
be heard and to offer evidence in support of his appeal. Pending a final
decision of a dispute hereunder, the Contractor shall proceed diligently with
the performance of the contract in accordance with the disputed decision.
4.090 AUDIT REQUIREMENTS
The state and federal standards for audits of DMA agents, contractors, and
programs conducted under contract are applicable to this section and are
incorporated by reference into this contract as though fully set out here.
4.091 Contractor Accounting Records Requirements
The Contractor agrees to maintain books, records, documents, and other evidence
pertaining to the costs and expenses of this contract (hereinafter collectively
called the "records") to the extent and in such detail as will properly reflect
all costs for which payment is made under the provisions of any contract of
which this contract is a part by reference or inclusion.
The Contractor's accounting procedures and practices shall conform to generally
accepted accounting principles and the costs properly applicable to the contract
shall be readily ascertainable therefrom.
4.092 Records Retention Requirements
The Contractor agrees to make available at its central business office at all
reasonable times during the period set forth below any of the records of the
contracted work for inspection or audit by any authorized representative of DMA,
the state auditor, the U.S. Department of Health and Human Services, the General
Accounting Office, the Georgia Public Service Commission (PSC), the Georgia
Office of the Attorney General, and for the Comptroller General of the United
States or their duly authorized representative.
The Contractor shall preserve and make available its records for a period of
three (3) years from the date of final payment under this contract, and for such
period, if any, as is required by applicable statute, by any other section of
this contract or associated contract.
If the contract is completely or partially terminated, the records relating to
the work terminated shall be preserved and made available for a period of three
(3) years from the date of any resulting final settlement.
Records which relate to appeals, litigations, or the settlements of claims
arising out of the performance of this contract, or costs and expenses of any
such agreement as to which exception has been taken by the state auditor or any
of his duly authorized representatives, shall be retained by the Contractor
until such appeals, litigations, claims, or exceptions have been disposed of.
APPENDIX A - Contract 8
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A file and report retention schedule shall be developed by the Contractor and
approved by DMA. The schedule shall be maintained by the Contractor and all
changes will be approved by DMA.
4.093 Substitution of Micro Media Records
Except for documentary evidence, the Contractor may in fulfillment of its
obligation to retain its records as required by this article, substitute clear
and legible photographs, microphotographs or other authentic reproductions of
such records, after the expiration of two (2) years following the last day of
the month of payment to the Contractor of the invoice to which such records
relate, unless a shorter period is authorized by DMA with the concurrence of the
state auditor or his duly authorized representatives.
4.094 Inclusion of Audit Requirements in Subcontracts
The provision of subsection 4.090 et. seq. shall be incorporated in any
subcontract.
4.100 CONFIDENTIALITY OF INFORMATION
The Contractor shall treat all information which is obtained by it through its
performance under the contract as confidential information, and shall not use
any information so obtained in any manner except as necessary for the proper
discharge of its obligations and securement of its rights herein, or as
otherwise provided for herein. DMA, the Attorney General, federal officials as
authorized by federal law or regulations, or the authorized representatives of
these parties shall have access to all confidential information in accordance
with the requirements of state and federal laws and regulations. Any other
party will be granted access to confidential information only after complying
with the requirements of state and federal laws and regulations pertaining to
such access. DMA shall have absolute authority to determine if and when any
other party has properly obtained the right to have access to this confidential
information. Nothing herein shall prohibit the disclosure of information in
summary, statistical, or other form which does not identify particular
individuals.
4.110 INDEMNITY AND INSURANCE
4.111 General
The Contractor shall be responsible from the time of the signing of this
agreement or from the effective date, whichever shall be later, for all injury
or damage of any kind resulting from its occupancy or any construction work
undertaken by Contractor or on Contractor's behalf.
4.112 Indemnification Agreement
Contractor hereby releases and agrees to indemnify and hold harmless the State
Agency, the State of Georgia and its departments, agencies and instrumentalities
(including the State Tort Claims Trust Fund, the State Authority Liability Trust
Fund, The State Employee Broad Form Liability Funds, the State Insurance and
Hazard Reserve Fund, and other self-insured funds, all such funds hereinafter
collectively referred to as the "Indemnities") from and against any and all
claims, demands, liabilities, losses, costs or
APPENDIX A - Contract 9
<PAGE>
expenses, and attorneys' fees, caused by, growing out of, or arising from this
Contract, due to any act or omission on the part of the Contractor, its agents,
employees, customers, invitees, licensees or others working at the direction of
Contractor or on it's behalf, or due to any breach of this Contract by the
Contractor, or due to the application or violation of any pertinent Federal,
State or local law, rule or regulation. This indemnification extends to the
successors and assigns of the Contractor, and this indemnification survives the
termination of the Contract and the dissolution or, to the extent allowed by the
law, the bankruptcy of the Contractor. If and to the extent such damage or loss
(including costs and expenses) as covered by this indemnification is covered by
the funds established and maintained by the State of Georgia Department of
Administrative Services (DOAS), the Contractor agrees to reimburse the Funds for
such monies paid out by the Funds.
This indemnification applies whether: (a) the claims, demands, liabilities,
losses, costs or expenses involve third parties or employees or agents or
customers or invitees or licensees of the Contractor or of the Indemnitees; or
(b) the Indemnitees are partially responsible for the situation giving rise to
the claim. This indemnification applies, without limitation, to claims, demands,
liabilities, losses, costs or expenses arising in any manner from the use, non-
use or occupancy of the premises, resulting from the discharge of polluting or
hazardous substances upon the premises, navigable and public waters, or
adjoining or nearby lands and private waters, or resulting from the failure of
Contractor to report to the appropriate governmental agency the discharge or
discovery of any pollutants or hazardous substances required by any governmental
entity or regulation.
This indemnification does not apply to the extent of the sole negligence of the
Indemnitees.
This indemnification does not extend beyond the term of this Contract, including
any extensions or options, and does not extend to claims exclusively between the
undersigned parties arising from the terms or regarding the interpretation of
this Contract.
4.113 Insurance Certificates
The Contractor shall, prior to the commencement of work, procure the insurance
policies identified below, at the Contractor's own expense and shall furnish the
State Agency an insurance certificate listing the agency as the certificate
holder with any endorsements thereof. The insurance certificate must document
that the liability insurance coverage purchased by the Contractor includes
contractual liability coverage and separate aggregate limits per project. In
addition, the insurance certificate must provide the following:
(a) Name and address of authorized agent
(b) Name and address of insured
(c) Name of insurance company(ies)
(d) Description of policies
(e) Policy Number(s)
(f) Policy Period(s)
(g) Limits of Liability
(h) Name and address of State Agency as certificate holder
(i) Signature of authorized agent
APPENDIX A - Contract 10
<PAGE>
(j) Telephone number of authorized agent
(k) Details of non-filed special policy exclusions in comments section of
the Certificate of Insurance
(1) Sixty days notice of cancellation/non-renewal
(m) Policy notification requirements for claims (to whom, address and time
limits) in comments section of the certificate of insurance.
4.114 Policy Provisions
Each of the insurance policies required below shall be issued by a company
licensed to transact the business of insurance in the State of Georgia by the
Insurance Commissioner for the applicable line of insurance and, unless waived
or modified in writing by the State Agency, shall be an insurer with a Best
Policyholders Rating of "A" or better and with a financial size rating of Class
IX or larger. Each such policy shall also contain the following provisions, or
the substance thereof, made a part of the insurance policy.
(a) The insurance company agrees that this policy shall not be canceled,
changed, allowed to lapse, or allowed to expire until sixty (60) days
after the State agency and the Department of Administrative Services,
Risk Management Division, has received written notice thereof as
evidenced by return receipt of registered letter or until such time as
other valid and effective insurance coverage acceptable in every
respect to the State Agency and providing protection equal to
protection called for in the policy shown below shall have been
received, accepted, and acknowledged by the State Agency. It is also
agreed that the said notice shall be valid only as to such project as
shall have been designated by name in said notice.
(b) Notice of any claim against the State or any indemnitee shall be
deemed to have occurred only when the Department of Administrative
Services, Risk Management Division, has received written notice
thereof and has acknowledged actual knowledge of the claim.
(c) The policy shall not be subject to invalidations as to any insured or
indemnitee by reason of any act or omission of another insured or any
of its officers, employees, agents or other representatives
("Severability of Insureds").
(d) The policy shall include "Cross-Liability" coverage.
(e) The policy shall acknowledge and agree that the Attorney General of
Georgia shall represent and defend the Indemnities and any settlement
on behalf of the Indemnities must be expressly approved by the
Attorney General.
4.115 Insurance Coverages
The Contractor agrees to purchase and have the authorized agent state on the
insurance certificate that the following types of insurance coverages,
consistent with the policies and requirements of O.C.G.A.
APPENDIX A - Contract 11
<PAGE>
(S) 50-321-37, have been purchased by the Contractor. The minimum liability
limits (general liability, automobile liability and employers' liability)
required from Contractors entering into an agreement with the State or an agency
or instrumentality of the State, is $5,000,000 per occurrence. Liability limits
for the Workers' Compensation Employers Liability, Commercial General Liability,
and Commercial Automobile Liability insurance coverages may be satisfied by
purchasing one or more insurance policies (e.g., a Commercial General Liability
Insurance Policy plus a Commercial Umbrella Insurance Policy). Any deviations
from these minimum limits must be approved by the Department of Administrative
Services, Risk Management Division.
(a) Workers' Compensation Insurance. The Contractor agrees to insure the
-------------------------------
statutory limits as established by the General Assembly of the State
of Georgia. (A self-insurer must submit a certificate from the Georgia
Board of Workers' Compensation stating the Contractor qualifies to pay
its own workers' compensation claims.)
(1) The Contractor shall also maintain employers Liability Insurance
Coverage with limits of at least:
(i) Bodily Injury by Accident - $1,000,000 each accident; and
(ii) Bodily Injury by Disease - $1,000,000 each employee.
(2) The Contractor shall require all Contractors or subcontractors
occupying the premises or performing work under this Contract to
obtain an insurance certificate showing proof of Workers'
Compensation and Employers Liability Insurance Coverage.
(b) Commercial General Liability Insurance. The Contractor shall procure
--------------------------------------
and maintain Commercial General Liability Insurance (1993 ISO
Occurrence Form or equivalent) which shall include, but need not be
limited to, coverage for bodily injury and property damage arising
from premises and operations liability, personal injury liability and
contractual liability. The Commercial General Liability Insurance
shall provide at lest the following limits (per occurrence) for each
type of coverage with a $2,000,000 aggregate:
Coverage Limit
-------- -----
1. Premises and Operations $1,000,000
2. Personal Injury $1,000,000
3. Contractual $1,000,000
The above coverage limits can be satisfied by purchasing one or more
insurance policies (e.g., a Commercial General Liability Insurance
Policy plus a Commercial Umbrella Insurance Policy).
APPENDIX A - Contract 12
<PAGE>
Additional Requirements for Commercial General Liability Insurance:
------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
(c) Commercial Automobile Liability Insurance. The Contractor shall
-----------------------------------------
procure and maintain Commercial Automobile Liability Insurance which
shall include courage for bodily injury and property damage arising
from the operation of any owned, non-owned or hired automobile. The
Commercial Automobile Liability Insurance Policy shall provide not
less than $1,000,000 Combined Single Limits for each occurrence.
Additional Requirements for Commercial Automobile Liability Insurance:
----------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claim Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
APPENDIX A - Contract 13
<PAGE>
(d) Commercial Umbrella Liability Insurance. The Contractor may purchase
---------------------------------------
a Commercial Umbrella Liability Insurance Policy to provide excess
coverage above the Commercial General Liability Insurance Policy, the
Commercial Automobile Liability Insurance Policy, and the Workers'
Compensation Employers' Liability Coverage to satisfy the minimum
liability limits set forth in this Article.
Additional Requirements for Commercial Umbrella Liability Insurance:
-------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
lndemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
4.120 LIQUIDATED DAMAGES - FAILURE TO MEET RFP/CONTRACT REQUIREMENTS
In the event that the Contractor fails to meet the RFP and contract requirements
listed below, damage shall be sustained by DMA which will be difficult or
impossible to ascertain exactly. The Contractor, therefore, agrees to pay DMA
the sums set forth below as liquidated damages, and not as a penalty.
A. DELIVERABLES AND REPORT PRODUCTION
REQUIREMENT:
All deliverables and reports described in Section 3 of the RFP must be delivered
to DMA in final form by the dates approved by DMA.
These include, but are not limited to:
1. operations manual interim or annual updates;
2. disaster recovery plan interim and annual updates;
3. vehicle reports;
APPENDIX A - Contract 14
<PAGE>
4. driver reports;
5. transportation services reporting;
6. detailed reports;
7. summary reports;
8. accident reports;
9. moving violation reports;
10. complaints reports;
11. telephone system reports;
12. annual certified financial audit; and
13. quality assurance plan interim and annual updates.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for each day each
report or other deliverable is late or unacceptable.
B. RECORD KEEPING
Requirement:
The Contractor shall maintain and shall make available within three (3) working
days of request all records. These include, but are not limited to:
1. Printouts of computerized recipient worksheets
2. Transportation provider records
3. Vehicle records
4. Vehicle manifests
5. Safety inspection records
6. Driver records
7. Records of complaints
8. Office/Business records relating to this contract as needed.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for failure to
produce any record as required.
C. VEHICLE RELATED REQUIREMENTS
REQUIREMENT:
The Contractor must assure that transportation providers maintain all vehicles
utilized in this contract up to all vehicle manufacturer and state and federal
safety standards, regulations of the PSC, the Americans with Disability Act
(ADA), and RFP requirements. Any vehicle found non-compliant with safety
APPENDIX A - Contract 15
<PAGE>
standards, PSC or ADA regulations, or RFP requirements must be removed from
service immediately upon discovery.
LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day or any partial day that non-
compliant vehicle is in service from the date of discovery.
D. DRIVER RELATED REQUIREMENTS
1. REQUIREMENT:
Any driver who is found not to be in compliance with Section 3.250 of the RFP
must be immediately removed from driving under this contract.
1. LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day or any part thereof in which a
driver who is non-compliant with Section 3.250 of the RFP is allowed to drive
under this contract.
2. REQUIREMENT:
Any driver who receives three (3) substantiated complaints in a 90-day period
must be removed from driving under this contract or enter a retraining program.
If a driver receives six (6) substantiated complaints within a twelve (12) month
time period, he/she must be removed from driving under this contract.
2. LIQUIDATED DAMAGES:
One hundred dollars ($100) a calendar day or any part thereof in which such a
driver is allowed to drive under this contract before retraining or before
dismissal.
E. REQUIREMENTS RELATED TO PROVISION OF TRANSPORTATION SERVICES
1. REQUIREMENT:
The Contractor shall be responsible for arranging for back-up vehicles and/or
personnel when notified by a recipient, a provider or DMA that a vehicle is
excessively late, is otherwise unavailable for services or when specifically
requested by DMA. The vehicle is "excessively late" if it is thirty (30)
minutes late in meeting its assigned schedule.
APPENDIX A - Contract 15
<PAGE>
1. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where back-up service is not available
within the required period of time.
2. REQUIREMENT:
The Contractor is required to assure that the proper type vehicle is utilized
for the status of the Medicaid recipient being transported.
2. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where a vehicle is utilized that is
not adequate to meet the health care status of the Medicaid recipient being
transported.
3. REQUIREMENT:
Contractors are required to assure that recipients are picked up within fifteen
(15) minutes of the scheduled pick-up time.
3. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
scheduled pick-ups are late. An additional one thousand dollars ($1000) will be
assessed for each percent that exceeds ten percent (10%).
4. REQUIREMENT:
Contractors are required to assure that recipients are delivered to scheduled
health care appointments on time.
4. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
arrivals for scheduled health care appointments are late. An additional one
thousand ($1000) will be assessed for each per cent that exceeds ten per cent
(10%).
F. BUSINESS REQUIREMENTS
1. REQUIREMENT:
The Contractor shall have sufficient toll free telephone lines, phones, staff,
and support equipment to meet these performance requirements. The phone system
installed must have an automated reporting system that identifies the number of
calls on hold and length of time, and number of calls per line.
APPENDIX A - Contract 17
<PAGE>
Telephone operating hours are 6:00 a.m. to 8:00 p.m. Eastern Time, Monday
through Friday and Saturday from 8:00 a.m. to 1:00 p.m. Eastern Time unless
otherwise approved by DMA.
Incoming telephone calls shall not be placed on "hold" for more than an average
of two minutes.
1. LIQUIDATED DAMAGES:
One hundred dollars ($100) per hour or any part thereof that telephone operating
hours/days do not meet the requirement.
Ten dollars ($10) for each minute or any part thereof that a call placed on
"hold" exceeds the requirement.
2. REQUIREMENT:
Incoming telephone calls shall not exceed a ten percent (10%) "busy" signal
rate. The Contractor must add sufficient telephone lines to bring the service
within contract standards within a time frame agreed upon by the DMA.
2. LIQUIDATED DAMAGES
Five hundred dollars ($500) per working day or any part thereof that corrective
action is late.
3. REQUIREMENT:
Contractor personnel used for scheduling must maintain a courteous and polite
attitude. Any service personnel who receives three (3) substantiated complaints
in a 90-day period must be removed from a position of direct public contact or
retained. If a service staff receives six (6) substantiated complaints within a
twelve (12) month period, he/she must be removed from a position of direct
public contact.
3. LIQUIDATED DAMAGES
One hundred dollars ($100) per business day or any part thereof that any service
staff personnel is allowed to remain in a direct public contact position after
the requirement is exceeded.
4. REQUIREMENT:
The Contractor must back up all computer files and store in a DMA approved off-
site storage area for safety.
4. LIQUIDATED DAMAGES:
Fifty dollars ($50) per working day for each file that is found not to have been
backed up correctly.
APPENDIX A - Contract 18
<PAGE>
5. REQUIREMENT:
The Contractor must provide on-line access to DMA during normal working hours.
On-line access includes the ability to view all system information and print
reports. DMA shall have free access (read-only) to the Contractor's systems to
include, but not limited to, recipient reservation worksheets, transportation
provider records, and historical records.
5. LIQUIDATED DAMAGES:
Two hundred fifty dollars ($250) per working day in which DMA access to the
Contractor's system is unavailable for sixty (60) or more minutes.
G. RECIPIENT NOTICES
1. REQUIREMENT:
Whenever NET service to a Medicaid recipient is denied or terminated, a notice
in writing must be issued to the recipient and DMA within three (3) working days
of the determination (see Section 3.281).
1. LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day that such a denial notice is late
in being sent or for failure to send notification.
2. REQUIREMENT:
Newly eligibles of a region are to receive a notice regarding availability of
services and instructions for accessing transportation from the region Broker
within ten (10) working days of the Broker's receipt of eligibility
notification.
2. LIQUIDATED DAMAGES:
Damages in the amount of one hundred ($100) shall be assessed for each calendar
day or any part thereof after the tenth working day that the newly eligible
notification of available services is late being sent.
3. REQUIREMENT:
Other notices are to be sent to recipients of a region by the region Broker as
agreed to by the Contractor and DMA staff.
APPENDIX A - Contract 19
<PAGE>
3. LIQUIDATED DAMAGES:
Damages for failure to send other notices as required by DMA will be agreed upon
in amount and duration at the time of the need for additional notices is agreed
upon by DMA.
H. OTHER CONTRACT PROVISIONS
REQUIREMENT:
DMA may identify any other condition resulting from Contractor non-compliance
with the RFP and contract through routine monitoring activities. DMA will
notify the Contractor in writing of the non-compliance and designate a
reasonable time for correction of the non-compliance.
LIQUIDATED DAMAGES:
Damages in the amount of two hundred dollars ($200) shall be assessed for each
working day or any part thereof after the designated time for correction until
the correction of the non-compliance.
4.130 LIMITATION OF LIABILITY
The total obligation of DMA for any term of this contract shall not exceed the
fund sources committed to this contract by DMA as of its effective date,
together with any additional fund sources subsequently determined to be
available and committed to it by DMA.
4.140 PERFORMANCE BOND
The Contractor in each NET region shall obtain and maintain for each contract
period a performance bond issued by a surety company that is listed in the
Federal Registry of Surety Companies in the amount of $250,000. In addition,
the Contractor in each NET region shall obtain and maintain for each contract
period a payment bond issued by a surety company that is listed in the Federal
Registry of Surety Companies in the amount of $750,000
Federal Registry of Surety Companies
Circular #570
Department of Treasury
Surety Section
401 14th Street, S.W.
Washington, D.C. 20227
Telephone: (202) 874-6850
(This Registry is updated every July 1st.)
Using the Performance Bond and Payment Bond forms in Appendix L, the Contractor
shall submit an executed performance bond and an executed payment bond to DMA
within fifteen (15) days of announcement of award and before the execution of
the contract and again at the time of each renewal.
APPENDIX A - Contract 20
<PAGE>
The performance bond shall be used to cover all costs of the State up to a
maximum of the full value of the bond in the event that the Contractor is unable
to properly, promptly and efficiently perform the contract and/or the contract
is terminated by default or bankruptcy. The payment bond shall be used to cover
delinquent payments to the transportation service providers and other vendors
under contract with the Broker up to a maximum of the full value of the bond in
the event that the Contractor is unable to properly, promptly and efficiently
perform the contract and/or the contract is terminated by default or bankruptcy.
4.150 ACCEPTANCE
The Contractor shall comply with all of the requirements of Section 3 of the
RFP, and DMA shall have no obligation to accept any deliverable tendered to it
until such time as all of said requirements have been met as to each such
deliverable.
4.160 WARRANTY AGAINST BROKERS' FEES
The Contractor warrants that it has not employed any company or person, other
than a bona fide employee working solely for the Contractor or company regularly
employed as its marketing agent, to solicit or secure this contract and that it
has not paid or agreed to pay any company or person, other than a bona fide
employee working solely for the Contractor or a company regularly employed by
the Contractor as its marketing agent, any fee, commission, percentage,
brokerage fee, gift, or other consideration contingent upon or resulting from
the award of this contract. In the event of a breach of this warranty by the
Contractor, DMA shall have the right to terminate this contract without any
liability whatsoever, or, in its discretion, to deduct from the contract price
or consideration or otherwise recover the full amount of such fee, commission,
percentage, brokerage fee, gift or contingent fee.
4.170 TERMINATION OF THE CONTRACT
This contract may terminate or may be terminated by DMA for any or all of the
following reasons:
.For any default by the Contractor;
.For the convenience of DMA;
.In the event of the insolvency of or declaration of bankruptcy by the
Contractor; and
.In the event sufficient appropriated, otherwise obligated funds no
longer exist for the payment of DMA's obligation hereunder.
Each of these is described in the following subsections.
4.171 Termination for Default
The failure of the Contractor to perform or comply with any term, condition, or
provision of this contract shall constitute a default by the Contractor. In the
event of default, DMA shall notify the Contractor by certified or registered
mail, return receipt requested, of the specific act or omission of the
Contractor which constitutes default. The Contractor shall have fifteen (15)
calendar days from the date of receipt
APPENDIX A - Contract 21
<PAGE>
of such notification to cure such default. In the event of default, and during
the above-specified grace period, performance under the contract shall continue
as though the default had never occurred. In the event the default is not cured
in fifteen (15) calendar days, DMA may, at its sole option, terminate the
contract for default. Such termination shall be accomplished by written notice
of termination forwarded to the Contractor by certified or registered mail,
return receipt requested, and shall be effective at the close of business on the
date specified in the notice. If it is determined, after notice of termination
for default, that the Contractor's failure was due to causes beyond the control
of and without error or negligence of the Contractor, the termination shall be
deemed a termination for convenience under subsection 4.182.
4.172 Termination for Convenience
DMA may terminate performance of work under the contract in whole or in part
whenever, for any reason, DMA shall determine that such termination is in the
best interest of the state. In the event that DMA elects to terminate the
contract pursuant to this provision, it shall so notify the Contractor by
certified or registered mail, return receipt requested. The termination shall
be effective as of the date specified in the notice.
4.173 Termination for Bankruptcy or Insolvency
In the event that the Contractor shall cease conducting business in the normal
course, become insolvent, make a general assignment for the benefit of
creditors, suffer or permit the appointment of a receiver for its business or
its assets or shall avail itself of, or become subject to, any proceedings under
the Federal Bankruptcy Act or any other statute of any state relating to
insolvency or the protection of the rights of creditors, DMA may, at its option,
terminate this contract. In the event DMA elects to terminate the contract
under this provision, it shall do so by sending notice of termination to the
Contractor by certified or registered mail, return receipt requested. The date
of termination shall be deemed to be the date such notice is mailed to the
Contractor, unless otherwise specified.
4.174 Termination for Unavailability of Funds
Notwithstanding any other provision of this contract, the parties hereto agree
that the charges hereunder are payable by DMA from appropriations received by
DMA from the General Assembly of the state and matched by current percentages of
federal financial participation (FFP). In the event such appropriations are
determined at the sole discretion of the Commissioner of DMA no longer to exist
or to be insufficient with respect to the charges payable hereunder, this
contract shall terminate without further obligation of DMA as of that moment.
In such event, the Commissioner of DMA shall certify to the Contractor the
occurrence thereof, and such certification shall be conclusive.
4.175 Termination Procedures
The Contractor shall:
.Stop work under the contract on the date and to the extent specified in
the notice of termination;
APPENDIX A - Contract 22
<PAGE>
. Place no further orders or subcontract for materials, services, or
facilities, except as may be necessary for completion of such portion of
the work under the contract as is not terminated;
. Terminate all orders and subcontracts to the extent that they relate to
the performance of work terminated by the notice of termination;
. Assign to DMA in the manner and to the extent directed by the Contract
Administrator all of the right, title, and interest of the Contractor under
the orders or subcontracts so terminated, in which case DMA shall have the
right, in its discretion, to settle or pay any or all claims arising out of
the termination of such orders and subcontracts;
. With the approval of the Contract Administrator, settle all outstanding
liabilities and all claims arising out of such termination or orders and
subcontracts, the cost of which would be reimbursable in whole or in part,
in accordance with the provisions of the contract;
. Complete the performance of such part of the work as shall not have been
terminated by the notice of termination;
. Take such action as may be necessary, or as the Contract Administrator may
direct, for the protection and preservation of any and all property or
information related to the contract which is in the possession of the
Contractor and in which DMA has or may acquire an interest;
4.176 Termination Claims
After receipt of a notice of termination, the Contractor shall submit to the
Contract Administrator any termination claim in the form and with the
certification prescribed by the Contract Administrator. Such claim shall be
submitted promptly but in no event later than six (6) months from the effective
date of termination. Upon failure of the Contractor to submit its termination
claim within the time allowed, the Contract Administrator may, subject to any
review required by the state procedures in effect as of the date of execution of
the contract, determine, on the basis of information available, the amount, if
any, due to the Contractor by reason of the termination and shall thereupon
cause to be paid to the Contractor the amount so determined.
Upon receipt of notice of termination, the Contractor shall have no entitlement
to receive any amount for lost revenues or anticipated profits or for
expenditures associated with this or in any other contract. The Contractor
shall be paid only by the following upon termination:
. At the contract price(s) for completed deliverables and services delivered
to and accepted by DMA; and/or
. At a price mutually agreed by the Contractor and DMA for partially
completed deliverables.
In the event of the failure of the Contractor and DMA to agree in whole or in
part as to the amounts with respect to costs to be paid to the Contractor in
connection with the total or partial termination of work
APPENDIX A - Contract 23
<PAGE>
pursuant to this article, DMA shall determine on the basis of information
available the amount, if any, due to the Contractor by reason of termination and
shall pay to the Contractor the amount so determined.
The Contractor shall have the right of appeal, as stated under subsection 4.080,
from any such determination made by DMA.
4.180 CHANGE OF OWNERSHIP OR LEGAL STATUS
Any Contractor that undergoes a change (including, but not limited to,
dissolution, incorporation, re-incorporation, reorganization, change of
ownership of assets, merger or joint venture) so that as a result, the
Contractor either becomes a different legal entity or is replaced in the program
by another contractor, must give DMA at least thirty (30) days prior written
notice. The successor Contractor simultaneously must submit the information
requested in sections 6.100 through 6.530 in this NET RFP for DMA's evaluation.
Failure of the successor to submit this information or failure to obtain a
successful evaluation from DMA will prevent DMA from reimbursing any further
services as of the date of the change.
4.190 LIABILITY FOR OVERPAYMENT, ENTITLEMENT TO UNDERPAYMENT
Any person or entity that replaces a Contractor in the Georgia Medicaid program
shall be deemed to have accepted joint and several liability, along with its
predecessor, for any overpayment sought to be recovered by DMA after the
effective date of the successor Contractor take over, regardless of the
successor's contract status or lack of affiliation with its predecessor at the
time the overpayment was made. An entity shall be deemed to have replaced a
Contractor if it (1) effectively became a different legal entity through
incorporation, re-incorporation, merger, joint venture, dissolution, creation of
a partnership, or reorganization; (2) took over more than fifty percent (50%) of
the predecessor's assets or Medicaid activities; or (3) has substituted for the
predecessor in the program, as evidenced by all attendant circumstances.
Reimbursement for services rendered prior to the effective date of take over by
a successor Contractor (including any adjustments for underpayment made by DMA)
shall be made to the Contractor of record at the time the payment is made or to
that Contractor's payee as properly designated on the appropriate form(s)
required by DMA. Any disputes or conflicts, legal or otherwise, arising between
the current Contractor and the predecessor Contractor concerning either
apportionment of liability for any overpayment previously made by DMA or the
right to additional reimbursement for any underpayment previously made by DMA
shall be the sole responsibility of such parties and shall not include DMA.
4.200 CONFORMANCE WITH FEDERAL LAWS AND REGULATIONS
The Contractor shall agree to conform with such Federal Laws as affect the
delivery of services under this contract including but not limited to Titles VI,
VII, and XIX of the Social Security Act, the Federal Rehabilitation Act of 1973,
and the Americans with Disability Act of 1993 (28 CFR 35.100 et seq.). The
Contractor shall agree to conform to such requirements or regulations as the
United States Department of Health and Human Services may issue from time to
time. Authority to implement federal requirements or regulations will be given
to the Contractor by DMA by a contract amendment.
APPENDIX A - Contract 24
<PAGE>
4.210 FORCE MAJEURE
Neither party to this contract shall be responsible for delays or failures in
performance resulting from acts beyond the control of such party. Such acts
shall include but not be limited to acts of God, strikes, riots, lock-outs, acts
of war, epidemics, fire, earthquakes, or other disasters.
4.220 CONFLICT OF INTEREST
The Contractor covenants that it presently has no interest and shall not acquire
any interest, direct or indirect, which would conflict in any manner or degree
with its performance hereunder. The Contractor further covenants that in the
performance of the contract no person having any such interest is presently
employed or shall be employed in the future by the Contractor.
The Contractor and all subcontractors are prohibited from owning or having any
financial interest in organizations that deliver NET transportation services to
Georgia Medicaid recipients. The Contractor and all subcontractors must
maintain an arm's length relationship with any transportation delivery entities.
All of the parties hereto hereby certify that the provisions of Chapter 45-10-20
through 45-10-28 of the Official Code of Georgia Annotated have not been
violated and will not be violated in any respect.
4.230 PROVISION OF GRATUITIES
Neither the Contractor nor any person, firm or corporation employed by the
Contractor in the performance of this contract shall offer or give, directly or
indirectly, to any employee or agent of the state, any gift, money or anything
of value, or any promise, obligation or contract for future reward or
compensation at any time during the term of this contract.
4.240 NON-COMPETITION FOR EMPLOYEES
During the term of this contract and for a period of one (1) year from the date
of termination or expiration of this contract, unless otherwise agreed to in
writing, neither DMA nor the Contractor shall solicit for employment as a
consultant or independent contractor any sales, marketing or management employee
hereinafter and during the term of this contract employed by the other, or the
Contractor's parent corporation, or any corporation controlled by, controlling,
or under common control with the Contractor who is working on this project
during the prior twelve (12) months; provided, however, the term "solicit for
employment" shall not be deemed to include advertising in newspapers or trade
publications addressed to the general public and either party may employ any
person now or hereafter employed by the other (including the Contractor's
parent, or any corporate affiliate) who, without other solicitation, responds to
such an advertisement or applies for employment without solicitation.
APPENDIX A - Contract 25
<PAGE>
4.250 STATE OWNERSHIP AND USE
The Broker shall provide to DMA all data files and documentation specifically
developed by the Broker for use with the Georgia NET Program, to include but
limited to:
. All data files in the most current version;
. Operational Procedures Manuals and other documentation;
. System and program documentation in a form usable and acceptable to DMA,
describing the most current version of the system;
. A complete description of the hardware, software, and communication
environment used by the Broker in support of the NET Program;
. Training programs for DMA staff, its agents or designated representatives
in the operation and maintenance of the Broker's system; and
. Any and all performance enhancing operational plans.
This obligation is not subject to any limitation in any respect, whether by
claim for the cost of any part of the system as proprietary or by failure to
claim for cost of any part of the system.
4.260 STATE PROPERTY
The Contractor shall be responsible for the proper custody and care of any
state-owned property furnished for use in connection with the performance of the
contract; and the Contractor will reimburse DMA for any loss or damage thereto;
normal wear and tear expected.
4.270 NOTICES
All notices under this contract shall be deemed duly given upon delivery, if
delivered by hand (against receipt); or three (3) calendar days after posting,
if sent by registered or certified mail, return receipt requested, to a party
hereto at the addresses set forth below or to such other address as a party may
designate by notice pursuant hereto.
DMA Contract Administrator
Carleton Guptill
Contract Administration
Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303
APPENDIX A - Contract 26
<PAGE>
DOAS Contract Issuing Officer
David Candler, Technical Procurement Manager
State Purchasing Office
Department of Administrative Services
1308 West Floyd Veterans Memorial Building
200 Piedmont Avenue, S.E.
Suite 1320, West Tower
Atlanta, Georgia 30334-9010
Vendor Representative and Address:
Automated Dispatch Solutions, Inc.
ATTN: John Shermyen
8715 NW 12th Street, Ste. 430
Miami, FL 33216
4.280SURVIVAL
The terms, provisions, representatives and warranties contained in this contract
shall survive the development and submission of all required deliverables and
the payment of the purchase price thereof.
4.290 ATTORNEY'S FEES
In the event that the state should prevail in any legal action arising out of
the performance or non-performance of this contract, the Contractor shall pay,
in addition to any damages, all expenses of such action including reasonable
attorneys' fees and costs regardless that DMA is represented by the Attorney
General. The term legal action shall be deemed to include administrative
proceedings of all kinds, as well as all actions at law or equity.
4.300 WAIVER
The waiver by DMA of any breech of any provision contained in this contract
shall not be deemed to be a waiver of such provision on any subsequent breech of
the same or any other provision contained in this contract and shall not
establish a course of performance between the parties contradictory to the terms
hereof.
4.310 AUTHORITY
Each party has full power and authority to enter into and perform this contract,
and the person signing this contract on behalf of each party certifies that such
person has been properly authorized and empowered to enter into this contract.
Each party further acknowledges that it has read this contract, understands it,
and agrees to be bound by it.
APPENDIX A - Contract
<PAGE>
4.320 SEVERABILITY
If any provision of the contract (including items incorporated by reference) is
declared or found to be illegal, unenforceable, or void, then both DMA and the
Contractor shall be relieved of all obligations arising under such provision; if
the remainder of the contract is capable of performance, it shall not, at the
sole option of DMA, be affected by such declaration or finding and shall be
fully performed.
4.330 ASSIGNABILITY
The Contractor shall not assign this contract to any third party without prior
written approval by DMA.
4.340 AMENDMENTS IN WRITING
No amendment to this contract shall be effective unless it is in writing and
signed by duly authorized representatives of the Contractor, DMA and DOAS.
4.350 ENTIRE AGREEMENT
This contract constitutes the entire agreement between the parties with respect
to the subject matter. No written or oral agreements, representatives,
statements, negotiations, understandings, or discussions which are not set out,
referenced, or specifically incorporated in this contract shall in no way be
binding or of affect between the parties.
APPENDIX A - Contract
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this contract this 17th day of
July, 1997.
DEPARTMENT OF MEDICAL ASSISTANCE
BY:
Marjorie P. Smith
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: David M. Candler
----------------
Signature/Date
Purchasing Agent
----------------
Title
CONTRACTOR
Automated Dispatch Solutions, Inc.
----------------------------------
Contractor Name
BY:
Signature Date
C.E.O.
------
Title
4/25/97 Signed before me this 25 day of April,
1977 as to Automated Dispatch Solutions, Inc.
John Shermyen known to me
Notary Public
APPENDIX A - Contract
<PAGE>
APPENDIX A
CONTRACT
APPENDIX A - Contract 30
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy
which eliminates the Contractor's obligation to transport nursing home
recipients to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization
and to report the results of such review to Contractor no later than
June 30, 1998.
III. The Department agrees not to print the Contractor's name or phone number
on any Medicaid cards issued on or after May 1, 1998.
IV.To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read
---
as follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by
the Department from future payments owed to the Contractor during
the same fiscal year.
C. Add new bullet to subsection 3.120, Page 9, regarding
---
Transportation to read as follows:
<PAGE>
. utilizing commercial taxi services to supplement ambulatory services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for recipients
that includes at least the following: initial mailing and any other
mutually agreed upon notices to recipients within their region, as defined
below. All notices shall be reviewed and approved by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read as
---
follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based upon
criteria established by the Contractor and approved by the Department (such
approval shall not be unreasonably withheld and shall be granted or denied
within ten work days of submission of the criteria to the Department),
appear to be receiving or requesting NET services which are not within the
scope of the services required under the Contract, it will be the
obligation of the recipient or facilities to prove that the requested
services are allowable. Until such proof is provided and verified, under
penalty of Medicaid fraud, the Department agrees that Contractor may deny
service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours of
------
Operation.
. The Broker shall provide scheduling services with sufficient capacity
Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern Time with no
routine scheduling hours on Saturdays. Time of the actual transport
is predicated on the need of the recipient. Scheduling and business
functions may be closed for New Year's Day, Memorial Day, July 4th,
Labor Day, Thanksgiving Day, and Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care and
replacing disabled vehicles after hours.
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region. Scheduling
staff must be at the office between the hours of 8:00 a.m. and 6:00
p.m., Eastern time, Monday through Friday.
<PAGE>
I. Modify subsection 3.260 to allow the Contractor to establish and implement
------
its own Driver, Attendant, and Service Personnel Training standards, in
lieu of the standards specified in the RFP, subject to receipt of written
advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to read
---
as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set forth
in this Contract shall govern unless otherwise specified in the Contract.
In the event of a conflict between the language of the RFP, as amended, and
the Contractor's proposal, the language in the RFP shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties (other
than elected or appointed officials or state government employees or
representatives) verbally informing the Department of Non-Emergency
Transportation service issues in the Contractor's region (hereinafter
"Complainants") shall be informed by the Department that such service
issues will not be handled by the Department directly and must be addressed
by such Complainants directly to Contractor and the Department and
Contractor agree that such complaints shall be handled in the manner
described in the RFP. The Department shall not become directly involved
with the processing of service issues identified verbally by Complainants
except in accordance with the procedures regarding appeals described in the
RFP. Additionally, the Department agrees to inform any and all
transportation providers who complain to the Department in written or
verbal form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor. The
Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department from
exercising its rights under the RFP and to the extent that the provisions
of this paragraph specifically conflict with the RFP, the RFP shall be
controlling.
<PAGE>
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1, Paragraph 2,
------
Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern Time,
Monday through Friday with no routine scheduling hours on Saturdays
unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and Use
---
to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in 3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6, Scheduling
------- ------------ ----------
Day/Hours, to read as follows:
---------
Business Day -- The business office must be open between the hours of
------------
8:00 a.m. and 5:00 p.m., Eastern time, Monday through Friday.
Scheduling staff must be at the office between the hours of 8:00 a.m.
and 6:00 p.m.., Eastern time, Monday through Friday with no routine
scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is expected,
--------------------
under the terms of this contract, to have personnel available for
scheduling NET services. Designated hours during which scheduling of
appointments can be done is a mandated function of the Broker. The
hours of 8:00 a.m. to 6:00 p.m., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
<PAGE>
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their
authorized officers and agents have caused this Amendment to be executed on
their behalf, all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
$3.00 $7.02 5
C. 2/ND/ CONTRACT SERVICE PERIOD
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $7.02 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
Logisticare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
7
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-030-0309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
EXHIBIT 10.10
APPENDIX A
Central
CONTRACT
<PAGE>
APPENDIX A
CONTRACT BETWEEN
THE GEORGIA DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
AND
Automated Dispatch Solutions, Inc.
----------------------------------
BROKER
FOR THE PROVISION OF NON-EMERGENCY TRANSPORTATION SERVICES
TO MEDICAID RECIPIENTS
IN NET REGION CENTRAL
CONTRACT NO. 419-03-00309
<PAGE>
TABLE OF CONTENTS
Page No.
<PAGE>
WHEREAS, the Georgia Department of Administrative Services (DOAS) issued RFP No.
419-03-00309, is incorporated herein, for the development and administration of
a broker system for the provision of a non-emergency transportation system in
the Central NET Region on behalf of the Georgia Department of Medical Assistance
(DMA); and
WHEREAS, Automated Dispatch Solutions, Inc. (Contractor) submitted a response to
the Request for Proposal (RFP) which is incorporated herein and has been
selected by DOAS and DMA to perform said services.
NOW, therefore, in consideration of the mutual consents and agreements contained
herein, the parties agree as follows:
4.000 GENERAL
The Request for Proposal (RFP), any amendments thereto, and the Contractor's
proposal submitted in response to the RFP, including any best and final offer,
are incorporated in this contract by reference and form an integral part of this
contract. The Contractor shall perform all of the services of a broker, and
shall develop, produce and deliver to DMA all of the deliverables described in
the RFP, and DMA shall make payment therefore as hereinafter described.
In the event of a conflict in language between the various documents
incorporated into this contract, the provisions and requirements set forth in
this contract shall govern. In the event of a conflict between the language of
the RFP, as amended, and the Contractor's proposal, the language in the RFP
shall govern.
This contract shall be construed in accordance with the laws of the state.
Contractor will forthwith pay all taxes lawfully imposed upon it with respect to
this contract or any product delivered in accordance herewith. DMA will
forthwith pay all taxes lawfully imposed upon it with respect to this contract
or any product delivered in accordance herewith. DMA makes no representation
whatsoever as to the liability or exemption from liability of the Contractor to
any tax imposed by any governmental entity.
This contract shall be executed on behalf of the Georgia Department of Medical
Assistance by the Georgia Department of Administrative Services in accordance
with the Purchasing Act (Official Code of Georgia Annotated Title 50, Chapter 5,
Article 3).
4.010 TERM OF THE CONTRACT
This contract shall begin on the date of issuance and shall continue until the
close of the state fiscal year 1998 (June 30, 1998) unless renewed as
hereinafter provided.
DMA is hereby granted two (2) successive options to renew this contract for
additional terms of up to one fiscal year each all upon the same terms,
conditions and price in effect according to the Contractor's price proposal.
Each such option shall be exercisable solely and exclusively by DMA and shall be
Appendix A - Contract
1
<PAGE>
effected by the issuance of a Purchase Order Correction no later than June 1 for
all subsequent years. As to each term, the contract shall terminate absolutely
at the close of the then current state fiscal year without further obligation by
DMA.
4.020 COST OR PRICING
The Contractor shall submit or shall require any subcontractors hereunder to
submit cost or pricing data prior to the award of any subcontract.
The Contractor shall certify and shall require subcontractors to certify in a
form satisfactory to DMA that, to the best of their knowledge and belief, the
cost or pricing data submitted under this contract is accurate, complete and
current as of the date of agreement on the negotiated price of the subcontract
or of the contract or subcontract change.
The Contractor shall insert the substance of this subsection, including this
paragraph, in each subcontract hereunder.
If the Contract Administrator determines that any price, including profit or
fee, negotiated in connection with this agreement, or any cost reimbursable
under this agreement was increased by any significant sums because the
Contractor or any subcontractor furnished incomplete or inaccurate cost or
pricing data not current as certified in the Contractor's or subcontractor's
certification of current cost or pricing data, then such price or cost shall be
reduced accordingly and this contract and the subcontract, if applicable, shall
be modified in writing to reflect such reduction.
Since the contract is subject to reduction under this subsection by reason of
defective cost or pricing data submitted in connection with certain
subcontracts, the Contractor shall include a clause in each subcontract
requiring the subcontractor to indemnify the Contractor as appropriate. It is
expected that any subcontractor subject to such indemnification will generally
require substantially similar indemnification for defective cost or pricing data
required to be submitted by its lower tier subcontractors.
4.030 INSPECTION OF WORK PERFORMED
DMA, the U. S. Department of Health and Human Services (HHS), the General
Accounting Office (GAO), the Georgia Public Service Commission (PSC), the
Georgia Office of the Attorney General, and any other federal, state, county or
local agency with appropriate jurisdiction or their authorized representatives
or agent shall, at reasonable times, have the right to enter the Broker's
premises or other such places where duties under the contract are being
performed, to inspect, monitor or otherwise evaluate the work being performed
and all related financial records. The Broker, all subcontractors and
transportation providers must provide reasonable access to all facilities and
cooperate with state and federal representatives conducting inspection visits,
audits, and investigations.
Appendix A - Contract
2
<PAGE>
4.040 SUBCONTRACTS
The Contractor will not subcontract or permit anyone other than Contractor
personnel to perform any of the work, services, or other performance required of
the Contractor under this contract, or assign any of its rights or obligations
hereunder, without the prior written consent of DMA. No subcontract which the
Contractor enters into with respect to the performance under the contract shall
in any way relieve the Contractor of any responsibility for any performance
required of it by this contract.
Service agreements with transportation providers are not considered subcontracts
for the purpose of this contract.
The Contractor shall give DMA immediate notice in writing by registered or
certified mail of any action or suit filed against it by any subcontractor, and
prompt notice of any claim made against the Contractor by any subcontractor or
vendor which in the opinion of the Contractor may result in litigation related
in any way to this contract with the state.
4.045 MINORITY AND SMALL BUSINESS SUBCONTRACTORS
The State encourages offerors to consider the use of certified minority and
small business firms as subcontractors. Offerors who do so are entitled to an
income tax credit under Georgia law (Code Title 48, Chapter 7 Amended, No. 1332
- - House Bill 635).
4.046 DMA Minority and Small Business Liaison Officer
Herbert Weldon, Deputy Commissioner
Georgia Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303-3151
Telephone: (404) 656-4496
FAX: (404) 651-6880
4.050 CONTRACTOR PERSONNEL
The Contractor warrants and represents that all persons including independent
Contractors and consultants (excluding all transportation providers) assigned by
it to the performance of this contract shall be employees of the Contractor and
shall be fully qualified to perform the work required herein. The Contractor
shall include a similar provision in any contract with a subcontractor selected
to perform work hereunder.
