EXHIBIT D

STOCKHOLDERS AGREEMENT

 

THIS STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated this ____ day of _____
2005 is entered into by and among Patient Infosystems, Inc., a Delaware
corporation (“PATY”), John Pappajohn, an individual residing in the state of
Iowa (“Pappajohn”), Derace Schaffer, an individual residing in the state of
Texas (“Schaffer” and together with Pappajohn the “PATY Guarantors”), Essex
Woodlands Health Ventures Fund IV, L.P., (“Essex IV”), Essex Woodlands Health
Ventures Fund V, L.P. (“Essex V” and together with Essex IV, “Essex”), Hickory
Venture Capital Corporation, (“Hickory”), Radius Venture Partners I, L.P.
(“Radius”), Psilos Group Partners, L.P., (“Psilos I”) and Psilos Group Partners
II, L.P., (“Psilos II” and together with Psilos I, “Psilos” Psilos, Essex,
Hickory and Radius are collectively referred to herein as the “CCS Guarantors”),
and Albert Waxman, an individual residing in the state of New York (“Waxman”).
The PATY Guarantors and the CCS Guarantors are sometimes collectively referred
to herein as the “Investors.” Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement (as defined
below).

 

W I T N E S S E T H:

 

WHEREAS, each of PATY, PATY Acquisition Corp. and CCS Consolidated, Inc. (“CCS”)
are party to an Agreement and Plan of Merger dated as of September __, 2005 (the
“Merger Agreement”) pursuant to which PATY Acquisition Corp., a wholly-owned
subsidiary of PATY, is to be merged with and into CCS; and

WHEREAS, the execution of this Agreement is a condition precedent to the
consummation of the transactions contemplated by the Merger Agreement; and

WHEREAS, prior to the execution of the Merger Agreement, the PATY Guarantors, as
stockholders of PATY, guaranteed the payment (the “Guarantee”) of a revolving
loan in the principal amount of up to six million dollars ($6,000,000) made by
Wells Fargo Bank Iowa, National Association to PATY pursuant to a Second Amended
and Restated Credit Agreement, dated March 28, 2002, as amended (the “Loan”);
and

WHEREAS, the obligations under the Guarantee and Loan shall remain in effect, in
accordance with their terms, following the consummation of the transactions
contemplated by the Merger Agreement; and

WHEREAS, in connection with the execution and consummation of the Merger
Agreement, CCS retained Sonenshine Pastor Advisors LLC (“Sonenshine Partners”)
to serve as its financial advisor; and

WHEREAS, Sonenshine Partners’ fee for the financial advisory services provided
to CCS is $______________ (the “Sonenshine Partners Fee”); and

 

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WHEREAS, in accordance with Section 13.5 of the Merger Agreement, PATY agreed to
pay the Expenses associated with the transaction, subject to the terms of this
Agreement; and

WHEREAS, the Sonenshine Partners Fee is an Expense; and

WHEREAS, stockholders holding ____ shares of CCS Common Stock and _______ shares
of CCS Preferred Stock (the “Dissenting Stockholders”) who are otherwise
entitled to receive ____ shares of PATY Common Stock (the “Dissenter Shares”) in
accordance with the terms and conditions set forth in Section 2.2(f) of the
Merger Agreement, have made a written demand to CCS for appraisal rights in
accordance with Section 262(d) of the GCL; and

WHEREAS, upon the consummation of the transactions contemplated by the Merger
Agreement, the Investors shall possess a majority of the shares of the PATY
Common Stock.

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and undertakings of the Corporation, the Investors and Waxman
hereunder the parties hereto do hereby agree as follows:

SECTION 1

The Loan.

