CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is executed this 1st day of
March, 1998, by and among Sierra Primary Care Medical Group, A Medical
Corporation., a California professional corporation (hereinafter referred to as
"Sierra"), Sinnadurai X. Xxxxxxx, M.D. (hereinafter referred to as "Physician"),
and X. X. Xxxxxxx, M.D., Inc., a California professional corporation
(hereinafter referred to as the "Company").
R E C I T A L S
A. Sierra owns and operates a medical practice, under the name Sierra
Primary Care Medical Group, A Medical Corporation (the "Practice"), located at
0000 Xxxx Xxxxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx 00000; 00000 00xx Xxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxx; and 00000 00xx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx.
B. Physician is the sole shareholder of Company.
C. Physician was formerly a shareholder of Sierra, but sold his shares to
Prospect Medical Group, Inc., a California professional corporation;
D. Following such sale, Sierra obtained the services of Physician, and
Physician was employed by Sierra, upon the terms and conditions set forth in an
Employment Agreement, executed on September 25, 1997, by and between Sierra and
Physician (the "Employment Agreement");
E. Prospect Medical Holdings, Inc., a Delaware corporation that is
affiliated with Sierra, has a vacancy on its Board of Directors and its
remaining Directors have proposed electing Physician to fill the vacancy for the
remaining term of office; and
F. Physician and Sierra desire to terminate the Employment Agreement and
in its stead Company desires to provide the services of Physician to Sierra
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. TERMS AND CONDITIONS OF CONSULTING ARRANGEMENT
1.1 CONSULTANT. Company hereby agrees to provide certain services of
Physician to Sierra as a consultant at the Practice subject to the terms and
conditions hereinafter set forth.
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1.2 SERVICES TO BE PROVIDED. Company shall cause Physician to render
such services as may be mutually agreed upon by Physician and Sierra as being
required for the administration and operation of the Practice. Company shall
also cause Physician to provide medical services at the Practice as mutually
agreed upon by Physician and Sierra. Physician shall provide covered services
on a readily available and accessible basis during normal business hours at
Physician's usual place of business and shall arrange for emergency services
twenty-four (24) hours per day, seven (7) days per week, three hundred
sixty-five (365) days per year.
1.3 FACILITIES. Sierra agrees to provide adequate office space for the
performance of the duties of Physician as contemplated in this Agreement
including, but not limited to, an appropriate examination room and waiting room
space at the Practice for conducting Physician's medical services in conformity
with the prevailing standard of care in the community.
1.4 NON-PHYSICIAN PERSONNEL. Through necessary arrangements, Sierra
will provide Physician with adequate non-physician personnel including, but not
limited to, nursing staff, reception and secretarial staff, to assist Physician
in the performance of his duties. Physician may recommend certain persons to
Sierra for any or all of the above positions, provided that all hiring and
firing decisions shall be made by Sierra in its sole discretion.
1.5 QUALIFICATIONS.
(a) Company and Physician hereby represent and warrant to Sierra
that except as set forth on Exhibit A attached hereto, Physician:
(i) Is currently duly licensed and qualified to engage in
the practice of medicine in the State of California pursuant to the requirements
of the Medical Board of California;
(ii) Has or will obtain such qualifications required to meet
the criteria necessary to provide professional services at the Practice;
(iii) Has all necessary narcotics and controlled substances
registration numbers and licenses for the performance of his duties hereunder;
(iv) In no state has Physician's license to practice
medicine ever been suspended, restricted, denied or revoked:
(v) Has never been reprimanded, sanctioned or disciplined
by a licensing board or state or local medical society or specialty board or any
healthcare facility;
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(vi) Has maintained, or there has been maintained on
Physician's behalf, professional liability insurance coverage in the amount of
$1,000,000 individually, and $3,000,000 in the aggregate;
(vii) No action based on an allegation of malpractice by
Physician has ever been settled by payment to the plaintiff of an aggregate
amount in excess of Thirty Thousand Dollars ($30,000); and
(viii) Has never resigned from or been denied membership or
reappointment of membership on the medical staff of any hospital, and no
hospital medical staff membership or clinical privileges of Physician have ever
been suspended, curtailed, denied or revoked.
