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EXHIBIT 10.2
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement ("Agreement") is made and entered into this ___ day of
_____ , 1998, by and between ORTHODONTIX, INC., a Florida corporation ("OTX"),
and ORTHODONTIX PROFESSIONAL FLORIDA, P.A., a Florida professional corporation
(the "Orthodontix Professional").
RECITALS
A. OTX is a Florida corporation which has developed systems,
procedures, and strategies to maximize the productivity, efficiency and
profitability of orthodontists and orthodontic practices. OTX is experienced in
providing equipment, capital investments, business, administrative and related
services to orthodontic practices. In connection with providing these services
to orthodontic practices, OTX owns certain assets, provides equipment and
nonprofessional personnel to, and manages certain business affairs of
orthodontic practices.
B. The Orthodontix Professional is a Florida professional corporation
performing orthodontic and related services through the services of
appropriately licensed health care professionals, including, but not limited to,
orthodontists and dentists (the "Orthodontist(s)" or "Health Care
Professionals") employed by or affiliated with the Orthodontix Professional (the
"Professional Services"). The Orthodontix Professional operates at offices
located in the facilities identified in Exhibit 2.2, as amended from time to
time (the "Premises").
C. OTX's services are designed to improve the efficiency and
profitability of orthodontic practices. The Orthodontix Professional and OTX
each desire to enter into an arrangement with the other party that: benefits
those seeking Professional Services as patients; facilitates the effective use
of the Orthodontix Professional's resources; facilitates consistency of service,
both in the orthodontic
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care provided by the Orthodontists employed by or affiliated with the
Orthodontix Professional and in the administrative and business services
provided by OTX; and ensures that the Orthodontix Professional and the
Orthodontists employed by or affiliated with the Orthodontix Professional will
owe their first duty of care to the patient and will preserve the nature of the
orthodontist-patient relationship.
D. The Orthodontix Professional desires to focus its energies,
expertise and time on the practice of orthodontics and the delivery of
orthodontic services to patients and to accomplish this goal it desires that the
increasingly more complex business functions of its orthodontic practice be
conducted by persons with business expertise. OTX desires to provide such
administrative and business services as are necessary and appropriate for the
day-to-day administration of the non-orthodontic aspects of the Orthodontix
Professional's orthodontic practice all upon the terms and conditions
hereinafter set forth.
E. The Orthodontix Professional and OTX have determined a fair market
value for the services to be rendered by OTX, and based on this fair market
value, have developed a formula for OTX and the Orthodontix Professional to earn
revenue that will allow the parties to establish a relationship permitting each
party to devote its skills and expertise to the appropriate responsibilities and
functions.
F. This Agreement is being entered into in connection with anticipated
transactions involving the acquisition of certain assets of orthodontic
practices (the "Transactions"), as set forth in Agreements and Plans of
Reorganization or similar agreements between orthodontic practices and OTX to be
entered into from time to time (the "Reorganization Agreement").
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NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, the parties agree as follow:
I. AUTHORITY OF PARTIES
1. AUTHORITY OF OTX. Consistent with the provisions of this Agreement
and Florida law, OTX shall have the responsibility and sole and complete
authority to provide exclusive full service practice business management
services for the Orthodontix Professional, such services to include,
consultation and other activities regarding (i) the suitability of office space,
furnishings and equipment; (ii) nonprofessional staffing required by the
Orthodontix Professional; (iii) regulatory compliance; (iv) methods relating to
increasing of productivity; (v) inventory and supplies management; (vi)
information systems management; (vii) marketing services; (viii) site selection,
relocation, design and physical layout of the Orthodontix Professional; (ix)
financial services related to accounting and bookkeeping, monitoring of accounts
receivable, payment of leases and subleases, payroll and benefits,
administration, billing and collection services, payment of federal and/or state
income taxes, personal property or intangible taxes, administration of interest
expense or indebtedness incurred to finance the operation of the Orthodontix
Professional; (x) administration of malpractice insurance expenses; and, (xi)
subject to applicable law, other services as OTX deems necessary and in any
manner OTX deems appropriate in its discretion to meet the day to day
requirements of the business functions of the Orthodontix Professional. The
parties acknowledge that OTX is not authorized or qualified to engage in any
activity that may be construed or deemed to constitute the practice of
orthodontics nor shall OTX now or in the future be regarded as practicing
orthodontics or dentistry within the meaning of applicable Florida law and
Florida Statutes Section 466.003(3). To the extent any act or service herein
required by OTX should be construed by a court of competent jurisdiction or by
the State Board of Dentistry to constitute the
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practice of dentistry or orthodontics, the requirement to perform that act or
service by OTX shall be deemed waived and unenforceable and shall not constitute
a breach or default by OTX under this Agreement, and the parties shall take the
actions contemplated by Section 5.2(e); hereof.
1.2 RESERVED.
1.3 AUTHORITY OF THE ORTHODONTIX PROFESSIONAL. The Orthodontix
Professional, through the Orthodontists, shall be solely responsible for and
have sole and complete authority, supervision and control over the provision of
Professional Services and other related healthcare services performed for
patients of the Orthodontix Professional. In this regard, the Orthodontix
Professional shall provide or cause to be provided through the Orthodontists all
services related to the clinical sufficiency, suitability, reliability or
efficacy of any product, service, process or activity related to the delivery of
Professional Services. All diagnoses and treatments shall be provided and
performed exclusively by, or under the supervision of the Orthodontists employed
or retained by the Orthodontix Professional, and in accordance with all laws.
This Agreement shall in no way be construed to mean or suggest that OTX is
engaged in the practice of dentistry or orthodontics.
