U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the Fiscal Year Ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________
TO ____________
Commission File Number 0-24768
MEDIX RESOURCES, INC.
(Name of small business issuer in its charter)
Colorado 84-1123311 (State or Other Jurisdiction of (IRS
Employer Incorporation or Organization Identification No.)
7100 E. Belleview Avenue, Suite 301
Englewood, Colorado 80111
(Address of Principal Executive Offices)
Issuer's Telephone Number: (303) 741-2045
Securities Registered Under Section 12(b) of the Exchange Act: None
Securities Registered Under Section 12(g) of the Exchange Act:
Common Stock. $.001 Par Value;
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
[ ]
Registrant's revenues for its most recent fiscal year: $24,000
The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant as of March 17, 2000 was approximately
$238,678,000 (for purposes of the foregoing calculation only, each of the
registrant's officers and directors is deemed to be an affiliate).
There were 34,932,311 shares of registrant's Common Stock outstanding as of
March 17, 2000.
Documents incorporated by reference:
None
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..........................2
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-B. We will furnish to
its shareholders of record as of the record date for its 1999 Annual Meeting of
Stockholders, a copy of any of the exhibits listed below upon payment of $.25
per page to cover the costs of the Company of furnishing the exhibits.
Exhibit No. Description
10.16 Employment Agreement between the Company and Mr. John R. Prufeta,
dated as of December 1, 1999
10.17 Employment Agreement between the Company and Mr. David R. Pfeil,
dated as of December 1, 1999
10.18 Employment Agreement between the Company and Mr. Michael G. Knepper,
dated as of February 11, 2000
10.19 Employment Agreement between the Company and Mr. David Kinsella,
dated as of September 27, 1999 , and as amended as of January 26,
2000
10.20 Consulting Agreement between the Company and Mr. John P. Yeros, dated
as of March 1, 2000
10.21 Employment Agreement between the Company and Mr. Brian R. Ellacott,
dated as of February 11, 2000
10.22 Employment Agreement between the Company and Ms. Patricia A.
Minicucci, dated as of February 15, 2000
10.24 Agreement and Plan of Merger, dated as of March 8, 2000, among Medix
Resources, Inc., Cymedix Lynx Corporation, Automated Design Concepts,
Inc. and David R. Pfeil
10.25 Consulting Agreement between the Company and Mr. Samuel H. Havens,
dated as of October 1, 1999.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on behalf by the
undersigned, thereunto duly authorized on April 7, 2000.
MEDIX RESOURCES, INC.
By: /s/ David Kinsella
Controller (Principal Accounting and
Financial Officer)
(Exhibit 10.16)
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of December 1, 1999, (the
"Agreement") by and between Medix Resources, Inc., a Colorado corporation with
principal offices located at Suite 301, 7100 E. Belleview Ave, Englewood,
Colorado. ("the Company") and John R. Prufeta, whose business address is 305
Madison Avenue, Suite 2033, New York, NY 10165 (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the Executive
agrees to serve the Company as its and Chief Executive Officer and President.
2. Position and Responsibilities. The Executive shall devote all of his
business time and attentions to the affairs of the Company. The Executive shall
be responsible for the day to day management and operation of the Company, and
shall have full authority and responsibility with respect thereto, including the
matters set forth in the Job Description attached hereto as Exhibit B, subject
to the general direction, approval and control of the Company's Executive
Committee, Board of Directors and to the restrictions, limitations and
guidelines set forth by the Board of Directors in resolutions adopted in the
minutes of the Board of Directors meetings, copies of which shall be provided to
the Executive from time to time.
3. Board of Directors. The Executive shall at all times discharge his
duties as Chief Executive Officer and President under the supervision of the
Board of Directors. In the performance of his duties, the Executive shall
maintain an office at 305 Madison Avenue, Suite 2033, New York, New York.
4. Term of Employment. The period of the Executive's employment under this
Agreement shall be for a period ending January 31, 2002, subject to the
termination provisions set forth in Paragraphs 12, 13, 14 and 15 hereafter.
5. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, under and pursuant to the general direction of the Board of Directors
of the Company, provided, however, that, with approval of the Board of Directors
of the Company, the Executive may serve, on the board of directors of, or hold
any other offices or positions in, companies or organizations which, in such
Board's judgment, will not present any conflict of interest with the Company or
any of its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement ; and further
provided that the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity which is either: (a)
Directly related to or within the scope of the existing business of the Company
and affiliated companies; or (b) Within the logical scope of the business of the
Company and affiliated companies, as such scope may be expanded or altered from
time-to-time by the Board of Directors. The parties understand that the
Executive shall continue to own an interest in the following businesses:
Creative Health Concepts, Inc., Creative Management Strategies, Inc. and TCG
Development, Inc. Such ownership interests and any meetings or discussions
relating to internal matters of those businesses that are not promotional or
representational in nature, which do not interfere with the Executive's full
time management of the Company and its interests, will not be considered a
violation of this Section 5. The terms "affiliate of" a company or "affiliated
company" as used herein means any company directly or indirectly controlling,
controlled by or under common control with the other company. A presumption of
control shall exist for any person owning or controlling 10% or more of the
outstanding voting securities of a company, any officer, director or general
partner of a company.
6. Compensation. The Company shall pay to the Executive as compensation for
his services, the base salary of $120,000 per year or such higher salary as may
be from time-to-time approved by the Board of Directors, payable bi-monthly in
accordance with the Company's normal payroll procedures. In addition, during the
term of this agreement the Executive will receive as compensation, a commission
of 2.5% of all revenue generated by the Company's subsidiary, Cymedix Lynx
Corporation for the period provided herein (net, however, of any rebates that
exceed 10%). This commission will exclude the revenues generated from agreements
with WellPoint Pharmacy Management, WellPoint Health Network, Advance Paradigm
and any affiliated company of each. The Executive's commission will be paid for
a period of three years beginning at the initiation of revenue from the customer
account, so long as the revenue stream begins before this Agreement is
terminated for whatever reason. It is understood that each new project for a
customer or an affiliate of a customer shall generate a new customer account. If
there is any uncertainty whether any work to be done for a client constitutes a
"new project," the Executive will discuss such issue with the Executive
Committee of the Board of Directors, and the decision of the Executive Committee
shall determine the issue. In addition, the Board of Directors shall review any
new acquisition or business development project that is conducted in a
subsidiary other than Cymedix or in the parent Company, on a case by case basis,
to determine whether it is appropriate to provide the Executive with an
incentive of the commission designated above for the business generated by that
subsidiary or that project. The Company also agrees to pay to Creative
Management Strategies, Inc., a total of $110,000, for services rendered to the
Company in 1999 by the Executive. The Company will submit to Creative Management
Strategies twelve (12) equal payments of $9,166.66 beginning February 1, 2000
and ending January 1, 2001. The Executive agrees that all previous agreements
between the Company, the Executive and Creative Management Strategies are hereby
terminated. Upon the execution of the Agreement, the Company will grant to the
Executive 400,000 Stock Options, at an exercise price of $.50 and 600,000 Stock
Options, at an exercise price of $4.97. Terms of the Stock Option grant are set
forth in the Stock Option Agreement attached hereto as Exhibit A.
7. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement, including travel and lodging costs. The Executive shall
present to the Executive Committee each month an itemized account of such
expenses in such form as is required by the Board of Directors.
8. Medical Coverage and Other Employee Benefits. The Executive will be
eligible to participate in the Company's current standard benefits package,
which provides health insurance with limited Company payments, limited sick time
accrual, paid holidays, 401(k) Plan participation when eligible, long-term
disability, and term life insurance at Executive's cost, on the same basis as
other Executives of the Company. If the Executive elects not to utilize the
Company's group health insurance policy, the Company will pay the Executive an
amount equal to the maximum amount the Company would pay any other Executive
then employed by the Company if he or she choose not to utilize the Company's
group health insurance policy.
9. Vacation Time. The Executive shall be entitled to take four (4) weeks
paid vacation per calendar year. Such vacation may not be taken in any greater
than consecutive two (2) week increments. Vacation not used by the Executive
during the calendar year will be forfeited. Compensation for annual vacation
time not taken by Executive shall be paid to the Executive at the date of
termination.
10. Obligations of Executive During and After Employment.
(a) In consideration of the compensation to be paid to Executive
hereunder, and in recognition of the confidential and proprietary nature of the
intellectual property that is the basis for the revenues of the Company and its
affiliated companies, the importance of confidential business information such
as its business plans and customer strategies to the Company and its affiliates,
and the fact the Executive will be fully aware and intimately involved in the
generation of some or all of such material, the Executive agrees that during his
employment by the Company and for a period of one (1) year after the termination
of such employment, he will not, directly or indirectly compete with the Company
in a business that is involved in a "Business Opportunity" of the Company or its
affiliated companies, as defined in Section 5 above.
(b) The Executive realizes that during the course of his employment,
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies. Therefore,
during his employment by the Company or by an affiliated company or while
receiving compensation under this Agreement, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such information, except to the extent authorized by the Company in
writing. All records, files, business plans, documents, equipment and the like,
or copies thereof, relating to Company's business, or the business of an
affiliated company, which Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated company's
premises without the written consent of the Chairman of the Board, and shall be
promptly returned to the Company upon termination of employment with the Company
and its affiliated companies. The Executive further agrees that after the term
of his employment, he will not disclose or make use of any proprietary
information owned by the Company or necessary in the operation of the Company's
products or products under development.
(c) In the event a court of competent jurisdiction finds any provision of
this Section 11 to be so over broad as to be unenforceable, then such provision
shall be reduced in scope by the court, but only to the extent deemed necessary
by the court to render the provision reasonable and enforceable, it being the
Executive's intention to provide the Company with the broadest protection
possible against harmful competition. (d) Irreparable harm should be presumed if
Section 11 of this Agreement is breached in any way. Damages would be difficult
if not impossible to ascertain, and the faithful observance of all terms of such
Section is an essential condition of employment with the Company. In light of
these considerations, Executive acknowledges that a court of competent
jurisdiction should immediately enjoin any breach of this Agreement by
Executive, upon the Company's request and the Company is released from the
requirement of posting any bond in connection with temporary or interlocutory
injunctive relief, to the extent permitted by law. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedy available to
the Company for such breach or threatened breach including, but not limited to,
the recovery of damages from the Executive.
11. Termination by the Company.
(a) Termination for Cause by the Company. During the first year of the
term of this Agreement, there can be no termination of the Executive by the
Company except for "Termination for Cause" as outlined below: Notwithstanding
anything herein to the contrary, the Company may, without liability, terminate
the Executive's employment hereunder for cause upon five days written notice,
and thereafter the Company's obligations hereunder shall cease and terminate.
Grounds for termination "for cause" shall be one or more of the following:
(1) A willful breach of duty by the Executive during the course
of his employment;
(2) The conviction of the Executive of a felony
(3) Habitual neglect of duty by the Executive;
(4) The Executive's material failure to perform or meet objective
and measurable standards set by the Board of Directors and agreed upon by the
Executive in advance If the Executive desires to contest the determination to
terminate his employment for cause, he may request in writing to the Executive
Committee, within 5 business days of the written notice to him of his
termination, that a meeting of the full Board of Directors be called to hear his
views on the matter. Such meeting shall take place within 30 days of such
written notice. During such period, unless otherwise agreed, the Executive will
be in the status of being on paid leave. The Board shall make its decision at
the meeting, and if it is in favor of the Executive, he shall immediately resume
his duties. If it is not in his favor, his employment shall be immediately
terminated.
(b) Termination Without Cause by the Company. After the completion of the
initial year of employment hereunder, the Company may terminate the employment
of the Executive upon thirty (30) days written notice without cause. In the
event of termination without cause, the Company will pay the Executive six
(6) months salary as compensation. In addition, at least three months prior to
the expiration of this contract, the Company will either notify the Executive in
writing that the contract will not be renewed or will commence good faith
negotiation to enter into a new or modified contract. However, failure to renew
the Executive's contract shall not be deemed to be "termination without cause"
hereunder.
12. Termination by the Executive Without Cause. The Executive, without
cause, may terminate this Agreement upon 90 days' written notice to the Company.
In such event, the Executive shall be required to render the services required
under this Agreement during such 90-day period unless otherwise directed by the
Board of Directors. Executive will be compensated only through the final day of
his employment.
13. Termination by the Executive with Cause. The Executive may terminate
this employment with the Company at any time upon 30 days' written notice and
opportunity for the Company to remedy any non-compliance, by reason of (i) the
Company's material failure to perform its duties pursuant to this Agreement or
(ii) any material diminishment in the duties and responsibilities, working
facilities, or benefits as described in paragraphs 2, 5, 6, 7, 8 and 10 of this
Agreement. Executive shall be entitled to all base salary specified herein for a
six-month period following the notice of termination for cause.
14. Termination Upon Death of Executive. In addition to any other provision
relating to termination, this Agreement shall terminate upon the Executive's
death. Upon Executive's death, the Company shall pay in a lump sum, within 45
days of the Executive's death, to such person as the Executive shall have
designated to the Company as his beneficiary, or, if no such person is
designated, to the Executive's estate, an amount equal to all of the Executive's
accrued but unpaid base salary, the value on the Company's books of any vested
but unused vacation time and accrued sick time, and all unpaid expense
reimbursements at the time of Executive's death.
15. Lump Sum Compensation. In the event of the occurrence of a "Triggering
Event" which shall be defined to include (i) change in ownership of 50% or more
of the outstanding shares of the Company, or (ii) the merger, consolidation,
reorganization or liquidation of the Company that results in a change in
ownership of 50% or more in the direct or indirect ownership of the Company
before the merger, consolidation, reorganization or liquidation, the Executive
shall receive lump sum compensations equal to his annual salary and incentive or
bonus payments, if any, as would have been paid to the Executive during the
Company's then current fiscal year ( as if the Executive had been employed for
the full fiscal year) within 30 days of the Triggering Event. Upon a Triggering
Event, any outstanding but unvested options granted by the Company to the
Executive shall immediately vest, and the Company shall cause the shares to be
registered with the Securities and Exchange Commission so that the Executive
will be free to sell such shares in the public securities markets. If the
Company has been acquired by another publicly traded company, the Company shall
cause that company to agree to exchange its options to acquire such company's
shares for the Company's options, and to cause such shares to be registered with
the Securities and Exchange Commission for sale in the public securities markets
by the Executive. If the Company has been acquired by a private company, the
Company shall cause such company to offer to purchase the Executive's options
granted by the Company or shares underlying the options, upon the same terms as
are offered to the Company's shareholders in connection with such company's
acquisition of control of the Company. If the total amount of the change of
control compensation were to exceed three times the Executive's base amount (the
average annul taxable compensation of the Executive for the five years preceding
the year in which the change of control occurs), the Company and the Executive
may agree to reduce the lump sum compensation to be received by Executive in
order to avoid the imposition of the golden parachute tax as provided in the Tax
Reform Act of 1984, as amended by the Tax Reform Act of 1986.
In the event the Executive is required to hire counsel to negotiate on his
behalf in connection with his termination or resignation from the Company upon
the occurrence of a Triggering Event, or in order to enforce the rights and
obligations of the Company as provided in this Paragraph, the Company shall
reimburse to the Executive all reasonable attorney's fees which may be expended
by the Executive in seeking to enforce the terms hereof. Such reimbursement
shall be paid every 30 days after the Executive provides copies of invoices from
the Executive's counsel to the Company.
16. Indemnification. The Company shall indemnify and hold harmless
Executive to the fullest extent and in the manner permitted by the provisions of
the Colorado Business Corporation Act, as it may be amended from time to time.
To the extent that any of the Company's officers or directors are covered by or
benefit from one or more director's and officer's liability insurance policies,
Executive shall also be covered by or benefit from such policy or policies.
17. Arbitration. Any controversy, dispute or claim arising out of, or
relating to this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Denver, Colorado
in accordance with the Rules of the American Arbitration Association for
employment disputes then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration laws of the State of
Colorado. The award rendered by the arbitrators shall be final and judgment may
be entered upon the award in any court of the State of Colorado having
jurisdiction of the matter.
If any legal proceeding and/or arbitration is brought to enforce or
interpret the terms of this Agreement, each party shall bear its own attorney's
fees, costs, and necessary disbursements in such legal proceeding and/or
arbitration except as otherwise provided herein.
18. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall not
be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other Corporation, or the sale by the Company of all or
substantially all of its property or assets.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible, and if
any of said provisions or any part thereof are declared invalid or unenforceable
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts thereof and the applicability thereof
shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding however, the provisions governing conflicts of law..
19. Construction. Throughout this Agreement, the singular shall include the
plural, and the plural shall include the singular, and the masculine and neuter
shall include the feminine, wherever the context so requires.
20. Text to Control. The headings of paragraphs and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this Agreement exists, the text shall control.
21. Authority. The officer executing this Agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
22. Effective Date. The effective date of this Agreement shall be
February 1, 2000.
FOR THE COMPANY: EXECUTIVE: MEDIX RESOURCES, INC.
/s/ John R. Prufeta
- --------------------
John R. Prufeta
By: /s/John P. Yeros
- --------------------
John P. Yeros
Chairman of the Board
<PAGE>
EXHIBIT A
VESTING SCHEDULE FOR OPTIONS
Options to acquire 250,000 shares of Company Common Stock at an exercise price
of $.50 per share will vest at the close of a $10 million financing with a level
one investment banker.
Options to acquire 150,000 shares of Company Common Stock at an exercise price
of $.50 per share will vest at the close of a second $10 million financing with
a level one investment banker.
Options to acquire 100,000 shares of the Company Common Stock at an exercise
price of $4.97 per share will vest at the close of a third $10 million financing
with a level one investment banker.
Options to acquire 250,000 shares of Company Common Stock at an exercise price
of $4.97 per share will vest at the completion of the first year of Executive's
employment agreement.
Options to acquire 250,000 shares of Company Common Stock at an exercise price
of $4.97 per share will vest at the completion of the second year of the
Executive's employment agreement.
The above Options shall be granted under the Company's 1999 Stock Option Plan
and so long as Executive is employed by the Company shall have a term of ten
years. However, if the Executive leaves the Company, the above options shall
terminate on the earlier of the third anniversary of the termination of his
employment or the end of the above referenced ten- year term. However, in order
to qualify for the exemption provided by Rule 16b-3, in no case shall Executive
transfer or dispose of any option (other than by exercise) or the underlying
common stock granted hereunder for a period of six months plus one day from the
grant of the options.
Exhibit B
JOB DESCRIPTION
Chief Executive Officer and President
Medix Resources, Inc.
The Chief Executive Officer and President of Medix Resources, Inc. shall be
responsible for the day to day management and operation of the Company. He shall
have full authority and responsibility for the Company's balance sheet and
profit & loss statements. He will be subject to the general direction, approval
and control of the Company's Executive Committee and Board of Directors.
