Document:

Exhibit 4.3

 

Genworth
Life and Annuity Insurance Company

 

Funding Agreement

 

POLICYHOLDER: 
Genworth Global Funding Trust 2008-22, its successors and permitted assignees

 

POLICY NUMBER: GS-R6038

 

EFFECTIVE DATE: May 8,
2008

 

ISSUE STATE:  Virginia

 

Genworth
Life and Annuity Insurance Company (“GLAIC”) (which term includes its
successors and permitted assignees) and the Policyholder hereby agree to the
terms of this funding agreement (this “Policy”).  This Policy, including the attached
Accumulation Fund Schedule, and any amendments thereto, constitutes the entire
contract between GLAIC and the Policyholder. 
This Policy is delivered in the Issue State and governed by the laws of
that state.

 

In witness whereof, GLAIC
and the Policyholder have agreed to this Policy as of the Effective Date and
caused the same to be in full force and effect.

 

 

	
  

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  President

  

 

Genworth Life and Annuity
Insurance Company

6610 West Broad Street

Richmond, VA  23230

1-800-635-8056

 

 

	
  Table of Contents

  
	
   

  
	
  Section 1 – Accumulation Fund – Establishment
  and Operation

  
	
   

  
	
  Section 2 – Payments From the Accumulation Fund

  
	
   

  
	
  Section 3 – Termination of Agreement

  
	
   

  
	
  Section 4 – General Provisions

  
	
   

  
	
  Section 5 – Definitions

  

 

 

SECTION 1
– ACCUMULATION FUND – ESTABLISHMENT AND OPERATION

 

1.1                         POLICY PAYMENTS. 
The Policyholder agrees to pay to GLAIC in the currency specified in the
Accumulation Fund Schedule (the “Specified Currency”), and by wire transfer,
the Net Deposit Amount on the Deposit Date. 
Regardless of the Effective Date of the Policy or the Deposit Date
specified in the Accumulation Fund Schedule, this Policy shall become effective
only upon the receipt by GLAIC, or its designee, of the Net Deposit Amount.

 

1.2                         ESTABLISHMENT OF THE
ACCUMULATION FUND.  Upon the receipt by GLAIC of the Net Deposit
Amount, GLAIC will establish an Accumulation Fund.  The Accumulation Fund is a general account
record that reflects the Fund Balance under this Policy.  GLAIC is neither a trustee nor a fiduciary
with respect to the Accumulation Fund. 
The Net Deposit Amount is allocated to GLAIC’s general account for
investment but all funds received under this Policy will become the exclusive
property of GLAIC without any duty or requirement for segregation or separate
investment.  The Fund Balance is not
affected by the investment results of the assets held in the general account.

 

1.3                         INTEREST ON THE
ACCUMULATION FUND.  The Guaranteed Rate for the Accumulation Fund
is effective until the Fund Balance is paid in full to the Policyholder.  Interest is credited based upon the
methodology specified in the Accumulation Fund Schedule.

 

1.4                         VALUE OF THE ACCUMULATION
FUND.  The Fund Balance on any given day equals the Deposit
Amount plus interest, if any, credited thereon at the Guaranteed Rate, less any
payments made under Section 2 of the Policy.

 

SECTION 2
– PAYMENTS FROM THE ACCUMULATION FUND

 

2.1                         PERIODIC
PAYMENTS.  GLAIC will pay the Policyholder the amounts
specified in the Accumulation Fund Schedule as Periodic Payouts, including the
Maturity Payout, on the dates specified (subject to Section 4.7).  Such payment amounts are adjusted to reflect
any other payment payable under this Section of the Policy.  The interest factor used in making such
adjustments is the Guaranteed Rate.

 

2.2                         OPTIONAL REPAYMENT.  If so indicated in the Accumulation Fund
Schedule, GLAIC shall pay to the Policyholder the amount the Policyholder needs
to redeem or repay any notes or other instruments issued by the Policyholder
and backed by this Policy, pursuant to any limited right of redemption or
repayment contained in such note or instrument. 
GLAIC may require reasonable evidence that the redemption or repayment
request satisfies all the terms and conditions described in the prospectus,
prospectus supplement and/or pricing supplement applicable to such note or
other instrument.  Additional
restrictions, if any, on the Policyholder’s reimbursement rights under this Section may
be included in the Accumulation Fund Schedule.

 

1

 

2.3                         OPTIONAL REDEMPTION. 
If so indicated in the Accumulation Fund Schedule, GLAIC may elect
to pay the Policyholder all or any part of the Fund Balance on the Call Dates
specified in the Accumulation Fund Schedule. 
Unless otherwise provided in the Accumulation Fund Schedule, GLAIC will
give the Policyholder at least thirty-five (35) calendar days and no more than
seventy-five (75) calendar days notice of its intent to make such
pre-payment.  No adjustment will be made
to the amount of such payment, unless such adjustment is specifically provided
for in the Accumulation Fund Schedule.

 

2.4                         MATURITY PAYMENTS.  GLAIC shall pay the Policyholder the Fund
Balance on the Maturity Date.

 

2.5                         FORM OF
PAYMENT.  All payments GLAIC makes to the Policyholder
will be made in the Specified Currency, by wire transfer, unless otherwise
agreed in writing by the parties hereto. 
Unless otherwise stated in the Accumulation Fund Schedule, all payments
GLAIC makes will be net of any applicable withholding or deduction for or on
account of any present or future taxes, duties, levies, assessments or other
governmental charges of whatever nature imposed or levied by or on behalf of
any governmental authority having the power to tax.  Unless otherwise specified in the Accumulation
Fund Schedule, such net payments fully satisfy GLAIC’s obligation to the Policyholder
with respect to the full amount due.

