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EXHIBIT 10.6
MANAGEMENT AGREEMENT
This Agreement is entered into this ____ day of ____________, 1997, by
and between QUORUM HEALTH RESOURCES, INC., a Delaware corporation ("Quorum"),
and ____________ (the "Hospital"), located in ____________,
________________.
1. TERM.
The initial term of this Agreement shall be ____ years ("Initial Term")
commencing _______, 199_, and terminating on __________, 199_. The Initial Term
shall automatically be extended by successive renewal periods of _____ years
each ("Renewal Term") unless either the Hospital or Quorum gives the other party
notice of termination no less than 90 days prior to the expiration of the then
current Term. The Initial Term and any Renewal Terms are herein together
referred to as the "Term" of this Agreement.
2. RETENTION OF AUTHORITY BY HOSPITAL; REPRESENTATIONS AND WARRANTIES.
(a) CONTROL RETAINED BY HOSPITAL. Throughout the Term of this
Agreement, the Hospital, through its Board of Directors (the "Board"), shall
retain all authority and shall exercise control over the business, policies,
operation, and assets of the Hospital, in accordance with the Hospital's Charter
and Bylaws. Quorum shall perform the services described in this Agreement in
accordance with such of the policies and directives of the Hospital as may be
from time to time provided to it. Quorum shall not be held responsible for any
such policies or directives of which it has not been advised. By entering into
this Agreement, the Hospital does not delegate to Quorum any of the powers,
duties, and responsibilities vested in the Board by law or by the Hospital's
Charter or Bylaws.
(b) QUORUM RELIANCE ON BOARD POLICIES. The Board shall communicate all
policies and directives to Quorum and Quorum shall rely on and assume the
validity of communications from, and shall report to, the Board, the Chairman of
the Board, or a designee of the Board. All matters requiring professional
medical judgments shall remain the responsibility of the Hospital's Board,
Medical Staff and allied health professionals. Quorum shall have no
responsibility for such judgments.
The relationship between Quorum and the Hospital created by this
Agreement is one of principal and agent. The Hospital and Quorum are not
partners, joint venturers, or independent contractors, and it is agreed that
Quorum is acting solely as the agent of the Hospital in performing services to
be provided by Quorum hereunder.
(c) REPRESENTATIONS OF THE HOSPITAL. Except as disclosed in writing to
Quorum prior to the date hereof, the Hospital represents the following to be
true:
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(i) This Agreement has been duly authorized, executed, and
delivered by the Board as the governing body of the Hospital and represents the
legal, valid, and binding agreement of the Hospital and is enforceable against
the Hospital in accordance with its terms.
(ii) The execution, delivery, and performance of this
Agreement by Hospital and consummation by it of the transactions contemplated
hereby do not: (A) require the consent, waiver, approval, license, or
authorization of any person or public authority which has not heretofore been
obtained; (B) violate any provision of law applicable to Hospital; (C) conflict
with or result in a default under, or create, any lien upon any of the property
or assets of Hospital pursuant to any agreement or instrument; or (D) violate
any judicial or administrative decree, regulation, or any other restriction of
any kind or character to which Hospital or Board is a party or by which Hospital
or any of its assets may be bound.
(iii) At the time of executing this Agreement, there are no
actions, suits, or proceedings pending or threatened against Hospital, at law or
in equity, or before or by any federal, state, municipal, or other governmental
department, commission, board, bureau, agency or instrumentality, that would, if
decided adversely, have a materially adverse effect on Hospital or its business.
(iv) At the time of executing this Agreement, the assets and
properties, including medical equipment ("Medical Equipment"), owned, operated,
or leased by Hospital and used by Hospital in the provision of medical and
related services are in a normal state of repair and operating condition,
reasonable wear and tear excepted, and suitable for the uses for which they are
intended. Hospital is in compliance in all material respects with all
requirements of federal and state laws and regulations regarding asbestos and
other toxic or hazardous materials.
(v) At the time of executing this Agreement, Hospital has
properly prepared and filed all reports required to be filed by Hospital
relative to all regulated activities. Such reports and the information and data
therein contained have been properly and accurately compiled and completed in
accordance with the requirements of the regulatory authority with which they
were filed and present fairly and accurately the information purported to be
shown thereby.
(vi) Hospital has made available to Quorum such of Hospital's
business records as Quorum has requested including all relevant inspection and
accreditation reports, patient or medical staff complaints or incident reports,
insurance and governmental inspection reports, and all files relative to
current, pending, or threatened litigation.
(vii) At the time of executing this Agreement, to the best of
the Hospital's knowledge after due inquiry, there is not currently pending any
license revocation proceeding or investigation nor any pending or threatened
medical malpractice claims relative to the Hospital, any employed nurse, any
medical staff member, or any member of the allied health professional staff.