RESPONSIBILITIES
o Day to day management and operation of the Company.
o Authority and responsibility of the balance sheet and profit & loss
statements.
o Provide near term and long term budgets as requested by the Board of
Directors.
o Management of budget & policies as determined by the Executive Committee
and the Board of Directors.
o Management of Investment Banking activities.
o Management of any merger and acquisition activities.
o Development of distribution network for the Company's subsidiaries
products.
o Management and training of all sales executives hired by the Company for
the purposes of marketing and sales for the Company's subsidiaries
products.
o Oversee all public & investor relations activities.
o Organize, attend, and chair all monthly and quarterly Board of
Directors meetings.
o Executive shall be the Chairman of the Board for each of the Company's
subsidiaries, and if he is not the chief executive officer of the
subsidiary, the president, chief executive officer or chief operating
officer of the subsidiary shall report to the Executive on a mutually
agreed upon schedule, regarding the activities of the subsidiary.
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of December 1, 1999, (the
"Agreement") by and between Cymedix Lynx Corporation, a Colorado corporation
with principal offices located at Suite 301, 7100 E. Belleview Ave, Englewood,
Colorado and One Boardwalk, Thousand Oaks, California, ("the Company") and David
Pfeil (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the Executive
agrees to serve the Company as its President and Chief Operating Officer.
2. Position and Responsibilities. The Executive shall devote all of his
business time and attentions to the affairs of the Company. The Executive shall
be responsible for the day to day management and operation of the Company, and
shall have full authority and responsibility with respect thereto, including the
matters set forth in the Job Description attached as Exhibit B, subject to the
general direction, approval and control of The Company's Chairman, Board of
Directors, and to the restrictions, limitations and guidelines set forth by the
The Company's Board of Directors in resolutions adopted in the minutes of the
Company's Board of Directors meetings, copies of which shall be provided to the
Executive from time to time. See Exhibit C
3. Board of Directors. The Executive shall at all times discharge his
duties as President and Chief Operating Officer under the supervision of the
Company's Chairman of the Board, and The Company's Board of Directors. In the
performance of his duties, the Executive shall have joint offices in Thousand
Oaks, California and East Brunswick, New Jersey and shall not be required to be
physically present at the Thousand Oaks office more than eight (8) days per
month.
4. Term of Employment. The period of the Executive's employment under this
Agreement shall be for a two (2) year period or until January 31, 2002, subject
to the termination provisions set forth in Paragraphs 12, 13,14, and 15
hereafter.
5. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, under and pursuant to the general direction of the Board of Directors
of the Company, provided, however, that, with approval of the Board of Directors
of the Company, the Executive may serve, on the board of directors of, or hold
any other offices or positions in, companies or organizations which, in such
Board's judgment, will not present any conflict of interest with the Company or
any of its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement ; and further
provided that the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity which is either:
(a) Directly related to or within the scope of the existing business of the
Company; or
(b) Within the logical scope of the business of the Company, as such scope
may be expanded or altered from time-to-time by the Board of Directors. See
Exhibit C.
6. Compensation. The Company shall pay to the Executive as compensation for
his services, the 2000 base salary of $200,000 per year, and the 2001 base
salary of $220,000 or such higher salary as may be from time-to-time approved by
the Board of Directors, payable bi-monthly in accordance with the Company's
normal payroll procedures.
Upon the execution of the Agreement, the Company will grant to the
Executive 200,000 Stock Options, at an exercise price of $.50. Terms of the
Stock Option grant are set forth in the Stock Option Agreement attached hereto
as Exhibit A.
7. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement, including travel and lodging costs to the Thousand Oaks
office. The Executive shall present to the Chief Accounting Officer each month
an itemized account of such expenses in such form as is required by the Board of
Directors.
8. Medical, Dental and Disability Coverage. The Executive, his spouse, and
those children who qualify will be eligible to participate in the Company's
current Employee Group Medical and other group insurance programs on the same
basis as other Executives of the Company and Medix.
9. Medical Examination. The Executive agrees to submit himself for physical
examination on one occasion per year as requested by the Company for the purpose
of the Company's obtaining life insurance on the life of the Executive for the
benefit of the Company; provided, however, that the Company shall bear the
entire cost of such examinations and shall pay all premiums on any key man life
insurance obtained for the benefit of the Company as beneficiary.
10. Vacation Time. The Executive shall be entitled to take four (4) weeks
paid vacation per calendar year. Such vacation may not be taken in any greater
than consecutive two (2) week increments. Vacation not used by the Executive
during the calendar year will be forfeited. Compensation for vacation time not
taken by Executive shall be paid to the Executive at the date of termination.
11. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his employment under this
Agreement or while receiving compensation under this Agreement, he will engage
in no other business activities directly or indirectly, which are or may be
competitive with or which might place him in a competing position to that of the
Company, or any affiliated company. See Exhibit C.
(b) The Executive realizes that during the course of his employment,
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies. Therefore,
during his employment by the Company or by an affiliated company or while
receiving compensation under this Agreement, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such information, except to the extent authorized by the Company in
writing. All records, files, business plans, documents, equipment and the like,
or copies thereof, relating to Company's business, or the business of an
affiliated company, which Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated company's
premises without its written consent, and shall be promptly returned to the
Company upon termination of employment with the Company and its affiliated
companies. The Executive further agrees that after the term of his employment,
he will not disclose or make use of any proprietary information owned by the
Company or necessary in the operation of the Company's products or products
under development.
(c) Because of his employment by the Company, Executive will have
access to trade secrets and confidential information about the Company, its
business plan, its business opportunities, and its expansion plans into other
geographical areas and its methods of doing business. Executive agrees that for
a period of one (1) year after termination of his employment, he will not,
directly or indirectly compete with the Company in a business that is a
"Business Opportunity" of the Company or defined in Section 5 above.
(d) In the event a court of competent jurisdiction finds any provision of
this Section 11 to be so over broad as to be unenforceable, then such provision
shall be reduced in scope by the court, but only to the extent deemed necessary
by the court to render the provision reasonable and enforceable, it being the
Executive's intention to provide the Company with the broadest protection
possible against harmful competition.
(e) Irreparable harm should be presumed if Section 11 of this Agreement is
breached in any way. Damages would be difficult if not impossible to ascertain,
and the faithful observance of all terms of such Section is an essential
condition of employment with the Company. In light of these considerations,
Executive acknowledges that a court of competent jurisdiction should immediately
enjoin any breach of this Agreement by Executive, upon the Company's request and
the Company is released from the requirement of posting any bond in connection
with temporary or interlocutory injunctive relief, to the extent permitted by
law. Nothing herein shall be construed as prohibiting the Company from pursuing
any other remedy available to the Company for such breach or threatened breach
including, but not limited to, the recovery of damages from the Executive.
12. Intellectual Property Statement
(a) Executive acknowledges that he has been an employee and officer of the
Company and its predecessors during the development of the software and
intellectual property currently owned by the Company, and Executive makes no
claim to any right, all right, title or interest (including patent rights,
copyrights, trade secret rights, trademark rights, sui generis database rights,
and all other intellectual property rights of any sort throughout the world)
relating to any and all inventions (whether or not patentable), works of
authorship, designations, designs, know-how, ideas and information made or
conceived or reduced to practice, in whole or in part, by Executive during such
employment by the Company and its predecessors that relate to such software and
intellectual property.
(b) Executive hereby assigns to the Company any right, title or interest he
may have (including patent rights, copyrights, trade secret rights, trademark
rights, sui generis database rights, and all other intellectual property rights
of any sort throughout the world) relating to any and all inventions (whether or
not patentable), works of authorship, designations, designs, know-how, ideas and
information made or conceived or reduced to practice, in whole or in part, by
Executive, (i) during the Term that relate to the subject matter of, or arise
out of, the Services, (ii) are referred to in clause (a) above, or (iii)
constitute any Proprietary Information (as defined below) (collectively,
"Inventions"). Executive will promptly disclose and provide all Inventions to
Company. Executive shall further assist Company, at its request and expense, to
further evidence, record and perfect such assignments and to perfect, obtain,
maintain, enforce and defend any rights assigned. Executive hereby irrevocably
designates and appoints the Company as its agent and attorney-in-fact to act for
and in Executive's behalf to execute and file any documents and to do all other
lawfully permitted acts to further the foregoing with the same legal force and
effect as if executed by Consultant.
(c) Executive agrees that all Inventions and all other business, customer,
marketing, technical and financial information (including, without limitation,
the identity of and information relating to the Company's customers or
employees) that Executive developed, learned or obtained for or about the
Company and its predecessors in the past, or that Executive develops, learns or
obtains during the Term that relate to the Company or the business or that are
received by or for the Company in confidence, constitute "Proprietary
Information," provided that Proprietary Information shall not include
information in the public domain through no fault of Executive. Executive will
hold in confidence and not disclose or, except in performing the Services, use
any Proprietary Information. Upon termination of this Agreement, and as
otherwise requested by Company, Executive will promptly return to Company all
items and copies containing or embodying Proprietary Information, except that
Executive may keep personal copies of his compensation records and this
Agreement.
(d) As additional protection for Proprietary Information, Executive agrees
that during the Term and for one year thereafter, Executive will not encourage
or solicit any employee or consultant of Company to leave Company for any
reason. As further protection, Executive will not engage in any activity that is
in any way competitive with the business of the Company, and Executive will not
assist any other person or organization in competing or in preparing to compete
with any business of Company.
(e) If any part of the Services or Inventions is based on, incorporates or
constitutes an improvement or derivative of, or cannot be reasonably and fully
made, used, reproduced, distributed and otherwise exploited without using or
violating technology or intellectual property rights owned or licensed by
Executive and not assigned hereunder, Executive hereby grants the Company and
its successors a perpetual, irrevocable, worldwide royalty-free, non-exclusive,
sub-licensable right and license to exploit and exercise all such technology and
intellectual property rights in the conduct of its business.
13. Termination by the Company.
(a) Termination for Cause by the Company. During the first year of the term
of this Agreement, there can be no termination of the Executive by the Company
except for "Termination for Cause" as outlined below:
Notwithstanding anything herein to the contrary, the Company may, without
liability, terminate the Executive's employment hereunder for cause and failure
by the employee to cure within 30 days of notice, and thereafter the Company's
obligations hereunder shall cease and terminate.
Grounds for termination "for cause" shall be one or more of the following:
(1) A willful breach of duty by the Executive during the course of his
employment;
(2) Habitual neglect of duty by the Executive;
(3) The Executive's material failure to perform or meet objective and
measurable financial standards set by the Board of Directors and agreed upon by
the Executive in advance.
(b) Termination Without Cause by the Company. After the completion of the
initial year of employment hereunder, the Board of Directors may terminate the
employment of the Executive upon thirty (30) days written notice without cause,
by a majority vote of the Company's Board of Directors. In the event of
termination without cause, the Company will pay the Executive six (6) months
salary as compensation. At least three months prior to the expiration of this
contract, the Company will either notify the Executive in writing that the
contract will not be renewed or will commence good faith negotiation to enter
into a new or modified contract.
14. Termination by the Executive Without Cause. The Executive, without
cause, may terminate this Agreement upon 30 days' written notice to the Company.
In such event, the Executive shall be required to render the services required
under this Agreement during such 30-day period unless otherwise directed by the
Board of Directors. Compensation for vacation time not taken by Executive shall
be paid to the Executive at the date of termination. Executive will be
compensated only through the final day of his employment.
15. Termination by the Executive with Cause. The Executive may terminate
this employment with the Company at any time upon 30 days' written notice and
opportunity for the Company to remedy any non-compliance, by reason of (i) the
Company's material failure to perform its duties pursuant to this Agreement or
(ii) any material diminishment in the duties and responsibilities, working
facilities, or benefits as described in paragraphs 2, 5, 6, 7, 8 and 10 of this
Agreement. Executive shall be entitled to all base salary specified herein for a
six-month period following the notice of termination for cause.
16. Termination Upon Death of Executive. In addition to any other provision
relating to termination, this Agreement shall terminate upon the Executive's
death. Upon Executive's death, the Company shall pay in lump sum, within 45 days
of the Executive's death, to such person as the Executive shall have designated
to the Company as his beneficiary, or, if no such person is designated, to the
Executive's estate, an amount equal to all of the Executive's accrued but unpaid
base salary, the value on the Company's books of any vested but unused vacation
time and accrued sick time, and all unpaid expense reimbursements at the time of
Executive's death.
17. Lump Sum Compensation. In the event of the occurrence of a "Triggering
Event" which shall be defined to include (i) change in ownership of 50% or more
of the outstanding shares of the Company, or (ii) merger, consolidation,
reorganization or liquidation of the Company that results in a change of
ownership of 50% or more in the direct or indirect ownership of the Company
before the merger, consolidation, reorganization or liquidation, the Executive
shall receive lump sum compensations equal to his annual salary and incentive or
bonus payments, if any, as would have been paid to the Executive during the
Company's then current fiscal year ( as if the Executive had been employed for
the full fiscal year) within 30 days of the Triggering Event. Upon a Triggering
Event, any outstanding but unvested options granted by Medix to the Executive
shall immediately vest, and Medix shall cause the shares to be registered with
the Securities and Exchange Commission so that the Executive will be free to
sell such shares in the public securities markets. If Medix has been acquired by
another publicly traded company, Medix shall cause that company to agree to
exchange its options to acquire such company's shares for the Medix options, and
to cause such shares to be registered with the Securities and Exchange
Commission for sale in the public securities markets by the Executive. If Medix
has been acquired by a private company, Medix shall cause such company to offer
to purchase the Executive's options granted by Medix upon the same terms as are
offered to the Medix shareholders in connection with such company's acquisition
of control of Medix.
If the total amount of the change of control compensation were to exceed
three times the Executive's base amount (the average annul taxable compensation
of the Executive for the five years preceding the year in which the change of
control occurs), the Company and the Executive may agree to reduce the lump sum
compensation to be received by Executive in order to avoid the imposition of the
golden parachute tax as provided in the Tax Reform Act of 1984, as amended by
the Tax Reform Act of 1986.
In the event the Executive is required to hire counsel to negotiate
on his behalf in connection with his termination or resignation from the Company
upon the occurrence of a Triggering Event, or in order to enforce the rights and
obligations of the Company as provided in this Paragraph, the Company shall
reimburse to the Executive all reasonable attorney's fees which may be expended
by the Executive in seeking to enforce the terms hereof. Such reimbursement
shall be paid every 30 days after the Executive provides copies of invoices from
the Executive's counsel to the Company.
18. Indemnification. The Company shall indemnify and hold harmless
Executive to the fullest extent and in the manner permitted by the provisions of
the Colorado Business Corporation Act, as it may be amended from time to time.
To the extent that any of the Company's officers or directors or the officers or
directors of the Company's parent are covered by or benefit from one or more
director's and officer's liability insurance policies, Executive shall also be
covered by or benefit from such policy or policies.
19. Arbitration. Any controversy, dispute or claim arising out of, or
relating to this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Denver, Colorado
in accordance with the Rules of the American Arbitration Association for
employment disputes then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration laws of the State of
Colorado. The award rendered by the arbitrators shall be final and judgment may
be entered upon the award in any court of the State of Colorado having
jurisdiction of the matter.
If any legal proceeding and/or arbitration is brought to enforce or
interpret the terms of this Agreement, each party shall bear its own attorney's
fees, costs, and necessary disbursements in such legal proceeding and/or
arbitration except as otherwise provided herein.
20. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall not
be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other Corporation, or the sale by the Company of all or
substantially all of its property or assets.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible, and if
any of said provisions or any part thereof are declared invalid or unenforceable
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts thereof and the applicability thereof
shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding, however, the provisions governing conflicts of law.
21. Construction. Throughout this Agreement, the singular shall include the
plural, and the plural shall include the singular, and the masculine and neuter
shall include the feminine, wherever the context so requires.
22. Text to Control. The headings of paragraphs and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this Agreement exists, the text shall control.
23. Authority. The officer executing this Agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
24. Effective Date. The effective date of this Agreement shall be
February 1, 2000.
FOR THE COMPANY:
CYMEDIX LYNX CORPORATION
By: /s/ John R. Prufeta
------------------------
John R. Prufeta
Chairman of the Board
Date
THE EXECUTIVE:
By: /s/ David P. Pfeil
-----------------------
David P. Pfeil
Date
PARENT COMPANY GUARANTY
Medix Resources, Inc. (the "Parent"), the owner of all the capital stock of the
Company referred above, and in consideration of the benefits provided to the
Company and through the Company to the Parent, the Parent does hereby agree to
guaranty, and act as surety of, all of the obligations of the Company undertaken
by it in the above Employment Agreement for the benefit of the Executive
referred to therein, and shall perform any such obligation in a timely manner
upon written notification from the Executive that the Company has failed to
perform its obligations in accordance with the terms of the above Employment
Agreement.
MEDIX RESOURCES, INC.
By: /s/ John R. Prufeta
-------------------------
John R. Prufeta,
Chief Executive Officer
EXHIBIT A
VESTING SCHEDULE FOR OPTIONS
OPTIONS to acquire 100,000 shares of Company Common Stock at an exercise price
of $.50 per share will vest when the total number of locations (site licenses)
installed for the Cymedix.com product equals or exceeds 1,000.
OPTIONS to acquire 100,000 shares of Company Common Stock at an exercise price
of $.50 per share will vest when. Two (2) or more additional sponsors are
contracted with Cymedix. A sponsor is defined as any user of the Cymedix.com
product, such as health plan, PBM, laboratory company, claims processor, etc. A
qualifying sponsor can be a contract initiated by Medix Resources, Inc. or
Cymedix Lynx Corporation.
However, in order to qualify for the exemption provided by Rule 16b-3, in no
case shall the Executive transfer or dispose of any option granted hereunder
(other than by exercise) or the underlying common stock for a period of six
months plus one day from the date of grant of these options.
STOCK OPTION AGREEMENT
This Stock Option Agreement is entered into as of February 1, 2000, between
David Pfeil (the "Optionee"), and Medix Resources, Inc. (the "Company"),
pursuant to the Company's 1999 Stock Option Plan (the "Plan").
The Board of Directors of the Company has determined that the Optionee is
eligible and deserving of an award under the Plan. This Stock Option Agreement
(the "Agreement") is subject to the terms of the Plan in all respects, and
specific reference shall be made to the Plan in determining the Optionee's
rights and obligations hereunder. Capitalized terms, which are used herein and
not otherwise defined, shall have the meanings set forth in the Plan. This
Agreement is made by and between the Company and the Optionee as follows:
1. Grant.
Grant Date: October 14, 1999 Number of Shares: 200,000
Expiration Date: October 13, 2009
Exercise Price: $ .50 per share
Vesting Schedule: See Exhibit A
The options granted pursuant to this Agreement (the "Options") are non-qualified
stock options under the Internal Revenue Code of 1986, as amended.