1.4 POWER OF ATTORNEY. In connection with this Agreement and throughout
the term of this Agreement, OTX shall have responsibility and sole and complete
authority over the following:
a. To xxxx the patients serviced by the Health Care Professionals
employed by or affiliated with the Orthodontix Professional, in the
Orthodontix Professional's name and on the Orthodontix Professional's
behalf, for billable Professional Services provided by the Health Care
Professionals;
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b. To xxxx, in the Orthodontix Professional's name and on the
Orthodontix Professional's behalf, all claims for reimbursement or
indemnification from third-party payors for covered billable
Professional Services provided by the Health Care Professionals;
c. To collect and receive, in the Orthodontix Professional's name and
on the Orthodontix Professional's behalf, all accounts receivable
generated by such xxxxxxxx and claims for reimbursement or
indemnification, and to deposit all amounts collected in the
Orthodontix Professional Account (as defined hereinbelow at Section II,
2.10);
d. To take custody of, endorse in the name of the Orthodontix
Professional, and deposit into the Orthodontix Professional Account any
notes, checks, money orders insurance payments, and any other
instruments received in payment of the accounts receivable for
Professional Services;
e. To deposit into the Orthodontix Professional Account all funds, fees
and revenues generated by the Health Care Professionals from the
provision of Professional Services, and to make withdrawals and sign
checks for disbursements from the Orthodontix Professional Account
solely for the purpose of withdrawing the collected revenues to be
applied to payment of the Practice Expenses (as defined at Section IV,
4.2 hereinbelow) and the Professional Compensation (as defined at
Section II, 2.10 hereinbelow) and as requested from time to time by the
Orthodontix Professional; and
f. Upon the request of OTX, the Orthodontix Professional shall execute
and deliver to OTX or the financial institution where the Orthodontix
Professional Account is maintained, such additional documents or
instruments as may be reasonably necessary to evidence or effect the
authority pursuant to this Agreement.
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1.5 ANNUAL BUSINESS PLAN AND BUDGET. Annually and at least thirty (30)
days prior to the commencement of each fiscal year, Orthodontix Professional and
OTX shall prepare a business plan and an operational budget for such fiscal year
(the "Business Plan"). The Business Plan shall set forth an estimate of the
operating revenues and expenses associated with the provision of Professional
Services at the Orthodontix Professional. Any non-budgeted expenses shall be
reviewed and approved by both parties. OTX and the Orthodontix Professional
shall use their best efforts to perform their duties and obligations under this
Agreement such that the actual revenues, costs and expenses associated with the
provisions of Professional Services at the Orthodontix Professional during any
applicable period of the Orthodontix Professional's fiscal year shall be
consistent with the Business Plan.
1.6 ADVISORY BOARD. The parties hereby establish an Advisory Board
which shall be responsible for providing dispute resolution on certain matters
and for developing and implementing management and administrative policies for
the overall operation of the Orthodontix Professional. The Advisory Board shall
consist of that number of members as agreed to from time to time between OTX and
the Orthodontix Professional. OTX shall designate, in its sole discretion, fifty
(50%) percent of the members of the Advisory Board. The Orthodontix Professional
shall designate, in its sole discretion, fifty (50%) percent of the members of
the Advisory Board. All members of the Advisory Board shall be licensed to
practice orthodontics. Each party's representatives to the Advisory Board shall
have the authority to make decisions on behalf of the respective party. Except
as may otherwise be provided, the act of the majority of the members of the
Advisory Board shall be the act of the Advisory Board. In the event of a voting
deadlock, a person mutually agreed upon by OTX and the Orthodontix Professional
shall be temporarily
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appointed to the Advisory Board within five (5) days for the sole purpose of
casting a deciding vote. The decisions, resolutions, actions or recommendations
of the Advisory Board shall be implemented by OTX or the Orthodontix
Professional as appropriate.
a. Duties and Responsibilities of the Advisory Board. The Advisory
Board shall review, evaluate and make recommendations concerning the
following matters:
(i) Capital Improvements and Expansion. Any renovation and
expansion plans and capital equipment expenditures with
respect to the Orthodontix Professional shall be reviewed by
the Advisory Board which shall make recommendations to the
Orthodontix Professional with respect to proposed changes
therein. Such renovation and expansion plans and capital
equipment expenditures shall be based upon economic
feasibility, dental support, productivity and then current
market conditions.
(ii) Ancillary Services. The Advisory Board shall advise OTX
and the Orthodontix Professional with respect to the
Orthodontix Professional provided ancillary services
concerning the pricing, access to and quality of such
services.
(iii) Provider and Payor Relationships. The Advisory Board
shall review and make recommendations to OTX and the
Orthodontix Professional regarding the establishment or
maintenance of relationships with institutional health care
providers and third-party payors. The Advisory Board shall
also advise OTX and the Orthodontix Professional concerning
discounted fee schedules, including capitated fee
arrangements, and shall allocate revenue generated from
capitation contracts.
(iv) Strategic Planning. The Advisory Board shall advise OTX
and the Orthodontix Professional concerning development of
long-term strategic planning
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objectives for the Orthodontix Professional.
(v) Capital Expenditures. The Advisory Board shall advise the
Orthodontix Professional concerning the priority of major
capital expenditures.
(vi) Fee Dispute Resolution. At the request of OTX, the
Advisory Board shall advise OTX with respect to any dispute
concerning a set-off or reduction in fees earned by OTX
hereunder.
(vii) Grievance Referrals. The Advisory Board shall consider
and make recommendations to OTX and the Orthodontix
Professional regarding grievances pertaining to matters not
specifically addressed in this Agreement as referred to it by
OTX or the Orthodontix Professional.
Notwithstanding any contrary provision of this Agreement, it is
acknowledged and agreed that recommendations of the Advisory Board are
intended for the advice and guidance of OTX and the Orthodontix
Professional and that the Advisory Board does not have the power to
bind OTX and the Orthodontix Professional. Where discretion with
respect to any matter is vested in OTX or the Orthodontix Professional
under the terms of this Agreement, OTX or the Orthodontix Professional
as the case may be, shall have ultimate responsibility for the exercise
of such discretion, notwithstanding any recommendations of the Advisory
Board. OTX and the Orthodontix Professional shall, however, take such
recommendations of the Advisory Board into account in good faith in the
exercise of such discretion.
b. Orthodontic Decisions. Despite the above listing of activities and
areas of interest, all orthodontic decisions and related decisions
required by applicable law to be made solely by licensed Health Care
Professionals will be made solely by the Health Care Professionals.
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The licensed Health Care Professionals who are members of the Advisory
Board shall have exclusive authority to review and resolve issues
related to:
(i) Types and levels of health care services to be provided;
(ii) Recruitment of licensed and other professional healthcare
providers, including the specific qualifications and
specialties of recruited dentists and orthodontists;
(iii) Fee schedules;
(iv) Any dental or orthodontic related functions; and
(v) Any other decisions required by applicable law to be made
solely by dentists and orthodontists.
c. Meetings of the Advisory Board. The Advisory Board shall meet on a
regular basis as mutually agreed by the parties. A special meeting of
the Advisory Board may be called by either the Orthodontix Professional
or OTX upon five (5) business days notice.