DMA shall have the absolute right to approve or disapprove any of the
Contractor's staff as defined in RFP subsection 3.310, et. seq., assigned to
this contract, to approve or disapprove any proposed changes in staff, or to
require the removal or reassignment of any Contractor employee or subcontractor
employee found unacceptable by DMA. The Contractor shall, upon request, provide
DMA with a
Appendix A - Contract
3
<PAGE>
resume of any member of its staff including independent Contractors and
consultants or subcontractor's staff assigned to or proposed to be assigned to
any aspect of the performance of this contract.
Personnel commitments made in the Contractor's proposal shall not be changed
except as hereinabove provided, or due to a resignation of any named individual.
Contractor staffing will include the named individuals at the levels of effort
proposed in the Contractor's technical proposal. Replacement of any personnel
will be with personnel of equal ability and qualifications as determined by DMA.
No diversion of staffing will be made by the Contractor, without prior written
consent of DMA.
The Contractor shall provide staff to perform all tasks specified as the
Contractor's responsibilities in this RFP. The staff level must be maintained
at the bid level or as authorized in writing by DMA for the duration of the
contract.
Failure of the Contractor to provide staffing at the bid level or level amended
by contract amendment or to receive DMA written approval for staffing changes
may result in liquidated damages.
All administrative personnel will be committed to this contract by the
Contractor unless DMA exercises its option to have a staff person removed. DMA
will be provided unrestricted access to appropriate Contractor personnel for
discussion of problems or concerns.
4.060 FEDERAL EMPLOYMENT PRACTICES REQUIREMENTS
The Contractor will not discriminate against any employee or applicant for
employment because of race, color, religion sex, national origin, age, marital
status, political affiliation, or handicap. The Contractor will take equal
opportunity approach to employ and treat employees during employment without
discrimination because of their race, color, religion, sex, national origin,
age, marital status, political affiliation, or handicap. Such action will
include, but will not be limited to, the following:
. Employment:
. Upgrade;
. Promotion;
. Demotion;
. Transfer;
. Recruitment;
. Advertisement for Recruitment;
. Layoff;
. Termination;
. Rates of pay or other compensation; and
. Selection for training (including apprenticeship).
The Contractor agrees to post in conspicuous places, available to employees and
applicants for employment, notices setting forth the provision of this
nondiscrimination clause.
Appendix A - Contract
4
<PAGE>
The Contractor will in all solicitations or advertisements for employees placed
by or on behalf of the Contractor, state that all qualified applicants will
receive consideration for employment without regard to race, color, religion,
sex, national origin, age, marital status, political affiliation, or handicap
except where it relates to a bona fide occupational qualification.
The Contractor shall comply with the nondiscrimination clause contained in
Federal Executive Order 11246, as amended by Federal Executive Order 11375,
relative to equal employment opportunity for all persons without regard to race,
color, religion, sex, or national origin, and the implementing rules and
regulations prescribed by the Secretary of Labor and with Title 41, Code of
Federal Regulations, Chapter 60. The Contractor and subcontractors shall comply
with related state laws and regulations regarding nondiscrimination.
The Contractor shall comply with regulations issued by the Secretary of Labor of
the United States in Title 48, Code of Federal Regulations, Subpart 22.14,
pursuant to the provisions of Executive Order 11758 and the Federal
Rehabilitation Act of 1973. The Contractor shall be responsible for ensuring
that all subcontractors comply with the above-mentioned regulations.
The Contractor and its subcontractors shall comply, with the Civil Rights Act of
1964, and any amendments thereto, and the rules and regulations thereunder;
Section 504 of Title V of the Federal Rehabilitation Act of 1973 as amended, and
the rules and regulations thereunder; and the Americans with Disabilities Act of
1990 (the ADA), and the rules and regulations thereunder.
The Contractor will furnish all information and reports required by Executive
Order Number 11246 of September 24, 1976, as amended and will permit access to
its books, records, and accounts by the Secretary of Labor or the Commissioner
of DMA or their authorized representatives, for purposes of investigation to
ensure compliance with rules, regulations, orders, and laws.
4.070 RELATIONSHIP OF THE PARTIES
Neither the Contractor nor any of its agents, consultants, servants, employees,
subcontractors or transportation providers with which the Contractor has active
service agreements shall become or be deemed to become agent, servant or
employee of the state or DMA. The Contractor and all such agents, consultants,
servants, employees, subcontractors or transportation providers shall for all
purposes be deemed to be independent contractors, and this contract shall not be
construed so as to create a partnership or joint venture between the Contractor
and DMA or the state.
4.080 DISPUTES
Any disputes concerning a question of fact arising under the contract which is
not disposed of by agreement shall be decided by the Contract Administrator who
shall reduce his decision to writing and mail or otherwise furnish a copy
thereof to the Contractor. The decision of the Contract Administrator shall be
final and conclusive unless within ten (10) calendar days from the date of
receipt of such copy the Contractor mails or otherwise furnishes a written
appeal to the Commissioner of DMA. The decision of the Commissioner or a duly
authorized representative for the determination of such appeals
Appendix A - Contract
5
<PAGE>
shall be final and conclusive unless determined by a court of competent
jurisdiction to have been fraudulent, or capricious or arbitrary, or so grossly
erroneous as necessarily to imply bad faith. In connection with any appeal
proceeding under this clause, the Contractor shall be afforded an opportunity to
be heard and to offer evidence in support of his appeal. Pending a final
decision of a dispute hereunder, the Contractor shall proceed diligently with
the performance of the contract in accordance with the disputed decision.
4.090 AUDIT REQUIREMENTS
The state and federal standards for audits of DMA agents, contractors, and
programs conducted under contract are applicable to this section and are
incorporated by reference into this contract as though fully set out here.
4.091 Contractor Accounting Records Requirements
The Contractor agrees to maintain books, records, documents, and other evidence
pertaining to the costs and expenses of this contract (hereinafter collectively
called the "records") to the extent and in such detail as will properly reflect
all costs for which payment is made under the provisions of any contract of
which this contract is a part by reference or inclusion.
The Contractor's accounting procedures and practices shall conform to generally
accepted accounting principles and the costs properly applicable to the contract
shall be readily ascertainable therefrom.
4.092 Records Retention Requirements
The Contractor agrees to make available at its central business office at all
reasonable times during the period set forth below any of the records of the
contracted work for inspection or audit by any authorized representative of DMA,
the state auditor, the U.S. Department of Health and Human Services, the General
Accounting Office, the Georgia Public Service Commission (PSC), the Georgia
Office of the Attorney General, and for the Comptroller General of the United
States or their duly authorized representative.
The Contractor shall preserve and make available its records for a period of
three (3) years from the date of final payment under this contract, and for such
period, if any, as is required by applicable statute, by any other section of
this contract or associated contract.
If the contract is completely or partially terminated, the records relating to
the work terminated shall be presented and made available for a period of three
(3) years from the date of any resulting final settlement.
Records which relate to appeals, litigations, or the settlements of claims
arising out of the performance of this contract, or costs and expenses of any
such agreement as to which exception has been taken by the state auditor or any
of his duly authorized representatives, shall be retained by the Contractor
until such appeals, litigations, claims, or exceptions have been disposed of.
Appendix A - Contract
6
<PAGE>
A file and report retention schedule shall be developed by the Contractor and
approved by DMA. The schedule shall be maintained by the Contractor and all
changes will be approved by DMA.
4.093 Substitution of Micro Media Records
Except for documentary evidence, the Contractor may in fulfillment of its
obligation to retain its records as required by this article, substitute clear
and legible photographs, microphotographs or other authentic reproductions of
such records, after the expiration of two (2) years following the last day of
the month of payment to the Contractor of the invoice to which such records
relate, unless a shorter period is authorized by DMA with the concurrence of the
state auditor or his duly authorized representatives.
4.094 Inclusion of Audit Requirements in Subcontracts
The provision of subsection 4.090 et. seq. shall be incorporated in any
subcontract.
4.100 CONFIDENTIALITY OF INFORMATION
The Contractor shall treat all information which is obtained by it through its
performance under the contract as confidential information, and shall not use
any information so obtained in any manner except as necessary for the proper
discharge of its obligations and securement of its rights herein, or as
otherwise provided for herein. DMA, the Attorney General, federal officials as
authorized by federal law or regulations, or the authorized representatives of
these parties shall have access to all confidential information in accordance
with the requirements of state and federal laws and regulations. Any other
party will be granted access to confidential information only after complying
with the requirements of state and federal laws and regulations pertaining to
such access. DMA shall have absolute authority to determine if and when any
other party has properly obtained the right to have access to this confidential
information. Nothing herein shall prohibit the disclosure of information in
summary, statistical, or other form which does not identify particular
individuals.
4.110 INDEMNITY AND INSURANCE
4.111 General
The Contractor shall be responsible from the time of the signing of this
agreement or from the effective date, whichever shall be later, for all injury
or damage of any kind resulting from its occupancy or any construction work
undertaken by Contractor or on Contractor's behalf.
4.112 Indemnification Agreement
Contractor hereby releases and agrees to indemnify and hold harmless the State
Agency, the State of Georgia and its departments, agencies and instrumentalities
(including the State Tort Claims Trust Fund, the State Authority Liability Trust
Fund, The State Employee Broad Form Liability Funds, the State Insurance and
Hazard Reserve Fund, and other self-insured funds, all such funds hereinafter
collectively referred to as the "Indemnities") from and against any and all
claims, demands, liabilities, losses, costs or
Appendix A - Contract
7
<PAGE>
expenses, and attorneys' fees, caused by, growing out of, or arising from this
Contract, due to any act or omission on the part of the Contractor, it's agents,
employees, customers, invitees, licensees or others working at the direction of
Contractor or on it's behalf, or due to any breach of this Contract by the
Contractor, or due to the application or violation of any pertinent Federal,
State or local law, rule or regulation. This indemnification extends to the
successors and assigns of the Contractor, and this indemnification survives the
termination of the Contract and the dissolution or, to the extent allowed by the
law, the bankruptcy of the Contractor. If and to the extent such damage or loss
(including costs and expenses) as covered by this indemnification is covered by
the funds established and maintained by the State of Georgia Department of
Administrative Services (DOAS), the Contractor agrees to reimburse the Funds for
such monies paid out by the Funds.
This indemnification applies whether: (a) the claims, demands, liabilities,
losses, costs or expenses involve third parties or employees or agents or
customers or invitees or licensees of the Contractor or of the Indemnitees; or
(b) the Indemnitees are partially responsible for the situation giving rise to
the claim. This indemnification applies, without limitation, to claims, demands,
liabilities, losses, costs or expenses arising in any manner from the use, non-
use or occupancy of the premises, resulting from the discharge of polluting or
hazardous substances upon the premises, navigable and public waters, or
adjoining or nearby lands and private waters, or resulting from the failure of
Contractor to report to the appropriate governmental agency the discharge or
discovery of any pollutants or hazardous substances required by any governmental
entity or regulation.
This indemnification does not apply to the extent of the sole negligence of the
Indemnitees.
This indemnification does not extend beyond the term of this Contract, including
any extensions or options, and does not extend to claims exclusively between the
undersigned parties arising from the terms or regarding the interpretation of
this Contract.
4.113 Insurance Certificates
The Contractor shall, prior to the commencement of work, procure the insurance
policies identified below, at the Contractor's own expense and shall furnish the
State Agency an insurance certificate listing the agency as the certificate
holder with any endorsements thereof. The insurance certificate must document
that the liability insurance coverage purchased by the Contractor includes
contractual liability coverage and separate aggregate limits per project. In
addition, the insurance certificate must provide the following:
(a) Name and address of authorized agent
(b) Name and address of insured
(c) Name of insurance company(ies)
(d) Description of policies
(e) Policy Number(s)
(f) Policy Period(s)
(g) Limits of Liability
(h) Name and address of State Agency as certificate holder
(i) Signature of authorized agent
Appendix A - Contract
8
<PAGE>
(j) Telephone number of authorized agent
(k) Details of non-filed special policy exclusions in comments section of
the Certificate of Insurance
(1) Sixty days notice of cancellation/non-renewal
(m) Policy notification requirements for claims (to whom, address and time
limits) in comments section of the certificate of insurance.
4.114 Policy Provisions
Each of the insurance policies required below shall be issued by a company
licensed to transact the business of insurance in the State of Georgia by the
Insurance Commissioner for the applicable line of insurance and, unless waived
or modified in writing by the State Agency, shall be an insurer with a Best
Policyholders Rating of "A" or better and with a financial size rating of Class
IX or larger. Each such policy shall also contain the following provisions, or
the substance thereof, made a part of the insurance policy.
(a) The insurance company agrees that this policy shall not be canceled,
changed, allowed to lapse, or allowed to expire until sixty (60) days
after the State agency and the Department of Administrative Services,
Risk Management Division, has received written notice thereof as
evidenced by return receipt of registered letter or until such time as
other valid and effective insurance coverage acceptable in every
respect to the State Agency and providing protection equal to
protection called for in the policy shown below shall have been
received, accepted, and acknowledged by the State Agency. It is also
agreed that the said notice shall be valid only as to such project as
shall have been designated by name in said notice.
(b) Notice of any claim against the State or any indemnitee shall be
deemed to have occurred only when the Department of Administrative
Services, Risk Management Division, has received written notice
thereof and has acknowledged actual knowledge of the claim.
(c) The policy shall not be subject to invalidations as to any insured or
indemnitee by reason of any act or omission of another insured or any
of its officers, employees, agents or other representatives
("Severability of Insureds").
(d) The policy shall include "Cross-Liability" coverage.
(e) The policy shall acknowledge and agree that the Attorney General of
Georgia shall represent and defend the Indemnities and any settlement
on behalf of the Indemnities must be expressly approved by the
Attorney General.
4.115 Insurance Coverages
The Contractor agrees to purchase and have the authorized agent state on the
insurance certificate that the following types of insurance coverages,
consistent with the policies and requirements of O.C.G.A.
Appendix A - Contract
9
<PAGE>
(S) 50-321-37, have been purchased by the Contractor. The minimum liability
limits (general liability, automobile liability and employers' liability)
required from Contractors entering into an agreement with the State or an agency
or instrumentality of the State, is $5,000,000 per occurrence. Liability limits
for the Workers' Compensation Employers Liability, Commercial General Liability,
and Commercial Automobile Liability insurance coverages may be satisfied by
purchasing one or more insurance policies (e.g., a Commercial General Liability
Insurance Policy plus a Commercial Umbrella Insurance Policy). Any deviations
from these minimum limits must be approved by the Department of Administrative
Services, Risk Management Division.
(a) Workers' Compensation Insurance. The Contractor agrees to insure the
-------------------------------
statutory limits as established by the General Assembly of the State
of Georgia. (A self-insurer must submit a certificate from the Georgia
Board of Workers' Compensation stating the Contractor qualifies to pay
its own workers' compensation claims.)
(1) The Contractor shall also maintain employers Liability Insurance
Coverage with limits of at least:
(i) Bodily Injury by Accident - $1,000,000 each accident; and
(ii) Bodily Injury by Disease - $1,000,000 each employee.
(2) The Contractor shall require all Contractors or subcontractors
occupying the premises or performing work under this Contract to
obtain an insurance certificate showing proof of Workers'
Compensation and Employers Liability Insurance Coverage.
(b) Commercial General Liability Insurance. The Contractor shall procure
--------------------------------------
and maintain Commercial General Liability Insurance (1993 ISO
Occurrence Form or equivalent) which shall include, but need not be
limited to, coverage for bodily injury and property damage arising
from premises and operations liability, personal injury liability and
contractual liability. The Commercial General Liability Insurance
shall provide at lest the following limits (per occurrence) for each
type of coverage with a $2,000,000 aggregate:
<TABLE>
<CAPTION>
Coverage Limit
----------------------------- ----------
<S> <C>
1. Premises and Operations $1,000,000
2. Personal Injury $1,000,000
3. Contractual $1,000,000
</TABLE>
The above coverage limits can be satisfied by purchasing one or more
insurance policies (e.g., a Commercial General Liability Insurance
Policy plus a Commercial Umbrella Insurance Policy).
Additional Requirements for Commercial General Liability Insurance:
------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with
Appendix A - Contract
10
<PAGE>
respect to claims for which the Georgia Tort Claims Act, O.C.G.A.
(S) 50-21-20 et seq. is not the exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
(c) Commercial Automobile Liability Insurance. The Contractor shall
-----------------------------------------
procure and maintain Commercial Automobile Liability Insurance which
shall include courage for bodily injury and property damage arising
from the operation of any owned, non-owned or hired automobile. The
Commercial Automobile Liability Insurance Policy shall provide not
less than $1,000,000 Combined Single Limits for each occurrence.
Additional Requirements for Commercial Automobile Liability Insurance:
----------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
(d) Commercial Umbrella Liability Insurance. The Contractor may purchase
---------------------------------------
a Commercial Umbrella Liability Insurance Policy to provide excess
coverage above the Commercial General Liability Insurance Policy, the
Commercial Automobile Liability Insurance
Appendix A - Contract
11
<PAGE>
Policy, and the Workers' Compensation Employers' Liability Coverage to
satisfy the minimum liability limits set forth in this Article.
Additional Requirements for Commercial Umbrella Liability Insurance:
-------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
lndemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
4.120 LIQUIDATED DAMAGES - FAILURE TO MEET RFP/CONTRACT REQUIREMENTS
In the event that the Contractor fails to meet the RFP and contract requirements
listed below, damage shall be sustained by DMA which will be difficult or
impossible to ascertain exactly. The Contractor, therefore, agrees to pay DMA
the sums set forth below as liquidated damages, and not as a penalty.
A. DELIVERABLES AND REPORT PRODUCTION
REQUIREMENT:
All deliverables and reports described in Section 3 of the RFP must be delivered
to DMA in final form by the dates approved by DMA.
These include, but are not limited to:
1. operations manual interim or annual updates;
2. disaster recovery plan interim and annual updates;
3. vehicle reports;
4. driver reports;
5. transportation services reporting;
6. detailed reports
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7. summary reports
8. accident reports;
9. moving violation reports;
10. complaints reports;
11. telephone system reports;
12. annual certified financial audit; and
13. quality assurance plan interim and annual updates.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for each day each
report or other deliverable is late or unacceptable.
B. RECORD KEEPING
REQUIREMENT:
The Contractor shall maintain and shall make available within three (3) working
days of request all records. These include, but are not limited to:
1. Printouts of computerized recipient worksheets
2. Transportation provider records
3. Vehicle records
4. Vehicle manifests
5. Safety inspection records
6. Driver records
7. Records of complaints
8. Office/Business records relating to this contract as needed.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for failure to
produce any record as required.
C. VEHICLE RELATED REQUIREMENTS
REQUIREMENT:
The Contractor must assure that transportation providers maintain all vehicles
utilized in this contract up to all vehicle manufacturer and state and federal
safety standards, regulations of the PSC, the Americans with Disability Act
(ADA), and RFP requirements. Any vehicle found non-compliant with safety
standards, PSC or ADA regulations, or RFP requirements must be removed from
service immediately upon discovery.
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LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day or any partial day that non-
compliant vehicle is in service from the date of discovery.
D. DRIVER RELATED REQUIREMENTS
1. REQUIREMENT:
Any driver who is found not to be in compliance with Section 3.250 of the RFP
must be immediately removed from driving under this contract.
1. LIQUIDATED DAMAGES:
Five hundred dollars. ($500) per calendar day or any part thereof in which a
driver who is non-compliant with Section 3.250 of the RFP is allowed to drive
under this contract.
2. REQUIREMENT:
Any driver who receives three (3) substantiated complaints in a 90-day period
must be removed from driving under this contract or enter a retraining program.
If a driver receives six (6) substantiated complaints within a twelve (12) month
time period, he/she must be removed from driving under this contract.
2. LIQUIDATED DAMAGES:
One hundred dollars ($100) a calendar day or any part thereof in which such a
driver is allowed to drive under this contract before retraining or before
dismissal.
E. REQUIREMENTS RELATED TO PROVISION OF TRANSPORTATION SERVICES
1. REQUIREMENT:
The Contractor shall be responsible for arranging for back-up vehicles and/or
personnel when notified by a recipient, a provider or DMA that a vehicle is
excessively late, is otherwise unavailable for services or when specifically
requested by DMA. The vehicle is "excessively late" if it is thirty (30)
minutes late in meeting its assigned schedule.
1. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where back-up service is not available
within the required period of time.
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2. REQUIREMENT:
The Contractor is required to assure that the proper type vehicle is utilized
for the status of the Medicaid recipient being transported.
2. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where a vehicle is utilized that is
not adequate to meet the health care status of the Medicaid recipient being
transported.
3. REQUIREMENT:
Contractors are required to assure that recipients are picked up within fifteen
(15) minutes of the scheduled pick-up time.
3. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
scheduled pick-ups are late. An additional one thousand dollars ($1000) will be
assessed for each percent that exceeds ten percent (10%).
4. REQUIREMENT:
Contractors are required to assure that recipients are delivered to scheduled
health care appointments on time.
4. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
arrivals for scheduled health care appointments are late. An additional one
thousand ($1000) will be assessed for each per cent that exceeds ten per cent
(10%).
F. BUSINESS REQUIREMENTS
1. REQUIREMENT:
The Contractor shall have sufficient toll free telephone lines, phones, staff,
and support equipment to meet these performance requirements. The phone system
installed must have an automated reporting system that identifies the number of
calls on hold and length of time, and number of calls per line.
Telephone operating hours are 6:00 a.m. to 8:00 p.m. Eastern Time, Monday
through Friday and Saturday from 8:00 a.m. to 1:00 p.m. Eastern Time unless
otherwise approved by DMA.
Incoming telephone calls shall not be placed on "hold" for more than an average
of two minutes.
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1. LIQUIDATED DAMAGES:
One hundred dollars ($100) per hour or any part thereof that telephone operating
hours/days do not meet the requirement.
Ten dollars ($10) for each minute or any part thereof that a call placed on
"hold" exceeds the requirement.
2. REQUIREMENT:
Incoming telephone calls shall not exceed a ten percent (10%) "busy" signal
rate. The Contractor must add sufficient telephone lines to bring the service
within contract standards within a timeframe agreed upon by the DMA.
2. LIQUIDATED DAMAGES
Five hundred dollars ($500) per working day or any part thereof that corrective
action is late.
3. REQUIREMENT:
Contractor personnel used for scheduling must maintain a courteous and polite
attitude. Any service personnel who receives three (3) substantiated complaints
in a 90-day period must be removed from a position of direct public contact or
retained. If a service staff receives six (6) substantiated complaints within a
twelve (12) month period, he/she must be removed from a position of direct
public contact.
3. LIQUIDATED DAMAGES
One hundred dollars ($100) per business day or any part thereof that any service
staff personnel is allowed to remain in a direct public contact position after
the requirement is exceeded.
4. REQUIREMENT:
The Contractor must back up all computer files and store in a DMA approved off-
site storage area for safety.
4. LIQUIDATED DAMAGES:
Fifty dollars ($50) per working day for each file that is found not to have been
backed up correctly.
5. REQUIREMENT:
The Contractor must provide on-line access to DMA during normal working hours.
On-line access includes the ability to view all system information and print
reports. DMA shall have free access (read-
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only) to the Contractor's systems to include, but not limited to, recipient
reservation worksheets, transportation provider records, and historical records.
5. LIQUIDATED DAMAGES:
Two hundred fifty dollars ($250) per working day in which DMA access to the
Contractor's system is unavailable for sixty (60) or more minutes.
G. RECIPIENT NOTICES
1. REQUIREMENT:
Whenever NET service to a Medicaid recipient is denied or terminated, a notice
in writing must be issued to the recipient and DMA within three (3) working days
of the determination (see Section 3.281).
1. LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day that such a denial notice is late
in being sent or for failure to send notification.
2. REQUIREMENT:
Newly eligibles of a region are to receive a notice regarding availability of
services and instructions for accessing transportation from the region Broker
within ten (10) working days of the Broker's receipt of eligibility
notification.
2. LIQUIDATED DAMAGES:
Damages in the amount of one hundred ($100) shall be assessed for each calendar
day or any part thereof after the tenth working day that the newly eligible
notification of available services is late being sent.
3. REQUIREMENT:
Other notices are to be sent to recipients of a region by the region Broker as
agreed to by the Contractor and DMA staff.
3. LIQUIDATED DAMAGES:
Damages for failure to send other notices as required by DMA will be agreed upon
in amount and duration at the time of the need for additional notices is agreed
upon by DMA.
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H. OTHER CONTRACT PROVISIONS
REQUIREMENT:
DMA may identify any other condition resulting from Contractor non-compliance
with the RFP and contract through routine monitoring activities. DMA will
notify the Contractor in writing of the non-compliance and designate a
reasonable time for correction of the non-compliance.
LIQUIDATED DAMAGES:
Damages in the amount of two hundred dollars ($200) shall be assessed for each
working day or any part thereof after the designated time for correction until
the correction of the non-compliance.
4.130 LIMITATION OF LIABILITY
The total obligation of DMA for any term of this contract shall not exceed the
fund sources committed to this contract by DMA as of its effective date,
together with any additional fund sources subsequently determined to be
available and committed to it by DMA.
4.140 PERFORMANCE BOND
The Contractor in each NET region shall obtain and maintain for each contract
period a performance bond issued by a surety company that is listed in the
Federal Registry of Surety Companies in the amount of $250,000. In addition,
the Contractor in each NET region shall obtain and maintain for each contract
period a payment bond issued by a surety company that is listed in the Federal
Registry of Surety Companies in the amount of $750,000
Federal Registry of Surety Companies
Circular #570
Department of Treasury
Surety Section
401 14th Street, S.W.
Washington, D.C. 20227
Telephone: (202) 874-6850
(This Registry is updated every July 1st.)
Using the Performance Bond and Payment Bond forms in Appendix L, the Contractor
shall submit an executed performance bond and an executed payment bond to DMA
within fifteen (15) days of announcement of award and before the execution of
the contract and again at the time of each renewal. The performance bond shall
be used to cover all costs of the State up to a maximum of the full value of the
bond in the event that the Contractor is unable to properly, promptly and
efficiently perform the contract and/or the contract is terminated by default or
bankruptcy. The payment bond shall be used to cover delinquent payments to the
transportation service providers and other vendors under contract with the
Broker up to a maximum of the full value of the bond in the event that the
Contractor is unable to
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properly, promptly and efficiently perform the contract and/or the contract is
terminated by default or bankruptcy.
4.150 ACCEPTANCE
The Contractor shall comply with all of the requirements of Section 3 of the
RFP, and DMA shall have no obligation to accept any deliverable tendered to it
until such time as all of said requirements have been met as to each such
deliverable.
4.160 WARRANTY AGAINST BROKERS' FEES
The Contractor warrants that it has not employed any company or person, other
than a bona fide employee working solely for the Contractor or company regularly
employed as its marketing agent, to solicit or secure this contract and that it
has not paid or agreed to pay any company or person, other than a bona fide
employee working solely for the Contractor or a company regularly employed by
the Contractor as its marketing agent, any fee, commission, percentage,
brokerage fee, gift, or other consideration contingent upon or resulting from
the award of this contract. In the event of a breach of this warranty by the
Contractor, DMA shall have the right to terminate this contract without any
liability whatsoever, or, in its discretion, to deduct from the contract price
or consideration or otherwise recover the full amount of such fee, commission,
percentage, brokerage fee, gift or contingent fee.
4.170 TERMINATION OF THE CONTRACT
This contract may terminate or may be terminated by DMA for any or all of the
following reasons:
. For any default by the Contractor;
. For the convenience of DMA;
. In the event of the insolvency of or declaration of bankruptcy
by the Contractor; and
. In the event sufficient appropriated, otherwise obligated
funds no longer exist for the payment of DMA's obligation
hereunder.
Each of these is described in the following subsections.
4.171 Termination for Default
The failure of the Contractor to perform or comply with any term, condition, or
provision of this contract shall constitute a default by the Contractor. In the
event of default, DMA shall notify the Contractor by certified or registered
mail, return receipt requested, of the specific act or omission of the
Contractor which constitutes default. The Contractor shall have fifteen (15)
calendar days from the date of receipt of such notification to cure such
default. In the event of default, and during the above-specified grace period,
performance under the contract shall continue as though the default had never
occurred. In the event the default is not cured in fifteen (15) calendar days,
DMA may, at its sole option, terminate the contract for default. Such
termination shall be accomplished by written notice of termination forwarded to
the Contractor by certified or registered mail, return receipt requested, and
shall be effective at the
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close of business on the date specified in the notice. If it is determined,
after notice of termination for default, that the Contractor's failure was due
to causes beyond the control of and without error or negligence of the
Contractor, the termination shall be deemed a termination for convenience under
subsection 4.182.
4.172 Termination for Convenience
DMA may terminate performance of work under the contract in whole or in part
whenever, for any reason, DMA shall determine that such termination is in the
best interest of the state. In the event that DMA elects to terminate the
contract pursuant to this provision, it shall so notify the Contractor by
certified or registered mail, return receipt requested. The termination shall
be effective as of the date specified in the notice.
4.173 Termination for Bankruptcy or Insolvency
In the event that the Contractor shall cease conducting business in the normal
course, become insolvent, make a general assignment for the benefit of
creditors, suffer or permit the appointment of a receiver for its business or
its assets or shall avail itself of, or become subject to, any proceedings under
the Federal Bankruptcy Act or any other statute of any state relating to
insolvency or the protection of the rights of creditors, DMA may, at its option,
terminate this contract. In the event DMA elects to terminate the contract
under this provision, it shall do so by sending notice of termination to the
Contractor by certified or registered mail, return receipt requested. The date
of termination shall be deemed to be the date such notice is mailed to the
Contractor, unless otherwise specified.
4.174 Termination for Unavailability of Funds
Notwithstanding any other provision of this contract, the parties hereto agree
that the charges hereunder are payable by DMA from appropriations received by
DMA from the General Assembly of the state and matched by current percentages of
federal financial participation (FFP). In the event such appropriations are
determined at the sole discretion of the Commissioner of DMA no longer to exist
or to be insufficient with respect to the charges payable hereunder, this
contract shall terminate without further obligation of DMA as of that moment.
In such event, the Commissioner of DMA shall certify to the Contractor the
occurrence thereof, and such certification shall be conclusive.
4.175 Termination Procedures
The Contractor shall:
. Stop work under the contract on the date and to the extent specified in
the notice of termination;
. Place no further orders or subcontract for materials, services, or
facilities, except as may be necessary for completion of such portion of
the work under the contract as is not terminated;
. Terminate all orders and subcontracts to the extent that they relate to
the performance of work terminated by the notice of termination;
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. Assign to DMA in the manner and to the extent directed by the Contract
Administrator all of the right, title, and interest of the Contractor
under the orders or subcontracts so terminated, in which case DMA shall
have the right, in its discretion, to settle or pay any or all claims
arising out of the termination of such orders and subcontracts;
. With the approval of the Contract Administrator, settle all outstanding
liabilities and all claims arising out of such termination or orders and
subcontracts, the cost of which would be reimbursable in whole or in
part, in accordance with the provisions of the contract;
. Complete the performance of such part of the work as shall not have been
terminated by the notice of termination;
. Take such action as may be necessary, or as the Contract Administrator
may direct, for the protection and preservation of any and all property
or information related to the contract which is in the possession of the
Contractor and in which DMA has or may acquire an interest;
4.176 Termination Claims
After receipt of a notice of termination, the Contractor shall submit to the
Contract Administrator any termination claim in the form and with the
certification prescribed by the Contract Administrator. Such claim shall be
submitted promptly but in no event later than six (6) months from the effective
date of termination. Upon failure of the Contractor to submit its termination
claim within the time allowed, the Contract Administrator may, subject to any
review required by the state procedures in effect as of the date of execution of
the contract, determine, on the basis of information available, the amount, if
any, due to the Contractor by reason of the termination and shall thereupon
cause to be paid to the Contractor the amount so determined.
Upon receipt of notice of termination, the Contractor shall have no entitlement
to receive any amount for lost revenues or anticipated profits or for
expenditures associated with this or in any other contract. The Contractor
shall be paid only by the following upon termination:
. At the contract price(s) for completed deliverables and services
delivered to and accepted by DMA; and/or
. At a price mutually agreed by the Contractor and DMA for partially
completed deliverables.
In the event of the failure of the Contractor and DMA to agree in whole or in
part as to the amounts with respect to costs to be paid to the Contractor in
connection with the total or partial termination of work pursuant to this
article, DMA shall determine on the basis of information available the amount,
if any, due to the Contractor by reason of termination and shall pay to the
Contractor the amount so determined.
The Contractor shall have the right of appeal, as stated under subsection 4.080,
from any such determination made by DMA.
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4.180 CHANGE OF OWNERSHIP OR LEGAL STATUS
Any Contractor that undergoes a change (including, but not limited to,
dissolution, incorporation, re-incorporation, reorganization, change of
ownership of assets, merger or joint venture) so that as a result, the
Contractor either becomes a different legal entity or is replaced in the program
by another contractor, must give DMA at least thirty (30) days prior written
notice. The successor Contractor simultaneously must submit the information
requested in sections 6.100 through 6.530 in this NET RFP for DMA's evaluation.
Failure of the successor to submit this information or failure to obtain a
successful evaluation from DMA will prevent DMA from reimbursing any further
services as of the date of the change.
4.190 LIABILITY FOR OVERPAYMENT, ENTITLEMENT TO UNDERPAYMENT
Any person or entity that replaces a Contractor in the Georgia Medicaid program
shall be deemed to have accepted joint and several liability, along with its
predecessor, for any overpayment sought to be recovered by DMA after the
effective date of the successor Contractor take over, regardless of the
successor's contract status or lack of affiliation with its predecessor at the
time the overpayment was made. An entity shall be deemed to have replaced a
Contractor if it (1) effectively became a different legal entity through
incorporation, re-incorporation, merger, joint venture, dissolution, creation of
a partnership, or reorganization; (2) took over more than fifty percent (50%) of
the predecessor's assets or Medicaid activities; or (3) has substituted for the
predecessor in the program, as evidenced by all attendant circumstances.
Reimbursement for services rendered prior to the effective date of take over by
a successor Contractor (including any adjustments for underpayment made by DMA)
shall be made to the Contractor of record at the time the payment is made or to
that Contractor's payee as properly designated on the appropriate form(s)
required by DMA. Any disputes or conflicts, legal or otherwise, arising between
the current Contractor and the predecessor Contractor concerning either
apportionment of liability for any overpayment previously made by DMA or the
right to additional reimbursement for any underpayment previously made by DMA
shall be the sole responsibility of such parties and shall not include DMA.
4.200 CONFORMANCE WITH FEDERAL LAWS AND REGULATIONS
The Contractor shall agree to conform with such Federal Laws as affect the
delivery of services under this contract including but not limited to Titles VI,
VII, and XIX of the Social Security Act, the Federal Rehabilitation Act of 1973,
and the Americans with Disability Act of 1993 (28 CFR 35.100 et seq.). The
Contractor shall agree to conform to such requirements or regulations as the
United States Department of Health and Human Services may issue from time to
time. Authority to implement federal requirements or regulations will be given
to the Contractor by DMA by a contract amendment.
4.210 FORCE MAJEURE
Neither party to this contract shall be responsible for delays or failures in
performance resulting from acts beyond the control of such party. Such acts
shall include but not be limited to acts of God, strikes, riots, lock-outs, acts
of war, epidemics, fire, earthquakes, or other disasters.
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4.220 CONFLICT OF INTEREST
The Contractor covenants that it presently has no interest and shall not acquire
any interest, direct or indirect, which would conflict in any manner or degree
with its performance hereunder. The Contractor further covenants that in the
performance of the contract no person having any such interest is presently
employed or shall be employed in the future by the Contractor.
The Contractor and all subcontractors are prohibited from owning or having any
financial interest in organizations that deliver NET transportation services to
Georgia Medicaid recipients. The Contractor and all subcontractors must
maintain an arm's length relationship with any transportation delivery entities.
All of the parties hereto hereby certify that the provisions of Chapter 45-10-20
through 45-10-28 of the Official Code of Georgia Annotated have not been
violated and will not be violated in any respect.
4.230 PROVISION OF GRATUITIES
Neither the Contractor nor any person, firm or corporation employed by the
Contractor in the performance of this contract shall offer or give, directly or
indirectly, to any employee or agent of the state, any gift, money or anything
of value, or any promise, obligation or contract for future reward or
compensation at any time during the term of this contract.
4.240 NON-COMPETITION FOR EMPLOYEES
During the term of this contract and for a period of one (1) year from the date
of termination or expiration of this contract, unless otherwise agreed to in
writing, neither DMA nor the Contractor shall solicit for employment as a
consultant or independent contractor any sales, marketing or management employee
hereinafter and during the term of this contract employed by the other, or the
Contractor's parent corporation, or any corporation controlled by, controlling,
or under common control with the Contractor who is working on this project
during the prior twelve (12) months; provided, however, the term "solicit for
employment" shall not be deemed to include advertising in newspapers or trade
publications addressed to the general public and either party may employ any
person now or hereafter employed by the other (including the Contractor's
parent, or any corporate affiliate) who, without other solicitation, responds to
such an advertisement or applies for employment without solicitation.
4.250 STATE OWNERSHIP AND USE
The Broker shall provide to DMA all data files and documentation specifically
developed by the Broker for use with the Georgia NET Program, to include but
limited to:
. All data files in the most current version;
. Operational Procedures Manuals and other documentation;
. System and program documentation in a form usable and acceptable to DMA,
describing the most current version of the system;
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. A complete description of the hardware, software, and communication
environment used by the Broker in support of the NET Program;
. Training programs for DMA staff, its agents or designated representatives
in the operation and maintenance of the Broker's system; and
. Any and all performance enhancing operational plans.
This obligation is not subject to any limitation in any respect, whether by
claim for the cost of any part of the system as proprietary or by failure to
claim for cost of any part of the system.
4.260 STATE PROPERTY
The Contractor shall be responsible for the proper custody and care of any
state-owned property furnished for use in connection with the performance of the
contract; and the Contractor will reimburse DMA for any loss or damage thereto;
normal wear and tear expected.
4.270 NOTICES
All notices under this contract shall be deemed duly given upon delivery, if
delivered by hand (against receipt); or three (3) calendar days after posting,
if sent by registered or certified mail, return receipt requested, to a party
hereto at the addresses set forth below or to such other address as a party may
designate by notice pursuant hereto.
DMA Contract Administrator
Carleton Guptill
Contract Administration
Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303
DOAS Contract Issuing Officer
David Candler, Technical Procurement Manager
State Purchasing Office
Department of Administrative Services
1308 West Floyd Veterans Memorial Building
200 Piedmont Avenue, S.E.
Suite 1320, West Tower
Atlanta, Georgia 30334-9010
Vendor Representative and Address:
Automated Dispatch Solutions, Inc.
ATTN: John Shermyen
8175 NW 12th Street, Ste. 430
Miami, FL 33216
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4.280 SURVIVAL
The terms, provisions, representatives and warranties contained in this contract
shall survive the development and submission of all required deliverables and
the payment of the purchase price thereof.
4.290 ATTORNEY'S FEES
In the event that the state should prevail in any legal action arising out of
the performance or non-performance of this contract, the Contractor shall pay,
in addition to any damages, all expenses of such action including reasonable
attorneys' fees and costs regardless that DMA is represented by the Attorney
General. The term legal action shall be deemed to include administrative
proceedings of all kinds, as well as all actions at law or equity.
4.300 WAIVER
The waiver by DMA of any breech of any provision contained in this contract
shall not be deemed to be a waiver of such provision on any subsequent breech of
the same or any other provision contained in this contract and shall not
establish a course of performance between the parties contradictory to the terms
hereof.
4.310 AUTHORITY
Each party has full power and authority to enter into and perform this contract,
and the person signing this contract on behalf of each party certifies that such
person has been properly authorized and empowered to enter into this contract.
Each party further acknowledges that it has read this contract, understands it,
and agrees to be bound by it.
4.320 SEVERABILITY
If any provision of the contract (including items incorporated by reference) is
declared or found to be illegal, unenforceable, or void, then both DMA and the
Contractor shall be relieved of all obligations arising under such provision; if
the remainder of the contract is capable of performance, it shall not, at the
sole option of DMA, be affected by such declaration or finding and shall be
fully performed.
4.330 ASSIGNABILITY
The Contractor shall not assign this contract to any third party without prior
written approval by DMA.
4.340 AMENDMENTS IN WRITING
No amendment to this contract shall be effective unless it is in writing and
signed by duly authorized representatives of the Contractor, DMA and DOAS.
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4.350 ENTIRE AGREEMENT
This contract constitutes the entire agreement between the parties with respect
to the subject matter. No written or oral agreements, representatives,
statements, negotiations, understandings, or discussions which are not set out,
referenced, or specifically incorporated in this contract shall in no way be
binding or of affect between the parties.
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SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this contract this 17th day of
July, 1997.
DEPARTMENT OF MEDICAL ASSISTANCE
BY:
Marjorie P. Smith
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ David M. Candler
--------------------
Signature/Date
Purchasing Agent
----------------
Title
CONTRACTOR
Automated Dispatch Solutions, Inc
---------------------------------
Contractor Name
BY:
Signature Date
C.E.O
-----
Title
4/25/97 Signed before me this 25 day
of April, 1997 as to Automated
Dispatch Solutions, Inc. John Shermyen
Notary Public
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AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy
which eliminates the Contractor's obligation to transport nursing home
recipients to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization
and to report the results of such review to Contractor no later than
June 30, 1998.
III. The Department agrees not to print the Contractor's name or phone number
on any Medicaid cards issued on or after May 1, 1998.
IV.To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read
---
as follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by
the Department from future payments owed to the Contractor during
the same fiscal year.
C. Add new bullet to subsection 3.120, Page 9, regarding
---
Transportation to read as follows:
<PAGE>
. utilizing commercial taxi services to supplement ambulatory services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for recipients
that includes at least the following: initial mailing and any other
mutually agreed upon notices to recipients within their region, as defined
below. All notices shall be reviewed and approved by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read as
---
follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based upon
criteria established by the Contractor and approved by the Department (such
approval shall not be unreasonably withheld and shall be granted or denied
within ten work days of submission of the criteria to the Department),
appear to be receiving or requesting NET services which are not within the
scope of the services required under the Contract, it will be the
obligation of the recipient or facilities to prove that the requested
services are allowable. Until such proof is provided and verified, under
penalty of Medicaid fraud, the Department agrees that Contractor may deny
service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours of
------
Operation.
. The Broker shall provide scheduling services with sufficient capacity
Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern Time with no
routine scheduling hours on Saturdays. Time of the actual transport
is predicated on the need of the recipient. Scheduling and business
functions may be closed for New Year's Day, Memorial Day, July 4th,
Labor Day, Thanksgiving Day, and Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care and
replacing disabled vehicles after hours.
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region. Scheduling
staff must be at the office between the hours of 8:00 a.m. and 6:00
p.m., Eastern time, Monday through Friday.
<PAGE>
I. Modify subsection 3.260 to allow the Contractor to establish and implement
------
its own Driver, Attendant, and Service Personnel Training standards, in
lieu of the standards specified in the RFP, subject to receipt of written
advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to read
---
as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set forth
in this Contract shall govern unless otherwise specified in the Contract.
In the event of a conflict between the language of the RFP, as amended, and
the Contractor's proposal, the language in the RFP shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties (other
than elected or appointed officials or state government employees or
representatives) verbally informing the Department of Non-Emergency
Transportation service issues in the Contractor's region (hereinafter
"Complainants") shall be informed by the Department that such service
issues will not be handled by the Department directly and must be addressed
by such Complainants directly to Contractor and the Department and
Contractor agree that such complaints shall be handled in the manner
described in the RFP. The Department shall not become directly involved
with the processing of service issues identified verbally by Complainants
except in accordance with the procedures regarding appeals described in the
RFP. Additionally, the Department agrees to inform any and all
transportation providers who complain to the Department in written or
verbal form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor. The
Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department from
exercising its rights under the RFP and to the extent that the provisions
of this paragraph specifically conflict with the RFP, the RFP shall be
controlling.
<PAGE>
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1, Paragraph 2,
------
Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern Time,
Monday through Friday with no routine scheduling hours on Saturdays
unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and Use
---
to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in 3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6, Scheduling
------- ------------ ----------
Day/Hours, to read as follows:
---------
Business Day -- The business office must be open between the hours of
------------
8:00 a.m. and 5:00 p.m., Eastern time, Monday through Friday.
Scheduling staff must be at the office between the hours of 8:00 a.m.
and 6:00 p.m.., Eastern time, Monday through Friday with no routine
scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is expected,
--------------------
under the terms of this contract, to have personnel available for
scheduling NET services. Designated hours during which scheduling of
appointments can be done is a mandated function of the Broker. The
hours of 8:00 a.m. to 6:00 p.m., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
<PAGE>
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their
authorized officers and agents have caused this Amendment to be executed on
their behalf, all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
$3.00 $7.02 5
C. 2/ND/ CONTRACT SERVICE PERIOD
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $7.02 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
Logisticare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
7
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-030-0309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
EXHIBIT 10.11
APPENDIX A
SW
CONTRACT
<PAGE>
APPENDIX A
CONTRACT BETWEEN
THE GEORGIA DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE
AND
Automated Dispatch Solutions, Inc.
----------------------------------
BROKER
FOR THE PROVISION OF NON-EMERGENCY TRANSPORTATION SERVICES
TO MEDICAID RECIPIENTS
IN NET REGION SOUTHWEST
CONTRACT NO. 419-03-00309
<PAGE>
WHEREAS, the Georgia Department of Administrative Services (DOAS) issued RFP No.
419-03-00309, is incorporated herein, for the development and administration of
a broker system for the provision of a non-emergency transportation system in
the Southwest NET Region on behalf of the Georgia Department of Medical
Assistance (DMA); and
WHEREAS, Automated Dispatch Solutions, Inc. (Contractor) submitted a response to
the Request for Proposal (RFP) which is incorporated herein and has been
selected by DOAS and DMA to perform said services.
NOW, therefore, in consideration of the mutual consents and agreements contained
herein, the parties agree as follows:
4.000 GENERAL
The Request for Proposal (RFP) any amendments thereto, and the Contractor's
proposal submitted in response to the RFP, including any best and final offer,
are incorporated in this contract by reference and form an integral part of this
contract. The Contractor shall perform all of the services of a broker, and
shall develop, produce and deliver to DMA all of the deliverables described in
the RFP, and DMA shall make payment therefore as hereinafter described.
In the event of a conflict in language between the various documents
incorporated into this contract, the provisions and requirements set forth in
this contract shall govern. In the event of a conflict between the language of
the RFP, as amended, and the Contractor's proposal, the language in the RFP
shall govern.
This contract shall be construed in accordance with the laws of the state.
Contractor will forthwith pay all taxes lawfully imposed upon it with respect to
this contract or any product delivered in accordance herewith. DMA will
forthwith pay all taxes lawfully imposed upon it with respect to this contract
or any product delivered in accordance herewith. DMA makes no representation
whatsoever as to the liability or exemption from liability of the Contractor to
any tax imposed by any governmental entity.
This contract shall be executed on behalf of the Georgia Department of Medical
Assistance by the Georgia Department of Administrative Services in accordance
with the Purchasing Act (Official Code of Georgia Annotated Title 50, Chapter 5,
Article 3).
