Document:

exv4w8

 

PROMISSORY NOTE

October 22, 2004

     FOR VALUE RECEIVED, Integrated Financial Systems, Inc., a Colorado
corporation (“Debtor”), promises to pay to the order of Henry J.
Roth(“Lender”), the principal sum of Thirty Five Thousand DOLLARS and 00/100
($35,000.00) and to pay interest on the outstanding principal amount of this
Promissory Note (this “Note”), in accordance with Section 2 of this Note.

     1. Maturity. To the extent not previously paid, Debtor shall repay the
outstanding principal balance of this Note on the earlier of January 20, 2005
or the date in which Debtor closes on the sale of equity securities which
results in gross proceeds to the Debtor of at least $3,000,000 (the “Repayment
Date”). All payments received shall be applied first against costs of
collection (if any), then against accrued and unpaid interest, then against
principal.

     2. Interest. Interest shall accrue on the unpaid principal balance of
this Note commencing on the date hereof and continuing until repayment of this
Note in full and shall equal 15% of the outstanding principal payment due upon
maturity. All accrued and unpaid interest shall be due on the Repayment Date.
If Debtor is in default on the Note as defined in paragraph 4 of this Note,
than the Debtor shall pay interest at a default rate of 30% per annum.

     3. Prepayment. This Note may be prepaid at any time in the discretion of
the Debtor.

     4. Default. The occurrence of any of the following events (a “Default”) shall
make all sums remaining unpaid pursuant to this Note with respect to which a
Default occurs become immediately due and payable, as follows:

     (a) Payment Default. Failure to pay any amounts due under this Note when
due.

     (b) Voluntary Bankruptcy. The filing by the Debtor of any petition or
action under any bankruptcy, debtor’s relief, reorganization, insolvency or
moratorium law or any assignment by the Debtor for the benefit of creditors,
which does not become dismissed within sixty (60) days thereafter.

     5. Miscellaneous.

     (a) Debtor hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, or other cause of release or
discharge other than actual payment in full hereon.

     (b) The remedies of Lender as provided herein, or any one or more of them,
or in law or in equity, shall be cumulative and concurrent, and may be pursued
singularly, successively or together at Lender’s sole discretion, and may be
exercised as often as occasion therefore shall occur.

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     (c) It is expressly agreed that if this Note is referred to an attorney or
if suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon Lender by this Note, then Debtor
promises and agrees to pay all costs, including reasonable attorneys’ fees,
incurred by Lender.

     (d) If any provision of this Note would require Debtor to pay interest
hereon at a rate exceeding the highest rate allowed by applicable law, Debtor
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

     (e) This Note shall be governed by and construed in accordance with and
the laws of the State of Colorado applicable to contracts wholly made and
performed in the State of Colorado.

     IN WITNESS WHEREOF, Debtor has executed this Promissory Note as of the
date first above written.

	 	 	 	 	 
	 	INTEGRATED FINANCIAL SYSTEMS, INC.,
a Colorado corporation

 	 
	 	By:  	 	 
	 	 	Name:  	John C. Herbers 	 
	 	 	Title:  	Chairman & CEO 	 
	 

2exv4w9

 

PROMISSORY NOTE

October 22, 2004

     FOR VALUE RECEIVED, Integrated Financial Systems, Inc., a Colorado
corporation (“Debtor”), promises to pay to the order of Silicon Prairie
Partners, LP (“Lender”), the principal sum of Thirty Five Thousand DOLLARS and
00/100 ($35,000.00) and to pay interest on the outstanding principal amount of
this Promissory Note (this “Note”), in accordance with Section 2 of this Note.

     1. Maturity. To the extent not previously paid, Debtor shall repay the
outstanding principal balance of this Note on the earlier of January 20, 2005
or the date in which Debtor closes on the sale of equity securities which
results in gross proceeds to the Debtor of at least $3,000,000 (the “Repayment
Date”). All payments received shall be applied first against costs of
collection (if any), then against accrued and unpaid interest, then against
principal.

     2. Interest. Interest shall accrue on the unpaid principal balance of
this Note commencing on the date hereof and continuing until repayment of this
Note in full and shall equal 15% of the outstanding principal payment due upon
maturity. All accrued and unpaid interest shall be due on the Repayment Date.
If Debtor is in default on the Note as defined in paragraph 4 of this Note,
than the Debtor shall pay interest at a default rate of 30% per annum.

     3. Prepayment. This Note may be prepaid at any time in the discretion of
the Debtor.

     4. Default. The occurrence of any of the following events (a “Default”)
shall make all sums remaining unpaid pursuant to this Note with respect to
which a Default occurs become immediately due and payable, as follows:

     (a) Payment Default. Failure to pay any amounts due under this Note when
due.