1.1        Satisfaction of Loan. PATY shall use its best efforts to satisfy its
obligations under the Loan and repay all amounts owed thereunder by December 31,
2005, in one or more of the following ways:

(a)        PATY may sell the shares of common stock of American Caresource
Holdings, Inc. (“ACS”) that it owns, and if any such sales occur, PATY shall
immediately use the proceeds of such sale to repay part or all of the Loan; or

(b)        PATY may enter into one or more transactions pursuant to which it
will sell equity securities of PATY, and if any such sales occur, PATY shall
immediately use the proceeds from such sale or sales to repay part or all of the
Loan (each a “Loan Satisfaction Transaction”);

provided, however, that in all cases such actions shall be subject to the prior
approval of the PATY Board of Directors pursuant to the terms of Section 4
hereof.

1.2        PATY Standby Commitment. If, despite its best efforts, PATY is unable
to satisfy its obligation to repay the Loan in full, in accordance with Section
1.1 above, by December 31, 2005 (the “Standby Commitment Date”), then each of
the PATY Guarantors shall be obligated, and hereby agrees, to purchase, at a
price that is five percent less than the Share Value (as defined below) (a “Five
Percent Discount”), on the Standby Commitment Date, a number of shares of PATY
Common Stock from PATY, which is equal in value (as determined using the average
closing price for the ten trading days immediately preceding the Standby
Commitment Date (the “Share Value”)), after taking into account the Five Percent
Discount, to seventy-five percent, in the case of Pappajohn and twenty-five
percent, in the case of Schaffer of the remaining principal balance of the Loan
(plus accrued but unpaid interest thereon) as of the Standby Commitment Date
(the “PATY Standby Commitment”). Immediately upon the consummation of such sales
(the “PATY Standby Sales”), PATY shall use the proceeds of the PATY Standby
Sales to satisfy its obligations to repay the Loan thus extinguishing the
obligations under the Loan and the Guarantee.

 

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1.3

True-Up Shares.

(a)        Within ten (10) business days after the consummation of a Loan
Satisfaction Transaction, Pappajohn, Schaffer and Waxman (as the CCS Stockholder
Representative) shall execute and deliver to the PATY Debt Escrow Agent a
Disbursement Notice (as defined in the PATY Debt Escrow Agreement) that provides
for the distribution from escrow to the holders of CCS Capital Stock, in
accordance with Section 2.2(f) of the Merger Agreement, an amount of Escrow
Shares (as defined in the PATY Debt Escrow Agreement) equal to the lesser of (i)
the product of (A) the number of shares of PATY Common Stock issued or issuable
as a result of each Loan Satisfaction Transaction and (B) the Applicable
Multiplier (as defined below) and (ii) the balance of the Escrow Shares (as
defined in the PATY Debt Escrow Agreement) on the date of the Loan Satisfaction
Transaction (the shares received by holders of CCS Capital Stock pursuant to
this Section 1.3(a) are hereinafter referred to as the “Loan Satisfaction
True-Up Shares”).

(b)        Within ten (10) business days after the consummation of a PATY
Standby Sale, Pappajohn and Waxman shall execute and deliver to the PATY Debt
Escrow Agent a Disbursement Notice (as defined in the PATY Debt Escrow
Agreement) that provides for the distribution from escrow to the holders of CCS
Capital Stock, in accordance with Section 2.2(f) of the Merger Agreement, an
amount of Escrow Shares (as defined in the PATY Debt Escrow Agreement) equal to
the lesser of (i) the product of (A) the number of shares of PATY Common Stock
issued in connection with the PATY Standby Sale and (B) the Applicable
Multiplier, and (ii) the balance of the Escrow Shares (as defined in the PATY
Debt Escrow Agreement) on the Standby Commitment Date (the shares received by
holders of CCS Capital Stock pursuant to this Section 1.3(b) are hereinafter
referred to as the “Standby True-Up Shares” and together with the Loan
Satisfaction True-Up Shares, the “True-Up Shares”)

(c)        Any Escrow Shares (as defined in the PATY Debt Escrow Agreement)
remaining in escrow after the satisfaction of the Loan and application of
paragraphs (a) and (b) of this Section 1.3 shall be disbursed to PATY.