2. Exercise. Subject to the provisions of this Agreement and the Plan, the
Options granted hereby shall vest and become exercisable as set forth herein. To
the extent exercisable, these Options may be exercised in whole or in part and
from time to time until fully exercised or until the Option expiration date set
forth above or until these Options otherwise terminates under the Plan.
3. Non-Transferable. These Options may be exercised only by the Optionee, his
guardian or legal representative during the Optionee's lifetime and, thereafter,
as provided in the Plan. Neither these Options nor any portion thereof or
interest therein may be sold, pledged, assigned or transferred in any manner
other than by will or by the laws of descent and distribution, and then only
within the limitations set forth in the Plan.
4. Payment. Exercise of these Options shall not be effective until the Company
or a designee thereof has received written notice of exercise, specifying the
number of whole shares of the Company's Common Stock (the "Shares") to be
purchased or otherwise received. Such notice shall be accompanied by full
payment of the aggregate Exercise Price for the number of Shares so purchased in
cash, by cashier's check, certified check, bank draft or money order or through
the delivery of Shares or Options to acquire Shares as provided in Section 14 of
the Plan. Upon a partial exercise of these Options, this Agreement shall be
automatically amended to reduce the number of Shares covered by these Options by
the number of Shares so purchased without the necessity of the execution of a
new agreement or a formal written amendment of this Agreement. The Company's
records regarding the number of Shares remaining to be exercised under this
Agreement shall control and not be subject to challenge by Optionee absent bad
faith or malfeasance by the Company.
5. Certain Taxes. The Optionee authorizes the Company to withhold, in accordance
with applicable law, from any Option Shares to be issued to an Optionee upon
exercise by the Optionee of all or a portion of these Options, if necessary, a
number of Shares based on their fair market value equal to the amount of any
taxes required to be withheld by any federal, state or local law or regulation
as a result of the exercise of these Options. In this regard, the Optionee
acknowledges and agrees that this withholding is mandatory and the determination
by the Board or committee to which such authority has been delegated by the
Board of the fair market value of any Shares on the date of exercise of these
Options shall be final and conclusive in all respects.
6. Compliance with Securities Laws. The Optionee agrees that the Shares acquired
upon exercise of these Options shall be acquired for his or her own account for
investment purposes only and not with a view to any distribution or public
offering thereof within the meaning of the Securities Act of 1933 (the "Act") or
applicable state securities laws. If the Company so determines, any stock
certificates issued upon exercise of these Options shall bear a legend to the
effect that the Shares have been so acquired. The Company shall not be required
to bear any expenses of compliance with the Act, applicable state securities
laws or the rules and regulations of any national securities exchange or other
regulatory authority in connection with the registration, qualification or
transfer, as the case may be, of these Options or any Shares acquired upon the
exercise thereof. The Company may legend the stock certificates evidencing
Shares acquired pursuant to the Plan in such manner it deems appropriate to
carry out the intent and purposes of the Plan. The foregoing restrictions on the
transfer of the Shares shall not apply if (a) the Company shall have been
furnished with an opinion of counsel satisfactory in form and substance to the
Company to the effect that such transfer will be in compliance with the Act and
other applicable securities laws, or (b) the Shares shall have been duly
registered in compliance with the Act and other applicable securities laws.
7. Acceptance of the Plan. The Optionee hereby approves and accepts the terms,
conditions, and provisions of this Agreement and the Plan and agrees to be bound
hereby and thereby, and further agrees that his or her executors,
administrators, heirs, and successors shall be bound hereby and thereby. Without
limitation of the foregoing, the Optionee hereby agrees, individually and for
his or her executors, administrators, heirs, and successors that all decisions
or interpretations of the Company or its duly authorized representatives with
regard to any and all aspects of the Plan and the administration thereof shall
be binding, conclusive and final.
8. Address for Notices. The parties hereto designate as the respective addresses
for the receipt of any notice under this Agreement or the Plan the addresses set
forth below their signatures on this Agreement.
9. Conformity With the Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, which
is incorporated herein by reference. Inconsistencies between this Agreement and
the Plan shall be resolved in accordance with the terms of the Plan. By
executing and returning the enclosed copy of this Agreement, you acknowledge
your receipt of the Plan and agree to be bound by all of the terms of the Plan.
All definitions stated in the Plan shall apply to this Agreement.
10. Use of Services; Successors. Nothing herein confers any right or obligation
on the Optionee to continue rendering services to the Company or shall affect in
any way the Optionee's right or the right of the Company, as the case may be, to
terminate the Optionee's services at any time.
11. Entire Agreement. This Agreement (including the Plan, which is incorporated
herein by reference) constitutes the entire understanding between the Optionee
and the Company, and supersedes all other agreements, whether written or oral,
with respect to the acquisition by the Optionee of his/her Options and/or
Shares.
MEDIX RESOURCES, INC. OPTIONEE:
By: /s/ John R. Prufeta /s/ David Pfeil
Print Name: John R. Prufeta Print Name: David Pfeil
Title: Chief Executive Officer
Address: 395 Madison Avenue, Ste. 2033 Address: 72 Brunswick Woods
Drive
New York, NY East Brunswick, NJ 08816
Exhibit B
JOB DESCRIPTION
President and Chief Operating Officer
Cymedix Lynx Corporation
The President and Chief Operating Officer of Cymedix Lynx Corporation shall be
responsible for the day to day management and operation of the Company. He shall
have full authority and responsibility for the Company's balance sheet and
profit & loss statements. He will be subject to the general direction, approval
and control of the Company's Chairman of the Board.
RESPONSIBILITIES
o Day to day management and operation of the Company.
o Authority and responsibility of the balance sheet and profit & loss
statements.
o Provide near term and long term budgets, as requested.
o Management of budgets & policies as determined by the Company's Board of
Directors.
o Account management of all current accounts; WellPoint, Advance Paradigm,
Loyola Hospital and Advice Health Resources.
o Sales and account management of all potential affiliated clients of the
current accounts.
o Identify and assist in managing vertical market sales with respect to pharmacy
benefit management, laboratory services, and electronic claims. This list
of vertical market applications may be modified from time to time as
determined by the Company's board of Directors.
o Authority to negotiate third party strategic alliances which would directly
impact the success of the Company( i.e. preferred ISP contracts). Approval of
any such contract will be retained at the Board.
o Assist, as requested, Medix in the search and close of all new merger and
acquisitions, as well as potential new business accounts. New business
accounts are defined as any new applications which have not been determined to
be a current vertical market of the Company.
o Responsible for all new hires to the Company.
o Oversight and management of the Company's technology.
o Oversight and management of the Company's new product development.
o Management of Company's programming & sales staff in California, Colorado or
New Jersey.
o As requested, to attend Board of Directors meetings for Cymedix Lynx
Corporation or Medix Resources Inc.
SCHEDULE C
The Company has been informed that Executive is an officer, Director and owner
through family attribution of Arrow Professional Enterprises, Inc. which
provides inter alia consulting, management and accounting services to
businesses. Such services include, inter alia, office automation consulting.
Executive shall not be prohibited from continuing to perform such activities for
Arrow Professional Enterprises, Inc. provided such activities do not interfere
with his performance hereunder. Furthermore, notwithstanding any provision
herein to the contrary, in no event shall any restriction, prohibition or
provision herein prohibit Executive before, during, and after the term hereof,
from performing services as described herein for Arrow Professional Enterprises,
Inc. its successors and/or assigns.
(Exhibit 10.18)
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of February 11, 2000, (the
"Agreement") by and between Medix Resources, Inc., a Colorado corporation with
its principal offices located at Suite 301, 7100 E. Belleview Ave, Englewood,
Colorado. ("the Company") and Michael G. Knepper (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the
Executive agrees to serve the Company as its Senior Vice President and Managing
Director for Mergers and Acquisitions.
2. Responsibilities and Supervision. The Executive shall devote all of his
business time and attention to the affairs of the Company and its affiliated
companies. The Executive shall be responsible for the identification of
businesses that may be candidates to be acquired by the Company, the
negotiations of any such transactions that may be authorized by the Company's
Board of Directors, and such other projects that may be assigned to the
Executive by the Company's Chief Executive Officer or the Company's Board of
Directors, in each case subject to the general direction, approval and
supervision of the Company's Chief Executive Officer and Board of Directors, and
to the restrictions, limitations and guidelines set forth by the Board of
Directors in resolutions adopted in the minutes of the Board of Directors
meetings, copies of which shall be provided to the Executive from time to time.
In the performance of his duties, the Executive shall maintain an office at 305
Madison Avenue New York, NY 10165. The terms "affiliate of" a company or
"affiliated company" as used herein means any company directly or indirectly
controlling, controlled by or under common control with the other company. A
presumption of control shall exist for any person owning or controlling 10% or
more of the outstanding voting securities of a company, and any officer,
director or general partner of a company.
3. Term of Employment. The period of the Executive's employment under this
Agreement shall begin on March 1, 2000, and be for a 2-year period ending
February 28, 2002, subject to the termination provisions set forth in Paragraphs
10, 11, and 12 hereunder.
4. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, provided, however, that, with approval of the Board of Directors of
the Company, the Executive may serve, on the board of directors of, or hold any
other offices or positions in, companies or organizations which, in such Board's
judgment, will not present any conflict of interest with the Company or any of
its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement; and further
provided that the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity, which is either: (a)
Directly related to or within the scope of the existing business of the Company;
or (b) Within the logical scope of the business of the Company, as such scope
may be expanded or altered from time-to-time by the Board of Directors.
5. Compensation. The Company shall pay to the Executive as compensation
for his services, the base salary of $175,000 per year or such higher salary as
from time-to-time may be approved by the Board of Directors, payable bi-monthly
in accordance with the Company's normal payroll procedures.
As additional compensation hereunder, upon the execution of this
Agreement, the Company will grant to the Executive 400,000 options to purchase
common stock of the Company under the Company's 1999 Stock Option Plan, at an
exercise price of $ 3.97. Such options are intended to be classified as
incentive stock options for tax purposes, and shall vest and expire as provided
on Exhibit A attached hereto. Terms of the Stock Option grant will be set forth
in a Stock Option Agreement in the form used pursuant to such Plan.
6. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement, including entertainment, travel and lodging costs. The
Executive shall present to the Chief Executive Officer each month an itemized
account of such expenses in such form as is required by the Company's accounting
policies.
7. Medical Coverage and Other Employee Benefits. The Executive will be
eligible to participate in the Company's current standard benefits package,
which provides health insurance with limited Company payments, long term
disability, limited sick time accrual, paid holidays, 401(k) Plan participation
when eligible and term life insurance at Executive's cost, on the same basis as
other Executives of the Company.
8. Vacation Time. The Executive shall be entitled to take four (4) weeks
paid vacation per calendar year, which, however shall vest at the rate of one
(1) week per full calendar quarter worked hereunder. Such vacation may not be
taken in any greater than consecutive two (2) week increments. Vacation time not
used by the Executive during the calendar year will be forfeited. Compensation
for annual vacation time vested but not taken by Executive shall be paid to the
Executive at the date of termination.
9. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his employment under this
Agreement or while receiving compensation under this Agreement, he will engage
in no other business activities directly or indirectly, which are or may be
competitive with or which might place him in a competing position to that of the
Company, or any affiliated company.
(b) The Executive realizes that during the course of his employment,
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies. Therefore,
during his employment by the Company or by an affiliated company or while
receiving compensation under this Agreement, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such information, except to the extent authorized by the Chief
Executive Officer of the Company in writing. All records, files, business plans,
documents, equipment and the like, or copies thereof, including copies on
Company computers, relating to Company's business, or the business of an
affiliated company, which Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated company's
premises without the written consent of the Chief Executive Officer, and shall
be promptly returned to the Company upon termination of employment with the
Company and its affiliated companies. The Executive further agrees that after
the term of his employment, he will not disclose or make use of any proprietary
information owned by the Company or necessary in the operation of the Company's
products or products under development.
(c) Because of his employment by the Company, Executive will have access to
trade secrets and confidential information about the Company, its business plan,
its business opportunities, and its expansion plans into other geographical
areas and its methods of doing business. Executive agrees that for a period of
one (1) year after termination of his employment, he will not, directly or
indirectly compete with the Company in a business that is a "Business
Opportunity" of the Company or defined in Section 4 above.
(d) In the event a court of competent jurisdiction finds any provision of
this Section 9 to be so over broad as to be unenforceable, then such provision
shall be reduced in scope by the court, but only to the extent deemed necessary
by the court to render the provision reasonable and enforceable, it being the
Executive's intention to provide the Company with the broadest protection
possible against harmful competition. (e) Irreparable harm should be presumed if
any provision of this Section 9 is breached in any way. Damages would be
difficult if not impossible to ascertain, and the faithful observance of all
terms of such Section is an essential condition of employment with the Company.
In light of these considerations, Executive acknowledges that a court of
competent jurisdiction should immediately enjoin any breach of this Agreement by
Executive, upon the Company's request and the Company is released from the
requirement of posting any bond in connection with temporary or interlocutory
injunctive relief, to the extent permitted by law. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedy available to
the Company for such breach or threatened breach including, but not limited to,
the recovery of damages from the Executive.
10. Termination by the Company.
(a) Termination for Cause by the Company. During the first year of the term
of this Agreement, there can be no termination of the Executive by the Company
except for "Termination for Cause" as outlined below:
Notwithstanding anything herein to the contrary, the Company may, without
liability, terminate the Executive's employment hereunder for cause upon five
days written notice, and thereafter the Company's obligations hereunder shall
cease and terminate. Grounds for termination "for cause" shall be one or more of
the following:
(1) A willful breach of duty by the Executive during the course of his
employment;
(2) The conviction of the Executive of a felony;
(3) Habitual neglect of duty by the Executive; The Executive's
material failure to perform or meet objective and measurable standards set by
the President and Chief Executive Officer and agreed upon by the Executive in
advance.
(b) Termination Without Cause by the Company. After the completion of the
initial year of employment hereunder, the Company may terminate the employment
of the Executive upon thirty (30) days written notice without cause. In the
event of termination without cause, the Company will pay the Executive six (6)
months salary as compensation. In addition, at least three months prior to the
expiration of this contract, the Company will either notify the Executive in
writing that the contract will not be renewed or will commence good faith
negotiation to enter into a new or modified contract. However, failure to renew
the Executive's contract shall not be deemed to be "termination without cause"
hereunder.
11. Termination by the Executive. The Executive, with or without cause, may
terminate this Agreement upon 90 days' written notice to the Company. In such
event, the Executive shall be required to render the services required under
this Agreement during such 90-day period, unless otherwise directed by the Board
of Directors. Executive will be compensated only through the final day of his
employment.
12. Termination Upon Death of Executive. In addition to any other provision
relating to termination, this Agreement shall terminate upon the Executive's
death. Upon Executive's death, the Company shall pay in a lump sum, within 45
days of the Executive's death, to such person as the Executive shall have
designated to the Company as his beneficiary, or, if no such person is
designated, to the Executive's estate, an amount equal to all of the Executive's
accrued but unpaid base salary, the value on the Company's books of any vested
but unused vacation time and accrued sick time, and all unpaid expense
reimbursements at the time of Executive's death.
13. Lump Sum Compensation. In the event of the occurrence of a "Triggering
Event," which shall be defined to include (i) change in ownership of 50% or more
of the outstanding shares of the Company, or (ii) the merger, consolidation,
reorganization or liquidation of the Company that results in a change in
ownership of 50% or more in the direct or indirect ownership of the Company
before the merger, consolidation, reorganization or liquidation, the Executive
shall receive a lump sum compensation equal to his annual salary and incentive
or bonus payments, if any, as would have been paid to the Executive during the
Company's then current fiscal year (as if the Executive had been employed for
the full fiscal year), within 30 days of the Triggering Event. All of
Executive's granted but unvested options shall immediately vest upon the
occurrence of a Triggering Event, and all of the shares underlying all the
options held by him shall be registered on a Form S-8 (or any successor form) in
a timely manner (no more than 45 days after such Triggering Event), to be sold
to him by the Company or its successor as unrestricted and freely tradable
shares. If the total amount of the change of control compensation were to exceed
three times the Executive's base salary (the average annual taxable compensation
of the Executive for the five years preceding the year in which the change of
control occurs), the Company and the Executive may agree to reduce the lump sum
compensation to be received by Executive in order to avoid the imposition of the
golden parachute tax as provided in the Tax Reform Act of 1984, as amended by
the Tax Reform Act of 1986. In the event the Executive is required to hire
counsel to negotiate on his behalf in connection with his termination or
resignation from the Company upon the occurrence of a Triggering Event, or in
order to enforce his rights and the obligations of the Company as provided in
this Paragraph, the Company shall reimburse to the Executive all reasonable
attorney's fees which may be expended by the Executive in seeking to enforce the
terms hereof. Such reimbursement shall be paid every 30 days after the Executive
provides copies of invoices from the Executive's counsel to the Company.
14. Indemnification. The Company shall indemnify and hold harmless
Executive to the fullest extent and in the manner permitted by the provisions of
the Colorado Business Corporation Act, as it may be amended from time to time.
To the extent that any of the Company's officers or directors are covered by or
benefit from one or more director's and officer's liability insurance policies,
the Executive shall also be covered by or benefit from such policy or policies.
15. Arbitration. Any controversy, dispute or claim arising out of, or
relating to this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Denver, Colorado
in accordance with the Rules of the American Arbitration Association for
employment disputes then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration laws of the State of
Colorado. The award rendered by the arbitrators shall be final and judgment may
be entered upon the award in any court of the State of Colorado having
jurisdiction of the matter. If any legal proceeding and/or arbitration is
brought to enforce or interpret the terms of this Agreement, each party shall
bear its own attorney's fees, costs, and necessary disbursements in such legal
proceeding and/or arbitration except as otherwise provided herein.
16. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall not
be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other corporation, or the sale by the Company of all or
substantially all of its property or assets. However, the rights of the
Executive hereunder shall be enforceable against any successor to the Company,
and the rights of the Company hereunder shall benefit any successor to the
Company.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible, and
if any of said provisions or any part thereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding however, the provisions governing conflicts of laws.
17. Construction. Throughout this Agreement, the singular shall include the
plural, and the plural shall include the singular, and the masculine and neuter
shall include the feminine, wherever the context so requires.
18. Text to Control. The headings of paragraphs and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this Agreement exists, the text shall control.