     (b) Voluntary Bankruptcy. The filing by the Debtor of any petition or
action under any bankruptcy, debtor’s relief, reorganization, insolvency or
moratorium law or any assignment by the Debtor for the benefit of creditors,
which does not become dismissed within sixty (60) days thereafter.

     5. Miscellaneous.

     (a) Debtor hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, or other cause of release or
discharge other than actual payment in full hereon.

     (b) The remedies of Lender as provided herein, or any one or more of them,
or in law or in equity, shall be cumulative and concurrent, and may be pursued
singularly, successively or together at Lender’s sole discretion, and may be
exercised as often as occasion therefore shall occur.

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     (c) It is expressly agreed that if this Note is referred to an attorney or
if suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon Lender by this Note, then Debtor
promises and agrees to pay all costs, including reasonable attorneys’ fees,
incurred by Lender.

     (d) If any provision of this Note would require Debtor to pay interest
hereon at a rate exceeding the highest rate allowed by applicable law, Debtor
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

     (e) This Note shall be governed by and construed in accordance with and
the laws of the State of Colorado applicable to contracts wholly made and
performed in the State of Colorado.

     IN WITNESS WHEREOF, Debtor has executed this Promissory Note as of the
date first above written.

	 	 	 	 	 
	 	INTEGRATED FINANCIAL SYSTEMS, INC.,

a Colorado corporation

 	 
	 	By:  	 	 
	 	Name:  	John C. Herbers 	 
	 	Title:  	Chairman & CEO 	 
	 

2exv10w5w3

 

Exhibit 10.5.3

INTEGRATED FINANCIAL SERVICES, INC.

SERVICES AGREEMENT

     This Services Agreement (“Agreement”) is made on September 29, 2004
(“Effective Date”) by and between Integrated Financial Systems, Inc., a
Colorado corporation (“IFS”) and Eastern Health Systems,
Inc. (“Hospital”).

SECTION 1.     Certain Definitions.

	1.1	 	For purposes of this Agreement, including any attachments and exhibits,
the following terms shall have the following meanings:

	(a)	 	“Managed Account” means any Patient Liability that is not
paid in full by the Registered Patient at the time the Registered
Patient receives services from Hospital.
	 
	(b)	 	“Patient Liability” means all payments owed to Hospital by a
Registered Patient, such as deductibles, co-payments, payments for
elective procedures and all other payments that are not covered by
third-party insurers.
	 
	(c)	 	“Registered Patient” means any patient admitted to Hospital
or that is otherwise registered as a patient of Hospital.
	 
	(d)	 	“Services” means all services provided by IFS to Hospital
under this Agreement.

SECTION 2.     Obligations of IFS.

	2.1	 	Billing and Payment Services. For all Managed Accounts, IFS shall
provide the billing and payment acceptance services as set forth on the
Statement of Work attached as Exhibit A.
	 
	2.2	 	Security and Access to Information. IFS shall provide the appropriate
levels of security in the IFS System to prevent any unauthorized third
parties from accessing any Registered Patient Information. IFS shall at
all times allow Hospital’s authorized employees to access to all
Registered Patient Information.
	 
	2.3	 	Compliance with Laws; HIPAA. IFS shall at all times comply with all
federal, state, and local laws governing all Services. Without limiting
the foregoing, IFS shall at all times comply with (i) all provisions of
the Health Insurance Portability and Accountability Act, 42 U.S.C. 201 et
seq., including all rules and regulations promulgated thereunder; (ii) the
Business Association Agreement between Hospital and IFS in order to comply
with the Federal Standards for Privacy of Individually Identifiable Health
Information, located at 45 C.F.R. parts 160 and 164; and (iii) all other
laws, rules and regulations governing the privacy of health-related
information. IFS represents and warrants to Hospital that (i) it is a
“business associate” of Hospital as defined in OCR Guidance Explaining
Significant Aspects of the Privacy Rule – December 3, 2002, Revised April
3, 2002, and (ii) the provisions of the Business Association Agreement
between Hospital and IFS are consistent with the U.S. Department of Health
and Human Services SAMPLE BUSINESS ASSOCIATE CONTRACT PROVISIONS
(Published in FR 67 No.157 pg.53182, 53264 (August 14, 2002)).
	 