(b) In the event any representation or warranty set forth above
becomes untrue or inaccurate in any material respect during the Term (as
hereinafter defined), Company or Physician shall send the Practice a notice (the
"Physician Warranty Notice") within ten (10) days thereafter setting forth with
reasonable particularity the reasons why such representation or warranty has
become untrue or inaccurate.
(c) In addition, Physician shall at all times during the Term of
this Agreement comply with applicable federal, state and municipal laws
including, without limitation, all licensing requirements, other applicable
statutes and ordinances, rules and regulations of governmental agencies
regulating Physician's profession, and applicable ethical standards.
1.6 FEES, XXXXXXXX AND COLLECTIONS. Sierra shall xxxx and collect all
fees for the services that are provided for the patients of Physician
("collected revenues"), and Physician and Company agree that neither Company nor
Physician shall take any actions whatsoever to xxxx (or cause to be billed,
other than by Sierra or its designee) any patient or other individual or entity
for any such services. The fees for services rendered by Physician shall be
established by Sierra. The fees for services may be changed from time to time by
Sierra to reflect charges that may have been agreed upon between Sierra and
third-party providers, including insurance companies, managed care plans, HMOs
and PPOs. Sierra (or its designee) shall xxxx Physician's charges and collect
payments for all Physician's services, and Company agrees that Physician shall
work with Sierra's office staff to ensure the prompt billing of all patients for
all services rendered and shall use his or her best efforts to help office staff
(or Sierra's designee) collect all patient accounts. The "Physician charges"
shall mean all xxxxxxxx for all of Physician's services provided hereunder. All
fees from xxxxxxxx generated by Physician shall be the sole and exclusive income
of Sierra, and Company and Physician expressly and irrevocably transfer, assign
or otherwise convey to Sierra all right, title and interest of Company or
Physician in and to any fees resulting from or incident to Physician's practice
of medicine under this Agreement.
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1.7 PHYSICIAN MEDICAL RECORDS. The medical records maintained by
Physician relating to patients seen by him during the term of this Agreement are
the property of Sierra, and Physician will comply with all applicable laws with
regard to maintaining them.
1.8 DUTIES. Except for services rendered at Physician's
gastroenterology practice, as provided herein below, Company agrees that
Physician shall devote his professional working time and attention to the
practice of medicine and the management of the Practice for the benefit of the
Practice under the terms of this Agreement. Company agrees that Physician shall
not engage in the practice of medicine, either directly or indirectly, alone or
in association with others, including covering calls for other physicians except
as a consultant to Sierra and for the benefit of Sierra and the Practice, except
as otherwise provided herein. Further, Company agrees that, except as otherwise
provided herein, Physician shall not become an employee of any other group,
hospital or institution wherein Physician provides direct or indirect services
to patients of such entities. Except for services rendered in Physician's
internal medicine and gastroenterology practice, as provided herein below, all
fees and xxxxxxxx produced by Physician for services to patients other than
patients of the Practice shall be income of the Practice. Company agrees that
Physician's duties shall include, but not be limited to the following:
(a) Providing professional medical services within Physician's
field of practice to any and all patients of the Practice in any office of the
Practice, regardless of whether the patients are covered by indemnity plans,
managed care plans, Medicaid (Medi-Cal) or Medicare plans;
(b) Keeping, preparing and maintaining appropriate records, claims
reports and correspondence (including, without limitation, patient charts)
relating to all services rendered by him under this Agreement in accordance with
all Practice, professional, and governmental record keeping and reporting
requirements, all of which records shall be and remain the property or in the
possession of Sierra;
(c) Attending professional conventions and medical education
seminars and generally performing all things necessary to maintain and improve
his medical practice and professional skills, provided that all absences from
the Practice for such purposes must be approved in advance by Sierra, in its
sole discretion; and
(d) Performing such other duties as Sierra shall from time to time
reasonably direct.
Nothing in this Agreement is intended nor shall be construed as
limiting or restricting Physician's right to engage in any activity unrelated to
the direct practice of medicine, provided that such activities do not interfere
with Physician's performance of his or her obligations hereunder.