II. DUTIES OF OTX
2.1 GENERAL. OTX shall provide the Orthodontix Professional with
comprehensive practice management, financial and marketing services, and such
facilities, equipment, and nonprofessional personnel as reasonably required by
the Orthodontix Professional to operate its practice. OTX shall have all power
and authority reasonably necessary to manage the business affairs of the
Orthodontix Professional and carry out OTX's duties under this Agreement,
subject to the requirements of the applicable law relating to the practice of
dentistry and orthodontics. It is expressly understood and agreed by the parties
that the Orthodontists shall have complete authority
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over and responsibility for the orthodontic care provided to the patients of the
Orthodontix Professional and that the services provided by OTX shall not
interfere with or compromise said authority and responsibility. OTX will have no
authority, directly or indirectly, to perform or govern the performance of, and
will not perform, any orthodontic function. OTX, may, however, advise
Orthodontix Professional as to the relationship between its performance of
orthodontic functions, and the overall administrative and business functioning
of its practice.
2.2 FACILITIES AND EQUIPMENT. OTX shall provide or arrange for the
offices, facilities, furnishings, equipment, and related services described in
Exhibit 2.2 hereto, as such Exhibit may be amended from time to time, and, on an
ongoing basis, shall provide for the maintenance and upkeep of the foregoing.
OTX additionally agrees, on an ongoing basis, to evaluate and consult with the
Orthodontix Professional on the equipment needs of and the efficiency and
adequacy of the facilities of the Orthodontix Professional. Title to such
furnishings and equipment, shall remain vested in OTX, provided, however, that
during the term of this Agreement the Orthodontix Professional shall maintain
complete care, custody and control of all inventory, equipment and supplies. OTX
makes no warranty, either express or implied with respect to the facilities and
equipment provided by OTX pursuant to this Agreement. All warranties of
merchantability and fitness for a particular purpose are hereby expressly
disclaimed.
2.3 PERSONNEL AND PAYROLL. OTX shall employ or otherwise retain all
management, clerical, secretarial, bookkeeping, accounting, payroll, billing and
collecting, and other nonprofessional or nonlicensed personnel (the "Staff") as
OTX deems reasonably necessary and appropriate for the Orthodontix Professional
and shall be responsible for Staff scheduling, provided, however the Orthodontix
Professional shall have complete and absolute authority over and control
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all decisions related to hours of operation of the Orthodontix Professional. OTX
shall have the sole responsibility and authority for determining the salaries
and fringe benefits of personnel employed by or retained by OTX, and for paying
such salaries and fringe benefits. The parties acknowledge that OTX personnel
retained by OTX may from time to time perform services for persons other than
the Orthodontix Professional and this Agreement shall not prevent OTX from
performing such services for others or restrict OTX from using its personnel to
provide services to others, provided, that such activity does not materially,
adversely affect the services to be provided by OTX hereunder.
2.4 BUSINESS SYSTEMS, PROCEDURES AND FORMS. In consultation with the
Orthodontix Professional, OTX shall offer advice to the Orthodontix Professional
regarding standardized business systems and procedures for the Orthodontix
Professional, including, but not limited to, a scheduling system (the "OTX
Scheduling System") that is designed to improve the Orthodontix Professional's
operating efficiency. The Orthodontix Professional expressly acknowledges and
agrees that it shall have no property rights in the foregoing systems,
procedures and clinical forms, and further agrees that such systems, procedures,
and forms shall be deemed to constitute Confidential Information within the
meaning of Section III, 3.7 hereof and is subject to the restrictions on the
use, appropriation, and reproduction of such Confidential Information provided
for in this Agreement.
2.5 PURCHASING, ACCOUNTS PAYABLE AND INVENTORY CONTROL. OTX shall be
responsible for and shall establish and maintain systems for the handling and
processing of all purchasing and payment activities and for the performance of
all payroll and payroll accounting functions of the Orthodontix Professional. In
consultation with the Orthodontix Professional, OTX
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shall purchase and maintain all patient care supplies and office supplies.
Patient care supplies shall be provided in accordance with the reasonable
specifications of the Orthodontix Professional with respect to brand names,
dosages, quantities and other specifications and shall at all times remain in
the Orthodontix Professional's complete care, custody and control.
2.6 INFORMATION SYSTEMS AND ACCOUNTING. OTX shall establish, maintain
and train the Staff in the use of information systems to produce financial and
operational information concerning the Orthodontix Professional's operations.
OTX shall analyze such information on an ongoing basis in order to advise the
Orthodontix Professional on ways of improving operating efficiencies. OTX shall
provide or arrange for all accounting and bookkeeping services related to the
Orthodontix Professional's operations.
2.7 LEGAL COMPLIANCE AND SERVICES. OTX shall be responsible for
ensuring compliance with all rules, regulations and ordinances applicable to the
Orthodontix Professional's operations, and shall arrange for all legal services
reasonably required by the Orthodontix Professional, but excluding the cost of
malpractice suits. Upon the Orthodontix Professional's request, OTX shall advise
and assist the Orthodontix Professional in instituting or defending in the name
of the Orthodontix Professional, all legal actions or proceedings by or against
third parties, including, without limitation, those actions to collect fees for
billed services and those actions necessary for the protection and continued
operation of the Orthodontix Professional.
2.8 MARKETING. OTX shall offer the Orthodontix Professional advice
regarding the design and execution of a marketing plan to promote the
professional services of the Orthodontix Professional. Such marketing plan may
include, as OTX determines to be appropriate, newspaper, yellow pages, and radio
and television advertising, special promotions and pricing programs, and
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direct marketing to employers, insurance companies, and other payors. In
connection with such marketing plan, OTX shall advise the Orthodontix
Professional on establishing and maintaining a plan for patients' payment for
orthodontic services on an installment plan basis. All marketing activities
hereunder shall be conducted in compliance with all applicable laws and
regulations governing advertising by the dental and orthodontic profession and
may be implemented through managed care and insurance companies.
2.9 FINANCIAL SERVICES. OTX shall be responsible for (i) billing and
collecting payments for all orthodontic services rendered by the Health Care
Professionals and for all other services billed by the Orthodontix Professional,
with all such billing and collecting to be done in the name of the Orthodontix
Professional; (ii) receiving payments from patients, insurance companies and all
other third party payors; (iii) taking possession of and endorsing in the name
of the Orthodontix Professional any notes, checks, money orders, insurance
payments and other instruments received in payment of accounts receivable; (iv)
administering the Orthodontix Professional's payroll, as applicable; and (v)
paying all Practice Expenses. The Orthodontix Professional, in consultation with
OTX, but in its discretion, shall establish the fees for all Professional
Services rendered by the Orthodontix Professional and shall timely advise OTX of
any changes in the Orthodontix Professional's fee schedule.