	2.4	 	Further Representations and Warranties. IFS represents and warrants to
Hospital that (i) all Services will be performed in a professional and
workmanlike manner, consistent with industry standards; (ii) all Services
will conform to the attached Statement(s) of Work and will be free from
deficiencies and defects in materials, workmanship, design and/or
performance; (iii) it has the requisite ownership, rights and licenses to
perform its obligations under this Agreement fully as contemplated hereby;
(iv) there are no pending or threatened lawsuits, claims, disputes or
actions: (A) alleging that any Services infringe, violate or
misappropriate any third party rights; or (B) adversely affecting any
Services or IFS’s ability to perform its obligations hereunder; and (v)
the Services do not violate, infringe, or misappropriate any patent,
copyright, trademark, trade secret, or other intellectual property or
proprietary right of any third party.

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SECTION 3.     Obligations of Hospital.

	3.1	 	Billing Information. Hospital shall, at the time accounts are assigned to
IFS, transfer electronically to IFS necessary patient information as
defined in Exhibit B, to allow IFS to perform the services covered under
this agreement.
	 
	3.2	 	Accuracy of Patient Information. Hospital shall be responsible for
ensuring that all Patient Information provided to IFS is accurate in all
material respects.
	 
	3.3	 	Representations and Warranties. Hospital represents and warrants to IFS
that it has the requisite ownership, rights and licenses to perform its
obligations under this Agreement fully as contemplated hereby.

SECTION 4.     Delegation of Authority.

	4.1	 	Billing Agent. Hospital appoints IFS as its administrative agent solely
for the limited purpose of providing billing, and payment acceptance
services for each Managed Account [for a period of 90 days after such
Managed Account has all charges completed]. In particular, IFS shall have
the authority to direct Registered Patients to make payments of Managed
Accounts to and in the name of IFS, which payments shall be placed into an
account by IFS for remittance to Hospital subject to Section 4.2 below.
[IFS shall [not] have the authority to bind Hospital with respect to any
matter, including but not limited to disputes regarding amounts of payment
due under the Managed Accounts.]
	 
	4.2	 	Payment of Fees. Prior to remitting to Hospital payments accepted by IFS
on account of Managed Accounts pursuant to Section 4.1, IFS is authorized
to deduct from such amount, as payment for the Services, the fees
specified on Exhibit C (the “Fees”). On a monthly basis, as directed, IFS
shall remit to Hospital all amounts received on account of Managed
Accounts, less the Fees, together with an accounting of all such amounts
and Fees.

SECTION 5.     Term and Termination.

	5.1	 	Either party may terminate this Agreement in the event of a breach by the
other party of any term of this Agreement, including the failure to pay
any invoice when due, upon 15 days written notice unless such breach is
cured within such 15-day period.
	 
	5.2	 	Either party may terminate this Agreement for its convenience upon 90
days written notice.
	 
	5.3	 	Upon termination of this Agreement for any reason, IFS agrees to fully
cooperate with Hospital to effect an orderly and timely transition of the
Services provided hereunder to another provider, including transmitting to
Hospital or such other provider all Registered Patient Information in any
format reasonably requested by Hospital. Hospital shall pay IFS’s
reasonable costs and expenses incurred in connection with this Section
5.3.

SECTION 6.     Miscellaneous.

	6.1	 	Indemnification. Hospital agrees to defend, indemnify and hold IFS, its
agents and employees harmless from and against any and all claims,
counterclaims, liabilities, losses, damages, court costs, attorneys’ fees
and other expenses arising from the origination of any Managed Account
hereunder and the collection activities performed by Hospital, its agents
or employees with respect to any Managed Accounts. IFS agrees to defend,
indemnify and hold Hospital, and its agents and employees harmless from
and against any and all claims, counterclaims, liabilities, losses,
damages, court costs, attorneys’ fees and other expenses arising out of
the failure of IFS to perform its Services for the Managed Accounts in
conformity with applicable laws and regulations.

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	6.2	 	Force Majeure. Neither party shall be deemed to be in default pursuant
to this Agreement so long as its failure to perform any of its obligations
hereunder is occasioned solely by fire, labor disturbance, acts of civil
or military authorities, acts of God, acts of terrorism, or any similar
cause beyond such party’s control.
	 
	6.3	 	Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sufficiently given when
delivered to the address and person identified on the signature page
hereto or to such other addresses or persons as may be specified from time
to time in writing.
	 
	6.4	 	Choice of Law. This Agreement shall, for all purposes, be construed and
enforced in accordance with the internal laws of the State of Colorado,
not including its choice of laws provisions. Any controversy or claim
arising out of or relating to this Agreement, or breach thereof, which the
parties fail to resolve by agreement, shall be settled by binding
arbitration in the State of Colorado in accordance with the commercial
arbitration rules of the American Arbitration Association, applying the
laws of the State of Colorado as provided in this paragraph.
	 