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(viii) Hospital is in compliance with all requirements of
state and federal wage and hour laws and other labor laws and has paid, in a
timely manner, all required federal and state withholding taxes for its
employees. Hospital has complied with all legal requirements relating to
employee retirement plans and other employee benefit programs offered by the
Hospital.
3. DUTIES OF QUORUM.
Subject to the limitations set forth in Section 3(i) hereof and the
Board's continuing control and direction, Quorum agrees to perform the
administrative services described herein including responsibility for management
of the day-to-day business affairs of the Hospital. Nothing in this Agreement is
intended to alter, weaken, displace, or modify the responsibility of the Board
for the Hospital's direction and control as set forth in Hospital's Charter and
Bylaws. Quorum shall use all reasonable efforts to implement the Board's
policies and directives with the goal of causing the Hospital to provide quality
health care consistent with the policies and directives dictated by the Board,
the financial resources available to the Hospital, the competitive marketplace
in which the Hospital is located, and Medicare reimbursement and other laws.
Quorum shall follow the policies and directives of the Board or any committee
thereof in discharging its duties hereunder.
Further, Quorum may rely on the recommendations of the Hospital's
Medical Staff (and its designated committees and departmental chairmen
(collectively "Medical Staff") relative to the quality of professional services
provided by individuals with clinical privileges, and on the Board and the
Medical Staff, or any jointly appointed or Board appointed committee or
representative as to the adequacy and proper state of repair of all Medical
Equipment and the professional competency, training, and requisite supervision
of nurses, medical technicians, and other Medical Staff. Quorum shall have the
following duties which shall be implemented as soon as reasonably possible, in
accordance with priorities determined by Quorum and the Board.
(a) PERSONNEL. Quorum shall provide the Hospital with the services of
the Key Personnel specified in Section 4, "Key Personnel," and such Key
Personnel shall be employees of Quorum. All other Hospital personnel shall be
employees or independent contractors of the Hospital and shall be subject to the
Hospital's personnel policies. Quorum, as agent for the Hospital, shall enforce
and administer the personnel policies established by the Hospital in hiring,
managing, and discharging Hospital employees; provided, however, that matters
with respect to professional competency shall be determined with the assistance
of the appropriate Hospital or Medical Staff committee. Furthermore, Quorum
shall assist the Hospital and its personnel director (or, if a designated
personnel director does not exist, the Hospital employee discharging
substantially similar duties) in determining the number and qualifications of
employees required for the efficient operation of the Hospital and in
establishing and revising wage scales, employee benefit packages, in-service
training programs, staffing schedules, and job
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descriptions, all in order to accomplish the goals and objectives of the
Hospital and in accordance with policies and procedures established by the
Board. Quorum shall provide the Board and the appropriate Medical Staff or
Hospital committee with a regular flow of information on these subjects, so as
to assist the Board in establishing personnel-related policies and resolving
related issues.
(b) BUDGETS. Prior to the end of each fiscal year of the Hospital
during the Term of this Agreement, in accordance with Board policies and
procedures, Quorum shall submit to the Hospital for approval, disapproval, or
modification by the Hospital an annual operating budget, annual capital
expenditures budget (if appropriate), and annual cash flow projections, all
designed to meet the goals and objectives of the Board. In addition, Quorum will
supply any appropriate revisions to the foregoing to reflect material changes
during the fiscal year. If applicable, Quorum shall also compile, subject to the
review of the Board, any information the Hospital may be required to provide for
the purpose of rate review. Once the Board approves said operating budget,
Quorum shall be entitled to proceed with expenditures contemplated thereby
without further Board approval; provided, however, that the Board may modify
said budget from time to time by written resolution, which modification shall
then become the new authorization for expenditures.
(c) ACCOUNTING. Quorum shall supervise the Hospital's accounting system
and shall supervise the preparation of monthly and annual balance sheets and
statements of income and loss. Annual statements shall be due following the
close of each fiscal year during the Term of this Agreement. Any fees charged by
the Hospital's independent auditors shall be the responsibility of the Hospital.
(d) CHARGES. Quorum shall supervise the issuance of bills and the
collection of accounts, in accordance with charge schedules and collection
policies established by the Board. Quorum shall be entitled to obtain on behalf
of the Hospital the assistance of one or more collection agencies, as approved
by the Board. Quorum shall carry out Board policy and exercise reasonable care
in managing the accounts and available cash of the Hospital by maintaining
accounts and/or certificates of deposit with a financial institution or
institutions authorized by the Hospital and by informing the Hospital of the
availability of any excess cash. The permitted investment of any excess cash
shall be made by Quorum only upon the written direction of the Board.