2.10 DISBURSEMENT OF FUNDS. (a) All monies collected for the
Orthodontix Professional by OTX pursuant to this Agreement shall be deposited
into an account with a bank whose deposits are insured with the Federal Deposit
Insurance Corporation (the "Orthodontix Professional Account"). The Orthodontix
Professional Account shall contain the name of the Orthodontix Professional but
OTX shall make all disbursements therefrom. OTX shall account for
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all monies so disbursed from the Orthodontix Professional Account. From the
funds collected and deposited by OTX in the Orthodontix Professional Account,
OTX shall make the following disbursements promptly when payable:
(i) Amounts payable to all contracted professional
corporations or individuals who provide Orthodontists or
orthodontic services (the "Professional Compensation"); and
(ii) All Practice Expenses (as defined at Section IV, 4.2).
(b) In the event the funds in the Orthodontix Professional Account are,
at any time insufficient to cover the Professional Compensation and the Practice
Expenses, OTX shall notify the Orthodontix Professional and OTX may advance
funds to the Orthodontix Professional, which advances will be deemed to be loans
to the Orthodontix Professional to be repaid upon such terms and at such rate of
interest as agreed to by the Orthodontix Professional and OTX, which
indebtedness shall be deemed a Practice Expense.
2.11 RECORDS. OTX shall supervise and maintain custody of all files and
records relating to the business operation of the Orthodontix Professional,
including but not limited to accounting, billing, patient records, and
collection records. For the term of this Agreement, OTX shall assign to the
Orthodontix Professional, any rights of ownership it may have in patient records
acquired in connection with the Reorganization Agreement, to the extent that
such records are for patients of the Orthodontix Professional. Such patient
records shall at all times be and remain the custody of the Orthodontix
Professional and accessible for patient care. To the extent lawful, OTX shall
have access to such patient records for the purpose of complying with this
Agreement, it being understood and agreed that nothing in this Section 2.11
shall permit OTX to exercise control over
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patient records or the selection, procedures or manner of a course of treatment
for a patient. The management of all files and records shall comply with
applicable state and federal statutes. OTX shall use its reasonable efforts to
preserve the confidentiality of patient medical records and use information
contained in such records only for the limited purpose necessary to perform the
services set forth herein; provided, however, in no event shall a breach of said
confidentiality be deemed a default under this Agreement.
2.12 CONTRACTS. OTX shall advise the Orthodontix Professional with
respect to all contractual arrangements with third parties that are reasonably
necessary and appropriate for the Orthodontix Professional's provision of
Professional Services, including, without limitation, negotiated price
agreements with third party payors, managed care providers or the purchasers of
group healthcare services, provided, however, that the Orthodontix Professional
shall maintain ultimate control over all pricing policies with respect to
orthodontic services and decisions relating to such contractual arrangements.
2.13 LICENSES AND PERMITS. OTX shall, on behalf of and in the name of
the Orthodontix Professional, apply for and maintain all federal, state and
local licenses (other than professional service licenses) and regulatory permits
required for, or in connection with the operation of the Orthodontix
Professional.
2.14 UTILITIES AND RELATED SERVICES. OTX shall arrange for and pay,
before delinquency, all charges relating to the necessary electricity, gas,
water, telephone, sewage, waste disposal, cleaning, pest extermination, heating
and air condition maintenance and other similar services reasonably necessary
and appropriate for the conduct of the Professional Services.
2.15 ACCOUNTS RECEIVABLE. To assure that the Orthodontix Professional
receives
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the entire amount of professional fees for its services and to assist the
Orthodontix Professional in maintaining reasonable cash flow for the payment of
the Practice Expenses, OTX may purchase, without recourse to the Orthodontix
Professional for the amount of the purchase, the accounts receivable of the
Orthodontix Professional arising during the previous month for an amount equal
to the gross revenue recorded each month by the Orthodontix Professional
(according to GAAP reflecting all adjustments related to bad debt reserve, if
any). OTX shall be entitled to offset the Practice Expenses against the amount
payable for the accounts receivable. Although it is the intention of the parties
that OTX purchase and thereby become the owner of the accounts receivable
generated by the Orthodontix Professional, in the event such purchase shall be
ineffective for any reason, the Orthodontix Professional is concurrently
herewith granting to OTX a security interest in the accounts so purchased, and
the Orthodontix Professional shall cooperate with OTX and execute all documents
in connection with the pledge of such purchased accounts receivable to OTX. All
collections in respect to such accounts receivable purchased by OTX shall be
received by OTX as the agent of the Orthodontix Professional and shall be
endorsed to OTX and deposited in a bank account designated by OTX. To the extent
the Orthodontix Professional comes into possession of any payments in respect of
such accounts receivable, the Orthodontix Professional shall direct such
payments to OTX for deposit in bank accounts designated by OTX, provided,
however, that nothing contained herein shall be construed as the Orthodontix
Professional relinquishing control over credit extended by the Orthodontix
Professional.
III. DUTIES OF THE ORTHODONTIX PROFESSIONAL
3.1 ORTHODONTISTS AND RENDERING OF PATIENT CARE. The Orthodontix
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Professional shall be responsible for the retention and supervision of
Orthodontists and all orthodontic care rendered to patients shall be rendered by
such Orthodontists.
3.2. PROFESSIONAL SERVICES. The Orthodontix Professional shall use and
occupy the offices and facilities designated on Exhibit 2.2 exclusively for the
practice of orthodontic services, and shall comply with all applicable local
rules, ordinances and all standards of dental and orthodontic care. It is
expressly acknowledged by the parties that the practice or orthodontics
conducted by the Orthodontix Professional shall be conducted solely by the
Orthodontists. The Orthodontists shall provide Professional Services to patients
hereunder in compliance at all times with ethical standards, and laws and
regulations applying to the dental and orthodontic professions. The Orthodontix
Professional shall ensure that each person that provides Professional Services
to patients is licensed by the state of Florida. In the event that any
disciplinary, medical malpractice or other actions are initiated or threatened
against any Orthodontists, the Orthodontix Professional shall immediately inform
OTX of such action and the underlying facts and circumstances. The Orthodontix
Professional agrees to cooperate with and participate in quality
assurance/utilization review programs established by OTX or mandated by
accreditation and/or licensure standards applicable to the practice of
orthodontics. Deficiencies discovered in the performance of any personnel or in
the quality of professional services shall be reported immediately to OTX, and
appropriate steps shall be taken by the Orthodontix Professional at once to
remedy such deficiencies.
