EXHIBIT 10.3

 

TRANSITION SERVICES AGREEMENT

 

THIS TRANSITION SERVICES AGREEMENT (“Agreement”) is made as of October 3, 2016
(the “Effective Date”) by and between MediGain, LLC, a Texas limited liability
company (“MediGain”), Millennium Practice Management Associates, LLC, a New
Jersey limited liability company (“Millennium”), and MTBC Acquisition, Corp., a
Delaware corporation (“Buyer”). For purposes of this Agreement, MediGain,
Millennium and Buyer may be collectively referred to as the “Principal Parties.”

 

RECITALS

 

WHEREAS, MediGain and Millennium currently occupy certain leased real property
(together with any other leasehold rights, attachments, appurtenances or other
rights or property to which MediGain and Millennium are entitled pursuant to the
leases, the “Leased Real Property” or “Facilities”), and there conduct their
business operations (such activity as conducted by MediGain and Millennium from
time to time at the Facilities being herein referred to as the “Permitted Use”);

 

WHEREAS, MediGain and Millennium currently lease certain equipment (the “Leased
Equipment”) which they use to conduct their business operations;

 

WHEREAS, pursuant to that certain Strict Foreclosure Agreement by and among
MediGain, Millennium and Buyer, dated as of October 3, 2016 (the “Strict
Foreclosure Agreement”), Buyer has acquired substantially all of the assets of
MediGain and Millennium (the date of the closing of the same is referred to
herein as the “Closing”); and

 

WHEREAS, in order to assist in the orderly transition of the business, and as a
condition to the Strict Foreclosure Agreement, MediGain and Millennium have
agreed to enter into this transition services agreement to allow Buyer to
utilize certain retained Facilities and Leased Equipment of MediGain and
Millennium, selected by Buyer in its sole discretion, for a limited period of
time, not to exceed ninety (90) days from Closing, and for which Buyer shall (i)
reimburse MediGain and Millennium dollar-for-dollar for all actual out of pocket
costs (including, but not limited to, rent, CAM charges, and utilities) incurred
relative to such services from and after Closing, (ii) shall provide MediGain
and Millennium an indemnification for any liability incurred as a result of
Buyer’s use and occupancy of the Facilities and Leased Equipment, and (iii)
reimburse MediGain and Millennium for their property and liability insurance,
and (iv) reimburse MediGain and Millennium for certain insurance premium
(property, liability, and directors and officers insurance shall be collectively
referred to as “Insurance Coverage”) incurred during the transition period.

 

NOW THEREFORE, in consideration of the mutual agreements and covenants herein
contained, the Principal Parties hereby agree as follows:

 

  1. Definitions, Services to be Performed, Term, Performance and Cooperation.

 

(a)       Capitalized terms not expressly defined in this Agreement shall have
the meanings ascribed to them in the Strict Foreclosure Agreement. In accordance
with the terms and provisions of this Agreement, MediGain and Millennium agree
to allow Buyer to occupy and use the Leased Real Property listed on Schedule A,
and to use the Leased Equipment listed on Schedule B, as selected by Buyer in
its sole discretion, for the term of this Agreement (collectively referred to as
“Services”); provided, however, that MediGain and Millennium shall not be
obligated to provide any Services other than those expressly described in this
Agreement, the Strict Foreclosure Agreement, and the attached Schedules. For the
avoidance of doubt, from and after the Closing, MediGain and Millennium shall
cooperate with Buyer and take such actions as shall be necessary to obtain for
Buyer the benefits of the transactions contemplated under the Strict Foreclosure
Agreement, including the execution and delivery of all documents necessary to
effectuate, memorialize, or perfect the transfer of title of the Foreclosed
Assets, including the stock of RCM-MediGain India Private Limited to Buyer.

  

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(b)       This Agreement shall become effective as of the Effective Date and
shall be terminated in ninety (90) days from the Closing. Provided, however,
that the Principal Parties may mutually agree to extend the term of this
Agreement.

 

(c)       Notwithstanding anything to the contrary contained herein, this
Agreement may be terminated, in whole or in part, at any time:

 

(i)       by the mutual written consent of the Principal Parties;

 

(ii)       by Buyer, if any case or other proceeding, whether voluntary or
involuntary, is commenced against MediGain or Millennium under any chapter of
title 11 of the United States Code (the “Bankruptcy Code”) or any other
insolvency law, or under any other law providing for the appointment of a
receiver, liquidator, assignee, trustee, or custodian for all or any part of the
property of Medigain or Millennium; or

 

(iii)       by MediGain and Millennium in the event of any material breach or
default by Buyer of any of its obligations under this Agreement and the failure
to cure such breach or default within five (5) days after receipt of written
notice from MediGain and Millennium requesting such breach or default to be
cured, or within two (2) days after receipt of such written notice for any
breach or default of any payment obligation under this Agreement.

 

(d)       MediGain and Millennium make no warranties of any kind, express or
implied, with respect to the quality or suitability of any Services provided
hereunder. As needed from time to time, MediGain and Millennium will provide
Buyer all records (in any format, electronic or otherwise) related to the
provision of Services under this Agreement, including, but not limited to,
billing and other business related records.