 

SECTION 3
– TERMINATION OF AGREEMENT

 

3.1                       AUTOMATIC
TERMINATION/ACCELERATION.  This Policy
terminates with respect to the Accumulation Fund when the Fund Balance is zero
and GLAIC’s obligations hereunder shall automatically accelerate upon the
occurrence of an Event of Default described in Section 3.3(a).

 

3.2                       EARLY
TERMINATION/ACCELERATION.  The Policyholder may
accelerate this Policy by giving GLAIC not less than two (2) Business Days’
written notice upon the occurrence of an Event of Default specified in Section 3.3
b., c. or d. below.  GLAIC may accelerate
this Policy, in whole but not in part, by giving the Policyholder not less than
forty-five (45) days’, but no more than seventy-five (75) days’, prior written
notice of the occurrence of a Tax Event as described in Section 3.4,
provided, however that this Policy shall not be terminated until the Fund
Balance has been paid to the Policyholder in full.

 

3.3                       EVENTS OF DEFAULT. 
An Event of Default occurs if:

 

a.               GLAIC is dissolved or a resolution is
passed or proceeding is instituted for the winding-up, liquidation or similar
arrangement of GLAIC (other than pursuant to a consolidation, amalgamation or
merger);

 

b.              GLAIC breaches any material obligation,
representation or certification contained herein, provided that there is no
bona fide dispute as to whether such breach has occurred and that such breach
continues for fifteen (15) Business Days following the Policyholder’s written
notice to GLAIC of such breach;

 

2

 

c.               GLAIC fails to make any required Periodic
Payout (other than the Maturity Payout) described in the Accumulation Fund Schedule
or any other payment described in Sections 2.2 or 2.3 of this Policy  or
any other funding agreement GLAIC issues in connection with the Program, and such
failure continues for seven (7) Business Days after the due date thereof;

 

d.              GLAIC fails to make the Maturity Payout
described in the Accumulation Fund Schedule or in any other funding agreement
GLAIC issues in connection with the Program and such failure is continuing as
of the end of the Business Day following the due date thereof.

 

3.4                       TAX EVENT.  A “Tax Event” occurs if GLAIC has received an
opinion of independent legal counsel stating in effect that there is more than
an insubstantial risk that as a result of 
any amendment to, or change (including any announced prospective change)
in, the laws (or regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any governmental authority in the United States, which amendment or change is
enacted, promulgated, issued or announced on or after the Deposit Date, the
Policyholder is or will be within ninety (90) days of the date thereof, (1) subject
to an entity level U.S. federal income tax with respect to interest accrued or
received on this Policy or (2) subject to more than a de minimis amount of
taxes, duties or other governmental charges.

 

Notwithstanding anything to the
contrary in this Section 3, if GLAIC shall comply in all respects with the
requirements of this Section 3, but an event of default has occurred with
respect to the notes backed by the Policy and as a result payments with respect
to the notes have been accelerated, otherwise than by reason of any default
under this Policy by GLAIC, no Event of Default (as defined above) under this
Policy shall be deemed to have occurred, no payments with respect to this Policy
shall be accelerated and GLAIC will remain obligated to make payments under
this Policy as if no Event of Default had occurred with respect to the notes.

 

SECTION 4 –
GENERAL PROVISIONS

 

4.1                       PAYMENT UPON
TERMINATION.  Unless otherwise specified in the Accumulation
Fund Schedule, GLAIC shall pay the Policyholder the Fund Balance on the
Maturity Date.  Such payment fully
discharges GLAIC’s obligation to the Policyholder under this Policy.

 

4.2                       DISCLAIMER OF
RESPONSIBILITY.  GLAIC’s only liability
is as set out in this Policy, including the Accumulation Fund Schedule attached
hereto.  In performing its obligations
under this Policy, GLAIC is not acting as a fiduciary or agent for the
Policyholder or anyone else regardless of whether or not they are directly or
indirectly associated with the Policyholder.

 

4.3                       NOTICES.  All agreements, notices, directions,
consents, elections or other communication (“Notices”) required by this Policy
must be in writing, directed to the applicable address designated on the face
page.  Any such Notices may be given by
facsimile transmission or other acceptable electronic means.  All Notices are effective when received.

 

3

 

4.4                         AMENDMENTS.  This Policy may be amended only by mutual
written agreement between the parties hereto.

 

4.5                         CONFLICT.  To the extent that there is a conflict in
terms between the Policy and the Accumulation Fund Schedule, the Accumulation
Fund Schedule will control the conduct of the parties.

 

4.6                         TRANSFERABILITY/ASSIGNMENT.  This Policy and the Accumulation Fund
established pursuant to it may solely be sold, assigned, transferred or pledged
in accordance with, and for the purposes contemplated by, the documents and
agreements governing the establishment and operation of the Program.  GLAIC will maintain a record of ownership of
this Policy on its books and records.