(e) PAYMENTS. Quorum shall exercise reasonable care in applying the
Hospital's funds to the timely payment of Hospital's liabilities and other
obligations. It is specifically agreed and understood, however, that Quorum's
obligations under this paragraph are subject to availability of funds to make
such payments. Nothing contained herein shall obligate Quorum to make any such
payments from its own funds or resources or to advance any monies whatsoever to
the Hospital. Quorum may utilize Hospital personnel to carry out the functions
described in
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this paragraph. Quorum shall not be liable either primarily or as guarantor for
debts of the Hospital.
(F) EXPENDITURES. Quorum may reasonably rely on recommendations given
to Quorum by the Board or its designee as to the ordering of Medical Equipment
and Supplies used in the diagnosis and treatment of patients. Under purchasing
policies established by the Board, Quorum shall have the authority to commit the
Hospital's funds for the purchase or lease of supplies, goods, and services
reasonably necessary to the operation of the Hospital and to cause the Hospital
to negotiate, enter into, administer, and terminate contracts therefor.
(G) GROUP PURCHASING PROGRAMS.
(i) ACCESS. Quorum will offer the Hospital access to the
volume purchasing programs in which Quorum participates or arranges for
(the "Purchasing Programs"), subject to the requirements of the
Purchasing Programs. Under the Purchasing Programs, participating
hospitals have access to discounted prices on goods and services. The
Hospital may choose to participate in a Purchasing Program or not, but
if the Hospital chooses to participate in a Purchasing Program, the
Hospital may be required to execute a written letter of understanding
with the Purchasing Program under which the Hospital agrees to the
requirements of the Purchasing Program.
(ii) ADMINISTRATIVE FEES. The Hospital acknowledges that
Quorum may receive administrative fees from vendors in connection with
certain products that are purchased, licensed or leased by Hospital
under the Purchasing Programs, including, without limitation,
administrative fees for providing marketing, distribution and promotion
services to the Hospital. Quorum shall disclose to the Hospital in
writing, on an annual basis, and to the Secretary of Health and Human
Services upon his or her request, the administrative fees Quorum
receives as a result of Hospital's purchases.
(iii) LIMITATION OF WARRANTIES. QUORUM MAKES NO AND HEREBY
DISCLAIMS ANY WARRANTIES WHATSOEVER, AND EXPRESSLY DISCLAIMS ALL
IMPLIED WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, WITH REGARD TO ANY GOODS OR SERVICES
PURCHASED OR USED BY THE HOSPITAL UNDER THE PURCHASING PROGRAMS.
(h) MANAGEMENT PLAN AND REPORT. Quorum shall submit to the Board for
its review and approval an annual management plan (the "Management Plan")
designed to implement the goals and objectives of the Hospital which will set
forth the efforts, methods, and resources to be used by Quorum and the timetable
to be observed to achieve such goals and objectives. Upon acceptance of any
Management Plan, the Board hereby agrees to use its best efforts, and to cause
the Medical Staff to use their best efforts, to take or cooperate with the
actions recommended (to the extent such actions are within the control of the
Hospital, the
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Board, or the Medical Staff and not wholly within the control of Quorum).
The initial Management Plan shall be due no later than 90 days
following the date the permanent chief executive officer commences work on site
at the Hospital, and subsequent plans shall be due no later than the last day of
each fiscal year of the Hospital. Furthermore, Quorum shall deliver to the
Hospital a written annual report on the completion of the goals and objectives
set forth in the Management Plan approved by the Board.
(i) LIMITATIONS ON QUORUM'S DUTIES. Quorum shall not have the authority
to:
(i) enter into or terminate contracts with physicians on behalf of
the Hospital, except as the Board may specifically authorize from time to time,
but Quorum shall have the authority on behalf of the Hospital to negotiate and
administer such contracts.
(ii) enter into or terminate contracts with outside consultants on
behalf of the Hospital, except as the Board may specifically authorize from time
to time, but Quorum shall have the authority on behalf of the Hospital to
negotiate and administer such contracts.
(iii) purchase capital assets without the prior approval of the
Board unless such approval is deemed granted as part of an approved annual
budget or within Board policies and procedures.
(iv) enter into any leases of capital assets which, if purchased,
would be described in iii. above without the prior approval of the Board unless
such approval is deemed granted as part of an approved annual budget.
(v) enter into any leases which extend beyond the then current
initial or renewal term of this Agreement without the prior approval of the
Board unless such approval is deemed granted as part of an approved annual
budget.
(vi) negotiate or enter into collective bargaining agreements
covering or purporting to cover employees of the Hospital.