3.3 RECORDS. The Orthodontix Professional shall keep or cause to be
kept accurate, complete and timely dental, orthodontic and other records of all
patients. Such records shall be sufficient to enable OTX, on behalf of the
Orthodontix Professional, to obtain payment for the services provided by the
Orthodontists, provided, however, that such records shall at all times during
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the term of this Agreement remain the property of the Orthodontix Professional.
3.4 PROFESSIONAL LICENSURE. The Orthodontix Professional shall ensure
that the Orthodontists;
(i) participate in continuing education as is necessary for such
persons to remain current; and
(ii) maintain professional licenses and board certification as
necessary.
3.5 PROFESSIONAL INSURANCE ELIGIBILITY. The Orthodontix Professional
shall cooperate in the obtaining and retaining of professional liability
insurance by assuring that each of its Orthodontists, is insurable, and
participating in an on-going risk management program.
3.6 SERVICES AGREEMENT. The parties recognize that the services of OTX
to be provided hereby and OTX's reasoning in part for entering into this
Agreement is based on the Orthodontix Professional operating an active
orthodontic practice to which it and each Orthodontist employed or associated
with the Orthodontix Professional devote their full time and attention, which
relationship may be memorialized pursuant to a Services Agreement or Employment
Agreement (collectively, the "Services Agreement"). For the term of this
Agreement, OTX shall assign to the Orthodontix Professional any rights it has in
any Employment Agreement that may be acquired by OTX in connection with the
Reorganization Agreement, to the extent such employee will become affiliated
with the Orthodontix Professional. Except as otherwise consented to by OTX, the
Orthodontix Professional will cause each individual Orthodontist who becomes
employed by or affiliated with the Orthodontix Professional to enter into the
Services Agreement, in substantially the form attached hereto, which will
provide, among other things, for restrictive covenants regarding non-competition
and liquidated damages in the event of breach by the Orthodontist of the
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Orthodontist's agreement to provide services. The terms and conditions of the
Services Agreement to be entered from time to time shall be substantially in the
form attached and shall be incorporated by reference hereby. All rights to
enforce the Services Agreement shall be enforceable by OTX and any payments made
by the breaching Orthodontist to the Orthodontix Professional in the form of
liquidated damages shall forthwith be delivered by the Orthodontix Professional
to OTX. The Orthodontix Professional shall have the sole responsibility for
paying the Professional Compensation (as defined at Section II, 2.10(a)(i))
salaries and fringe benefits of all Orthodontists. OTX shall, in the name and on
behalf of the Orthodontix Professional, establish and administer, out of funds
available in the Orthodontix Professional Account, the Professional
Compensation.
3.7 CONFIDENTIALITY. The Orthodontix Professional agrees and
acknowledges that all materials provided by OTX to the Orthodontix Professional
constitute "Confidential Information" and are disclosed in confidence and with
the understanding that it constitutes valuable business information developed by
OTX at great expenditures of time, effort, and money. The Orthodontix
Professional further agrees that it shall not, directly or indirectly, without
the express prior written consent of OTX, use or disclose such Confidential
Information for any purpose other than in connection with the services to be
rendered hereunder. The Orthodontix Professional further agrees: (i) to keep
strictly confidential and hold in trust all Confidential Information and not
disclose such Confidential Information to any third party, including its
affiliates without the express prior written consent of OTX; and (ii) to impose
this obligation of confidentiality on its affiliates, partners, employees and
independent contractors. The Orthodontix Professional acknowledges that the
disclosure of Confidential Information to it by OTX is done in reliance upon its
representations and covenants in this Agreement. Upon expiration or termination
of this Agreement by either party for
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any reason whatsoever, the Orthodontix Professional shall immediately return and
shall cause its affiliates, partners, employees and independent contractors not
to, thereafter use, appropriate, or reproduce such Confidential Information. The
Orthodontix Professional further expressly acknowledges and agrees that any such
use, appropriation, or reproduction of any such Agreement will result in
irreparable injury to OTX, that the remedy at law for the foregoing would be
inadequate, and that in the event of any such use, appropriation, or
reproduction of any such Confidential Information after the termination or
expiration of this Agreement, OTX in addition to any other remedies or damages
available to it, shall be entitled to injunctive or other equitable relief
without the necessity of proving actual damages but such rights to relief shall
not preclude OTX from such other remedies which may be available to it
hereunder.
3.8 COVENANT NOT TO COMPETE. During the term of this Agreement and
expressly subject to the Services Agreement and all other agreements entered
into between the Orthodontix Professional and the Orthodontists, the Orthodontix
Professional shall not and shall cause its shareholders and Orthodontists not to
establish, develop or open any offices for the provision of Professional
Services without the express written consent of OTX. Subject to terms of the
Services Agreement which terms shall control, for a period of two years
following the termination or expiration of this Agreement, the Orthodontix
Professional shall not and shall cause its shareholders and Orthodontists not to
advertise in print (except for yellow page advertising and announcements for the
opening of a practice) or electronic media of any kind and shall and not solicit
in any manner patients, orthodontists or staff associated with the Orthodontix
Professional or OTX.
IV. FINANCIAL MATTERS
4.1 AMOUNTS DELIVERED TO OTX. The Orthodontix Professional and OTX
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mutually recognize and acknowledge that OTX will incur substantial costs in
providing the equipment, support services, personnel, marketing, management,
administration, and other items and services that are the subject matter of this
Agreement. The Orthodontix Professional and OTX further recognize that certain
of such costs and expenses can vary to a considerable degree, according to the
extent of the Orthodontix Professional's business and services. Furthermore, the
Orthodontix Professional and OTX agree that it will be impracticable to
ascertain and segregate all of the exact costs and expenses that will be
incurred by OTX from time to time in performance of its obligations under this
Agreement. However, it is the intent of the parties that the amounts delivered
to OTX be reasonable and approximate its costs and expenses, plus a reasonable
return, considering the investment and risk taken by OTX and the value of the
services provided by OTX. In consideration of the foregoing, OTX shall be
entitled to receive a management amount (the "Management Amount") and service
amount (the "Service Amount") consisting of the following:
a. A Management Amount equal to fifteen (15%) percent of Accrued
Revenue, (as defined below); and
b. Subject to the Services Agreements generally, Service Amount equal
to (.30) multiplied by the Net Operating Income (as defined below) of
the Orthodontix Professional.