 

4.7                         PAYMENTS BY
GLAIC.  When this Policy provides that GLAIC will
make a payment to the Policyholder, such payment shall be made to the
Policyholder or to the agent the Policyholder designates.  Unless otherwise specified in the
Accumulation Fund Schedule, if a payment date is not a Business Day, GLAIC will
pay such amount on the next Business Day.

 

4.8                         WAIVER BY GLAIC.  At the Policyholder’s request, GLAIC may
waive any terms, conditions or adjustments provided for in this Policy.  Any such waiver is subject to any limitations
GLAIC specifies in making the waiver and does not require GLAIC to grant
similar future waivers to the Policyholder or anyone else.  A failure or delay in exercising a right
under this Policy does not waive GLAIC’s right or ability to assert such right
in the future.

 

4.9                         MUTUAL REPRESENTATIONS.  The parties mutually represent and warrant,
each to the other, that:

 

a.               This Policy is its legal, valid and
binding obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditor’s rights, and subject, as to enforceability, to general
principals of equity, regardless of whether enforcement is sought in proceeding
in equity or law;

 

b.              It has the power to enter into this
Policy and to consummate the transactions contemplated hereby;

 

c.               All information provided in connection
with this Policy is, to the best of its knowledge and belief, true, correct and
complete;

 

d.              The execution and the delivery of this
Policy and the performance of obligations hereunder do not and will not
constitute or result in a default, breach or violation, of the terms or
provisions of its certificate, articles or charter of incorporation,
declaration of trust, by-laws or any agreement, instrument, mortgage, judgment,
injunction or order applicable to it or any of its property.

 

4

 

4.10                  TAX
PROVISIONS.  The Policyholder and each transferee and
assignee of this Policy, to the extent required by law, agree to provide GLAIC
with any properly completed tax forms that are needed for GLAIC to satisfy its
tax reporting obligations with respect to amounts held under this Policy.  This Policy is intended to be ignored for
U.S. federal, state and local income and franchise tax purposes. To the extent
it cannot be ignored, GLAIC and the Policyholder and each transferee and
assignee of this Policy agree to treat this Policy as GLAIC’s debt obligation
for U.S. federal, state and local income and franchise tax purposes. 

 

SECTION 5 –
DEFINITIONS

 

5.1        POLICY DEFINITIONS. 
The following terms have the meanings indicated:

 

“Accumulation
Fund” is the
accounting record GLAIC will establish under this Policy as described in Section 1.2.

 

“Accumulation
Fund Schedule” is
attached to this Policy and establishes the terms of the Accumulation Fund.

 

“Business
Day” is any day,
other than Saturday or Sunday, that is neither a legal holiday nor a day on
which commercial banks are authorized or required by law, regulation or executive
order to close, or are otherwise closed, in each Business Day City specified in
the Accumulation Fund Schedule.

 

“Call
Date” is the day
or days prior to the Stated Maturity Date, if any, specified in the
Accumulation Fund Schedule attached to this Policy, on which GLAIC may elect to
pay the Policyholder all or any part of the Fund Balance.  If no Call Date is indicated in an
Accumulation Fund Schedule, GLAIC will pay to the Policyholder the Fund Balance
prior to the Stated Maturity Date only to the extent provided in Section 3.2.

 

“Deposit
Amount” is the
amount GLAIC credits to the Accumulation Fund on the Deposit Date as set forth
in the Accumulation Fund Schedule.

 

“Deposit
Date” is the
date, specified in the Accumulation Fund Schedule, on which GLAIC receives the
Net Deposit Amount.

 

“Event
of Default” has
the meaning described in Section 3.3.

 

“Fund
Balance” is the
value of the Accumulation Fund, determined pursuant to Section 1.4.

 

“Guaranteed
Rate” is the
interest rate, if any, applied to the Accumulation Fund, as stated in the
Accumulation Fund Schedule.

 

“Indenture” is that certain indenture agreement,
made between the Policyholder and the Indenture Trustee related to the notes to
be supported by this Policy as such agreement may be amended, supplemented or
replaced from time to time.

 

5

 

“Indenture
Trustee” is the
party specified as trustee under the Indenture, or its successor.

 

“Maturity
Date” is the
earlier of (i) the Stated Maturity Date and (ii) each date on which
the Fund Balance is payable in full to the Policyholder pursuant to an Event of
Default, Optional Repayment, Optional Redemption or otherwise.  Unless otherwise indicated in the
Accumulation Fund Schedule, if any of the foregoing dates is not a Business
Day, the Maturity Date is the next following Business Day.  Interest accrues during such delay only if
specified in the Accumulation Fund Schedule.

 

“Net
Deposit Amount”
is the amount GLAIC receives from the Policyholder on the Deposit Date as set
forth in the Accumulation Fund Schedule.

 

“Program” is the Genworth Global Funding program,
as described in the prospectus relating thereto, including the applicable
prospectus supplement or pricing supplement or in any amendment thereto.

 

“Stated Maturity
Date” is the
date, as set forth on the Accumulation Fund Schedule, when the Fund Balance is
originally due and payable to the Policyholder.

 

“Tax
Event” has the
meaning described in Section 3.4.

 

5.2                   OTHER DEFINITIONS. 
Other capitalized terms appearing in this Policy have the meanings indicated
on the Policy’s face page or in the Accumulation Fund Schedule.