Absent a specific agreement to the contrary, Quorum's services shall
not include such items as legal services, audit services, cost report
preparation, data processing fees, architectural, engineering, MSO, or facility
planning services, feasibility studies, certificate of need applications related
to major capital projects, and similar items; nor shall Quorum perform the
functions of a certified public accounting firm. In addition, the services
included in the management fee do not include those specialized programs
developed and made available by Quorum on a hospital by hospital basis pursuant
to the terms of a separate agreement.
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4. KEY PERSONNEL.
(a) OBLIGATION TO PROVIDE. Quorum shall provide the Hospital with the
services of a hospital administrator and a controller, each of whom shall be
acceptable to the Hospital on a continuing basis. In addition, Quorum may, with
the Board's permission, provide the service of other hospital management
personnel (for example, the chief operating officer). All persons employed by
Quorum whose services are furnished to the Hospital under this section are
referred to as "Key Personnel." All Key Personnel shall be employees of Quorum
throughout the Term of this Agreement. Quorum shall determine the amount and
nature of and shall pay compensation (as hereinafter described) to the Key
Personnel for all services rendered by them in connection with this Agreement.
Nevertheless, the selection of Key Personnel and their replacements shall be
subject to the Board's approval, which shall not be unreasonably withheld.
(b) COVENANT NOT TO HIRE. The Hospital will not, and will not permit
any of its Affiliates to, employ or offer to employ any Key Personnel until one
year following the termination or expiration of the Term of this Agreement
unless (i) such Key Personnel were employees of the Hospital immediately prior
to their becoming Key Personnel or (ii) Quorum gives its written consent
thereto. Likewise, Quorum will not, and will not permit any of its Affiliates
to, employ or offer to employ any Hospital personnel until one year following
the termination or expiration of the Term of this Agreement unless the Hospital
gives its written consent thereto. The parties recognize and agree that monetary
damages are not an adequate remedy for a breach by a party of this covenant not
to hire employees of the other party. The parties agree that irreparable damage
will result to a party and its business from a breach of this covenant by the
other party and that in the event of a breach or a threatened breach of this
covenant, in addition to monetary damages, the injured party shall be entitled
to an injunction enjoining the other party from violating this covenant.
(c) REIMBURSEMENT OF COMPENSATION. In addition to Quorum's management
fee hereunder, the Hospital shall, upon receipt of invoice, reimburse Quorum for
the costs and expenses associated with Quorum's provision of the Key Personnel,
including their salaries, taxes, fringe benefits, and business expenses. The
amount of salary reimbursable hereunder shall be subject to the Board's
approval, which shall not be withheld if the salary is within the range for
similar hospitals covered by the Quorum compensation program. The term "fringe
benefits" as used herein shall include all fringe benefits which are or may
become standard for administrative or managerial personnel of Quorum (such as
health insurance, disability insurance, life insurance, retirement plans and,
with respect to the administrator, automobile and automobile expenses). The
Hospital shall also reimburse Quorum for relocation expenses, severance
expenses, and interim living expenses related to the Key Personnel.
It is specifically understood and agreed that reimbursable compensation
for Key Personnel shall be considered a payroll obligation
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of the Hospital for purposes of setting priorities for payments of Hospital
obligations as described in Paragraph 3(e) hereof.
Except as specifically provided elsewhere in this Agreement, or as
otherwise agreed to by the Board, Quorum shall bear the expense relating to the
salaries, compensation, travel, lodging and out-of-pocket expenses of its
corporate staff necessary to carry out the terms and provisions of this
Agreement, and Quorum's sole compensation shall be the management fees and
reimbursable expenses described in this Agreement.
5. MANAGEMENT FEE.
(a) AMOUNT. The Hospital shall pay Quorum a management fee of
$___________ for the first year of this Agreement. The annual management fee
thereafter shall be calculated as set forth in subsection (b) below.
(b) ADJUSTMENT. The management fee set forth in subsection (a) above
shall be adjusted annually as set forth herein to reflect changes in the Medical
Care Component of the Consumer Price Index for Urban Wage Earners and Clerical
Workers, U.S. All City Average Report, published by the United States Department
of Labor (hereinafter referred to as the "CPI"). If such an index shall no
longer be published on an anniversary date, the substitute index (or comparable
if no substitute) shall be utilized. On each yearly contract anniversary date,
the management fee shall be increased or decreased by a percentage equal to the
percentage increase or decrease in the CPI over the twelve (12) months up to and
including the previous month of ___________.