19. Authority. The officer executing this Agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company. IN WITNESS WHEREOF, the Company and the Executive hereby execute
this Agreement, as of the date first above written, with the full intention to
be mutually bound by the terms hereof.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By:/s/ John R. Prufta
---------------------
John R. Prufeta
President and Chief Executive Officer
THE EXECUTIVE:
By:/s/ Michael G. Knepper
-------------------------
Michael G. Knepper
EXHIBIT A
VESTING SCHEDULE FOR OPTIONS
Options covering 400,000 shares of the Company common stock shall be granted to
Executive upon the execution of this Employment Agreement, which shall vest as
follows: options covering 50,000 shares will vest immediately and options
covering 50,000 shares shall vest on the same date of each third month from the
prior vesting date, until all options have vested (which date shall be 21 months
from the date of this Agreement), so long as Executive is still employed by the
Company on each of those vesting dates. However, in order to qualify for the
exemption provided by Rule 16b-3, in no case shall Executive transfer or dispose
of any option (other than by exercise) or the underlying common stock granted
hereunder for a period of six months plus one day from the date of this
Agreement. The expiration date of all of the options granted hereunder shall be
the earlier of five years from the date of this Agreement or 90 days after the
Executive leaves the employment of the Company.
10.19
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") by and between
Medix Resources, Inc. (the "Company") with principal offices located
at Suite 301, 7100 E. Belleview, Englewood, Colorado and David
Kinsella (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and
the Executive agrees to serve the Company as its Chief Accounting Officer.
2. Position and Responsibilities. The Executive shall exert his best
efforts and devote all of his business time and attentions to the affairs of the
Company. The Executive shall be responsible for the day to day management and
operation of the Company's financial affairs, and shall have full authority and
responsibility with respect thereto, subject to the general direction, approval
and control of the Board of Directors and to the restrictions, limitations and
guidelines set forth by the Board of Directors in Resolutions adopted in the
Minutes of the Board of Directors meetings, copies of which shall be provided to
the Executive from time to time.
3. Board of Directors. The Executive shall at all times discharge his
duties as Chief Accounting Officer under the supervision of the Board of
Directors of the Corporation. In the performance of his duties, the Executive
shall make his principal office at the Corporate offices located in Englewood,
Colorado.
4. Term of Employment. The period of the Executive's employment under this
Agreement shall be for a two-year period or until September 30, 2001, subject to
the termination provisions set forth in Paragraph 13 and 14 hereafter.
5. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, under and pursuant to the general direction of the Board of Directors
of the Company, provided, however, that, with approval of the Board of Directors
of the Company, the Executive may continue to serve, on the Board of Directors
of, or hold any other offices or positions in, companies or organizations which,
in such Board's judgment, will not present any conflict of interest with the
Company or any of its subsidiaries or affiliates or divisions, or materially
affect the performance of Executive's duties pursuant to this Agreement; and
further provided that the outside business is not a "Business Opportunity" of
the Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity which is either:
(a) Directly related to or within the scope of the existing business of
the Company; or
(b) Within the logical scope of the business of the Company, as such
scope may be expanded or altered from time-to-time by the Board of Directors.
6. Compensation. The Company shall pay to the Executive as compensation
for his services, the base salary of $100,000 per year, or such higher salary as
may be from time-to-time approved by the Board of Directors, plus additional
compensation and/or bonuses or stock options as may be voted to him at the sole
discretion of the Board of Directors.
7. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement. The Executive shall present to the CEO each month an
itemized account of such expenses in such form as is required by the Board of
Directors.
8. Medical, Dental and Disability Coverage. The Executive, his spouse, and
those children who qualify will be eligible to participate in the Company's
current Employee Group Medical and other group insurance programs on the same
basis as other Executives of the Company.
9. Medical Examination. The Executive agrees to submit himself for
physical examination on one occasion per year as requested by the Company for
the purpose of the Company's obtaining life insurance on the life of the
Executive for the benefit of the Company; provided, however, that the Company
shall bear the entire cost of such examinations and shall pay all premiums on
any key man life insurance obtained for the benefit of the Company as
beneficiary.
10. Vacation Time. The Executive shall be entitled to take three (3) weeks
paid vacation per calendar year. Such vacation may not be taken in any greater
than consecutive two (2) week increments. Vacation not used by the Executive
during the calendar year will be forfeited.
11. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his employment under
this Agreement or while receiving compensation under this Agreement,
he will engage in no other business activities directly or indirectly,
which are or may be competitive with or which might place him in a competing
position to that of the Company, or any affiliated company.
(b) The Executive realizes that during the course of his employment,
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies. Therefore,
during his employment by the Company or by an affiliated company or while
receiving compensation under this Agreement, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such information, except to the extent authorized by the Company in
writing. All records, files, business plans, documents, equipment and the like,
or copies thereof, relating to Company's business, or the business of an
affiliated company, which Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated company's
premises without its written consent, and shall be promptly returned to the
Company upon termination of employment with the Company and its affiliated
companies.
(c) Because of his employment by the Company, Executive will have
access to trade secrets and confidential information about the Company, its
business plan, its hospital and supplemental staffing accounts, its business
opportunities, its expansion plans into other geographical areas and its methods
of doing business. Executive agrees that for a period of one year after
termination of his employment, he will not, directly or indirectly compete with
the Company in the business of supplemental staffing, home health,
rehabilitation services, travel nurse and iHealth software related services
within 100 miles of locations operated by the Company on the date of
termination.
(d) In the event a court of competent jurisdiction finds any
provision of this Section 11 to be so over broad as to be unenforceable, then
such provision shall be reduced in scope by the court, but only to the extent
deemed necessary by the court to render the provision reasonable and
enforceable, it being the Executive's intention to provide the Company with the
broadest protection possible against harmful competition.
12. Termination by the Company.
(a) Termination for Cause by the Company. During the first year of
the term of this Agreement, there can be no termination of the Executive by the
Company except for "Termination for Cause" as outlined below:
(1) Notwithstanding anything herein to the contrary, the Company
may, without liability, terminate the Executive's employment hereunder for cause
at any time upon written notice from the Board of Directors specifying such
cause, and thereafter the Company's obligations hereunder shall cease and
terminate; provided, however, that the Company shall pay the Executive 30 days
pay and that such written notice shall not be delivered until the Board of
Directors shall have given the Executive written notice specifying the conduct
alleged to have constituted such cause and the Executive has failed to cure such
conduct, if curable within thirty (30) days following receipt of such notice.
Grounds for termination "for cause" shall be one or more of the following:
(1) A willful breach of duty by the Executive duringthe course of his
employment;
(2) Habitual neglect of duty by the Executive;
(3) The Executive's material failure to perform or meet objective
and measurable financial standards set by the Board of Directors and
agreed upon by theExecutive in advance;
(4) Disloyal, dishonest or illegal conduct of the Executive
(b) Termination Without Cause by the Company. After the completion of
the initial year of employment hereunder, the Board of Directors may terminate
the employment of the Executive upon thirty (30) days written notice without
cause, by a majority vote, if in the opinion of the Board, the Executive has
failed to meet projected financial goals and/or discharged his duties and
responsibilities to the satisfaction of the Board. In the event of termination
without cause, the Company will pay the Executive three (3) months salary as
compensation. At least three months prior to the expiration of this contract,
the Company will either notify the Executive in writing that the contract will
not be renewed or will commence good faith negotiation to enter into a new or
modified contract.
13. Termination by the Executive Without Cause. The Executive, without
cause, may terminate this Agreement upon 30 days' written notice to the Company.
In such event, the Executive shall be required to render the services required
under this Agreement during such 30-day period unless otherwise directed by the
Board of Directors. Compensation for vacation time not taken by Executive shall
be paid to the Executive at the date of termination.
14. Termination by the Executive with Cause. The Executive may terminate
this employment with the Company at any time upon 30 days' written notice and
opportunity for the Company to remedy any non-compliance, by reason of (i) the
Company's material failure to perform its duties pursuant to this Agreement; or
(ii) any material diminishment in the duties and responsibilities, working
facilities, or benefits as described in paragraphs 2, 5, 6,and 8 of this
Agreement. Executive shall be entitled to all base salary specified herein for a
six-month period following the notice of termination for cause.
15. Termination Upon Death of Executive. In addition to any other
provision relating to termination, this Agreement shall terminate upon the
Executive's death. No severance allowance or compensation for vacation
time not taken by Executive shall be paid to the Executive's estate.
16. Lump Sum Compensation. In the event of the occurrence of a "Triggering
Event" which shall be defined to include (i) change in ownership of 50% or more
of the outstanding shares of the Company, or (ii) merger, consolidation,
reorganization or liquidation of the Company, the Executive shall receive lump
sum compensations equal to his annual salary and incentive or bonus payments, if
any, as would have been paid to the Executive during the Company's most recent
fiscal year (as if the Executive had been employed for the full fiscal year)
within 30 days of the Triggering Event. The Executive will also receive complete
vesting of any outstanding granted options an registration of all underlying
shares not previously registered. If the total amount of the change of control
compensation were to exceed three times the Executive's base amount (the average
annual taxable compensation of the Executive for the five years preceding the
year in which the change of control occurs), the Company and the Executive may
agree to reduce the lump sum compensation to be received by Executive in order
to avoid the imposition of the golden parachute tax as provided in the Tax
Reform Act of 1984, as amended by the Tax Reform Act of 1986.
In the event the Executive is required to hire counsel to negotiate
on his behalf in connection with his termination or resignation from the Company
upon the occurrence of a Triggering Event, or in order to enforce the rights and
obligations of the Company as provided in this Paragraph, the Company shall
reimburse to the Executive all reasonable attorney's fees which may be expended
by the Executive in seeking to enforce the terms hereof. Such reimbursement
shall be paid every 30 days after the Executive provides copies of invoices from
the Executive's counsel to the Company. 17. Arbitration. Any controversy,
dispute or claim arising out of, or relating to this Agreement and/or its
interpretation shall, unless resolved by agreement of the parties, be settled by
binding arbitration in Denver, Colorado in accordance with the Rules of the
American Arbitration Association for employment disputes then existing. This
Agreement to arbitrate shall be specifically enforceable under the prevailing
arbitration laws of the State of Colorado. The award rendered by the arbitrators
shall be final and judgment may be entered upon the award in any court of the
State of Colorado having jurisdiction of the matter.
If any legal proceeding and/or arbitration is brought to enforce or
interpret the terms of this Agreement, the prevailing party shall bear all
attorney's fees, costs and necessary disbursements in such legal proceeding
and/or arbitration.
18. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other Corporation, or the sale by the Company of all or
substantially all of its property or assets.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible,
and if any of said provisions or any part thereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado.
19. Construction. Throughout this Agreement, the singular shall include
the plural, and the plural shall include the singular, and the masculine and
neuter shall include the feminine, wherever the context so requires.
20. Text to Control. The headings of paragraphs and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this Agreement exists, the text shall control.
21. Authority. The officer executing this Agreement on behalf
of the Company has been empowered and directed to do so by the Board
of Directors of the Company.
22. Effective Date. The effective date of this Agreement shall be
September 27, 1999.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By: /s/ John P. Yeros
---------------------
Date:10/29/99 John P. Yeros
Chief Executive Officer
FOR THE EXECUTIVE:
By:/s/ David Kinsella
---------------------
Date: 10/29/99 David Kinsella
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment (this "Amendment") to the Executive Employment Agreement,
effective September 27, 1999, and any extension thereof or replacement agreement
therefore (the "Employment Agreement"), between Medix Resources, Inc. (the
"Company") and David Kinsella (the "Executive") is being executed by the parties
to provide additional terms to the Employment Agreement of the Executive. The
effective date of this Amendment, notwithstanding the actual date of signing, is
January 26, 2000.
1. Agreement as to Severance. If the Executive or the Company
terminate his employment for any reason before August 1, 2000, he will
receive a severance payment of an amount equal to six months of salary as
currently provided in the Employment Agreement. Such payment shall be made
to the Executive in a lump sum payment, subject to deductions for
applicable tax withholding and employee benefits to be retained by the
Executive, no later than two weeks after the last day of his employment
with the Company. Such payment shall also include all reimbursable expenses
owed to the Executive, and accrued sick leave and vacation time, at the
time of the termination of his employment.
2. Vesting of Stock Options. All of the Executive's currently granted but
unvested stock options to purchase Company common stock shall immediately vest,
but all of the other terms thereof shall remain in full force and effect.
3. General. The general contract provisions of the Employment Agreement
shall apply to this Amendment and all of the terms and conditions of the
Employment Agreement, as amended, shall continue in full force and effect until
terminated as provided therein.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be
effective as of the date first stated above, based upon the action of the
Company's Board of Directors at their meeting held on January 26, 2000.
MEDIX RESOURCES, INC. EMPLOYEE:
By: /s/ John P. Yeros By: /s/David Kinsella
- --------------------- ---------------------
John P. Yeros David Kinsella
Chairman of the Board
(Exhibit 10.20)
CONSULTING AGREEMENT
Effective as of March 1, 2000, MEDIX RESOURCES, INC. a Colorado corporation
(the "Company") located at 7100 E. Belleview Avenue, Suite 301, Englewood, CO
80111, and John P. Yeros, (the "Consultant"), located at 9763 S. Tall Grass
Circle, Lone Tree, CO 80124, agree as follows:
1. (a) The Company agrees to and does hereby retain the Consultant to
perform the following services (the "Services") for the Company: to advise the
Company on matters of past company practices, decisions and procedures as
requested by the President of the Company, to advise and consult with the
President or any officer designated by the President on any matter of then
current significance to the Company, and to generally assist the Company in the
transition after the Consultant's retirement from his employment with the
Company, and the offices of Chairman of the Board and President of the Company.
(b) Consultant shall not be required to devote his full time and
attention to the performance of the Services, but shall devote only so much of
his time and attention as is necessary to provide the Services in a timely and
competent manner in the mutual judgment of the Consultant and President and CEO
of the Company.
2. The term of this Agreement (including any extended term, the
"Term") shall commence on the date hereof and will terminate on December 31,
2001. The Term of this Agreement may be extended for any number of one-year
periods after the initial Term upon the mutual consent of the Consultant and the
President and CEO of the Company.
3. (a) Consultant shall receive a fee, paid by the company during the
initial Term at the rate of $232,815 per year for 2000 ($194,012.50 for the ten
month period) and $254,777 per year for 2001, payable every two weeks during the
Term.
(b) The Company shall reimburse Consultant for out-of-pocket
expenses that have been mutually agreed to in advance. Consultant shall provide
to the Company a copy of all third-party invoices, receipts or other evidence
of the expenditures by Consultant.
4. (a) Consultant hereby assigns to the Company any right, title or
interest he may have (including patent rights, copyrights, trade secret rights,
trademark rights, sui generis database rights, and all other intellectual
property rights of any sort throughout the world) relating to any and all
inventions (whether or not patentable), works of authorship, designations,
designs, know-how, ideas and information made or conceived or reduced to
practice, in whole or in part, by Consultant, (i) during the Term that relate to
the subject matter of, or arise out of, the Services, or (ii) constitute any
Proprietary Information (as defined below) (collectively, "Inventions").
Consultant will promptly disclose and provide all Inventions to Company.
Consultant shall further assist Company, at its request and expense, to further
evidence, record and perfect such assignments and to perfect, obtain, maintain,
enforce and defend any rights assigned. Consultant hereby irrevocably designates
and appoints the Company as its agent and attorney-in-fact to act for and in
Consultant's behalf to execute and file any documents and to do all other
lawfully permitted acts to further the foregoing with the same legal force and
effect as if executed by Consultant.
(b) Consultant agrees that all Inventions and all other business,
customer, marketing, technical and financial information (including, without
limitation, the identity of and information relating to the Company's customers
or employees) that Consultant develops, learns or obtains during the Term that
relate to the Company or its business or that are received by or for the Company
in confidence, constitute "Proprietary Information," provided that Proprietary
Information shall not include information in the public domain through no fault
of Consultant. Consultant will hold in confidence and not disclose or, except in
performing the Services, use any Proprietary Information. In addition,
Consultant agrees not to use any of such Proprietary Information as "insider
information" in connection with the trading of the Company's securities, either
for his own account or as a "tipper" to benefit any third person, and the
Consultant acknowledges that he owes a fiduciary duty to the Company to refrain
from any such improper use of insider information. Upon termination of this
Agreement, and as otherwise requested by Company, Consultant will promptly
return to the Company all items and copies containing or embodying Proprietary
Information, except that Consultant may keep personal copies of his compensation
records and this Agreement.
(c) As additional protection for Proprietary Information, Consultant
agrees that during the Term and for one year thereafter, Consultant will not
encourage or solicit any employee or consultant of Company to leave Company for
any reason, and Consultant will not engage in any activity that is in any way
competitive with the business of Company, and Consultant will not assist any
other person or organization in competing or in preparing to compete with any
business of Company.
5. Upon any material breach of this Agreement by either party, the
other party may terminate this Agreement upon fifteen days' notice to the
breaching party. Sections 4 and 6 of this Agreement and any remedies for breach
of this Agreement shall survive any termination or expiration.
6. Notwithstanding any provision hereof, for all purposes of this
Agreement each party shall be and act as an independent contractor and not as
partner, joint venturer, or agent of the other and shall not bind nor attempt to
bind the other to any contract. Consultant is an independent contractor and is
solely responsible for all taxes, withholdings, and other statutory or
contractual obligations of any sort, including, but not limited to, Workers'
Compensation Insurance; and Consultant agrees to defend, indemnify and hold
Company harmless from any and all claims, damages, liability, attorneys' fees
and expenses on account of (i) an alleged failure by Consultant to satisfy any
such obligations or any other obligation (under this Agreement or otherwise) or
(ii) any other action or inaction of Consultant.
7. In connection with Consultant's retirement from the Company, the
Company hereby agrees that it will register all of the Company's shares of
Common Stock issuable to Consultant upon Consultant's exercise of warrants or
options to purchase Common Stock on a Form S-8 registration statement, with
respect to the sale of the shares to Consultant, and in addition will register
all of the Company's shares of Common Stock, which the Consultant currently owns
or has a right to purchase, on a Form S-2 registration statement, with respect
to the sale of the shares by Consultant. Such registration statements shall be
filed as soon as possible by the Company. In addition, the Consultant and the
Company agree that for the purposes of Section 16 of the Securities Exchange Act
of 1934, as amended, and the regulations thereunder, the Consultant does not
fall into the category of "any other person who performs similar policy-making
functions for the issuer," which would subject the Consultant to the reporting
and trading restrictions of Section 16.
8. This Agreement and the Services to be provided hereunder are
personal to Consultant, who shall not have the right to assign, transfer or
subcontract any obligations under this Agreement without the written consent of
the Company. Any attempt to do so shall be void.
9. Consultant agrees that he has not been made an agent of the Company
for any purpose and will not claim to be acting in that capacity. Consultant
shall indemnify and hold harmless the Company against any loss, claim, expense
or damages that the Company suffers as a result of Consultant's breach of this
provision.