1.4        Applicable Multiplier.        For purposes of this Agreement, the
(“Applicable Multiplier”) shall mean quotient obtained by dividing (i) the
product of (A) the difference between (I) the sum of (a) the number of shares of
PATY Common Stock outstanding immediately prior to Closing, (b) the number of
shares of PATY Common Stock issuable upon exercise of PATY Options outstanding
immediately prior to Closing, and (c) the number of shares of PATY Common Stock
issuable upon the exercise of PATY Warrants outstanding immediately prior to
Closing and (II) the sum of (a) the number of Initial Pipe Securities and (b)
the number of Supplemental Pipe Securities the proceeds of which were not used
to pay the debt associated with the Loan, and (B) 1.857142 and (ii) the
difference between (A) the total number of shares of PATY Common Stock
outstanding (for the avoidance of doubt the shares held in escrow pursuant the
PATY Debt Escrow Agreement are outstanding for the purposes of this Section)
immediately following the Effective Time minus (B) the sum of (I) the result of
the calculations set forth above in (i) and (II) the number of shares held in
escrow pursuant to the PATY Debt Escrow Agreement.

SECTION 2     

 

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Sonenshine Partners Fee.

2.1

Payment of the Sonenshine Partners Fee.

(a)        On the Closing Date PATY shall make a payment to Sonenshine Partners
of $500,000 as partial or full payment for the Sonenshine Partners Fee.

(b)        PATY shall use its best efforts to pay the balance of the Sonenshine
Partners Fee, by entering into one or more transactions pursuant to which it
will sell equity securities of PATY and use the proceeds from such sale or sales
to pay the balance of the Sonenshine Partners Fee (each, a “Sonenshine Partners
Fee Satisfaction Transaction”); provided, however, that any proceeds derived
from the sale of such securities shall first be used to pay any remaining
balance of the Loan, and next to satisfy the balance of the Sonenshine Partners
Fee and fund the Dissenter Reserve Account (as defined below) on a pari passu
basis; and provided, further, that in all cases such sales of securities shall
be subject to the prior approval of the PATY Board of Directors pursuant to the
terms of Section 4 hereof.

2.2        CCS Sonenshine Partners Standby Commitment. If, despite its best
efforts, PATY is unable, following the satisfaction of the obligations of the
Loan, to pay the entire unpaid balance of the Sonenshine Partners Fee using the
proceeds from the Sonenshine Partners Fee Satisfaction Transactions, then each
of the CCS Guarantors shall be obligated, and hereby agrees, to purchase, at a
Five Percent Discount, on the Standby Commitment Date, a number of shares of
PATY Common Stock which is equal in value (as determined using the average
closing price for the ten trading days immediately preceding the Standby
Commitment Date), after taking into account the Five Percent Discount, to the
percentage of the remaining balance of the Sonenshine Partners Fee set forth
opposite each such CCS Guarantor below as of the Standby Commitment Date:

Essex IV – 40.5%

Essex V -

1%

Hickory – 23.8%

Radius -

20%

 

Psilos I –

13.7%

 

Psilos II -

1%

(the commitment of each CCS Guarantor to purchase the PATY Common Stock as set
forth in this Section 2.2 being referred to herein as the “CCS Sonenshine
Partners Standby Commitment”). Immediately upon the consummation of such sales
(the “CCS Sonenshine Partners Standby Sales”), PATY shall use the proceeds of
the CCS Sonenshine Partners Standby Sales to satisfy its obligation to pay the
unpaid balance of the Sonenshine Partners Fee.

2.3        

 

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Residual Shares.