 

6

 

GLAIC

Accumulation
Fund Schedule – Fixed Rate

 

Policy
Number: GS-R6038

 

	
  Deposit
  Date:

  	
   

  	
  May 8, 2008 or the
  date the deposit is actually received by GLAIC

  
	
   

  	
   

  	
   

  
	
  Specified
  Currency:

  	
   

  	
  United
  States Dollars

  
	
   

  	
   

  	
   

  
	
  Deposit
  Amount:

  	
   

  	
  $9,369,000.00

  
	
   

  	
   

  	
   

  
	
  Net
  Deposit Amount:

  	
   

  	
  $9,181,620.00

  
	
   

  	
   

  	
   

  
	
  Stated
  Maturity Date:

  	
   

  	
  May 15, 2023

  
	
   

  	
   

  	
   

  
	
  Guaranteed
  Rate:

  	
   

  	
  6.05%

  

 

	
  Crediting
  Period:

  	
   

  	
  The first Crediting
  Period shall be a long period commencing on the Deposit Date to but 

  
	
   

  	
  excluding
  November 15, 2008. Each subsequent Crediting Period shall be the
  semi-annual period occurring between the 15th of each May and
  November thereafter. The final Crediting Period will be the period from
  and including November 15, 2022, to but excluding May 15, 2023.

  
				

 

	
  Interest
  Crediting:

  	
   

  	
  Interest is credited
  based upon a 30/360 basis, applied to
  the Fund Balance each day.

  

 

	
  Periodic
  Payouts:

  	
   

  	
  On the 15th of each May and November, GLAIC will
  pay the Policyholder all accrued and 

  
	
   

  	
  unpaid interest (if
  such date is not a Business Day, the Periodic Payout will be made on the next
  following Business Day, and in such cases the amount of interest shall not be
  adjusted for non-Business Days) (each, an “Interest Payment Date”); provided, however, that
  the final Periodic Payout shall be on the Maturity Date, on which date all
  accrued and unpaid interest will be paid.

  
				

 

	
  Optional
  Repayment:

  	
   

  	
  Optional Repayments
  under Section 2.2 of the Policy may be made solely with respect to the 

  
	
   

  	
  “Survivor’s Option”
  described in Pricing Supplement No. 027 dated April 28, 2008 to the
  Prospectus Supplement dated December 9, 2005 related to the Program.

  
				

 

 

	
  Call
  Terms:

  	
   

  	
  Under Section 2.3
  of the Policy, GLAIC may elect to pay the Policyholder all of the Fund 

  
	
   

  	
  Balance on May 15,
  2011, or as of any date thereafter when a Periodic Payout is due (the “Call
  Dates”).

  
				

 

	
  Maturity
  Payout:

  	
   

  	
  On the Maturity Date,
  GLAIC will pay to the Policyholder the Fund Balance. If such date is 

  
	
   

  	
  not a Business Day, the
  Maturity Payout will be made on the next following Business Day; provided, however, that
  interest shall not accrue beyond the Maturity Date.

  
				

 

	
  Business
  Day City(s):

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
   

  
	
  Other
  Terms:

  	
   

  	
  None

  

 

*********************

 

The calculation of the Guaranteed Rate and all
other payment terms of this Policy will be determined in the manner described
in the “Description of the Notes” section in the Prospectus Supplement.

 

*********************

 

	
  GENWORTH LIFE AND
  ANNUITY

  	
   

  	
  GENWORTH GLOBAL FUNDING
  TRUST 2008-22 2005-A

  
	
  INSURANCE
  COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Pamela C. Asbury

  	
   

  	
  By*: 

  	
  /s/ Nancy J. Arvin

  
	
   

  	
  Pamela C. Asbury

  	
   

  	
   

  	
  Nancy J. Arvin

  
	
   

  	
   

  	
   

  
	
  Official Title:

  	
  Vice President

  	
   

  	
  Official Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  May 6,
  2008

  	
   

  	
  Date:

  	
  May 6, 2008

  
									

 

* It is expressly
understood and agreed that (a) this Policy is executed and delivered by
U.S. Bank National Association (“USB”) not individually or personally, but
solely as Trustee of the Genworth Global Funding Trust 2008-22 in the exercise
of powers and authority conferred and vested in it (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by USB but is made and intended for the purpose of binding only the
Trust, (c) nothing herein contained shall be construed as creating any
liability on USB 

 

 

individually or
personally, to perform any covenant either express or implied contained herein,
all such liability, if any being expressly waived by the parties hereto and by
any person claiming by, through or under the parties hereto and (d) under
no circumstances shall USB be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warrant or covenant made or undertaken by the
Trust under this Policy or any other related documents.

 

*********************Exhibit 10.1

 

EARN OUT AGREEMENT

 

This EARN OUT AGREEMENT (this
“Agreement”) is made and entered into as
of May 2, 2008, by and between Delta Health Systems, Inc., a Florida corporation
(“Seller”), and InfoLogix Systems
Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, pursuant to an Asset
Purchase Agreement (the “Purchase Agreement”),
dated as of the date hereof, among InfoLogix, Inc., a Delaware corporation
(the “Parent”), the Company, Seller, and the
stockholders of Seller (together, the “Stockholders”),
Seller is selling the Purchased Assets to the Company;

 

WHEREAS, the Purchase
Agreement provides that Seller shall be eligible to receive additional consideration
of up to $1,000,000 based upon the financial performance of the Business (as defined
in Section 1), to be calculated based upon Gross Revenue (as
defined in Section 1) generated by the Business during each of the
First Earn Out Period and the Second Earn Out Period (as defined in Section 1);
and

 

WHEREAS, Seller and the
Company have agreed that determination and payment of the additional
consideration contemplated by the Purchase Agreement is to be in accordance
with the terms of this Agreement.