10. Any waiver, amendment or modification of any of the provisions of
this Agreement, or any termination of this Agreement, shall not be valid unless
in writing and signed or initialed by the parties hereto. A waiver of the breach
of any provisions hereof or a default under any provision hereof shall not be
deemed a waiver of such provisions or any subsequent breach or default of any
kind or nature.
11. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Colorado, without regard to rules governing
conflict of laws thereof. All notices shall be in writing and shall be deemed
given upon receipt by the party to whom addressed at the addresses provided
above or at any address for which a notice has been given as herein provided.
This Agreement shall be enforceable by decrees of specific performances as well
as other remedies. Any breach of Section 4 of this Agreement will cause
irreparable harm to the Company for which damages would not be an adequate
remedy, and therefore, the Company will be entitled to injunctive relief with
respect thereto in addition to any other remedies permitted by law. This
Agreement shall inure to the benefit of, and bind, the parties hereto and their
respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the Consultant and the below captioned authorized
signatories for Medix Resources, Inc. have hereunder set their hands, and have
caused these presents to be duly executed and authorized as of the date first
written above.
MEDIX RESOURCES, INC.
By:____________________
------------------------
John P. Yeros
President and CEO
(Ex. 10.21)
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of February 11, 2000, (the
"Agreement") by and between Medix Resources, Inc., a Colorado corporation with
its principal offices located at Suite 301, 7100 E. Belleview Ave, Englewood,
Colorado. ("the Company") and Brian R. Ellacott (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the
Executive agrees to serve the Company as its Senior Vice President, Business
Development.
2. Responsibilities and Supervision. The Executive shall devote all of his
business time and attention to the affairs of the Company and its affiliated
companies. The Executive shall be responsible for the identification and closing
of sales to Medix target markets, the negotiations of any such transactions that
may be authorized by the Company's Chief Executive Officer or Executive Vice
President of Development, and such other projects that may be assigned to the
Executive by the Company's Chief Executive Officer or the Company's Board of
Directors, in each case subject to the general direction, approval and
supervision of the Company's Chief Executive Officer and Board of Directors, and
to the restrictions, limitations and guidelines set forth by the Board of
Directors in resolutions adopted in the minutes of the Board of Directors
meetings, copies of which shall be provided to the Executive from time to time.
In the performance of his duties, the Executive shall maintain an office in
Atlanta, GA. The terms "affiliate of" a company or "affiliated company" as used
herein means any company directly or indirectly controlling, controlled by or
under common control with the other company. A presumption of control shall
exist for any person owning or controlling 10% or more of the outstanding voting
securities of a company, and any officer, director or general partner of a
company.
3. Term of Employment. The period of the Executive's
employment under this Agreement shall be for a two-year period ending March 1,
2002, subject tothe termination provisions set forth in Paragraphs 10, 11,
and 12 hereunder.
4. Duties. During the period of his employment hereunder and except for
illness,specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, provided, however, that, with approval of the Board of Directors of
the Company, the Executive may serve, on the board of directors of, or hold any
other offices or positions in, companies or organizations which, in such Board's
judgment, will not present any conflict of interest with the Company or any of
its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement; and further
provided that the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity, which is either:
(a) Directly related to or within the scope of the existing business of the
Company; or
(b) Within the logical scope of the business of the Company, as such scope may
be expanded or altered from time-to-time by the Board of Directors.
5. Compensation. The Company shall pay to the Executive as compensation for
his services, the base salary of $150,000 per year or such higher salary as from
time-to-time may be approved by the Board of Directors, payable bi-monthly in
accordance with the Company's normal payroll procedures. As additional
compensation hereunder, upon the execution of this Agreement, the Company will
grant to the Executive 150,000 options to purchase common stock of the Company
under the Company's 1999 Stock Option Plan, at an exercise price of $ 3.97 (the
closing price reported on OTCBB for February 11, 2000), subject to board
ratification and approval. Such options are intended to be classified as
incentive stock options for tax purposes, and shall vest and expire as provided
on Exhibit A attached hereto. Terms of the Stock Option grant will be set forth
in a Stock Option Agreement in the form used pursuant to such Plan.
6. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement, including entertainment, travel and lodging costs. The
Executive shall present to the Chief Executive Officer each month an itemized
account of such expenses in such form as is required by the Company's accounting
policies.
7. Medical Coverage and Other Employee Benefits. The Executive will be
eligible to participate in the Company's current standard benefits package,
which provides health insurance with limited Company payments, limited sick time
accrual, paid holidays, 401(k) Plan participation when eligible and term life
insurance at Executive's cost, on the same basis as other Executives of the
Company.
8. Vacation Time. The Executive shall be entitled to take four (4) weeks
paid vacation per calendar year, which, however shall vest at the rate of
one (1) week per full calendar quarter worked hereunder. Such vacation may
not be taken in any greater than consecutive two (2) week increments.
Vacation time not used by the Executive during the calendar year will be
forfeited. Compensation for annual vacation time vested but not taken by
Executive shall be paid to the Executive at the date of termination.
9. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his
employment under this Agreement or while receiving compensation under this
Agreement, he will engage in no other business activities directly or
indirectly, which are or may be competitive with or which might place him in a
competing position to that of the Company, or any affiliated company.
(b) The Executive realizes that during the course of his employment,
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies. Therefore,
during his employment by the Company or by an affiliated company or while
receiving compensation under this Agreement, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such information, except to the extent authorized by the Chief
Executive Officer of the Company in writing. All records, files, business plans,
documents, equipment and the like, or copies thereof, including copies on
Company computers, relating to Company's business, or the business of an
affiliated company, which Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated company's
premises without the written consent of the Chief Executive Officer, and shall
be promptly returned to the Company upon termination of employment with the
Company and its affiliated companies. The Executive further agrees that after
the term of his employment, he will not disclose or make use of any proprietary
information owned by the Company or necessary in the operation of the Company's
products or products under development.
(c) Because of his employment by the Company, Executive will have
access to trade secrets and confidential information about the Company, its
business plan, its business opportunities, and its expansion plans into other
geographical areas and its methods of doing business. Executive agrees that for
a period of one (1) year after termination of his employment, he will not,
directly or indirectly compete with the Company in a business that is a
"Business Opportunity" of the Company or defined in Section 4 above.
(d) In the event a court of competent jurisdiction finds any provision
of this Section 9 to be so over broad as to be unenforceable, then such
provision shall be reduced in scope by the court, but only to the extent
deemed necessary by the court to render the provision reasonable and
enforceable, it being the Executive's intention to provide the Company with
the broadest protection possible against harmful competition.
(e) Irreparable harm should be presumed if any provision of this Section
9 isbreached in any way. Damages would be difficult if not impossible to
ascertain, and the faithful observance of all terms of such Section is an
essential condition of employment with the Company. In light of these
considerations, Executive acknowledges that a court of competent jurisdiction
should immediately enjoin any breach of this Agreement by Executive, upon the
Company's request and the Company is released from the requirement of posting
any bond in connection with temporary or interlocutory injunctive relief,
to the extent permitted by law. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedy available to the Company
for such breach or threatened breach including, but not limited to, the
recovery of damages from the Executive.
10. Termination by the Company.
(a) Termination for Cause by the Company. Notwithstanding anything
herein to the contrary, the Company may, without liability, terminate the
Executive's employment hereunder for cause upon five days written notice,
and thereafter the Company's obligations hereunder shall cease and terminate.
Grounds for termination "for cause" shall be one or more of the following:
(1) A willful breach of duty by the Executive during the course of
his employment;
(2) The conviction of the Executive of a felony;
(3) Habitual neglect of duty by the Executive;
(b) Termination Without Cause by the Company. The Company may terminate
the employment of the Executive upon thirty (30) days written notice without
cause. In the event of termination without cause, the Company will pay the
Executive six (6) months salary as compensation. In addition, at least three
months prior to the expiration of this contract, the Company will either notify
the Executive in writing that the contract will not be renewed or will commence
good faith negotiation to enter into a new or modified contract. However,
failure to renew the Executive's contract shall not be deemed to be "termination
without cause" hereunder.
11. Termination by the Executive. The Executive, with or without cause, may
terminate this Agreement upon 90 days' written notice to the Company. In
such event, the Executive shall be required to render the services required
under this Agreement during such 90-day period, unless otherwise directed
by the Board of Directors. Executive will be compensated only through the
final day of his employment.
12. Termination Upon Death of Executive. In addition to any other
provision relating to termination, this Agreement shall terminate upon the
Executive's death. Upon Executive's death, the Company shall pay in a lump sum,
within 45 days of the Executive's death, to such person as the Executive shall
have designated to the Company as his beneficiary, or, if no such person is
designated, to the Executive's estate, an amount equal to all of the Executive's
accrued but unpaid base salary, the value on the Company's books of any vested
but unused vacation time and accrued sick time, and all unpaid expense
reimbursements at the time of Executive's death.
13. Indemnification. The Company shall indemnify and hold harmless
Executive to the fullest extent and in the manner permitted by the provisions of
the Colorado Business Corporation Act, as it may be amended from time to time.
To the extent that any of the Company's officers or directors are covered by or
benefit from one or more director's and officer's liability insurance policies,
the Executive shall also be covered by or benefit from such policy or policies.
14. Arbitration. Any controversy, dispute or claim arising out of, or
relating to this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Denver, Colorado
in accordance with the Rules of the American Arbitration Association for
employment disputes then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration laws of the State of
Colorado. The award rendered by the arbitrators shall be final and judgment may
be entered upon the award in any court of the State of Colorado having
jurisdiction of the matter. If any legal proceeding and/or arbitration is
brought to enforce or interpret the terms of this Agreement, each party shall
bear its own attorney's fees, costs, and necessary disbursements in such legal
proceeding and/or arbitration except as otherwise provided herein.
15. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other corporation, or the sale by the Company of all or
substantially all of its property or assets. However, the rights of the
Executive hereunder shall be enforceable against any successor to the Company,
and the rights of the Company hereunder shall benefit any successor to the
Company.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible,
and if any of said provisions or any part thereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding however, the provisions governing conflicts of laws.
16. Construction. Throughout this Agreement, the singular shall
include the plural, and the plural shall include the singular, and the masculine
and neuter shall include the feminine, wherever the context so requires.
17. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
18. Authority. The officer executing this Agreement on
behalf of the Company has been empowered and directed to do so by the
Board of Directors of the Company.
IN WITNESS WHEREOF, the Company and the Executive hereby execute this
Agreement, as of the date first above written, with the full intention to be
mutually bound by the terms hereof.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By: /s/ John R. Prufeta
-----------------------
John R. Prufeta
President and Chief Executive Officer
THE EXECUTIVE:
By: /s/ Brian Ellacott
----------------------
Brian Ellacott
EXHIBIT A
VESTING SCHEDULE FOR OPTIONS
Options covering 150,000 shares of the Company common stock shall be granted to
Executive upon the execution of this Employment Agreement, which shall vest as
follows: options covering 50,000 shares will vest immediately and options
covering 12,500 shares shall vest on the same date of each third month from the
prior vesting date, until all options have vested, so long as Executive is still
employed by the Company on each of those vesting dates. In no case shall
Executive transfer or dispose of any option (other than by exercise) or the
underlying common stock granted hereunder for a period of six months plus one
day from the date of this Agreement. The expiration date of all of the options
granted hereunder shall be the earlier of five years from the date of this
Agreement or 90 days after the Executive leaves the employment of the Company.
(Exhibit 10.22)
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of February 15, 2000, (the
"Agreement") by and between Medix Resources, Inc., a Colorado corporation with
its principal offices located at Suite 301, 7100 E. Belleview Ave, Englewood,
Colorado. ("the Company") and Patricia A. Minicucci (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and
the Executive agrees to serve the Company as its Executive Vice
President, Operations.
2. Responsibilities and Supervision. The Executive shall devote all of her
business time and attention to the affairs of the Company and its affiliated
companies. The Executive shall be responsible for the overall operations and
administration of the company in each case subject to the general direction,
approval and supervision of the Company's Chief Executive Officer and Board of
Directors, and to the restrictions, limitations and guidelines set forth by the
Board of Directors in resolutions adopted in the minutes of the Board of
Directors meetings, copies of which shall be provided to the Executive from time
to time. In the performance of her duties, the Executive shall maintain an
office at 305 Madison Avenue New York, NY 10165. The terms "affiliate of" a
company or "affiliated company" as used herein means any company directly or
indirectly controlling, controlled by or under common control with the other
company. A presumption of control shall exist for any person owning or
controlling 10% or more of the outstanding voting securities of a company, and
any officer, director or general partner of a company.
3. Term of Employment. The period of the Executive's
employment under this Agreement shall begin on March 8, 2000 and be for a 2-year
period ending March 1, 2002, subject to the termination provisions set forth in
Paragraphs 10, 11, and 12 hereunder.
4. Duties. During the period of her employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and all her business time, attention and
skill to the business and affairs of the Company and its affiliated companies,
as such business and affairs now exist and as they may be hereinafter changed or
added to, provided, however, that, with approval of the Board of Directors of
the Company, the Executive may serve, on the board of directors of, or hold any
other offices or positions in, companies or organizations which, in such Board's
judgment, will not present any conflict of interest with the Company or any of
its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement; and further
provided that the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the Company shall be a
product, service, investment, venture or other opportunity, which is either:
(a) Directly related to or within the scope of theexisting business of the
Company; or
(b) Within the logical scope of the business of the Company, as such scope
may be expanded or altered from time-to-time by the Board of Directors.
5. Compensation. The Company shall pay to the Executive as
compensation for her services, the base salary of $200,000 per year or such
higher salary as from time-to-time may be approved by the Board of Directors,
payable bi-monthly in accordance with the Company's normal payroll procedures.
The Executive also is eligible to participate in an annual bonus plan, the terms
and provisions of which will be decided by the Board of Directors. As additional
compensation hereunder, upon the execution of this Agreement, the Company will
grant to the Executive 400,000 options to purchase common stock of the Company
under the Company's 1999 Stock Option Plan, at an exercise price of $4.97. Such
options are intended to be classified as incentive stock options for tax
purposes, and shall vest and expire as provided on Exhibit A attached hereto.
Terms of the Stock Option grant will be set forth in a Stock Option Agreement in
the form used pursuant to such Plan.
6. Expense Reimbursement. The Company will reimburse the Executive for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement, including entertainment, travel and lodging costs. The
Executive shall present to the Chief Executive Officer each month an itemized
account of such expenses in such form as is required by the Company's accounting
policies.
7. Medical Coverage and Other Employee Benefits. The Executive will be
eligible to participate in the Company's current standard benefits package,
which provides health insurance with limited Company payments, long term
disability, limited sick time accrual, paid holidays, 401(k) Plan participation
when eligible and term life insurance at Executive's cost, on the same basis as
other Executives of the Company.
8. Vacation Time. The Executive shall be entitled to take four (4)
weeks paid vacation per calendar year, which, however shall vest at the rate
of one (1) week per full calendar quarter worked hereunder. Such vacation may
not be taken in any greater than consecutive two (2) week increments. Vacation
time not used by the Executive during the calendar year will be forfeited.
Compensation for annual vacation time vested but not taken by Executive shall be
paid to the Executive at the date of termination.
9. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of heremployment under this
Agreement or while receiving compensation under this Agreement, she will
engage in no other business activities directly or indirectly, which are or
may be competitive with or which might place him in a competing position to
that of the Company, or any affiliated company.
(b) The Executive realizes that during the course of her employment,
Executive will have produced and/or have access to confidential business
plans, information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and secret
inventions and processes of the Company and its affiliated companies.
Therefore, during his employment by the Company or by an affiliated company
or while receiving compensation under this Agreement, the Executive agrees
to hold in confidence and not to directly or indirectly disclose or use or
copy or make lists of any such information, except to the extent authorized
by the Chief Executive Officer of the Company in writing. All records,
files, business plans, documents, equipment and the like, or copies
thereof, including copies on Company computers, relating to Company's
business, or the business of an affiliated company, which Executive shall
prepare, or use, or come into contact with, shall remain the sole property
of the Company, or of an affiliated company, and shall not be removed from
the Company's or the affiliated company's premises without the written
consent of the Chief Executive Officer, and shall be promptly returned to
the Company upon termination of employment with the Company and its
affiliated companies. The Executive further agrees that after the term of
his employment, he will not disclose or make use of any proprietary
information owned by the Company or necessary in the operation of the
Company's products or products under development.
(c) Because of her employment by the Company, Executive will have
access to trade secrets and confidential information about the Company, its
business plan, its business opportunities, and its expansion plans into other
geographical areas and its methods of doing business. Executive agrees that for
a period of one (1) year after termination of his employment, she will not,
directly or indirectly compete with the Company in a business that is a
"Business Opportunity" of the Company or defined in Section 4 above.
(d) In the event a court of competent jurisdiction finds any provision of
this Section 9 to be so over broad as to be unenforceable, then such
provision shall be reduced in scope by the court, but only to the extent
deemed necessary by the court to render the provision reasonable and
enforceable, it being the Executive's intention to provide the Company with
the broadest protection possible against harmful competition.
(e) Irreparable harm should be presumed if any provision of
this Section 9 is breached in any way. Damages would be difficult if not
impossible to ascertain, and the faithful observance of all terms of such
Section is an essential condition of employment with the Company. In light of
these considerations, Executive acknowledges that a court of competent
jurisdiction should immediately enjoin any breach of this Agreement by
Executive, upon the Company's request and the Company is released from the
requirement of posting any bond in connection with temporary or interlocutory
injunctive relief, to the extent permitted by law. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedy available to
the Company for such breach or threatened breach including, but not limited to,
the recovery of damages from the Executive.
10. Termination by the Company.
(a) Termination for Cause by the Company. During the first year of the
term of this Agreement, there can be no termination of the Executive by the
Company except for "Termination for Cause" as outlined below:
Notwithstanding anything herein to the contrary, the Company may, without
liability, terminate the Executive's employment hereunder for cause upon
five days written notice, and thereafter the Company's obligations
hereunder shall cease and terminate. Grounds for termination "for cause"
shall be one or more of the following:
(1) A willful breach of duty by the Executive during the course of
her employment;
(2) The conviction of the Executive of a felony;
(3) Habitual neglect of duty by the Executive; The Executive's
material failure to perform or meet objective and measurable standards
set by the President and Chief Executive Officer and agreed upon by
the Executive in advance.
(b) Termination Without Cause by the Company. After the completion of
the initial year of employment hereunder, the Company may terminate employment
of the Executive upon thirty (30) days written notice without cause. In the
event of termination without cause, the Company will pay the Executive six (6)
months salary as compensation. In addition, at least three months prior to the
expiration of this contract, the Company will either notify the Executive in
writing that the contract will not be renewed or will commence good faith
negotiation to enter into a new or modified contract. However, failure to renew
the Executive's contract shall not be deemed to be "termination without cause"
hereunder.