4.010 TERM OF THE CONTRACT
This contract shall begin on the date of issuance and shall continue until the
close of the state fiscal year 1998 (June 30, 1998) unless renewed as
hereinafter provided.
DMA is hereby granted two (2) successive options to renew this contract for
additional terms of up to one fiscal year each all upon the same terms,
conditions and price in effect according to the Contractor's price proposal.
Each such option shall be exercisable solely and exclusively by DMA and shall be
1
<PAGE>
effected by the issuance of a Purchase Order Correction no later than June 1 for
all subsequent years. As to each term, the contract shall terminate absolutely
at the close of the then current state fiscal year without further obligation by
DMA.
4.020 COST OR PRICING
The Contractor shall submit or shall require any subcontractors hereunder to
submit cost or pricing data prior to the award of any subcontract.
The Contractor shall certify and shall require subcontractors to certify in a
form satisfactory to DMA that, to the best of their knowledge and belief, the
cost or pricing data submitted under this contract is accurate, complete and
current as of the date of agreement on the negotiated price of the subcontract
or of the contract or subcontract change.
The Contractor shall insert the substance of this subsection, including this
paragraph, in each subcontract hereunder.
If the Contract Administrator determines that any price, including profit or
fee, negotiated in connection with this agreement, or any cost reimbursable
under this agreement was increased by any significant sums because the
Contractor or any subcontractor furnished incomplete or inaccurate cost or
pricing data not current as certified in the Contractor's or subcontractor's
certification of current cost or pricing data, then such price or cost shall be
reduced accordingly and this contract and the subcontract, if applicable, shall
be modified in writing to reflect such reduction.
Since the contract is subject to reduction under this subsection by reason of
defective cost or pricing data submitted in connection with certain
subcontracts, the Contractor shall include a clause in each subcontract
requiring the subcontractor to indemnify the Contractor as appropriate. It is
expected that any subcontractor subject to such indemnification will generally
require substantially similar indemnification for defective cost or pricing data
required to be submitted by its lower tier subcontractors.
4.030 INSPECTION OF WORK PERFORMED
DMA, the U. S. Department of Health and Human Services (HHS), the General
Accounting Office (GAO), the Georgia Public Service Commission (PSC), the
Georgia Office of the Attorney General, and any other federal, state, county or
local agency with appropriate jurisdiction or their authorized representatives
or agent shall, at reasonable times, have the right to enter the Broker's
premises or other such places where duties under the contract are being
performed, to inspect, monitor or otherwise evaluate the work being performed
and all related financial records. The Broker, all subcontractors and
transportation providers must provide reasonable access to all facilities and
cooperate with state and federal representatives conducting inspection visits,
audits, and investigations.
2
<PAGE>
4.040 SUBCONTRACTS
The Contractor will not subcontract or permit anyone other than Contractor
personnel to perform any of the work, services, or other performance required of
the Contractor under this contract, or assign any of its rights or obligations
hereunder, without the prior written consent of DMA. No subcontract which the
Contractor enters into with respect to the performance under the contract shall
in any way relieve the Contractor of any responsibility for any performance
required of it by this contract.
Service agreements with transportation providers are not considered subcontracts
for the purpose of this contract.
The Contractor shall give DMA immediate notice in writing by registered or
certified mail of any action or suit filed against it by any subcontractor, and
prompt notice of any claim made against the Contractor by any subcontractor or
vendor which in the opinion of the Contractor may result in litigation related
in any way to this contract with the state.
4.045 MINORITY AND SMALL BUSINESS SUBCONTRACTORS
The State encourages offerors to consider the use of certified minority and
small business firms as subcontractors. Offerors who do so are entitled to an
income tax credit under Georgia law (Code Title 48, Chapter 7 Amended, No. 1332
- - House Bill 635).
4.046 DMA Minority and Small Business Liaison Officer
Herbert Weldon, Deputy Commissioner
Georgia Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303-3151
Telephone: (404) 656-4496
FAX: (404) 651-6880
4.050 CONTRACTOR PERSONNEL
The Contractor warrants and represents that all persons including independent
Contractors and consultants (excluding all transportation providers) assigned by
it to the performance of this contract shall be employees of the Contractor and
shall be fully qualified to perform the work required herein. The Contractor
shall include a similar provision in any contract with a subcontractor selected
to perform work hereunder.
DMA shall have the absolute right to approve or disapprove any of the
Contractor's staff as defined in RFP subsection 3.310, et. seq., assigned to
this contract, to approve or disapprove any proposed changes in staff, or to
require the removal or reassignment of any Contractor employee or subcontractor
employee found unacceptable by DMA. The Contractor shall, upon request, provide
DMA with a
<PAGE>
resume of any member of its staff including independent Contractors and
consultants or subcontractor's staff assigned to or proposed to be assigned to
any aspect of the performance of this contract.
Personnel commitments made in the Contractor's proposal shall not be changed
except as hereinabove provided, or due to a resignation of any named individual.
Contractor staffing will include the named individuals at the levels of effort
proposed in the Contractor's technical proposal. Replacement of any personnel
will be with personnel of equal ability and qualifications as determined by DMA.
No diversion of staffing will be made by the Contractor without prior written
consent of DMA.
The Contractor shall provide staff to perform all tasks specified as the
Contractor's responsibilities in this RFP. The staff level must be maintained
at the bid level or as authorized in writing by DMA for the duration of the
contract.
Failure of the Contractor to provide staffing at the bid level or level amended
by contract amendment or to receive DMA written approval for staffing changes
may result in liquidated damages.
All administrative personnel will be committed to this contract by the
Contractor unless DMA exercises its option to have a staff person removed. DMA
will be provided unrestricted access to appropriate Contractor personnel for
discussion of problems or concerns.
4.060 FEDERAL EMPLOYMENT PRACTICES REQUIREMENTS
The Contractor will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin, age, marital
status, political affiliation, or handicap. The Contractor will take equal
opportunity approach to employ and treat employees during employment without
discrimination because of their race, color, religion, sex, national origin,
age, marital status, political affiliation, or handicap. Such action will
include, but will not be limited to, the following:
. Employment:
. Upgrade;
. Promotion;
. Demotion;
. Transfer;
. Recruitment;
. Advertisement for Recruitment;
. Layoff;
. Termination;
. Rates of pay or other compensation; and
. Selection for training (including apprenticeship).
The Contractor agrees to post in conspicuous places, available to employees and
applicants for employment, notices setting forth the provision of this
nondiscrimination clause.
4
<PAGE>
The Contractor will in all solicitations or advertisements for employees placed
by or on behalf of the Contractor, state that all qualified applicants will
receive consideration for employment without regard to race, color, religion,
sex, national origin, age, marital status, political affiliation, or handicap
except where it relates to a bona fide occupational qualification.
The Contractor shall comply with the nondiscrimination clause contained in
Federal Executive Order 11246, as amended by Federal Executive Order 11375,
relative to equal employment opportunity for all persons without regard to race,
color, religion, sex, or national origin, and the implementing rules and
regulations prescribed by the Secretary of Labor and with Title 41, Code of
Federal Regulations, Chapter 60. The Contractor and subcontractors shall comply
with related state laws and regulations regarding nondiscrimination.
The Contractor shall comply with regulations issued by the Secretary of Labor of
the United States in Title 48, Code of Federal Regulations, Subpart 22.14,
pursuant to the provisions of Executive Order 11758 and the Federal
Rehabilitation Act of 1973. The Contractor shall be responsible for ensuring
that all subcontractors comply with the above-mentioned regulations.
The Contractor and its subcontractors shall comply with the Civil Rights Act of
1964, and any amendments thereto, and the rules and regulations thereunder;
Section 504 of Title V of the Federal Rehabilitation Act of 1973 as amended, and
the rules and regulations thereunder; and the Americans with Disabilities Act of
1990 (the ADA), and the rules and regulations thereunder.
The Contractor will furnish all information and reports required by Executive
Order Number 11246 of September 24, 1976, as amended and will permit access to
its books, records, and accounts by the Secretary of Labor or the Commissioner
of DMA or their authorized representatives, for purposes of investigation to
ensure compliance with rules, regulations, orders, and laws.
4.070 RELATIONSHIP OF THE PARTIES
Neither the Contractor nor any of its agents, consultants, servants, employees,
subcontractors or transportation providers with which the Contractor has active
service agreements shall become or be deemed to become agent, servant or
employee of the state or DMA. The Contractor and all such agents, consultants,
servants, employees, subcontractors or transportation providers shall for all
purposes be deemed to be independent contractors, and this contract shall not be
construed so as to create a partnership or joint venture between the Contractor
and DMA or the state.
4.080 DISPUTES
Any disputes concerning a question of fact arising under the contract which is
not disposed of by agreement shall be decided by the Contract Administrator who
shall reduce his decision to writing and mail or otherwise furnish a copy
thereof to the Contractor. The decision of the Contract Administrator shall be
final and conclusive unless within ten (10) calendar days from the date of
receipt of such copy the Contractor mails or otherwise furnishes a written
appeal to the Commissioner of DMA. The decision of the Commissioner or a duly
authorized representative for the determination of such appeals
5
<PAGE>
shall be final and conclusive unless determined by a court of competent
jurisdiction to have been fraudulent, or capricious or arbitrary, or so grossly
erroneous as necessarily to imply bad faith. In connection with any appeal
proceeding under this clause, the Contractor shall be afforded an opportunity to
be heard and to offer evidence in support of his appeal. Pending a final
decision of a dispute hereunder, the Contractor shall proceed diligently with
the performance of the contract in accordance with the disputed decision.
4.090 AUDIT REQUIREMENTS
The state and federal standards for audits of DMA agents, contractors, and
programs conducted under contract are applicable to this section and are
incorporated by reference into this contract as though fully set out here.
4.091 Contractor Accounting Records Requirements
The Contractor agrees to maintain books, records, documents, and other evidence
pertaining to the costs and expenses of this contract (hereinafter collectively
called the "records") to the extent and in such detail as will properly reflect
all costs for which payment is made under the provisions of any contract of
which this contract is a part by reference or inclusion.
The Contractor's accounting procedures and practices shall conform to generally
accepted accounting principles and the costs properly applicable to the contract
shall be readily ascertainable therefrom.
4.092 Records Retention Requirements
The Contractor agrees to make available at its central business office at all
reasonable times during the period set forth below any of the records of the
contracted work for inspection or audit by any authorized representative of DMA,
the state auditor, the U.S. Department of Health and Human Services, the General
Accounting Office, the Georgia Public Service Commission (PSC), the Georgia
Office of the Attorney General, and for the Comptroller General of the United
States or their duly authorized representative.
The Contractor shall preserve and make available its records for a period of
three (3) years from the date of final payment under this contract, and for such
period, if any, as is required by applicable statute, by any other section of
this contract or associated contract.
If the contract is completely or partially terminated, the records relating to
the work terminated shall be presented and made available for a period of three
(3) years from the date of any resulting final settlement.
Records which relate to appeals, litigations, or the settlements of claims
arising out of the performance of this contract, or costs and expenses of any
such agreement as to which exception has been taken by the state auditor or any
of his duly authorized representatives, shall be retained by the Contractor
until such appeals, litigations, claims, or exceptions have been disposed of.
6
<PAGE>
A file and report retention schedule shall be developed by the Contractor and
approved by DMA. The schedule shall be maintained by the Contractor and all
changes will be approved by DMA.
4.093 Substitution of Micro Media Records
Except for documentary evidence, the Contractor may in fulfillment of its
obligation to retain its records as required by this article, substitute clear
and legible photographs, microphotographs or other authentic reproductions of
such records, after the expiration of two (2) years following the last day of
the month of payment to the Contractor of the invoice to which such records
relate, unless a shorter period is authorized by DMA with the concurrence of the
state auditor or his duly authorized representatives.
4.094 Inclusion of Audit Requirements in Subcontracts
The provision of subsection 4.090 et. seq. shall be incorporated in any
subcontract.
4.100 CONFIDENTIALITY OF INFORMATION
The Contractor shall treat all information which is obtained by it through its
performance under the contract as confidential information, and shall not use
any information so obtained in any manner except as necessary for the proper
discharge of its obligations and securement of its rights herein, or as
otherwise provided for herein. DMA, the Attorney General, federal officials as
authorized by federal law or regulations, or the authorized representatives of
these parties shall have access to all confidential information in accordance
with the requirements of state and federal laws and regulations. Any other
party will be granted access to confidential information only after complying
with the requirements of state and federal laws and regulations pertaining to
such access. DMA shall have absolute authority to determine if and when any
other party has properly obtained the right to have access to this confidential
information. Nothing herein shall prohibit the disclosure of information in
summary, statistical, or other form which does not identify particular
individuals.
4.110 INDEMNITY AND INSURANCE
4.111 General
The Contractor shall be responsible from the time of the signing of this
agreement or from the effective date, whichever shall be later, for all injury
or damage of any kind resulting from its occupancy or any construction work
undertaken by Contractor or on Contractor's behalf.
4.112 Indemnification Agreement
Contractor hereby releases and agrees to indemnify and hold harmless the State
Agency, the State of Georgia and its departments, agencies and instrumentalities
(including the State Tort Claims Trust Fund, the State Authority Liability Trust
Fund, The State Employee Broad Form Liability Funds, the State Insurance and
Hazard Reserve Fund, and other self-insured funds, all such funds hereinafter
collectively referred to as the "Indemnities") from and against any and all
claims, demands, liabilities, losses, costs or
7
<PAGE>
expenses, and attorneys' fees, caused by, growing out of, or arising from this
Contract, due to any act or omission on the part of the Contractor, its agents,
employees, customers, invitees, licensees or others working at the direction of
Contractor or on it's behalf, or due to any breach of this Contract by the
Contractor, or due to the application or violation of any pertinent Federal,
State or local law, rule or regulation. This indemnification extends to the
successors and assigns of the Contractor, and this indemnification survives the
termination of the Contract and the dissolution or, to the extent allowed by the
law, the bankruptcy of the Contractor. If and to the extent such damage or loss
(including costs and expenses) as covered by this indemnification is covered by
the funds established and maintained by the State of Georgia Department of
Administrative Services (DOAS), the Contractor agrees to reimburse the Funds for
such monies paid out by the Funds.
This indemnification applies whether: (a) the claims, demands, liabilities,
losses, costs or expenses involve third parties or employees or agents or
customers or invitees or licensees of the Contractor or of the Indemnitees; or
(b) the Indemnitees are partially responsible for the situation giving rise to
the claim. This indemnification applies, without limitation, to claims, demands,
liabilities, losses, costs or expenses arising in any manner from the use, non-
use or occupancy of the premises, resulting from the discharge of polluting or
hazardous substances upon the premises, navigable and public waters, or
adjoining or nearby lands and private waters, or resulting from the failure of
Contractor to report to the appropriate governmental agency the discharge or
discovery of any pollutants or hazardous substances required by any governmental
entity or regulation.
This indemnification does not apply to the extent of the sole negligence of the
Indemnitees.
This indemnification does not extend beyond the term of this Contract, including
any extensions or options, and does not extend to claims exclusively between the
undersigned parties arising from the terms or regarding the interpretation of
this Contract.
4.113 Insurance Certificates
The Contractor shall, prior to the commencement of work, procure the insurance
policies identified below, at the Contractor's own expense and shall furnish the
State Agency an insurance certificate listing the agency as the certificate
holder with any endorsements thereof. The insurance certificate must document
that the liability insurance coverage purchased by the Contractor includes
contractual liability coverage and separate aggregate limits per project. In
addition, the insurance certificate must provide the following:
(a) Name and address of authorized agent
(b) Name and address of insured
(c) Name of insurance company(ies)
(d) Description of policies
(e) Policy Number(s)
(f) Policy Period(s)
(g) Limits of Liability
(h) Name and address of State Agency as certificate holder
(i) Signature of authorized agent
8
<PAGE>
(j) Telephone number of authorized agent
(k) Details of non-filed special policy exclusions in comments section of
the Certificate of Insurance
(1) Sixty days notice of cancellation/non-renewal
(m) Policy notification requirements for claims (to whom, address and time
limits) in comments section of the certificate of insurance.
4.114 Policy Provisions
Each of the insurance policies required below shall be issued by a company
licensed to transact the business of insurance in the State of Georgia by the
Insurance Commissioner for the applicable line of insurance and, unless waived
or modified in writing by the State Agency, shall be an insurer with a Best
Policyholders Rating of "A" or better and with a financial size rating of Class
IX or larger. Each such policy shall also contain the following provisions, or
the substance thereof, made a part of the insurance policy.
(a) The insurance company agrees that this policy shall not be canceled,
changed, allowed to lapse, or allowed to expire until sixty (60) days
after the State agency and the Department of Administrative Services,
Risk Management Division, has received written notice thereof as
evidenced by return receipt of registered letter or until such time as
other valid and effective insurance coverage acceptable in every
respect to the State Agency and providing protection equal to
protection called for in the policy shown below shall have been
received, accepted, and acknowledged by the State Agency. It is also
agreed that the said notice shall be valid only as to such project as
shall have been designated by name in said notice.
(b) Notice of any claim against the State or any indemnitee shall be
deemed to have occurred only when the Department of Administrative
Services, Risk Management Division, has received written notice
thereof and has acknowledged actual knowledge of the claim.
(c) The policy shall not be subject to invalidations as to any insured or
indemnitee by reason of any act or omission of another insured or any
of its officers, employees, agents or other representatives
("Severability of Insureds").
(d) The policy shall include "Cross-Liability" coverage.
(e) The policy shall acknowledge and agree that the Attorney General of
Georgia shall represent and defend the Indemnities and any settlement
on behalf of the Indemnities must be expressly approved by the
Attorney General.
4.115 Insurance Coverages
The Contractor agrees to purchase and have the authorized agent state on the
insurance certificate that the following types of insurance coverages,
consistent with the policies and requirements of O.C.G.A.
9
<PAGE>
(S) 50-321-37, have been purchased by the Contractor. The minimum liability
limits (general liability, automobile liability and employers' liability)
required from Contractors entering into an agreement with the State or an agency
or instrumentality of the State, is $5,000,000 per occurrence. Liability limits
for the Workers' Compensation Employers Liability, Commercial General Liability,
and Commercial Automobile Liability insurance coverages may be satisfied by
purchasing one or more insurance policies (e.g., a Commercial General Liability
Insurance Policy plus a Commercial Umbrella Insurance Policy). Any deviations
from these minimum limits must be approved by the Department of Administrative
Services, Risk Management Division.
(a) Workers' Compensation Insurance. The Contractor agrees to insure the
-------------------------------
statutory limits as established by the General Assembly of the State
of Georgia. (A self-insurer must submit a certificate from the Georgia
Board of Workers' Compensation stating the Contractor qualifies to pay
its own workers' compensation claims.)
(1) The Contractor shall also maintain employers Liability Insurance
Coverage with limits of at least:
(i) Bodily Injury by Accident - $1,000,000 each accident; and
(ii) Bodily Injury by Disease - $1,000,000 each employee.
(2) The Contractor shall require all Contractors or subcontractors
occupying the premises or performing work under this Contract to
obtain an insurance certificate showing proof of Workers'
Compensation and Employers Liability Insurance Coverage.
(b) Commercial General Liability Insurance. The Contractor shall procure
--------------------------------------
and maintain Commercial General Liability Insurance (1993 ISO
Occurrence Form or equivalent) which shall include, but need not be
limited to, coverage for bodily injury and property damage arising
from premises and operations liability, personal injury liability and
contractual liability. The Commercial General Liability Insurance
shall provide at lest the following limits (per occurrence) for each
type of coverage with a $2,000,000 aggregate:
Coverage Limit
-------- -----
1. Premises and Operations $1,000,000
2. Personal Injury $1,000,000
3. Contractual $1,000,000
The above coverage limits can be satisfied by purchasing one or more
insurance policies (e.g., a Commercial General Liability Insurance
Policy plus a Commercial Umbrella Insurance Policy).
Additional Requirements for Commercial General Liability Insurance:
------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with
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respect to claims for which the Georgia Tort Claims Act, O.C.G.A.
(S) 50-21-20 et seq. is not the exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
(c) Commercial Automobile Liability Insurance. The Contractor shall
-----------------------------------------
procure and maintain Commercial Automobile Liability Insurance which
shall include courage for bodily injury and property damage arising
from the operation of any owned, non-owned or hired automobile. The
Commercial Automobile Liability Insurance Policy shall provide not
less than $1,000,000 Combined Single Limits for each occurrence.
Additional Requirements for Commercial Automobile Liability Insurance:
----------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide primary limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claim Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
Indemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
(d) Commercial Umbrella Liability Insurance. The Contractor may purchase
---------------------------------------
a Commercial Umbrella Liability Insurance Policy to provide excess
coverage above the Commercial General Liability Insurance Policy, the
Commercial Automobile Liability Insurance
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Policy, and the Workers' Compensation Employers' Liability Coverage to
satisfy the minimum liability limits set forth in this Article.
Additional Requirements for Commercial Umbrella Liability Insurance:
-------------------------------------------------------------------
(1) The policy or policies shall name or cover as additional insureds
the officers, agents and employees of the State Agency and the
State of Georgia, but only with respect to claims for which the
Georgia Tort Claims Act, O.C.G.A. (S) 50-21-20 et seq. is not the
exclusive remedy.
(2) The policy or policies must provide limits over any other
liability policy provided by the State for any claims not covered
by the Georgia Tort Claims Act. However, the policy(ies) must
indemnify the Funds for any claims covered by the Georgia Tort
Claim Act.
(3) The policy or policies must be on an "occurrence" basis unless
waived by the State of Georgia, Department of Administrative
Services, Risk Management Office.
(4) To the full extent permitted by the Constitution and the laws of
the State of Georgia and the terms of the Funds, the Contractor
and its insurers waive any right of subrogation against the
lndemnitees, the Funds and insurers participating thereunder, to
the full extent of this indemnification.
4.120 LIQUIDATED DAMAGES - FAILURE TO MEET RFP/CONTRACT REQUIREMENTS
In the event that the Contractor fails to meet the RFP and contract requirements
listed below, damage shall be sustained by DMA which will be difficult or
impossible to ascertain exactly. The Contractor, therefore, agrees to pay DMA
the sums set forth below as liquidated damages, and not as a penalty.
A. DELIVERABLES AND REPORT PRODUCTION
REQUIREMENT:
All deliverables and reports described in Section 3 of the RFP must be delivered
to DMA in final form by the dates approved by DMA.
These include, but are not limited to:
1. operations manual interim or annual updates;
2. disaster recovery plan interim and annual updates;
3. vehicle reports;
4. driver reports;
5. transportation services reporting;
6. detailed reports;
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7. summary reports;
8. accident reports;
9. moving violation reports;
10. complaints reports;
11. telephone system reports;
12. annual certified financial audit; and
13. quality assurance plan interim and annual updates.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for each day each
report or other deliverable is late or unacceptable.
B. RECORD KEEPING
Requirement:
The Contractor shall maintain and shall make available within three (3) working
days of request all records. These include, but are not limited to:
1. Printouts of computerized recipient worksheets
2. Transportation provider records
3. Vehicle records
4. Vehicle manifests
5. Safety inspection records
6. Driver records
7. Records of complaints
8. Office/Business records relating to this contract as needed.
LIQUIDATED DAMAGES:
One hundred dollars ($100) per working day or any part thereof for failure to
produce any record as required.
C. VEHICLE RELATED REQUIREMENTS
REQUIREMENT:
The Contractor must assure that transportation providers maintain all vehicles
utilized in this contract up to all vehicle manufacturer and state and federal
safety standards, regulations of the PSC, the Americans with Disability Act
(ADA), and RFP requirements. Any vehicle found non-compliant with safety
standards, PSC or ADA regulations, or RFP requirements must be removed from
service immediately upon discovery.
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LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day or any partial day that non-
compliant vehicle is in service from the date of discovery.
D. DRIVER RELATED REQUIREMENTS
1. REQUIREMENT:
Any driver who is found not to be in compliance with Section 3.250 of the RFP
must be immediately removed from driving under this contract.
1. LIQUIDATED DAMAGES:
Five hundred dollars.($500) per calendar day or any part thereof in which a
driver who is non-compliant with Section 3.250 of the RFP is allowed to drive
under this contract.
2. REQUIREMENT:
Any driver who receives three (3) substantiated complaints in a 90-day period
must be removed from driving under this contract or enter a retraining program.
If a driver receives six (6) substantiated complaints within a twelve (12) month
time period, he/she must be removed from driving under this contract.
2. LIQUIDATED DAMAGES:
One hundred dollars ($100) a calendar day or any part thereof in which such a
driver is allowed to drive under this contract before retraining or before
dismissal.
E. REQUIREMENTS RELATED TO PROVISION OF TRANSPORTATION SERVICES
1. REQUIREMENT:
The Contractor shall be responsible for arranging for back-up vehicles and/or
personnel when notified by a recipient, a provider or DMA that a vehicle is
excessively late, is otherwise unavailable for services or when specifically
requested by DMA. The vehicle is "excessively late" if it is thirty (30)
minutes late in meeting its assigned schedule.
1. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where back-up service is not available
within the required period of time.
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2. REQUIREMENT:
The Contractor is required to assure that the proper type vehicle is utilized
for the status of the Medicaid recipient being transported.
2. LIQUIDATED DAMAGES:
Two hundred dollars ($200) per occurrence where a vehicle is utilized that is
not adequate to meet the health care status of the Medicaid recipient being
transported.
3. REQUIREMENT:
Contractors are required to assure that recipients are picked up within fifteen
(15) minutes of the scheduled pick-up time.
3. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
scheduled pick-ups are late. An additional one thousand dollars ($1000) will be
assessed for each percent that exceeds ten percent (10%).
4. REQUIREMENT:
Contractors are required to assure that recipients are delivered to scheduled
health care appointments on time.
4. LIQUIDATED DAMAGES:
One thousand dollars ($1000) for any month in which ten per cent (10%) of
arrivals for scheduled health care appointments are late. An additional one
thousand ($1000) will be assessed for each per cent that exceeds ten per cent
(10%).
F. BUSINESS REQUIREMENTS
1. REQUIREMENT:
The Contractor shall have sufficient toll free telephone lines, phones, staff,
and support equipment to meet these performance requirements. The phone system
installed must have an automated reporting system that identifies the number of
calls on hold and length of time, and number of calls per line.
Telephone operating hours are 6:00 a.m. to 8:00 p.m. Eastern Time, Monday
through Friday and Saturday from 8:00 a.m. to 1:00 p.m. Eastern Time unless
otherwise approved by DMA.
Incoming telephone calls shall not be placed on "hold" for more than an average
of two minutes.
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1. LIQUIDATED DAMAGES:
One hundred dollars ($100) per hour or any part thereof that telephone operating
hours/days do not meet the requirement.
Ten dollars ($10) for each minute or any part thereof that a call placed on
"hold" exceeds the requirement.
2. REQUIREMENT:
Incoming telephone calls shall not exceed a ten percent (10%) "busy" signal
rate. The Contractor must add sufficient telephone lines to bring the service
within contract standards within a time frame agreed upon by the DMA.
2. LIQUIDATED DAMAGES
Five hundred dollars ($500) per working day or any part thereof that corrective
action is late.
3. REQUIREMENT:
Contractor personnel used for scheduling must maintain a courteous and polite
attitude. Any service personnel who receives three (3) substantiated complaints
in a 90-day period must be removed from a position of direct public contact or
retained. If a service staff receives six (6) substantiated complaints within a
twelve (12) month period, he/she must be removed from a position of direct
public contact.
3. LIQUIDATED DAMAGES
One hundred dollars ($100) per business day or any part thereof that any service
staff personnel is allowed to remain in a direct public contact position after
the requirement is exceeded.
4. REQUIREMENT:
The Contractor must back up all computer files and store in a DMA approved off-
site storage area for safety.
4. LIQUIDATED DAMAGES:
Fifty dollars ($50) per working day for each file that is found not to have been
backed up correctly.
5. REQUIREMENT:
The Contractor must provide on-line access to DMA during normal working hours.
On-line access includes the ability to view all system information and print
reports. DMA shall have free access (read-
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only) to the Contractor's systems to include, but not limited to, recipient
reservation worksheets, transportation provider records, and historical records.
5. LIQUIDATED DAMAGES:
Two hundred fifty dollars ($250) per working day in which DMA access to the
Contractor's system is unavailable for sixty (60) or more minutes.
G. RECIPIENT NOTICES
1. REQUIREMENT:
Whenever NET service to a Medicaid recipient is denied or terminated, a notice
in writing must be issued to the recipient and DMA within three (3) working days
of the determination (see Section 3.281).
1. LIQUIDATED DAMAGES:
Five hundred dollars ($500) per calendar day that such a denial notice is late
in being sent or for failure to send notification.
2. REQUIREMENT:
Newly eligibles of a region are to receive a notice regarding availability of
services and instructions for accessing transportation from the region Broker
within ten (10) working days of the Broker's receipt of eligibility
notification.
2. LIQUIDATED DAMAGES:
Damages in the amount of one hundred ($100) shall be assessed for each calendar
day or any part thereof after the tenth working day that the newly eligible
notification of available services is late being sent.
3. REQUIREMENT:
Other notices are to be sent to recipients of a region by the region Broker as
agreed to by the Contractor and DMA staff.
3. LIQUIDATED DAMAGES:
Damages for failure to send other notices as required by DMA will be agreed upon
in amount and duration at the time of the need for additional notices is agreed
upon by DMA.
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H. OTHER CONTRACT PROVISIONS
REQUIREMENT:
DMA may identify any other condition resulting from Contractor non-compliance
with the RFP and contract through routine monitoring activities. DMA will
notify the Contractor in writing of the non-compliance and designate a
reasonable time for correction of the non-compliance.
LIQUIDATED DAMAGES:
Damages in the amount of two hundred dollars ($200) shall be assessed for each
working day or any part thereof after the designated time for correction until
the correction of the non-compliance.
4.130 LIMITATION OF LIABILITY
The total obligation of DMA for any term of this contract shall not exceed the
fund sources committed to this contract by DMA as of its effective date,
together with any additional fund sources subsequently determined to be
available and committed to it by DMA.
4.140 PERFORMANCE BOND
The Contractor in each NET region shall obtain and maintain for each contract
period a performance bond issued by a surety company that is listed in the
Federal Registry of Surety Companies in the amount of $250,000. In addition,
the Contractor in each NET region shall obtain and maintain for each contract
period a payment bond issued by a surety company that is listed in the Federal
Registry of Surety Companies in the amount of $750,000
Federal Registry of Surety Companies
Circular #570
Department of Treasury
Surety Section
401 14th Street, S.W.
Washington, D.C. 20227
Telephone: (202) 874-6850
(This Registry is updated every July 1st.)
Using the Performance Bond and Payment Bond forms in Appendix L, the Contractor
shall submit an executed performance bond and an executed payment bond to DMA
within fifteen (15) days of announcement of award and before the execution of
the contract and again at the time of each renewal. The performance bond shall
be used to cover all costs of the State up to a maximum of the full value of the
bond in the event that the Contractor is unable to properly, promptly and
efficiently perform the contract and/or the contract is terminated by default or
bankruptcy. The payment bond shall be used to cover delinquent payments to the
transportation service providers and other vendors under contract with the
Broker up to a maximum of the full value of the bond in the event that the
Contractor is unable to
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properly, promptly and efficiently perform the contract and/or the contract is
terminated by default or bankruptcy.
4.150 ACCEPTANCE
The Contractor shall comply with all of the requirements of Section 3 of the
RFP, and DMA shall have no obligation to accept any deliverable tendered to it
until such time as all of said requirements have been met as to each such
deliverable.
4.160 WARRANTY AGAINST BROKERS' FEES
The Contractor warrants that it has not employed any company or person, other
than a bona fide employee working solely for the Contractor or company regularly
employed as its marketing agent, to solicit or secure this contract and that it
has not paid or agreed to pay any company or person, other than a bona fide
employee working solely for the Contractor or a company regularly employed by
the Contractor as its marketing agent, any fee, commission, percentage,
brokerage fee, gift, or other consideration contingent upon or resulting from
the award of this contract. In the event of a breach of this warranty by the
Contractor, DMA shall have the right to terminate this contract without any
liability whatsoever, or, in its discretion, to deduct from the contract price
or consideration or otherwise recover the full amount of such fee, commission,
percentage, brokerage fee, gift or contingent fee.
4.170 TERMINATION OF THE CONTRACT
This contract may terminate or may be terminated by DMA for any or all of the
following reasons:
.For any default by the Contractor;
.For the convenience of DMA;
.In the event of the insolvency of or declaration of bankruptcy by the
Contractor; and
.In the event sufficient appropriated, otherwise obligated funds no
longer exist for the payment of DMA's obligation hereunder.
Each of these is described in the following subsections.
4.171 Termination for Default
The failure of the Contractor to perform or comply with any term, condition, or
provision of this contract shall constitute a default by the Contractor. In the
event of default, DMA shall notify the Contractor by certified or registered
mail, return receipt requested, of the specific act or omission of the
Contractor which constitutes default. The Contractor shall have fifteen (15)
calendar days from the date of receipt of such notification to cure such
default. In the event of default, and during the above-specified grace period,
performance under the contract shall continue as though the default had never
occurred. In the event the default is not cured in fifteen (15) calendar days,
DMA may, at its sole option, terminate the contract for default. Such
termination shall be accomplished by written notice of termination forwarded to
the Contractor by certified or registered mail, return receipt requested, and
shall be effective at the
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close of business on the date specified in the notice. If it is determined,
after notice of termination for default, that the Contractor's failure was due
to causes beyond the control of and without error or negligence of the
Contractor, the termination shall be deemed a termination for convenience under
subsection 4.182.
4.172 Termination for Convenience
DMA may terminate performance of work under the contract in whole or in part
whenever, for any reason, DMA shall determine that such termination is in the
best interest of the state. In the event that DMA elects to terminate the
contract pursuant to this provision, it shall so notify the Contractor by
certified or registered mail, return receipt requested. The termination shall
be effective as of the date specified in the notice.
4.173 Termination for Bankruptcy or Insolvency
In the event that the Contractor shall cease conducting business in the normal
course, become insolvent, make a general assignment for the benefit of
creditors, suffer or permit the appointment of a receiver for its business or
its assets or shall avail itself of, or become subject to, any proceedings under
the Federal Bankruptcy Act or any other statute of any state relating to
insolvency or the protection of the rights of creditors, DMA may, at its option,
terminate this contract. In the event DMA elects to terminate the contract
under this provision, it shall do so by sending notice of termination to the
Contractor by certified or registered mail, return receipt requested. The date
of termination shall be deemed to be the date such notice is mailed to the
Contractor, unless otherwise specified.
4.174 Termination for Unavailability of Funds
Notwithstanding any other provision of this contract, the parties hereto agree
that the charges hereunder are payable by DMA from appropriations received by
DMA from the General Assembly of the state and matched by current percentages of
federal financial participation (FFP). In the event such appropriations are
determined at the sole discretion of the Commissioner of DMA no longer to exist
or to be insufficient with respect to the charges payable hereunder, this
contract shall terminate without further obligation of DMA as of that moment.
In such event, the Commissioner of DMA shall certify to the Contractor the
occurrence thereof, and such certification shall be conclusive.
4.175 Termination Procedures
The Contractor shall:
. Stop work under the contract on the date and to the extent specified in
the notice of termination;
. Place no further orders or subcontract for materials, services, or
facilities, except as may be necessary for completion of such portion of
the work under the contract as is not terminated;
. Terminate all orders and subcontracts to the extent that they relate to
the performance of work terminated by the notice of termination;
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. Assign to DMA in the manner and to the extent directed by the Contract
Administrator all of the right, title, and interest of the Contractor
under the orders or subcontracts so terminated, in which case DMA shall
have the right, in its discretion, to settle or pay any or all claims
arising out of the termination of such orders and subcontracts;
. With the approval of the Contract Administrator, settle all outstanding
liabilities and all claims arising out of such termination or orders and
subcontracts, the cost of which would be reimbursable in whole or in
part, in accordance with the provisions of the contract;
. Complete the performance of such part of the work as shall not have been
terminated by the notice of termination;
. Take such action as may be necessary, or as the Contract Administrator
may direct, for the protection and preservation of any and all property
or information related to the contract which is in the possession of the
Contractor and in which DMA has or may acquire an interest;
4.176 Termination Claims
After receipt of a notice of termination, the Contractor shall submit to the
Contract Administrator any termination claim in the form and with the
certification prescribed by the Contract Administrator. Such claim shall be
submitted promptly but in no event later than six (6) months from the effective
date of termination. Upon failure of the Contractor to submit its termination
claim within the time allowed, the Contract Administrator may, subject to any
review required by the state procedures in effect as of the date of execution of
the contract, determine, on the basis of information available, the amount, if
any, due to the Contractor by reason of the termination and shall thereupon
cause to be paid to the Contractor the amount so determined.
Upon receipt of notice of termination, the Contractor shall have no entitlement
to receive any amount for lost revenues or anticipated profits or for
expenditures associated with this or in any other contract. The Contractor
shall be paid only by the following upon termination:
. At the contract price(s) for completed deliverables and services
delivered to and accepted by DMA; and/or
. At a price mutually agreed by the Contractor and DMA for partially
completed deliverables.
In the event of the failure of the Contractor and DMA to agree in whole or in
part as to the amounts with respect to costs to be paid to the Contractor in
connection with the total or partial termination of work pursuant to this
article, DMA shall determine on the basis of information available the amount,
if any, due to the Contractor by reason of termination and shall pay to the
Contractor the amount so determined.
The Contractor shall have the right of appeal, as stated under subsection 4.080,
from any such determination made by DMA.
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4.180 CHANGE OF OWNERSHIP OR LEGAL STATUS
Any Contractor that undergoes a change (including, but not limited to,
dissolution, incorporation, re-incorporation, reorganization, change of
ownership of assets, merger or joint venture) so that as a result, the
Contractor either becomes a different legal entity or is replaced in the program
by another contractor, must give DMA at least thirty (30) days prior written
notice. The successor Contractor simultaneously must submit the information
requested in sections 6.100 through 6.530 in this NET RFP for DMA's evaluation.
Failure of the successor to submit this information or failure to obtain a
successful evaluation from DMA will prevent DMA from reimbursing any further
services as of the date of the change.
4.190 LIABILITY FOR OVERPAYMENT, ENTITLEMENT TO UNDERPAYMENT
Any person or entity that replaces a Contractor in the Georgia Medicaid program
shall be deemed to have accepted joint and several liability, along with its
predecessor, for any overpayment sought to be recovered by DMA after the
effective date of the successor Contractor take over, regardless of the
successor's contract status or lack of affiliation with its predecessor at the
time the overpayment was made. An entity shall be deemed to have replaced a
Contractor if it (1) effectively became a different legal entity through
incorporation, re-incorporation, merger, joint venture, dissolution, creation of
a partnership, or reorganization; (2) took over more than fifty percent (50%) of
the predecessor's assets or Medicaid activities; or (3) has substituted for the
predecessor in the program, as evidenced by all attendant circumstances.
Reimbursement for services rendered prior to the effective date of take over by
a successor Contractor (including any adjustments for underpayment made by DMA)
shall be made to the Contractor of record at the time the payment is made or to
that Contractor's payee as properly designated on the appropriate form(s)
required by DMA. Any disputes or conflicts, legal or otherwise, arising between
the current Contractor and the predecessor Contractor concerning either
apportionment of liability for any overpayment previously made by DMA or the
right to additional reimbursement for any underpayment previously made by DMA
shall be the sole responsibility of such parties and shall not include DMA.
4.200 CONFORMANCE WITH FEDERAL LAWS AND REGULATIONS
The Contractor shall agree to conform with such Federal Laws as affect the
delivery of services under this contract including but not limited to Titles VI,
VII, and XIX of the Social Security Act, the Federal Rehabilitation Act of 1973,
and the Americans with Disability Act of 1993 (28 CFR 35.100 et seq.). The
Contractor shall agree to conform to such requirements or regulations as the
United States Department of Health and Human Services may issue from time to
time. Authority to implement federal requirements or regulations will be given
to the Contractor by DMA by a contract amendment.
4.210 FORCE MAJEURE
Neither party to this contract shall be responsible for delays or failures in
performance resulting from acts beyond the control of such party. Such acts
shall include but not be limited to acts of God, strikes, riots, lock-outs, acts
of war, epidemics, fire, earthquakes, or other disasters.
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4.220 CONFLICT OF INTEREST
The Contractor covenants that it presently has no interest and shall not acquire
any interest, direct or indirect, which would conflict in any manner or degree
with its performance hereunder. The Contractor further covenants that in the
performance of the contract no person having any such interest is presently
employed or shall be employed in the future by the Contractor.
The Contractor and all subcontractors are prohibited from owning or having any
financial interest in organizations that deliver NET transportation services to
Georgia Medicaid recipients. The Contractor and all subcontractors must
maintain an arm's length relationship with any transportation delivery entities.
All of the parties hereto hereby certify that the provisions of Chapter 45-10-20
through 45-10-28 of the Official Code of Georgia Annotated have not been
violated and will not be violated in any respect.
4.230 PROVISION OF GRATUITIES
Neither the Contractor nor any person, firm or corporation employed by the
Contractor in the performance of this contract shall offer or give, directly or
indirectly, to any employee or agent of the state, any gift, money or anything
of value, or any promise, obligation or contract for future reward or
compensation at any time during the term of this contract.
4.240 NON-COMPETITION FOR EMPLOYEES
During the term of this contract and for a period of one (1) year from the date
of termination or expiration of this contract, unless otherwise agreed to in
writing, neither DMA nor the Contractor shall solicit for employment as a
consultant or independent contractor any sales, marketing or management employee
hereinafter and during the term of this contract employed by the other, or the
Contractor's parent corporation, or any corporation controlled by, controlling,
or under common control with the Contractor who is working on this project
during the prior twelve (12) months; provided, however, the term "solicit for
employment" shall not be deemed to include advertising in newspapers or trade
publications addressed to the general public and either party may employ any
person now or hereafter employed by the other (including the Contractor's
parent, or any corporate affiliate) who, without other solicitation, responds to
such an advertisement or applies for employment without solicitation.
4.250 STATE OWNERSHIP AND USE
The Broker shall provide to DMA all data files and documentation specifically
developed by the Broker for use with the Georgia NET Program, to include but
limited to:
. All data files in the most current version;
. Operational Procedures Manuals and other documentation;
. System and program documentation in a form usable and acceptable to DMA,
describing the most current version of the system;
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. A complete description of the hardware, software, and communication
environment used by the Broker in support of the NET Program;
. Training programs for DMA staff, its agents or designated
representatives in the operation and maintenance of the Broker's system;
and
. Any and all performance enhancing operational plans.
This obligation is not subject to any limitation in any respect, whether by
claim for the cost of any part of the system as proprietary or by failure to
claim for cost of any part of the system.
4.260 STATE PROPERTY
The Contractor shall be responsible for the proper custody and care of any
state-owned property furnished for use in connection with the performance of the
contract; and the Contractor will reimburse DMA for any loss or damage thereto;
normal wear and tear expected.
4.270 NOTICES
All notices under this contract shall be deemed duly given upon delivery, if
delivered by hand (against receipt); or three (3) calendar days after posting,
if sent by registered or certified mail, return receipt requested, to a party
hereto at the addresses set forth below or to such other address as a party may
designate by notice pursuant hereto.
DMA Contract Administrator
Carleton Guptill
Contract Administration
Department of Medical Assistance
40th Floor
2 Peachtree Street, N.W.
Atlanta, Georgia 30303
DOAS Contract Issuing Officer
David Candler, Technical Procurement Manager
State Purchasing Office
Department of Administrative Services
1308 West Floyd Veterans Memorial Building
200 Piedmont Avenue, S.E.
Suite 1320, West Tower
Atlanta, Georgia 30334-9010
Vendor Representative and Address:
Automated Dispatch Solutions, Inc.
ATTN: John Shermyen
8175 NW 12th Street, Ste. 430
Miami, FL 33216
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4.280 SURVIVAL
The terms, provisions, representatives and warranties contained in this contract
shall survive the development and submission of all required deliverables and
the payment of the purchase price thereof.
4.290 ATTORNEY'S FEES
In the event that the state should prevail in any legal action arising out of
the performance or non-performance of this contract, the Contractor shall pay,
in addition to any damages, all expenses of such action including reasonable
attorneys' fees and costs regardless that DMA is represented by the Attorney
General. The term legal action shall be deemed to include administrative
proceedings of all kinds, as well as all actions at law or equity.
4.300 WAIVER
The waiver by DMA of any breech of any provision contained in this contract
shall not be deemed to be a waiver of such provision on any subsequent breech of
the same or any other provision contained in this contract and shall not
establish a course of performance between the parties contradictory to the terms
hereof.
4.310 AUTHORITY
Each party has full power and authority to enter into and perform this contract,
and the person signing this contract on behalf of each party certifies that such
person has been properly authorized and empowered to enter into this contract.
Each party further acknowledges that it has read this contract, understands it,
and agrees to be bound by it.
4.320 SEVERABILITY
If any provision of the contract (including items incorporated by reference) is
declared or found to be illegal, unenforceable, or void, then both DMA and the
Contractor shall be relieved of all obligations arising under such provision; if
the remainder of the contract is capable of performance, it shall not, at the
sole option of DMA, be affected by such declaration or finding and shall be
fully performed.
4.330 ASSIGNABILITY
The Contractor shall not assign this contract to any third party without prior
written approval by DMA.
4.340 AMENDMENTS IN WRITING
No amendment to this contract shall be effective unless it is in writing and
signed by duly authorized representatives of the Contractor, DMA and DOAS.
25
<PAGE>
4.350 ENTIRE AGREEMENT
This contract constitutes the entire agreement between the parties with respect
to the subject matter. No written or oral agreements, representatives,
statements, negotiations, understandings, or discussions which are not set out,
referenced, or specifically incorporated in this contract shall in no way be
binding or of affect between the parties.
26
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this contract this 17th day of
July, 1997.
DEPARTMENT OF MEDICAL ASSISTANCE
BY:
Marjorie P. Smith
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: David M. Candler
----------------
Signature/Date
Purchasing Agent
----------------
Title
CONTRACTOR
Automated Dispatch Solutions, Inc.
----------------------------------
Contractor Name
BY: 4/25/97
-------
Signature Date
C.E.O.
------
Title
4/25/97 Signed before me this 25 day of April, 1997
at to Automated Dispatch Solutions, Inc., John Shermyen
known to me
Notary Public
27
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy
which eliminates the Contractor's obligation to transport nursing home
recipients to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization
and to report the results of such review to Contractor no later than
June 30, 1998.
III. The Department agrees not to print the Contractor's name or phone number
on any Medicaid cards issued on or after May 1, 1998.
IV.To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read
---
as follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by
the Department from future payments owed to the Contractor during
the same fiscal year.
C. Add new bullet to subsection 3.120, Page 9, regarding
---
Transportation to read as follows:
<PAGE>
. utilizing commercial taxi services to supplement ambulatory services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for recipients
that includes at least the following: initial mailing and any other
mutually agreed upon notices to recipients within their region, as defined
below. All notices shall be reviewed and approved by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read as
---
follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based upon
criteria established by the Contractor and approved by the Department (such
approval shall not be unreasonably withheld and shall be granted or denied
within ten work days of submission of the criteria to the Department),
appear to be receiving or requesting NET services which are not within the
scope of the services required under the Contract, it will be the
obligation of the recipient or facilities to prove that the requested
services are allowable. Until such proof is provided and verified, under
penalty of Medicaid fraud, the Department agrees that Contractor may deny
service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours of
------
Operation.