4.2 ACCRUED REVENUE/NET OPERATING INCOME/PRACTICE EXPENSES.
For purposes of this Agreement, "Accrued Revenue" shall be defined as follows:
(i) 24% of the Initial Contract Amount; plus
(ii) the Monthly Contract Residual Amount; plus
(iii) Additional Non-Contract Service Charges.
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"INITIAL CONTRACT AMOUNT" for a given month shall be defined as the
total value of any contracts to provide orthodontic services between a patient
or third party payor on the one hand and the Orthodontist or Orthodontix
Professional on the other, for the provision of orthodontic services at a
pre-determined fee-for service amount (whether or not payable in cash) (the
"Contract") which contract was generated after the date hereof (the "Effective
Date"), entered into on or prior to the last business day of each month.
"MONTHLY CONTRACT RESIDUAL AMOUNT" shall mean that amount equal to the
amounts remaining to be paid by the patient or third party payor under a
Contract (the "Remaining Amounts Payable") divided by the number of months
remaining in the term of such Contract; provided, however, that the Remaining
Amounts Payable shall not be in excess of 76% (other than for a Contract entered
into prior to the Effective Date) of the total amounts payable by the patient or
third party payor under the Contract.
"ADDITIONAL NON-CONTRACT SERVICE CHARGES" shall mean that amount
charged for orthodontic services which are not included in a patient contract.
Such orthodontic services shall include, but are not limited to, diagnosis
charges, observation charges, retention charges and office visit charges.
For purposes hereof, "Net Operating Income" shall be defined as an
amount equal to Accrued Revenue less the sum of Professional Compensation
(defined at Section 2.10 of this Agreement) and the Practice Expenses. For
purposes hereof, "Practice Expenses" shall be defined as:
(i) Salaries, benefits, and other direct costs of all
employees of OTX at the Orthodontix Professional, excluding
those persons covered under Professional Compensation;
(ii) Direct costs of all patient care supplies and office
supplies associated with the
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Orthodontix Professional;
(iii) Personal property and real property leasehold
obligations entered into in connection with the operation of
the Orthodontix Professional;
(iv) Personal property and intangible taxes assessed against
OTX's assets used in connection with the operation of the
Orthodontix Professional;
(v) Interest expense on indebtedness incurred by OTX to
finance any of its obligations hereunder or services provided
hereunder;
(vi) Malpractice insurance expenses and Orthodontist
recruitment expenses; and
(vii) the Management Amount.
4.3 AUDIT RIGHTS. No more than once quarterly either party, upon giving
notice to the other party hereto, shall have the right to inspect the records of
the Orthodontix Professional to ascertain and audit Accrued Revenue and the
Practice Expenses, subject to patient confidentiality laws. If, upon audit or
examination, it is determined that the Management Amount or Service Amount was
incorrectly computed, the parties shall, within twenty (20) days of such
determination, reconcile the difference by a cash payment to the applicable
party.
4.4 PAYMENT OF MANAGEMENT AMOUNT AND SERVICE AMOUNT. The Management
Amount shall be payable to OTX once monthly no later than the tenth of the
month. Payment of the Service Amount shall be payable by the Orthodontix
Professional once annually no later than March 25. Payment of the Management
Amount and the Service Amount is not intended to be, and shall not be,
interpreted or applied as permitting OTX to share in the Orthodontix
Professional's fees for Professional Services or any other services, but is
acknowledged as the parties' negotiated agreement as to the reasonable, fair
market value of the equipment, support services,
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personnel, marketing, management, administration, and other items and services
furnished by OTX pursuant to this Agreement, considering the nature and volume
of the services required and the risks assumed by OTX. The amounts payable
monthly shall be estimated based upon the previous month's operating results of
the Orthodontix Professional. Adjustments to the estimated payments shall be
made to reconcile actual amounts due hereunder, no later than the last day of
the following month.
V. TERM AND TERMINATION
5.1 INITIAL TERM. The initial term of this Agreement shall commence on
the effective date hereof, and shall expire on the date which is forty (40)
years thereafter subject to the earlier termination as set forth herein.
5.2. TERMINATION. This Agreement may be terminated upon the first to
occur of any of the following events:
a. Termination by Agreement. In the event the Orthodontix Professional
and OTX shall mutually agree in writing, this Agreement may be terminated on the
date specified in such written agreement.
b. Bankruptcy or Dissolution. In the event that either party dissolves
or becomes insolvent, or if any petition under federal or State law pertaining
to bankruptcy or insolvency or for a reorganization or arrangement or other
relief from creditors shall be filed by or against either party, or if a
receiver, trustee or similar officer or creditor's committee shall be appointed
to take charge of any property of or to operate or wind up the affairs of either
party, then the other party may by written notice terminate this Agreement.
c. Orthodontix Professional Breaches. At OTX's option, in the event
Orthodontix
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Professional is in default of any material obligation under this Agreement, then
OTX may by written notice (as specified in 5.3 of this Agreement) to Orthodontix
Professional terminate this Agreement.
d. OTX Breaches. At the Orthodontix Professional's option, in the event
OTX is in default of any material obligation under this Agreement, which default
causes a material, adverse impact upon the Orthodontix Professional, then the
Orthodontix Professional may by written notice (as specified in 5.3 of this
Agreement) to OTX terminate this Agreement.
e. Termination by Reason of Legislative, Regulatory or Administrative
Change. In the event there shall be a change in law or a change in any third
party reimbursement system, any of which, are reasonably likely to adversely
affect the manner in which either party may perform or be compensated for its
services under this Agreement or which shall make this Agreement unlawful, the
parties shall immediately enter into good faith negotiations regarding a new
arrangement or basis for compensation for the services furnished pursuant to
this Agreement that complies with the law and that approximates as closely as
possible the economic position of the parties prior to the change.
5.3 RIGHT TO CURE DEFAULT. Except in the event of a
termination of this Agreement due to expiration of the Agreement or through
mutual agreement, a termination for breach shall not be effective until thirty
(30) days after written notice specifying the facts constituting the alleged
breach is provided by the party desiring termination. In the event either party
shall give written notice of termination to the other as set forth above, the
party receiving said notice shall have thirty (30) days to cure the alleged
default. If such default shall not have been cured within thirty (30) days
following the giving of such written notice, the party giving such written
notice shall have the right to immediately terminate this Agreement unless the
defaulting party shall, within said (30) day period, have made a good faith
effort to initiate curative action and
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diligently prosecutes such action to completion within the following thirty (30)
day period.
