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| AGIS.OB > SEC Filings for AGIS.OB > Form 8-K on 7-Nov-2005 | All Recent SEC Filings |
7-Nov-2005
Entry into Material Agreement
On November 1, 2005, Aegis Communications Group, Inc. ("Aegis") entered into a
Master Lease Agreement with NationsHealth, Inc. Under the Master Lease, Aegis
will lease or otherwise provide call services and other related operational
capabilities to NationsHealth in support of NationsHealth's Medicare Part D
Services. Pursuant to this Master Lease, NationsHealth will lease from Aegis
(i) the services of contract agents, center supervisors, and management
(identified in the Master Lease) and (ii) operational capacity in New York City
and Port St. Lucie, Florida, including facilities space, workstations,
technology and intangible assets relating to that operational capacity at the
New York and the Port St. Lucie facilities. NationsHealth has a Strategic
Agreement with Connecticut General Life Insurance Company and United States
Pharmaceutical Group, LLC, which is, in part, relevant to Aegis's obligations
under the Master Lease. In this regard, CIGNA is also a third party beneficiary
to the Master Lease and will be entitled to enforce all provisions that are
intended for its benefit. The Master Lease also contains non-compete,
non-solicitation and confidentiality provisions applicable to both Aegis and
NationsHealth.
The initial term of the Master Lease begins on November 1, 2005 and expires thirty-six (36) months thereafter. Unless Aegis provides NationsHealth with a non-renewal notice, the Master Lease automatically renews under the same terms and conditions. NationsHealth may terminate services provided by the Master Lease for "convenience" at any time upon seventy (70) days written notice to Aegis. In addition, NationsHealth may terminate the Master Lease if Aegis materially breaches the Master Lease or is deficient in maintaining NationsHealth's service standards, and fails to cure such default or deficiency within thirty (30) days after receiving written notice specifying the default or the deficiency. Aegis may terminate the Master Lease if NationsHealth materially breaches the Master Lease (including a default in payment to Aegis) and fails to cure such default within thirty (30) days after receiving written notice specifying the default.
Under the Master Lease, NationsHealth will pay Aegis an initial advance, which will be applied to the lease payments. In addition, NationsHealth will reimburse Aegis for payroll expenses; facility expenses; operations expenses; connectivity expenses in the New York and Port St. Lucie facilities; applicable maintenance costs; specifically requested improvements implemented at the New York and Port St. Lucie facilities; and licensing expenses. NationsHealth will also pay management fees to Aegis. Aegis currently projects that this arrangement will generate approximately $15 million in annual revenue under the Master Lease, although this amount could decrease or increase significantly depending on payroll and operational expenses and overall demand for Aegis's services. If Aegis and NationsHealth cannot informally resolve fees or expenses in good faith within thirty (30) days, Aegis and NationsHealth agree to appoint a mediator reasonably acceptable to both parties and attempt to resolve the dispute through mediation within ten (10) additional business days.
Six months prior to the expiration date of the Master Lease, NationsHealth will have the option at any time upon thirty (30) days written notice to Aegis, to purchase or assume Aegis's contractual rights and obligations in all (but not less than all) of the non-employee assets specific to the services provided at the New York Facility and/or the Port St. Lucie Facility.
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