 

(e)       MediGain and Millennium are not required and do not intend to request
any consents, licenses, sublicenses or approvals necessary or desirable to
permit Buyer to occupy and use the Leased Real Property and the Leased
Equipment, and shall have no obligations or liability of any kind to Buyer if a
particular lease is terminated by the lessor for any reason. MediGain and
Millennium are only agreeing to (i) remain in existence for ninety (90) days
after the Closing, and (ii) to pay monthly obligations due and owing under
applicable leases as actually paid to MediGain and Millennium by Buyer monthly
in advance (as outlined in Section 2 hereof).

 

(f)       The Principal Parties shall coordinate after the Effective Date to
review outstanding vendor relationships.

 

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2.       Payment. In consideration for the Services to be provided by MediGain
and Millennium hereunder, Buyer shall pay to MediGain and Millennium (i) all
costs incurred and accrued on and after October 1, 2016 through the end of the
transition period relative to the Facilities and Leased Equipment, including
rent, CAM charges, and utilities from and after the closing, estimated on
Schedule A and Schedule B attached hereto, (ii) the premiums and costs for
Insurance Coverage from and after October 1, 2016 through the end of the
transition period as outlined on Schedule C attached hereto, (iii) $28,000 to
reimburse MediGain for expenses incurred and paid on behalf of its offshore
subsidiary prior to the Effective Date and (iv) all expenses incurred on or
after October 1, 2016 (including MediGain credit card charges) through the end
of the transition period for the benefit of Buyer; provided, however, that Buyer
shall not be obligated to pay for any Services for a particular Facility or item
of equipment if (a) Buyer is not able to occupy the particular Facility or use
an item of Leased Equipment for any reason, including the termination of an
applicable lease by the lessor, or (b) Buyer provides MediGain and/or Millennium
written notice five (5) days prior to the beginning of a month notifying them
that Buyer no longer wishes to occupy or use a particular Facility or item of
Leased Equipment. If Buyer requests support to be provided by Medigain and
Millennium for purposes of providing the cooperation described in Section 1(a)
above or completing the audit described in the Strict Foreclosure Agreement
(beyond the mere act of signing the management rep letter), Buyer shall request
Alan Weiner’s assistance for specific tasks in writing, and shall pay Alan
Weiner’s hourly rate of $400 for actual services performed. The fees for the
Services and Insurance Coverage shall be payable monthly by the 25th of the
month immediately preceding the month for which such fees are owed. With respect
to the first month of this Agreement, such payment shall be made upon execution
of this Agreement. Although estimates of utilities and CAM charges are estimated
on Schedule A, the parties hereto agree to a monthly “true-up” for actual
amounts invoiced and owed. If Buyer fails to make any payment stipulated in this
Agreement by the date specified herein, MediGain and/or Millennium may terminate
the applicable lease and Buyer shall have no further right to occupy and/or use
the Facility or Leased Equipment covered by that terminated lease. Buyer shall
additionally be responsible for providing funds to MediGain and Millennium to
allow it to pay for all utilities for the Leased Real Property and any sales or
other taxes relating to the provision of goods or services received with respect
to Services provided hereunder, but not any taxes attributable to or measured by
MediGain and Millennium’s net income.

 

3.       Relationship of Parties. The Principal Parties hereto are independent
contractors, and neither such party nor its respective employees or agents will
be deemed to be employees or agents of the other Principal Party for any purpose
or under any circumstances. No partnership, joint venture, alliance, fiduciary
or any relationship other than that of independent contractors is created
hereby, expressly or by implication.

 

4.       Compliance with Laws. Each party will, with respect to its obligations
and performance hereunder, comply with all applicable requirements of federal,
state and local laws, rules and regulations, including without limitation import
and export control, environmental and occupational safety requirements.

 

5.        Covenant of Buyer Regarding Permitted Use; Indemnity and Damages.

 

(a)      Buyer hereby covenants to MediGain and Millennium that, during the
period of time that Buyer occupies the Facilities or uses the Equipment, Buyer’s
activities will be consistent with and in compliance with the applicable lease.

 

(b)      upon Buyer’s election to cease occupying a Facility or using any Leased
Equipment, or upon the termination of this Agreement, Buyer shall:

 

(i)      prior to vacating a Facility, Buyer will dismantle and remove all
moveable assets for which it has title from the Facility. In addition, all
office, conference, and cubicle areas will be cleaned so that the facility can
be occupied immediately by a new tenant and any damage to the Facility caused by
Buyer from and after the Closing under this Agreement will be promptly and fully
remediated at Buyer’s sole expense; and

 

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(ii)      Buyer shall comply with the applicable Leased Equipment lease
provisions for return of the Leased Equipment to the lessor.

 

(c)      Buyer shall be liable to MediGain and Millennium under this Agreement
for damages, costs and expenses, including legal fees and litigation expenses,
resulting from Buyer’s damage to the Facilities or the Leased Equipment from and
after Closing under this Agreement.