(a)        Within ten (10) business days of the consummation of a Sonenshine
Partners Fee Satisfaction Transaction, Pappajohn, Schaffer and Waxman shall
execute and deliver to the Sonenshine Partners Escrow Agent a Disbursement
Notice (as defined in the Sonenshine Partners Escrow Agreement) that provides
for the distribution from escrow to PATY an amount of Escrow Shares (as defined
in the Sonenshine Partners Debt Escrow Agreement) equal to the lesser of (i) the
number of shares of PATY Common Stock issued or issuable as a result of such
Sonenshine Partners Fee Satisfaction Transaction and (ii) the balance of the
Escrow Shares (as defined in the Sonenshine Partners Debt Escrow Agreement).

(b)        Within ten business days of the consummation of a CCS Sonenshine
Partners Standby Sale, Pappajohn, Schaffer and Waxman shall execute and deliver
to the Sonenshine Partners Escrow Agent a Disbursement Notice (as defined in the
Sonenshine Partners Escrow Agreement) that provides for the distribution from
escrow to PATY an amount of Escrow Shares (as defined in the Sonenshine Partners
Debt Escrow Agreement) equal to the lesser of (i) the number of shares of PATY
Common Stock issued in connection with the CCS Sonenshine Partners Standby Sale
and (ii) the balance of the Escrow Shares (as defined in the Sonenshine Partners
Debt Escrow Agreement).

(c)        Any Escrow Shares (as defined in the Sonenshine Partners Debt Escrow
Agreement) remaining in escrow after the satisfaction of the Sonenshine Partners
Fee and the application of paragraphs (a) and (b) of this Section 2.3 (the
“Residual Shares”) shall be disbursed to the holders of CCS Capital Stock in
accordance with Section 2.2(f) of the Merger Agreement.

SECTION 3

Dissenter Liability.

3.1        Payment of Dissenter Liability. PATY shall reserve funds in an
account (the “Dissenter Reserve Account”) for the exclusive purpose of
satisfying any liability to Dissenting Stockholders deriving from the exercise
of appraisal rights under Section 262 of the GCL (the “Dissenter Liability”).
The Dissenter Reserve Account shall initially be funded by PATY, within ten
business days after the Closing Date, with the lesser of the Dissenter Reserve
(as defined below) and $1,000,000. Such amount may be increased as set forth
below in Section 3.2 or may be decreased as set forth below in this Section 3.1.
Unless otherwise required by law, PATY shall not make any payments related to
the Dissenter Liability until the obligations of the Loan are completely
satisfied. Once the obligations of the Loan are satisfied, PATY may use the
funds in the Dissenter Reserve Account to satisfy the Dissenter Liability as it
comes due (each instance, a “Dissenter Payment”). PATY may release the funds
from the Dissenter Reserve Account once all claims of the Dissenting
Stockholders have been settled or adjudicated to a final decision and all
opportunities for appeal have been exhausted.

3.2        CCS Dissenter Standby Commitment. Following the satisfaction of the
Loan, if the number of Dissenter Shares multiplied by the closing price of PATY
Common Stock on the first trading day immediately after the Closing Date (the
“Dissenter Reserve”) exceeds $1,000,000, PATY shall, contemporaneously with its
efforts to satisfy its obligations set forth in Section 2.1(b), until the
Standby Commitment Date, use its best efforts to raise funds up to an

 