. The Broker shall provide scheduling services with sufficient capacity
Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern Time with no
routine scheduling hours on Saturdays. Time of the actual transport
is predicated on the need of the recipient. Scheduling and business
functions may be closed for New Year's Day, Memorial Day, July 4th,
Labor Day, Thanksgiving Day, and Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care and
replacing disabled vehicles after hours.
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region. Scheduling
staff must be at the office between the hours of 8:00 a.m. and 6:00
p.m., Eastern time, Monday through Friday.
<PAGE>
I. Modify subsection 3.260 to allow the Contractor to establish and implement
------
its own Driver, Attendant, and Service Personnel Training standards, in
lieu of the standards specified in the RFP, subject to receipt of written
advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to read
---
as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set forth
in this Contract shall govern unless otherwise specified in the Contract.
In the event of a conflict between the language of the RFP, as amended, and
the Contractor's proposal, the language in the RFP shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties (other
than elected or appointed officials or state government employees or
representatives) verbally informing the Department of Non-Emergency
Transportation service issues in the Contractor's region (hereinafter
"Complainants") shall be informed by the Department that such service
issues will not be handled by the Department directly and must be addressed
by such Complainants directly to Contractor and the Department and
Contractor agree that such complaints shall be handled in the manner
described in the RFP. The Department shall not become directly involved
with the processing of service issues identified verbally by Complainants
except in accordance with the procedures regarding appeals described in the
RFP. Additionally, the Department agrees to inform any and all
transportation providers who complain to the Department in written or
verbal form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor. The
Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department from
exercising its rights under the RFP and to the extent that the provisions
of this paragraph specifically conflict with the RFP, the RFP shall be
controlling.
<PAGE>
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1, Paragraph 2,
------
Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern Time,
Monday through Friday with no routine scheduling hours on Saturdays
unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and Use
---
to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in 3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6, Scheduling
------- ------------ ----------
Day/Hours, to read as follows:
---------
Business Day -- The business office must be open between the hours of
------------
8:00 a.m. and 5:00 p.m., Eastern time, Monday through Friday.
Scheduling staff must be at the office between the hours of 8:00 a.m.
and 6:00 p.m.., Eastern time, Monday through Friday with no routine
scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is expected,
--------------------
under the terms of this contract, to have personnel available for
scheduling NET services. Designated hours during which scheduling of
appointments can be done is a mandated function of the Broker. The
hours of 8:00 a.m. to 6:00 p.m., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
<PAGE>
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their
authorized officers and agents have caused this Amendment to be executed on
their behalf, all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
LogistiCare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
$3.00 $7.02 5
C. 2/ND/ CONTRACT SERVICE PERIOD
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
CENTRAL NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.90 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $9.35 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $6.93 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $6.93 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
PRICE PROPOSAL
SOUTHWEST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $7.02 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $5.23 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $5.23 12
(7/1/99 - 6/30/00
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-03-00309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
IN WITNESS WHEREOF, DMA, the Contractor, and DOAS through their authorized
officers and agents have caused this Amendment to be executed on their behalf,
all on the date, month and year written below.
DEPARTMENT OF MEDICAL ASSISTANCE
BY: /s/ William R. Taylor 3-2-98
--------------------- ------
William R. Taylor, M.D., M.P.H. Date
Commissioner
DEPARTMENT OF ADMINISTRATIVE SERVICES
BY: /s/ 3/5/98
--- ------
Signature Date
Tech Procurement Mgr.
---------------------
Title
CONTRACTOR
Logisticare
-----------
Contractor Name
BY: /s/ 3-3-98
--- ------
Signature Date
President/CEO
-------------
Title
7
<PAGE>
AMENDMENT NO. 1
TO THE
CONTRACT BETWEEN
THE DEPARTMENT OF ADMINISTRATIVE SERVICES
ON BEHALF OF
THE DEPARTMENT OF MEDICAL ASSISTANCE
AND
LOGISTICARE
RFP NO. 419-03-00309
<PAGE>
AMENDMENT #1 TO THE CONTRACT BETWEEN THE DEPARTMENT OF
ADMINISTRATIVE SERVICES (DOAS) ON BEHALF OF THE DEPARTMENT
OF MEDICAL ASSISTANCE AND NON-EMERGENCY BROKER
WHEREAS, The Department of Medical Assistance (hereinafter called the
"Department") and LogistiCare, formerly known as Automated Dispatch Solutions,
Inc. (ADS), (hereinafter called the "Contractor") executed a Contract for the
development and administration of a broker system for the provision of a non-
emergency transportation system in the Central, Southwest and East NET Regions
on behalf of the Georgia Department of Medical Assistance, including in its
terms RFP No. 419-030-0309, (hereinafter called the "Contract");
WHEREAS, DMA and the Contractor desire to amend the above-referenced
Contract pursuant to 4.020 by modifying the reimbursement methodology and
certain other provisions of the Contract as set forth below.
NOW THEREFORE, for and in consideration of the mutual promises of the
parties, the terms provisions and conditions of this agreement (hereinafter
called the "Amendment") and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Department and the Contractor,
with the express consent of DOAS, hereby agree:
I. Effective April 1, 1998, the Department agrees to implement a policy which
eliminates the Contractor's obligation to transport nursing home recipients
to mental health services with specified exemptions.
II. The Department agrees to review the appropriateness of treatment in the
delivery of outpatient mental health services affecting NET utilization and
to report the results of such review to Contractor no later than June 30,
1998.
III. The Department agrees not to print the Contractor's name or phone number on
any Medicaid cards issued on or after May 1, 1998.
IV. To modify the RFP/Contract as specified:
A. Add Number 5 to subsection 3.011, Modes of Transportation to read as
---
follows:
5. COMMERCIAL TAXI SERVICES: The Contractor is allowed to use
commercial taxi services to supplement its ambulatory services.
B. Add new paragraph to subsection 3.020, Reimbursement, to read as
---
follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
2
<PAGE>
C. Add new bullet to subsection 3.120, Page 9, regarding Transportation
---
to read as follows:
. utilizing commercial taxi services to supplement ambulatory
services.
D. Modify subsection 3.130, Page 9, regarding RECIPIENT EDUCATION AND
------
APPLICATION FOR SERVICES, Paragraph 2, to read as follows:
The Broker is responsible for developing an educational plan for
recipients that includes at least the following: initial mailing and
any other mutually agreed upon notices to recipients within their
region, as defined below. All notices shall be reviewed and approved
by DMA prior to mailing.
E. Delete the paragraph entitled MONTHLY NOTICE, in subsection 3.130.
------
F. Add new paragraph to subsection 3.132, Validity of Information to read
---
as follows:
The Department agrees that if and when Contractor identifies specific
recipients or facilities acting on behalf of recipients which, based
upon criteria established by the Contractor and approved by the
Department (such approval shall not be unreasonably withheld and shall
be granted or denied within ten work days of submission of the
criteria to the Department), appear to be receiving or requesting NET
services which are not within the scope of the services required under
the Contract, it will be the obligation of the recipient or facilities
to prove that the requested services are allowable. Until such proof
is provided and verified, under penalty of Medicaid fraud, the
Department agrees that Contractor may deny service.
G. Modify subsection 3.210, Page 14, Paragraphs 2 and 3 regarding Hours
------
of Operation.
. The Broker shall provide scheduling services with sufficient
capacity Monday through Friday, 8:00 a.m. to 6:00 p.m., Eastern
Time with no routine scheduling hours on Saturdays. Time of the
actual transport is predicated on the need of the recipient.
Scheduling and business functions may be closed for New Year's
Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and
Christmas Day.
. The Broker must have a telephone system and appropriate personnel
available to allow for "paging" after-hours, including Saturdays,
Sundays and stated holidays. The Broker will be responsible for
arranging transportation services for appointments, urgent care
and replacing disabled vehicles after hours.
3
<PAGE>
H. Modify subsection 3.320, Page 29, Paragraph 3 to read as follows:
------
. The Project manager of the contract and scheduling staff must be
located at the central business office in each NET region.
Scheduling staff must be at the office between the hours of 8:00
a.m. and 6:00 p.m., Eastern time, Monday through Friday.
I. Modify subsection 3.260 to allow the Contractor to establish and
------
implement its own Driver, Attendant, and Service Personnel Training
standards, in lieu of the standards specified in the RFP, subject to
receipt of written advance approval from the Department.
J. Delete subsection 6.420, COST DETAILS FOR PRICING PROPOSAL.
------
K. Add new paragraph to subsection 6.433, Monthly Operational Payment, to
---
read as follows:
Any advance payments made to the Contractor shall be deducted by the
Department from future payments owed to the Contractor during the same
fiscal year.
L. Delete Appendix D-5, Price Proposal and substitute Attachment A,
------
incorporated by reference into this Amendment, to reflect payment
modifications.
M. Modify subsection 4.000, Paragraph 2, to read as follows:
------
In the event of a conflict in language between the various documents
incorporated into this Contract, the provisions and requirements set
forth in this Contract shall govern unless otherwise specified in the
Contract. In the event of a conflict between the language of the RFP,
as amended, and the Contractor's proposal, the language in the RFP
shall govern.
N. Add new section, 4.116, Complaints, to read as follows:
---
The Department agrees that effective immediately any and all parties
(other than elected or appointed officials or state government
employees or representatives) verbally informing the Department of
Non-Emergency Transportation service issues in the Contractor's region
(hereinafter "Complainants") shall be informed by the Department that
such service issues will not be handled by the Department directly and
must be addressed by such Complainants directly to Contractor and the
Department and Contractor agree that such complaints shall be handled
in the manner described in the RFP. The Department shall not become
directly involved with the processing of service issues identified
verbally by Complainants except in accordance with the procedures
regarding appeals described in the RFP. Additionally, the Department
agrees to inform any and all transportation providers who complain to
the Department in written or verbal
4
<PAGE>
form that such issues will not be handled by the Department and must
be addressed by such transportation providers directly to Contractor.
The Department agrees that the manner in which Contractor manages its
relationship with any and all transportation providers is within the
Contractor's discretion. Nothing herein shall prevent the Department
from exercising its rights under the RFP and to the extent that the
provisions of this paragraph specifically conflict with the RFP, the
RFP shall be controlling.
O. Modify subsection 4.120 (F.) BUSINESS REQUIREMENTS, Number 1,
------
Paragraph 2, Page 15 to read as follows:
. Telephone operating hours are 8:00 a.m. to 6:00 p.m. Eastern
Time, Monday through Friday with no routine scheduling hours on
Saturdays unless otherwise approved by DMA.
P. Delete subsection 4.120 (G.) RECIPIENT NOTICES, Item 2, Page 17.
------
Q. Add new bullet in the Contract, subsection 4.250, State Ownership and
---
Use to read as follows:
. Any Driver, Attendant, and Service Personnel training standards
established and implemented in lieu of standards specified in
3.260.
R. Replace Appendix J, Glossary, Page 1, Business Day and Page 6,
------- ------------
Scheduling Day/Hours, to read as follows:
---------- ---------
Business Day -- The business office must be open between the
------------
hours of 8:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday. Scheduling staff must be at the office between the hours
of 8:00 a.m. and 6:00 p.m.., Eastern time, Monday through Friday
with no routine scheduling hours on Saturdays.
Scheduling Day/Hours -- Any day or time when the Broker is
--------------------
expected, under the terms of this contract, to have personnel
available for scheduling NET services. Designated hours during
which scheduling of appointments can be done is a mandated
function of the Broker. The hours of 8:00 a.m. to 6:00 p.m.,
Eastern time, Monday through Friday with no routine scheduling
hours on Saturdays.
S. Delete Appendix J, Glossary, Page 8, last paragraph.
------
DMA and the Contractor agree that they have assumed an obligation to perform the
covenants, agreements, duties and obligations of the Contract, as modified and
amended herein, and agree to abide by all the provisions, terms and conditions
contained in the Contract as modified and amended.
5
<PAGE>
This Amendment shall be binding and inure to the benefit of the parties hereto,
their heirs, representatives, successors and assigns. Whenever the provisions
of the Amendment and the Contract are in conflict, the provisions of the
Amendment shall take precedence and control.
It is understood by the parties hereto that, if any part, term or provision of
this Amendment or this entire Amendment is held to be illegal or in conflict
with any law of this State, then DMA at its sole option may enforce the
remaining unaffected portions or provisions of this Amendment or of the Contract
and the rights and obligations of the parties shall be construed and enforced as
if the Contract or Amendment did not contain the particular part, term or
provision held to be valid.
The Contract and this Amendment constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
negotiations, representations or contracts, either written or oral, between the
parties hereto relating to the subject matter hereof and shall be independent of
and have no effect upon any other contracts.
This Amendment shall remain effective for so long as the Contract is in effect.
This Amendment shall be construed in accordance with the laws of the State of
Georgia.
6
<PAGE>
PRICE PROPOSAL
EAST NET REGION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
A. IMPLEMENTATION PERIOD (FEE NOT TO EXCEED $200,000)
- -----------------------------------------------------------------------------------------------------
Maximum Monthly Proposed Monthly Number of Months
Period Amount per Eligible Amount per Eligible in Period
(Column 1) (Column 2) (Column 3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B. 1/ST/ CONTRACT SERVICE PERIOD $3.00 $3.00 4
(10/1/97 - 1/31/98)
- -----------------------------------------------------------------------------------------------------
C. 2/ND/ CONTRACT SERVICE PERIOD $3.00 $6.38 5
(2/1/98 - 6/30/98)
- -----------------------------------------------------------------------------------------------------
D. 3/RD/ CONTRACT SERVICE PERIOD $2.75 $4.88 12
(7/1/98 - 6/30/99)
- -----------------------------------------------------------------------------------------------------
E. 4/TH/ CONTRACT SERVICE PERIOD $2.50 $4.88 12
(7/1/99 - 6/30/00)
- -----------------------------------------------------------------------------------------------------
</TABLE>
SIGNED:
OFFEROR'S COMMITTING AUTHORITY DATE
<PAGE>
EXHIBIT 10.12
THE LEASE
THIS LEASE AGREEMENT (hereinafter referred to as the "Lease") , made and entered
into on the 27 day of August, 1997, between Principal Mutual Life Insurance
Company, an Iowa Corporation (hereinafter referred to as "Landlord") and
Automated Dispatch Solutions, Inc. d/b/a ADS (hereinafter referred to as
- --------------------------------------------
"Tenant").
WITNESSETH:
1. Summary of Lease.
The following is a summary of certain portions of the Lease:
Landlord: Principal Mutual Life Insurance Company an Iowa Corporation
-----------------------------------------------------------
Landlord's Address: Principal Mutual Life Insurance Company
----------------------------------------------------------------------
711 High Street
----------------------------------------------------------------------
Des Moines, IA 50392-0137
----------------------------------------------------------------------
Other Address: Principal Mutual Life Insurance Company
----------------------------------------------------------------------
c/o Brannen/Goddard Company
----------------------------------------------------------------------
1895 Phoenix Boulevard, Suite 247
----------------------------------------------------------------------
Tenant: Automated Dispatch Solutions, Inc. d/b/a ADS
------------------------------------------------------------
Tenant Address: 1895 Phoenix Boulevard
-----------------------------------------------------
Atlanta, GA 30349
----------------------------------------------------------------------
Building Address: One Crown Center
--------------------------------------------------
Atlanta, GA 30349
----------------------------------------------------------------------
Suite Number: 235
---
Floor(s) upon which the Premises are located: 2/nd/
-----
Lease Term: 5 years and No months
- --
Commencement Date: September 1, 1997
-----------------
Expiration Date: August 31, 2002
---------------
Base Rental: $74,733.72 per annum
----------
Monthly Base Rental: $6,227.81
---------
Rentable Area of Premises: 4,745 square feet
-----
Rentable Area of Building: 98,000 square feet
------
Tenant's Percentage of Building: 4.84 percent
----
Security Deposit: $7,009.45
---------
<PAGE>
Broker: Peachtree Partners
------------------
It is understood that the foregoing is intended as a summary of portions of
the Lease for convenience only and if there is a conflict between the above
summary and any provisions of this Lease hereinafter set forth, the latter
shall control.
2. Definitions:
(a) "Building" means the office building located upon certain real property
(the "Property") in Land Lot(s)58, 59, 70 and 71 of the 13th District of
-----------------------------------------
Clayton County, Georgia the address of which is 1895 Phoenix Boulevard,
-----------------------------------------------------------------------
Atlanta, GA 30349.
-----------------
(b) "Premises" or "Leased Premises" means the office space which is located
in the Building and shown on the drawing attached hereto as Exhibit "A".
(c) "Base Rental" means the annual rental of $74,733.72, as the same may be
---------
increased from time to time pursuant to the provisions of this Lease.
(d) "Commencement Date" means September 1, 1997.
-----------------
(e) "Expiration Date" means August 31, 2002.
---------------
(f) "Security Deposit" means the sum of $7,009.45 which has been deposited
--------
with Landlord by Tenant.
(g) "Common Areas" means those areas of the Building devoted to corridors,
elevator foyers, restrooms, mechanical rooms, janitorial closets,
electrical and telephone closets, vending areas and other similar
facilities (but shall not include any such areas provided or reserved for
the exclusive use of a particular tenant). Common Areas shall be measured
from and to the inside finished surface of exterior Building walls, and
from and to the center of any partition walls which separate Common Areas
from tenant spaces, including the Premises, and from Service Areas.
(h) "Service Areas" means those areas within the Building used for Building
stairs, fire towers, elevator shafts, flues, vents, stacks, pipe shafts and
vertical ducts (but shall not include any such areas provided or reserved
for the exclusive use of a particular tenant). Service Areas shall be
measured from and to the inside finished surface of exterior Building
walls, and from and to the center of any partition walls which separate
Service Areas front tenant spaces, including the Premises, and from Common
Areas.
(i) "Exterior Common Areas" means all areas, not located within the
Building, provided and maintained for the common use and benefit of
Landlord and tenants of the Building generally, and the employees, invitees
and licensees of Landlord and such tenants, including, without limitation,
parking areas (whether enclosed or not), streets, sidewalks, and landscaped
areas (including Landlord's interest in any such areas which are part of
the "common areas" established pursuant to the Declaration of Covenants,
Conditions and Restrictions affecting the Building).
(j) "Rentable Area" of the Premises means (1) the gross area of the
Premises as measured from and to the inside surface of the outer glass of
the exterior Building walls, and from and to the center of any partition
walls which separate the Premises from adjoining Common Areas, Service
Areas, or premises of other tenants; plus (2) an area equal to the gross
area of the Common Areas, measured by the method described in Paragraph
2(g), times a fraction, the numerator of which is the gross area of the
Premises as described in (1) above and the denominator of which is the
Rentable Area of the Building, as hereinafter defined.
2
<PAGE>
"Rentable Area" of the Building means the gross area of the Building as
measured from and to the outer glass of the exterior Building walls, and
from and to the center of any partition walls of any Service Areas, which
Rentable areas of the Building is set forth in the Lease summary in
Paragraph 1.
(k) "Basic Costs" means all expenses, costs and disbursements (but not
repayment of debt or replacement of capital investment items other than
those elsewhere herein expressly included, nor specific costs specially
billed to and paid by other tenants of the Building) of every kind and
nature which Landlord shall pay or become obligated to pay because of, or
in connection with the ownership and operation of the Building, the
Property and the Exterior Common Areas, including but not limited to the
following: (i) wages and salaries, including payroll taxes, workers'
compensation, insurance premiums, and all other employment benefit and
insurance costs to Landlord of all employees directly engaged in operating
and maintaining the Building, and that part of central accounting costs
which are applicable to the Building; (ii) costs of all supplies and
materials used in operation and maintenance of the Building; (iii) cost of
all utilities for the Building including the cost of water, sewer, gas, oil
and electric and other fuels or forms of power or energy; (iv) cost of all
maintenance and service agreements (oral or written) for the Building and
the equipment therein including, but not limited to, security service,
window cleaning, janitorial service, elevator maintenance, maintenance of
heating, ventilation and air-conditioning equipment, plumbing, controls,
locks, alarms and all other parts of the Building; (v) landscaping and
grounds maintenance costs and expenses; (vi) annual and special assessments
against the Property made pursuant to tile Declaration of Covenants,
Conditions and Restrictions by the Owners Associations; (vii) cost of all
insurance relating to the Building or rents therefrom including, but not
limited to, the costs of casualty and liability insurance applicable to the
Building and the Exterior Common Areas and to Landlord's personal property
used in connection with the Building and the Exterior Common Areas; (viii)
the following taxes; (A) personal property taxes (attributable to the year
in which paid) imposed upon the furniture, fixtures, machinery, equipment,
apparatus, systems, and appurtenances used in connection with the Building
for tile operation thereof, and (B) real estate taxes, assessments, sewer
rents, rates, and charges, transit taxes, taxes based upon the receipt of
rent and any other federal, state, or local governmental charge, general,
special, ordinary, or extraordinary (but not including income or franchise
taxes or any other taxes imposed upon or measured by landlord's income or
profits, unless the same shall be imposed in lieu of real estate taxes)
which may now or hereafter be levied or assessed against the Building
and/or the Property or the rents derived from the Building (in the case of
special taxes or assessments which may be payable in installments, only the
amount of each installment paid during the calendar year shall be included
in the taxes for that year); (ix) costs for the maintenance and repair of
the Building and the personal property used in connection therewith
(excluding repairs and maintenance costs which are paid from proceeds of
insurance of which are paid by, Tenant or other third parties, and
alterations attributable solely to tenants of the Building other than
Tenant); (x) amortization of the cost of installation of capital investment
items which are primarily for the purpose of reducing operating costs or
which may be required by governmental authority, as reasonably amortized by
Landlord, with interest at 15% per annum on the amount unamortized from
time to time; (xi) advertising and leasing fees; and (xii) legal and
accounting expenses, including, but not limited to, such expenses as
related to seeking or obtaining reductions in and/or refunds of real estate
taxes; and (xiii) management fees.
(l) The Basic Costs of the Building shall be computed on the accrual basis
and shall be all Basic Costs incurred by Landlord to maintain all
facilities of the Building and the Exterior Common Areas in operation
during all or part of the year, together with such additional or substitute
facilities in subsequent years as may be determined by Landlord to be
necessary. If less than ninety five percent (95%) of
3
<PAGE>
the Rentable Area of the Building shall have been occupied by tenants at
any time during any calendar year of the Lease Term, the Basic Costs for
such calendar year shall be deemed to be an amount equal to the Basic Costs
which would normally be expected to have been incurred had such occupancy
been ninety-five percent (95%) throughout such calendar year.
(m) "Building Standard Improvements" when used herein, means those
Improvements to the Premises described as such in Exhibit "A".
3. Lease Grant
Subject to and upon the terms herein set forth, Landlord leases to Tenant
and Tenant leases from Landlord the Premises for the Lease Term. Tenant is
hereby granted only a usufruct, not subject to levy or sale; neither an
estate for years nor other estate shall pass from the Landlord on account
thereof. The Rentable Area of the Premises is stipulated for all purposes
to be 4,745 (four thousand seven hundred forty five) square feet.
---------------------------------------------
4. Lease Term
(a) The "Lease Term" is for a period of time commencing at 12:01 a.m. on
the Commencement Date, or on such later date as is provided in subparagraph
(c) below, and continuing thereafter through and until 6:00 p.m. on the
Expiration Date.
(b) If on the Commencement Date the Premises have not been substantially
completed due to omission, delay or default by Tenant or anyone acting
under or for the Tenant (including, without limitation, Tenant's default or
failure to perform its obligations in a timely manner or any delay
resulting from changes to the "Drawings and Specifications" by Tenant )
then Tenant's obligations under this Lease (including, without limitation,
the obligation to pay rent) shall nonetheless commence as of the
Commencement Date.
(c) If, due to causes other than as set forth in subparagraph (b) above,
Landlord does not deliver possession of the Premises to Tenant on the
commencement date this Lease shall not be void or voidable, nor shall
Landlord be liable to Tenant for any loss or damage resulting therefrom,
but in that event rent shall abate until the date when Landlord does
deliver possession, and the Lease Term shall commence on the date when
possession is delivered to Tenant except that, if for any reason other than
strikes, casualties or other causes beyond the control of the Landlord,
possession of the Premises is not delivered to Tenant within ninety (90)
days after the Commencement Date or if possession is not so delivered for
any reason whatsoever other than the causes set forth in subparagraph (b)
above within one hundred eighty (180) days after the Commencement Date,
then this Lease shall be voidable by either party upon thirty (30) days
written notice to the other given at any time prior to the delivery of
possession, provided that such notice shall be void, and this Lease shall
remain in full force and effect, if possession is delivered within said
thirty (30) day period following such notice of termination. In the event
this Lease is terminated as provided in this Paragraph 4(c), any monies
advanced by Tenant to Landlord shall be returned and the parties hereto
shall have further obligation one to the other.
(d) In the event that Landlord cannot deliver possession of the Premises to
Tenant on the Commencement Date because of Tenant's failure to perform its
obligations under, or to pay the amounts specified, this Lease shall be
terminable at the sole option of Landlord at any time after the
Commencement Date and prior to Tenant's performance or payment; and should
Landlord so elect to terminate this Lease, such termination shall be
without prejudice to Landlord's right to sue Tenant to recover damages for
Tenant's failure to perform its obligations, or to pay amounts due.
4
<PAGE>
5. Base Rental
(a) Tenant shall pay to Landlord as annual rental during the term of this
Lease the Base Rental, payable in lawful money of the United States, in
advance, in monthly equal installments on or before the first day of each
month during the Lease Term. The Base Rental is subject to increase as
provided hereinbelow. If this Lease commences on a day other than the
first day of the calendar month or ends on a day other than the last day of
a calendar month, the monthly installment of Base Rental for the fractional
month shall be appropriately prorated on a daily basis for such month.
Tenant has paid Landlord $6,227.81 (six thousand two hundred twenty-seven
------------------------------------------------
dollars and eighty-one cents) upon Tenant's execution of this Lease,
----------------------------
representing the monthly installment of Base Rental for the month of
September, 1997.
---------------
(b) On January 1/st/ of each year beginning with the January 1, 19__
payment of Base Rental, and on each January 1/st/ thereafter during the
Lease Term, the Base Rental shall be increased by one half (1/2) of the
amount equal to the product of: (i) the amount of Base Rental set forth in
Paragraph 2(c) of this Lease, as increased from time to time by all earlier
adjustments established under this subparagraph (b), multiplied by (ii) the
difference (expressed as a percentage) between the Consumer Price Index (as
hereinafter defined) published for the month of October of the calendar
year just ended and the Consumer Price Index published for the month of
October of the calendar year preceding the calendar year just ended. In no
event shall the Base Rental computed according to the provisions of this
subparagraph (b) for any calendar year be less than the Base Rental for the
preceding calendar year. Such increase shall be prorated over the first
year.
(c) "Consumer Price Index" means the Consumer Price Index for all Urban
Consumers, U.S. Metro Atlanta (if "Metro Atlanta" is not available will use
South Average) for All Items (1967 - 100) of the Bureau of Labor Statistics
of the United States Department of Labor. If the Consumer Price Index
published by the United States Department of Labor, Bureau of Labor
Statistics, is changed so that it affects the calculations achieved
hereunder, the Consumer Price Index shall be converted in accordance with a
conversion factor published by the United States Department of Labor,
Bureau of Labor Statistics in order to obtain substantially the same result
as would have been obtained if the Consumer Price Index had not been
changed. If the Consumer Price Index is discontinued or revised during the
term of this Lease, such other government index or computation with which
is replaced shall be used in order to obtain substantially the same result
as would have been obtained if the Consumer Price Index had not been
discontinued or revised. If the Consumer Price Index is discontinued and no
government index or computation replaces same, the Landlord shall designate
an appropriate substitute.
(d) Tenant shall pay to Landlord all Base Rental, additional rent, and all
other charges due and owing by Tenant under this Lease with deduction or
set-off, in legal tender, and at Landlord's address or as otherwise
directed from time to time by Landlord's notice.
6. Additional Rent
(a) Tenant's Base Rental is based, in part, upon the estimate that annual
Basic Costs will be equal to the _____ per square foot of Rentable Area of
the Building at full occupancy as determined below. (Base Year shall be
defined as the actual "Basic Costs" paid or incurred during the calendar
year 1995. In the event the building is less than ninety percent (90%)
occupied, the costs shall be adjusted by the Landlord to reflect ninety
percent (90%) occupancy). The Rentable Area of the Building is stipulated
to be 98,000 square feet. Tenant shall, from time to time during the term
------
of the Lease, pay as additional rent hereunder an amount equal to the
produce obtained by multiplying (i) the excess in actual Basic Costs over
5
<PAGE>
$_________ per square foot of Rentable Area of the Building times (ii) the
number of square feet of the Rentable Area of the Premises (the "Excess").
(b) Landlord shall also have the right, prior to after the close of any
calendar year, to make a good faith estimate of the Excess for the
succeeding calendar year and, following thirty (30) days' notice to Tenant,
Tenant shall pay to Landlord, on or before the first day of each month of
such calendar year, one twelfth (1/12th) of such estimated Excess;
provided, however, that prior to receipt of such notice, Tenant shall
continue to pay Landlord the monthly installment amount of the Excess, if
any, which was paid or payable in the calendar year just ended.
(c) By April 1 of each calendar year following the year during which the
Lease Term begins, or as soon thereafter as practical, Landlord shall
furnish to Tenant a statement of Landlord's actual Basic Costs for the
previous calendar year, and Landlord shall notify Tenant of the actual
amount of the Excess owing by Tenant to Landlord, which statement shall
show the calculations used to derive the amount of the Excess. Tenant
agrees to pay Landlord promptly, with the next monthly rental payment, as
additional rent, all Excess which has not been previously paid as estimated
Excess. If for any calendar year additional rent collected for the prior
year, as a result of Landlord's estimate of Excess, is greater than the
additional rent actually due during such prior year, then Landlord shall
refund to Tenant any such overpayment or, at Landlord's option, apply such
amount against rentals thereafter coming due under the Lease.
7. Late Payments
Tenant shall pay, as a late charge in the event any installment of Base
Rental, additional rent, or other charge to be paid by Tenant hereunder is
not paid when due, an amount equal to five percent (5%) of the amount due
for each and every 30-day period that said amount remains unpaid (but in no
event shall the amount of such late charge exceed an amount based upon the
highest legally permissible rate chargeable at any time by Landlord under
the circumstances). Should Tenant make a partial payment of past due
amounts, the amount of such partial payment shall be applied first to
reduce all accrued and unpaid late charges, in inverse order of their
maturity, and then to reduce all other past due amounts, in inverse order
of their maturity.
8. Occupancy and Use
(a) Tenant shall use and occupy the Premises for general office purposes
and for no other use or purpose without prior written consent of Landlord.
(b) Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Building or injure or annoy them. Tenant
shall not use the Premises or allow the Premises to be used for any
improper, immoral, unlawful, or objectionable purposes, or for any
business, use or purpose which is, in Landlord's judgment, disreputable or
inconsistent with the operation of a first class office building, nor shall
Tenant cause or maintain or permit any nuisance in, on, or about the
Premises.
9. Hazardous Substances
Tenant shall not use the Premises or permit anything to be done in or about
the Premises which will in any way conflict with any law, governmental
standard or regulation applicable to Tenant and/or to the Premises in
connection with occupational health and safety, Hazardous Substances (as
hereinafter defined) and environmental matters. Tenant shall not use the
Premises or allow the Premises to be used for, the generation, storing or
disposal of any Hazardous Substances. Tenant shall promptly notify
Landlord of its receipt of any notice of a violation of any such law,
standard or regulation. The use,
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generation, storage, release, threatened release, discharge, disposal or
presence on or about the Premises of any Hazardous Substances by Tenant,
Tenant's agents or any sublessee or assignee occupying all or part of the
Premises shall be an immediate event of default under this Lease. For the
purpose hereof "Hazardous Substances" means any toxic or hazardous waste or
substances, including, without limitation, asbestos, PCBs, substances
defined as "hazardous substances" or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. section 9601 et seq., Hazardous Materials
Transportation Act, 49 U.S.C. section 1802, the Resource Conservation and
Recovery Act, 42 U.S.C. section 6901 et seq. and in the Toxic Substance
Control Act of 1976, as amended, 15 U.S.C. section 2601 el seq., or in any
applicable state environmental statues.
10. Compliance with Laws
Tenant shall not use the Premises or permit anything to be done in or about
the Premises which will in any way conflict with any law, statute,
ordinance, or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything
therein which will in any way increase the rate of any insurance upon the
Building in which the Premises are situated or any of its contents or cause
a cancellation of said insurance or otherwise affect said insurance in any
manner, and Tenant shall at its sole cost and expense promptly comply with
all laws, statutes, ordinances, and governmental rules, regulations, or
requirements now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use, or
occupancy of the Premises.
11. Service and Utilities
(a) Landlord shall maintain the Service Areas and Common Areas of the
Building, the mechanical, plumbing and electrical equipment serving the
Building, and the structure itself, in reasonably good order and condition
except for damage occasioned by the act or negligence of Tenant, which
damage shall be repaired by Landlord at Tenant's expense. In the event
Tenant requires or needs to have one or more separate systems of either
heating, ventilating, air-conditioning or other similar systems over and
above that provided by Landlord, the installation, care, expense, and
maintenance of each such system shall be borne by and paid for by Tenant.
(b) Provided the Tenant shall not be in default hereunder, and subject to
the provisions elsewhere herein contained and the rules and regulations of
the Building, Landlord agrees to furnish to the Premises during ordinary
business hours (7 a.m - 6 p.m. M-F; 8 a.m. - 1 p.m., Sat.) of generally
recognized business days, to be determined by Landlord (but exclusive, in
any event, of Sundays and legal holidays: (i) heat and air-conditioning
required in Landlord's judgment for the comfortable use and occupation of
the Premises; (ii) janitorial services during the times and in the manner
that such services are, in Landlord's judgment, customarily furnished in
comparable office buildings in the immediate market area, except that, if
Tenant's floor covering or other improvements require special treatment,
Tenant shall pay the additional cleaning cost attributable thereto as
additional rent upon presentation of a statement therefor by Landlord;
(iii)elevator service; (iv) electricity; and (v) water.
(c) Tenant will not without the written consent of Landlord use any
apparatus or device in the Premises, including without limitation,
electronic data processing machines and machines using excess lighting or
current which will in any way increase the amount of electricity or water
usually furnished or supplied for use of the Premises as general office
space; nor connect with electric current, except through existing
electrical outlets in the Premises, or with water pipes, any
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apparatus or devise for the purpose of using electrical current or water.
If Tenant in Landlord's judgment shall require water or electric current or
any other resource in excess of that usually furnished or supplied for use
of the Premises as general office space (it being understood that such an
excess may result from the number of fixtures, apparatus and devices, the
hours of use, or any combination of such factors), Tenant shall first
procure the consent of Landlord, which Landlord may in its discretion
withhold, to the use thereof, and Landlord may cause a special meter to be
installed in the Premises, at Tenant's expense, so as to measure the amount
of water, electric current or other resource so consumed, as shown by said
meters, at the rates charged by the local public utility furnishing the
same, plus any additional expense incurred in keeping account of the water,
electric current or other resources so consumed.
(d) Landlord shall not be liable to Tenant or to any person, firm,
corporation, or other business association claiming by, through or under
Tenant for: (i) failure to furnish or for delay in furnishing any service
provided for in this Lease, and no such failure or delay by Landlord shall
be an actual or constructive eviction of Tenant nor shall any such failure
or delay operate to relieve Tenant from the prompt and punctual performance
of each and all of the covenants to be performed hereunder by Tenant; (ii)
any latent defects in the Premises or Building; (iii) defects in the
cooling, heating, electric, water, elevator, or other apparatus or systems
or for water discharged from sprinkler systems, if any, in the Building;
(iv) the limitation, curtailment, rationing or restricting of use of water
or electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or the Building; (v) for Landlord's
reasonable voluntary cooperation with the efforts of national, state or
local government agencies or utilities suppliers in reducing energy or
other resource consumption.
(e) Any sums payable under this Paragraph 11 shall be considered additional
rent and shall be added to any installment of Base Rental thereafter
becoming due, and Landlord shall have the same remedies for payment of such
sums as for a default in the payment of Base Rental.
(f) Tenant shall not provide any janitorial services without Landlord's
written consent and then only subject to supervision of Landlord and by a
janitorial contractor or employees at all times satisfactory to Landlord.
Any such services provided by Tenant shall be Tenant's sole responsibility
and at Tenant's sole risk.
(g) Access to the Building may be regulated during other then normal
business hours in such manner as Landlord deems appropriate. Landlord,
however, shall have no liability to Tenant, its employees, agents, invitees
or licensees for losses due to theft or burglary, or for damages or
injuries done by unauthorized persons on the Premises or in the Building
and neither shall Landlord be required to insure against such losses.
Tenant shall cooperate fully in Landlord's efforts to regulate access to
the Building.
12. Improvements on Premises
All installations and improvements now or hereafter placed on the Premises
other than Building Standard Improvements shall be made by Landlord at
Tenant's elections for Tenant's account and at Tenant's cost (and Tenant
shall pay ad valorem taxes and increased insurance thereon or attributable
thereto), which cost shall be payable by Tenant to Landlord in advance as
additional rent.
13. Graphics
Landlord shall provide and install, at Tenant's cost, all letters and
numerals on doors in the Premises, all such letters and numerals shall be
in the standard graphics chosen by
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Landlord for the Building and no others shall be used or permitted on the
Premises without Landlord's prior written consent.
14. Care of Premises
Tenant agrees not to commit any waste or allow any waste to be committed on
any portion of the Premises, and at the termination of this Lease to
deliver up to the Premises to Landlord in as good condition as at the
Commencement Date, ordinary wear and tear excepted.
15. Alterations
Tenant shall not make or suffer to be made any alterations, additions, or
improvements in, on, or to the Premises or any part thereof, without the
prior written consent of Landlord; and any such alterations, additions, or
improvements in, on, or to said Premises, except for Tenant's movable
furniture and equipment, shall immediately become Landlord's property and,
at the end of the term hereof, shall remain on the Premises without
compensation to Tenant. In the event Landlord consents to the making of
any such alterations, additions, or improvements by Tenant, the same shall
be made by Tenant, at Tenant's sole cost and expense, in accordance with
all applicable laws, ordinances, and regulations and all requirements of
Landlord's and Tenant's insurance policies, and in accordance with plans
and specifications approved in writing by Landlord, and any contractor or
person selected by Tenant to make the same, and all subcontractors must
first be approved in writing by Landlord, or, at Landlord's option, the
alteration, addition or improvement shall be made by Landlord for Tenant's
account and Tenant shall reimburse Landlord for the cost thereof upon
demand.
16. Repair
By taking possession of the Premises, Tenant accepts the Premises as being
in the condition in which Landlord is obligated to deliver them and
otherwise in good order, condition and repair. Tenant shall at all times
during the term hereof, at Tenant's sole cost and expense, keep the
Premises and every part thereof in good order, condition and repair,
excepting ordinary wear and tear, damage thereto by fire, earthquake, act
of God or the elements. Should Tenant fail to make any repairs or
replacements required of it hereunder promptly, Landlord may at its option
make such repairs and replacements and Tenant shall pay the cost thereof to
Landlord as additional rent.
17. Parking
During the Lease Term, Tenant shall have the nonexclusive use in common
with Landlord, other tenants of the Building, their guests and invitees, of
the non-reserved common automobile parking areas not to exceed (See Special
-----------
Stipulation Section 4) spaces, driveways, and footways located on the
---------------------
Property, subject to such rules and regulations for the use thereof as may
be prescribed from time to time by Landlord.
18. Re-Entry by Landlord
Landlord reserves and shall at all times have the right to re-enter the
Premises to inspect the same, to supply janitorial service and any other
service to be provided by Landlord to Tenant hereunder, to show the
Premises to prospective purchasers, mortgagees or tenants, to post notices
of non-responsibility, and to alter, improve, or repair the Premises and
any portion of the Building of which the Premises are a part or to which
access is conveniently made through the Premises, without abatement of
rent, and may for that purpose erect, use, and maintain scaffolding, pipes,
conduits, and other necessary structures and equipment in and through the
Premises where reasonably required by the character of the work to be
performed, provided that entrance to the Premises shall not be blocked
thereby, and further provided that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for
damages for any injury or
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inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon, and
about the Premises, and Landlord shall have the right to use any and all
means which Landlord may deem necessary or proper to open said doors in an
emergency, in order to obtain entry to any portion of the Premises, and any
entry to the Premises, or portions thereof obtained by Landlord by any of
said means, or otherwise, shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of the
Premises, or an eviction, actual or constructive, of Tenant from the
Premises or any portions thereof; Landlord shall also have the right at any
time, without the same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor, to change the
arrangement and/or location of entrances or passageways, doors and
doorways, and corridors, elevator, stairs, toilets, or other public parts
of the Building and to change the name, number of designation by which the
Building is commonly known.
19. Assignment and Subletting
(a) Tenant shall not, without the prior written consent of Landlord,
(i)sell, assign, convey, mortgage, pledge, encumber or otherwise transfer
this Lease or any interest herein (whether voluntarily, by operation of
law, or otherwise), (ii) sublet the Premises or any portion thereof, or
(iii) permit any one other than Tenant to occupy or use the Premises or any
portion thereof; and any attempt to consummate any of the foregoing without
Landlord's written consent shall be void. Landlord may deny or withhold
its consent to any of the foregoing (i) through (iii) for any reason or for
no reason.
(b) If at any time during the term of this Lease Tenant desires to sublet
all or part of the Premises or to assign this Lease, Tenant shall submit
such request to Landlord in writing, together with a copy of the proposed
assignment or sublease and such additional information concerning the
proposed assignee or sublessee as may be requested by Landlord for
Landlord's review. If Landlord, in its discretion, approves in writing the
terms of the proposed assignment or sublease and the proposed assignee or
sublessee, but a fully executed counterpart of such assignment or sublease
is not delivered to Landlord within thirty (30) calendar days after the
date of Landlord's written approval, then Landlord's approval of the
proposed assignment or sublease shall be automatically withdrawn and shall
be deemed null and void. As a condition to Landlord's prior written
consent as provided for in this Paragraph 19, the assignee or subtenant
shall agree in writing to comply with and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease, and Tenant
shall deliver to Landlord promptly after execution an executed copy of said
sublease or assignment and an agreement of said compliance by each
sublessee or assignee, Landlord's consent to any assignment or subletting
shall not release Tenant from any of Tenant's obligations hereunder or be
deemed to be a consent to any other or subsequent assignment or subletting.
Tenant agrees to pay to Landlord, on demand, reasonable costs incurred by
Landlord in connection with any request by Tenant for Landlord to consent
to any assignment or subletting by Tenant.
(c) Notwithstanding the giving by Landlord of its consent to any assignment
or sublease with respect to the Premises, no assignee or sublessee may
exercise any expansion option, right of first refusal option, or renewal
option under this Lease except in accordance with a separate written
agreement entered into directly between such assignee or sublessee and
Landlord.
(d) Any transfer after the date hereof, whether to one or more persons or
entitles and whether at one or more different times, of a controlling
interest in Tenant (whether Tenant is a corporation, partnership, or other
entity), whether
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voluntarily, by operation of law, or otherwise, shall be deemed an
assignment of this Lease within the meaning of this Paragraph 19.
(e) If, with the consent of the Landlord, this Lease or any interest
therein is assigned or the Premises or any part thereof is sublet or
occupied by anybody other than Tenant, Landlord may, after default by
Tenant, collect rent from the assignee, subtenant or occupant, and apply
the net amount collected to the Base Rental and additional rent herein
reserved, but no such assignment, subletting, occupancy, or collection
shall be deemed (i) a waiver of any of Tenant's covenants contained in this
Lease, the acceptance by Landlord of the assignee, subtenant or occupant as
Tenant, or (iii) a release of Tenant from further performance by Tenant of
its covenants under this Lease.
(f) If this Lease is assigned or the Premises or any part thereof is sublet
or occupied by anyone other than Tenant, then Tenant shall pay to Landlord,
in addition to any other amounts owing hereunder, all compensation received
by Tenant from such assignee or subtenant with respect to such assignment
or subletting, over and above the amount of Base Rental, additional rent or
other sums owing under this Lease, whether such additional compensation to
Tenant is in the form of a lump sum payment, monthly payment or otherwise;
such additional compensation or any installment thereof shall be payable by
Tenant to Landlord as and when received by Tenant, and Tenant hereby
assigns all rights it might have or ever acquire in any such additional
compensation to Landlord.
20. Discharge of Liens
Tenant shall discharge of record by bond or otherwise within ten (10) days
following the filing thereof any mechanic's or similar lien filed against
the Premises, the Building or the Property for work or materials claimed to
have been furnished to or for the benefit of Tenant and/or the Premises;
provided, however, that Tenant shall have no responsibility with respect to
any mechanic's or similar lien filed against the Premises or the Building
for work or materials furnished by or at Landlord's request, if Tenant is
current in the payment of all obligations owed Landlord. If Tenant shall
fail to cause such lien or claim of lien to be so discharged or bonded
within such period, in addition to any other right or remedy it may have,
Landlord may, but shall not be obligated to, discharge the same by paying
the amount claimed to be due or by procuring the discharge of such lien or
claim by deposit in court or bonding, and in any such event, Landlord shall
be entitled, if Landlord so elects, to compel the prosecution of any action
for the foreclosure of such lien or claim by the lienor or claimant and to
pay the amount of the judgment, if any, in favor of the lienor, with
interest, costs, and allowances. Tenant shall pay as additional rent on
demand from time to time any sum or sums so paid by Landlord, including,
but not limited to, attorneys' fees in processing such discharge or in
defending any such action.
21. Insurance and Indemnification
(a) Landlord shall not be liable to Tenant, and Tenant hereby waives all
claims against Landlord, for any injury or damage to any person or property
in or about the Premises or the Property by or from any cause whatsoever,
including, without limitation, any such injury or damage caused or
occasioned by or resulting from (i) water leakage of any charger from the
roof, walls, basement or other portions of the Premises or the Building,
(ii) gas, fire or explosion of the Premises or the Building, (iii) theft,
mysterious disappearance, burglary, or loss of any property of Tenant
whether from the Premises or any part of the Building, (iv) acts of or
disturbances or interference by third persons, including other tenants, (v)
acts or omissions to act, whether criminal, negligent, or otherwise, of
independent contractors (including security guards and janitorial staff),
other tenants, or third parties, (vi) acts of' God, public enemy,
injunction, riot, strike, vandalism, insurrection, war, casualty, court
order, requisition, or order of governmental body
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or authority and (vii) any other cause beyond the control of Landlord.
Further, Landlord shall not be liable for any damage or inconvenience which
may arise through repair or alteration of any part of the Building,
Exterior Common Areas, or Premises.
