EXHIBIT 10.23
PROCESSING AGREEMENT
This Processing Agreement is effective as of May 1, 1998 (the
"Effective Date"), between Imaged Data, Inc., a Texas corporation ("IDI"),
having an address of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and
the facsimile number ▇▇▇-▇▇▇-▇▇▇▇, and Electronic Transmission Corporation a
Delaware corporation ("ETC"), having an address of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and the facsimile number ▇▇▇-▇▇▇-▇▇▇▇.
ETC is in the business of receiving, processing, editing and
transmitting medical claims of all types electronically to organizations that
reprice, adjudicate, and otherwise pay these claims (collectively, "Medical
Payors"). In order for ETC to pursue more clients and build its claims
network between payors and managed care organizations, ETC must have a
resource that can convert paper claims and images into electronic data by
extracting the data from various claim forms. IDI is in the business of
imaging forms, including medical claims, and extracting the data from these
claims by means of a technology known in the computer industry as OCR
(Optical Character Recognition). Both ETC and IDI acknowledge that all claims
received by ETC and/or IDI cannot be processed using OCR and same will
require manual data entry.
Both ETC and IDI acknowledge that the accuracy of the data extracted is
the single most important part of the claim conversion process and are thus
dedicated to accuracy above all else. ETC wishes to engage IDI to convert
paper medical claims and images of medical claims and to extract the data
from these claims accurately from machine-printed HCFA 1500 and UB-92 forms.
IDI agrees to accept paper claims or scanned images from ETC or its clients
and to extract as much of the data as is required by any given client of ETC.
The information extracted will be checked for accuracy and then transmitted
to ETC on a timely basis, in a format agreed to by both parties. The time
allowed to process any given group of claims will be determined by the need
of the clients and will be approved in advance by IDI. ETC will pay IDI $0.20
per claim sheet to image printed claim forms or to accept an image of a claim
form and extract the data and transmit the data to ETC for further
processing. Subsequent pricing arrangements will be submitted to IDI in
writing by ETC and approved by IDI in advance and will be subject to the
terms and conditions of this Agreement.
ETC will pay to IDI the amount of $8,000.00 each month, due no later
than the fifteenth day of that month, to represent fixed-fee payment in
advance for the first 40,000 claims processed by IDI. This monthly advance
amount shall be due from ETC without any further notice or invoice needed
from IDI. At the end of each month, IDI will reconcile the actual number of
claims processed during that month against the 40,000 claim budget, and shall
issue an invoice to ETC which wall show either: (a) if the actual number of
claims processed is less than 40,000, a credit due to ETC for $0.20
multiplied by the difference between 40,000 and the actual number of claims
processed that month, which credit may be applied by ETC against the
following month's fixed-fee payment in advance; or (b) if the actual number
of claims processed is greater than 40,000, a balance due from ETC to IDI for
$0.20 multiplied by the difference between 40,000 and the actual number of
claims processed that month. If the end-of-the-month invoice reflects a
balance due from ETC to IDI, ETC will pay IDI the full amount of the invoice
within 30 days of the date of the invoice,
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without regard to any payment arrangements between ETC and its clients. Any
fixed-fee payment in advance which remains unpaid after the fifteenth of the
month, and/or any invoice, or any portion thereof, which remains unpaid after
30 days, will constitute a breach of this Agreement, and will entitle IDI, in
addition to any other remedies set forth herein, to interest on the unpaid
amount at the rate of prime as of the date of the invoice. For any month in
which interest is due, "prime" shall be defined for that entire month as the
prime rate of interest published in the Wall Street Journal on the first
business day of that month.
ETC and IDI agree that, during the term of this Agreement, ETC will be
the exclusive agent for medical claims for IDI. For all medical forms
processed, imaged, archived, or otherwise processed by IDI for any customer
other than ETC, IDI will pay to ETC a royalty of five percent (5%) of the
gross revenue paid to IDI. The parties expressly agree that ETC's entitlement
to this royalty will end with the termination of this Agreement.
This Agreement shall be effective for a term of one year following the
Effective Date (the "Term"). Such Term shall be automatically extended for
successive one year periods unless IDI or ETC gives at least 60 days advance
written notice to the other party prior to the annual anniversary of the
Effective Date that the Agreement will not be so extended. This Agreement may
only be terminated by either party hereto as follows. WITHOUT CAUSE: Either
party may give notice of non-renewal to the other party as provided herein,
and the Agreement will terminate automatically on the annual anniversary of
its Effective Date. WITH CAUSE: (a) If any party breaches any provision of
this Agreement, the non-breaching party, after written notice of breach and
upon failure of the breaching party to cure the breach within 10 business
days after the notice of breach, may immediately terminate this Agreement; or
(b) If either party files for bankruptcy, becomes insolvent, or makes an
assignment for the benefit of any creditor, the other party may immediately
terminate this Agreement. Any indulgence, forbearance, or delay by the party
entitled to terminate the Agreement shall not constitute a waiver of that
party's right to terminate the Agreement. A party's termination of this
Agreement shall not effect that party's right to enforce the terms of the
Agreement up to the time of termination, including but not limited to
recovery of payment for any services rendered thereunder.