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amount equal to (i) the Dissenter Reserve minus (ii) $1,000,000 (the “Net
Dissenter Liability”) through one or more transactions pursuant to which it
shall sell PATY’s equity securities; provided, however, that the proceeds from
such sale shall be used to satisfy the balance of the Sonenshine Partners Fee
and fund the Dissenter Reserve Account on a pari pasu basis; and provided
further that in all cases such sales of securities shall be subject to the prior
approval of the PATY Board of Directors pursuant to the terms of Section 4
hereof. Such funds raised in accordance with this Section 3.2 shall be added to
the Dissenter Reserve Account. If, despite its best efforts, PATY is unable to
raise funds equal in value to the Net Dissenter Liability by the Standby
Commitment Date, then each of the CCS Guarantors shall be obligated, and hereby
agrees, to purchase, at a Five Percent Discount, on the date that is ten
business days following the date when all claims by Dissenting Stockholders have
been settled or adjudicated to a final decision and all opportunities for appeal
have been exhausted (the “Dissenter Standby Commitment Date”), a number of
shares of PATY Common Stock from PATY which is equal in value (as determined
using the average closing price for the ten trading days immediately preceding
the Dissenter Standby Commitment Date), after taking into account the Five
Percent Discount, to a percentage of the positive amount, if any, equal to the
difference between the aggregate Dissenter Liability and the greater of (A) the
balance of the Dissenter Reserve Account plus the aggregate Dissenter Payments
made as of such date, and (B) $1,000,000 as of the Dissenter Standby Commitment
Date, equal to the percentages set forth in Section 2.2 above for each CCS
Guarantor (the “CCS Dissenter Standby Commitment”). Immediately upon the
consummation of such sales (the “CCS Dissenter Standby Commitment Sales”), PATY
shall use the proceeds of such sales, along with the balance of the Dissenter
Reserve Account, to satisfy the remaining Dissenter Liability. Notwithstanding
anything herein to the contrary, the obligations of the CCS Dissenter Standby
Commitment shall be extinguished if all claims of the Dissenting Stockholders
have been settled or adjudicated to a final decision and all opportunities for
appeal have been exhausted and the balance of the Dissenter Reserve Account
equals or exceeds the actual amounts due to the Dissenting Stockholders as a
result of the exercise of their appraisal rights, on or before the Standby
Commitment Date.

3.3        No Appraisal Right Exercise. In the event that no holder of CCS
Capital Stock has exercised his, her or its appraisal rights pursuant to the
terms of Section 262(d) of the GCL, this Section 3 shall have no force or effect
and no party to this Agreement shall have any obligation in connection herewith.

SECTION 4       The Committee. PATY shall use its best efforts to effectuate the
purposes of Sections 1, 2 and 3, including the creation and maintenance of a
Debt Elimination Committee (the “Committee”) of the Board of Directors, in
accordance with Section 141 of the Delaware General Corporation Law and Section
2.13 of the Corporation’s By-laws. The Committee shall be comprised exclusively
of the PATY Guarantors and Waxman and shall be delegated the exclusive authority
to pursue equity financing opportunities for the specific purpose of raising
funds to be used to satisfy the obligations of the Loan. Unless otherwise
provided herein, all decisions of the Committee shall require the consent of a
majority of the Committees members. Once the obligations of the Loan have been
satisfied, the Committee shall be expanded to include such other PATY board
member designated by the holders of a majority of PATY Common Stock held by the
CCS Guarantors and shall be delegated the exclusive authority to pursue equity

 

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financing opportunities for the specific purposes of raising funds to be used to
pay the balance of the Sonenshine Partners Fee and to satisfy the Dissenter
Liability. Furthermore, the Committee shall have the exclusive authority to
negotiate the terms and conditions of such financings, consistent with its
fiduciary duties, for PATY, subject to the final approval by the PATY Board of
Directors of any such transaction. The PATY Board of Directors shall approve any
financing transaction presented by the Committee involving the sale of the PATY
Common Stock and/or warrants to purchase PATY Common Stock, provided that the
sale price of such common stock and/or the exercise price for such warrants must
be in any event greater than or equal to 90 percent of the average closing price
for the twenty trading days immediately preceding the date of such sale. The
PATY Board of Directors shall approve any financing transaction presented by the
Committee relating to the sale of either (i) securities other than PATY Common
Stock or warrants to purchase PATY Common Stock (as contemplated in the previous
sentence, including the proviso) provided the Committee unanimously recommends
such sale or (ii) ACS common stock unless such approval would, upon the advice
of counsel, reasonably be expected to cause the Board of Directors to breach its
fiduciary duties to PATY’s stockholders. The Committee shall remain in effect
until the later of (a) such time that (1) the Loan is repaid and all obligations
under the Loan and the Guarantee have been satisfied and extinguished, (2) the
balance of the Sonenshine Partners Fee has been paid, and (3) the Dissenter
Reserve Account plus all Dissenter Payments made exceeds the value of the Net
Dissenter Liability or (b) the consummation of (1) the PATY Standby Sales, (2)
the CCS Sonenshine Partners Fee Standby Sales, and (3) the CCS Dissenter Standby
Commitment Sales.