(c) WHEN DUE. The management fee in each year of the Term shall be paid
in equal monthly installments in advance, payable on the first day of each
month. The first and last monthly payment shall be prorated in accordance with
the number of days during those months. The Hospital agrees to pay Quorum
interest, at the rate of twelve percent (12%) per annum, on all management fees
and reimbursable expenses not paid when due, said interest to accrue from the
date originally due until payment is made. The Hospital agrees to be responsible
for payment of all legal fees and collection fees incurred by Quorum for
collection of all past due management fees and reimbursable expenses.
6. DUTY TO COOPERATE.
The parties acknowledge that the parties' mutual cooperation is
critical to the ability of Quorum to perform its duties hereunder successfully
and efficiently. Accordingly, each party agrees to cooperate with the other
fully in formulating and implementing goals and objectives which are in the
Hospital's best interest.
7. OWNERSHIP OF INFORMATION; CONFIDENTIALITY.
(a) QUORUM SYSTEMS - OWNERSHIP. Quorum retains all ownership and other
rights in all systems, manuals, computer software, materials, and other
information, in whatever form, provided by or developed by Quorum in the
performance of its obligations hereunder (hereinafter
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collectively referred to as "Systems"); and nothing contained in this Agreement
shall be construed as a license or transfer of such Systems or any portion
thereof, either during the Term of this Agreement or thereafter. Upon the
termination or expiration of this Agreement, Quorum shall have the right to
retain all such Systems, and the Hospital shall upon request deliver to Quorum
all such Systems in its possession. Notwithstanding the foregoing, any Systems
specifically tailored or designed for Hospital may be retained by the Hospital
upon the termination or expiration of this Agreement.
(b) QUORUM SYSTEMS-CONFIDENTIALITY. The Hospital acknowledges that
Quorum has invested a significant amount of its resources in developing and
maintaining the Systems and that the value to Quorum of these Systems may be
diminished or destroyed if the Hospital discloses information concerning the
Systems or any portion thereof to a third party. Accordingly, the Hospital shall
maintain the confidentiality of the Systems. The Hospital shall not duplicate or
permit the duplication of any portion of the Systems and shall not permit access
to the Systems by the Hospital's personnel or any third party other than on a
strict "need-to-know" basis and in the ordinary course of business. The Hospital
shall take at least those steps that it would take to protect its own
confidential information. The Hospital shall not loan, lease, or otherwise
permit the use of any of the Systems by any other person or entity, regardless
of its relationship to the Hospital. The Hospital shall notify Quorum of any
suspected or actual breach of these confidentiality requirements. The provisions
of this section shall survive any termination or expiration of this Agreement.
(c) QUORUM PURCHASING PROGRAMS. The Hospital will not disclose the
terms or prices of any agreement under the Quorum Purchasing Program to any
third party unless specifically authorized to do so by Quorum.
(d) HOSPITAL INFORMATION. During the Term of this Agreement the
Hospital shall give Quorum full access to the Hospital, its facilities, and its
records. Quorum shall maintain the confidentiality of patient records, Hospital
charges, wages, marketing strategies, and other confidential information
regarding the Hospital, except to the extent that disclosure is required by law.
8. LICENSING; ACCREDITATION.
The Hospital shall take all steps reasonably necessary to keep the
Hospital fully licensed and, if eligible, duly accredited by the Joint
Commission for Accreditation of Healthcare Organizations, and Quorum shall
cooperate in said endeavors. The Hospital shall do nothing willful to jeopardize
Medicare, Medicaid, or other third-party reimbursement arrangements. Both the
Hospital and Quorum shall abide by all relevant laws, ordinances, rules, and
regulations of state, local, or federal governments.
9. INSURANCE.
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(a) HOSPITAL. The Hospital has and shall maintain throughout the Term
of this Agreement the following minimum insurance coverage:
Worker's Compensation Statutory amount
Employer's Liability $ 100,000
Comprehensive General $1,000,000 per occurrence
Liability $3,000,000 aggregate
Hospital Professional $1,000,000 per occurrence
Liability $3,000,000 aggregate
Automobile Liability $1,000,000
Directors' and Officers'
Liability $1,000,000
Fidelity Bond $ 500,000
Property Insurance Insurable Value
Property damage insurance shall insure against loss or direct physical damage to
Hospital buildings, furnishings, equipment, machinery, and boiler under standard
all-risk coverage (including but not limited to fire, smoke, lightning,
windstorm, explosion, aircraft or vehicle damage, riot, civil commotion,
vandalism, and malicious mischief) and shall also include damage due to flood
and earthquake unless waived by Quorum.