5.4 EFFECTS OF TERMINATION. Upon termination, but not expiration of
this Agreement, neither party shall have any further obligations or rights
hereunder except for (i) the Orthodontix Professional shall be obligated at the
time of termination, to purchase from OTX all equipment, capital improvements
and other tangible assets provided by OTX to the Orthodontix Professional at a
price equal to the current value of said assets as reflected on the books of OTX
at the time of termination, (ii) obligations and rights accruing prior to the
date of termination, that are expressly made to extend beyond the term of this
Agreement or the Reorganization Agreement including, without limitation,
indemnity, confidentiality, and restrictive covenant provisions, which
provisions shall survive the expiration or termination of this Agreement.
5.5 CONTINUED PROFESSIONAL SERVICES. Following any notice of
termination hereunder, whether given by OTX or the Orthodontix Professional, the
Orthodontix Professional and OTX will fully cooperate with each other in all
matters relating to the performance or discontinuance of Professional Services,
as appropriate, and the orderly transition of patients.
VI. INDEMNIFICATION
6.1 INDEMNIFICATION BY OTX. The Orthodontix Professional, its officers,
its employees and its agents will incur no liability in connection with the
conduct of OTX prior to the Effective Date. The Orthodontix Professional shall
not, by entering into this Agreement and performing its obligations hereunder,
assume or become liable for any of the existing or future claims made against
OTX or arising out of or connected with the negligence or fault of OTX, its
employees, agents, or contractors or OTX's performance of its obligations within
its scope of
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responsibility hereunder. Accordingly, OTX shall and hereby does indemnify, hold
harmless, and agrees to defend the Orthodontix Professional and its officers,
employees and agents from and against any claims, obligations, damages, causes
of action, losses, liabilities, damages, costs and expenses, including
reasonable attorneys' fees, arising out of or connected with the conduct of OTX
prior to the effective date of this Agreement or arising out of or connected
with the negligence or fault of OTX, its employees, agents, or contractors or
OTX's performance of its obligations within its scope of responsibility
hereunder. In the event the Orthodontix Professional is required to hire an
attorney to defend itself against a claim indemnified hereunder, OTX shall be
responsible for retaining counsel reasonably acceptable to the Orthodontix
Professional to defend Orthodontix Professional and OTX shall be responsible to
pay said attorneys' fees as reasonably incurred.
6.2 INDEMNIFICATION BY THE ORTHODONTIX PROFESSIONAL. OTX, its officers,
its employees and its agents, will incur no liability in connection with the
conduct of the Orthodontix Professional prior to the Effective Date. OTX shall
not, by entering into this Agreement and performing hereunder, assume or become
liable for any existing or future claims made against the Orthodontix
Professional or arising out of or connected with the negligence or fault of the
Orthodontix Professional its employees, agents, or contractors or the
Orthodontix Professional's performance of its obligations hereunder.
Accordingly, the Orthodontix Professional shall and hereby does indemnify, hold
harmless, and agrees to defend OTX and its affiliates, officers, employees and
agents from and against any claims, obligations, demands, causes of action,
losses, liabilities, damages, costs and expenses, including reasonable
attorneys' fees, arising out of or connected with the conduct of the Orthodontix
Professional prior to the effective date of this Agreement or arising out of or
connected with the negligence or fault of the Orthodontix
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Professional its employees, agents, or contractors or the Orthodontix
Professional's performance of its obligations hereunder.
VII. TRADEMARKS AND TRADE NAMES OF OTX
7.1 TRADE NAMES AND TRADEMARKS OF OTX. The Orthodontix Professional
shall not use or imitate, in whole or in part, any trademarks, trade names,
service marks, insignias, slogans, emblems, symbols, designs or other
identifying characteristics owed by or associated with OTX or any of its
subsidiaries or affiliates (collectively, "Proprietary Marks") until such time
as OTX (i) approves any such use in writing, or (ii) otherwise grants to the
Orthodontix Professional a license to use the Proprietary Marks. Such
restrictions include, without limitation, using any of the Proprietary Marks in
any signs, advertising or any promotional material.
Upon termination of this Agreement for any cause whatsoever, including
OTX's breach, the Orthodontix Professional shall immediately, at its sole cost
and expense, make whatever changes may be necessary in any signs, advertising
and promotional material in order to comply with the provisions of this
paragraph and cease using the Proprietary Marks. The Orthodontix Professional
covenants under this section are unconditional and are in no way dependent upon
the performance of OTX of any of its agreements hereunder.
The Orthodontix Professional hereby acknowledges and will always
acknowledge and recognize both before and after the expiration of this Agreement
the exclusive right of OTX to use or grant to others the right or license to
use, whether separately, or as a part of or in connection with other words, any
Proprietary Xxxx.
If the Orthodontix Professional utilizes any Proprietary Xxxx, the
Orthodontix Professional shall take all actions which are necessary to maintain
OTX's goodwill and reputation or cease
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utilizing, at OTX's demand, any and all Proprietary Marks.
VIII. INDEPENDENT CONTRACTOR
8.1 ORTHODONTIX PROFESSIONAL'S CONTROL OVER PROFESSIONAL SERVICES.
Notwithstanding the authority granted to OTX herein, OTX and the Orthodontix
Professional agree that Orthodontix Professional personally, or through any of
its affiliated Orthodontists, employees or agents, shall have control or
supervision over the provision of all Professional Services with the sole
authority, directly or indirectly, to perform any orthodontic function. OTX will
have no authority, directly or indirectly, to perform, and will not perform, any
orthodontic function. OTX may, however, advise the Orthodontix Professional as
to the relationship between its performance of orthodontic functions and the
overall administrative and business functioning of its practice.
8.2 INDEPENDENT RELATIONSHIP. The Orthodontix Professional and OTX
intend to act and perform independently with respect to their respective
authority, rights and obligations under this Agreement and the provisions hereof
are not intended to create any partnership, joint venture, agency or employment
relationship between the parties. The Orthodontix Professional will not have any
claim under this Agreement, or otherwise, against OTX for vacation pay, sick
leave, unemployment insurance, worker's compensation, disability benefits or
employee benefits of any kind.