BREACH. In addition to any other rights hereunder, if any party breaches
any provision of this Agreement, the non-breaching party shall be entitled to
institute a lawsuit to recover its damages caused by the breach, plus
reasonable attorney's fees and costs. However, the parties agree that the
liability for any error in the processing of any medical claim shall be
limited to the cost paid by or due from ETC to IDI for processing the
disputed claim. At its sole option, ETC may seek to have IDI re-process the
disputed claim at no additional charge hereunder, in lieu of seeking damages
hereunder. In any event, neither party shall be entitled to exemplary,
special, or consequential damages, or future lost profits, alleged to have
been caused by the other party's breach.
All notices hereunder shall be in writing and delivered personally or
sent by: the U.S. Mail; any nationally-recognized express package delivery
service (such as Federal Express, UPS, Airborne, etc.); facsimile with
written confirmation of receipt by the other party; or any recognized
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local courier service with written confirmation of receipt by the other
party, to the address set forth above or to any other address as any party
may hereafter set for itself in writing to the other party.
This Agreement constitutes the entire agreement between the parties, and
supersedes and replaces any and all prior, contemporaneous, or existing
agreements, understandings, or arrangements between the parties, including
but not limited to that Processing Agreement dated November 15, 1995 (the
"Prior Processing Agreement"), except as follows: (a) that Promissory Note
given to IDI by ETC, dated May 4, 1998, shall remain in full force and
effect and is incorporated herein by reference thereto; and (b) IDI's invoice
to ETC for all work performed in April, 1998, under the Prior Processing
Agreement shall survive and shall be subject to the terms and conditions of
this Agreement, including the payment terms for end-of-the-month invoices.
This Agreement may be amended, waived, or supplemented in whole or in
part only by written instrument executed by both parties hereto. No party may
assign this Agreement or its rights or responsibilities hereunder without the
advance written consent of the other party. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, administrators, and assigns,
and any other entity in which they have or may acquire a monetary interest.
This Agreement may be executed by the parties in multiple counterparts,
including by facsimile, each of which shall be an original but all of which
together shall constitute a single instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its duly authorized representatives, on and
effective as of the Effective Date.
ELECTRONIC TRANSMISSION IMAGED DATA, INC.
CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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(Signature Of Representative) (Signature of Representative)
Name: /s/ ▇▇▇ ▇▇▇▇▇▇ Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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(Typed or Printed Name (Typed or Printed Name
of Representative) of Representative)
Its: Executive Vice President Its: President
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(Title of Representative) (Title of Representative)
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PROMISSORY NOTE
$20,757.70 County of Dallas
4-May-98 State of Texas
For value received, Electronic Transmission Corporation (ETC)
hereinafter referred to as "Maker" promises to pay to the order of IMAGED
DATA, INC. (IDI) located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, hereinafter referred to as "Payee," the principal sum of Twenty
Thousand Dollars ($20,757.70), (reflecting processing services Payee
completed on behalf of Maker during the first three months of 1998) with
interest accruing at a rate of 9% per annum. This note is to be paid in 6
equal installments of $3,551 payable on the first day of each month starting
on the 1st day of June, 1998.
Demand, presentment, protest, notice of protest and notice of dishonor
are hereby waived.
This Note shall be governed by and construed in accordance with the laws
of the State of Texas. This Promissory Note shall be non-negotiable, and
shall remain exclusively in the hands of Payee, or Payee's successor,
assigns, heirs, or beneficiaries.
On the happening of any of the following events, each of which shall
constitute an Event of Default under this Note, all liabilities of Maker to
Payee shall be accelerated, and become immediately due and payable, at the
option of Payee:
1) failure of Maker to perform under the Processing Agreement executed on or
about this date;
2) filing of any petition in bankruptcy by or against Maker;
3) application for appointment of a receiver for, making of a general
assignment for the benefit of creditors by, or insolvency of Maker; or
4) determination by Payee that a material adverse change has occurred in the
financial condition of Maker.
On occurrence of any such event or at any time thereafter, payee shall
have the remedies to which Payee would be entitled under the Uniform
Commercial Code of the State of Texas. Payee may waive any default before or
after default has been declared without impairing its right to declare
subsequent default under this Note, this right being a continuing one.
Maker waives protest to this Note. If this Note is not paid as due,
Maker agrees to pay all costs and expenses of collection, including
reasonable attorney's
fees. Payee shall in no event be liable to any party for failure to collect
this Note, in whole or in part.
Executed under hand and seal with 11th day of May, 1998.
MAKER:
Electronic Transmission Corporation
By:
/s/ ▇▇▇ ▇▇▇▇▇▇
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Name(print) ▇▇▇ ▇▇▇▇▇▇
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Title: Executive Vice President
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(Corporate Seal)