Quorum, its parent company, and their agents, servants, employees,
officers, and directors shall be named as additional insureds, with respect to
this Agreement, under the comprehensive general and hospital professional
liability policies. Their rights to invoke the protection of such policies shall
be severable from and independent of the Hospital's rights, and these policies
shall not be terminable or non-renewable except upon thirty (30) days prior
written notice to Quorum. No later than thirty (30) days following the execution
of this Agreement and thirty (30) days following the end of each policy year,
the Hospital shall give to Quorum a copy of the endorsements naming Quorum and
its parent company as additional insureds. Such insurance policies shall also
contain endorsements which reflect the primary liability of the Hospital's
insurance carrier for all covered losses provided for in this Section 9,
notwithstanding any insurance which may be maintained by Quorum or any Affiliate
thereof covering such loss. The Hospital hereby waives any right of contribution
with respect to a loss covered under such policies (or their deductibles)
against Quorum or any of Quorum's insurance carriers.
(b) QUORUM. Quorum has and shall maintain throughout the Term of this
Agreement Fidelity Insurance in an amount no less than $500,000 insuring against
dishonesty and other wrongdoing by its employees, officers and directors.
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10. ACCESS TO BOOKS AND RECORDS.
Upon the written request of the Secretary of Health and Human Services,
the Comptroller General, or any of their duly authorized representatives, Quorum
will make available those contracts, books, documents, and records necessary to
certify the nature and extent of the costs of providing services under this
Agreement. Such inspection shall be available up to 4 years after the rendering
of such services. If Quorum carries out any of the duties of this Agreement
through a subcontract with a value of $10,000 or more over a 12-month period
with a related individual or organization, Quorum agrees to include this
requirement in any such subcontract. This section is included pursuant to and is
governed by the requirements of Public Law 96-499, Sec. 952, and the regulations
promulgated thereunder.
11. CONFLICT OF INTEREST.
Any member of the Hospital's Board or Medical Staff having any direct
or indirect financial interest or investment in the Hospital, any department
thereof, or any contractor providing goods or services to the Hospital shall
disclose such relationship in writing to Quorum in order to enable Quorum to
discharge its duties under this Agreement effectively and efficiently.
12. BREACH.
In the event of a breach of any obligation or covenant under this
Agreement, other than the obligation to pay money, the nonbreaching party may
give the breaching party written notice of the specifics of the breach, and the
breaching party shall have 60 days (the "Cure Period") in which to cure the
breach. Only if the breach is not cured within said Cure Period shall the
nonbreaching party be entitled to pursue any remedies it may have by reason of
the breach. A waiver of any breach of this Agreement shall not constitute a
waiver of any future breaches of this Agreement, whether of a similar or
dissimilar nature.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated prior to the expiration of the Term
only as follows, and any such termination shall not affect any rights or
obligations arising prior to the effective date of termination:
(A) BREACH. In the event of a material breach of this Agreement which
is not cured within the Cure Period set forth in Section 12, "Breach," or in the
event of a breach as to which no Cure Period is provided by this Agreement, the
nonbreaching party may terminate this Agreement upon no less than 30 days'
notice; provided that notice of termination must be given no later than 30 days
after the expiration of the Cure Period if one is applicable. This remedy shall
be in addition to any other remedy available at law or in equity. Failure to
terminate this Agreement shall not waive any breach of this Agreement.
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(b) CASUALTY. In the event that the physical plant housing the Hospital
is destroyed or is so damaged that it is reasonably anticipated that the
Hospital will not within 90 days commence repair or reconstruction with a view
toward resuming full operation, then either party may terminate this Agreement
upon no less than 30 days notice, provided that such notice is given within 30
days following the destruction or damage.
(c) INSOLVENCY. Quorum may terminate this Agreement upon 30 days notice
in the event the Hospital becomes insolvent or fails to pay, or admits in
writing its inability to pay, its debts as they mature; or a trustee, receiver
or other custodian is appointed for the Hospital for all or a substantial part
of the Hospital's property and is not discharged within 30 days; or any
bankruptcy reorganization, debt, arrangement, or other proceeding under any
bankruptcy or insolvency law or any dissolution or liquidation proceeding is
instituted by or against the Hospital and if instituted against the Hospital is
consented to or acquiesced in by the Hospital or remains for 60 days
undismissed; or any warrant or attachment is issued against any substantial
portion of the property of the Hospital which is not released within 30 days of
service.
(d) REORGANIZATION. In the event that the Hospital undergoes a
reorganization which materially alters Quorum's duties or is reasonably
anticipated to have a material effect on Quorum's ability to perform
satisfactorily its duties hereunder, then Quorum may terminate this Agreement
upon no less than 30 days notice given no later than 60 days following the
effective date of the reorganization.
(e) REPRESENTATIONS. Quorum may terminate this Agreement upon 30 days
written notice in the event any representation made by the Hospital or the Board
herein is found to be untrue in any respect which would have a material adverse
effect upon the financial condition or business operations of the Hospital, or
would have a material adverse effect upon the ability of the Hospital or Quorum
to perform under this Agreement.