11. Termination by the Executive. The Executive, with or without
cause, may terminate this Agreement upon 90 days' written notice to the Company.
In such event, the Executive shall be required to render the services required
under this Agreement during such 90-day period, unless otherwise directed by the
Board of Directors. Executive will be compensated only through the final day of
his employment.
12. Termination Upon Death of Executive. In addition to any other,
provision relating to termination, this Agreement shall terminate upon the
Executive's death. Upon Executive's death, the Company shall pay in a lump
sum, within 45 days of the Executive's death, to such person as the
Executive shall have designated to the Company as her beneficiary, or, if
no such person is designated, to the Executive's estate, an amount equal to
all of the Executive's accrued but unpaid base salary, the value on the
Company's books of any vested but unused vacation time and accrued sick
time, and all unpaid expense reimbursements at the time of Executive's
death.
13. Lump Sum Compensation. In the event of the occurrence of a
"Triggering Event," which shall be defined to include
(i) change in ownership of 50% or more of the outstanding shares of the
Company, or
(ii) the merger, consolidation, reorganization or liquidation of the
Company that results in a change in ownership of 50% or more in the
direct or indirect ownership of the Company before the merger,
consolidation, reorganization or liquidation, the Executive shall
receive a lump sum compensation equal to her annual salary and
incentive or bonus payments, if any, as would have been paid to the
Executive during the Company's then current fiscal year (as if the
Executive had been employed for the full fiscal year), within 30 days
of the Triggering Event. All of Executive's granted but unvested
options shall immediately vest upon the occurrence of a Triggering
Event, and all of the shares underlying all the options held by him
shall be registered on a Form S-8 (or any successor form) in a timely
manner (no more than 45 days after such Triggering Event), to be sold
to her by the Company or its successor as unrestricted and freely
tradable shares. If the total amount of the change of control
compensation were to exceed three times the Executive's base salary
(the average annual taxable compensation of the Executive for the five
years preceding the year in which the change of control occurs), the
Company and the Executive may agree to reduce the lump sum
compensation to be received by Executive in order to avoid the
imposition of the golden parachute tax as provided in the Tax Reform
Act of 1984, as amended by the Tax Reform Act of 1986. In the event
the Executive is required to hire counsel to negotiate on his behalf
in connection with his termination or resignation from the Company
upon the occurrence of a Triggering Event, or in order to enforce her
rights and the obligations of the Company as provided in this
Paragraph, the Company shall reimburse to the Executive all reasonable
attorney's fees which may be expended by the Executive in seeking to
enforce the terms hereof. Such reimbursement shall be paid every 30
days after the Executive provides copies of invoices from the
Executive's counsel to the Company.
14. Indemnification. The Company shall indemnify and hold harmless
Executive to the fullest extent and in the manner permitted by the provisions of
the Colorado Business Corporation Act, as it may be amended from time to time.
To the extent that any of the Company's officers or directors are covered by or
benefit from one or more director's and officer's liability insurance policies,
the Executive shall also be covered by or benefit from such policy or policies.
15. Arbitration. Any controversy, dispute or claim arising out of, or
relating to this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Denver, Colorado
in accordance with the Rules of the American Arbitration Association for
employment disputes then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration laws of the State of
Colorado. The award rendered by the arbitrators shall be final and judgment may
be entered upon the award in any court of the State of Colorado having
jurisdiction of the matter. If any legal proceeding and/or arbitration is
brought to enforce or interpret the terms of this Agreement, each party shall
bear its own attorney's fees, costs, and necessary disbursements in such legal
proceeding and/or arbitration except as otherwise provided herein.
16. General Provisions.
(a) The Executive's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or to the claims of the Company's creditors. Nothing in
this Agreement shall prevent the consolidation of the Company, with or its
merger into, any other corporation, or the sale by the Company of all or
substantially all of its property or assets. However, the rights of the
Executive hereunder shall be enforceable against any successor to the Company,
and the rights of the Company hereunder shall benefit any successor to the
Company.
(b) This Agreement and the rights of Executive with respect to the
obligations and benefits of employment recited in this Agreement, constitute the
entire Agreement between the parties hereto in respect of the employment of the
Executive by the Company and supersede any and all other agreements either oral
or in writing between the parties hereto with respect to the employment of the
Executive.
(c) The provisions of this Agreement shall be regarded as divisible,
and if any of said provisions or any part thereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a written
instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding however, the provisions governing conflicts of laws.
17. Construction. Throughout this Agreement, the singular shall
include the plural, and the plural shall include the singular, and the masculine
and neuter shall include the feminine, wherever the context so requires.
18. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
19. Authority. The officer executing this Agreement on behalf
of the Company has been empowered and directed to do so by the Board of
Directors of the Company.
IN WITNESS WHEREOF, the Company and the Executive hereby execute this
Agreement, as of the date first above written, with the full intention to be
mutually bound by the terms hereof.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By:/s/John R. Prufuta
---------------------
John R. Prufeta
President and Chief Executive Officer
THE EXECUTIVE:
By:/s/Patricia Minicucci
------------------------
Patricia Minicucci
EXHIBIT A
VESTING SCHEDULE FOR OPTIONS
Options covering 400,000 shares of the Company common stock shall be granted to
Executive upon the execution of this Employment Agreement, which shall vest as
follows: options covering 50,000 shares will vest immediately and options
covering 50,000 shares shall vest on the same date of each third month from the
prior vesting date, until all options have vested (which date shall be 21 months
from the date of this Agreement), so long as Executive is still employed by the
Company on each of those vesting dates. However, in order to qualify for the
exemption provided by Rule 16b-3, in no case shall Executive transfer or dispose
of any option (other than by exercise) or the underlying common stock granted
hereunder for a period of six months plus one day from the date of this
Agreement. The expiration date of all of the options granted hereunder shall be
the earlier of five years from the date of this Agreement or 90 days after the
Executive leaves the employment of the Company.
10.24
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is entered into as of March 8, 2000 by
and among Medix Resources, Inc., a Colorado corporation (Medix), Cymedix Lynx
Corporation, a Colorado corporation wholly owned by the Company (Cymedix) and
Automated Design Concepts, Inc., a New Jersey corporation (the ADC), and
joined in by David R. Pfeil (the ADC Shareholder).
The parties wish to effect the merger of ADC with and into Cymedix on the
terms and conditions hereof (the Merger). By approving resolutions authorizing
the Merger, Cymedix and ADC wish to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the Code), and the regulations thereunder, and to cause
the Merger to qualify as a reorganization under the provisions of Section
368(a)(1)(A) of the Code.
Accordingly, in consideration of the representations and covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1.The Merger
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the Colorado Business Corporation Act (the Colorado
Act) and the New Jersey Business Corporation Act (the New Jersey Act), ADC
shall be merged with and into Cymedix, the separate corporate existence of ADC
shall cease, and Cymedix shall continue as the surviving company. Cymedix as the
surviving company after the Merger is sometimes referred to herein as the
ASurviving Company.
1.2 Effective Time. Subject to the provisions of this Agreement, the
parties hereto shall cause the Merger to be consummated by filing a Certificate
of Merger in substantially the form attached as Exhibit A-1 (the New Jersey
Certificate of Merger) with the Secretary of the State of the State of New
Jersey in accordance with the relevant provisions of the New Jersey Act and a
Certificate of Merger in substantially the form attached hereto as Exhibit A-2
(the Colorado Certificate of Merger) with the Secretary of State of the State
of Colorado in accordance with the relevant provisions of the Colorado Act. The
time of filing the Colorado Certificate of Merger is referred to herein as the
Effective Time, and the date on which the Effective Time occurs is sometimes
referred to herein as the Effective Date.
1.3 Closing. The closing of the Merger (the Closing) shall take place
at the offices of Cymedix at a time and date to be specified by the parties,
which shall be as soon as practicable after the satisfaction or waiver of the
conditions set forth in Articles 6 and 7 or at such other time, date and
location as the parties hereto agree in writing (the Closing Date). At the
Closing,
(a) Cymedix shall deliver to ADC the various certificates and
instruments required under Article 7,
(b) ADC shall deliver to Cymedix the various certificates and
instruments required under Article 6 and
(c) Cymedix and ADC shall execute and file the Colorado Certificate
of Merger with the Secretary of State of the State of Colorado and the New
Jersey Certificate of Merger with the Secretary of State of the State of New
Jersey.
1.4 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
Colorado Act and the New Jersey Act.
1.5 Governing Documents; Directors and Officers. At the Effective Time,
the Certificate of Incorporation and the Bylaws of Cymedix (the Cymedix
Governing Documents), each as in effect immediately prior to the Effective
Time, shall be the governing documents of the Surviving Company. The directors
and officers of the Surviving Company shall be the directors and officers of
Cymedix in office immediately prior to the Effective Time, to serve until their
respective successors are duly elected or appointed and qualified.
1.6 Conversion of ADC Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of any party, the following shall
occur:
(a) Conversion. All shares of common stock, no par value, of ADC (the
ADC Stock) issued and outstanding immediately prior to the Effective Time will
be automatically converted into and become the right to receive
(i) $100,000 in cash (the Merger Cash) and (ii) 60,400 shares (the Merger
Shares) of common stock, $.001 par value, of Medix (Common Stock). The
certificate representing the Merger Shares shall be registered in the name of
the ADC Shareholder and shall bear a legend reflecting the restricted status of
the Merger Shares under the Securities Act of 1933, as amended (the Securities
Act).
(b) Adjustments to Merger Consideration. The Merger Cash and Merger
Shares issuable to the ADC Shareholder on conversion of the ADC Stock
(collectively, the Merger Consideration) shall not be subject to any
adjustment except in the event of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
Common Stock), recapitalization or other like change without receipt of
consideration with respect to the Common Stock occurring on or after the date
hereof and prior to the Effective Time (a Recapitalization), in which event
the number of Merger Shares shall be adjusted appropriately to reflect the
Recapitalization.
1.7 Payment of Merger Consideration. On the Closing Date, ADC shall
deliver to Cymedix properly endorsed certificates representing all of the issued
and outstanding shares of ADC Stock, and Medix shall deliver the Merger
Consideration to the ADC Shareholder. The certificates representing the ADC
Stock surrendered at the Closing (together with any treasury stock of ADC) shall
be canceled.
1.8 Maintenance of Medical Insurance. Cymedix shall continue to maintain
ADC's existing medical insurance policy for the benefit of the ADC Employees (as
defined in Section 6.3) at all times after the Effective Time until comparable
coverage is obtained for their benefit after December 31, 2000.
1.9 Taking of Necessary Action; Further Action. At any time after the
Effective Time, if any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest Cymedix with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
ADC, the officers and directors of ADC and Cymedix are fully authorized in the
name of their respective companies or otherwise to take, and will take, all such
lawful and necessary action, as long as such action is consistent with this
Agreement.
2. Representations and Warrantees of ADC and the ADC
Shareholder. ADC and the ADC Shareholder represent and warrant to Cymedix as
follows:
2.1 Organization. ADC is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey and has the
corporate power to own, lease and operate its property and to carry on its
business as now conducted.
2.2 Capital Structure and Ownership.
(a) The authorized capital stock of ADC consists of 2,500 shares of
common stock, no par value, of which there are 100 shares issued and outstanding
on the date hereof. All outstanding shares of ADC Stock are duly authorized,
validly issued, fully paid and non-assessable and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of ADC or
any agreement or document to which ADC is a party or by which it is bound.There
are no outstanding warrants, options, rights, phantom stock rights, agreements,
convertible or exchangeable securities or other instruments or commitments
pursuant to which ADC is or may become obligated to issue, sell, purchase,
return or redeem any shares of its capital stock or other securities or
(b) that give any person the right toreceive any benefits or rights
similar to any rights enjoyed by or accruing to the holders of shares of ADC
Stock or other interests of ADC. There are no outstanding bonds, debentures,
notes or other indebtedness having the right to vote on any matters on which
shareholders of ADC may vote.
(c) The ADC Shareholder is the lawful beneficial owner of the ADC
Stock, all of which is registered in his name on the stock records of ADC. The
ADC Shareholder has good and marketable title to the ADC Shares and has the full
right to transfer title to thereto, free and clear of any liens, claims,
encumbrances, security interests, options, charges and restrictions of any kind.
Other than this Agreement, the ADC Shares are not subject to any agreement,
arrangement, commitment or understanding that could impair Cymedix=s rights
thereto.
(d) The ADC Shareholder
(i) is an Aaccredited investor, as defined in Rule 501 under the
Securities Act,
(ii) have received, reviewed and considered all information deemed
relevant in making an informed decision about accepting the Merger Shares as
part of the Merger Consideration,
(iii) will acquire the Merger Shares for investment and with no present
intention of distributing or reselling them and
(iv) is aware that the Merger Shares
(A) will be deemed to be Arestricted securities for purposes of the
Securities Act and
(B) may not be sold or otherwise transferred in the absence of an
exemption from the registration requirements of the Securities Act and
applicable state securities laws.
2.3 Authority. ADC has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of ADC, subject only to the filing and recording of
the New Jersey Certificate of Merger pursuant to the New Jersey Act and the
Colorado Certificate of Merger pursuant to the Colorado Act. This Agreement has
been duly executed and delivered by ADC and the ADC Shareholder, and assuming
the due authorization, execution and delivery by Medix and Cymedix, constitutes
the valid and binding obligation of ADC and the ADC Shareholder, enforceable in
accordance with its terms.
2.4 No Conflict.
(a) Except as set forth in Schedule 2.4, the execution and delivery of
this Agreement by ADC do not, and the performance of this Agreement
by ADC will not,
(i) conflict with or violate the Certificate of Incorporation or Bylaws
of ADC,
(ii) subject to compliance with the requirements set forth in Section
2.4(b) below, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to ADC or by which its properties are bound, or
(iii) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or impair
the rights of ADC or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration
or cancellation of, or result in the creation of a lien or encumbrance
on any of the properties or assets of ADC pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which ADC is a party or by which
ADC or its properties are bound or affected.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental or regulatory body or authority or instrumentality
(Governmental Authority) is required by or with respect to ADC in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated, except for the filing of the Colorado Certificate of
Merger with the Secretary of State of Colorado and the New Jersey Certificate of
Merger with the Secretary of State of the State of New Jersey.
(c) ADC has heretofore delivered to the Company true and complete
copies of its Certificate of Incorporation and Bylaws, each as amended to date,
and minute books, including its stock certificate ledger and stock transfer
books.
2.5 Financial Statements; Undisclosed Liabilities.
(a) The unaudited financial statements of ADC for the year ended
December 31, 1999 heretofore delivered to Cymedix comply as to form in all
material respects with applicable accounting requirements, were prepared in
accordance with generally accepted accounting principles (GAAP) applied on a
consistent basis during the period involved (except as may be indicated in the
notes thereto) and fairly present the financial position of ADC as of the date
thereof and its results of operations for the period then ended.
(b) ADC does not have any material liabilities or obligations of any
nature (whether accrued, absolute, contingent, unasserted or otherwise), except
(i) as disclosed, reflected or fully reserved against in its balance
sheet as of February 25, 2000 (the ADC Balance Sheet) and any notes thereto,
(ii) for items set forth in Schedule 2.5 and iii) for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since the date of the ADC Balance Sheet and not in violation of this
Agreement or in excess of $5,000 in the aggregate.
(c) Except as set forth in Schedule 2.5,
(i) ADC has filed or caused to be filed in a timely manner (within any
applicable extension periods) all tax returns, reports and forms required to be
filed by the Internal Revenue Code (the Code) or by applicable state, local or
foreign tax laws,
(ii) all taxes required to be paid by ADC have been timely paid in full
and all taxes for current periods are adequately provided for, and
(iii) no tax liens have been filed and no material claims are being
asserted in writing with respect to any taxes. The federal income tax returns
filed by ADC have never been examined by the Internal Revenue Service.
2.6 Assets.
(a) ADC has good and valid title to all assets reflected on
the ADC Balance Sheet, in each case free and clear of all mortgages, liens,
security interests or encumbrances of any kind except as set forth in Schedule
2.6 (the Scheduled Liens).
(b) All the material tangible personal property of ADC has been
maintained in all material respects in accordance with good commercial
practices. Each item of material tangible personal property of ADC is in all
material respects in good operating condition and repair, ordinary wear and tear
excepted. All leased personal property of ADC is in all material respects in the
condition required by the terms of the applicable lease during the term of the
lease and upon the expiration thereof.
2.7 Intellectual Property. Schedule 2.7 sets forth a true and complete
list of all intellectual property and proprietary rights, whether or not subject
to statutory registration or protection (collectively, ADC Intellectual
Property), owned, used, filed by or licensed to ADC. Except as set forth in
Schedule 2.7, ADC owns and has the right to use, execute, reproduce, display,
perform, modify, enhance, distribute, prepare derivative works of and
sublicense, without payment to any other person, all ADC Intellectual Property,
and the consummation of the transactions contemplated hereby will not conflict
with, alter or impair any of those rights. ADC has not granted any options,
licenses or agreements of any kind relating to the ADC Intellectual Property or
the marketing or distribution thereof, except for nonexclusive licenses to end
users in the ordinary course of business or as otherwise indicated in Schedule
2.7. Except as set forth in Schedule 2.7, ADC is not bound by or a party to any
options, licenses or agreements of any kind relating to the ADC Intellectual
Property. Subject to the rights of third parties set forth in Schedule 2.7, all
ADC Intellectual Property is free and clear of any third party claims and all
liens, security interests and encumbrances whatsoever, other than Scheduled
Liens. The conduct of the business of ADC has not violated, conflicted or
infringed and does not violate, conflict with or infringe the intellectual
property rights of any other person. Except as set forth in Schedule 2.7,
(i) no claims are pending or, to the knowledge of the ADC Shareholder,
threatened, against ADC by any person with respect to the ownership, validity,
enforceability, effectiveness or use of any ADC Intellectual Property and
(ii) since its inception, ACD has not received any communications alleging
that it has violated any rights relating thereto.