 

NOW, THEREFORE, in
consideration of the premises and of the respective covenants and provisions contained
in this Agreement, the parties hereby agree as follows:

 

1.             Definitions.           For purposes of this Agreement, the terms listed below
have the following meanings.  Capitalized
terms used and not otherwise defined in this Agreement have the meanings given
to such terms in the Purchase Agreement.

 

“Additional
Earn Out Payment” shall have the meaning set forth in Section 2(d).

 

“Additional
Earn Out Ratio” shall mean the quotient of (a) the Cumulative
Gross Revenue divided by (b) $9,000,000. 
The Additional Earn Out Ratio shall be calculated to two decimal places
and shall be rounded down to the nearest hundredth.

 

“Business”
shall mean the business of providing strategic cost management consulting
services and web-based management data collection to the healthcare industry, as conducted
by Seller as of the Closing Date.  Any
businesses providing similar services that are acquired by the Company after
the date hereof shall not be considered part of the “Business” hereunder unless
otherwise expressly agreed by Seller and the Company in writing.

 

“Cause”
shall have the meaning set forth in the Employment Agreement between the
Company and Michael Talerico dated as of the date hereof and the Employment Agreement
between the Company and Michael Talerico II dated as of the date hereof.

 

“Cumulative
Gross Revenue” shall mean the sum of Gross Revenue for the First
Earn Out Period plus Gross Revenue for the Second Earn Out Period.

 

 

“Dispute
Auditors” shall have the meaning set forth in Section 3(b)(ii).

 

“Earn Out
Period” shall mean the First Earn Out Period and/or the Second Earn Out
Period, as applicable.

 

“Earn Out
Ratio” shall mean, for the applicable Earn Out Period, the quotient
of (a) the Gross Revenue for such Earn Out Period divided by (b) $4,500,000.
 The Earn Out Ratio shall be calculated
to two decimal places and shall be rounded down to the nearest hundredth.

 

“Earn Out
Statement”  shall have the
meaning set forth in Section 3(b)(i) below.

 

“First Earn
Out Amount” shall have the meaning set forth in Section 2(b).

 

“First
Earn Out Period” shall mean the period
beginning on the Closing Date and ending on June 30, 2009.

 

“First
Earn Out Target” shall mean Gross
Revenue earned during the First Earn Out Period equal to $4,500,000.

 

“GAAP”
shall mean generally accepted accounting principles in the Unites States as in
effect from time to time, applied consistently.

 

“Gross
Revenue” shall mean, for the Earn Out Period, the Gross Revenue of
the Business as determined in accordance with GAAP and Exhibit A to
this Agreement.

 

“Second
Earn Out Amount” shall have the
meaning set forth in Section 2(c).

 

“Second
Earn Out Period” shall mean the period
beginning on July 1, 2009 and ending on August 31, 2010.

 

“Second
Earn Out Target” shall mean Gross
Revenue earned during the Second Earn Out Period equal to $4,500,000.

 

2.             Earn Out Amounts.

 

(a)          For
each of the First Earn Out Period and the Second Earn Out Period, the Company
shall, pursuant to Section 3, calculate Gross Revenue for such
period.

 

(b)          For
the First Earn Out Period, Seller shall be entitled to receive up to $500,000 based
upon the Earn Out Ratio (the “First  Earn Out Amount”).  The
First Earn Out Amount shall be calculated as follows:

 

	
  Earn Out Ratio

  	
   

  	
  First Earn Out Amount

  
	
   

  	
   

  	
   

  
	
  Less
  than 0.80

  	
   

  	
  $0

  
	
   

  	
   

  	
   

  
	
  Between
  0.80 and 0.99

  	
   

  	
  The
  product of the (i) Earn Out Ratio multiplied by
  (ii) $500,000

  
	
   

  	
   

  	
   

  
	
  1.00
  or greater

  	
   

  	
  $500,000

  

 

2

 

(c)          For
the Second Earn Out Period, Seller shall be entitled to receive up to $500,000 based
upon the Earn Out Ratio (the “Second  Earn Out Amount”). 
The Second Earn Out Amount shall be calculated as
follows:

 

	
  Earn Out Ratio

  	
   

  	
  Second Earn Out Amount

  
	
   

  	
   

  	
   

  
	
  Less
  than 0.80

  	
   

  	
  $0

  
	
   

  	
   

  	
   

  
	
  Between
  0.80 and 0.99

  	
   

  	
  The
  product of the (i) Earn Out Ratio multiplied by
  (ii) $500,000

  
	
   

  	
   

  	
   

  
	
  1.00
  or greater

  	
   

  	
  $500,000

  

 

(d)          Without limiting the foregoing, Seller shall be
entitled to receive an additional amount in respect of the Cumulative Gross
Revenue based on the Additional Earn Out Amount Ratio (the “Additional Earn Out Amount”).  The Additional Earn Out Amount, if any, shall
be calculated as follows:

 

	
  Additional Earn Out Ratio

  	
   

  	
  Additional Earn Out Amount

  
	
   

  	
   

  	
   

  
	
  Less
  than 0.80

  	
   

  	
  $0

  
	
   

  	
   

  	
   

  
	