(f) LITIGATION. Quorum may terminate this Agreement upon 30 days
written notice in the event there is entered against the Hospital one or more
judgments or decrees which would have a material adverse effect upon the
financial condition or business operations of the Hospital or the Hospital's
ability to perform under this Agreement.
(g) LICENSES. Quorum may terminate this Agreement upon 30 days written
notice in the event any material license or certification required by Hospital
to operate cannot be obtained or is suspended, terminated, or revoked.
14. EFFECTS OF TERMINATION.
In the event of the termination of this Agreement Quorum shall
immediately be paid all management fees theretofore earned and reimbursed for
all expenses incurred for which reimbursement is required under this Agreement
and otherwise. This remedy shall be in addition to any other
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remedy available at law or in equity. The termination of this Agreement for any
reason shall be without prejudice to any payments or obligations which may have
accrued or become due hereunder prior to the date of termination or which may
become due after such termination. If either party commences legal action
alleging any violation of this Agreement, the non-prevailing party shall pay all
costs and reasonable attorneys' fees incurred by the prevailing party in
connection with such action.
15. INDEMNIFICATION AND HOLD HARMLESS. The provisions of this Section 15 shall
survive the termination or expiration of this Agreement.
(a) INDEMNIFICATION BY HOSPITAL. Hospital agrees to indemnify and hold
harmless Quorum, its Affiliates, and each of their shareholders, directors,
officers, employees, and agents ("Quorum Indemnified Party") from and against
any and all losses, claims, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees and expenses related to the defense of any claims),
joint or several, which may be asserted against any of the Quorum Indemnified
Parties or for which they may now or hereafter become subject arising in
connection with the activity of the Hospital ("Quorum Claim"), including but not
limited to: (i) alleged or actual failure by the Board to perform any of its
duties hereunder, (ii) any pending or threatened medical malpractice or other
tort claims asserted against Quorum; (iii) any action against Quorum brought by
any of the Hospital's current or former employees or Medical Staff members; (iv)
any act or omission by any Hospital employee, Medical Staff member, or other
personnel; and (v) any violation of any requirement applicable to Hospital under
any federal, state, or local environmental, hazardous waste or similar law or
regulation; provided that such claims have not been caused by the gross
negligence or willful or wanton misconduct of the Quorum Indemnified Party
seeking indemnification pursuant to this Agreement.
(b) INDEMNIFICATION BY QUORUM. Quorum agrees to indemnify and hold
harmless the Hospital and its shareholders, directors, officers or trustees
("Hospital Indemnified Party") from and against all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys fees and
expenses related to the defense of any claims), joint or several, which may be
asserted against any Hospital Indemnified Party ("Hospital Claim"), as a result
of (1) any personnel or other action brought against any Hospital Indemnified
Party by any Key Person relating to any acts performed by such Key Person within
the scope of his or her employment by Quorum; or (2) the sole negligence of
Quorum outside the scope of its employment under this Agreement; provided that
such Hospital Claims have not been caused by the gross negligence or willful or
wanton misconduct of the Hospital Indemnified Party seeking indemnification
pursuant to this Agreement.
(c) NOTICE AND DEFENSE OF CLAIMS. The Hospital and Quorum agree to
notify each other promptly of commencement of or indication that any Claim may
be asserted against any Indemnified Party or of any litigation or proceedings
which could give rise to a Claim by any Indemnified Party. The Indemnitor shall
be entitled to participate in the defense of any such action at Indemnitor's own
expense, but such defense shall be
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conducted by counsel of recognized standing and satisfactory to the Indemnified
Party. Unless the Indemnitor timely assumes the defense thereof, the Indemnified
Party may through its own or independent counsel defend such Claim(s). Each
Indemnitor agrees that no settlement of any Claim involving its Indemnified
Party will be made without the consent of such Indemnified Party. Likewise, each
Indemnified Party agrees that it will not settle any Claim without the consent
of its Indemnitor. The Indemnitor will furnish to the Indemnified Party copies
of all pleadings in any action hereunder, permit the Indemnified Party to be an
observer therein, and apprise the Indemnified Party of all developments therein,
all at the Indemnitor's expense.