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During the Term, Company agrees that Physician shall not, at any
time or place, either directly or indirectly, engage in the practice of medicine
or surgery to any extent whatsoever, except pursuant to and in accordance with
this Agreement. Except as otherwise expressly provided herein, Company agrees
that Physician shall comply with all policies and procedures applicable to
Practice employees generally. Notwithstanding the foregoing, Physician shall be
entitled to maintain an internal medicine and gastroenterology practice located
at 00000 00xx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 provided that he shall
not perform medical services for any capitated primary care patient outside the
consulting arrangement between Company and Sierra pursuant to this Agreement.
Nothing herein shall be construed to prevent Physician from
receiving honoraria or other stipends for performing services outside the scope
of his consulting arrangement hereunder; provided however, that Physician shall
not perform any such services on behalf of any competitor of Sierra or its
affiliates.
2. COMPENSATION
2.1 FEES. Sierra shall pay Company Eighty-four Thousand Four Hundred
Dollars ($84,400) annually. Sierra shall pay Company on a monthly basis in
arrears in accordance with Sierra's policies in effect from time to time. Such
fees shall be increased at Sierra's sole discretion, based on performance
criteria established by Sierra. Such amount includes reimbursement for
automobile expenses, phone expenses and continuing education classes. Physician
shall not seek any other payment or surcharge from any enrollee for covered
services under any circumstances, including but not limited to the event of
Sierra's or any contracting health plan's insolvency, or Sierra's nonpayment of
Physician, except as may be expressly provided in the agreement between enrollee
and the contracting health plan. Sierra or a contracting health plan, upon
receiving notice of any such surcharge or other prohibited payment by Physician,
shall take appropriate action to assist the affected enrollee in obtaining
restitution and to prevent a recurrence by, for example, terminating this
Agreement for material breach, which shall be deemed not to be subject to cure
unless otherwise determined by Sierra, in its sole discretion. The term
"surcharge" shall have the meaning provided in regulations promulgated pursuant
to the Xxxx-Xxxxx Health Care Service Plan Act of 1975.
2.2 BENEFITS. During the term of this Agreement, on Company's behalf
Sierra shall provide Physician and his or her beneficiaries with certain
benefits commensurate with those received by Sierra's and Prospect Medical
Holdings, Inc. senior management, including, but not limited to, the following:
(a) Physician shall be entitled to participate in Sierra's
retirement 401(k) and other benefit plans as offered from time to time at a
level commensurate with the retirement benefits offered to Sierra's employees;
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(b) Coverage under a policy of disability insurance;
(c) Participation in Sierra's Stock Option Plan;
(d) A policy of medical insurance for Physician and Physician's
immediate family;
(e) A policy of dental insurance for Physician and Physician's
immediate family; and
(f) A policy of vision insurance for Physician and Physician's
immediate family.
However, with respect to the foregoing benefits, Sierra's life insurance
company, if any, and/or disability insurer, if any, may require Physician to
satisfactorily pass a physical examination in order to issue a life insurance
policy to Physician, and Physician shall comply with all such reasonable
requirements. In addition, Sierra may elect to obtain key-man life insurance
coverage on Physician, and Physician agrees to submit to any required
examination therefor.
2.3 VACATION BENEFITS. Company shall be entitled to allow Physician
four weeks of paid vacation for each twelve month period ending on September 24,
commencing on the date hereof; provided, however, that for the twelve month
period ending on September 24, 1998, the amount of such paid vacation shall be
reduced by any such paid vacation taken by Physician under the Employment
Agreement. Additionally, Company shall be entitled to allow Physician to take
up to one week per year for continuing medical education classes.
2.4 MALPRACTICE INSURANCE. Sierra will purchase and maintain a
professional liability insurance policy for Physician on Company's behalf which
will cover acts or omissions commencing with the Effective Date through the
termination of this Agreement at a level commensurate with that paid by Sierra
for physician employees.
3. TERM AND TERMINATION OF AGREEMENT
3.1 CONTRACT TERM. The initial term of this Agreement shall commence
on March 1, 1998 (the "Effective Date"), and shall terminate on September
24, 2000, subject to earlier termination of this Agreement as provided herein.