  Between
  0.80 and 0.99

  	
   

  	
  The
  sum of (i) the product of the Additional Earn Out Ratio multiplied by
  $1,000,000 minus (ii) the sum of the First Earn
  Out Amount and the Second Earn Out Amount

  
	
   

  	
   

  	
   

  
	
  1.00
  or greater

  	
   

  	
  The
  sum of (i) $1,000,000 minus (ii) the sum of the First Earn
  Out Amount and the Second Earn Out Amount

  

 

(e)          Notwithstanding
the foregoing and subject to Section 4(c), (i) if the Company
terminates the employment of both Michael Talerico and Michael Talerico II without
Cause prior to the end of the First Earn Out Period, then the full First Earn
Out Amount of $500,000 and the full Second Earn Out Amount of $500,000 shall be
deemed to have been earned, and the Company shall pay such amounts to Seller by
wire transfer of immediately available funds to an account or accounts
designated in writing by Seller, or (ii) if the Company terminates the
employment of both Michael Talerico and Michael Talerico II without Cause after
the end of the First Earn Out Period but prior to the end of the Second First
Earn Out Period and the Gross Revenue for the First Earn Out Period was at
least $3,600,000, then the full Second Earn Out Amount of $500,000 shall be
deemed to have been earned, and the Company shall pay such amount to Seller by
wire transfer of immediately available funds to an account or accounts
designated in writing by Seller.

 

3.             Computation of Gross
Revenue.

 

(a)          Calculation of Gross Revenue.  The
components of Gross Revenue for the Earn Out Period shall be determined in
accordance with GAAP and shall be calculated as set forth on 

 

3

 

Exhibit A.

 

(b)           Time of Determination.

 

(i)           The Company shall prepare or cause to be prepared and
delivered to Seller, within 90 days after the end of each of the First Earn Out
Period and the Second Earn Out Period, a written statement setting forth the
computation of Gross Revenue (including, with respect to the Second Earn Out
Period, the Cumulative Gross Revenue) for the applicable Earn Out Period in
sufficient detail to permit Seller to confirm that such calculations have been
made in accordance with this Agreement (the “Earn Out
Statement”).  Seller may
provide written notice of objection to the Company’s determination of Gross
Revenue and/or Cumulative Gross Revenue within 30 days after receipt of the Earn
Out Statement by Seller, which notice shall state in reasonable detail the
specific reasons for its objection.  If
Seller does not provide timely notice of objection as provided above, then Gross
Revenue and/or Cumulative Gross Revenue for the applicable Earn Out Period calculated
by the Company as set forth in the Earn Out Statement shall be binding and
conclusive on the parties.  During such
30 day period and during any period in which the calculation of Gross Revenue
and/or Cumulative Gross Revenue for the applicable Earn Out Period and payment
of the First Earn Out Amount, the Second Earn Out Amount and/or the Additional
Earn Out Amount is in dispute between Seller and the Company, Seller, or its
agents, upon reasonable written notice to the Company, shall have reasonable
access during regular business hours, to inspect and audit all records of the
Business used by the Company in calculating Gross Revenue and/or Cumulative
Gross Revenue for the applicable Earn Out Period.

 

(ii)          If Seller provides the Company with notice of objection pursuant
to (i) above within 30 days after receipt of the Earn Out Statement by Seller,
the Company and Seller shall attempt in good faith to reach an agreement as to
the issues in dispute.  If the parties
fail to resolve all such disagreements within 15 Business Days after the
Company’s receipt of the notice of objection (or such longer period as mutually
agreed upon by the parties), then any issues remaining in dispute may thereafter
be submitted by either Seller or the Company to a recognized independent
accounting firm mutually agreed upon by the parties (the “Dispute
Auditors”).  The Company and Seller
shall take, or cause to be taken, all actions and do, or cause to be done, all
things necessary to cooperate with the Dispute Auditors in its resolution of
the issues remaining in dispute, including furnishing to the Dispute Auditors
such work papers and other documents and information relating to the disputed
issues as the Dispute Auditors may reasonably request.  The determination of Gross Revenue and/or
Cumulative Gross Revenue for the applicable Earn Out Period by the Dispute
Auditors shall be set forth in a notice to be delivered to Seller and the
Company within 45 days of the submission to the Dispute Auditors of the issues
remaining in dispute, and such determination shall be binding and conclusive on
the parties as to the amount of Gross Revenue and/or Cumulative Gross Revenue for
the applicable Earn Out Period.  The fees
and expenses of the Dispute Auditors incurred for such determination shall be equitably
apportioned based upon the extent to which Seller or the Company is determined
by the Dispute Auditors to be the prevailing party in such determination.

 

4.             Payment of Earn Out Amounts.

 

(a)           Payment.  The
Company shall, at the same time that the Earn Out Statement is delivered by the
Company to Seller, pay the First Earn Out Amount or the Second Earn Out Amount,
if any, for the applicable Earn Out Period. 
Such payment shall be by wire transfer of immediately available funds to
an account or accounts designated in writing by Seller.  If Seller is entitled to any Additional Earn
Out Amount, the Company shall pay such amount to Seller at the 

 

4

 

same time that the Earn Out
Statement for the Second Earn Out Period is delivered by the Company to Seller.