	6.5	 	Amendment and Waiver. This Agreement may not be amended or any provision
waived except in a writing signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written by their respective
authorized officials.

	 	 	 
	IFS:

	 	HOSPITAL:
	 
	 	 
	Integrated Financial Systems, Inc.

	 	Eastern Health Systems, Inc.
	 
	 	 
	/s/ John C. Herbers

	 	/s/ Robert C. Chapman
	
 

	 	
 
	Name: John C. Herbers

	 	Name: Robert C. Chapman
	 
	 	 
	Title: CEO

	 	Title: President and CEO

Address:

7807 East Peakview Avenue, Suite 300

Greenwood Village, Colorado 80111

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Exhibit A – Administrative Billing Services Statement of Work

	 	 	 
	Primary Sponsor of Program:

	 	Steve Ferris, Adm. Dir. Of Patient Financial Services
	Secondary Sponsors:

	 	Donna Ellenburg, Business Office Manager
	

	 	Tavie Bender, Access Service Mgr
	

	 	Sheila Landers, Customer Service
	

	 	Tina McClaran, Manager of Patient Accounts

	1.	 	Aging – All Managed Accounts will be serviced with monthly
statements, phone attempts, and letters by IFS for a period of 90 days.
	2.	 	Delinquency – Any Managed Account that has missed a payment date
but is still being serviced by IFS.
	3.	 	Default – Any Managed Account that has been delinquent for a
period of 90 days will be returned to the Hospital for processing.
	4.	 	Disputes – Any disputed accounts will be flagged as such and
returned to Hospital immediately upon identification. This includes
accounts where the Registered Patient has refused payment, filed for
bankruptcy, denied the provision of services, or sought governmental
financial assistance.
	5.	 	Discounts - At POS or if account is paid with 3 payments within 90
days, a 50% discount is offered.

	a.	 	Once the account is sent to IFS, the patient has
another 30 days to take advantage of the 50% discount, if the
payment is made in full.

	i.	 	After 90 days the patient has 25%
discount.
	ii.	 	Following 90 days, the discount goes to
10%.

	6.	 	Charity – The client requests electronic interface with
indigent/charity care. They would like daily referrals along with
credit scores run on all candidates.
	7.	 	Remittance – Funds will be remitted no later than the fourth Friday
of every month and will be transferred electronically as requested by
Hospital to the banking numbers as they are provided to IFS for EFT
functions.

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Exhibit B — File Data Specifications

Integrated Financial Systems requires three daily extracts from your systems.

	•	 	Extract One contains data for accounts that are being transferred
to IFS for handling.

	•	 	Extract Three contains payments, adjustments, charges or refunds
made to patient accounts in the previous 24-hour period for accounts
assigned to IFS. Any transaction that occurs after the final bill has
been compiled that modifies account balances must be included in this
file extract.

IFS would like to establish the submission of the extract files on a daily
schedule, with the files transmitted to us via a secure FTP site. Either the
files can be uploaded to our secure FTP site, or we can download the files from
your secure FTP site. IFS is pleased to implement the transfer method that you
prefer.

The files should be in a flat-file, comma-delimited format. Alphanumeric
fields should be delimited by double-quotes (“). Please include validations
in your extract code to check for double-quotes included within a field value.

The format for each file is detailed on the following pages. If you are not
able to provide the files in the requested format, please contact Christopher
Smith at 303.200.4222 to discuss alternatives.

Frequently Asked Questions:

	•	 	Is a fixed-width, flat-file format acceptable?

Yes. We can work with you to develop a fixed-width file specification.
We have suggested a comma-delimited format to provide you with
flexibility regarding the width of fields.
	 
	•	 	Is the ordering of data fields important?

Yes. Our systems are setup to process the data based upon the field order in the specification.
	 
	•	 	Can other file formats be processed?

No. At this time, our systems cannot process alternative file structures.
	 
	•	 	When do we have to the extracts available?

A formal “go-live” date will be established for this project and
communicated to you as soon as possible. We would appreciate having the
initial test files no later than 10 business days from the initial
meeting to review the file extracts. Your hospital cannot fully utilize
the system until the extract data transfer is in place and validated.
Therefore, implementing this transfer process is the critical path of the
implementation project timeline.

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Exhibit C — Fees

Administrative Billing and Payment Acceptance Fees

	 	 	 
	1.

	 	7.5% of all payments received by IFS on account of Managed Accounts.

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