SECTION 5

Election of Directors.

5.1        Voting for Directors. At each annual meeting of the stockholders of
PATY and at each special meeting of the stockholders of PATY called for the
purposes of electing directors of PATY, and at any time at which stockholders of
PATY shall have the right to, or shall, vote for or consent to the election of
directors, then, in each such event, each Investor shall vote all shares of PATY
Common Stock, and any other shares of voting stock of PATY then owned (or
controlled as to voting rights) by it or him, whether by purchase, exercise of
rights, warrants or options, stock dividends or otherwise:

(a)        to fix and maintain the number of directors on the Board of Directors
at seven (7);

(b)        to elect to the Board of Directors three designees nominated by the
holders of at least a majority of PATY Common Stock held by the CCS Guarantors,
John Pappajohn or his designee and Derace Schaffer or his designee.

(c)        to elect to the Board of Directors two (2) directors who meet all
requirements of independence under the Securities Exchange Act of 1934, as
amended, applicable to PATY and who are approved by the unanimous consent of
members of the board selected in accordance with Section 5.1(b) of this
Agreement.

 

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5.2        Cooperation. PATY shall use its best efforts to effectuate the
purposes of this Section 5, including promoting the adoption of any necessary
amendment of the By-laws of PATY and its Certificate of Incorporation. In
addition, PATY, Waxman, and the Investors shall take such action as is necessary
to convene annual and/or special meetings of the Board of Directors and annual
and/or special meetings of stockholders for the election of the directors (or to
act by written consent) in order to elect and re-elect the directors in
accordance with this Section 5. Such action shall include, but not be limited
to, the holding of a meeting of the Board of Directors immediately following the
Effective Time for the purpose of electing the directors in accordance with this
Section 5.

SECTION 6        Wells Fargo Credit Line. Under no circumstances shall PATY draw
down funds on the Wells Fargo Credit Line without the written consent of
Pappajohn and Schaffer. Without limitation, any breach of this Section shall
relieve Pappajohn and Schaffer of all obligations it may have under Section 1 of
this Agreement.

SECTION 7        Charter Amendment. If the number of shares of PATY Common Stock
needed to be issued by PATY in order to consummate a transaction or transactions
contemplated by Sections 1.1(b), 2.1(b) or 3.2 of this Agreement exceeds the
number of shares of PATY Common Stock available to be issued by PATY in
accordance with its Certificate of Incorporation, each Investor hereto agrees to
vote all of their shares of PATY Common Stock in favor of any proposal presented
to the holders of PATY Common Stock which would provide for an amendment to
PATY’s Certificate of Incorporation to increase the number of authorized shares
of PATY Common Stock to a level that would allow PATY to consummate such
transactions.

SECTION 8       Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may proceed to protect and enforce its or their rights, either by
suit in equity and/or action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement. The
rights, powers and remedies of the parties under this Agreement are cumulative
and not exclusive of any other right, power or remedy which such parties may
have under any other agreement or law. No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude any
other or further assertion or exercise thereof.