 

(d)      Notwithstanding the foregoing, Buyer shall indemnify, defend and hold
harmless MediGain and Millennium and their directors, officers, shareholders,
employees, agents and controlling persons from and against any and all losses,
claims, damages, liabilities, costs and expenses (including any amounts paid in
any settlement, legal fees and litigation expenses) resulting from any third
party demand, claim, lawsuit, action or proceeding arising from and related to
Buyer’s breach of this Agreement.

 

  6. Miscellaneous.

 

(a)      Force Majeure. Neither Principal Party will have any liability for
damages or delay due to fire, explosion, lightning, power failure or surges,
strikes or labor disputes, water or food, acts of God, the elements, war, civil
disturbances, acts of civil or military authorities or the public enemy, acts or
omissions of communications or other carriers, or any other cause beyond a
party’s reasonable control, whether or not similar to the foregoing, that
prevents such party from materially performing its obligations hereunder.

 

(b)      Entire Agreement; Modification; Waivers. This Agreement and the
Schedules attached hereto constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiation, commitments and writings with respect to Services. This Agreement
and the Schedules attached hereto may not be altered, modified or amended except
by a written instrument signed by the affected parties. The failure of any party
to require the performance or satisfaction of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, shall not
prevent subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach.

 

(c)      Severability. The provisions of this Agreement are severable, and in
the event that any one or more provisions are deemed illegal or unenforceable
the remaining provisions shall remain in full force and effect unless the
deletion of such provision shall cause this Agreement to become materially
adverse to either party, in which event the parties shall use reasonable
commercial efforts to arrive at an accommodation that best preserves for the
parties the benefits and obligations of the illegal or unenforceable provision.

 

(d)      Notices. All notices and other communications hereunder will be in
writing and deemed to have been duly given if provided as follows:

 

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If to MediGain and Millennium, to:

 

MediGain, LLC

Millennium Practice Management Associates, LLC

Attn. Juanita Schwartzkopf

2800 Dallas Parkway, Suite 200

Plano, TX 75093

J.Schwartzkopf@focusmg.com

 

with a copy to:

 

Gardere Wynne Sewell LLP

Attn. Stephen A. McCartin

3000 Thanksgiving Tower

1601 Elm Street

Dallas, Texas 75201-4761

smccartin@gardere.com

 

If to Buyer, to:

 

MTBC Acquisition, Corp.

7 Clyde Road

Somerset, NJ 08873

Attn: Shruti Patel

spatel@mtbc.com

 

with a copy to:

 

Bryan Cave LLP

JP Morgan Chase Tower

2200 Ross Avenue, Suite 3300

Dallas, TX 75201-7965

Attn: Keith Aurzada, Esq.

 

(e)      Survival of Obligations. The respective obligations of the Principal
Parties set forth in Sections 2 and 5 shall survive expiration or termination of
this Agreement for any reason.

 

(f)      Assignment. Each of MediGain and Millennium acknowledges and agrees
that the Services to be provided by them under this Agreement represent
nondelegable personal services based upon the specific skills and experience of
MediGain and Millennium and their employees. Accordingly, each of MediGain and
Millennium expressly acknowledge and agree that this Agreement is a personal
services contract that cannot and shall not be assigned (or assumed and assigned
under Section 365 of title 11 of the United States Code) absent the prior
written consent of Buyer, which consent may be withheld by Buyer in its sole and
absolute discretion.

 

(g)      No Third Party Beneficiary. This Agreement is made solely for the
benefit of Buyer, MediGain, and Millennium and their respective successors and
assigns, and no other person shall have any right, benefit, or interest under or
because of this Agreement except as otherwise specifically provided herein. For
the avoidance of doubt, this Agreement shall not confer any rights on any lessor
of Leased Real Property or Leased Equipment, including any right to seek payment
of rent directly from Buyer.

 

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(h)      Title and Headings. Titles and headings to sections herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.

 

(i)      Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each Principal Party, and delivered to the other signatories, it being
understood that all signatories need not sign the same counterpart. In the event
that any signature is delivered by e-mail transmission, such signature shall
create a valid and binding obligation of the entity executing (or on whose
behalf such signature is executed) with the same force and effect as if such
e-mail signature page were an original thereof.

 

(j)      Governing Law. This Agreement and the rights and obligations hereunder
of each of the parties hereto shall be governed by and interpreted, determined,
and enforced in accordance with the internal laws of the State of Texas, without
giving effect to principles of conflicts of laws.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, each of MediGain, Millennium and Buyer has caused this
Agreement to be duly executed on its behalf by its duly authorized officer as of
the date first written above.

 

  MediGain, LLC, a Texas limited liability company         By: /s/ Juanita
Schwartzkopf   Name: Juanita Schwartzkopf   Title: CEO         Millennium
Practice Management Associates,   LLC, a New Jersey limited liability company  
      By: /s/ Juanita Schwartzkopf   Name: Juanita Schwartzkopf   Title: CEO    
    MTBC Acquisition, Corp., a Delaware corporation         By: /s/ Mahmud U.
Haq   Name: Mahmud U. Haq   Title: CEO

 

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