(b) Each party hereto hereby waives all liability of and all right of
recovery and subrogation against and agrees that neither such party or any
of its officers, agents, employees or its or their insurer will sue, the
other party, or any of the officers, agents or employees of the other party
from any loss or a damage to property arising out of fire or other
casualty, and agrees that all such party's insurance will contain waivers
by the insurer of such liability, recovery, subrogation and suit.
(c) Tenant agrees to purchase at its own expense and to keep in force
during the term of this Lease a policy or policies of worker's compensation
and comprehensive general liability insurance, including personal injury
and property damage, with contractual liability endorsement, in the amount
of Five Hundred Thousand Dollars ($500,000.00) for property damage and One
Million Dollars ($1,000,000.00) per occurrence for personal injuries or
deaths of persons occurring in or about the Premises. Each such policy
shall: (i) name Landlord as an additional insured (except for the worker's
compensation policy), (ii) be issued by an insurance company which is
acceptable to Landlord and licensed to do business in the State of Georgia,
(iii) include a waiver of subrogation endorsement in favor of Landlord, and
(iv) provide that said insurance shall not be canceled unless thirty (30)
days prior written notice shall be given to Landlord. Said policy or
policies or certificates thereof shall be delivered to Landlord by Tenant
upon commencement of the term of the Lease and upon each renewal of said
insurance.
22. Waiver of Subrogation
Each of Landlord and Tenant hereby releases the other from any and all
liability or responsibility to the other or anyone claiming through or
under the releaser or by way of subrogation or otherwise for any loss or
damage to property caused by fire or any other perils insured in policies
of insurance covering such property, even if such loss or damage shall have
been caused by the fault or negligence of the other party, or anyone for
whom such party may be responsible, including any other tenants or
occupants of the remainder of the Building in which the Premises are
located.
23. Damage by Fire, Etc.
(a) If the Building, improvements, or Premises are rendered partially or
wholly untenantable by fire or other casualty, and if such damage cannot,
in Landlord's reasonable estimation, be materially restored within ninety
(90) days of such damage, then Landlord may, at its sole option, terminate
this Lease as of the date of such fire or casualty. Landlord shall
exercise its option provided herein by written notice to Tenant within
sixty (60) days of such fire or other casualty. For purposes hereof, the
Building, improvements, or Premises shall be deemed "materially restored"
if they are in such condition as would not prevent or materially interfere
with Tenant's use of the Premises for the purpose for which it was then
being used.
(b) If this Lease is not terminated by Landlord pursuant to this Paragraph
23, then Landlord shall proceed with all due diligence to repair and
restore the Building, improvements or Premises, as the case may be (except
that Landlord may elect not to rebuild if such damage occurs during the
last year of the term of this Lease, exclusive of any option which is
unexercised at the date of such damage).
(c) If this Lease is terminated by Landlord pursuant to this Paragraph 23,
the term of this Lease shall end on the date of such damage as if that date
had been originally
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fixed in this Lease for the expiration of the term hereof. If this Lease is
not terminated by Landlord pursuant to this Paragraph 23 and if the
Premises is untenantable in whole or in part following such damage, the
Base Rental and additional rent payable during the period in which the
Premises is untenantable shall be reduced to such extent, if any, as may be
fair and reasonable under all of the circumstances.
In the event that Landlord shall fail to complete such repairs and
material restoration within one hundred fifty (150) days after the date of
such damage, Tenant may at its option and as its sole remedy terminate this
Lease by delivering written notice to Landlord, whereupon the Lease shall
terminate on the date of such notice as if the date of such notice were the
date originally fixed in this Lease for the expiration of the term hereof;
provided, however, that if construction is delayed because of changes,
deletions, or additions in construction requested by Tenant, strikes,
lockouts, casualties, acts of God, war, material or labor shortages,
governmental regulation or control or other cause beyond the reasonable
control of Landlord, the period for restoration, repair or rebuilding shall
be extended for the amount of time Landlord is so delayed.
In no event shall Landlord be require to rebuild, repair or replace
any part of the partitions, fixtures, additions or other improvements which
may have been placed in or about the Premises by Tenant. Any insurance
which may be carried by Landlord or Tenant against loss or damage to the
Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control except that Landlord's insurance
may be for the benefit of and subject to control by the holder or holders
of any indebtedness secured by a deed to secure debt or similar instrument
encumbering the Building.
(d) Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a deed to secure debt encumbering the
Building requires that any insurance proceeds be paid to it, then Landlord
shall have the right to terminate this Lease by delivering written notice
of termination to Tenant within fifteen (15) days after such requirement is
made by any such holder, whereupon the Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the term.
(e) In the event of any damage or destruction to the Building or the
Premises, Tenant shall, upon notice from Landlord, remove forthwith, at his
sole cost and expense, such portion or all of the property belonging to
Tenant or Tenant's licensees from such portion or all of the Building or
the Leased Premises as Landlord shall request and Tenant hereby indemnifies
and holds Landlord harmless from any loss, liability, costs, and expenses,
including attorneys' fees, arising out of any claim of damage or injury as
a result of any alleged failure to properly secure the Premises prior to
such removal and/or resulting from such removal.
24. Condemnation
If any substantial part of the Premises shall be taken for any public or
quasi-public use under governmental law, ordinance or regulation, or by
right of eminent domain, or by private purchase in lieu thereof (any of the
foregoing being referred to as a "taking"), this Lease shall terminate when
the physical taking shall occur in the same manner as if the date of such
physical taking were the date originally fixed in this Lease for the
expiration or the term hereof; provided, however, that in no event shall a
partial taking of less than twenty percent (20%) of the Rentable Area of
the Premises give rise to an option on Tenant's part to terminate this
Lease. In the event of a partial taking which does not result in this
Lease being terminated, the Base Rental shall be adjusted in proportion to
the percentage of the Rentable Area of the Premises so taken. In the event
any such taking, in Landlord's judgment, would prevent or materially
interfere with the use of the Building or the Premises for the purpose for
which it is then being used, or would render
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the Landlord's continued use or leasing of the Building economically or
physically unfeasible, Landlord shall have the right to terminate this
Lease by written notice to Tenant. In the event of any termination of this
Lease pursuant to this Paragraph 24, any Base Rental or additional rent pay
by Tenant for any period following the date of such termination shall be
refunded to Tenant. Tenant shall not share in the condemnation award or
payment in lieu thereof or in any award for damages resulting from any such
taking, the same being hereby assigned to Landlord by Tenant; provided,
however, that Tenant may separately claim and receive from the condemning
authority, if legally payable, compensation for Tenant's removal and
relocation costs and for Tenant's loss of business and/or business
interruption.
25. Events of Default
The following events shall be deemed to be events of default by Tenant
under this Lease:
(a) Tenant shall fail to pay when due any sum of money becoming due to be
paid to Landlord under this Lease, whether such sum be any installment of
the Base Rental or additional rent hereunder, or any other payment or
reimbursement to Landlord required herein, whether or not treated as
additional rent hereunder, and such failure shall continue for a period of
five (5) days from the date such payment was due; or
(b) Tenant shall fail to comply with any term, provision or covenant of
this Lease, other than by failing to pay when or before due any sum of
money becoming due to be paid to Landlord hereunder, and shall not cure
such failure within twenty (20) days (forthwith, if the default involves a
hazardous conditions) after written notice thereof to Tenant; or
(c) Tenant shall vacate or abandon any substantial portion of the Premises,
even though Tenant continues to pay the stipulated monthly rent; or
(d) Tenant shall fail to vacate the Premises immediately upon termination
of this Lease, by lapse of time or otherwise, or upon termination of
Tenant's right to possession; or
(e) Tenant's interest in the Lease or the Premises shall b subjected to any
attachment, levy, or sale pursuant to any order or decree entered against
Tenant in any legal proceeding and such order or decree shall not be
vacated within ten (10) days after entry thereof; or
(f) A receiver shall be appointed to take possession of all or
substantially all of the assets of Tenant, Tenant shall make an assignment
for the benefit of creditors, or Tenant shall take or suffer any action
under any insolvency, bankruptcy or reorganization act (it being expressly
agreed that in no event shall this Lease be assigned or assignable by
operation of law or by voluntary or involuntary bankruptcy proceedings or
otherwise and in no event shall this Lease or any rights or privileges
hereunder be an asset of Tenant under any bankruptcy, insolvency, or
reorganization proceedings).
26. Landlord's Remedies
Upon the occurrence of any events of defaults described in Paragraph 25 or
elsewhere in this Lease, Landlord shall have the option to pursue any one
or more of the following remedies without any notice or demand whatsoever:
(a) Landlord may, at its election, terminate this Lease or terminate
Tenant's right to possession only, without terminating the Lease.
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(b) Upon any termination of this Lease or upon any termination of Tenant's
right to possession without termination of the Lease. Tenant shall
surrender possession and vacate the Premises immediately, and deliver
possession thereof to Landlord and Tenant hereby grants to Landlord full
and free license to enter into and upon the Premises in such event with or
without process of law and to repossess the Premises and to expel or remove
Tenant and any others who may be occupying or within the Premises and to
remove any and all property therefrom, without being deemed in any manner
guilty of trespass, eviction or forcible entry or detainer, and without
incurring any liability for any damages resulting therefrom, whether in
contract or tort or otherwise. Tenant hereby waiving any right to claim
damage, whether in contract or tort or otherwise, for such re-entry and
expulsion, and without relinquishing Landlord's rights to rent or any other
right given to Landlord hereunder or by operation of law.
(c) Upon termination of this Lease, Landlord shall be entitled to recover,
on the date of termination, all Base Rental and additional rent hereunder
and other sums due and payable by Tenant on the date of termination, plus
the sum of (i) liquidated damages in an amount equal to the future Base
Rental and additional rent hereunder, and other sums provided herein to be
paid by Tenant for the remainder of the Lease Term, discounted to present
value on the basis of interest calculated at 5 percent per annum, less any
amounts actually realized by Landlord in reletting the Premises after
taking into account all expenses and time necessary to obtain a replacement
tenant or tenants, including, without limitation, broker's commissions,
recovery of the Premises, preparation for reletting and for itself, if any;
(ii) the unamortized cost of all work performed on the Premises by Landlord
in preparing the Premises for occupancy by Tenant; and (iii) the cost of
performing any other covenants which would have otherwise been performed by
Tenant. Tenant expressly agrees that Landlord is under no obligation to
find a replacement tenant or to accept any tenant offered by Tenant or to
observe any instructions given by Tenant about such reletting upon
termination and Tenant expressly waives and renounces any defenses it may
have under Georgia law relating to mitigation of damages and expressly
agrees and covenants that Landlord's action or inaction with respect to the
reletting of the Premises do not in any way constitute a failure to
mitigate damages or any other diminution of any damages which Landlord is
entitled to recover pursuant to this paragraph.
(d) Upon termination of Tenant's right to possession without termination of
the Lease: (i) Landlord may, at Landlord's option, enter into the Premises,
remove Tenant's signs and other evidences of tenancy, and take and hold
possession thereof as provided in subparagraph (b) above, without such
entry and possession terminating the Lease or releasing Tenant, in whole or
part, from any obligation including Tenant's obligation to pay the Base
Rental and additional rent hereunder for the full Lease Term. In such
case, Tenant shall pay forthwith to Landlord, if Landlord so elects, a sum
equal to the entire amount of the Base Rental and additional rent hereunder
for the remainder of the Lease Term plus any other sums provided herein to
be paid by Tenant for the remainder of the Lease Term; (ii) Landlord may,
but need not, relet the Premises or any part thereof for such rent and upon
such terms as Landlord in its sole discretion shall determine (including
the right to relet the Premises for a greater or lesser term than that
remaining under this Lease, the right to relet the Premises as a part of a
larger area, and the right to change the character and use made of the
Premises) and Landlord shall not be required to accept any Tenant offered
by Tenant or to observe any instructions given by Tenant about such
reletting. In any such case, Landlord may make repairs, alterations in or
to the Premises, and redecorate same, to the extent Landlord deems
necessary or desirable, and Tenant shall, upon demand, pay the cost
thereof, together with Landlord's expenses for reletting including, without
limitations any broker's commission incurred by Landlord . If the
consideration collected by Landlord upon any such reletting plus any sums
previously collected from Tenant are not sufficient to pay the full amount
of all
15
<PAGE>
Base Rental and additional rent hereunder and other sums reserved in this
Lease for the remaining term hereof, together with the cost or repairs,
alterations, additions, redecorating, and Lessor's expenses of reletting
and the collection of the rent accruing therefrom (including attorney's
fees and broker's commissions), Tenant shall pay to Landlord the amount of
such deficiency upon demand and Tenant agrees that Landlord may file suit
to recover any sums falling due under this subparagraph (d) from time to
time.
(e) In the event of any default in the payment of any installment when due,
or upon any amount falling due pursuant to this paragraph, (or for any
other breach of any other provisions of this Lease), Tenant agrees to pay
Landlord the actual attorneys' fees incurred by Landlord in the collection
of any such amounts, including any and all costs and expenses of
litigation.
Pursuit of any of the remedies provided in this Paragraph 26 shall not
preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord
by reason of a violation of any of the terms, provisions and covenants
herein contained. Landlord's acceptance of the payment of rental or other
payments hereunder after the occurrence of an event of default shall not be
construed as a waiver of such default, unless Landlord so notifies Tenant
in writing. Forbearance by Landlord in enforcing one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default of Landlord's right to
enforce any such remedies with respect to such default or any subsequent
default. Without limiting the foregoing, to the extent permitted by law,
Tenant hereby: (i) appoints and designates the Premises as a proper place
for service of process upon Tenant, and agrees that service of process upon
any person apparently employed by Tenant upon the Premises or leaving
process in a conspicuous place within the Premises shall constitute a
personal service of such process upon Tenant (provided, however, Landlord
does not hereby waive the right to serve Tenant with process by any other
lawful means); (ii) expressly waives any right to trial by jury; (iii)
expressly waives the service of any notice under any existing or future law
of the State of Georgia applicable to landlords and tenants; (iv) expressly
consents to the personal jurisdiction of the courts of the State of
Georgia; and (v) expressly waives the defense of failure to mitigate
damages or any other defense which would constitute a diminution of any
remedies or damages to which landlord is entitled hereunder.
In no event shall Tenant have the right to terminate or rescind this Lease
as a result of the breach of any promise or inducement hereof, whether in
this Lease or elsewhere. Tenant hereby waives such remedies of termination
and recession and hereby agrees that Tenant's remedies for default
hereunder and for breach of any promise or inducement shall be limited to a
suit for damages and/or injunction. In addition, Tenant hereby covenants
that, prior to the exercise of any such remedies, it will give the holder
of any deed to secure debt or similar instrument encumbering the Building,
notice of and a reasonable time to cure any default by Landlord.
27. Quiet Enjoyment
Landlord represents and warrants that it has full right and authority to
enter into this Lease and that Tenant, while paying the Base Rental and
additional rent hereunder and performing its other covenants and agreements
herein set forth, shall peaceably and quietly have, hold and enjoy the
Premises for the term hereof without hindrance or molestation from
Landlord, subject to the terms and provisions of this Lease. In the event
this Lease is a sublease, then Tenant agrees to take the Premises subject
to the provisions of the prior leases. Landlord shall not be liable for
any interference or disturbance by other tenants or third persons, nor
shall Tenant be released from any obligations of this Lease because of such
Interferences or disturbances.
16
<PAGE>
28. Surrender of Premises
(a) At the end of the term or any renewal thereof or other sooner
termination of this Lease, the Tenant will peaceably deliver up to the
Landlord possession of the Premises, together with all improvements or
additions upon or belonging to the same, by whomsoever made, in the same
conditions as received or first installed, ordinary wear and tear, damage
by fire, earthquake, act of God or the elements alone excepted. Tenant
shall, upon the termination of this Lease, remove all movable furniture and
equipment belonging to Tenant, at Tenant's sole cost, title to which shall
be in name of Tenant until such termination, repairing any damage caused by
such removal. Property not so removed shall be deemed abandoned by the
Tenant, and title to the same shall thereupon pass to Landlord. Upon
request by Landlord, Tenant shall remove, at Tenant's sole cost, any or all
permanent improvements or additions to the Premises installed by or for the
account of Tenant and all movable furniture and equipment belonging to
Tenant which may be left by Tenant and Tenant shall repair any damage
resulting from such removal and restore the Premises to its original
condition. Any and all property which Tenant fails to remove from the
Premises or the Building upon termination of this Lease may be handled,
removed and stored by or at the direction of Landlord, at the sole risk,
cost and expense of Tenant, and Landlord shall in no event be responsible
for the value, preservation or safekeeping thereof. Tenant shall pay to
Landlord, upon demand, any and all expenses incurred in such removal and
all storage charges against such property so long as the same shall be in
Landlord's possession or under Landlord's control.
(b) The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
the Landlord, terminate all or any existing subleases or subtenancies, or
may, at the option of Landlord, operate as an assignment to it if any or
all such subleases or subtenancies.
29. Subordination and Attornment
(a) This Lease and all rights of Tenant hereunder are and shall be subject
and subordinate to the lien and security title of any deed to secure debt
or similar instrument which may now or hereafter encumber Landlord's title
in and to the Building and to any modifications, renewals, consolidations,
extensions, or replacements thereof.
(b) Subparagraph (a) above shall be self-operative, and no further
instrument of subordination shall be required. However, in confirmation of
such subordination, Tenant shall, upon demand, at any time or times,
execute, acknowledge, and deliver to Landlord or the holder of any such
deed to secure debt or similar instrument, without expense, such
instruments as may be reasonably requested by Landlord or such holder to
evidence the subordination of this Lease and all rights hereunder to the
lien of any such deed to secure debt or similar instrument, and each
renewal, modification, consolidation, replacement, and extension thereof,
and if Tenant shall fail at any time, within ten (10) days following the
giving of a written request therefore to execute, acknowledge, and deliver
any such instrument, Landlord in addition to any other remedies available
to it in consequence thereof, may execute, acknowledge, and deliver the
same as the attorney-in-fact of Tenant and in Tenant's name, place, and
stead, and Tenant hereby irrevocably makes, constitutes, and appoints
Landlord and its successors and assigns, such attorney-in-fact for that
purpose.
(c) If the holder of any deed to secure debt or similar instrument
encumbering Landlord's title in and to the Building shall hereafter succeed
to the rights of Landlord under this Lease, whether through possession or
foreclosure action or delivery of a new lease, Tenant shall at the option
of such holder, attorn to and
17
<PAGE>
recognize such successor as Tenant's landlord under this lease and shall
promptly execute and deliver any instrument that may be necessary to
evidence such attornment, and Tenant hereby irrevocably appoints Landlord
or such holder the attorney-in-fact of Tenant to execute and deliver such
instrument on behalf of Tenant should Tenant refuse and fail to do so
within ten (10) days after Landlord or such holder shall have given notice
to Tenant requesting the execution and delivery of such instrument. Upon
such attornment, this Lease shall continue in full force and effect as a
direct lease between such successor landlord and Tenant, subject to all of
the then executory terms, covenants, and conditions of this Lease.
30. Estoppel Certificate
Within ten (10) days following any written request which Landlord may make
from time to time, Tenant shall execute and deliver to Landlord a
certificate substantially in the form attached hereto as Exhibit "C" and
made a part hereof, indicating thereon any exceptions thereto which may
exist at that time. Failure of the Tenant to execute and deliver such
certificate shall constitute an acceptance of the Premises and
acknowledgment by Tenant that the statements included in Exhibit "C" are
true and correct without exception. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph 30 may be relied upon by
Landlord or by any lender, purchaser or prospective purchaser of the
Building or the Property or anyone else to whom Landlord may provide said
certificate.
31. Waiver
If either Landlord or Tenant waives the performance of any term, covenant
or condition contained in this Lease, such waiver shall not be deemed to be
a waiver of any subsequent breach of the same or of any other term,
covenant or condition contained herein.
32. Security Deposit
The Security Deposit shall be held by Landlord without liability for
interest and as security for the performance by Tenant of Tenant's
covenants and obligations under this Lease, it being expressly understood
that the Security Deposit shall not be considered an advance payment of
rent or a measure of Landlord's damages in case of default by Tenant.
Landlord may, from time to time, without prejudice to any other remedy, use
the Security Deposit to the extent necessary to make good any arrearages of
rent or to satisfy any other covenant or obligation of Tenant hereunder.
Following any such application of the Security Deposit, Tenant shall pay to
Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. Landlord shall be entitled to commingle
the Security Deposit with other funds of Landlord, and the Security Deposit
shall not be deemed to be held in trust by Landlord for Tenant or any other
person. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by
Landlord to Tenant or Tenant's last permitted assignee at such time after
termination of this Lease when Landlord shall have determined that all of
Tenant's obligations under this Lease (including, without limitation, the
obligations, of Tenant to maintain and repair the Premises) have been
fulfilled. On the occurrence of any events of default as described in the
Lease, said Security Deposit shall become due and payable to Landlord. If
the Building is conveyed by Landlord, said Security Deposit shall become
due and payable to Landlord. If the Building is conveyed by Landlord, said
Security Deposit may be paid over to Landlord's successor and, if so,
Tenant hereby releases Landlord from any and all liability with respect to
said Security Deposit and its application or return. The Security Deposit
shall not be assigned or encumbered by Tenant without the written consent
of Landlord and such assignment or encumbrance without Landlord's consent
shall be void.
18
<PAGE>
33. Notices
Whenever any notice, demand or request is required or permitted hereunder,
such notice shall be sent by United States Mail, registered, postage pre-
paid, or by a commercial mail service with delivery confirmed by receipt
or, if by hand delivery, with confirmation delivery as described above to
the address set forth below:
<TABLE>
<CAPTION>
Tenant: Automated Dispatch Solutions, Inc. Automated Dispatch Solutions, Inc.
- -----------------------------------------------------------------------------------
<S> <C>
8175 Northwest 12th Street 1985 Phoenix Blvd
- -----------------------------------------------------------------------------------
Suite 430 Suite 235
- -----------------------------------------------------------------------------------
Miami, Florida 33126 Atlanta, Georgia 30349
- -----------------------------------------------------------------------------------
Attn: Attn:
- -----------------------------------------------------------------------------------
Landlord:Principal Mutual Life Insurance Principal Mutual Life Insurance
Company Company
- -----------------------------------------------------------------------------------
c/o Brannen/Goddard Company 711 High Street
- -----------------------------------------------------------------------------------
1895 Phoenix Boulevard, Suite 336 Des Moines, IA 50392-0137
- -----------------------------------------------------------------------------------
Atlanta, GA 30349
- -----------------------------------------------------------------------------------
</TABLE>
Any notice, demand or request which shall be served upon either of the
parties in the manner aforesaid shall be deemed sufficiently given for all
purposes hereunder (i) at the time such notices, demands or requests are
hand-delivered in person or (ii) on the third day after the mail of such
notices, demands or requests in accordance with the preceding portion of
this Paragraph 33.
Either Landlord or Tenant shall have the right from time to time to
designate by written notice to the other party such other places in the
United States as Landlord or Tenant may desire written notice to be
delivered or sent in accordance herewith; provided, however, at no time
shall either party be required to send more than an original and two copies
of any such notice, demand or request required or permitted hereunder.
34. Captions and References
The paragraph headings herein are for convenience of reference and shall in
no way define, increase, limit, or describe the scope or intent of any
provision of this Lease.
35. Successors and Assigns
The words "Landlord" and "Tenant" as used herein include the respective
contracting party, whether singular or plural, and whether an individual,
masculine or feminine, or a partnership, joint venture, business trust, or
corporation. The provisions of this Lease shall inure to the benefit of
and be binding upon Landlord and Tenant, and their respective successors,
and assigns subject, however, to the provisions of Paragraph 19 hereof.
36. Severability
If any clause, phrase, provisions or portions of this Lease or the
application thereof to any person or circumstance shall be invalid or
unenforceable under applicable law, such even shall not affect, impair or
render invalid or unenforceable the remainder of this Lease or any other
clause, phrase, provision or portion hereof, nor shall it affect the
application of any clause, phrase, provision or portion to other persons or
circumstances, and it is also the intention of the parties to this Lease
that in lieu of each such clause, phrase, provision or portion of this
Lease that is invalid or unenforceable, there shall be added as a part of
this Lease a clause, phrase, provision or portion as similar in terms to
such invalid or
19
<PAGE>
unenforceable clause, phrase, provision or portion as may be possible and
be valid and enforceable.
37. Governing Law
This lease and the rights and obligations of the parties hereto shall be
interpreted, construed, and enforced in accordance with the laws of the
State of Georgia.
38. Force Majeure
Whenever a period of time is herein prescribed for the taking or any action
by Landlord, Landlord shall not be liable or responsible for, and there
shall be excluded from the computation of such period of time, any delays
due to strikes, riots, fire, acts of God, shortages of labor or materials,
war, governmental laws, regulations or restrictions, or any other cause
whatsoever beyond the control of Landlord.
39. Time of Essence
Time is of the essence of this Lease and all of its provisions.
40. Entire Agreement
This Lease together with its exhibits contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been
no representations made by the Landlord or understandings made between the
parties other than those set forth in this Lease and its exhibits. This
Lease may not be modified except by a written instrument signed by the
parties hereto.
41. Survival of Tenant's Obligations
All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term or this Lease shall survive
the expiration or earlier termination of the term hereof.
42. Holding Over
In no event shall there be any renewal of this Lease by operation of law,
and if Tenant remains in possession of the Premises after the termination
of this Lease and without a new lease executed by Landlord and Tenant,
Tenant shall be deemed to be occupying the Premises as a tenant at
sufferance on a month to month basis and shall pay rent in an amount equal
to two hundred percent (200%) of the Base Rental and additional rent
provided for in this Lease and otherwise subject to all the covenants and
provisions of this Lease insofar as the same are applicable to a month-to-
month tenancy.
43. Corporate Authority
If Tenant is a corporation each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duty
authorized and existing corporation, that Tenant has and is qualified to do
business in Georgia, that the corporation has full right and authority to
enter into this Lease, and that each and both persons signing on behalf of
the corporation were authorized to do so. Upon Landlord's request, Tenant
shall provide Landlord with evidence reasonably satisfactory to Landlord
confirming the foregoing covenants and warranties.
44. Mortgage Approvals
Landlord shall not be deemed to have unreasonably withheld its consent or
approval of any matter hereunder if the holder of any deed to secure debt
or similar instrument encumbering the Building or the Property or any
portion thereof shall refuse or withhold
20
<PAGE>
its approval or consent thereto. Any requirement which Landlord imposes
pursuant to the direction of any such holder shall be deemed to have been
reasonably imposed by Landlord if made in good faith.
45. Landlord's Lien
In addition to any statutory lien for rent in Landlord's favor, Landlord
shall have and Tenant hereby grants to Landlord a continuing security
interest for all rentals and other sums of money becoming due hereunder
from Tenant, upon all goods, wares, equipment, fixtures, furniture,
inventory, accounts, contract rights, chattel paper and other personal
property of Tenant situated on the Premises, and such property shall not be
removed therefrom without the consent of Landlord until all arrearages in
rent as well as any and all other sums of money then due to Landlord
hereunder shall first have been paid and discharged. In the event of a
dreamt under this Lease, Landlord shall have, in addition to any other
remedies provided herein or by law, all rights and remedies under the
Uniform Commercial Code. including without limitation the right to sell the
property described in this Paragraph 45 at public or private sale upon
providing the notice called for by the Uniform Commercial Code or if none
is so called for upon five (5) days notice to Tenant. Tenant hereby agrees
that this Lease shall constitute a security agreement and further agrees to
execute such financing statements and other instruments necessary or
desirable in Landlord's discretion to perfect the security interest hereby
created. Any statutory lien for rent is not hereby waived, the express
contractual lien herein granted being in addition and supplementary
thereto.
46. Landlord's Liability
In no event shall Landlord's liability for any breach of this Lease exceed
the amount of rental then remaining unpaid for the then current term
(exclusive of any renewal periods which have not then actually commenced).
This provision is not intended to be a measure of agreed amount of
Landlord's liability with respect to any particular breach, and shall not
be utilized by any court or otherwise for the purpose of determining any
liability of Landlord hereunder, except only as a maximum amount not to be
exceeded in any event. Neither Landlord nor any partner of Landlord shall
have any personal liability with respect to any of the provisions of this
Lease, and if Landlord is in default with respect to its obligations under
this Lease, Tenant shall look solely to Landlord's equity in the Building
and the Property or any available insurance proceeds for satisfaction.
47. Right to Relocate
If the size of Tenant's Premises is less than 5,000 square feet, Landlord
reserves the right to relocate Tenant during the term of this Lease or any
renewal hereof, to similar quality office space within the Building. If
Landlord exercises this right to relocate Tenant, then the expenses of
moving Tenant's property from the Premises to Tenant's new office space
shall be determined prior to the relocation of Tenant.
48. Rules and Regulations
Tenant shall faithfully observe and comply with the Rules and Regulations
attached hereto as Exhibit "D" to this Lease and all reasonable
modifications thereof and additions thereto from time to time put into
effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other tenant or occupant of the Building of any of
said Rules and Regulations.
49. Transfers by Landlord
Landlord shall have the right to transfer and assign, in whole or in part
all its rights and obligations hereunder and in the Building or the
Property, and in such event and upon such transfer Landlord shall be
released from any further obligations hereunder, and
21
<PAGE>
Tenant agrees to look solely to such successor in interest of Landlord for
the performance of such obligations. Tenant agrees to attorn to such
successor in interest of Landlord.
50. Commissions
Tenant represents and warrants to Landlord that (except with respect to any
broker identified in Paragraph 1 hereof) no broker or other person has
represented Tenant in the negotiations for and procurement of this Lease
and that no commissions or compensation of any kind are due and payable in
connection herewith to any broker or other person. Tenant agrees to
indemnify and hold Landlord harmless from any and all claims, suits, or
judgments (including, without limitation, reasonable attorneys' fees and
court costs incurred in the enforcement of this indemnity or otherwise) for
any commissions or compensation of any kind which arise out of or are in
any way connected with any claimed agency relationship with Tenant (except
for any broker identified in Paragraph 1 above).
51. Submission of Lease
The submission of this Lease to Tenant for examination does not constitute
an offer to lease, and this Lease shall be effective only upon its complete
execution by both Landlord and Tenant. Execution of this Lease by Tenant
and delivery of such Lease to Landlord for its execution shall constitute
an offer to lease to Landlord which shall remain open for Landlord's
acceptance for a period of fourteen (14) days after the receipt by Landlord
of such executed Lease.
52. Special Stipulations
In the event that the following conflicts with the foregoing provisions of
this Lease, the following shall control:
EXHIBIT A: Premises
EXHIBIT B: Special Stipulation
EXHIBIT C: Estoppel Certificate
EXHIBIT D: Rules and Regulations
EXHIBIT E: Lower Lot
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple counterparts each of which shall be deemed an original as of the day
and year first above written
LANDLORD: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
BY: /s/ Scott D. Harris
--------------------------------------------------
TITLE: Assistant Director
--------------------------------------------------
ATTEST: /s/ Timothy E. Minton
--------------------------------------------------
TITLE: Director
--------------------------------------------------
TENANT: AUTOMATED DISPATCH SOLUTIONS, INC.
BY: /s/
--------------------------------------------------
TITLE: President
--------------------------------------------------
ATTEST: /s/
--------------------------------------------------
TITLE:
--------------------------------------------------
(corporate seal)
22
<PAGE>
EXHIBIT "B"
SPECIAL STIPULATIONS
Lease Agreement between Principal Mutual Insurance Company, as Landlord, and
Automated Dispatch Solutions, Inc. d/b/a ADS, as Tenant dated _______________,
for Suite 235 at One Crown Center containing 4,745 rentable square feet.
These special Stipulations are made and entered into contemporaneously with the
lease agreement described above. In the case of any conflict between the
Special Stipulations and the Lease, these Special Stipulations shall control.
All terms used herein shall be the same as defined in the Lease.
1. RENTAL SCHEDULE. The Base Rental shall be:
---------------
PERIOD MONTHLY AMOUNT ANNUAL AMOUNT
- ------------------ -------------- -------------
9/1/97 - 8/31/98 $6,227.81 $74,733.72
- -------------------------------------------------
9/1/98 - 8/31/99 $6,414.64 $76,975.68
- -------------------------------------------------
9/1/99 - 8/31/00 $6,607.08 $79,284.96
- -------------------------------------------------
9/1/00 - 8/31/01 $6,805.29 $81,663.48
- -------------------------------------------------
9/1/01 - 8/31/02 $7,009.45 $84,113.40
- -------------------------------------------------
2. CONSTRUCTION OF PREMISES. Landlord shall repaint and recarpet the Premises
------------------------
and otherwise deliver the Premises in "as is" condition. Tenant may elect
to vary from the plans and specifications, however, such changes shall be
confirmed by a work change order prior to the performance of such changes.
Landlord will not be responsible for delays in the completion of the
Premises resulting from changes made at the request of the Tenant after
final construction documents are issued. Tenant shall pay Landlord for
such changes which result in increased construction costs in cash prior to
the Commencement Date. During the course of construction of the Premises,
any changes made by Tenant will not delay the Commencement Date.
Landlord's failure to deliver possession due to Tenant's failure to pay any
such cost shall not be a breach of this Lease.
3. OPTION TO TERMINATE. Provided Tenant is not in default Tenant shall have
-------------------
the option to terminate the lease without penalty effective September 1,
2000 upon notice to Landlord on or before September 1, 1999.
4. PARKING. Tenant will require 19 of Tenant's Employees to park in the
-------
"Lower Lot" (See Exhibit "E") and Tenant will be responsible for the
enforcement of this provision. Failure to do so will constitute a default
under this Lease. Tenant shall also be allowed the use of 8 spaces
throughout the Building parking areas with no restrictions.
5. All rental payments are to be forwarded to:
One Crown Center
c/o Brannen/Goddard Company
3390 Peachtree Road
Suite 1200
Atlanta, GA 30326
6. REPRESENTATION. In this transaction the Tenant has been represented by
--------------
Peachtree Partners and Peachtree Partners shall receive a commission from
the Landlord payable by
23
<PAGE>
Brannen/Goddard Company. The Landlord has been represented by
Brannen/Goddard company and Brannen/Goddard Company shall be paid a
commission by the Landlord.
24
<PAGE>
EXHIBIT "C"
ESTOPPEL CERTIFICATE
- --------------------
- --------------------
EXHIBIT
- --------------------
- --------------------
RE:
Gentlemen:
The undersigned, as Tenant under that certain lease (the "Lease") dated
___________________ made with _______________________, as Landlord (the
"Landlord"), does hereby agree and certify:
1. That the copy of the Lease attached hereto as Exhibit "A" is a true
and complete copy of the Lease, and there are no amendments, modifications
or extensions of or to the Lease except as set forth immediately below:
--------------------
--------------------
--------------------
2. That the term of the Lease commenced or began on ______________,
19____, and the Lease is now in full force and effect.
3. That its leased premises at the above location have been completed in
accordance with the terms of the Lease, that it has accepted
possession of said premises, that it now occupies the same and that
Tenant is Paying full lease rental.
4. That it began paying rent on ________________________, and that save
only as may be required by the terms of the Lease, no rental has been
paid in advance, nor has the undersigned deposited any sums with the
Landlord as security except as set forth immediately below:
-----------------------------
-----------------------------
-----------------------------
5. That there exist no defenses or offsets to enforcement of the Lease by
the Landlord and, so far as is known to the undersigned, the Landlord
is not, as of the date hereof, in default in the performance of the
Lease, nor has the Landlord committed any breach thereof, nor has any
event occurred which, with the passage of time or the giving of
notice, or both, would constitute a default or breach by the Landlord.
The undersigned acknowledges that you are relying on the above
representations of the undersigned in (advancing funds to purchase the
existing first mortgage loan covering the building in which the leased
premises arc located) and does hereby warrant and affirm to
25
<PAGE>
and for your benefit, and that of your successors and assigns, that each of
the foregoing representations is true, correct and complete as of the date
hereof.
Dated: Tenant:
-------------------- --------------------
By: EXHIBIT
------------------------
Its:
26
<PAGE>
-------------------------
EXHIBIT "D"
RULES AND REGULATIONS
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators and
stairways shall not be obstructed by Tenants or used by them for any
purpose other than for ingress and egress from their respective premises.
The halls, passages, exits, entrances, elevators and stairways are not for
the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence,
in the judgment of Landlord, shall be prejudicial to the safety, character,
reputation and interests of the Building and its Tenants, provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any Tenant normally deals in the ordinary course of such
Tenant's business unless such persons are engaged in illegal activities.
No Tenant, and no employees or invitees of any Tenant, shall go upon the
roof of the Building, except as authorized by Landlord.
2. No sign, placard, picture, name, advertisement or notice, visible from the
exterior of the leased premises shall be inscribed, painted, affixed,
installed or otherwise displayed by any tenant either on its premises or
any part of the Building without the prior written consent of Landlord, and
Landlord shall have the right to remove any such sign, placard, picture,
name, advertisement, or notice without notice to and at the expense of
Tenant,
If Landlord shall have given such consent to any Tenant at any time,
whether before or after the execution of the Lease, such consent shall in
no way operate as a waiver or release of any of the provisions hereof or of
such Lease and shall be deemed to relate only to the particular sign,
placard, picture, name, advertisement or notice so consented to by Landlord
and shall not be construed as dispensing with the necessity of obtaining
the specific written consent of Landlord with respect to any other such
sign, placard, picture, name, advertisement or notice.
All approved signs or lettering on doors and walls shall be painted,
affixed and inscribed at the expense of the Tenant by a person approved by
Landlord.
3. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of Tenants only and
Landlord reserves the right to exclude any other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or
placed in, or used in connection with, any window or door on any premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's standard window covering and shall in no way be visible from the
exterior of the Building. No articles shall be placed or kept on the window
sills so as to be visible from the exterior of the Building. No articles
shall be placed against glass partitions or doors which might appear
unsightly from outside Tenant's premises.
5. Landlord reserves the right to exclude from the Building between the hours
of 6 p.m. and 8 a.m. at all hours on Saturday, Sundays and holidays all
persons who are not Tenants or their accompanied guests in the Building.
Each Tenant shall be responsible for all persons it allows to enter the
Building and shall be liable to Landlord for all acts of such persons.
Landlord shall in no case be liable for damages for error with regard to
the admission to or exclusion from the Building of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstances rendering such action advisable in Landlord's opinion.
Landlord reserves
27
<PAGE>
the right to prevent access to the Building by closing the doors, or
otherwise, for the safety of Tenants and protection of the Building and
property in the Building.
6. No Tenant shall employ any person or persons other than the janitor of
Landlord for the purpose of cleaning premises unless otherwise agreed to by
Landlord in writing. Except with the written consent of Landlord no person
or persons other than those approved by Landlord shall be permitted to
enter the Building for the purpose of cleaning same. No Tenant shall cause
any unnecessary labor by reason of such Tenant's carelessness or
indifference in the preservation of good order and cleanliness of the
premises. Landlord shall in no way be responsible to any tenant for any
loss of property on the premises, however occurring, or for any damage done
to the effects of any Tenant by the janitor or any other person.
7. No Tenant shall obtain or maintain for use upon its premises coin-operated
vending machines or receive barbering or shoe shine services in its
premises except from persons authorized by Landlord.
8. Each Tenant shall see that all doors of its premises are closed and
securely locked and must observe strict care and caution that all water
faucets or water apparatus are entirely shut off before the Tenant or its
employees leave such premises, and that all utilities shall likewise be
carefully shut off so as to prevent waste or damage, and for any default or
carelessness the Tenant shall make good all injuries sustained by other
Tenants or occupants of the Building or Landlord. On multiple-tenancy
floors. all Tenants shall keep the door or doors to the Building corridors
closed at all times except for ingress and egress.
9. As more specifically provided in the Tenant's Lease of the premises, Tenant
shall not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air-conditioning, and shall refrain from attempting
to adjust any controls.
10. No Tenant shall alter any lock or access device or install a new or
additional lock or access device or any bolt off any door of its premises
without prior written consent of Landlord. If Landlord shall give its
consent, Tenant shall in each case furnish Landlord with a key for any such
lock.
11. No Tenant shall make or have made additional copies of any keys or access
devices provided by Landlord. Each Tenant upon the termination of' the
Tenancy, shall deliver to Landlord all the keys or access devices for the
Building, offices, rooms and toilet rooms which shall have been furnished
the Tenant or which the Tenant shall have had made. In the event of the
loss of any keys or access devices so furnished by Landlord, Tenant shall
pay Landlord therefor.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed
and no foreign substance of any kind whatsoever, including, but not limited
to, coffee grounds shall be thrown therein, and the expense of any
breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the Tenant who, or whose employee or invitees, shall have
caused it.
13. No Tenant shall use or keep in its premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material other than limited
quantities necessary for the operation or maintenance of office equipment.
No Tenant shall use any method of heating or air-conditioning other than
that supplied by Landlord.
14. No Tenant shall use, keep or permit to be used or kept in its premises any
foul or noxious gas or substance or permit or suffer such premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations
or interfere in any way with other Tenants or those having
28
<PAGE>
business therein, nor shall any animals or birds be brought in or kept in
or about any premises of the Building.
15. No cooking shall be done or permitted by any Tenant on its Premises (except
microwave ovens or Underwriters' Laboratory approved equipment for the
preparation of coffee, tea, hot chocolate and similar beverages for Tenants
and their employees shall be permitted, provided that such equipment and
use is in accordance with applicable federal, state and city laws, codes,
ordinances, rules and regulations) nor shall premises be used for lodging.
Except with the prior written consent of Landlord, no Tenant shall sell,
permit the sale, at retail, of newspapers, magazines periodicals, theater
tickets or any other goods or merchandise in or on any premises, nor shall
Tenant carry on, or permit or allow any employees or other person to carry
on, the business of stenography, typewriting or any similar business in or
from any premises for the service or accommodation of occupants of any
other portion of the Building, nor shall the premises of any Tenant be used
for the storage of merchandise or for manufacturing of any kind, or the
business of a public barber shop, beauty parlor, nor shall the premises of
any Tenant be used for any improper, immoral or objectionable purpose, or
any business activity other than that specifically provided for in such
Tenant's lease.
16. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlords instructions in
their installation.
17. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of
Landlord. The location of burglar alarms, telephones, call boxes or other
office equipment affixed to all premises shall be subject to the written
approval of Landlord.
18. No Tenant shall install any radio or television antenna, loudspeaker or any
other device on the exterior walls or the roof of the Building. Tenant
shall not interfere with radio or television broadcasting or reception from
or in the Building or elsewhere.
19. No Tenant shall lay linoleum, tile, carpet or any other floor covering so
that the same shall be affixed to the floors of its premises in any manner
except as approved in writing by Landlord. The expense of repairing any
damage resulting from a violation of this rule or the removal of any floor
covering shall be borne by the Tenant by whom, or by whose contractors,
employees or invitees, the damage shall have been caused
20. No furniture, freight equipment, materials, supplies, packages, merchandise
or other property will be received in the Building or carried up or down
the elevators except between such hours and in such elevators as shall be
designated by Landlord. Landlord shall have the right to prescribe the
weight, size and position of all sales, furniture, files, bookcases or
other heavy equipment brought into the Building. Safes or other heavy
objects shall, if considered necessary by Landlord, stand on wood strips of
such thickness as determined by Landlord to be necessary to property
distribute the weight thereof. Landlord will not be responsible for loss
of or damage to any such safe, equipment or property from any cause, and
all damage done to the Building by moving or maintaining any such safe,
equipment or other property shall be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to Landlord
or to any tenants in the Building shall be placed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient
to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
29
<PAGE>
21. No Tenant shall place a load upon any floor of the premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowed by law. No Tenant shall mark, or drive nails, screws or drill
into, the partitions, woodwork or plaster or in any way deface such
premises or any part thereof.
22. There shall not be used in any space, or in the public areas of the
Building, either by Tenant or others, any hand trucks except those equipped
with rubber tires and side guards or such other material-handling equipment
as Landlord may approve. No other vehicles of any kind shall be brought by
any Tenant into or kept in or about the premises.
23. Each Tenant shall store all its trash and garbage within the interior of
its premises. No materials shall be placed in the trash boxes or
receptacles if such material is of such nature that it may not be disposed
of in the ordinary and customary manner of removing and disposing of trash
and garbage in this area without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be
made only through entry ways and elevators provided for such purposes and
at such times as Landlord may designate.
24. Canvassing, soliciting, distributing of handbills or any other written
material, and peddling in the Building are prohibited and each Tenant shall
cooperate to prevent the same. No Tenant shall make room-to-room
solicitation of business from other tenants in the Building.
25. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence
of liquor or drugs or who is in violation of any of the rules and
regulations of the Building.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
27. Tenant shall comply with all energy conservation, safety, fire protection
and evacuation procedures and regulations established by Landlord or any
governmental agency.
28. Tenant assumes any and all responsibility for protecting its premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the premises closed.
29. The requirements of Tenants will be attended to only upon application at
the office of the Building by an authorized individual. Employees of
Landlord shall not perform any work or do anything outside of their regular
duties unless special instruction from Landlord, and no employees will
admit any person (Tenant or otherwise) to any office without specific
instructions from Landlord.
30. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular Tenant or Tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of
any other Tenant or Tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all Tenants of the Building.
31. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the
preservation of good order therein. Tenant agrees to abide by all such
Rules and Regulations herein above stated and any additional rules and
regulations which are adopted.
32. All wallpaper or vinyl fabric materials which Tenant may install on painted
walls shall be applied with a strippable adhesive. The use of
nonstrippable adhesives will cause damage
30
<PAGE>
to the walls when materials are removed, and repairs made necessary thereby
shall be made by Landlord at Tenant's expense.
33. Tenant shall provide and maintain hard surface protective mats under all
desk chairs which are equipped with casters to avoid excessive wear and
tear to carpeting. If Tenant falls to provide such mats, the cost of
carpet repair or replacement made necessary by such excessive wear and tear
shall be charged to and paid for by Tenant.
34. Tenant will refer all contractors, contractor's representatives and
installation technicians, rendering any service to Tenant to Landlord for
Landlord's supervision, approval, and control before performance of any
contractual service. This provision shall apply to all work performed in
the Building, including installations of telephones, telegraph equipment,
electrical devices and attachments and installations of any nature
affecting floors, walls, woodwork, trim, windows, ceilings, equipment or
any other physical portion of the Building.
35. Tenant shall give prompt notice to Landlord of any accidents to or defects
in plumbing, electrical mixtures, or heating apparatus so that such
accidents or defects may be attended to properly.
36. No Tenant shall store items in any common areas, corridors, stairwells or
restrooms. This includes any mechanical, telephone or other rooms
restricted to Landlord.
37. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
38. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify, after or amend, in whole or in part, the terms,
covenants, agreements and conditions of any Lease of premises in the
Building.
39. No smoking is allowed within the Building, including any Tenant premises or
Building common areas. Landlord may designate a specific smoking area in a
suitable area outside of the Building.
40. No animals or dogs are allowed within the Building, including any Tenant
premises or Building common areas.
41. Tenant shall not store nor bring into the Buildings, Fire Arms, ammunition
or other devices generally considered to be a weapon.