8.3 OTHER PROFESSIONALS. No provision of this Agreement is intended to
limit OTX's right, authority, or ability under applicable law to contract with
other persons, or to employ, contract with, or enter into any partnership or
joint venture with any healthcare professional.
IX. MISCELLANEOUS
9.1 RECITALS. The foregoing recitals are true and correct and are
incorporated herein.
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9.2 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
9.3 NON-WAIVER. No delay or failure by either party to exercise any
right under this Agreement, and no partial or single exercise of that right,
shall constitute a waiver of that or any other right, unless otherwise expressly
provided herein. No waiver of any provisions of this Agreement shall be
effective unless it is in writing, signed by the party against whom it is
asserted and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
9.4 HEADINGS. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe the provisions of this Agreement.
9.5 ATTORNEY'S FEES, COSTS AND EXPENSES. In any action or proceeding to
enforce this Agreement, including any appeals or post judgment proceedings, the
prevailing party shall be entitled to recover from the other party thereto the
reasonable attorneys' fees, court costs, filing fees, publication costs and
other expenses incurred by the prevailing party in connection therewith.
9.6 VENUE, JURISDICTION AND GOVERNING LAW. The Agreement shall be
interpreted, construed and enforced in accordance with the laws of the State of
Florida. Venue for any litigation involving this Agreement shall be Dade County,
Florida. The parties agree to submit to the jurisdiction of the courts of Dade
County, Florida. The parties acknowledge that OTX is not authorized or qualified
to engage in any activity which may be construed or deemed to constitute the
practice of dentistry or orthodontics. To the extent any act or service required
of OTX is this
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Agreement should be construed or deemed, by any governmental authority, agency
or court to constitute the practice of dentistry or orthodontics, the
performance of said act or service by OTX shall be deemed waived and forever
unenforceable and the provisions of section 9.12 shall be applicable.
9.7 RULE OF CONSTRUCTION. The terms and conditions set forth in this
Agreement are the product of mutual draftsmanship and/or review by the parties
hereto, each being represented by counsel. Any ambiguities in this Agreement or
any agreement prepared or to be prepared pursuant to or in connection with this
Agreement shall not be construed against any one party because of the
draftsmanship. The Agreement shall be interpreted in a neutral fashion
consistent with the intent of the parties as stated herein.
9.8 NOTICES. Any notice, request, demand, instruction, or other
communication to be given to any party to this Agreement, shall be in writing
and shall be sent either by: registered or certified mail; hand delivery; by
Federal Express or other reputable courier service, and shall be deemed
delivered upon receipt of said notice. The addresses for the purposes of this
section may be changed by giving written notice hereunder. Unless and until
written notice of a change of address is given in writing and received, the
addresses and provided herein shall be deemed to continue in effect for all
purposes.
As to OTX: Orthodontix, Inc.
0000 Xxxxx xx Xxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000
As to Orthodontix Professional: Orthodontix Professional, P.A.
------------------------------
------------------------------
9.9 MODIFICATION OF AGREEMENT AND MERGER. This Agreement, including
the exhibits attached hereto and made part hereof, constitutes the entire
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agreement of the parties. This Agreement may not be supplemented, modified or
revised in any manner except by a single writing executed by all parties hereto,
no additional consideration required. There are no prior or contemporaneous oral
promises, representations or agreements not set forth herein inducing entry into
this Agreement. The provision of this paragraph cannot be modified by conduct,
oral agreement or written agreement, unless signed by all parties hereto.
9.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Confirmation of execution
by telex or by telefax of a facsimile signature page shall be binding upon that
party so confirming.
9.11 AUTHORITY TO SIGN. By signing this Agreement, each party
represents and warrants to all other parties that its execution of this
Agreement is duly authorized in accordance with applicable laws relating to such
parties, that this Agreement is fully enforceable according to its terms against
such executing party and that the individual executing on any corporation's
behalf has the requisite power and authority to do so.
9.12 SEVERABILITY. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under any present or future
law by the final judgment of a court of competent jurisdiction, the remainder of
this Agreement will not be affected thereby. It is the intention of the parties
that if any such provision is held to be illegal, invalid or unenforceable,
there will be added in lieu thereof a provision as similar in terms to such
provision as is possible and be legal, valid and enforceable.
9.13 TIME OF ESSENCE. Time is of the essence in this Agreement.
9.14 CONFIDENTIALITY. The parties agree to keep the provisions in this
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agreement confidential and will not disclose these provisions to any person
excluding the parties' accountants, attorneys, and other professionals with whom
the parties conduct business and to whom such disclosure is reasonably
necessary; provided however that such person shall be advised of the
confidential nature of this Agreement at the time of such disclosure.
9.15 FURTHER ASSURANCES. Each party covenants to perform any lawful
additional acts, including execution of additional agreements and documents, as
are reasonably necessary to effectuate the intent and purpose of this Agreement.
9.16 ASSIGNMENT. OTX shall have the right to assign its rights
hereunder. The Orthodontix Professional shall not have the right to assign its
respective rights and obligations hereunder without the written consent of OTX.
9.17 CONTRACT MODIFICATIONS FOR PROSPECTIVE LEGAL EVENTS. In the event
any state or federal laws or regulations, now existing or enacted or promulgated
after the effective date of this Agreement, are interpreted by judicial
decision, a regulatory agency or legal counsel for both parties in such a manner
as to indicate that the structure of this Agreement may be in violation of such
laws or regulations, the Orthodontix Professional and OTX shall amend this
Agreement as necessary. To the maximum extent possible, any such amendment shall
preserve the underlying economic and financial arrangements between the
Orthodontix Professional and OTX.
9.18 THIRD PARTY BENEFICIARIES. OTX understands and agrees that certain
orthodontists and their wholly owned professional associations are third party
beneficiaries of this Agreement pursuant to the Services Agreements entered into
by and between those orthodontists, their professional associations and
Orthodontix Professional with respect to the rights, benefits and
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obligations provided by OTX to Orthodontix Professional hereunder and a breach
by OTX of this Agreement (as adjudicated by a court of competent jurisdiction,
after the exhaustion of all appeals) shall entitle those orthodontists to
terminate such Services Agreements with no liability accruing to them or their
professional associations.
The parties hereto have duly executed this Agreement on the date first
written above and the effective date of this Agreement shall be the date first
written above.
ORTHODONTIX, INC.
Dated: By:
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F.W. "Mort" Guilford, President
ORTHODONTIX PROFESSIONAL, P.A.
Dated: By:
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Xxxxxxx Xxxxxxxxx, D.D.S., President
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