3.2 TERMINATION WITHOUT CAUSE. No party may terminate this Agreement
or Physician's consulting arrangement hereunder, without cause.
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3.3 TERMINATION BY SIERRA. Sierra may terminate this Agreement
hereunder at any time for "cause" by giving notice of termination (the
"Termination Notice") to the Company. Cause includes the following:
(a) Upon material violation by Company or Physician of any
provisions of this Agreement or the rules, policies, and/or procedures of the
Practice.
(b) Upon repeated failure by Physician to meet utilization,
performance, or productivity standards established by Sierra for the Practice.
(c) Upon revocation, cancellation, suspension or limitation of
Physician's professional license, or disciplinary action in any state by an
appropriate licensing authority including, without limitation, the revocation,
suspension, limitation, or reduction of such license or of Physician's DEA
license.
(d) Upon cancellation of Company's or Physician's coverage, or his
uninsurability, under the terms and conditions of the professional liability
insurance provided by Sierra as set forth above.
(e) Upon the imposition of any restrictions or limitations on
Company or Physician by any governmental or professional authority having
jurisdiction over Physician to such an extent that Company or Physician cannot
engage in the practice of medicine as required hereunder.
(f) Upon Company's or Physician's conviction of a felony or crime
of moral turpitude.
(g) Upon repeated failure by Company or Physician to conform and
comply with Sierra's professional requirements concerning maintenance of medical
records.
(h) Upon the use of alcohol or a controlled substance which
materially impairs the ability of Physician to effectively perform Physician's
duties and obligations under this Agreement.
(i) If Sierra, in good faith, determines that Physician is not
providing adequate patient care or that the health, safety or welfare of
patients is jeopardized by continuing the consulting arrangement with the
Company for the services of Physician.
(j) In the event the performance by either party hereto of any
term, covenant, condition or provision of this Agreement should jeopardize (1)
the licensure of Sierra, any Affiliate of Sierra, or Physician, or (2) Sierra's
(or any Affiliate's) or Physician's participation in,
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or reimbursement from, Medicare, Medicaid (Medi-Cal) or other reimbursement
or payment programs; or if for any other reason said performance should be in
violation of any statute, ordinance, or be otherwise deemed illegal, by a
state or federal court or governmental agency (collectively, "Jeopardy
Event"), then the parties shall use their best efforts to meet forthwith and
attempt to negotiate an amendment to this Agreement to remove or negate the
effect of the Jeopardy Event. In the event the parties are unable to
negotiate such an amendment within fifteen (15) days following such notice,
then the provisions of this Agreement that give rise to the Jeopardy Event
shall be ineffective only to the extent that they are in contravention of
applicable law or otherwise give rise to the Jeopardy Event, without
invalidating the remaining provisions of this Agreement, unless the same
should defeat an essential business purpose of this Agreement.
3.4 TERMINATION BY COMPANY OR PHYSICIAN. Company or Physician may
terminate this Agreement at any time for "cause." Cause is limited to a material
breach by Sierra of a material term of this Agreement. In the event Company or
Physician terminates this Agreement for cause, termination shall be effective
upon two (2) weeks notification to Sierra by Company or Physician. In such
case, upon notification, Sierra shall have a two (2) week period in which to
cure such breach.
3.5 EFFECT OF TERMINATION. Unless otherwise set forth below, neither
Company nor Physician shall be entitled to any severance pay for the services
of Physician upon the termination this Agreement by Sierra for cause. Company
shall only be entitled to receive accrued but unpaid fees for the services of
Physician through the date of such termination. Upon and after termination of
this Agreement, Physician will be provided full access to copy Sierra patient
medical records in the event of a malpractice action or administrative
investigation or proceeding against Physician.