31
<PAGE>
FIRST AMENDMENT TO LEASE
This Amendment of Lease is made as of _____________, 1997, between PRINCIPAL
MUTUAL LIFE INSURANCE COMPANY ("Landlord") and AUTOMATED DISPATCH SOLUTIONS,
INC. D/B/A ADS ("Tenant").
WHEREAS:
A. Principal Mutual Life Insurance Company ("Landlord") and Automated Dispatch
Solutions, Inc. d/b/a ADS, ("Tenant") have entered into a lease agreement
dated ___________________ ("Lease"), by which Landlord demised unto Tenant
4,745 square feet, Suite 235, on the second floor of One Crown Center,
situated at 1895 Phoenix Boulevard, Atlanta, Georgia 30349, as described in
the Lease.
B. Landlord and Tenant desire to amend the lease as described below:
NOW THEREFORE BE IT AGREED:
42. Expansion of Premises: Effective October 1, 1997 the Premises shall
---------------------
increase by 2,075 rentable square feet (Suite 306 "Expansion Area") to a
total of 6,820 rentable square feet.
43. Lease Term: The Lease Term termination date shall be amended to September
----------
30, 2002.
44. Base Rental: The Base rental schedule shall be amended as follows:
-----------
PERIOD MONTHLY RATE PERIOD AMOUNT
------ ------------ -------------
10/1/97 - 9/30/98 $ 8,951.25 $107,415.00
10/1/98 - 9/30/99 $ 9,219.79 $110,637.48
10/1/99 - 9/30/00 $ 9,496.38 $113,956.56
10/1/00 - 9/30/01 $ 9,781.27 $117,375.24
10/1/01 - 9/30/02 $10,074.71 $120,896.52
45. Tenant Improvements: Landlord at Landlord's expense shall repaint and
-------------------
recarpet the Expansion Area. Landlord shall also remove one wall,
construct two walls and install a door, close one opening.
46. Option to Terminate: Provided Tenant is not in default, Tenant shall have
-------------------
the option to Terminate the Lease effective October 1, 2000 upon notice to
Landlord on or before October 1, 1999 and payment of $2,000.00 at the time
of notice.
47. Early Occupancy: Tenant may temporarily occupy the "Expansion Area"
---------------
effective September 1, 1997 on an "as-is" basis. Landlord shall make the
Tenant improvements after the completion of Tenant's temporary occupancy.
48. Parking: Reference Special Stipulations Exhibit B section 5. Tenant will
-------
require 19 of Tenant's employees to park in the "Lower Lot" (See Exhibit
"E") and Tenant will be responsible for the enforcement of this provision.
Failure to do so will constitute a default under this Lease. Tenant shall
also be allowed the use of 16 spaces throughout the Building parking areas
with no restrictions.
32
<PAGE>
49.50. Security Deposit.Reference 2.6 of the Lease. The Security Deposit is
----------------
hereby increased to $10,074.71
51. First Month's Rent.Tenant shall pay to Landlord $2,723.44 as additional
------------------
first month's rent on the expansion area for the month of October 1997.
52. Peachtree Partners represents the Tenant and Peachtree Partners shall be
paid a commission by the Landlord. Brannen/Goddard Company represents the
Landlord and will be paid a commission by the Landlord.
53. In the event of conflict between the terms of this Amendment and the Lease,
this Amendment shall control.
54. Except as otherwise stated herein, all capitalized terms shall bear the
same meanings as ascribed to them in the Lease.
55. Except as set forth herein, the Lease remains unmodified and in full force
and effect.
LANDLORD: Principal Mutual Life Insurance Co.
Attest: By:
----------------- -------------------------------------------
Its: Its:
----------------- -------------------------------------------
TENANT: Automated Dispatch Solutions
Attest: By: /s/
----------------- -------------------------------------------
Its: Its: President
----------------- -------------------------------------------
33
<PAGE>
Exhibit "A"
Suite 306
2,075 RSF
34
<PAGE>
LANDLORD: NEW WORLD PARTNERS JOINT VENTURE, a
Florida general partnership
c/o Codina Real Estate Management, Inc.
8323 N.W. 12/th/ Street, Suite 115
Miami, Florida 33126
TENANT: AUTOMATED DISPATCH SOLUTIONS, INC., a
Delaware corporation
8175 N.W. 12/th/ Street
Miami, Florida 33126
DATE OF EXECUTION: Aug. 7, 1997
--------------------------------------------------------------------
LEASE-OFFICE COMMERCIAL
--------------------------------------------------------------------
Revised Form 4/6/95
35
<PAGE>
EXHIBIT 10.14
LEASE
-----
THIS LEASE made this 8th day of October, 1996, by and between GERALD A.
CHASE of the Town of Middletown, County of Middlesex and State of Connecticut,
(hereinafter referred to as "Landlord") and AUTOMATED DISPATCH SOLUTIONS, INC.
of 8175 N.W. 12th, Suite 430, Miami, Florida 33126 (hereinafter referred to as
"Tenant").
1. In consideration of the rents and covenants herein reserved and
contained on the part of the Tenant to be paid, performed and observed, Landlord
does hereby demise and lease unto Tenant and Tenant does hereby hire and take
from Landlord, upon the conditions agreements and covenants herein expressed the
following space (hereinafter called the "demised premises"), to wit:
Approximately Three Thousand Five Hundred (3500) square feet being the entire
second floor of the premises known as 515 Main Street, Yalesville Section of
Wallingford, Connecticut.
2. Tenant shall use and occupy the demised premises for offices and sales
purposes.
3. This Lease Agreement shall be for a period of Three (3) years
commencing on October 15, 1996 and ending on October 14, 1999.
4. Tenant hereby covenants and agrees to pay to Landlord during the term
of this Lease Twenty-Nine Thousand Seven Hundred Fifty and 00/100ths
($29,750.00) Dollars per year payable in monthly installments of Two Thousand
Four Hundred Seventy-Nine and 17/100ths ($2,479.17) Dollars, commencing October
15, 1996, with all subsequent payments
<PAGE>
due on the fifteenth (15th) day of each month. The first months rent shall be
paid upon signing as provided in Paragraph 7.
All rental payments during the entire term of this Lease shall be payable
at the office of Landlord, c/o Joval Machine, 515 Main Street, Yalesville,
Connecticut, or at such other place as Landlord shall designate in writing,
without any setoff or deductions whatsoever.
5. The demised premises are leased together with the right of Tenant to
park automobiles in the spaces designated by Landlord in common with the other
tenants and other tenants, agents, employees, business invitees and customers.
Tenant and its employees must use entrance on the south side. The Tenant may
use the front door for visitors. Landlord shall be responsible for the
maintenance of said parking lot and clearing the same of snow, ice and debris.
6. Tenant, at its own cost and expense, may make alterations only with
prior written permission of Landlord, within the leased premises but shall
obtain building permits if required by law and shall comply with all building
codes and regulations as established by the municipal or State authorities and
shall pay all bills in connection with any such alterations promptly, when due,
and shall save Landlord harmless from all liens, encumbrances or other
obligations with regard to any such alterations or changes. In the event of any
violations of the provisions herein set forth, Landlord, without otherwise
limiting the rights and remedies, shall have the right, but not the duty to pay
any such obligations and any amounts so expended by Landlord, including
attorney's fees in connection therewith, shall be deemed additional rent, and
shall be immediately due and payable upon demand from the Landlord.
2
<PAGE>
7. Coincident with the execution of this Lease, Tenant shall pay a
security deposit to Landlord in the sum of Two Thousand Four Hundred Seventy-
Nine and 17/100ths ($2,479.17) Dollars for the faithful performance of all
covenants and conditions of the Lease by Tenant. If Tenant performs all
covenants and conditions of the Lease, the sum deposited shall be returned to
said Tenant at the end of the Lease period. In addition, Tenant shall pay,
coincident with the execution of this Lease, the sum of Two Thousand Four
Hundred Seventy-Nine and 17/100ths ($2,479.17) Dollars for the first months
rent.
8. Tenant shall in connection with its use and occupancy of the demised
premises comply with all laws, orders and regulations of Federal, State, County
and municipal authorities, all rules, orders and regulations of the Connecticut
Board of Fire Underwriters, and with any public officer or officers, pursuant to
law, which shall impose any violation, order or duty; Tenant shall not do or
permit to be done any act or thing upon said premises, which will invalidate or
be in conflict with fire insurance policies covering the building of which the
demised premises form a part, and fixtures and property therein, or cause any
increase in the rate for fire insurance applicable to the building.
9. Tenant shall upon written request of Landlord subordinate this Lease to
the lien of any first mortgage which may now or hereinafter affect the real
property of which the demised premises for a part, and to all renewals,
modifications, consolidations, replacements and extensions thereof. In
confirmation of such subordination, Tenant shall execute within ten days any
reasonable certificates that Landlord may request. The Tenant hereby
constitutes and appoints Landlord the Tenant's attorney-in-fact to execute any
such certificates for and on behalf of Tenant.
3
<PAGE>
10. Unless caused by the negligence of Landlord, Landlord shall not be
liable for any loss or damage to any property of Tenant by reason of theft or
illegal entry. Unless caused by negligence of the Landlord, Landlord or their
agents shall not be liable for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water,
rain or snow or leaks from any part of said building or from the pipes,
appliances or plumbing works or from the roof, street, or sub-surface or from
any other place or by dampness or by any other cause of whatever nature; nor
shall Landlord or their agents by liable for any such damage caused by other
tenants or persons in said building.
11. Tenant shall give immediate notice to Landlord in case of fire or
accidents in the demised premises. If the demised premises shall be partially
damaged by fire or other cause, the damage (except as to Tenant's fixtures or
improvements made by Tenant), shall be repaired by and at the expense of
Landlord and the rent until such repairs shall be made shall be apportioned
according to the part of the demised premises which is usable by Tenant. No
penalty shall accrue for reasonable delay which may arise by reason of
adjustment of insurance on the part of Landlord and/or Tenant, and for
reasonable delay on account of "labor troubles," or any other cause beyond
Landlord's control. However, Landlord will pursue said repairs in a timely and
diligent manner. If the demised premises are totally damaged or are rendered
wholly untenantable by fire or other cause, and if Landlord shall decide not to
restore or not to rebuild the same, or if the building shall be so damaged that
Landlord shall decide to demolish it, then Landlord may, within thirty (30) days
after such fire or other cause, cancel this Lease by giving Tenant notice in
writing of such decision, which notice shall be given as in this Lease provided,
and thereupon the term of this Lease shall expire by lapse of time upon
4
<PAGE>
the thirtieth (30th) day after such notice is given, and Tenant shall vacate the
demised promises and surrender the same to Landlord. No rent shall be due during
period that Premises is unusable by Tenant.
12. If the whole of the premises or part of the demised premises shall be
acquired or condemned by eminent domain for any public or quasi-public purposes
then in that event the term of this Lease shall cease and terminate from the
date of title vesting in such proceeding, and Tenant shall have no claim against
Landlord for the value of unexpired terms of said Lease. In the event any part
of the premises (other than the demised premises) shall be so acquired or
condemned by eminent domain, Landlord shall have the option to cancel and
terminate this Lease upon written notice to the Tenant given within thirty (30)
days after the date of title vesting in such proceeding. In no event shall
Tenant be entitled to any portion of the award, judgment or settlement received
by Landlord as a result of such proceedings of eminent domain. Tenant, however,
shall have the right to make its own claim against the condemning authority for
those items permitted to be paid by the condemning authority to the Tenant
without diminution of Landlord's award, judgment or settlement.
13. Tenant, for itself, its legal representatives and successors expressly
covenants that it shall not assign, mortgage or encumber this Agreement, or
underlet or suffer or permit the demised premises or any part thereof to be used
by others, without the prior written consent of Landlord in each instance which
consent may not be unreasonably withheld. Any assignment shall not relieve the
Tenant of any obligations under this Lease. The consent by Landlord to an
assignment or underletting shall not in any way be construed to relieve Tenant
5
<PAGE>
from obtaining the express consent in writing of Landlord to any further
assignment or underletting .
14. in the event of any failure of Tenant to pay any rental or additional
rental within ten (10) days after the same becomes due, or upon any failure to
commence and diligently pursue the performance of any other of the terms,
conditions or covenants of this Lease to be observed or performed by Tenant for
more than thirty (30) days after written notice of such default shall have been
mailed to Tenant, or if Tenant shall become bankrupt or insolvent, or file any
debtor proceedings, or take or have taken against Tenant in any court pursuant
to any statute either of the United States or of any State a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of Tenant's property, or if Tenant makes
an assignment for the benefit of creditors, or petitions for or enters into an
arrangement, or if Tenant shall abandon said premises, then Landlord besides
other rights or remedies they may have, shall have the immediate right of re-
entry and may lawfully remove all persons and property from the leased premises
and such property may be removed and stored in a public warehouse or elsewhere
at the cost of, and for the account of Tenant, all without being deemed guilty
of trespass, or becoming liable for any loss or damage which may be occasioned
thereby.
Should Landlord at any time terminate this Lease for any breach of Tenant,
in addition to any other remedies they may have, Landlord may recover from
Tenant all damages Landlord may incur by reason of such breach, including the
cost of recovering the demised premises, such as court costs and reasonable
attorney fees.
6
<PAGE>
15. Tenant covenants and agrees to permit Landlord, or their agents, to
enter the demised premises at all reasonable business hours during the term of
this Lease, for the purpose of inspection with regard to the performance of the
terms of this Lease on the part of Tenant to be performed, or for the purpose of
inspecting for or of making repairs therein, or for carrying out any covenants
on the part of Landlord to be performed, or for the purpose of showing the same
to prospective purchasers, or mortgagees of said premises or for any other
reasonable purpose. Landlord may show premises to perspective tenants within
last six (6) months of said Lease and last six (6) months of said option.
16. Tenant covenants and agrees to save and hold Landlord harmless from
any suit or claim for injury to persons or damage to property arising out of the
use and occupancy of the premises by Tenant; and for the further protection of
Landlord, to carry public liability insurance covering said obligation, in
insurance companies licensed to do business in the State of Connecticut in
amount of not less than $100,000.00 for injury to any one (1) person,
$300,000.00 for injuries to persons in any one (l) accident, and $5,000.00 for
property damage; and to name Landlord as an additional insured in any such
policy and to provide Landlord with a certificate of insurance evidencing the
same.
Landlord shall carry liability insurance covering the parking lot and other
common areas.
17. Tenant further agrees that no signs or other exterior ornamentation,
shall be affixed to or placed upon any exterior part of the demised premises
except in such manner and of such size, design and color as shall be approved in
advance, in writing by Landlord.
7
<PAGE>
18. Tenant covenants and agrees that at the expiration of the term of this
Lease or other determination of the same, to quit and surrender the demised
premises in as good state and condition as reasonable wear thereof will permit,
damage by fire or other casualty excepted.
19. Landlord shall, at their own cost and expense, provide the demised
premises with water. The Tenant shall be responsible for heat, air conditioning
and electricity. Landlord shall provide a submeter for electricity and shall
bill Tenant for electricity. Tenant shall reimburse Landlord within ten days of
receipt. Tenant shall pay Landlord additional rent for janitorial services
consisting of cleaning bathrooms, vacuum carpet, waste basket removal and
dusting to be provided by Landlord approximately twice per week. The additional
rent shall be $1,750.00 annually payable in monthly installments of $145.83.
Said service shall be for one year only. After said one year, the parties shall
renegotiate said price and if no agreement is made, the Tenant shall provide the
janitorial services. If additional services are required, said cost shall
increase proportionately
20. Tenant shall be responsible for replacement of all light bulbs and
shall be responsible for ordinary plumbing repairs and ordinary repairs. The
parties agree that Tenant's responsibility for ordinary repairs shall be up to
$300.00 per incident. Tenant may obtain dumpster service, at its own cost at
any time. It Tenant does not obtain its own dumpster service the Landlord will
provide said service and bill the Tenant for its portion of the cost. The
Tenant shall reimburse the Landlord within ten (10) days of receipt.
21. Landlord shall be responsible for repairing ceiling tiles prior to the
commencement of this Lease. In addition, Landlord shall provide submeter for
electricity.
8
<PAGE>
22. Tenant shall use the rear entrance for all freight deliveries.
23. It is agreed that this is a Non-Smoking facility. There shall be a
designated smoking area outside the building.
24. It is agreed that all furniture modules located on the premises shall
become the property of the Tenant provided Tenant makes all payments provided
under this Lease.
25. Tenant shall have the option to renew this Lease, for a further period
of two (2) years (from October 15, 1999 to October 14, 2001) from the
termination date of the first term hereunder, provided that Tenant shall perform
during the first term hereunder all of the conditions and obligations on its
part to be performed and further provided that Tenant give to Landlord in
writing at least six (6) months notice of its intention to exercise such renewal
option. Time is of the essence in giving said notice.
(a) In the event the Tenant exercises his option to extend the term of this
Lease as hereinabove set forth, the fixed rent which the Tenant shall pay during
such extended term shall be Thirty Thousand Six Hundred and Twenty-Five
($30,625.00) Dollars per annum payable in monthly installments of Two Thousand
Five Hundred Fifty-Two and 08/100ths ($2,552.08) Dollars commencing October 15,
1999 with all subsequent payments due on the fifteenth (15th) of each month.
26. Failure on the part of the Landlord to act upon any breach of any of
the covenants of this Lease by Tenant shall in no way constitute a waiver of the
rights of Landlord to at any time in the future act upon such default; nor shall
such failure to act prevent Landlord from acting in the event of any other or
further breach of Tenant's covenants. Any and all
9
<PAGE>
rights and remedies herein created for Landlord shall be cumulative and the use
of one remedy shall not be taken to exclude or waive the right to the use of
another.
27. Any notice from Landlord to Tenant shall be deemed duly given if sent
by Registered or Certified Mail to the Tenant at the demised premises with a
copy to 8715 N.W. 12th Street, Suite 430, Miami, Florida 33126.
28. Any notice from Tenant to Landlord shall be deemed duly given if sent
by Registered or Certified Mail to Landlord, Stantack Road, Middletown,
Connecticut 06457, or to such other place as Landlord may designate in writing
to Tenant.
29. This Lease embodies all the agreements between the parties, and no
representations not set forth herein in writing shall be binding on Landlord or
Tenant, nor shall any modification or explanation of any of the terms or
conditions of this Lease be binding on Landlord or Tenant unless in writing and
signed by both parties.
30. This Lease shall be binding upon Tenant, its successors or assigns,
and shall inure to the benefit of Landlord, their heirs and assigns.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto caused to be set their
hands and seals the day and year first above written.
Signed, Sealed and Delivered
in the Presence of:
- -------------------
- -------------------
- -------------------
----------------------------
Gerald A. Chase, Landlord
AUTOMATED DISPATCH SOLUTIONS,
INC.
By:
--------------------------
John L. Shermyen
Its President
STATE OF CONNECTICUT :
: ss. Meriden
COUNTY OF NEW HAVEN :
Personally appeared Gerald A. Chase, signer and sealer of the foregoing
instrument, and acknowledged the same to be his free act and deed, before me.
-------------------------------
Leonard E. Cheerman
Commissioner of Superior Court
STATE OF CONNECTICUT :
: ss. Meriden
COUNTY OF NEW HAVEN :
Personally appeared John L. Shermyen, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
--------------------------------
Leonard E. Cheerman
Commissioner of Superior Court
11
<PAGE>
EXHIBIT 10.13
LEASE SUMMARY
-------------
The following is a summary of basic lease provisions with respect to
the Lease. It is an integral part of the Lease, and terms defined or dollar
amounts specified in this Summary shall have the meanings or amounts as stated,
unless expanded upon in the text of the Lease and its Exhibits, which are
attached to and made a part of this Summary.
1. Date of Lease Execution: August 7, 1997
-----------------------
2. "Landlord": New World Partners Joint Venture
--------
3. Landlord's Address: c/o Codina Real Estate Management,
------------------ Inc. 8323 N.W. 12th Street, Suite 115
Miami, Florida 33126
Attention: Property Manager
4. "Tenant": Automated Dispatch Solutions, Inc.
5. Tenant's Address: 8175 N.W. 12th Street
Miami, Florida 33126
6. "Guarantor": N/A
7. Guarantor's Address: N/A
--------------------
8. Premises (section 1.1): Suite 109, as shown on Exhibit "A"
----------------------
9. Gross Rentable Area of Premises (section 1.1): Approximately
5,285 rentable square feet,
consisting of approximately 4,651
rentable square feet to be delivered
on or about November 1, 1997, and
approximately 634 rentable square
feet to be delivered no later than
March 1, 1998, all as shown on
Exhibit "A "
10. Gross Rentable Area of
----------------------
Building (section 1.1): Approximately 46,510 rentable square
feet
11. Tenant's Proportionate
----------------------
Share (section 2.3): 11.36%
-------------------
12. Permitted Use of
----------------
Premises (section 3.1): General office
----------------------
13. Term of Lease (section 1.1): Five (5) years and four (4)
-------------------------- months "Commencement Date": Date
of Substantial Completion
(estimated to be on or about
November 1, 1997) "Expiration
Date": Five (5) years and four (4)
months after the Commencement Date
14. Option to Renew (Rider 1): One (1) term of five (5) years
-------------------------
<PAGE>
15. "Minimum Rent" (section 2.2):
---------------------------
(a) From the Commencement Date through February 28, 1998, Minimum Rent
shall be based on 4,651 square feet of the Premises, and shall be at the
rate of Seventeen and 50/100 ($17.50) Dollars per square foot per annum,
payable in advance in equal monthly installments of Six Thousand Seven
Hundred Eighty-Two and 71/100 ($6,782.71) Dollars, plus tax.
(b) From March 1, 1998 through the Expiration Date of the Term,
Minimum Rent shall be based on the entire 5,285 square feet of the
Premises, as follows:
<TABLE>
<CAPTION>
ANNUAL MINIMUM RENT MONTHLY PAYMENT
YEAR RATE PER SQUARE FOOT (PLUS SALES TAX)
---- -------------------- ----------------
<S> <C> <C>
3/l/98 -
expiration of
1st Lease Year $17.50 $7,707.29
2 $18.50 $8,147.71
3 $19.50 $8,588.13
4 $20.50 $9,028.54
5 (plus
last 4 months) $21.50 $9,468.96
</TABLE>
16. Prepaid Rent: $7,223.59 (includes sales tax) (due upon
------------
execution of Lease; to be applied to first
full month Minimum Rent is due)
17. Security Deposit $15,414.58 (excludes sales tax) (due upon
----------------- execution of Lease)
(section 2.6):
--------------
18. Cost Pass-Throughs
------------------
(section 2.3): Operating Costs
-------------
19. Base Year
---------
(section 2.3): 1998
--------------
20. Comprehensive General
---------------------
Liability Insurance
-------------------
(section 6.1): $1,000 ,000.00
-------------
21. No. of Parking Spaces: Twent y-one (21) unassigned
----------------------
22. Broker(s) (section 13.12): Codin a Bush Klein.Oncor International
<PAGE>
THIS LEASE (the "Lease"), dated the 7 day of August , 1997, is made
------- ---------
between New World Partners Joint Venture, a Florida general partnership (the
"Landlord"), and Automated Dispatch Solutions, Inc., a Delaware corporation (the
"Tenant").
ARTICLE I. TERM.
---------------
1.1 Grant; Term. In consideration of the performance by the Tenant of
------------
its obligations under this Lease, the Landlord leases to the Tenant, and the
Tenant leases from the Landlord, for the Term, the "Premises," which Premises
are shown outlined on the floor plan attached hereto and made a part hereof as
Exhibit "A." The Premises are located in that certain office building, in The
Village at Beacon Centre (the "Building"), located in Dade County, Florida, as
more particularly described in Exhibit "B," attached hereto and made a part
hereof. The gross rentable area of the Premises (which includes a proportionate
share of the Common Areas) and the Building are approximately as shown on the
Lease Summary.
The "Term" of the Lease is the period from the Commencement Date as
specified in the Lease Summary, through the Expiration Date, as specified in the
Lease Summary. If the Premises are ready for occupancy prior to the
Commencement Date, then Tenant shall take occupancy on such date and Tenant's
obligations to pay Minimum Rent and all other charges shall commence on such
date. If Landlord cannot deliver possession of the Premises to Tenant on the
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom, but in that
event, this Lease shall in all ways remain in full force and effect except that
Minimum Rent and other charges shall be waived for the period between the
Commencement Date and the time when Landlord can deliver possession; provided,
however, if delivery of possession is delayed more than ninety (90) days past
the scheduled Commencement Date, Tenant may terminate this Lease upon fifteen
(15) days' written notice to Landlord, whereupon both parties shall be relieved
of all further obligations hereunder. Notwithstanding the foregoing, if
delivery of possession is delayed due to any act or omission of Tenant, then the
Commencement Date shall be the date Landlord would have delivered possession,
but for Tenants delay.
The Landlord shall have no construction or improvement obligations
with respect to the Premises unless expressly set forth in a work letter
agreement, which, if executed by Landlord and Tenant, shall be incorporated as
an exhibit to this Lease. Upon the expiration of five (5) business days
following the Commencement Date, the Premises shall be conclusively deemed to be
accepted by Tenant unless Tenant shall have given Landlord written notice of any
contended defects in the Premises.
ARTICLE II. RENT.
-----------------
2.1 Covenant to Pay. The Tenant shall pay to Landlord all sums due
---------------
hereunder from time to time from the Commencement Date without prior demand,
together with all applicable Florida sales tax thereon; however, unless
otherwise provided in this Lease, payments other than Tenants regular monthly
payments of Minimum Rent and Increased Operating Costs shall be payable by
Tenant to Landlord within five (5) days following demand. All rent or other
charges that are required to be paid by Tenant to Landlord shall be payable at
Landlord's address indicated on the Lease Summary. Minimum Rent and Additional
Rent for any "Lease Year" consisting of less than twelve (12) months shall be
prorated on a per them basis, based upon a period of 365 days. "Lease Year"
means the twelve (12) full calendar months commencing on the Commencement Date.
However, the final Lease Year may contain less than twelve (12) months due to
expiration or sooner termination of the Term. The Tenant agrees that its
covenant to pay rent and all other sums under this Lease is an independent
covenant and that all such amounts are payable without counterclaim, set-off,
deduction, abatement, or reduction whatsoever, except as expressly provided for
in this Lease.
2.2 Minimum Rent. Subject to any escalation which may be provided for
------------
in this Lease, the Tenant shall pay Minimum Rent for the Term in the initial
amount specified in the Lease Summary, which, except for the first installment,
shall be payable throughout the Term in equal monthly installments in advance on
the first day of each calendar month of each year of the Term, such monthly
installments to be in the amounts (subject to
<PAGE>
escalation) specified in the Lease Summary. The first monthly installment of
Minimum Rent shall be due on the date of this Lease. The Minimum Rent described
above shall be adjusted at the beginning of the second and each succeeding Lease
Year during the Term of this Lease as provided in the Lease Summary.
2.3 Operating Costs. The Tenant shall pay to the Landlord the Tenant's
----------------
proportionate share of the amount by which the annual Operating Costs, as
hereinafter defined, for each calendar year exceed the Operating Costs incurred
during the Base Year specified in the Lease Summary. Such excess is referred to
for purposes of this Lease as the "Increased Operating Costs." Tenant's
obligation to pay its proportionate share of Increased Operating Costs shall
commence as of the beginning of the first full calendar year following the Base
Year. The amount of Increased Operating Costs payable to the Landlord may be
estimated by the Landlord for such period as the Landlord determines from time
to time (not to exceed twelve (12) months), and the Tenant agrees to pay to the
Landlord the amounts so estimated in equal installments, in advance, on the
first day of each month during such period. Notwithstanding the foregoing, when
bills for all or any portion of Increased Operating Costs so estimated are
actually received by Landlord, the Landlord may bill the Tenant for the Tenant's
proportionate share thereof, less any amount previously paid by Tenant to
Landlord on account of such item(s) by way of estimated Increased Operating
Costs payments.
Within a reasonable period of time after the end of the period for
which estimated payments have been made, the Landlord shall submit to the Tenant
a statement from the Landlord setting forth the actual amounts payable by the
Tenant based on actual costs. If the amount the Tenant has paid based on
estimates is less than the amount due based on actual costs, the Tenant shall
pay such deficiency within five (5) days after submission of such statement. If
the amount paid by the Tenant is greater than the amount actually due, the
excess may be retained by the Landlord to be credited and applied by the
Landlord to the next due installments of the Tenants proportionate share of
Increased Operating Costs, or as to the final Lease Year, provided Tenant is not
in default, Landlord will refund such excess to Tenant. The Tenant's
proportionate share of actual Increased Operating Costs for the final estimate
period of the Term of this Lease shall be due and payable even though it may not
be finally calculated until after the expiration of the Term. Accordingly,
Landlord shall have the right to continue to hold Tenant's security deposit
following expiration of the Term until Tenants share of actual Increased
Operating Costs has been paid.
For purposes of this Lease, Tenants proportionate share shall be a
fraction, the numerator of which is the gross rentable area of the Premises, and
the denominator of which is the gross rentable area of the Building (which is as
set forth in the Lease Summary). Tenants proportionate share is as set forth in
the Lease Summary. The term "Operating Costs" shall mean any amounts paid or
payable whether by the Landlord or by others on behalf of the Landlord, arising
out of Landlord's maintenance, operation, repair, replacement (if such
replacement increases operating efficiency) and administration of the Building
and Common Areas, including, without limitation: (i) the cost of all real
estate, personal property and other ad valorem taxes, and any other levies,
charges, local improvement rates, and assessments whatsoever assessed or charged
against the Building and Common Areas, the equipment and improvements therein
contained, and including any amounts assessed or charged in substitution for or
in lieu of any such taxes, excluding only income or capital gains taxes imposed
upon Landlord, and including all costs associated with the appeal of any
assessment on taxes; (ii) the cost of insurance which the Landlord is obligated
or permitted to obtain under this Lease and any deductible amount applicable to
any claim made by the Landlord under such insurance; (iii) the cost of security,
janitorial, landscaping, garbage removal, and trash removal services; (iv) the
cost of heating, ventilating, and air conditioning, to the extent incurred with
respect to Common Areas or with respect to any shared systems; (v) the cost of
all fuel, water, electricity, telephone, and any other utilities used in the
maintenance, operation, or administration of the Building and Common Areas; (vi)
salaries, wages, and any other amounts paid or payable for all personnel
involved in the repair, maintenance, operation, security, supervision, or
cleaning of the Building and Common Areas; and (vii) a reasonable management
fee.
2.4 Payment of Personal Property Taxes. Tenant shall pay, when due, all
----------------------------------
taxes attributable to the personal property, trade fixtures, business,
occupancy, or sales of Tenant or any other occupant of the Premises and to the
use of the Building by Tenant or such other occupant.
<PAGE>
2.5 Rent Past Due. If any payment due from Tenant shall be overdue, a
--------------
late charge of five (5%) percent of the delinquent sum may be charged by
Landlord. If any payment due from Tenant shall remain overdue for more than
fifteen (15) days, an additional late charge in an amount equal to the lesser of
the highest rate permitted by law or one and one-half (1 1/2%) percent per month
(eighteen (18%) percent per annum) of the delinquent amount may be charged by
Landlord, such charge to be computed for the entire period for which the amount
is overdue and which shall be in addition to and not in lieu of the five (5%)
percent late charge or any other remedy available to Landlord.
2.6 Security Deposit. The Landlord acknowledges receipt of a security
----------------
deposit in the amount specified on the Lease Summary to be held by the Landlord,
without any liability for interest thereon, as security for the performance by
the Tenant of all its obligations under this Lease. Landlord shall be entitled
to commingle the security deposit with Landlord's other funds. If Tenant
defaults in any of its obligations under this Lease, the Landlord may at its
option, but without prejudice to any other rights which'the Landlord may have,
apply all or part of the security deposit to compensate the Landlord for any
loss, damage, or expense sustained by the Landlord as a result of such default.
If all or any part of the security deposit is so applied, the Tenant shall
restore the security deposit to its original amount on demand of the Landlord.
Subject to the provisions of section 2.3, within thirty (30) days following
termination of this Lease, if the Tenant is not then in default, the security
deposit will be returned by the Landlord to the Tenant.
2.7 Landlord's Lien. To secure the payment of all rent and other sums
---------------
of money due and to become due hereunder and the faithful performance of this
Lease by Tenant, Tenant hereby gives to Landlord an express first and prior
contract lien and security interest on all property now or hereafter acquired
(including fixtures, equipment, chattels, and merchandise) which may be placed
in the Premises and also upon all proceeds of any insurance which may accrue to
Tenant by reason of destruction of or damage to any such property. Such
property shall not be removed therefrom without the written consent of Landlord
until all arrearages in rental and other sums of money then due to Landlord
hereunder shall first have been paid. All exemption laws are hereby waived in
favor of said lien and security interest. This lien and security interest is
given in addition to Landlord's statutory lien and shall be cumulative thereto.
Landlord shall, in addition to all of its rights hereunder, also have all of the
rights and remedies of a secured party under the Uniform Commercial Code as
adopted in the State in which the Premises is located. To the extent permitted
by law, this Lease shall constitute a security agreement under Article 9 of the
Flofida Uniform Commercial Code. Notwithstanding the foregoing, Landlord agrees
to subordinate its lien to a bona fide institutonal lender providing acquisition
financing or lease financing for Tenant's furniture, fixtures, and equipment, so
that Landlord will have a second lien on such furniture, fixtures, and
equipment.
ARTICLE III. USE OF PREMISES.
-----------------------------
3.1 Permitted Use. The Premises shall be used and occupied only for the
-------------
use specified in the Lease Summary. Tenant shall carry on its business on the
Premises in a reputable manner and shall not do, omit, permit, or suffer to be
done or exist upon the Premises anything which shall result in a nuisance,
hazard, or bring about a breach of any provision of this Lease or any applicable
municipal or other governmental law or regulation. Tenant shall observe all
reasonable rules and regulations established by Landlord from time to time for
the Building. The rules and regulations in effect as of the date hereof are
attached to and made a part of this Lease as Exhibit "C." The names for the
Building and the business park of which the Building is a part, which the
Landlord may from time to time adopt, and every name or mark adopted by the
Landlord in connection with the Building shall be used by the Tenant only in
association with the business carried on in the Premises during the Term and the
Tenants use thereof shall be subject to such regulation as the Landlord may from
time to time impose.
3.2 Compliance with Laws. The Premises shall be used and occupied in a
--------------------
safe, careful, and proper manner so as not to contravene any present or future
governmental or quasigovernmental laws, regulations, or orders, or the
requirements of the Landlord's or Tenants insurers. If due to the Tenants use
of the Premises,
<PAGE>
repairs, improvements, or alterations are necessary to comply with any of the
foregoing, the Tenant shall pay the entire cost thereof.
3.3 Signs. Except with the prior written consent of the Landlord, the
-----
Tenant shall not erect, install, display, inscribe, paint, or affix any signs,
lettering, or advertising medium upon or above any exterior portion of the
Premises. Landlord, at its expense, will provide one building standard
identification sign outside the principal entry to the Premises and will provide
space on a directory in the Building lobby.
3.4 Environmental Provisions. Tenant warrants and represents that it
------------------------
will not use or employ the Landlord's and/or the Building property, facilities,
equipment, or services to handle, transport, store, treat, or dispose of any
hazardous waste or hazardous substance, whether or not it was generated or
produced on the Premises; and, Tenant further warrants and represents that any
activity on or relating to the Premises shall be conducted in full compliance
with all applicable laws. Tenant agrees to defend, indemnify, and hold harmless
Landlord against any and all claims, costs, expenses, damages, liability, and
the like, which Landlord may hereafter be liable for, suffer, incur, or pay
arising under any applicable laws and resulting from or arising out of any
breach of the warranties and representations contained in this section 3.4, or
out of any act, activity, or violation of any applicable laws on the part of
Tenant, its agents, employees, or assigns. Tenants liability under this section
3.4 shall survive the expiration or any termination of this Lease.
ARTICLE IV. ACCESS AND ENTRY.
------------------------------
4.1 Right of Examination. The Landlord shall be entitled at all
--------------------
reasonable times and upon reasonable notice (but no notice is required in
emergencies) to enter the Premises to examine them; to make such repairs,
alterations, or improvements thereto as the Landlord considers necessary or
reasonably desirable; to have access to underfloor facilities and access panels
to mechanical shafts and to check, calibrate, adjust, and balance controls and
other parts of the heating, air conditioning, ventilating, and climate control
systems. The Landlord reserves to itself the fight to install, maintain, use,
and repair pipes, ducts, conduits, vents, wires, and other installations leading
in, through, over, or under the Premises and for this purpose, the Landlord may
take all material into and upon the Premises which is required therefor. The
Tenant shall not unduly obstruct any pipes, conduits, or mechanical or other
electrical equipment so as to prevent reasonable access thereto. The Landlord
reserves the fight to use all exterior walls and roof area. The Landlord shall
exercise its rights under this section, to the extent possible in the
circumstances, in such manner so as to minimize interference with the Tenants
use and enjoyment of the Premises.
4.2 Right to Show Premises. The Landlord and its agents have the fight
----------------------
to enter the Premises at all reasonable times and upon reasonable notice to show
them to prospective purchasers, lenders, or anyone having a prospective interest
in the Building, and, during the last six months of the Term (or the last six
(6) months of any renewal term if this Lease is renewed), to show them to
prospective tenants.
ARTICLE V. MAINTENANCE, REPAIRS, AND ALTERATIONS.
------------------------------------------------
5.1 Maintenance and Repairs by Landlord. The Landlord covenants to keep
-----------------------------------
the following in good repair as a prudent owner: (i) the structure of the
Building including exterior walls and roofs; (ii) the mechanical, electrical,
HVAC, and other base building systems (except such as may be installed by or be
the property of the Tenant or as may be serving only the Premises); and (iii)
the entrances, sidewalks, corridors, parking areas and other facilities from
time to time comprising the Common Areas. The cost of such maintenance and
repairs shall be included in Operating Costs. So long as the Landlord is acting
in good faith, the Landlord shall not be responsible for any damages caused to
the Tenant by reason of failure of any equipment or facilities serving the
Building or delays in the performance of any work for which the Landlord is
responsible pursuant to this Lease. Notwithstanding any other provisions of this
Lease, if any part of the Building is damaged or destroyed or requires repair,
replacement, or alteration as a result of the act or omission of the Tenant, its
employees, agents, invitees, licensees, or contractors, Landlord shall have the
right to perform same and the cost of such repairs, replacement, or alterations
shall be paid by the Tenant to the Landlord upon demand. In addition, if, in an
<PAGE>
emergency, it shall become necessary to make promptly any repairs or
replacements required to made by Tenant, Landlord may re-enter the Premises and
proceed forthwith to have the repairs or replacements made and pay the costs
thereof. Upon demand, Tenant shall reimburse Landlord for the cost of making the
repairs.
5.2 Maintenance and Repairs by Tenant. The Tenant shall, at its sole
---------------------------------
cost, repair and maintain the Premises (including, without limitation, floor and
wall coverings and electric light bulbs and tubes and tube casings) exclusive of
base building mechanical and electrical systems, all to a standard consistent
with a first class office building, with the exception only of those repairs
which are the obligation of the Landlord pursuant to this Lease. All repair and
maintenance performed by the Tenant in the Premises shall be performed by
contractors or workmen designated or approved by the Landlord. At the
expiration or earlier termination of the Term, the Tenant shall surrender the
Premises to the Landlord in as good condition and repair as the Tenant is
required to maintain the Premises throughout the Term.
5.3 Approval of Tenant's Alterations. No alterations (including,
--------------------------------
without limitation, repairs, replacements, additions, or modifications to the
Premises by Tenant), other than minor or cosmetic alterations which are interior
and nonstructural, shall be made to the Premises without the Landlord's written
approval, which, as to exterior or structural alterations may be withheld in
Landlord's sole discretion. Any alterations by Tenant shall be performed at the
sole cost of the Tenant, by contractors and workmen approved by the Landlord, in
a good and workmanlike manner, and in accordance with all applicable laws and
regulations.
5.4 Removal of Improvements and Fixtures. All leasehold improvements
------------------------------------
(other than unattached, movable trade fixtures which can be removed without
damage to the Premises) shall at the expiration or earlier termination of this
Lease become the Landlord's property. The Tenant may, during the Term, in the
usual course of its business, remove its trade fixtures, provided that the
Tenant is not in default under this Lease; and the Tenant shall, at the
expiration or earlier termination of the Term, at its sole cost, remove such of
the leasehold improvements (except for improvements installed by Landlord prior
to the Commencement Date) and trade fixtures in the Premises as the Landlord
shall require to be removed and restore the Premises to the condition existing
prior to such removal. The Tenant shall at its own expense repair any damage
caused to the Building by such removal. If the Tenant does not remove its trade
fixtures at the expiration or earlier termination of the Term, the trade
fixtures shall, at the option of the Landlord, become the property of the
Landlord and may be removed from the Premises and sold or disposed of by the
Landlord in such manner as it deems advisable without any accounting to Tenant.
5.5 Liens. The Tenant shall promptly pay for all materials supplied and
-----
work done in respect of the Premises so as to ensure that no lien is recorded
against any portion of the Building or against the Landlord's or Tenant's
interest therein. If a lien is so recorded, the Tenant shall discharge it
promptly by payment or bonding. If any such lien against the Building or
Landlord's interest therein is recorded and not discharged by Tenant as above
required within fifteen (15) days following recording, the Landlord shall have
the right to remove such lien by bonding or payment and the cost thereof shall
be paid immediately from Tenant to Landlord. Landlord and Tenant expressly
agree and acknowledge that no interest of Landlord in the Premises or the
Building shall be subject to any lien for improvements made by Tenant in or for
the Premises, and the Landlord shall not be liable for any lien for any
improvements made by Tenant, such liability being expressly prohibited by the
terms of this Lease. In accordance with applicable laws of the State of
Florida, Landlord has filed in the public records of Dade County, Florida, a
public notice containing a true and correct copy of this paragraph, and Tenant
hereby agrees to inform all contractors and material men performing work in or
for or supplying materials to the Premises of the existence of said notice.
5.6 Services, Utilities. Landlord shall, as part of Operating Costs,
-------------------
furnish the Premises with the following services in the manner that such
services are furnished in comparable office buildings in the area: (a)
electricity for lighting and the operation of office machines, (b) heating,
ventilation, and air conditioning ("HVAC") to the extent reasonably required for
the comfortable occupancy by Tenant in its use of the Premises during the period
from 8:00 a.m. to 6:00 p.m. on weekdays, and from 8:00 a.m. to 1:00 p.m. on
Saturdays, except for holidays declared by the federal government or such
shorter periods as may be prescribed by any
<PAGE>
applicable policies or regulations adopted by any utility or governmental
agency, (c) elevator service, (d) rest room supplies, (e) window washing with
reasonable frequency, and (f) daily janitor service five (5) days a week. HVAC
service at times other than 8:00 a.m. to 6:00 p.m., Monday through Friday and
8:00 a.m. to 1:00 p.m. on Saturday shall be provided by Landlord, at Tenant's
expense, upon written request by Tenant delivered to Landlord prior to 1:00 p.m.
on the date for which service is needed, or, if for a Saturday or Sunday, prior
to 1:00 p.m. at least one (1) business day in advance of the date for which such
service is needed. In addition, Landlord shall provide security to the Building
in the manner required by this Lease. The Tenant shall pay to the Landlord, or
as the Landlord directs, all gas, electricity, water, and other utility charges
applicable to the Premises as separately metered or, if not so metered, as part
of Tenant's proportionate share of Increased Operating Costs.
ARTICLE VI. INSURANCE AND INDEMNITY.
-------------------------------------
6.1 Tenant's Insurance. The Tenant shall, throughout the Term (and any
------------------
other period when Tenant is in possession of the Premises), maintain at its sole
cost the following insurance:
(A) All risks property insurance, naming the Tenant and the Landlord
as insured parties, containing a waiver of subrogation rights which the Tenant's
insurers may have against the Landlord and against those for whom the Landlord
is in law responsible including, without limitation, its directors, officers,
agents, and employees, and (except with respect to the Tenants chattels)
incorporating a standard New York mortgagee endorsement (without contribution).
Such insurance shall insure (i) property of every kind owned by the Tenant in an
amount not less than the full replacement cost thereof (new), with such cost to
be adjusted no less than annually.
(B) Comprehensive general liability insurance. Such policy shall
contain inclusive limits per occurrence of not less than the amount specified in
the Lease Summary; provide for cross liability; and include the Landlord and any
mortgagee of Landlord as additional insureds.
(C) Worker's compensation and employee's liability insurance in
compliance with applicable legal requirements.
(D) Any other form of insurance which the Tenant or the Landlord,
acting reasonably, requires from time to time in form, in amounts, and for risks
against which a prudent tenant would insure.
All policies referred to above shall: (i) be taken out with insurers
licensed to do business in Florida and reasonably acceptable to the Landlord;
(ii) be in a form reasonably satisfactory to the Landlord; (iii) be non-
contributing with, and shall apply only as primary and not as excess to any
other insurance available to the Landlord or any mortgagee of Landlord; (iv)
contain an undertaking by the insurers to notify the Landlord by certified mail
not less than thirty (30) days prior to any material change, cancellation, or
termination, and (v) with respect to subsection (A), contain replacement cost,
demolition cost, and increased cost of construction endorsements. Certificates
of insurance on the Landlord's standard form or, if required by a mortgagee,
copies of such insurance policies certified by an authorized officer of Tenant's
insurer as being complete and current, shall be delivered to the Landlord
promptly upon request. If a) the Tenant fails to take out or to keep in force
any insurance referred to in this section 6.1, or should any such insurance not
be approved by either the Landlord or any mortgagee, and b) the Tenant does not
commence and continue to diligently cure such default within forty-eight (48)
hours after written notice by the Landlord to the Tenant specifying the nature
of such default, then the Landlord has the right, without assuming any
obligation in connection therewith, to effect such insurance at the sole cost of
the Tenant and all outlays by the Landlord shall be paid by the Tenant to the
Landlord without prejudice to any other rights or remedies of the Landlord under
this Lease. The Tenant shall not keep or use in the Premises any article which
may be prohibited by any fire or casualty insurance policy in force from time to
time covering the Premises or the Building.
6.2 Loss or Damage. The Landlord shall not be liable for any death or
--------------
injury arising from or out of any occurrence in, upon, at, or relating to the
Building or damage to property of the Tenant or of others located
<PAGE>
on the Premises or elsewhere in the Building, nor shall it be responsible for
any loss of or damage to any property of the Tenant or others from any cause,
UNLESS SUCH DEATH, INJURY, LOSS, OR DAMAGE RESULTS FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE LANDLORD. Without limiting the generality of the
foregoing, the Landlord shall not be liable for any injury or damage to Persons
or property resulting from fire, explosion, failing plaster, falling ceiling
tile, falling fixtures, steam, gas, electricity, water, rain, flood, or leaks
from any part of the Premises or from the pipes, sprinklers, appliances,
plumbing works, roof, windows, or subsurface of any floor or ceiling of the
Building or from the street or any other place or by dampness, or by any other
cause whatsoever. The Tenant agrees to indemnify the Landlord and hold it
harmless from and against any and all loss (including loss of Minimum Rent and
additional rent payable in respect to the Premises), claims, actions, damages,
liability, and expense of any kind whatsoever (including attorneys' fees and
costs at all tribunal levels), UNLESS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LANDLORD OR ITS AGENTS, arising from any occurrence in, upon, or
at the Premises, or the occupancy, use, or improvement by the Tenant or its
agents or invitees of the Premises or any part thereof, or occasioned wholly or
in part by any act or omission of the Tenant its agents, employees, and invitees
or by anyone permitted to be on the Premises by the Tenant.