 

(b)          Additional
Payment.  Subject to Section 4(c), if
Seller provides the Company with timely notice of objection to the Company’s
calculation of Gross Revenue for an Earn Out Period pursuant to Section 3(b) and
if it is finally determined that an additional payment is required with respect
to the Earn Out Amount for an Earn Out Period or any Additional Earn Out Amount,
then within five days of such final determination, the Company shall make such
additional payment in cash by wire transfer of immediately available funds to
an account or accounts designated in writing by Seller.

 

(c)           Right
of Set Off.  The Company shall have the right to withhold
and set off any amount, determined in good faith, due Seller under this Agreement
against any amount owed by Seller or the Stockholders to the Company, including
pursuant to any claim for indemnification or payment of Damages to which the
Company may be entitled under the Purchase Agreement or any other agreement
entered into pursuant to the Purchase Agreement, or otherwise.  If the Company exercises its
rights pursuant to this Section 4(c), the Company shall place the
amount of such set off in an interest bearing escrow account, on such terms and
conditions which are mutually agreeable to Seller, the Stockholders and the Company.  Upon a final determination, whether by mutual
written agreement of the parties or upon the non-appealable adjudication of the
applicable dispute, the escrowed sum, plus the accrued and unpaid interest on such
sum, shall be released to the party or parties entitled to the receipt thereof.

 

5.             Operation of the Company and the Business.

 

(a)         Operation of Business.  From the date of this Agreement through the
end of the Second Earn Out Period, the Company shall operate the Business in good faith
and in a commercially reasonable manner, and shall not take any action or omit
to take any action that is intended to impede Seller’s ability to earn the Earn
Out Amount.

 

(b)         Assumption of Obligations.  Notwithstanding anything to
the contrary contained in this Agreement, (i) until all obligations of the
Company hereunder are completed, the Company will use its reasonable efforts to
require any successor (whether direct or indirect, by purchase, merger, sale of
stock or assets, consolidation or otherwise) to assume and agree, in writing,
to perform this Agreement, in the same manner and to the same extent that the
Company would have been required to perform as if no such succession had taken
place and (ii) immediately prior to any succession event (as set described
in Section 5(b)(i)), the Company shall pay or cause to be paid to
Seller any amounts that have been finally determined to be payable to Seller pursuant
to the terms 

and conditions of this Agreement and remain unpaid
by the Company as of the date of the succession event, subject to the Company’s
rights pursuant to Section 4(c).

 

6.             Governing Law;
Dispute Resolution.

 

(a)         Governing Law. 
This Agreement shall be governed by and construed in accordance with the
domestic substantive laws of the Commonwealth of Pennsylvania without giving
effect to any choice or conflict of law provision or rule (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.

 

5

 

(b)         Mediation.  In the event any claims, disputes, or
controversies arise in connection with this Agreement, or the interpretation or
enforcement of any provisions thereof, and the dispute is not resolved the
dispute within 30 days through informal, good faith negotiations between the
parties, the dispute shall be referred to non-binding mediation.  The parties agree that any such mediation
shall be conducted in Philadelphia, Pennsylvania (or such other location as
agreed by Buyer and Seller), at the time and place convenient to the mediator
and the parties.  The parties shall, in
good faith, select a mediator that is mutually agreeable to both parties.  Each party shall bear its own costs and
attorneys’ fees associated with the mediation, and shall share equally the
mediator’s fee.

 

(c)         Arbitration.  Should any dispute remain between the
parties after the resolution process set forth in Section 6(b), the
parties agree that the dispute shall be submitted to and resolved by final,
binding arbitration administered by the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules in effect
at such time as modified by the following provisions:

 

(i)           Each
arbitration shall be conducted by a panel of one arbitrator who shall be a
retired U.S. federal court judge and agreed upon by Buyer and Seller (the “Arbitrator”).  If
Buyer and Seller are unable to agree on the Arbitrator, the AAA shall appoint
the Arbitrator.

 

(ii)          All
arbitration proceedings shall take place in Philadelphia, Pennsylvania, unless
otherwise agreed by Buyer and Seller.

 

(iii)         The
following procedures shall apply to any arbitration:  (A) the scope of any discovery shall be
reasonably intended to provide probative evidence in supporting a party’s
position, (B) discovery for any arbitration hereunder must be completed
within six months, (C) party depositions and third party depositions shall
be permitted, (D) document requests, requests for admission, and
interrogatories shall be permitted, and (E) Buyer and Seller shall each
use good faith efforts to complete any arbitration under this Section 6(e) as
expeditiously as possible.

 

(iv)         Not
later than 30 days after the conclusion of the arbitration hearing, the
Arbitrator shall prepare and distribute to the parties a writing setting forth
the arbitral award and the Arbitrator’s reasons therefor.  Any award rendered by the Arbitrator shall be
final, conclusive, and binding upon the parties, and judgment thereon may be
confirmed and/or enforced in any court of competent jurisdiction; provided,
that the Arbitrator shall have no power or authority to grant injunctive
relief, specific performance, or other equitable relief.

 

(v)          The
Arbitrator shall have no power or authority, under the AAA rules or
otherwise, to (A) modify or disregard any provision of this Agreement or (B) address
or resolve any issue not submitted by the parties.