4. CONFIDENTIALITY/TRADE SECRETS. Company and Physician acknowledge that the
position of Physician with the Practice will be one of the highest trust and
confidence both by reason of his position and by reason of his access to and
contact with the trade secrets and confidential and proprietary business
information of Sierra and all of its Affiliates (as defined below), during the
term of this Agreement and thereafter. Company and Physician covenant and agree
as follows:
4.1 PROTECTION. That Company and Physician shall use their best
efforts and exercise utmost diligence to protect and safeguard the trade secrets
and confidential and proprietary information of Sierra and its "Affiliates"
(which term as used in this Agreement shall include any person, corporation,
partnership, general partner or other entity that (i) provides management or
other services to the Practice ("Manager"), or (ii) directly, or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with Sierra or Manager), including, without limitation, their
trade secrets, proprietary information, the identity of their
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customers and suppliers, their arrangements with their customers and
suppliers, and their technical data, records, compilations of information,
processes, computer software, and specifications relating to their customers,
suppliers, products and services (collectively, "Confidential Information").
4.2 NONDISCLOSURE. That neither Company nor Physician shall disclose
any Confidential Information, except as may be required in the course of
Physician's consulting arrangement or as may be required by law.
4.3 NON-USAGE. That neither Company nor Physician shall use, directly
or indirectly, for its or his own benefit or for the benefit of another, any
Confidential Information.
The covenants contained in this Section 4 shall not be applicable to any
information which is in the public domain other than as a result of action by
Company or Physician or which Company or Physician can establish was obtained
from sources other than Sierra or any of its Affiliates, who are not under a
duty of nondisclosure. All Confidential Information and all files, records,
documents, drawings, specifications, computer software, memorandums, notes, or
other documents relating thereto or otherwise relating to the business of Sierra
and its Affiliates or the Practice, whether prepared by Company or Physician or
otherwise coming into its or his possession, shall be the exclusive property of
Sierra (and/or its Affiliates, as applicable) and shall be delivered to Sierra
or its Affiliates as appropriate and not retained by (nor any copies thereof
retained by) Company or Physician upon termination of the consulting arrangement
hereunder for any reason whatsoever.
5. NON-SOLICITATION; NON-DIVERSION.
5.1 PLAN MEMBER CONTACT. Company and Physician acknowledge and agree
that Sierra has expended a great deal of time, effort and money in developing
its business and obtaining the patients enrolled in prepaid capitated health
plans (each a "Plan Member") that are enrolled with Sierra, and that all of the
patients to whom Physician renders professional medical services pursuant to
this Agreement are and will remain patients of Sierra ("Sierra Patients").
Because of this, Sierra considers, and Company and Physician acknowledge, that
the Sierra Patients constitute an important corporate asset and Sierra's Plan
Member lists constitute valuable proprietary information. In consideration of
Sierra providing current Sierra Patients (I.E. Plan Members), as well as future
Sierra Patients, to Physician, Company and Physician acknowledge and agree that
Sierra will suffer irreparable harm and injury if Company or Physician attempts
to, or does, communicate with Sierra Patients in any way concerning termination
of this Agreement or concerning any other Sierra business matter. As such,
Company and Physician expressly waive any rights (including those set forth in
California Business and Professions Code Section 651) to contact Sierra Patients
in any way about the termination of this Agreement or about any other Sierra
business matter. Company and Physician agree that, except to the extent
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that Sierra has provided written authorization, neither Company nor Physician
shall directly contact Sierra Patients, their employers or health plans in
regard to business related matters pertaining to Sierra contracted heath
plans including, but not limited to, (1) switching plans or similar entities
or contracting directly with Company or Physician (or some other provider
organization that Physician is a member of) instead of Sierra; (2) the
options Sierra Patients have to transfer to other plans (or to switch to
other providers) as a result of termination of this Agreement; or (3) the
fact that the Sierra Patient will no longer be able to obtain services from
Physician. Understanding and acknowledging the foregoing, Company and
Physician agree to cooperate fully with Sierra in any communications to
Sierra Patients concerning termination of this Agreement and other Sierra
business matters, and Company and Physician agree not to interfere in any way
with the relationship between Sierra and Sierra Patients. In the event that
either Company or Physician violates this provision, Sierra may seek a
temporary restraining order and/or injunction to preclude such activity, as
well as all appropriate damages resulting from Company's or Physician's
breach of this provision. Notwithstanding the foregoing, nothing contained
herein shall be construed to limit the Physician's opportunity to discuss
with any Sierra Patient information relevant to such Sierra Patient's medical
condition, including such Sierra Patient's treatment options, alternative
plans or other coverage arrangements.