6.3 Landlord's Insurance. The Landlord shall throughout the Term carry:
--------------------
(i) "all risks" insurance on the Building and the machinery and equipment
contained therein or servicing the Building and owned by the Landlord (excluding
any property with respect to which the Tenant and other tenants are obliged to
insure pursuant to section 6.1 or similar sections of their respective leases);
(ii) public liability and property damage insurance with respect to the
Landlord's operations in the Building; and (iii) such other forms of insurance
as the Landlord or its mortgagee reasonably considers advisable. Such insurance
shall be in such reasonable amounts and with such reasonable deductibles as
would be carried by a prudent owner of a similar building, having regard to
size, age, and location.
ARTICLE VII. DAMAGE AND DESTRUCTION
------------------------------------
7.1 Damage to Premises. If the Premises are partially destroyed due to
------------------
fire or other casualty, the Landlord shall diligently repair the Premises, to
the extent of its obligations under section 5.1, Minimum Rent shall abate
proportionately to the Owner of the Premises, if any, rendered untenantable from
the date of destruction or damage until the Landlord's repairs have been
substantially completed. If the Premises are totally destroyed due to fire or
other casualty, the Landlord shall diligently repair the Premises to the extent
only of its obligations pursuant to section 5.1, and Minimum Rent shall abate
entirely from the date of destruction or damage to such date which is the
earlier of (i) the date tenantable, or (ii) thirty (30) days after Landlord's
repairs have been substantially completed. Upon being notified by the Landlord
that the Landlord's repairs have been substantially completed, the Tenant shall
diligently perform all other work required to fully restore the Premises for use
in the Tenant's business, in every case at the Tenant's cost and without any
contribution to such cost by the Landlord, whether or not the Landlord has at
any time made any contribution to the cost of supply, installation, or
construction of leasehold improvements in the Premises. Tenant agrees that
during any period of reconstruction or repair of the Premises, it will continue
the operation of its business within the Premises to the extent practicable. If
all or any part of the Premises shall be damaged by fire or other casualty and
the fire or other casualty is caused by the fault or neglect of Tenant or
Tenant's agents, guest, or invitees, rent and all other charges shall not abate.
7.2 Termination for Damage. Notwithstanding section 7.1, if damage or
----------------------
destruction which has occurred to the Premises or the Building is such that in
the reasonable opinion of the Landlord such reconstruction or repair cannot be
completed within one hundred twenty (120) days of the happening of the damage or
destruction, the Landlord may, at its option, terminate this Lease on notice to
the Tenant given within thirty (30) days after such damage or destruction and
the Tenant shall immediately deliver vacant possession of the Premises in
accordance with the terms of this Lease.
<PAGE>
ARTICLE VIII. ASSIGNMENT, SUBLEASES, AND TRANSFERS.
---------------------------------------------------
8.1 Transfer by Tenant. The Tenant shall not enter into, consent to, or
------------------
permit any Transfer, as hereinafter defined, without the prior written consent
of the Landlord in each instance, which consent shall not be unreasonably
withheld. For purposes of this Lease, "Transfer" means an assignment of this
Lease in whole or in part; a sublease of all or any part of the Premises; any
transaction whereby the rights of the Tenant under this Lease or to the Premises
are transferred to another; any mortgage or encumbrance of this Lease or the
Premises or any part thereof or other arrangement under which either this Lease
or the Premises become security for any indebtedness or other obligations; and
if Tenant is a corporation or a partnership, the transfer of a controlling
interest in the stock of the corporation or partnership interests, as
applicable. If there is a permitted Transfer, the Landlord may collect rent or
other payments from the transferee and apply the net amount collected to the
rent or other payments required to be paid pursuant to this Lease but no
acceptance by the Landlord of any payments by a transferee shall be deemed a
waiver of any provisions hereof regarding Tenant. Notwithstanding any Transfer,
the Tenant shall not be released from any of its obligations under this Lease.
The Landlord's consent to any Transfer shall be subject to the further condition
that if the Minimum Rent and additional rent pursuant to such Transfer exceeds
the Minimum Rent and additional rent payable under this Lease, the amount of
such excess shall be paid to the Landlord. If, pursuant to a permitted Transfer,
the Tenant receives from the transferee, either directly or indirectly, any
consideration other than Minimum Rent and additional rent for such Transfer,
either in the form of cash, goods, or services, the Tenant shall, upon receipt
thereof, pay to the Landlord an amount equivalent to such consideration.
8.2 Assignment by Landlord. The Landlord shall have the unrestricted
----------------------
right to sell, lease, convey, or otherwise dispose of the Building or any part
thereof and this Lease or any interest of the Landlord in this Lease. To the
extent that the purchaser or assignee from the Landlord assumes the obligations
of the Landlord under this Lease, the Landlord shall thereupon and without
further agreement be released of all further liability under this Lease. If the
Landlord sells its interest in the Premises, it shall deliver the security
deposit to the purchaser and the Landlord will thereupon be released from any
further liability with respect to the security deposit or its return to the
Tenant and the purchaser shall become directly responsible to Tenant.
ARTICLE IX. DEFAULT.
---------------------
9.1 Defaults. A default by Tenant shall be deemed to have occurred
--------
hereunder, if and whenever: (i) any Minimum Rent or Tenants proportionate share
of Increased Operating Costs is not paid when due whether or not any notice or
demand for payment has been made by the Landlord; (ii) any other additional rent
is in arrears and is not paid within five (5) days after written demand by the
Landlord; (iii) the Tenant has breached any of its obligations in this Lease
(other than the payment of Rent) and the Tenant fails to remedy such breach
within fifteen (15) days (or such shorter period as may be provided in this
Lease), or if such breach cannot reasonably be remedied within fifteen (15) days
(or such shorter period), then if the Tenant fails to immediately commence to
remedy and thereafter proceed diligently to remedy such breach, in each case
after notice in writing from the Landlord; (iv) the Tenant becomes bankrupt or
insolvent; (v) any of the Landlord's policies of insurance with respect to the
Building are cancelled or adversely changed as a result of Tenant's use or
occupancy of the Premises; or (vi) the business operated by Tenant in the
Premises shall be closed by governmental or court order for any reason.
9.2 Remedies. In the event of any default hereunder by Tenant, then
--------
without prejudice to any other rights which it has pursuant to this Lease or at
law or in equity, the Landlord shall have the following rights and remedies,
which are cumulative and not alternative:
(A) Landlord may cancel this Lease by notice to the Tenant and retake
possession of the Premises for Landlord's account. Tenant shall then quit and
surrender the Premises to Landlord. Tenant's liability under all of the
provisions of this Lease shall continue notwithstanding any expiration and
surrender, or any re-entry, repossession, or disposition hereunder.
<PAGE>
(B) Landlord may enter the Premises as agent of the Tenant to take
possession of any property of the Tenant on the Premises, to store such property
at the expense and risk of the Tenant or to sell or otherwise dispose of such
property in such manner as the Landlord may see fit without notice to the
Tenant. Re-entry and removal may be effectuated by summary dispossess
proceedings, by any suitable action or proceeding, or otherwise. Landlord shall
not be liable in any way in connection with its actions pursuant to this
section, to the extent that its actions are in accordance with law.
(C) If this Lease is canceled under subsection (A) above, Tenant shall
remain liable (in addition to accrued liabilities) to the extent legally
permissible for all rent and all of the charges Tenant would have been required
to pay until the date this Lease would have expired had such cancellation not
occurred. Tenant's liability for rent shall continue notwithstanding re-entry or
repossession of the Premises by Landlord. In addition to the foregoing, Tenant
shall pay to Landlord such sums as the court which has jurisdiction thereover
may adjudge as reasonable attorneys' fees with respect to any successful lawsuit
or action instituted by Landlord to enforce the provisions of this Lease.
(D) Landlord may relet all or any part of the Premises for all or any
part of the unexpired portion of the Term of this Lease or for any longer
period, and may accept any rent then attainable; grant any concessions of Rent,
and agree to paint or make any special repairs, alterations, and decorations for
any new Tenant as it may deem advisable in its sole and absolute discretion.
Landlord shall be under no obligation to relet or to attempt to relet the
Premises.
(E) If this Lease is canceled in accordance with subsection (A) above,
and Landlord so elects, the Rent hereunder shall be accelerated and Tenant shall
pay Landlord damages in the amount of any and all sums which would have been due
for the remainder of the Term.
(F) Landlord may remedy or attempt to remedy any default of the Tenant
under this Lease for the account of the Tenant and to enter upon the Premises
for such purposes. No notice of the Landlord's intention to perform such
covenants need be given the Tenant unless expressly required by this Lease. The
Landlord shall not be liable to the Tenant for any loss or damage caused by acts
of the Landlord in remedying or attempting to remedy such default and the Tenant
shall pay to the Landlord all expenses incurred by the Landlord in connection
with remedying or attempting to remedy such default. Any expenses incurred by
Landlord shall accrue interest from the date of payment by Landlord until repaid
by Tenant at the highest rate permitted by law.
9.3 Costs. The Tenant shall pay to the Landlord on demand all costs
-----
incurred by the Landlord, including attorneys' fees and costs at all tribunal
levels, incurred by the Landlord in enforcing any of the obligations of the
Tenant under this Lease. In addition, upon any default by Tenant, Tenant shall
be also liable to Landlord for the expenses to which Landlord may be put in re-
entering the Premises; repossessing the Premises; painting, altering, or
dividing the Premises; combining the Premises with an adjacent space for any new
tenant; putting the Premises in proper repair; protecting and preserving the
Premises by placing watchmen and caretakers therein; reletting the Premises
(including attorneys' fees and disbursements, marshall's fees, and brokerage
fees, in so doing); and any other expenses reasonably incurred by Landlord.
9.4 Additional Remedies; Waiver. The rights and remedies of Landlord
---------------------------
set forth herein shall be in addition to any other right and remedy now and
hereinafter provided by law. All rights and remedies shall be cumulative and
non-exclusive of each other. No delay or omission by Landlord in exercising a
right or remedy shall exhaust or impair the same or constitute a waiver of, or
acquiescence to, a default.
9.5 Default by Landlord. In the event of any default by Landlord,
-------------------
Tenant's exclusive remedy shall be an action for damages, but prior to any such
action Tenant will give Landlord written notice specifying such default with
particularity, and Landlord shall have a period of thirty (30) days following
the date of such notice in which to commence the appropriate cure of such
default. Unless and until Landlord fails to commence and diligently pursue the
appropriate cure of such default after such notice or complete same within a
reasonable period of time, Tenant shall not have any remedy or cause of action
by reason thereof. Notwithstanding any
<PAGE>
provision of this Lease, Landlord shall not at any time have any personal
liability under this Lease. In the event of any breach or default by Landlord of
any term or provision of this Lease, Tenant agrees to look solely to the equity
or interest then-owned by Landlord in the Building, and in no event shall any
deficiency judgment be sought or obtained against Landlord.
ARTICLE X. ESTOPPEL CERTIFICATE; SUBORDINATION.
-----------------------------------------------
10.1 Estoppel Certificate. Within ten (10) days after written request by
--------------------
the Landlord, the Tenant shall deliver in a form supplied by the Landlord, an
estoppel certificate to the Landlord as to the status of this Lease, including
whether this Lease is unmodified and in full force and effect (or, if there have
been modifications, that this Lease is in full force and effect as modified and
identifying the modification agreements); the amount of Minimum Rent and
additional rent then being paid and the dates to which same have been paid;
whether or not there is any existing or alleged default by either party with
respect to which a notice of default has been served, or any facts exist which,
with the passing of time or giving of notice, would constitute a default and, if
there is any such default or facts, specifying the nature and extent thereof;
and any other matters pertaining to this Lease as to which the Landlord shall
request such certificate. The Landlord, and any prospective purchaser, lender,
or ground lessor shall have the right to rely on such certificate.
10.2 Subordination; Attornment. This Lease and all rights of the Tenant
-------------------------
shall be subject and subordinate to any and all mortgages, security agreements,
or like instruments resulting from any financing, refinancing, or collateral
financing (including renewals or extensions thereof), and to any and all ground
leases, made or arranged by Landlord of its interests in all or any part of the
Building), from time to time in existence against the Building, whether now
existing or hereafter created. Such subordination shall not require any further
instrument to evidence such subordination. However, on request, the Tenant
shall further evidence its agreement to subordinate this Lease and its rights
under this Lease to any and all documents and to all advances made under such
documents. The form of such subordination shall be made as required by the
Landlord, its lender, or ground lessor. The Tenant shall promptly on request
attorn to any mortgagee, or to the future owner(s) of the Building, or the
purchaser at any foreclosure or sale under proceedings taken under any mortgage,
security agreement, like instrument, or ground lease, and shall recognize such
mortgagee, owner, or purchaser as the Landlord under this Lease.
ARTICLE XI. CONTROL OF BUILDING BY LANDLORD.
---------------------------------------------
11.1 Use and Maintenance of Common Areas. The Tenant and those doing
-----------------------------------
business with Tenant for purposes associated with the Tenant's business on the
Premises, shall have a non-exclusive license to use the Common Areas for their
intended purposes during normal business hours in common with others entitled
thereto and subject to any rules and regulations imposed by the Landlord. The
Landlord shall keep the Common Areas in good repair and condition and shall
clean the Common Areas when necessary. Subject to all of the terms, provisions,
covenants, and conditions contained herein, Tenant shall have the right to use
the number of parking spaces indicated in the Lease Summary in the parking lot
which Landlord shall provide for the use of tenants of the Building. Landlord
shall not be liable for any damage to automobiles of any nature whatsoever to,
or any theft of, automobiles or other vehicles or the contents thereof, while in
or about the parking lots. The Tenant acknowledges that its non-exclusive right
to use any parking facilities forming part of the Building may be subject to
such rules and regulations as reasonably imposed by the Landlord from time to
time. The Tenant acknowledges that all Common Areas shall at all times be under
the exclusive control and management of the Landlord. For purposes of this
Lease, "Common Areas" shall mean those areas, facilities, utilities,
improvements, equipment, and installations of the Building which serve or are
for the benefit of the tenants of more than one component of the Building and
which are not designated or intended by the Landlord to be leased, from time to
time, or which are provided or designated from time to time by the Landlord for
the benefit or use of all tenants in the Building, their employees, customers,
and invitees, in common with others entitled to the use or benefit of same.
11.2 Alterations by Landlord. The Landlord may (i) alter, add to,
-----------------------
subtract from, construct improvements on, re-arrange, and construct additional
facilities in, adjoining, or proximate to the Building;
<PAGE>
(ii) relocate the facilities and improvements in or comprising the Building or
erected on the land; (iii) do such things on or in the Building as required to
comply with any laws, by-laws, regulations, orders, or directives affecting the
land or any part of the Building; and (iv) do such other things on or in the
Building as the Landlord, in the use of good business judgment determines to be
advisable, provided that notwithstanding anything contained in this section
11.2, access to the Premises shall be available at all times. The Landlord shall
not be in breach of its covenants for quiet enjoyment or liable for any loss,
costs, or damages, whether direct or indirect, incurred by the Tenant due to any
of the foregoing.
11.3 Covenants, Conditions, and Restrictions. Tenant hereby acknowledges
---------------------------------------
and agrees that the Building of which the Premises is a part, and Tenant's
occupancy thereof, is subject to that certain Master Declaration of Covenants,
Conditions, and Restrictions for Beacon Centre (the "Declaration"), which
Declaration has been recorded among the Public Records of Dade County, Florida.
Copies of the Declaration are located at Landlord's management office and may be
reviewed by Tenant during Landlord's normal business hours. Tenant hereby
acknowledges the existence of such Declaration and agrees to be bound by the
terms thereof (and any amendments or modifications thereto). Tenant hereby
agrees to reimburse Landlord, within five (5) days after demand therefor, for
the proportionate share of Common Expenses attributable to the Premises, as
described in the Declaration.
11.4 Tenant Relocation. Landlord shall have the right, at any time upon
-----------------
sixty (60) days written notice to Tenant, to relocate Tenant into other space
within the Building comparable to the Premises. Upon such relocation, such new
space shall be deemed the Premises and the prior space originally demised shall
in all respects be released from the effect of this Lease. If the Landlord
elects to relocate Tenant as above described, (i) the new space shall contain
approximately the same as, or greater usable area than the original space, (ii)
the Landlord shall improve the new space, at Landlord's sole cost, to at least
the standards of the original space, (iii) the Landlord shall pay the reasonable
costs of moving Tenant's trade fixtures and furnishings from the original space
to the new space, (iv) as total compensation for all other costs, expenses, and
damages which Tenant may suffer in connection with the relocation, including but
not limited to, lost profit or business interruption, no Minimum Rent or
Operating Costs shall be due or payable for the first full calendar month of
Tenant's occupancy of the new space, and Landlord shall not be liable for any
further indirect or special expenses of Tenant resulting from the relocation,
(v) Minimum Rent, Tenant's proportionate share of Increased Operating Costs, and
all other charges hereunder shall be the same for the new space as for the
original space, notwithstanding that the new space may be larger than the
original space, and (vi) all other terms of this Lease shall apply to the new
space as the Premises, except as otherwise provided in this paragraph.
ARTICLE XII. CONDEMNATION.
--------------------------
12.1 Total or Partial Taking. If the whole of the Premises, or such
-----------------------
portion thereof as will make the Premises unusable for the purposes leased
hereunder, shall be taken by any public authority under the power of eminent
domain or sold to public authority under threat or in lieu of such taking, the
Term shall cease as of the day possession or title shall be taken by such public
authority, whichever is earlier ("Taking Date"), whereupon the rent and all
other charges shall be paid up to the Taking Date with a proportionate refund by
Landlord of any rent and all other charges paid for a period subsequent to the
Taking Date. If less than the whole of the Premises, or less than such portion
thereof as will make the Premises unusable for the purposes leased hereunder,
the Term shall cease only as to the part so taken as of the Taking Date, and
Tenant shall pay rent and other charges up to the Taking Date, with appropriate
credit by Landlord (toward the next installment of rent due from Tenant) of any
rent or charges paid for a period subsequent to the Taking Date. Minimum Rent
and other charges payable to Landlord shall be reduced in proportion to the
amount of the Premises taken.
12.2 Taking For Temporary Use. If there is a taking of the Premises for
------------------------
temporary use, this Lease shall continue in full force and effect, and Tenant
shall continue to comply with Tenant's obligations under this Lease, except to
the extent compliance shall be rendered impossible or impracticable by reason of
the taking. Minimum Rent and other charges payable to Landlord shall be reduced
in proportion to the amount of the Premises taken for the period of such
temporary use.
<PAGE>
12.3 Award. All compensation awarded or paid upon a total or partial
-----
taking of the Premises or Building including the value of the leasehold estate
created hereby shall belong to and be the property of Landlord without any
participation by Tenant; Tenant shall have no claim to any such award based on
Tenant's leasehold interest. However, nothing contained herein shall be
construed to preclude Tenant, at its cost, from independently prosecuting any
claim directly against the condemning authority in such condemnation proceeding
for damage to, or cost of removal of, stock, trade fixtures, furniture, and
other personal property belonging to Tenant; provided, however, that no such
claim shall diminish or otherwise adversely affect Landlord's award or the award
of any mortgagee.
ARTICLE XIII. GENERAL PROVISIONS
---------------------------------
13.1 Delay. Except as expressly provided in this Lease, whenever the
-----
Landlord or Tenant is delayed in the fulfillment of any obligation under this
Lease, other than the payment of rent or other charges, by an unavoidable
occurrence which is not the fault of the party delayed in performing such
obligation, then the time for fulfillment of such obligation shall be extended
during the period in which such circumstances operate to delay the fulfillment
of such obligation.
13.2 Holding Over. If the Tenant remains in possession of the Premises
------------
after the end of the Term without having executed and delivered a new lease or
an agreement extending the Term, there shall be no tacit renewal of this Lease
or the Term, and the Tenant shall be deemed to be occupying the Premises as a
Tenant from month to month at a monthly Minimum Rent payable in advance on the
first day of each month equal to twice the monthly amount of Minimum Rent
payable during the last month of the Term, and otherwise upon the same terms as
are set forth in this Lease, so far as they are applicable to a monthly tenancy.
13.3 Waiver Partial Invalidity. If either the Landlord or Tenant excuses
-------------------------
or condones any default by the other of any obligation under this Lease, this
shall not be a waiver of such obligation in respect of any continuing or
subsequent default and no such waiver shall be implied. All of the provisions
of this Lease are to be construed as covenants even though not expressed as
such. If any such provision is held or rendered illegal or unenforceable it
shall be considered separate and severable from this Lease and the remaining
provisions of this Lease shall remain in force and bind the parties as though
the illegal or unenforceable provision had never been included in this Lease.
13.4 Recording. Neither the Tenant nor anyone claiming under the Tenant
---------
shall record this Lease or any memorandum hereof in any public records without
the prior written consent of the Landlord.
13.5 Notices. Any notice, consent, or other instrument required or
-------
permitted to be given under this Lease shall be in writing and shall be
delivered in person, or sent by certified mail, return receipt requested, or
overnight express mail courier, postage prepaid, addressed (i) if to Landlord,
at the address set forth on the Lease Summary; and (ii) if to the Tenant, at the
Premises or, prior to Tenant's occupancy of the Premises, at the address set
forth on the Lease Summary. Any such notice or other instruments shall be
deemed to have been given and received on the day upon which personal delivery
is made or, if mailed, then forty-eight (48) hours following the date of
mailing. Either party may give notice to the other of any change of address and
after the giving of such notice, the address therein specified is deemed to be
the address of such party for the giving of notices. If postal service is
interrupted or substantially delayed, all notices or other instruments shall be
delivered in person or by overnight express mail courier.
13.6 Successors; Joint and Several Liability. The fights and liabiiibes
---------------------------------------
created by this Lease extend to and bind the successors and assigns of the
Landlord and the heirs, executors, administrators, and permitted successors and
assigns of the Tenant. No rights, however, shall inure to the benefit of any
transferee unless such Transfer complies with the provisions of Article VIII.
If there is at any time more than one Tenant or more than one person
constituting the Tenant, their covenants shall be considered to be joint and
several and shall apply to each and every one of them.
<PAGE>
13.7 Captions and Section Numbers. The captions, section numbers,
----------------------------
article numbers, and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way affect the substance of this Lease.
13.8 Extended Meanings. The words "hereof," "hereto," "hereunder," and
-----------------
similar expressions used in this Lease relate to the whole of this Lease and not
only to the provisions in which such expressions appear. This Lease shall be
read with all changes in number and gender as may be appropriate or required by
the context. Any reference to the Tenant includes, when the context allows, the
employees, agents, invitees, and licensees of the Tenant and all others over
whom the Tenant might reasonably be expected to exercise control. This Lease
has been fully reviewed and negotiated by each party and their counsel and shall
not be more strictly construed against either party.
13.9 Entire Agreement; Governing Law; Time. This Lease and the Exhibits
-------------------------------------
and Riders, if any, attached hereto are incorporated herein and set forth the
entire agreement between the Landlord and Tenant concerning the Premises and
there are no other agreements or understandings between them. This Lease and its
Exhibits and Riders may not be modified except by agreement in writing executed
by the Landlord and Tenant. This Lease shall be construed in accordance with and
governed by the laws of the State of Florida. Time is of the essence of this
Lease.
13.10 No Partnership. Nothing in this Lease creates any relationship
--------------
between the parties other than that of lessor and lessee and nothing in this
Lease constitutes the Landlord a partner of the Tenant or a joint venturer or
member of a common enterprise with the Tenant.
13.11 Quiet Enjoyment. If the Tenant pays rent and other charges and
---------------
fully observes and performs all of its obligations under this Lease, the Tenant
shall be entitled to peaceful and quiet enjoyment of the Premises for the Term
without interruption or interference by the Landlord or any person claiming
through the Landlord.
13.12 Brokerage. Landlord and Tenant each represent and warrant one to
---------
the other that except as set forth in the Lease Summary, neither of them has
employed any broker in connection with the negotiations of the terms of this
Lease or the execution thereof. Landlord and Tenant hereby agree to indemnify
and to hold each other harmless against any loss, expense, or liability with
respect to any claims for commissions or brokerage fees arising from or out of
any breach of the foregoing representation and warranty. Landlord recognizes
the broker(s) specified in the Lease Summary as the sole broker(s) with whom
Landlord has dealt in this transaction and agrees to pay any commissions
determined to be due said broker(s). Tenant acknowledges that Codina Bush
Klein-Oncor International represents solely the Landlord with respect to this
Lease.
13.13 TRIAL BY JURY. LANDLORD AND TENANT EACH HEREBY WAIVES ITS
-------------
RIGHT TO A JURY TRIAL OF ANY ISSUE OR CONTROVERSY ARISING UNDER THIS LEASE.
EXECUTED as of the day and year first above written.
WITNESSES: LANDLORD:
New World Partners Joint Venture,
a Florida general partnership
By: Codina/Tradewind, Ltd., a Florida
limited partnership, as general partner
<PAGE>
By: Codina West Dade Development Corp.,
as general partner
By:
-------------------------------
Armando Codina, President
- ---------------------
- ---------------------
TENANT:
Automated Dispatch Solutions, Inc., a Delaware
corporation
By.
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT "B"
-----------
Legal Description
The Village
ALL of Tracts A, B, C and the Easterly 1/2 of NW 84th Avenue as shown
on SHAUN PLAT NUMBER ONE, according to the Plat thereof, as recorded
in Plat Book 132 at Page 58 of the Public Records of Dade County,
Florida, being more particularly described as follows:
Begin at the Northeast corner of said Tract A; thence run S89 degrees
58 feet 33 inches W along the North line of said SHAUN PLAT NUMBER ONE
for a distance of 695.83 to a point; thence run S1 degree 24 feet 11
inches E for a distance of 8.03 feet to a point; thence run S88
degrees 35 feet 49 inches W for a distance of 41.00 feet to a point;
thence run S77 degrees 24 feet 11 inches E for a distance of 402.33
feet to a point; thence run S77 degrees 26 feet 37 inches E for a
distance of 119.82 feet to a point of curvature of a circular curve
concave to the Northeast, having for its elements a central angle of
12 degrees 32 feet 22 inches and a radius of 2809.79 feet; thence run
Southeasterly and easterly along the arc of said curve for a distance
of 614.93 feet to a point, said point being the Southeast comer of
said Tract C; thence run NO degrees 01 degree 27 inches W along the
East line of said SHAUN PLAT NUMBER ONE for a distance of 504.78 feet
to THE POINT OF BEGINNING.
Containing 7.932 acres, more or less.
<PAGE>
EXHIBIT "C"
-----------
RULES AND REGULATIONS
---------------------
1. Security. The Landlord may from time to time adopt appropriate
--------
systems and procedures for the security or safety of the Building, any persons
occupying, using, or entering the same, or any equipment, furnishings, or
contents thereof, and the Tenant shall comply with the Landlord's reasonable
requirements relative thereto.
2. Return of Keys. At the end of the Term, the Tenant shall promptly
--------------
return to the Landlord all keys for the Building and Premises which are in the
possession of the Tenant. In the event any Tenant fails to return keys,
Landlord may retain $50.00 of Tenant's security deposit for locksmith work and
administration.
3. Repair, Maintenance, Alterations, and Improvements. The Tenant shall
--------------------------------------------------
carry out Tenant's repair, maintenance, alterations, and improvements in the
Premises only during times agreed to in advance by the Landlord and in a manner
which will not interfere with the rights of other tenants in the Building.
4. Water Fixtures. The Tenant shall not use water fixtures for any
--------------
purpose for which they are not intended, nor shall water be wasted by tampering
with such fixtures. Any cost or damage resulting from such misuse by the Tenant
shall be paid for by the Tenant.
5. Personal Use of Premises. The Premises shall not be used or permitted
---------------
to be used for residential, lodging, or sleeping purposes or for the storage of
personal effects or property not required for business purposes.
6. Heavy Articles. The Tenant shall not place in or move about the
--------------
Premises without the Landlord's prior written consent any safe or other heavy
article which in the Landlord's reasonable opinion may damage the Building, and
the Landlord may designate the location of any such heavy articles in the
Premises.
7. Bicycles, Animals. The Tenant shall not bring any animals or birds
-----------------
into the Building, and shall not permit bicycles or other vehicles inside or on
the sidewalks outside the Building except in areas designated from time to time
by the Landlord for such purposes.
8. Deliveries. The Tenant shall ensure that deliveries of supplies,
----------
fixtures, equipment, furnishings, wares, and merchandise to the Premises are
made through such entrances, elevators, and corridors and at such times as may
from time to time be designated by the Landlord, and shall promptly pay or cause
to be paid to the Landlord the cost of repairing any damage in the Building
caused by any person making improper deliveries.
9. Solicitations. The Landlord reserves the right to restrict or
-------------
prohibit canvassing, soliciting, or peddling in the Building.
10. Food and Beverages. Only persons approved from time to time by the
------------------
Landlord may prepare, solicit orders for, sell, serve, or distribute foods or
beverages in the Building, or use the Common Areas for any such purpose. Except
with the Landlord's prior written consent and in. accordance with arrangements
approved by the Landlord, the Tenant shall not permit on the Premises the use of
equipment for dispensing food or beverages or for the preparation, solicitation
of orders for, sale, serving, or distribution of food or beverages.
11. Refuse. The Tenant shall place all refuse in proper receptacles
------
provided by the Tenant at its expense in the Premises or in receptacles (if any)
provided by the Landlord for the Building, and shall keep sidewalks and
driveways outside the Building, and lobbies, corridors, stairwells, ducts, and
shafts of the Building, free of all refuse.
<PAGE>
12. Obstructions. The Tenant shall not obstruct or place anything in or
------------
on the sidewalks or driveways outside the Building or in the lobbies, corridors,
stairwells, or other Common Areas, or use such locations for any purpose except
access to and exit from the Premises without the Landlord's prior written
consent. The Landlord may remove at the Tenant's expense any such obstruction or
thing caused or placed by the Tenant (and unauthorized by the Landlord) without
notice or obligation to the Tenant.
13. Proper Conduct. The Tenant shall not conduct itself in any manner
--------------
which is inconsistent with the character of the Building as a first quality
building or which will impair the comfort and convenience of other tenants in
the Building.
14. Employees, Agents, and Invitees. In these Rules and Regulations,
-------------------------------
"Tenant" includes the employees, agents, invitees, and licensees of the Tenant
and others permitted by the Tenant to use or occupy the Premises.
15. Parking. If the Landlord designates tenant parking areas for the
-------
Building, the Tenant shall park its vehicles and shall cause its employees and
agents to park their vehicles only in such designated parking areas. The Tenant
shall fumish the Landlord, upon request, with the current license numbers of all
vehicles owned or used by the Tenant or its employees or agents and the Tenant
thereafter shall notify the Landlord of any changes in such numbers within five
(5) days after the occurrence thereof. In the event of failure of the Tenant or
its employees or agents to park their vehicles in such designated parking areas,
the Tenant shall forthwith on demand pay to the Landlord the sum of Twenty and
No/100 ($20.00) Dollars per day per each car so parked. Landlord may itself or
through any agent designated for such purpose, make, administer, and enforce
additional rules and regulations regarding parking by tenants and by their
employees or agents, including, without limitation, rules and regulations
permitting the Landlord or such agent to move any vehicles improperly parked to
the designated tenant or employee parking areas. No disabled vehicle shall be
left in the parking areas of the Building for more than 24 hours.
<PAGE>
EXHIBIT "D"
-----------
WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT (the "Work Letter"), dated as of Aug 7 , 1997, is
------
attached to and made part of that certain Lease by and between New World
Partners Joint Venture, a Florida general partnership (the "Landlord"), and
Automated Dispatch Solutions, Inc., a Delaware corporation (the "Tenant"). The
terms, definitions, and other provisions of the Lease are hereby incorporated
into this Work Letter by reference as if set forth in full.
IN CONSIDERATION OF the execution of the Lease and the mutual covenants and
conditions hereinafter set forth, Landlord and Tenant agree as follows:
(a) Landlord, at its expense (except as otherwise expressly set forth
below), will cause Substantial Completion, as hereinafter defined, of the tenant
improvements (the "Tenant Improvements") to the Premises, in accordance with
plans and specifications for the Premises to be prepared by Landlord's
architect, at Landlord's expense (except as otherwise expressly provided below).
As of the date hereof, Landlord and Tenant have approved that certain space plan
for the Premises, prepared by the Matthews & Diaz Architects, dated July 25,
1997 (the "Space Plan"). The plans and specifications shall be based on the
Space Plan. Landlord assumes no responsibility whatsoever, and shall not be
liable, for the manufacturer's, architect's, or engineer's design or performance
of any structural, mechanical, electrical, or plumbing systems or equipment of
Tenant. Changes to the Space Plan or the plans and specifications shall be made
only by written addendum signed by both parties. "Substantial Completion" shall
mean that a certificate of occupancy has been obtained for the Premises and that
the Tenant Improvements are sufficiently complete so as to allow Tenant to
occupy the Premises for the use and purposes intended without unreasonable
disturbance or interruption; provided that Landlord, its employees, agents, and
contractors, shall be allowed to enter upon the Premises at any reasonable
time(s) following Substantial Completion as necessary to complete any unfinished
details pursuant to a punchlist to be prepared by Tenant and delivered to
Landlord within thirty (30) days following the date of Substantial Completion.
(b) Upon Substantial Completion of the Premises, Tenant, at its
expense, shall install its furniture, trade fixtures, and equipment so that
Tenant can occupy the Premises for the use and purposes intended. Tenant may
begin to install such items prior to Substantial Completion; provided, however,
that no such pre-Substantial Completion installation shall in any way delay or
interfere with Landlord's work pursuant to this Work Letter and Tenant shall
arrange a meeting to coordinate with Landlord prior to any such pre-Substantial
Completion installation. Any such pre-Substantial Completion installation of
furniture, fixtures, and equipment shall be at Tenant's sole risk, and if at any
time such entry shall cause disharmony, impediment, or interference with
Landlord's work, then Tenant's right to enter the Premises prior to Substantial
Completion may be withdrawn by Landlord upon 48 hours' notice to Tenant. Such
access shall at all times be subject to the Landlord's rules and regulations
regarding such access. If the parties agree that Tenant will undertake to
construct or install some portion of the Tenant Improvements or retain its own
subcontractors to perform any other work, Tenant shall only use contractor(s),
subcontractor(s), or material supplier(s) first approved by Landlord ("Tenant's
Contractors"). Tenant shall be responsible for obtaining all necessary permits
and approvals at Tenant's sole expense in connection with the work performed by
Tenant's Contractors. Tenant shall advise Tenant's Contractors that no interest
of Landlord in the Premises or Building shall be subject to liens to secure
payment of any amount due for work performed or materials installed in the
Premises and that Landlord has recorded a notice to that effect in the public
records of Dade County, Florida. Landlord shall permit Tenant and Tenant's
Contractors to enter the Premises to accomplish any work as agreed, however,
Tenant agrees to insure that Tenant's Contractors do not impede Landlord's
contractor(s) in performance of their respective tasks. Landlord shall not be
liable in any way for any injury, loss, damage, or delay which may be caused by
or arise from such entry by Tenant, its employees, or Tenant's Contractors, and
Tenant agrees to indemnify and hold harmless Landlord, its agents, and employees
from and against any and all costs, expenses, damage, loss, or liability,
including, but not limited to, reasonable attorneys' fees and costs, which arise
out of, is occasioned by, or is in any way attributable to the work being
performed by Tenant's Contractors. Prior to any work being
<PAGE>
performed by any Tenant's Contractor, Tenant shall provide to Landlord
certificates of insurance evidencing that Tenant has the required comprehensive
general liability insurance required of Tenant under the Lease, as well as
certificates of insurance in forms and in amounts satisfactory to Landlord
evidencing that each Tenant's Contractor has in effect (and shall maintain at
all times during the course of the work hereunder) workers' compensation
insurance to cover full liability under workers' compensation laws of the State
of Florida with employers' liability coverage and comprehensive general
liability and buildees risk insurance for the hazards of operations, independent
contractors, products and completed operations.
(d) Tenant shall be responsible for any delay (including associated
costs) in Substantial Completion resulting from any of the following causes:
(i) Tenant's failure to pay any portion of Tenant's Costs, as
hereinafter defined, when due; or
(ii) Tenant's specification of special materials or finishes, or
special installations, which special items cannot be delivered or completed
within Landlord's construction schedule (subject to Landlord's obligation to
give Tenant prior notice of same at the time of such specification); or
(iii) any change in the Space Plan or the plans and specifications
caused by Tenant, even though Landlord may approve such change (Landlord agrees
to estimate the delay to be caused by a change order, provided Tenant expressly
requests such estimate at the time it requests a change order); or
(iv) any other delay in Substantial Completion directly attributable
to the negligent or willful acts or omissions of Tenant, its employees, or
agents.
If any delay caused by Tenant results in or contributes to a delay in
Substantial Completion, then Substantial Completion shall be deemed to have
occurred as of the date Landlord would have otherwise achieved Substantial
Completion, but for Tenant's delay. Landlord will specify in writing to Tenant
the Tenant delay(s) which resulted in or contributed to a delay in Substantial
Completion.
(e) Landlord, at its expense, shall cause Substantial Completion of
the Premises on a "turnkey" basis to the extent that the plans and
specifications are based on the Space Plan, and utilizing Landlord's Building-
standard methods and materials. Any and all other improvements to the Premises
(including, without limitation, the fees and costs incurred with respect to
preparation of the plans and specifications for the other improvements) will be
at Tenant's expense ("Tenant's Costs"). Tenant's Costs shall be paid to
Landlord as follows:
(i) Prior to commencement of construction of the Tenant Improvements,
Tenant shall pay Landlord an amount equal to fift (50%) percent of the Tenant's
Costs.
(ii) When fifty (50%) of the Tenant Improvements are complete in
accordance with the plans and specifications (as verified in writing by
Landlord's architect), Tenant shall pay Landlord an amount equal to the
remaining unpaid balance of Tenant's Costs, as such amount can then be
reasonably determined by Landlord based on available information.
(iii) Within ten (10) days following Landlord's submittal to Tenant
of a final accounting of Tenant's Costs, Tenant shall pay Landlord the then
remaining balance of Tenant's Costs, or Landlord shall reimburse Tenant as to
any excess amounts previously paid, as the case may be.
Tenant's Costs represent a reimbursement of monies expended by
Landlord on Tenant's behalf. Payment when due shall be a condition to Landlord's
continued performance under this Work Letter. Any delay in construction of the
Tenant Improvements or in Tenant taking occupancy of the Premises resulting from
Tenant's failure to make any Tenant's Costs payments when due shall be Tenant's
responsibility. Tenant's failure
<PAGE>
to pay any portion of Tenant's Costs when due shall constitute a default under
the Lease (subject to any applicable notice requirements or grace periods),
entitling Landlord to all of its remedies thereunder.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter
as of the day and first year above written.
WITNESSES: LANDLORD:
New World Partners Joint Venture, a Florida general
partnership
By: Codina/Tradewind, Ltd., a Florida limited partnership,
as general partner
By: Codina West Dade Development Corp.,
as general partner
By:
- ---------------- --------------------------------
Armando Codina, President
- ----------------
TENANT:
Automated Dispatch Solutions, Inc., a Delaware
corporation
By:
- ---------------- -------------------------------
Name:
- ---------------- -----------------------------
Title:
----------------------------
<PAGE>
RIDER NUMBER 1 TO LEASE
dated __________, 1997
Automated Dispatch Solutions, Inc.
OPTION TO RENEW
---------------
A. Landlord hereby grants Tenant the option to renew (the "Renewal
Option") the initial Term (not to include, for purposes of this Rider only, the
Renewal Term, as hereinafter defined) for one (1) additional term of sixty (60)
months (the "Renewal Term"), commencing as of the date immediately following the
expiration of the initial Term, such option to be subject to the covenants and
conditions hereinafter set forth in this Rider.
B. Tenant shall give Landlord written notice (the "Renewal Notice")
of Tenant's election to exercise its Renewal Option not later than one hundred
eighty (180) days prior to the expiration of the then-current term of the Lease;
provided that Tenant's failure to give the Renewal Notice by said date, whether
due to Tenant's oversight or failure to cure any existing defaults or otherwise,
shall render the Renewal Option null and void.
C. Tenant shall not be permitted to exercise the Renewal Option at
any time during which Tenant is in default under the Lease, subject to
applicable notice and grace periods (if any). If Tenant fails to cure any
default under the Lease prior to the commencement of the Renewal Term, subject
to applicable notice and grace periods, the Renewal Term shall be immediately
cancelled, unless Landlord elects to waive such default, and Tenant shall
forthwith deliver possession of the Premises to Landlord as of the expiration or
earlier termination of the then-current term of the Lease.
D. Tenant shall be deemed to have accepted the Premises in "as-is"
condition as of the commencement of the Renewal Term, subject to any other
repair and maintenance obligations of Landlord under the Lease, it being
understood and agreed that Landlord shall have no additional obligation to
renovate or remodel the Premises or any portion of the Building as a result of
Tenant's renewal of the Lease.
E. The covenants and conditions of the Lease in force during the
original Term, as the same may be modified from time to time, shall continue to
be in effect during the Renewal Term, except as follows:
(1) The "Commencement Date" for the purpose of the Lease shall be
the first day of the Renewal Term.
(2) The Minimum Rent for the Renewal Term shall be an amount equal to
the then Fair Market Rental Value of the Premises. "Fair Market Rental Value"
of the Premises shall be an amount determined by Landlord on the basis of the
then-prevailing market rental rate for office space comparable to the Premises
as reflected in one or more leases executed by Landlord with new tenants of the
Building within the twelve-month period immediately preceding commencement of
the Renewal Term. If Landlord has not executed any lease with new tenants
within said twelve-month period, the new prevailing market rental rate
determination shall be based on new leases for premises comparable to the
Premises herein, as executed within said twelve-month period by owners of other
comparable office building properties located in west Dade County, Florida.
However, in no event shall Minimum Rent for any year of the Renewal Term be less
than the amount of Minimum Rent for the immediately prior year.
(3) Following expiration of the Renewal Term as provided herein,
Tenant shall have no further right to renew or extend the Lease.
F. Tenant's option to renew the Lease shall not be transferable by
Tenant, except in conjunction with a permissible Transfer in accordance with the
applicable provisions of the Lease.
<PAGE>
NOTICE REQUIRED BY CHAPTER 88-285, LAWS
OF FLORIDA
Chapter 88-285, Laws of Florida, requires the following notice to be
provided with respect to the contract for sale and purchase of any building, or
a rental agreement for any building:
"RADON GAS: Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
your country public health unit."
Automated Dispatch Solutions, Inc.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Dated:
--------------------------
1
<PAGE>
Exhibit 10.15
LICENSE AGREEMENT
License Agreement dated and effective as of the Effective Date between
AUTOMATED DISPATCH SERVICES, INC., a Delaware corporation, and AUTOMATED
DISPATCH 9 SYSTEMS, INC., a Florida corporation. Capitalized terms used in this
Agreement and not otherwise defined are used as defined in Article 1.
PRELIMINARY STATEMENT
Licensor has rights to the EMTrack Software described below, and uses
the EMTrack Software in the operation of a dispatch center for customers in
south Florida.
As part of Licensee's purchase of assets related to Licensor's south
Florida dispatch center, Licensor wishes to grant to Licensee, and Licensee
wishes to receive, rights to use the EMTrack Software as described below.
Therefore, in consideration of the mutual obligations set forth herein
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Licensor and Licensee agree as follows:
ARTICLE I.
DEFINITIONS
Each of the following capitalized terms are used in this Agreement with
the following ascribed meaning:
"AFFILIATE" means, as to any person or entity, any other person or
entity that is controlling, controlled by, or is under common control with, such
person or entity. For purposes of the preceding definition, "control" means the
right to control, or actual control of, the management of such other entity,
whether by ownership of voting securities, by agreement, or otherwise.
"EFFECTIVE DATE" means the date on which this Agreement is executed by
the later to execute of Licensor and Licensee evidenced by the dates set forth
next to the names of the parties on the signature page of this Agreement.
"EMTRACK SOFTWARE" means (a) U.S. Patent No. 5,122,959, dated June 16,
1992, and any renewals thereof, and (b) object code in customary format for the
copyrighted materials subject to United States Copyright Office Registration
No. TX 2 818 347, Custom 2000 (Dispatch, Order-Entry, MDDS Modules), and United
States Copyright Office Registration No. TX 2 818 348, EMTRACK (Dispatch, Order-
Entry, MDDS Modules).
<PAGE>
"LICENSEE" means Automated Dispatch Systems, Inc., a Florida
corporation, and its successors and assigns.
"LICENSOR" means Automated Dispatch Services, Inc., a Delaware
corporation, and its successors and assigns.
"SOUTH FLORIDA TRANSPORT DISPATCH" means two-way mobile dispatch
functions performed by Licensee through a mobile wireless communications network
for the benefit of a third party in Monroe, Dade, Broward and Palm Beach
Counties, Florida.
ARTICLE II.
GRANT OF LICENSE
A. GRANT BY LICENSOR. Effective on and after the Effective Date, and
subject to the terms and conditions of this Agreement, Licensor hereby grants to
Licensee a royalty-free, exclusive license to use the EMTrack Software for South
Florida Transport Dispatch. Licensor agrees not to grant licenses to use EMTrack
Software for South Florida Transport Dispatch to any other person while this
Agreement is in effect, except for a license to TransCare Corporation, a
Delaware corporation, and its affiliates and sublicensees.
B. RESERVATIONS. Notwithstanding any contrary provision of this
Agreement, all rights to any EMTrack Software which are not expressly granted to
Licensee hereunder are expressly reserved to Licensor.
ARTICLE III.
CONSIDERATION FOR LICENSE
A. FEES. For the licenses and rights granted in Article 2 of this
Agreement, Licensee shall pay Licensor the sum of $10,000 in immediately
available funds, payable simultaneously with the execution of this Agreement
(the "LICENSE FEE"). Also simultaneously with the execution of this Agreement,
Licensor shall deliver to Licensee one copy of the object code to the complete
current EMTrack Software, on floppy disks in standard machine-readable format,
together with one copy of Licensor's current technical manuals and software
documentation related thereto. Upon Licensee's receipt of the foregoing, the
License Fee shall thereafter be nonrefundable under any and all circumstances.
B. ROYALTIES. Licensee shall not be obligated to pay any fee, royalty or
other charge for the licenses and rights granted in Section 2 of this Agreement
other than the License Fee.
2
<PAGE>
ARTICLE IV.
NO WARRANTIES; INDEMNIFICATION
A. KNOWLEDGE OF INFRINGEMENT. To the actual knowledge of the officers
of Licensor, the subject matter of the EMTrack Software does not as of the
Effective Date infringe the United States copyright rights of any other person,
and the use of the subject matter of the EMTrack Software for South Florida
Transport Dispatch does not infringe any United States patent issued prior to
the Effective Date.