SECTION 9       Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of PATY, each of the
Investors and Waxman and the respective successors and permitted assigns of
PATY, each of the Investors and Waxman. Prior to the transfer of any shares of
PATY Common Stock by any Investor, such transferee must (unless such transferee
is already an Investor), as a condition to such transfer, deliver to PATY and
the other Investors, a written instrument by which such transferee identifies
itself, identifies the securities of PATY to be acquired by it and agrees to be
bound by the

 

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obligations imposed hereunder to the same extent as if such transferee were an
Investor hereunder. Upon receipt of such notice by PATY and the other Investors,
the transfer of the PATY Common Stock may be consummated and the transferee
shall be deemed to be an Investor hereunder.

SECTION 10      Duration of Agreement. Except as specifically set forth herein,
the rights and obligations of PATY, each Investor and Waxman set forth herein
shall survive indefinitely, unless and until, by their respective terms, they
are no longer applicable.

SECTION 11     Entire Agreement. This Agreement, together with the other
writings referred to herein or delivered pursuant hereto which form a part
hereof, contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous arrangements
or understandings with respect thereto.

SECTION 12     Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class registered,
certified or overnight mail, postage prepaid, or telecopied with a confirmation
copy by regular mail, addressed or telecopied, as the case may be, to such party
at the address or telecopier number, as the case may be, set forth below or such
other address or telecopier number, as the case may be, as may hereafter be
designated in writing by the addressee to the addressor listing all parties:

(i)

if to PATY, to:

46 Prince Street

Rochester, NY 14601

Attention: Chief Executive Officer

Telecopier: (585) 244-1367

with a copy to:

McCarter & English, LLP

Four Gateway Center

100 Mulberry Street

Newark, NJ 07102

Attention: Jeffrey A. Baumel, Esq.

Telecopier: (973) 624-7070

(ii)

if to John Pappajohn:

Equity Dynamics

2116 Financial Center

De Moines, IA 50309

Telecopier: (515) 244-2346

 

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(iii)

if to Derace Schaffer:

3489 Elmwood Ave

Rochester, NY 14610

Telecopier: __________

(iv)

if to Albert Waxman:

Psilos Group Invesors, LLC

625 Avenue of the Americas

New York, NY 10011

Telecopier: __________

(v)

if to Essex:

____________________

____________________

____________________

____________________

Attention: ____________

Telecopier:____________

(vi)

if to Hickory:

____________________

____________________

____________________

____________________

Attention: ____________

Telecopier:____________

(vii)

if to Radius:

____________________

____________________

____________________

____________________

Attention: ____________

Telecopier:____________

(viii)

if to Psilos:

625 Avenue of the Americas

New York, NY 10011

Attention: ____________

Telecopier:____________

 

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All such notices, requests, consents and communications shall be deemed to have
been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of mailing, on the third business day following the
date of such mailing, (c) in the case of overnight mail, on the first business
day following the date of such mailing, and (d) in the case of facsimile
transmission, when confirmed by facsimile machine report.

SECTION 13     Changes. The terms and provisions of this Agreement may be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, only pursuant to the written consent of PATY, each of the Investors
and Waxman.

SECTION 14     Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

SECTION 15     Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.

SECTION 16    Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and
vice-versa.

SECTION 17      Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

SECTION 18      Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, excluding choice of law
rules thereof.

IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
first above written.

PATIENT INFOSYSTEMS, INC.

 

By:           

Name:

Title:

 

 

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John Pappajohn

 

 

Derace Schaffer

 

ESSEX WOODLANDS HEALTH VENTURES FUND IV, L.P.

 

By:           

Name:

Title:

 

ESSEX WOODLANDS HEALTH VENTURES FUND V, L.P.

 

By:           

Name:

Title:

 

HICKORY VENTURE CAPITAL CORPORATION

By:           

Name:

Title:

RADIUS VENTURE PARTNERS I, L.P.

By:           

Name:

Title:

 

 

-12-

 

 

 

PSILOS GROUP PARTNERS I, L.P.

By:           

Name:

Title:

PSILOS GROUP PARTNERS II, L.P.

By:           

Name:

Title:

 

Albert Waxman

 

 

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