2.8 Contracts.
(a) Except as set forth in Schedule 2.8, ADC is not a party to or
bound by any of the following:
(i) employment or consulting agreement that has an aggregate future
liability in excess of $5,000 and is not by ADC upon notice of not more than 30
days for a cost of less than $5,000;
(ii) covenant of Cymedix not to compete or otherwise restricting the
operations of ADC;
(iii) lease or similar agreement with any person under which
(A) ADC is lessee of or holds or uses any machinery, equipment, vehicle
or other tangible personal property owned by any other person or
(B) ADC is a lessor or sublessor of, or makes available for use by any
other person, any tangible personal property owned or leased by ADC;
(iv)
(A) continuing contract for the future purchase of
materials, supplies or equipment,
(B) management, service, consulting or other similar type of contract or
(C) advertising agreement or arrangement;
(v)material license, option or other agreement relating in whole
or in part to
(A) the ADC Intellectual Property, including any license or other
agreement under which ADC is licensee or licensor thereof, or
(B) trade secrets, confidential information or other proprietary rights of
ADC;
(vi) agreement, contract or other instrument under which ADC has
borrowed any money from, or issued any note, bond, debenture or other evidence
of indebtedness to, any other person;
(viii) agreement, contract or other instrument under which
(A) any person has directly or indirectly guaranteed indebtedness,
liabilities or obligations of ADC or
(B) ADC has directly or indirectly guaranteed indebtedness,
liabilities or obligations of any other person;
(ix) agreement, contract or other instrument under which ADC has,
directly or indirectly, made any advance, loan, extension of credit or capital
contribution to, or other investment in, any other person;
(x)agreement, contract or other instrument providing for
indemnification of any person with respect to liabilities relating to any
current or former business of ADC; or
(xi) other agreement, contract or other instrument to which ADC
is a party or by or to which it or any of its assets or business is bound or
subject that has an aggregate future liability to any other person in excess of
$5,000 and is not terminable by ADC upon notice of not more than 300 days for a
cost of less than $5,000.
(b) Except as set forth in Schedule 2.8, all agreements, contracts or
other instruments of ADC listed or required to be listed in the Schedules hereto
(collectively, the AADC Contracts@) are valid, binding and in full force and
effect and are enforceable by ADC in accordance with its terms. Except as set
forth in Schedule 2.8, ADC has performed all material obligations required to be
performed by it to date under the ADC Contracts and it is not in breach or
default in any material respect thereunder (with or without the lapse of time or
the giving of notice, or both) nor has any other party to any of the ADC
Contracts notified ADC of that party=s belief that ADC is or is likely to become
in breach or default in any material respect thereunder or of that party=s
intention to accelerate or modify in a manner adverse to ADC any of its
obligations or rights thereunder and, to the knowledge of the ADC Shareholder,
no other party to any of the ADC Contracts is in breach or default in any
material respect thereunder (with or without the lapse of time or the giving of
notice, or both).
2.9 Litigation. Schedule 2.9 sets forth a list of all pending lawsuits or
claims against or affecting ADC or any of its properties, assets, operations or
business. Except as set forth in Schedule 2.9,
(a) none of the lawsuits or claims listed therein would have a material
adverse affect on ADC if determined adversely to ADC, individually or in the
aggregate,
(b) ADC is not a party or subject to or in default under any judgment,
order, injunction or decree of any Governmental Authority or arbitration
tribunal applicable to it or any of its properties, assets, operations or
business,
(iii) there is no lawsuit or claim by ADC pending, or which ADC intends to
initiate, against any other person and
(iv) to the knowledge of the ADC Shareholder, there is no pending or
threatened investigation of or affecting ADC by any Governmental Authority.
2.10 Insurance. ADC maintains policies of fire and casualty, liability and
other forms of insurance in amounts, with deductibles and against risks and
losses that are, in its judgment, reasonable for the business and assets of ADC.
The insurance policies maintained by ADC are listed in Schedule 2.10. Except as
set forth in Schedule 2.10, all of the policies listed therein are in full force
and effect, all premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but may be,
required to be paid with respect to any period ending prior to the Effective
Date under comprehensive general liability and workmen=s compensation insurance
policies), and no notice of cancellation or termination has been received with
respect thereto. The activities and operations of ADC have been conducted in a
manner conforming in all material respects to all applicable provisions of its
insurance policies.
2.11 Benefit Plans.
(a) Schedule 2.11 sets forth a list and brief description of all
benefit plans maintained by ADC for the benefit of any of its employees. ADC
has heretofore delivered to Cymedix true, complete and correct copies of
(i) each benefit plan,
(ii) the most recent annual report on Form 5500 filed with the Internal
Revenue Service with respect to each benefit plan (if required),
(iii) the most recent summary plan description for each benefit plan
for which a summary plan description is required and
(iv) each trust agreement, group annuity contract and other financing and
funding arrangement relating to any benefit plan.
(b) Each benefit plan maintained by ADC has been administered in all
material respects in accordance with its terms and applicable law. There are no
lawsuits, actions, termination proceedings or other proceedings pending or, to
the knowledge of the ADC Shareholder, threatened against or involving any of
ADC's benefit plans and no investigations by any Governmental Authority or other
claims (except claims for benefits payable in the normal operation of the
benefit plans) pending or threatened against or involving any of its benefit
plans.
2.12 Absence of Changes or Events. Except as set forth in Schedule 2.12,
(a) since the date of the ADC Balance Sheet, there has not occurred any
event or events or arisen any change of affairs that, individually or
in the aggregate, has had or could have a material adverse effect,
(b) since the date of the ADC Balance Sheet, the business of ADC has been
conducted in the ordinary course and in substantially the same manner as
previously conducted,
(c) ADC has made all reasonable efforts consistent with past practices to
adhere to preserve its relationships with customers, suppliers and others with
whom it deals, and
(d) from the date of the ADC Balance Sheet, ADC has not taken any action
that, if taken after the date of this Agreement, would constitute a breach of
any of its covenants set forth herein.
2.13 Compliance with Applicable Laws. Except as set forth on Schedule
2.13, ADC is in compliance in all material respects with all applicable
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority applicable to its business and operations.
2.14 Disclosure. No representation or warranty of ADC or the ADC
Shareholder contained in this Agreement, no statement contained in any document,
certificate or Schedule and no data provided in connection with the due
diligence investigation contemplated by Section 6(a) furnished or to be
furnished by or on behalf of ADC to the Cymedix or any of its representatives
pursuant to this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading or necessary to fully and fairly
provide the information required to be provided therein.
3. Representations and Warrantees of Medix and Cymedix. Medix and
Cymedix represent and warrant to ADC as follows:
3.1 Organization. Cymedix is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, is (or
shall be prior to the Effective Time) duly qualified to do business and in good
standing as a foreign corporation in the State of New Jersey, and has the power
to own, lease and operate its property and to carry on its business as now
conducted.
3.2 Authority.
(a) Each of Medix and Cymedix has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of Medix and Cymedix, subject only to the
filing and recording of the New Jersey Certificate of Merger pursuant to
the New Jersey Act and the Colorado Certificate of Merger pursuant to the
Colorado Act. This Agreement has been duly executed and delivered by Medix
and Cymedix and, assuming the due authorization, execution and delivery of
this Agreement by ADC, constitutes the valid and binding obligation of
Medix and Cymedix, enforceable in accordance with its terms.
(b) The Merger Shares have been duly authorized by all requisite
corporate action of Medix and shall, upon issuance, be validly issued, fully
paid and nonassessable. Upon delivery to the ADC Shareholder of certificates
representing the Merger Shares, they will acquire good and valid title to their
Merger Shares, free and clear of any liens, claims, encumbrances, security
interests, options, charges and restrictions of any kind, other than those
arising from their own acts or omissions. Other than this Agreement, the Merger
Shares are not subject to any agreement, arrangement, commitment or
understanding, including any restriction relating to the voting, dividend rights
or disposition of the Merger Shares. No stock transfer taxes will be due in the
State of Colorado as a result of the issuance of the Merger Shares.
(c) The Board of Directors of Medix has taken (or shall take by the
Effective Time) all action necessary to approve the issuance of the Merger
Shares pursuant to the Merger. No anti-takeover or similar statute or regulation
applies or purports to apply to the transactions contemplated by this Agreement.
3.3 No Conflict.
(a) The execution and delivery of this Agreement by Medix and Cymedix
do not, and the performance of this Agreement by them will not,
(i) conflict with or violate the their respective certificates of
incorporation or bylaws,
(ii) subject to compliance with the requirements set forth in Section
3.3(b) below, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to them or by which their properties are
bound or affected, or
(iii) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or impair
their respective rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of their properties or assets pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which either of them is a party or by which
their properties are bound or affected.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Authority is required by or with
respect to Medix or Cymedix in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby,
except for the filing of the Colorado Certificate of Merger with the Secretary
of State of Colorado and the New Jersey Certificate of Merger with the Secretary
of State of the State of New Jersey.
4.Indemnities
4.1 Survival of Representations. All representations and warranties made
by the parties hereunder shall survive the Effective Date until the first
anniversary thereof (the Survival Date). ADC shall have the continuing
obligation until the Closing promptly to supplement or amend the Schedules
delivered hereunder with respect to any matter hereafter arising or discovered
that, if existing or known at he date of this Agreement, would have been
required to be set forth or described in the Schedules hereto.
4.2 ADC Shareholder Indemnity.
(a) The ADC Shareholder agrees to indemnify and hold harmless
Cymedix from and against all losses, liabilities, claims, damages, costs and
expenses, including reasonable attorneys fees (collectively, Losses and
individually, a Loss) that Cymedix may sustain arising out of any breach by
ADC or the ADC Shareholder of any of their representations, warranties or
covenants in this Agreement. Cymedix shall promptly notify the ADC
Shareholder of the existence of any third party claim, demand or other matter
to which the indemnification obligations of the ADC Shareholder would apply.
The ADC Shareholder shall be entitled, at his expense and with counsel
reasonably acceptable to Cymedix, to assume and conduct the defense of the
claim. If the ADC Shareholder does not undertake the defense of the claim, or
if he has a conflict of interest with respect to the claim, Cymedix shall be
entitled to retain separate counsel reasonably acceptable to the ADC
Shareholder, at the expense of the ADC Shareholder, to conduct the defense.
(b) The ADC Shareholder shall continue to defend and shall bear all
Losses associated with a pending litigation captioned Dezine Healthcare
Solutions, Inc. vs. David R. Pfeil d/b/a Arrow Professional Enterprises and
d/b/a Automated Design Concepts (Docket No. C 80-99, Middlesex County, New
Jersey.
4.3 Cymedix Indemnity. Cymedix agrees to indemnify and hold harmless the
ADC Shareholder from and against all Losses that the ADC Shareholder may sustain
arising out of any breach by Medix or Cymedix of any of their representations,
warranties or covenants in this Agreement. The ADC Shareholder shall promptly
notify Cymedix of the existence of any third party claim, demand or other matter
to which the indemnification obligations of Cymedix would apply. Cymedix shall
be entitled, at its expense and with counsel reasonably acceptable to the ADC
Shareholder, to assume and conduct the defense of the claim. If Cymedix does not
undertake the defense of the claim, or if it has a conflict of interest with
respect to the claim, the ADC Shareholder shall be entitled to retain separate
counsel reasonably acceptable to the Cymedix, at the expense of Cymedix, to
conduct the defense.
5.Conduct of Business Pending Closing
5.1 Conduct of Operations. ADC agrees, from the date of this Agreement to
the Closing, and unless otherwise approved in advance in writing by Cymedix, it
will conduct its business in the ordinary and usual courses of business and
shall maintain its books of account in a manner that fairly and correctly
reflects its income, expenses, assets and liabilities in accordance with GAAP.
5.2 Preservation of Representations. Prior to the Closing, ADC shall not
take any action that
(a) if taken on or before the date hereof, would make untrue any of
the representations and warranties contained in Article 2 or
(b) would interfere with the ability of Medix or Cymedix to perform this
Agreement.
5.3 Procuring Approvals. ADC shall use its best efforts to obtain all
licenses, consents or other approvals required to be obtained from any financial
institution or other person in connection with the consummation of the
transactions contemplated by this Agreement.
6. Conditions to Obligations of Medix and Cymedix.The obligations of Medix
and Cymedix under this Agreement are subject to the following conditions, any of
which may be waived in writing in whole or in part by Cymedix.
6.1 No Material Breaches. There shall not have been any material breach
of the representations, warranties, covenants and agreements of ADC or the ADC
Shareholder contained in this Agreement, and all of their representations and
warranties shall be true as of the Closing Date, except to the extent that they
are expressly stated to be true as of some other time.
6.2 Compliance with Entire Agreement. ADC shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it.
6.3 Employment Agreements. The employees of ADC listed on Schedule 6.3
(the ADC Employees) shall have entered into employment agreements with Cymedix
in form and substance acceptable to Cymedix.
6.4 Certain Consents Obtained. ADC shall have obtained any required
written consents of any third parties whose consent is required to the
transactions contemplated by this Agreement.
6.5 Indebtedness. On the Effective Date, the outstanding indebtedness and
accounts payable of ADC, net of accounts receivable, shall not exceed $40,000 in
the aggregate.
6.6 Further Assurances. ADC or the ADC Shareholder shall have delivered
to Cymedix any documents and further assurances that it may reasonably request
to memorialize the transactions contemplated hereby or to confirm the
satisfaction of the conditions set forth in this Article 6.
7. Conditions to Obligations of ADC. The obligations of ADC under this
Agreement are subject to the following conditions, any of which may be waived in
writing in whole or in part by ADC.
7.1 No Material Breaches. There shall not have been any material breach
of the representations, warranties, covenants and agreements of the Medix and
Cymedix contained in this Agreement, and all of its representations and
warranties shall be true as of the Closing Date, except to the extent that they
are expressly stated to be true as of some other time.
7.2 Compliance with Entire Agreement. Medix and Cymedix shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by them.
7.3 Employment Agreements. Cymedix shall have entered into employment
agreements with the ADC Employees in form and substance acceptable to them.
7.4 Office Lease. Cymedix shall have entered into a two-year lease for
the office space currently leased by ADC at 72 Brunswick Woods Drive, East
Brunswick, New Jersey 08816 on terms acceptable to the ADC Shareholder.
7.5 Further Assurances. Cymedix shall have delivered to the ADC
Shareholder any documents and further assurances that he may reasonably request
to memorialize the transactions contemplated hereby or to confirm the
satisfaction of the conditions set forth in this Article 7.
8.Termination
8.1 Cymedix Termination. This Agreement may be terminated by Cymedix and
the transactions contemplated hereby abandoned at any time prior to the Closing
if ADC shall have failed to satisfy any of the conditions set forth in Section 6
or any of those conditions shall have become incapable of fulfillment and shall
not have been waived by Cymedix.
8.2 ADC Termination. This Agreement may be terminated by ADC and the
transactions contemplated hereby abandoned at any time prior to the Closing if
Medix or Cymedix shall have failed to satisfy any of the conditions set forth in
Section 7 or any of those conditions shall have become incapable of fulfillment
and shall not have been waived by ADC.
8.3 Other Termination Events. This Agreement may be terminated and the
transactions contemplated hereby abandoned by Cymedix or ADC if the Closing does
not occur within 30 days of the date hereof, provided that the party seeking
termination pursuant to this Section 8.3 is not in breach in any of its material
representations, warranties, covenants or agreements contained in this
Agreement.
8.4 Notice of Termination. In the event a party seeks to terminate this
Agreement pursuant to this Section 8, it shall give written notice thereof to
the other party, setting forth in reasonable detail the grounds for termination,
whereupon the transactions contemplated by this Agreement shall be terminated
without further action by any party. In the event of termination, this Agreement
shall become void and of no further force or effect, except that each party
shall return all documents and other material received from or on behalf of the
other party in connection with the transactions contemplated hereby, whether so
obtained before or after the execution hereof. All confidential information
received by a party with respect to the business of the other party shall be
held in confidence notwithstanding any termination of this Agreement.
9. Miscellaneous
9.1 Benefit. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their successors and permitted assigns.
9.2 Entire Agreement. This Agreement, including the Schedules and
Exhibits, contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and shall not be modified or
affected by any offer, proposal, statement or representation, oral or written,
made by or for any party in connection with the negotiation of the terms hereof.
There are no representations, promises, warranties, covenants, undertakings or
assurances (express or implied) other than those expressly set forth or provided
for herein and in the other documents referred to herein. This Agreement may not
be modified or amended orally, but only by a writing signed by all the parties
hereto.
9.3 Construction. Whenever the context requires, the gender of all words
used in this Agreement includes the masculine, feminine and neuter. The headings
and captions in this Agreement and the Schedules are for convenience and
identification only and are in no way intended to define, limit or expand the
scope and intent of this Agreement or any provision hereof.
9.4 Governing Law. This Agreement and all rights and obligations
hereunder shall be governed by, and construed in accordance with, the law of the
State of Colorado applicable to agreements made and to be performed wholly
within that State, without regard to the conflicts of laws principles of that
State.
9.5 Expenses. Each party hereto shall pay its own expenses incidental to
the preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated hereby.
9.6 Assignment. This Agreement may not be assigned by any party
without the prior written consent of the other parties.
9.7 Notices. All notices, requests, consents and demands by the parties
hereunder shall be delivered by hand, by recognized national overnight courier
or by deposit in the United States mail, postage prepaid, by registered or
certified mail, return receipt requested, addressed to the party to be notified
at the addresses set forth below:
(a) if to the Medix or Cymedix, to:
Medix Resources, Inc.
7100 E. Belleview Avenue B Suite 301
Englewood, CO 80111
Attention: President
With a copy to:
Cymedix Lynx Corporation
One Broadwalk B Suite 200
Thousand Oaks, CA 91360
Attention: Chairman
(b) if to ADC or the ADC Shareholder, to:
Automated Design Concepts, Inc.
72 Brunswick Woods Drive
East Brunswick, New Jersey 08816
New York, NY 10118
Attn: President
9.8 Non-waivers. Neither any failure nor any delay on the part of any
party to this Agreement in exercising any right, power or privilege hereunder
shall operate as a waiver of any rights of such party, unless such waiver is
made by a writing executed by the party and delivered to the other parties
hereto, nor shall a single or partial exercise of any right preclude any other
or further exercise of any other right, power or privilege accorded to any party
hereto.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
MEDIX RESOURCES, INC.
By:___________________________________
John R. Prufeta,
President and Chief Executive Officer
CYMEDIX LYNX CORPORATION
By:___________________________________
John R. Prufeta,
President and Chief Executive Officer
AUTOMATED DESIGN CONCEPTS, INC.
By:___________________________________
David R. Pfeil,
President
By:-----------------------------------
David R. Pfeil
EXHIBIT A-1
CERTIFICATE OF MERGER
OF
AUTOMATED DESIGN CONCEPTS, INC.
INTO
CYMEDIX LYNX CORPORATION
(The Surviving Corporation)
To the Department of the Treasury
State of New Jersey
Pursuant to the provisions of Section 14A:10-7 of the New Jersey Business
Corporation Act, it is hereby certified that:
1. The names of the merging corporations are Automated Design Concepts,
Inc., a business corporation organized under the laws of the State of New
Jersey, and Cymedix Lynx Corporation, a business corporation organized under the
laws of the State of Colorado.
2.Annexed hereto as Annex A and made a part hereof is the Plan and
Agreement of Merger for merging Automated Design Concepts, Inc. with and into
Cymedix Lynx Corporation (the Plan of Merger), as approved by the board of
directors of each constituent corporation.