B. DISCLAIMER OF WARRANTIES. Except as expressly set forth in Section
IV.A above, Licensor HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND OR NATURE, WHETHER EXPRESS OR IMPLIED, RELATING TO THE EMTRACK SOFTWARE.
Licensor FURTHER HEREBY EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE PRACTICE OF THE
EMTRACK SOFTWARE WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER
RIGHTS OF THIRD PARTIES. Without limiting the generality of the foregoing,
Licensor expressly does not warrant (i) the patentability or copyrightability of
any of the EMTrack Software, or (ii) the accuracy, safety, or usefulness for any
purpose of the EMTrack Software. Nothing contained in this Agreement shall be
construed as either a warranty or representation by Licensor as to the validity
or scope of any EMTrack Software. Licensor assumes no liability in respect of
any infringement of any patent, copyright or other right of third parties due to
the activities of Licensee under this Agreement.
C. INDEMNIFICATION.
1. None of Licensor, any Affiliate of Licensor, or any director,
officer, employee, agent or representative of any of the foregoing (each an
"Indemnified Person") shall have any liability whatsoever to Licensee, any of
its Affiliates or any other person for or on account of (and Licensee agrees and
covenants, and agrees to cause each of its Affiliates to agree and covenant, not
to sue any Indemnified Person in connection with) any injury, loss, or damage,
of any kind or nature, sustained by, or any damage assessed or asserted against,
or any other liability incurred by or imposed upon, Licensee, any of its
Affiliates or any other person, arising out of or in connection with or
resulting from (i) the use of any EMTrack Software by Licensee or any of its
Affiliates, (ii) any advertising or other promotional activities with respect to
either of the foregoing, or (iii) the production, use or sale of any product
identified, characterized or otherwise developed by Licensee or any Affiliate
with the aid of the EMTrack Software.
2. This Agreement is entered into by Licensor independently from its
Affiliates. Correspondingly, it is understood and agreed that no Affiliate of
Licensor is a party to this Agreement and in no manner shall be liable for nor
assume any responsibility or obligation for any claim, cost or damages arising
out of or resulting from this Agreement, the subject matter
3
<PAGE>
licensed, or any action or lack thereof by Licensor, any Affiliate of Licensor,
Licensee or any of Licensee's Affiliates with respect thereto.
3. Licensee's and Licensor's obligations under this Section IV.C shall
survive the expiration or earlier termination of all or any part of this
Agreement.
ARTICLE V.
SOURCE CODE ESCROW
Upon execution of this Agreement, Licensor shall place into escrow one
(1) written copy of the source code to the EMTrack Software ("Source Code"),
subject to the terms of a Source Code Escrow Agreement being entered into by
Licensor and Carlos & Abbott, P.A., as escrow agent.
ARTICLE VI.
CONFIDENTIALITY; NO COPYING
Licensee agrees to treat (and to cause its Affiliates to treat) as
confidential all proprietary information with respect to the EMTrack Software
made available by Licensor to Licensee. Licensee agrees not to make copies of
the EMTrack Software other than in connection with Licensee's internal backup
procedures, and not to transfer any part of the EMTrack Software to any other
person.
ARTICLE VII.
INFRINGEMENT
If Licensee becomes aware of the infringement of any patent or copyright
under the EMTrack Software, it shall immediately inform Licensor in writing of
all details available. The prosecution, settlement, or abandonment of any legal
proceedings with respect to infringement by a third party of any patent or
copyright under the EMTrack Software shall be at Licensor's sole and complete
discretion. All recoveries by way of royalties, damages and claims with respect
to infringement actions instituted, and claims made (including penalties and
interest), with respect to infringement of EMTrack Software shall belong to
Licensor. Licensor may request the cooperation of Licensee in any such
proceeding, such cooperation not to be unreasonably withheld, and shall pay
Licensee's expenses incurred in such cooperation.
TERMINATION
A. LICENSOR RIGHT TO TERMINATE. Licensor shall have the right (without
prejudice to any of its other rights conferred on it by this Agreement) to
terminate this Agreement if Licensee is in breach of any provision of this
Agreement, and Licensee fails to remedy any such default within 30 days after
written notice thereof by Licensor.
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B. LICENSEE RIGHT TO TERMINATE. Licensee may terminate this Agreement at
any time by written notice to Licensor, given at least 90 days prior to the
termination date specified in the notice.
C. EFFECT OF TERMINATION.
1. If this Agreement is terminated for any reason, whether by Licensee
or Licensor, Licensee shall immediately cease and shall cause each of its
Affiliates to immediately cease using the EMTrack Software, and shall return to
Licensor, or deliver as Licensor directs, all materials relating to the EMTrack
Software then in the possession of Licensor and any of its Affiliates.
2. Notwithstanding the termination of this Agreement pursuant to Section
VIII.A or VIII.B above, the following provisions of this Agreement shall
survive:
a. Licensee's obligations under Articles III and IV (to the extent
still applicable), Article VI and, to the extent proceedings have been
initiated, Article VII and this Section VIII.C.2, and
b. any cause of action or claim of Licensee or Licensor, accrued or
to accrue, because of any breach or default of this Agreement by the
other party.
D. EXPIRATION OF EMTRACK SOFTWARE. This Agreement shall terminate
automatically upon the expiration of the last-to-expire patent or copyright,
including any renewal, included within the EMTrack Software.
ARTICLE IX.
MISCELLANEOUS
A. ASSIGNMENT.
1. Licensor may in its sole discretion assign its rights and obligations
under this Agreement. Upon written notice to Licensee from Licensor and the
assignee of any such assignment, the term "Licensor" as used in this Agreement
shall refer to the assignee and the assignor shall no longer have any rights or
obligations under this Agreement.
2. Licensee may assign its rights and obligations under this Agreement
to any assignee of substantially all of the dispatch business of Licensee. Upon
written notice to Licensor from Licensee and the assignee of any such
assignment, the term "Licensee" as used in this Agreement shall refer to the
assignee and the assignor shall no longer have any rights or obligations under
this Agreement.
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B. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof.
This Agreement may be amended, modified or altered only by an instrument in
writing duly executed by the parties hereto. The waiver of a breach hereunder
may be effected only by a writing signed by the waiving party and shall not
constitute a waiver of any other breach.
C. NOTICES. Any notice or report required or permitted to be given or
made under this Agreement by one of the parties hereto to the other shall be in
writing and shall be given by personal delivery or by United States registered
or certified mail, return receipt requested, addressed as follows:
If to Licensor: Automated Dispatch Services, Inc.
8175 Northwest 12th Street
Miami, Florida 33126
Attention: President
with a copy to: Thomas M. Fitzpatrick, Esq.
Fitzpatrick Eilenberg & Zivian
20 North Wacker Drive, Suite 2200
Chicago, Illinois 60606
If to Licensee: Automated Dispatch Systems, Inc.
8175 Northwest 12th Street
Miami, Florida 33126
Attention: President
or to such other address of which the intended recipient shall have notified the
sender by a written notice given in accordance with the terms of this Section
IX.C. Any notice under this Agreement shall be effective when received.
D. SEVERABILITY. In the event that any one or more of the provisions of
this Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement, or either of the parties hereto, to be
invalid, illegal or unenforceable, such provision or provisions shall be
reformed to approximate as nearly as possible the intent of the parties, and the
validity of the remaining provisions shall not be affected.
E. GOVERNING LAW. The interpretation and performance of this Agreement
shall be governed by the laws of the State of Florida applicable to contracts
made and to be performed in that state by residents of that state.
F. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which when taken together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective duly authorized officers or representatives on the
respective dates set forth below next to the names of the parties.
LICENSOR: AUTOMATED DISPATCH SERVICES, INC., a
Delaware corporation
Date: /s/ 1/1/95 By: /s/
----------------- -------------------------------------
John Shermyen, President
LICENSEE: AUTOMATED SYSTEMS, INC., a Florida
corporation
Date: /s/ 1/1/95 By: /s/
----------------- -------------------------------------
Its: /s/ President
------------------------------
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<PAGE>
EXHIBIT 10.16
LICENSE AGREEMENT
License Agreement dated and effective as of the Effective Date between
AUTOMATED DISPATCH SERVICES, INC., a Delaware corporation, and RADIOSOFT, INC.,
a Delaware corporation. Capitalized terms used in this Agreement and not
otherwise defined are used as defined in Section 1.
PRELIMINARY STATEMENT
---------------------
ADS holds the Licensed Rights described below, and Radiosoft wishes to
obtain rights to exploit the Licensed Rights in certain commercial settings
described below. Therefore, in consideration of the mutual obligations set forth
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, ADS and Radiosoft agree as follows:
ARTICLE I
DEFINITIONS
-----------
Each of the following capitalized terms are used in this Agreement with
the following ascribed meaning:
"ADS" means Automated Dispatch Services, Inc., a Delaware corporation,
and its permitted successors and assigns.
"ADS USERS" means Trans Care, any Affiliate of ADS, and any Affiliate of
Trans Care.
"AFFILIATE" means, as to any person or entity, any other person or
entity which is controlling, controlled by, or is under common control with,
such person or entity. For purposes of the preceding definition, "control" means
the right to control, or actual control of, the management of such other entity,
whether by ownership of voting securities, by agreement, or otherwise.
"ADS DERIVATIVE WORKS" means any patented or unpatented, or copyrighted
or uncopyrighted, now or hereafter existing translation (including any
translation into other computer language), portation, modification, addition,
improvement, abridgement or other form in which the Licensed Rights or any
portion of the Licensed Rights may be used or recast, transformed or adapted by
or at the direction of ADS, and regardless of whether any of the foregoing shall
include source or object codes, algorithms, data, copyrighted materials, patent
rights or other intellectual property owned or controlled by ADS or any of its
Affiliates.
<PAGE>
"EFFECTIVE DATE" MEANS the date on which this Agreement is executed by
the later to execute of ADS and Radiosoft, evidenced by the dates set forth next
to the names of the parties on the signature page of this Agreement.
"GENERAL TRANSPORT DISPATCH" means two-way mobile transport dispatch
functions performed through a mobile wireless communications network, whether
performed by the user for itself or by the user for the benefit of a third
party.
"GOVERNMENTAL PROVIDER" means a local, municipal, state or federal
governmental authority operating the business of transport dispatch directly or
through a subdivision or unit of such governmental authority, and excludes any
transport dispatch conducted on behalf of a local, municipal, state or federal
governmental authority under a contract or license by a private or quasi-public
service provider.
"LICENSED COPYRIGHTS" means (a) the copyrights and copyrighted materials
listed on Schedule I attached to this Agreement, and (b) copyrights and
copyrighted materials arising from the services performed by ADS pursuant to
Section 3.3 of this Agreement, including in all cases without limitation all
source code, object code and algorithms included in such copyrights and
copyrighted material.
"LICENSED PATENT RIGHTS" means (a) the patents and patent applications
listed on Schedule II attached to this Agreement, and (b) patents and patent
applications with respect to inventions conceived or first reduced to practice
in the course of the services performed by ADS pursuant to Section 3.3 of this
Agreement, and (c) all patents and patent applications which are divisions,
continuations, continuations-in-part, reissues, renewals, re-examinations,
foreign counterparts, substitutions, or extensions of or to any patent
applications or patents described in clause (a) or clause (b) of this sentence.
"LICENSED RIGHTS" means the Licensed Patent Rights, the Licensed
Copyrights, and the Technical Information, collectively.
"LICENSED USES" means (a) through March 31, 1997, General Transport
Dispatch excluding Private Ambulance Dispatch, and (b) on and after April 1,
1997, General Transport Dispatch.
"PRIVATE AMBULANCE DISPATCH" means two-way mobile dispatch functions for
medical, paramedical, ambulance or health-related transport performed through a
mobile wireless communications network by any person other than a Governmental
Provider, whether performed by the user for itself or by the user for the
benefit of one or more third parties (including local, municipal, state and
federal governmental authorities).
"RADIOSOFT" means Radiosoft, Inc., a Delaware corporation, and its
permitted successors and assigns.
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<PAGE>
"RADIOSOFT DERIVATIVE WORKS" means any patented or unpatented, or
copyrighted or uncopyrighted, now or hereafter existing translation (including
any translation into other computer language), portation, modification,
addition, improvement, abridgement or other form in which the Licensed Rights or
any portion of the Licensed Rights may be used or recast, transformed or adapted
by or at the direction of Radiosoft, and regardless of whether any of the
foregoing shall include source or object codes, algorithms, data, copyrighted
materials, patent rights or other intellectual property owned or controlled by
Radiosoft or any of its Affiliates.
"SOFTWARE SUPPORT" means installation and maintenance support with
respect to the software subject to the Licensed Rights, and does not include
software development.
"TECHNICAL INFORMATION" means the technical information and know-how, if
any, in ADS's possession relating to the Licensed Rights.
"TRANS CARE" means Trans Care Corporation, a Texas corporation, and
includes any successor to or assignee of substantially all of the health-related
transport business of Trans Care.
ARTICLE II
GRANT OF LICENSE
----------------
2.1 Grant by ADS.
------------
(a) Effective on and after the Effective Date, ADS hereby grants to
Radiosoft an Exclusive License, as defined in Section 2.2 below, to use, and
sublicense the use of, the Licensed Rights for General Transport Dispatch
excluding Private Ambulance Dispatch.
(b) Effective on and after April 1, 1997, ADS hereby grants to Radiosoft
an Exclusive License, as defined in Section 2.2 below to use, and sublicense the
use of, the Licensed Rights for Private Ambulance Dispatch.
(c) Effective on and after the Effective Date, ADS hereby grants to
Radiosoft the right to incorporate source code and any other matters included in
the Licensed Rights in Radiosoft Derivative Works for, but only for, any and all
Licensed Uses.
(d) The licenses and rights granted in this Section 2.1 shall extend
worldwide, to the extent ADS has Licensed Rights anywhere in the world.
(e) Radiosoft's rights to sublicense the use of Licensed Rights pursuant
to clauses (a) and (b) of this Section 2.1 shall not include the right of any
sublicensee to grant any further sublicense to any Licensed Rights.
2.2 Exclusivity. An "EXCLUSIVE LICENSE" under this Agreement shall at
-----------
any time exclude ADS, other ADS Users, and all other third parties from the
Licensed Uses at the
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time, except as follows:
(a) nothing in this Agreement shall limit the rights at any time of
any person licensed by ADS prior to the Effective Date to use any of the
Licensed Rights for General Transport Dispatch or any part thereof ADS hereby
represents and warrants to RadioSoft that no license granted by ADS prior to the
Effective Date to use any of the Licensed Rights for General Transport Dispatch
or any part thereof permits any licensee to sublicense any of its licensed
rights; and
(b) nothing in this Agreement shall limit the rights at any time of
any person licensed by ADS prior to April 1, 1997, to use any of the Licensed
Rights for Private Ambulance Dispatch or any part thereof; ADS hereby agrees not
to grant the right to sublicense in any such license; and
(c) subject to the provisions of Section 5. 1 (b) below, nothing in
this Agreement shall limit the rights of ADS to use, and to license other ADS
Users to use, and of other ADS Users to use (but, not to license or sublicense),
Licensed Rights for Private Ambulance Dispatch.
2.3 Reservations. Notwithstanding any contrary provision of this
------------
Agreement, all rights to any Licensed Rights which are not expressly granted to
Radiosoft hereunder or reserved to third parties are hereby expressly reserved
to ADS for any and all purposes. None of ADS or any other ADS User shall have
any obligation to pay Radiosoft a royalty or any other consideration for the
rights excluded in Section 2.2 above, reserved in this Section 2.3 or otherwise
not specifically granted to Radiosoft under Section 2.1 above.
ARTICLE III
PAYMENTS AND OTHER FEES
-----------------------
3.1 Fees. For the licenses and rights granted in Section 2 of this
----
Agreement, Radiosoft shall pay ADS the sum of $150,000.00 in immediately
available funds, payable within three business days after the execution of this
Agreement (the "License Fee"). Within three business days after ADS receives
payment of the License Fee, ADS shall deliver to Radiosoft one copy of the
complete current software subject to the Licensed Rights, including both source
code and object code, on floppy disks in standard machine-readable format,
together with one copy of ADS's current technical manuals and software
documentation related thereto. Upon Radiosoft's receipt of the foregoing, the
License Fee shall thereafter be non-refundable under any and all circumstances.
3.2 Royalties. Radiosoft shall not be obligated to pay any fee, royalty
---------
or other charge for the licenses and rights granted in Section 2 of this
Agreement other than the License Fee.
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<PAGE>
3.3 Consulting Services. For the period from the Effective Date through
-------------------
May 31, 1995, ADS agrees to perform, or cause to be performed, for Radiosoft the
consulting services described on Parts l and 2 of Schedule III attached to this
Agreement (the "CONSULTING WORK"). In consideration of the performance of the
Consulting Work described in Part I of Schedule III, Radiosoft will pay ADS the
sum of $50,000.00, payable on the completion of the Consulting Work described in
Part I of Schedule III, but not later than sixty (60) days after the Effective
Date. In consideration of the performance of the Consulting Work described in
Part 2 of Schedule III, Radiosoft will pay ADS the sum of $100,000.00, payable
in installments as described in Part 2 of Schedule III. Such payments will be
made by wire transfer or by delivery of a check or other instrument representing
immediately available funds. Any payment not paid when due shall bear interest
at the rate of 18% per annum for the days actually elapsed until paid, based on
a year consisting of 365 days. In addition to the fees for the Consulting Work
described above, Radiosoft will pay, or promptly reimburse ADS for actual out-
of-pocket expenses incurred by ADS personnel in connection with the performance
of the Consulting Work, to the extent authorized in advance by Radiosoft in
writing and upon presentation of appropriate documentation for such expenses.
ADS will not be required to purchase any additional machinery or equipment, hire
any additional personnel, or otherwise incur any additional general overhead
costs in order to perform its obligations under this Section 3.3. ADS will not
be obligated to perform any Consulting Work during such times as any payment or
reimbursement under this Section 3.3 shall be due but not paid. All products,
codes, algorithms or other intellectual property created by ADS in the
performance of its obligations under this Section 3.3 shall belong to and be the
property of ADS and shall be included within the "Licensed Rights" subject to
this Agreement.
ARTICLE IV
NO WARRANTIES~ INDEMNIFICATION
------------------------------
4.1 Knowledge of Infringement. To the actual knowledge of the of ficers
-------------------------
of ADS, the subject matter of the Licensed Copyrights does not as of the
Effective Date infringe the United States copyright rights of any other person,
and the use of the subject matter of the Licensed Rights for General Transport
Dispatch does not infringe any United States patent issued prior to the
Effective Date.
4.2 Disclaimer of Warranties. Except as expressly set forth in Section
------------------------
4.1 above, ADS HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND OR
NATURE, WHETHER EXPRESS OR IMPLIED, RELATING TO THE LICENSED RIGHTS, OR ANY
SERVICE PERFORMED FOR RADIOSOFT PURSUANT TO SECTION 3.3 ABOVE. ADS FURTHER
HEREBY EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE PRACTICE OF THE LICENSED RIGHTS,
ANY SERVICE PERFORMED FOR RADIOSOFT PURSUANT TO SECTION 3.3 ABOVE, OR THE
RADIOSOFT DERIVATIVE WORKS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK,
OR OTHER RIGHTS OF THIRD PARTIES. Without limiting the generality of
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<PAGE>
the foregoing, ADS expressly does not warrant (i) the patentability or
copyrightability of any of the Licensed Rights, (ii) the accuracy of any
Technical Information, or (iii) the accuracy, safety, or usefulness for any
purpose of the Licensed Rights or the Radiosoft Derivative Works. Nothing
contained in this Agreement shall be construed as either a warranty or
representation by ADS as to the validity or scope of any Licensed Rights. ADS
assumes no liability in respect of any infringement of any patent, copyright or
other right of third parties due to the activities of Radiosoft or any Affiliate
of Radiosoft under this Agreement.
4.3 Indemnification.
---------------
(a) None of ADS, any Affiliate of ADS, any ADS User, or any director, of
ficer, employee, agent or representative of any of the foregoing (each an
"Indemnified Person") shall have any liability whatsoever to Radiosoft, any of
its Affiliates or any other person for or on account of (and Radiosoft agrees
and covenants, and agrees to cause each of its Affiliates to agree and covenant,
not to sue any Indemnified Person in connection with) any injury, loss, or
damage, of any kind or nature, sustained by, or any damage assessed or asserted
against, or any other liability incurred by or imposed upon, Radiosoft, any of
its Affiliates or any other person, arising out of or in connection with or
resulting from (i) the use of any Licensed Rights or Radiosoft Derivative Works
by Radiosoft or any of its Affiliates, (ii) any advertising or other promotional
activities with respect to either of the foregoing, or (iii) the production, use
or sale of any product identified, characterized or otherwise developed by
Radiosoft or any Affiliate with the aid of the Licensed Rights or any Radiosoft
Derivative Works.
(b) This Agreement is entered into by ADS independently from its
Affiliates and the other ADS Users. Correspondingly, it is understood and agreed
that no Affiliate of ADS or any other ADS User is a party to this Agreement and
in no manner shall be liable for nor assume any responsibility or obligation for
any claim, cost or damages arising out of or resulting from this Agreement, the
subject matter licensed, or any action or lack thereof by ADS, any Affiliate of
ADS, any other ADS User, Radiosoft or any of Radiosoft's Affiliates with respect
thereto.
(c) Radiosoft's obligations under this Section 4.3 shall survive the
expiration or earlier termination of all or any part of this Agreement.
ARTICLE V
PROSECUTION AND MAINTENANCE OF LICENSED PATENT RIGHTS
-----------------------------------------------------
5.1 Prosecution and Maintenance of Patent Rights.
--------------------------------------------
(a) During the term of this Agreement, and subject to the provisions of
Section 5. 1 (b) below, ADS shall be responsible for prosecuting and maintaining
the patents and copyrights under the Licensed Rights (other than the Radiosoft
Derivative Works, which shall be the sole responsibility of Radiosoft). At
either party's request, the other party shall use its best efforts to provide
copies of all of ficial actions and other communications received by such party
or its
6
<PAGE>
patent or copyright counsel with respect to patents and copyrights under the
Licensed Rights or incorporating any Radiosoft Derivative Work, as the case may
be, and, prior to submission to the recipients, copies of all draft filings with
governmental agencies from such party or its patent or copyright counsel with
respect to the Licensed Rights.
(b) In the event that ADS determines to abandon a patent application or
copyright application included within the Licensed Patent Rights or the Licensed
Copyrights, or to cease the maintenance of any patent or copyright included
within the Licensed Patent Rights or the Licensed Copyrights, it will use
reasonable efforts to give Radiosoft at least 90 days prior written notice of
its intention to do so. Radiosoft may, by written notice to ADS, elect to
continue such prosecution or maintenance at Radiosoft's sole expense but in
ADS's name. In the event that Radiosoft continues the prosecution or maintenance
of any patent or copyright pursuant to the preceding sentence, then the rights
reserved to ADS and its Affiliates (although not the rights reserved to arty ADS
Users which are not Affiliates of ADS) under clause (c) of Section 2.2 above
shall terminate.
5.2 Cooperation. Each party agrees to cooperate with the other in the
-----------
preparation, filing, prosecution and maintenance of patents or copyrights under
the Licensed Rights or incorporating any Radiosoft Derivative Work, by
disclosing such information as may be necessary and by promptly executing such
documents as the filing party may request to effect such efforts. Each party
shall bear its own costs in connection with its cooperation with ADS or
Radiosoft under this Section. All patents and copyrights under the Licensed
Rights shall be filed, prosecuted and maintained in ADS's name or as ADS shall
designate, provided that all patents and copyrights incorporating any Radiosoft
Derivative Work shall be filed, prosecuted and maintained in Radiosoft's name or
as Radiosoft shall designate.
5.3 Confidentiality.
---------------
(a) Both Radiosoft and ADS agree to treat (and to cause their respective
Affiliates to treat) as confidential all proprietary information with respect to
the Licensed Rights and Radiosoft Derivative Works made available by ADS to
Radiosoft or by Radiosoft to ADS. Each party acknowledges that the other party
may find it beneficial to disclose such information during the conduct of such
other party's business. Under such circumstances, such other party may make such
information available to third parties, provided that it shall first obtain from
any recipient a fully-executed confidentiality agreement which is at least as
restrictive as the confidentiality agreement such party employs to protect its
own most valuable trade secrets.
(b) Neither Radiosoft nor ADS, nor their respective Affiliates, shall be
bound by the provisions of Section 5.3(a) with respect to information which (i)
was previously known to the recipient at the time of disclosure; (ii) is in the
public domain at the time of disclosure; (iii) becomes a part of the public
domain after the time of disclosure, other than through disclosure by the
recipient or some other third party who is under an agreement of confidentiality
with respect to the subject information; or (iv) is required to be disclosed by
law.
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(c) Radiosoft ard ADS shall each take such actions as the other party
may reasonably request from time to time to safeguard the confidentiality of any
information subject to the terms of this Section 5.3.
(d) To the extent that United States Export Control Regulations apply,
neither Radiosoft nor ADS (nor their respective Affiliates) shall, without
having first fully complied with such regulations, (i) knowingly transfer,
directly or indirectly, any unpublished technical data obtained or to be
obtained from the other party hereto to a destination outside the United States,
or (ii) knowingly ship, directly or indirectly, any product produced using such
unpublished technical data to any destination outside the United States.
(d) The obligations of Radiosoft and ADS under this Section 5.3 shall
survive the expiration or earlier termination of all or any other part of this
Agreement.
ARTICLE VI
INFRINGEMENT
------------
6.1 Notification. If Radiosoft becomes aware of the infringement of any
------------
patent or copyright under the Licensed Rights, it shall immediately inform ADS
in writing of all details available. If ADS becomes aware of the infringement of
any patent or copyright under the Licensed Rights, it shall immediately inform
Radiosoft in writing of all details available.
6.2 Rights to Prosecute.
-------------------
(a) Licensed Uses Only and Radiosoft Derivative Works.
-------------------------------------------------
(i) In the event of infringement by a third party of any patent or
copyright under the Licensed Rights relating solely to Licensed Uses or
Radiosoft Derivative Works, Radiosoft may, but shall not be obligated to,
enforce the Licensed Rights at Radiosoft's expense against the infringers by
appropriate legal proceedings. Radiosoft may request the cooperation of ADS in
any such proceeding, such cooperation not to be unreasonably withheld, and shall
pay ADS's expenses incurred in such cooperation. Radiosoft shall regularly
inform ADS of the status of any proceedings under this Section 6.2(a).
(ii) All recoveries by way of royalties, damages and claims with
respect to infringement actions instituted, and claims made (including penalties
and interest), with respect to infringement of Licensed Rights relating solely
to Licensed Uses or to Radiosoft Derivative Works, during the term of this
Agreement shall belong to Radiosoft.
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(b) Licensed Uses and Other Uses.
----------------------------
(i) In the event of infringement by a third party of any patent or
copyright under the Licensed Rights relating to Licensed Uses and other uses,
Radiosoft and ADS shall consult with each other regarding the enforcement of the
Licensed Rights against the infringers by appropriate legal proceedings. If both
ADS and Radiosoft wish to commence and prosecute such proceedings, they shall do
so jointly. If only one of ADS and Radiosoft wishes to commence and prosecute
such proceedings, the party wishing to commence and prosecute such proceedings
may do so at its expense, and shall regularly inform the other party of the
status of any such proceedings.
(ii) All recoveries by way of royalties, damages and claims with respect
to infringement actions instituted, and claims made (including penalties and
interest), with respect to infringement of Licensed Rights relating to Licensed
Uses and other uses during the term of this Agreement shall belong to (A)
Radiosoft, if ADS did not participate in the proceedings, or (B) ADS, if
Radiosoft did not participate in the proceedings, or (C) Radiosoft and ADS in
equal shares, if both Radiosoft and ADS participated in the proceedings.
(c) Uses Other Than Licensed Uses. The prosecution, settlement, or
-----------------------------
abandonment of any legal proceedings with respect to infringement by a third
party of any patent or copyright under the Licensed Rights not described in
Section 6.2(a) or (b) above shall be at ADS's sole and complete discretion. All
recoveries by way of royalties, damages and claims with respect to infringement
actions instituted, and claims made (including penalties and interest), with
respect to infringement of Licensed Rights not relating to Licensed Uses during
the term of this Agreement shall belong to ADS. ADS may request the cooperation
of Radiosoft in any such proceeding, such cooperation not to be unreasonably
withheld, and shall pay Radiosoft's expenses incurred in such cooperation.
(d) Settlement. No settlement by Radiosoft of any action or claim
----------
described in Section 6.2(a) or (b) shall grant any right in connection with the
Licensed Rights, or impose any restriction on any of the Licensed Rights, not
already granted or imposed in this Agreement.
ARTICLE VII
TERMINATION
-----------
7.1 ADS Right to Terminate. ADS shall have the right (without prejudice
----------------------
to any of its other rights conferred on it by this Agreement) to terminate this
Agreement if Radiosoft is in breach of any provision of this Agreement, and
Radiosoft fails to remedy any such default within 30 days after written notice
thereof by ADS.
7.2 Radiosoft Right to Terminate. Radiosoft may terminate this
----------------------------
Agreement at any time by written notice to ADS, given at least 90 days prior to
the termination date specified in the notice.
9
<PAGE>
7.3 Effect of Termination.
---------------------
(a) If this Agreement is terminated for any reason, whether by Radiosoft
or ADS, Radiosoft shall immediately cease and shall cause each of its Affiliates
to immediately cease using the Licensed Rights, and shall return to ADS, or
deliver as ADS directs, all materials relating to the Licensed Rights then in
the possession of ADS and any of its Affiliates.
(b) Notwithstanding the termination of this Agreement pursuant to
Section 7.1 or 7.2 above, the following provisions of this Agreement shall
survive:
(i) Radiosoft's obligations under Section 2.2, Articles 3 and 4 (to
the extent still applicable), Article S and, to the extent proceedings
have been initiated, Section 6.2 and this Section 7.3(b), and
(ii) any cause of action or claim of Radiosoft or ADS, accrued or to
accrue, because of any breach or default of this Agreement by the other
party.
(c) Notwithstanding the termination of this Agreement pursuant to
Section 7.1 or 7.2 above, any sublicensee of any of Radiosoft's rights under
this Agreement other than an Affiliate of Radiosoft shall continue to have the
rights to use (but not sublicense) the Licensed Rights granted to it by
Radiosoft prior to the termination of this Agreement, as if this Agreement had
not been terminated.
7.4 Expiration of Licensed Rights. This Agreement shall terminate
-----------------------------
automatically upon the expiration of the last-to-expire patent or copyright,
including any renewal, included within the Licensed Rights.
ARTICLE VIII
ADVERTISING
-----------
Each party agrees not to use the name of the other party in any
commercial activity, marketing, advertising or sales brochures except with the
prior written consent of the other party, which such consent may be granted or
with held in such party's sole and complete discretion.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Assignment.
----------
(a) This Agreement may not be assigned by ADS without the prior written
consent of Radiosoft, which will not be unreasonably with held, except that ADS
may at any time assign its
10
<PAGE>
the remaining obligations to perform Consulting Work to any entity controlled by
the present executive management of ADS.
(b) This Agreement may not be assigned by Radiosoft without the prior
written consent of ADS, which will not be unreasonably withheld, except to a
wholly-owned subsidiary of Radiosoft or to the successor or assignee of
substantially all of Radiosoft's business related to Licensed Rights. Any such
attempted assignment which is not permitted shall be null and void and of no
force or effect whatsoever.
9.2 Entire Agreement. Amendment and Waiver. This Agreement (including
----------------
any schedules attached) contains the entire understanding of the parties with
respect to the subject matter hereof. This Agreement may be amended, modified or
altered only by an instrument in writing duly executed by the parties hereto.
The waiver of a breach hereunder may be effected only by a writing signed by the
waiving party and shall not constitute a waiver of any other breach.
9.3 Notices. Any notice or report required or permitted to be given or
-------
made under this Agreement by one of the parties hereto to the other shall be in
writing and shall be given by personal delivery or by United States registered
or certified mail, return receipt requested, addressed as follows:
If to ADS: Automated Dispatch Services, Inc.
8175 Northwest 12th Street
Miami, Florida 33126
Attention: President
with a copy, to:
Thomas M. Fitzpatrick, Esq.
Fitzpatrick Law Offices
20 North Wacker Drive, Suite 2200
Chicago, Illinois 60606
If to Radiosoft: Radiosoft, Inc.
777 Third Avenue
New York, New York 10017
Attention: General Manager
or to such other address of which the intended recipient shall have notified the
sender by a written notice given in accordance with the terms of this Section.
Any notice under this Agreement shall be effective when received.
9.4 Severability. In the event that any one or more of the provisions of
------------
this Agreement should for any reason be held by any court or authority having
jurisdiction over this
11
<PAGE>
Agreement, or either of the parties hereto, to be invalid, illegal or uner
forceable, such provision or provisions shall be reformed to approximate as
nearly as possible the intent of the parties, and the validity of the remaining
provisions shall not be affected.
9.5 Governing Law. The interpretation and performance of this Agreement
-------------
shall be governed by the laws of the State of New York applicable to contracts
made and to be performed in that state by residents of that state:.
9.6 Implementation. Each party shall, at the request of the other party,
--------------
execute any document reasonably necessary to implement the provision of this
Agreement.
9.7 Counterparts. This Agreement May be executed in multiple
------------
counterparts, each of which when taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective duly authorized officers or representatives on the
respective dates set forth below next to the names of the parties.
ADS: AUTOMATED DISPATCH SERVICES, INC., a
Delaware corporation
By:
-------------------------------------
John Shermyen, President
Date of Execution: April 2l, l994
Radiosoft: RADIOSOFT, INC., a Delaware corporation
By:
-------------------------------------
Its: Vice President
Date of Execution: April 26, 1994
12
<PAGE>
Schedule I
Custom 2000 (Dispatch, Order-Entry, MDDS Modules), United States Copyright
Office Registration No. TX 2 818 347.
EMTRACK (Dispatch, Order-Entry, MDDS Modules), United States Copyright Office
Registration No. TX 2 818 348.
13
<PAGE>
Schedule II
U.S. Patent No. 5,122,959, dated June 16, 1992
14
<PAGE>
Schedule III
Part 1
ADS will assist Radiosoft at its request in the development of a business plan
to exploit the Licensed Rights for Licensed Uses, including qualitative market
assessments based on information in the possession of ADS.
Part 2
ADS will provide up to a total of 2,000 person hours of Software Support during
the period ending May 31, 1995, as follows: ADS commits to provide at least 500
person-hours of Software Support during each of the four periods (each a
"Support Period") beginning and ending respectively:
(1) from the Effective Date through the 90th day after the Effective
Date, and
(2) from the 91st day after the Effective Date through the 180th day
after the Effective Date, and
(3) from the 181st day after the Effective Date through the 270th day
after the Effective Date, and
(2) from the 271st day after the Effective Date through May 31, 1995,
to the extent requested by Radiosoft, and will use reasonable efforts to provide
Software Support in addition to 500 hours in any one Support Period, to the
extent requested by Radiosoft. Any person-hours of Software Support not used on
or before May 31, 1995, shall expire at that time.
The fee under this Part 2 shall be payable to ADS in four installments of
$25,000.00 each, due respectively as follows:
(a) on the completion of the first 500 person-hours of Software Support
or, if earlier, the 90th day after the Effective Date, and
(b) on the completion of the first 1,000 person-hours of Software
Support or, if earlier, the 180th day after the Effective Date, and
(c) on the completion of the first l,500 person-hours of Software
Support or, if earlier, the 270th day after the Effective Date, and
(d) on the completion of 2,000 person-hours of Software Support or, if
earlier, May 31, 1995.
15
<PAGE>
FIRST AMENDMENT TO LICENSE AGREEMENT
This First Amendment to License Agreement ("First Amendment") is entered
into this 14th day of December, 1994 (the "Effective Date"), by Automated
Dispatch Services, Inc., a Delaware corporation ("ADS") and Radiosoft, Inc., a
Delaware corporation ("Radiosoft").
In consideration of the mutual agreements set forth herein and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, ADS and Radiosoft hereby amend the License Agreement dated April
26, 1994 (the "Radiosoft License Agreement"), all effective as of the Effective
Date, as follows:
1. Article I of the Radiosoft License Agreement is hereby amended by adding
the following definition:
"General Transport Third Party Dispatch means two-way mobile transport
dispatch functions performed by the user through a mobile wireless
communications network for the benefit of a third party."
2. Section 2.1 (e) of the Radiosoft License Agreement is hereby deleted
in its entirety.
3. Section 2.2 of the Radiosoft License Agreement is hereby amended by adding a
new subsection (d) that reads in its entirety as follows:
"(d) Radiosoft's Exclusive License shall not include the use, or sublicense
of the use, of the Licensed Rights for General Transport Third Party
Dispatch in any or all of Monroe, Dade, Broward and Palm Beach Counties,
Florida."
4. Section 3.3 of the Radiosoft License Agreement is hereby amended by
inserting the following at the end of such section:
"Radiosoft acknowledges that ADS has performed in full all of the Consulting
Work described on Part I of Schedule III attached to this Agreement, and ADS
acknowledges that Radiosoft has paid in full for the Consulting Work
described on Part 1 of Schedule III attached to this Agreement. ADS and
Radiosoft agree that, notwithstanding any contrary provision of this
Agreement, ADS shall have no obligation to perform any of the Consulting
Work described on Part 2 of Schedule III attached to this Agreement, and
Radiosoft shall have no obligation to purchase or pay for any part of the
Consulting Work described on Part 2 of Schedule III attached to this
Agreement."
5. Except as set forth in this First Amendment, the Radiosoft License
Agreement remains in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their respective duly authorized of ficers as of the date
first above written.
16
<PAGE>
AUTOMATED DiSPATCH SERVICES, INC. RADIOSOFT, INC.
By: By:
------------------------- ----------------------------
Its President Its
----------------------------
17
<PAGE>
FIRST AMENDMENT TO LICENSE AGREEMENT
This First Amendment to License Agreement ("First Amendment") is entered
into this 14th day of December, 1994 (the "Effective Date"), by Automated
Dispatch Services, Inc., a Delaware corporation ("ADS") and Radiosoft, Inc., a
Delaware corporation ("Radiosoft").
In consideration of the mutual agreements set forth herein and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, ADS and Radiosoft hereby amend the License Agreement dated April
26, 1994 (the "Radiosoft License Agreement"), all effective as of the Effective
Date, as follows:
1. Article I of the Radiosoft License Agreement is hereby amended by adding the
following definition:
"General Transport Third Party Dispatch means two-way mobile transport
dispatch functions performed by the user through a mobile wireless
communications network for the benefit of a third party."
2. Section 2.1 (e) of the Radiosoft License Agreement is hereby deleted
in its entirety.
3. Section 2.2 of the Radiosoft License Agreement is hereby amended by adding a
new subsection (d) that reads in its entirety as follows:
"(d) Radiosoft's Exclusive License shall not include the use, or sublicense
of the use, of the Licensed Rights for General Transport Third Party
Dispatch in any or all of Monroe, Dade, Broward and Palm Beach Counties,
Florida."
4. Section 3.3 of the Radiosoft License Agreement is hereby amended by
inserting the following at the end of such section:
"Radiosoft acknowledges that ADS has performed in full all of the Consulting
Work described on Part I of Schedule III attached to this Agreement, and ADS
acknowledges that Radiosoft has paid in full for the Consulting Work
described on Part 1 of Schedule III attached to this Agreement. ADS and
Radiosoft agree that, notwithstanding any contrary provision of this
Agreement, ADS shall have no obligation to perform any of the Consulting
Work described on Part 2 of Schedule III attached to this Agreement, and
Radiosoft shall have no obligation to purchase or pay for any part of the
Consulting Work described on Part 2 of Schedule III attached to this
Agreement."
5. Except as set forth in this First Amendment, the Radiosoft License Agreement
remains in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their respective duly authorized officers as of the date
first above written.
18
<PAGE>
AUTOMATED DISPATCH SERVICES, INC. RADIOSOFT, INC.
By: ____________________________ By: ____________________________
Its __________________________ Its Vice President
19
<PAGE>
SECOND AMENDMENT TO LICENSE AGREEMENT
This Second Amendment to License Agreement ("Second Amendment") is
entered into this 14th day of December, 1994 (the "Effective Date"), by
Automated Dispatch Services, Inc., a Delaware corporation ("ADS") and Radiosoft,
Inc., a Delaware corporation ("Radiosoft").
In consideration of the mutual agreements set forth herein and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, ADS and Radiosoft hereby amend the License Agreement dated
December April 26, 1994 and first amended on December 14, 1994 (as amended, the
"Radiosoft License Agreement"), all effective as of the Effective Date, as
follows:
1. All capitalized terms not defined in this Second Amendment shall have the
meanings ascribed to them in the Radiosoft License Agreement.
2. The definition of "Affiliate" in Article I of the Radiosoft License Agreement
is hereby amended by inserting the words", or any other person or entity in
which such person or entity owns a twenty-five percent interest after "or is
under common control with, such person or entity".
3. The definition of "Licensed Uses" in Article 1 of the Radiosoft License
Agreement is hereby amended to read in its entirety as follows: " 'Licensed
Uses' means General Transport Dispatch."
4. Article 1 of the Radiosoft License Agreement is hereby amended to include the
following definitions:
"'Consolidator' means Laidlaw, AMR, Rural Metro, Careline, AmNet or AmStat."
"'Private Ambulance Self Dispatch' means dispatch functions for medical,
paramedical, ambulance or health-related transport performed through a
wireless communications network by any person other than a Governmental
Provider by the user for itself (and its Affiliates) and not for the benefit
of a third party."
5. Each of Section 2.1 (b) and Section 2.2 (b) of the Radiosoft License
Agreement is hereby amended by deleting "April 1, 1997" and replacing it with
"December 14, 1994".
6. Section 2.2 of the Radiosoft License Agreement is hereby amended by adding a
new subsection (e) that reads in its entirety as follows:
"(e) Radiosoft's Exclusive License shall not include the right to use or
sublicense the use of the Licensed Rights for Private Ambulance Self
Dispatch, except for the Single-Site Rights described in Section 9.9 hereof.
20
<PAGE>
7. Article 9 of the Radiosoft License Agreement is hereby amended by adding a
new Section 9.9 that reads in its entirety as follows:
"9.9 Acknowledgment of TransCare Rights.
(a) Radiosoft acknowledges the grant by ADS to TransCare Corporation, a
Delaware corporation ("TransCare"), of an irrevocable, royalty-free
exclusive (except as set forth in subsection (b) below) license to use
for itself and its Affiliates (without the right to sublicense the use
of) the Licensed Rights for Private Ambulance Self Dispatch.
(b) TransCare acknowledges and agrees that its exclusive license for
Private Ambulance Self Dispatch shall not limit the right of ADS or
Radiosoft, as the case may be, to grant Single-Site Turnkey Licenses or
the right of ADS or Radiosoft, as the case may be, to copy, modify and
create derivative works from the source code and support materials
related to the Licensed Rights (such rights for Private Ambulance Self
Dispatch herein reserved for ADS or Radiosoft being herein called the
"Single-Site Rights").
(c) Radiosoft agrees with TransCare that, notwithstanding any provision in
this Radiosoft License Agreement, without the prior written consent of
TransCare, it shall not (i) grant a sublicense or any other rights in
respect of the SingleSite Rights to a Consolidator, (ii) grant to any
single entity more than one Single-Site Turnkey License for operation
within the New York City metropolitan area or (iii) grant to any single
entity more than two Single-Site Turnkey Licenses for operation outside
the New York City metropolitan area. Radiosoft agrees with TransCare
that it will not assign its interest, in whole or in part, in the
Single-Site Rights to any assignee unless such assignee agrees in
writing to be bound by the provisions of this Section 9.9(c).
(d) Radiosoft acknowledges that the ADS grant to TransCare to use the
Licensed Rights for Private Ambulance Self Dispatch, plays a vital,
necessary and unique role in TransCare's business plan and operations,
and that any breach by Radiosoft of the agreements made in this Section
9.9 could not be adequately compensated by damages. Accordingly, if
Radiosoft breaches its obligations to TransCare under this Agreement,
TransCare shall be entitled to enforcement of this Agreement by a
decree of specific performance requiring Radiosoft to fulfill its
obligations under this Agreement including without limitation,
enjoining the granting by Radiosoft of any rights in the Licensed
Rights in violation of this Section 9.9.
(e) For purposes of this Section 9.9, the term "Single-Site Turnkey
License" means any single license granted to a single entity, without
the right to sublicense, to use any or all of the Licensed Rights,
except for source code, for Private Ambulance
21
<PAGE>
Self Dispatch conducted at a single dispatching site for no more than
forty (40) medical transportation vehicles.
(f) Radiosoft, ADS and TransCare agree that the provisions of this Section
9.9 have been made for good and sufficient consideration and may not be
modified or amended without the written consent of Radiosoft, ADS and
TransCare.
8. Except as set forth in this Second Amendment, the Radiosoft License
Agreement remains in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be executed by their respective duly authorized officers as of the Effective
Date.
AUTOMATED DISPATCH SERVICES, INC. RADIOSOFT, INC.
By: By:
---------------------------- -----------------------
Its President Its
-----------------
ACKNOWLEDGED AND AGREED:
TRANSCARE CORPORATION
By:
-------------------------------------
Donald E. Strange, Chairman and
Chief Executive Officer
22
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form SB-2 of our report dated May 7, 1998 relating
to the financial statements of LogistiCare, Inc., which appears in such
Prospectus. We also consent to the reference to us under the headings
"Experts" and "Selected Financial Information" in such Prospectus. However, it
should be noted that Price Waterhouse LLP has not prepared or certified such
"Selected Financial Information".
PRICE WATERHOUSE LLP
Ft. Lauderdale, Florida
May 8, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LOGISTICARE, INC. AS OF DECEMBER 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 MAR-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 MAR-31-1998
<CASH> 639,598 3,680,573
<SECURITIES> 0 0
<RECEIVABLES> 610,495 2,100,649
<ALLOWANCES> (95,000) (95,000)
<INVENTORY> 0 0
<CURRENT-ASSETS> 22,282 30,003
<PP&E> 849,732 933,396
<DEPRECIATION> 154,126 29,367
<TOTAL-ASSETS> 2,257,506 6,874,805
<CURRENT-LIABILITIES> 4,696,300 9,083,260
<BONDS> 0 0
0 0
974 974
<COMMON> 80,474 80,474
<OTHER-SE> (2,759,122) (2,531,581)
<TOTAL-LIABILITY-AND-EQUITY> 2,257,506 6,874,805
<SALES> 11,501,975 11,714,962
<TOTAL-REVENUES> 11,501,975 11,714,962
<CGS> 0 0
<TOTAL-COSTS> 15,714,357 11,494,130
<OTHER-EXPENSES> (25,929) 26,822
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 27,537 20,113
<INCOME-PRETAX> (4,213,990) 227,541
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,213,980) 227,541
<EPS-PRIMARY> (0.59) 0.03
<EPS-DILUTED> (0.59) 0.02
</TABLE>