5.2 NON-SOLICITATION OF PLAN MEMBERS. As part of the consideration for
Sierra to enter into this Agreement, during the initial and any succeeding term
of this Agreement and for a period of three (3) years following the date of
termination of this Agreement, neither Company nor Physician will directly or
indirectly, either individually or on behalf of or as a provider for any person
or entity other than Sierra whose business competes with the business of Sierra,
(i) advise any Sierra Plan Member or patient to disenroll from Sierra, or
(ii) solicit any Plan Member or patient or any Plan Member's or patient's
employer to become enrolled with any other health maintenance organization,
provider organization, or any other similar hospitalization or medical payment
plan or insurance program. Company and Physician shall use their best efforts
to ensure that no employee, agent or independent contractor of Company or
Physician makes any derogatory remarks regarding Sierra to any Plan Member, Plan
Member's employer, health plan or health maintenance organization.
5.3 OTHER AGREEMENTS FOLLOWING TERMINATION. Nothing contained herein
shall prevent Physician, following the termination of this Agreement, from:
(a) Entering into contracts or other agreements with any capitated
health plan that does not have an agreement or contract with Sierra as of the
date of this Agreement;
(b) Providing services to fee for service patients; or
(c) Joining or otherwise becoming a member of an independent
practice association or physician network.
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Notwithstanding the foregoing, in the event a Sierra Patient seeks, without
being solicited or otherwise contacted by Physician or any agent of Physician in
violation of the provisions of Sections 5.1 and 5.2 herein, to receive medical
services from Physician and Physician desires to provide medical services to
such former Sierra Patient, Physician shall only be entitled to provide such
services as an outside provider of Sierra under the terms of Sierra's standard
participating provider agreement then in effect, and pursuant to Sierra's
agreement with the respective health plan under which the capitation payments
for such former Sierra Patient are paid.
6. REMEDIES FOR BREACH OF COVENANTS OF PHYSICIAN. The covenants set forth in
Sections 4 and 5 of this Agreement shall continue to be binding upon Company and
Physician notwithstanding the termination of this Agreement for any reason
whatsoever. Such covenants shall be deemed and construed as separate agreements
independent of any other provision of this Agreement. The existence of any
claim or cause of action by Company or Physician against Sierra or any of its
Affiliates, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Sierra or any of its Affiliates of
any or all of such covenants. It is expressly agreed that the remedy at law for
the breach of any such covenant is inadequate and that temporary and permanent
injunctive relief shall be available to prevent the breach or any threatened
breach thereof, without the necessity of proof of actual damages and without the
necessity of posting a bond, cash or otherwise. In this connection, Company and
Physician agree not to assert any defense that monetary damages would be
sufficient.
7. DEFAULT. Any default by Sierra in the payment when due of any amount owed
by Sierra to Physician under the Contingent Promissory Note, of even date
herewith, issued from Sierra to Physician, in the original principal amount of
$1,125,000, of which $1,068,750 principal amount is currently outstanding, which
default continues for a period of ten (10) days, shall constitute a default
under this Agreement. Upon written notice from Physician of such default,
Sierra shall have a thirty (30) day period in which to cure such default. In
the event Sierra fails to cure such default within thirty (30) days of such
notice, at Physician's or Company's option, except for the provisions continued
in Sections 4 and 5 herein above, which shall remain in full force and effect,
this Agreement shall terminate and neither Physician nor Company shall have any
further obligations hereunder.
8. ARBITRATION. The parties firmly desire to resolve all disputes arising
hereunder without resort to litigation in order to protect their respective
business reputations and the confidential nature of certain aspects of their
relationship. Accordingly, any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration as set
forth below.
8.1 All disputes which in any manner arise out of or relate to this
Agreement or the subject matter thereof, shall be resolved exclusively by
arbitration in accordance with the
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provisions of this Section 8. Either party may commence arbitration by
sending a written demand for arbitration to the other party, setting forth
the nature of the controversy, the dollar amount involved, if any, and the
remedies sought, and attaching a copy of this Section to the demand.