3.The number of shares of capital stock of Automated Design Concepts, Inc.
that were entitled to be voted at the time of approval of the Plan of Merger by
its shareholders is 100 shares, all of which are of one class and all of which
were voted for approval of the Plan of Merger by unanimous written consent dated
March 8, 2000.
4.The applicable provisions of the laws of the jurisdiction of Cymedix
Lynx Corporation relating to the merger of Automated Design Concepts, Inc. with
and into Cymedix Lynx Corporation will have been complied with upon compliance
with the filing requirements thereof.
5.Cymedix Lynx Corporation hereby agrees that it may be served with
process in the State of New Jersey in any proceeding for the enforcement of any
obligation of Automated Design Concepts, Inc. or any obligation of Cymedix Lynx
Corporation for which it is previously amenable to suit in the State of New
Jersey and in any proceeding for the enforcement of the rights of a dissenting
shareholder of Automated Design Concepts, Inc. against Cymedix Lynx Corporation;
and Cymedix Lynx Corporation hereby irrevocably appoints the Department of the
Treasury of the State of New Jersey as it agent to accept service of process in
any such proceeding and designates the following post office address outside the
State of New Jersey to which the Department of the Treasury of the State of New
Jersey shall mail a copy of the process in such proceeding:
Cymedix Lynx Corporation
One Boardwalk B Suite 200
Thousand Oaks, CA 91360
Attention: Chairman
6. Cymedix Lynx Corporation will continue its existence as the surviving
corporation under its present name pursuant to the laws of its jurisdiction of
organization.
Executed on this 14th day of March, 2000.
CYMEDIX LYNX CORPORATION
By:___________________________________
John R. Prufeta,
Chairman of the Board
AUTOMATED DESIGN CONCEPTS, INC.
By:___________________________________
David R. Pfeil,
President
ANNEX A
PLAN AND AGREEMENT OF MERGER
OF
AUTOMATED DESIGN CONCEPTS, INC.
(a New Jersey corporation)
INTO
CYMEDIX LYNX CORPORATION
(a Colorado corporation)
This Plan of Merger (the APlan of Merger@) was adopted on March 8, 2000 by
the board of directors of Automated Design Concepts, Inc., a business
corporation organized under the laws of the State of New Jersey (ADC), and by
the board of directors of Cymedix Lynx Corporation, a business corporation
organized under the laws of the State of Colorado (Cymedix).
1.Pursuant to the provisions of the New Jersey Business Corporation Act
(the New Jersey Act) and the provisions of the Colorado Business Corporation
Act (the Colorado Act), ADC shall merge (the Merger) with and into Cymedix,
which shall be the surviving corporation of the Merger.
2.Effective upon the filing of certificates of merger in accordance with
the New Jersey Act and the Colorado Act (the Effective Time), the separate
existence of ADC will cease, and Cymedix will be the surviving entity in the
Merger (the Surviving Company) and will continue to be governed by the laws of
the State of Colorado in accordance with the Colorado Act and the provisions of
its certificate of incorporation and bylaws, which shall continue in full force
and effect until amended in the manner prescribed by the Colorado Act.
3.The directors and officers of the Surviving Company shall be the
directors and officers of Cymedix in office immediately prior to the Effective
Time, to serve until their respective successors are duly elected or appointed
and qualified.
4.At the Effective Time, all of the issued and outstanding capital stock
of ADC will be converted into the right to receive, in the aggregate,
(a) cash in the amount of One Hundred Thousand Dollars ($100,000) and
(ii) 60,400 shares of common stock, $.001 par value, of Medix
Resources, Inc., the parent corporation of Cymedix. No other cash, rights or
securities will be issued in the Merger.
5.From and after the Effective Time,
(a) Cymedix shall possess all the rights, privileges, powers and franchises
of ADC and shall be subject to all the restrictions, disabilities and duties of
ADC,
(b) all of the rights, privileges, powers and franchises of ADC, and all
property and debts due to ADC on whatever account shall be vested in Cymedix,
(c) all property, rights, privileges, powers and franchises of ADC shall be
as effectually the property of Cymedix as they were of ADC, and the title to
any real estate vested by deed or otherwise in ADC shall not revert to or be in
any way impaired by reason of the Merger, and
(d) all rights of creditors and all liens upon any property of ADC
shall be preserved unimpaired, and all debts, liabilities and duties of ADC
shall attach to Cymedix and may be enforced against it to the same extent as if
those debts, liabilities and duties had been incurred or contracted by Cymedix.
6.The Merger shall have all the other effects provided by the New Jersey
Act and the Colorado Act.
7.The Plan of Merger shall be submitted to the shareholders of ADC for
their approval in the manner prescribed by the provisions of the New Jersey Act,
and the Merger shall be authorized in the manner prescribed by the provisions of
the Colorado Act.
8.ADC and Cymedix hereby stipulate that, upon approval of the Plan of
Merger by the shareholders of ADC entitled to vote thereon in the manner
prescribed by the provisions of the New Jersey Act and authorization of the
Merger in the manner prescribed by the provisions of the Colorado Act, they will
cause to be executed and filed any document prescribed by the provisions of the
New Jersey Act and the Colorado Act, and they will cause to be performed all
acts necessary to effectuate the Merger.
9.The proper officers of ADC and of Cymedix are hereby authorized,
empowered and directed to do any and all acts and to make, execute, deliver and
file any and all instruments and documents that shall be necessary or proper to
carry out or effect any of the provisions of the Plan of Merger. Each of the
parties will use all reasonable efforts to obtain any necessary waivers,
consents and approvals, effect all necessary filings and take all actions
necessary or appropriate to consummate the transactions contemplated by the Plan
of Merger.
10. Notwithstanding the approval of the Plan of Merger by the shareholders
of ADC entitled to vote thereon in the manner prescribed by the provisions of
the New Jersey Act and authorization of the Merger in the manner prescribed by
the provisions of the Colorado Act, the Merger may be abandoned at any time
prior to the effective time in the State of New Jersey in the event that either
party elects to do so.
AS APPROVED, ADOPTED AND EXECUTED BY EACH OF THE CONSTITUENT ENTITIES AND EACH
OF THE OTHER PARTIES TO THE MERGER AGREEMENT AS OF MARCH 8, 2000
EXHIBIT A-2
ARTICLES OF MERGER
OF
AUTOMATED DESIGN CONCEPTS, INC.
INTO
CYMEDIX LYNX CORPORATION
(The Surviving Corporation)
Pursuant to the provisions of Section 7-111-105 of the Colorado Business
Corporation Act (the Act), Cymedix Lynx Corporation, a Colorado corporation
incorporated on October 28, 1997, the surviving corporation (the Surviving
Corporation) in the merger described herein (the Merger), hereby represents
as follows:
1. Plan of Merger. The Plan and Agreement of Merger in the form annexed
hereto as Annex A, summarizing the principal terms of the Agreement and Plan of
Merger entered into as of March 8, 2000 among the Surviving Corporation,
Automated Design Concepts, Inc., a New Jersey corporation (ADC), and David R.
Pfeil, the sole shareholder of ADC (the Plan), has been approved and adopted
by the Surviving Corporation and ADC in accordance with the requirements of the
Act , the requirements of the laws of the State of New Jersey and the
requirements of the Plan.
2. Shareholder Approval. The shareholders of ADC were required to approve
the Plan, and the number of votes cast for approval of the Plan by each group
entitled to vote separately on the Merger were sufficient for approval of the
Plan by that voting group. The shareholder of the Surviving Corporation were not
required to approve the Plan pursuant to Section 7-111-103(7) of the Act.
3. Effective Date. The Merger shall take effect upon the filing of these
Articles of Merger with the office of the Secretary of State of the State of
Colorado and a Certificate of Merger relating to the Merger with the Secretary
of State of the State of New Jersey.
Executed on this 14th day of March, 2000
CYMEDIX LYNX CORPORATION
By:___________________________________
John R. Prufeta,
Chairman the Board
AUTOMATED DESIGN CONCEPTS, INC.
By:___________________________________
David R. Pfeil,
President
ANNEX A
PLAN AND AGREEMENT OF MERGER
OF
AUTOMATED DESIGN CONCEPTS, INC.
(a New Jersey corporation)
INTO
CYMEDIX LYNX CORPORATION
(a Colorado corporation)
This Plan of Merger (the Plan of Merger) was adopted on March 8, 2000 by
the board of directors of Automated Design Concepts, Inc., a business
corporation organized under the laws of the State of New Jersey (ADC), and by
the board of directors of Cymedix Lynx Corporation, a business corporation
organized under the laws of the State of Colorado (Cymedix).
1. Pursuant to the provisions of the New Jersey Business Corporation Act
(the New Jersey Act) and the provisions of the Colorado Business Corporation
Act (the Colorado Act), ADC shall merge (the Merger) with and into Cymedix,
which shall be the surviving corporation of the Merger.
2. Effective upon the filing of certificates of merger in accordance with
the New Jersey Act and the Colorado Act (the Effective Time), the separate
existence of ADC will cease, and Cymedix will be the surviving entity in the
Merger (the Surviving Company) and will continue to be governed by the laws of
the State of Colorado in accordance with the Colorado Act and the provisions of
its certificate of incorporation and bylaws, which shall continue in full force
and effect until amended in the manner prescribed by the Colorado Act.
3.The directors and officers of the Surviving Company shall be the
directors and officers of Cymedix in office immediately prior to the Effective
Time, to serve until their respective successors are duly elected or appointed
and qualified.
4. At the Effective Time, all of the issued and outstanding capital stock
of ADC will be converted into the right to receive, in the aggregate,
(a) cash in the amount of One Hundred Thousand Dollars ($100,000) and
(ii) 60,400 shares of common stock, $.001 par value, of Medix Resources,
Inc., the parent corporation of Cymedix. No other cash, rights or securities
will be issued in the Merger.
5. From and after the Effective Time,
(a) Cymedix shall possess all the rights, privileges, powers and franchises
of ADC and shall be subject to all the restrictions, disabilities and duties of
ADC,
(b) all of the rights, privileges, powers and franchises of ADC, and all
property and debts due to ADC on whatever account shall be vested in Cymedix,
(c) all property, rights, privileges, powers and franchises of ADC shall be
as effectually the property of Cymedix as they were of ADC, and the title to
any real estate vested by deed or otherwise in ADC shall not revert to or be in
any way impaired by reason of the Merger, and
(d) all rights of creditors and all liens upon any property of ADC shall be
preserved unimpaired, and all debts, liabilities and duties of ADC shall attach
to Cymedix and may be enforced against it to the same extent as if those debts,
liabilities and duties had been incurred or contracted by Cymedix.
6. The Merger shall have all the other effects provided by the New Jersey
Act and the Colorado Act.
7. The Plan of Merger shall be submitted to the shareholders of ADC for
their approval in the manner prescribed by the provisions of the New Jersey Act,
and the Merger shall be authorized in the manner prescribed by the provisions of
the Colorado Act.
8. ADC and Cymedix hereby stipulate that, upon approval of the Plan of
Merger by the shareholders of ADC entitled to vote thereon in the manner
prescribed by the provisions of the New Jersey Act and authorization of the
Merger in the manner prescribed by the provisions of the Colorado Act, they will
cause to be executed and filed any document prescribed by the provisions of the
New Jersey Act and the Colorado Act, and they will cause to be performed all
acts necessary to effectuate the Merger.
9.The proper officers of ADC and of Cymedix are hereby authorized,
empowered and directed to do any and all acts and to make, execute, deliver and
file any and all instruments and documents that shall be necessary or proper to
carry out or effect any of the provisions of the Plan of Merger. Each of the
parties will use all reasonable efforts to obtain any necessary waivers,
consents and approvals, effect all necessary filings and take all actions
necessary or appropriate to consummate the transactions contemplated by the Plan
of Merger.
10. Notwithstanding the approval of the Plan of Merger by the shareholders
of ADC entitled to vote thereon in the manner prescribed by the provisions of
the New Jersey Act and authorization of the Merger in the manner prescribed by
the provisions of the Colorado Act, the Merger may be abandoned at any time
prior to the effective time in the State of New Jersey in the event that either
party elects to do so.
AS APPROVED, ADOPTED AND EXECUTED BY EACH OF THE CONSTITUENT ENTITIES AND EACH
OF THE OTHER PARTIES TO THE MERGER AGREEMENT AS OF MARCH 8, 2000
EXHIBIT 10.25
CONSULTING AGREEMENT
Effective as of October 1, 1999, MEDIX RESOURCES, INC. a Colorado
corporation (the "Company") located at 7100 E. Belleview Avenue, Suite 301,
Englewood, CO 80111, and Samuel H. Havens, (the "Consultant"), resident at 58
Winged Foot Drive, Livingston, NJ 07039, agree as follows:
1. (a) The Company agrees to and does hereby retain the Consultant to
perform the following services (the "Services") for the Company: to introduce
the Company to managers, officers and directors of health care businesses that
might be useful to the Company in the marketing and development of its software
products for the health care industry, and to make follow-on contacts with such
persons to advance the goals of the Company.
(b) Consultant shall not be required to devote his full time and
attention to the performance of the Services, but shall devote only so much of
his time and attention as is necessary to provide the Services in a timely and
competent manner in the mutual judgment of the Consultant and President and CEO
of the Company.
2. The term of this Agreement (including any extended term, the
"Term") shall commence on the date hereof and will terminate on December 31,
2000. The Term of this Agreement may be extended for any number of one-year
periods after the initial Term upon the mutual consent of the Consultant and the
President and CEO of the Company.
3. (a) Consultant shall receive a fee, paid by the company during the
initial Term at the rate of $5,000 per month.
(b) The Company shall reimburse Consultant for out-of-pocket
expenses that have been mutually agreed to in advance. Consultant shall provide
to the Company a copy of all third-party invoices, receipts or other evidence
of the expenditures by Consultant.
4. (a) Consultant hereby assigns to the Company any right, title or
interest he may have (including patent rights, copyrights, trade secret rights,
trademark rights, sui generis database rights, and all other intellectual
property rights of any sort throughout the world) relating to any and all
inventions (whether or not patentable), works of authorship, designations,
designs, know-how, ideas and information made or conceived or reduced to
practice, in whole or in part, by Consultant,
(i) during the Term that relate to the subject matter of, or arise
out of, the Services, or
(ii) constitute any Proprietary Information (as defined below)
(collectively, "Inventions"). Consultant will promptly disclose and provide
all Inventions to Company. Consultant shall further assist Company, at its
request and expense, to further evidence, record and perfect such assignments
and to perfect, obtain, maintain, enforce and defend any rights assigned.
Consultant hereby irrevocably designates and appoints the Company as its agent
and attorney-in-fact to act for and in Consultant's behalf to execute and
file any documents and to do all other lawfully permitted acts to further
the foregoing with the same legal force and effect as if executed by Consultant.
(b) Consultant agrees that all Inventions and all other business,
customer, marketing, technical and financial information (including, without
limitation, the identity of and information relating to the Company's customers
or employees) that Consultant develops, learns or obtains during the Term that
relate to the Company or its business or that are received by or for the Company
in confidence, constitute "Proprietary Information," provided that Proprietary
Information shall not include information in the public domain through no fault
of Consultant. Consultant will hold in confidence and not disclose or, except in
performing the Services, use any Proprietary Information. In addition,
Consultant agrees not to use any of such Proprietary Information as "insider
information" in connection with the trading of the Company's securities, either
for his own account or as a "tipper" to benefit any third person, and the
Consultant acknowledges that he owes a fiduciary duty to the Company to refrain
from any such improper use of insider information. Upon termination of this
Agreement, and as otherwise requested by Company, Consultant will promptly
return to the Company all items and copies containing or embodying Proprietary
Information, except that Consultant may keep personal copies of his compensation
records and this Agreement.
(c) As additional protection for Proprietary Information, Consultant
agrees that during the Term and for one year thereafter, Consultant will not
encourage or solicit any employee or consultant of Company to leave Company for
any reason, and Consultant will not engage in any activity that is in any way
competitive with the business of Company, and Consultant will not assist any
other person or organization in competing or in preparing to compete with any
business of Company.
5. Upon any material breach of this Agreement by either party, the
other party may terminate this Agreement upon fifteen days' notice to the
breaching party. Sections 4 and 6 of this Agreement and any remedies for breach
of this Agreement shall survive any termination or expiration.
6. Notwithstanding any provision hereof, for all purposes of this
Agreement each party shall be and act as an independent contractor and not as
partner, joint venturer, or agent of the other and shall not bind nor attempt to
bind the other to any contract. Consultant is an independent contractor and is
solely responsible for all taxes, withholdings, and other statutory or
contractual obligations of any sort, including, but not limited to, Workers'
Compensation Insurance; and Consultant agrees to defend, indemnify and hold
Company harmless from any and all claims, damages, liability, attorneys' fees
and expenses on account of
(i) an alleged failure by Consultant to satisfy any
such obligations or any other obligation (under this Agreement or otherwise) or
(ii) any other action or inaction of Consultant.
7. This Agreement and the Services to be provided hereunder are
personal to Consultant, who shall not have the right to assign, transfer or
subcontract any obligations under this Agreement without the written consent of
the Company. Any attempt to do so shall be void.
8.Consultant agrees that he has not been made an agent of the Company
for any purpose and will not claim to be acting in that capacity. Consultant
shall indemnify and hold harmless the Company against any loss, claim, expense
or damages that the Company suffers as a result of Consultant's breach of this
provision.
9. Any waiver, amendment or modification of any of the provisions of
this Agreement, or any termination of this Agreement, shall not be valid unless
in writing and signed or initialed by the parties hereto. A waiver of the breach
of any provisions hereof or a default under any provision hereof shall not be
deemed a waiver of such provisions or any subsequent breach or default of any
kind or nature.
10. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Colorado, without regard to rules governing
conflict of laws thereof. All notices shall be in writing and shall be deemed
given upon receipt by the party to whom addressed at the addresses provided
above or at any address for which a notice has been given as herein provided.
This Agreement shall be enforceable by decrees of specific performances as well
as other remedies. Any breach of Section 4 of this Agreement will cause
irreparable harm to the Company for which damages would not be an adequate
remedy, and therefore, the Company will be entitled to injunctive relief with
respect thereto in addition to any other remedies permitted by law. This
Agreement shall inure to the benefit of, and bind, the parties hereto and their
respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the Consultant and the below captioned authorized
signatory for Medix Resources, Inc. have hereunder set their hands, and have
caused these presents to be duly executed and authorized as of the date first
written above.
MEDIX RESOURCES, INC.
By: /s/John R. Prufeta
-----------------------
By: /s/Samuel H. Havens
-----------------------
Samuel H. Havens
President and CEO