 

(vi)         In
connection with any arbitration proceeding pursuant to this Agreement, each
party shall bear its own costs and expenses. 
Notwithstanding the foregoing, the fees and costs of the AAA and the
Arbitrator, the costs and expenses of obtaining the facility where the
arbitration hearing is held, and such other costs and expenses as the
Arbitrator may determine to be directly related to the conduct of the
arbitration and appropriately borne jointly by the parties (which shall not
include any party’s attorneys’ fees or costs, witness fees (if any), costs of
investigation, and similar expenses), shall be shared equally by Buyer and
Seller.

 

6

 

The Arbitrator’s decision shall be final and binding
and may be entered and judicially enforced by any court having jurisdiction
over the parties.  Nothing herein shall
prohibit a party from seeking equitable relief in a court of law while an
arbitration is pending hereunder.

 

7.             Miscellaneous.

 

(a)         Entire Agreement.  This Agreement supersedes all prior
agreements, whether written or oral, between the parties with respect to its
subject matter and constitutes a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter.

 

(b)         Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties named in this Agreement, their respective
successors, and permitted assigns.  No party
may assign this Agreement or any of its rights, interests, or obligations under
this Agreement without the prior written approval of the other parties,
provided that the Company may assign this Agreement or any of its rights,
interests, or obligations under this Agreement to any of its Affiliates without
approval of the other parties; provided, that Parent shall guarantee the
performance by any such Affiliate of the Company’s obligations hereunder.

 

(c)         Counterparts.  This Agreement may be executed in one or more
counterparts, including by facsimile transmission, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.

 

(d)         Headings.  The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.

 

(e)         Amendments and Waivers.  This Agreement may not be amended,
supplemented, or otherwise modified except by an instrument in writing signed
by each of the parties to this Agreement. 
The failure of any party to this Agreement to enforce at any time any of
the provisions of this Agreement shall in no way be construed to be a waiver of
any such provision, nor in any way to affect the validity of this Agreement or
any part thereof or the right of any party thereafter to enforce each and every
such provision.  No waiver of any breach
of this Agreement shall be held to be a waiver of any other or subsequent
breach.

 

(f)          Severability.  The invalidity or unenforceability of any
particular provision, or part of any provision, of this Agreement shall not
affect the other provisions or parts hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions or
parts were omitted.

 

(g)         Notices.  All
notices, consents, waivers, and other communications required or permitted by
this Agreement shall be in writing and shall be deemed given to a party when (i) delivered
to the appropriate address by hand or by nationally recognized courier service
(costs prepaid); (ii) sent by facsimile with confirmation of transmission
by the transmitting equipment; or (iii) received or rejected by the
addressee, if sent by certified mail, return receipt requested; in each case to
the following addresses or facsimile numbers and marked to the attention of the
person (by name or title) designated below (or to such other address or
facsimile number, or person as a party may designate in writing to the other
parties):

 

7

 

If
to the Company:

 

InfoLogix
Systems Corporation

101 East County Line Road

Suite 210

Hatboro, PA 19040

Attention: 
Chief Financial Officer

Telephone: 
(215) 604-0691

Fax:  (267) 681-0682

 

With a copy to (which shall not constitute notice):

 

Drinker Biddle &
Reath LLP

18th
and Cherry Streets

One
Logan Square

Philadelphia,
PA  19103-6996

Attention:
Stephen T. Burdumy

Telephone:  (215) 988-2700

Fax:  (215) 988-2757

 

If to Seller:

 

Michael Talerico

8236 Lakeview Drive

West Palm Beach, FL 33412

 

Hal Young

12288 Arbor Drive

Ponte Vedra Beach, FL 32082

 

Michael Talerico II

12 Stonewall Lane

West Chester, PA 19382

 

With a copy to (which shall
not constitute notice):

 

Stephanie
A. Zembar, Esq.

c/o
BH1

2555
Meridian Blvd., Suite 330

Franklin,
TN 37067

Telephone:  (615) 786-0850

Fax:  (615) 786-0851

 

A copy of any and all notices, consents, and other
communications sent by facsimile pursuant to this Agreement shall also be sent
by United States certified mail to the appropriate address in accordance with
this Agreement.

 

(h)         Expenses. 
Except as otherwise expressly provided in this Agreement, each party
shall bear its own expenses in connection with this Agreement.

 

8

 

(i)           Construction. 
Within this Agreement, the singular shall include the plural and the
plural shall include the singular, and any gender shall include all other
genders, all as the meaning and the context of this Agreement shall
require.  Except as otherwise indicated,
all agreements defined in this Agreement refer to the same as from time to time
amended or supplemented.  The parties
have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as having been drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. 
The word “including” shall mean including without limitation.  All references to Sections refer to the
Sections of this Agreement, and all references to Exhibits refer to Exhibits
attached to this Agreement, each of which is made a part of this Agreement for
all purposes.  Any reference in this
Agreement to wire transfers or other payments requires payment in dollars of
the United States of America unless some other currency is expressly stated in
that reference.

 

[Signature page follows]

 

9

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date first written above.

 

 

	
   

  	
  DELTA
  HEALTH SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Talerico

  
	
   

  	
  Name:

  	
  Michael
  Talerico

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFOLOGIX
  SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  T. Gulian

  
	
   

  	
  Name:

  	
  David
  T. Gulian

  
	
   

  	
  Title:

  	
  President

  
							

 

 

EXHIBIT A

 

Calculation
of Gross Revenue

 

Gross Revenue shall be calculated in accordance with
GAAP and in accordance with Parent’s stated revenue recognition policies and
credit for sales of services similar to that of the Business as of the Closing
Date.

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