(d) PAYMENT OF CLAIMS. Each Indemnitor covenants that, immediately upon
demand, it will pay its Indemnified Parties any and all sums of money which any
or all of such Indemnified Parties shall pay or become liable to pay by reason
of the Claim(s), including any and all costs incurred in connection with the
investigation or defense of any Claim (whether successful or unsuccessful)
including attorneys fees and costs incurred by reason of any litigation
(including any appeals or the cost of other action taken in connection with
judgments or orders rendered in any such litigation). In the event judgment is
rendered against any Indemnified Party in any such litigation or in the event a
settlement is made , its Indemnitor shall pay the full amount of such judgment
or settlement sum together with any interest, attorneys fees and other costs due
or payable by the Indemnified Party in connection therewith to the party in
whose favor the judgment is rendered within thirty (30) days of the date of the
final adjudication ("Final Adjudication") or, as to an Indemnified Party with
whom a settlement is made, on or before the date for payment under the
settlement agreement. "Final Adjudication" as used herein shall mean the
decision of the trial court, but in the event of appeal then it shall mean the
decision of the Appellate Court after petition for re-hearing has been denied or
the time for filing such petition (or for the filing of further appeal) has
expired (provided that as to an appeal the Indemnitor hereby agrees at its sole
cost and expense to post the requisite bond to stay enforcement of the
judgment).
(e) NON-PAYMENT OF CLAIMS. In the event an Indemnitor fails to pay,
timely and fully, any amounts due relative to any Claims, its Indemnified Party
may pay such Claim to a third party. In such event, such Indemnified Party may
recover from its Indemnitor in addition to the amount so paid, interest on the
amount claimed at the higher of 12% per annum or such maximum amount of interest
as is permitted by law and also recover the costs of such Indemnified Party's
reasonable attorneys fees in connection with the enforcement of this Agreement.
16. NOTICES.
All notices permitted or required by this Agreement shall be deemed
given when in writing and delivered personally or deposited in the United States
mail, postage prepaid, return receipt requested, addressed to the other party at
the address set forth below or such other address as the party may designate in
writing:
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TO QUORUM: Quorum Health Resources, Inc.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn.: President
TO THE HOSPITAL:
Attn.:
17. AFFILIATES.
As used in this Agreement the term "Affiliate" means any corporation
owning 50% or more of the voting stock of Quorum or the Hospital, any subsidiary
corporation of which Quorum or the Hospital owns 50% or more of the voting
stock, and any subsidiary of a parent corporation (owning 50% or more of the
voting stock of Quorum or the Hospital) of which the parent corporation owns 50%
or more of the voting stock.
18. BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their heirs, executors, administrators, assigns,
subtenants, successors in interest, and successors in ownership, operation, or
control of the Hospital.
19. LIMITATION OF LIABILITY.
Quorum's liability, if any, for loss or damages arising out of any
breach by Quorum of the provisions hereof shall in no event exceed the aggregate
management fees paid Quorum by Hospital hereunder.
20. WAIVER OF TRIAL BY JURY.
Each party hereto hereby irrevocably waives any and all rights it may
have to demand that any action, proceeding or counterclaim arising out of or in
any way related to this Agreement or the relationships of the parties hereto be
tried by jury. This waiver extends to any and all rights to demand a trial by
jury arising form any source including, but not limited to, the Constitution of
the United States or any state therein, common law or any applicable statute or
regulations. Each party hereto acknowledges that it is knowingly and voluntarily
waiving its right to demand trial by jury.
21. CONFIDENTIALITY OF AGREEMENT.
Quorum and the Hospital agree that the terms and conditions of this
Agreement shall remain confidential. Neither Quorum nor the Hospital shall
distribute this Agreement, or any part thereof, to any third party unless
required by law to do so.
22. MISCELLANEOUS.
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(a) HEADINGS. Section headings are for convenience of reference only
and shall not be used to construe the meaning of any provision of this
Agreement.
(b) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one agreement.
(c) SEVERANCE. Should any part of this Agreement be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
and enforceability of the remaining portions.
(d) AUTHORITY. Each individual signing this Agreement warrants that
such execution has been duly authorized by the party for which he or she is
signing. The execution and performance of this Agreement by each party has been
duly authorized by all applicable laws and regulations and all necessary
corporate action, and this Agreement constitutes the valid and enforceable
obligation of each party in accordance with its terms.
(e) LAW. This Agreement shall be construed in accordance with the laws
of the State of _____________.
(f) AMENDMENT. This Agreement may not be modified except in a written
document executed by the party to be charged.
(g) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto and supersedes all prior agreements and representations
with respect to the subject matter hereof.
ATTEST:
HOSPITAL
By:_________________________ By:_________________________
Title: _____________________ Name:_______________________
Chairman, Board of Directors
QUORUM HEALTH RESOURCES, INC.
By:_________________________ By:_________________________
Assistant Secretary Name:_______________________
Vice President - Marketing
By:_________________________ By:_________________________
Assistant Secretary Xxxxxxx X. Xxxxxxxxx
Executive Vice President -
Marketing
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