8.2 There shall be one arbitrator. If the parties shall fail to
select a mutually acceptable arbitrator within ten (10) days after the demand
for arbitration is mailed, then the parties stipulate to arbitration before a
single arbitrator sitting on the Los Angeles, California Judicial Arbitration
Mediation Services (JAMS) panel, and selected in the sole discretion of the
JAMS administrator.
8.3 The parties shall share all costs of arbitration. The prevailing
party shall be entitled to reimbursement by the other party of such party's
attorneys' fees and costs and any arbitration fees and expenses incurred in
connection with the arbitration hereunder.
8.4 The substantive law of the State of California shall be applied
by the arbitrator.
8.5 Arbitration shall take place in Los Angeles, California unless
the parties otherwise agree. As soon as reasonably practicable, a hearing
with respect to the dispute or matter to be resolved shall be conducted by
the arbitrator. As soon as reasonably practicable thereafter, the arbitrator
shall arrive at a final decision, which shall be reduced to writing, signed
by the arbitrator and mailed to each of the parties and their legal counsel.
8.6 All decisions of the arbitrator shall be final, binding and
conclusive on the parties and shall constitute the only method of resolving
disputes or matters subject to arbitration pursuant to this Agreement. The
arbitrator or a court of appropriate jurisdiction may issue a writ of
execution to enforce the arbitrator's judgment. Judgment may be entered upon
such a decision in accordance with applicable law in any court having
jurisdiction thereof.
8.7 Notwithstanding the foregoing, because time is of the essence of
this Agreement, the parties specifically reserve the right to seek a judicial
temporary restraining order, preliminary injunction, or other similar short
term equitable relief, and grant the arbitrator the right to make a final
determination of the parties' rights, including whether to make permanent or
dissolve such court order.
8.8 The decision and award of the arbitrator shall be kept
confidential by the parties to the greatest extent possible. No disclosure
of such decision or award shall be made by the parties except as required by
law or as necessary or appropriate to effect the enforcement thereof.
9. CONTRACTS. Neither Company nor Physician shall have the right or authority
and each hereby expressly covenants not to, enter into a contract in the name of
Sierra or the Practice or otherwise bind Sierra or the Practice, in any way,
without the express written consent of Sierra.
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Company and Physician shall hold Sierra and the Practice harmless from any
loss attributable to a violation of this covenant.
10. USE OF PREMISES. Company and Physician covenant not to use, or permit any
other personnel under the control of Company or Physician to use, any part of
the premises of the Practice for any purpose other than the performance of
services hereunder.
11. MEDICAL RECORDS.
11.1 ENROLLEE RECORDS. Physician shall maintain the usual and customary
records, in accordance with all applicable federal and state statutory and
regulatory requirements, for each enrollee in the same manner as for other
patients of Physician. Each enrollee's medical record shall be opened upon the
enrollee's first visit to Physician, and all enrollees' medical records shall be
completed in a timely fashion, be legible, and fully document billed services.
11.2 ACCESS TO RECORDS. Subject to applicable federal and state law
regarding privacy and confidentiality requirements, Physician shall, upon
reasonable request, make an enrollee's medical records available to Sierra and
to any contracting health plans, and to each Sierra physician treating the
enrollee and to duly authorized representatives of federal, state and local
governments.
11.3 CONFIDENTIALITY. Except as otherwise required by applicable law,
Sierra and Physician agree to keep confidential, and to take the usual
precautions to prevent the unauthorized disclosure of, any and all records
required to be prepared or maintained by Physician hereunder.
12. MISCELLANEOUS.
12.1 NOTICES. Any notice, demand, or communication required, permitted
or desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
Physician: Sinnadurai X. Xxxxxxx, M.D.
00000 00xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Company: X. X. Xxxxxxx, M.D., Inc.
c/o Sinnadurai X. Xxxxxxx, M.D.
00000 00xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
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Sierra: Sierra Primary Care Medical Group, Inc.
c/o Prospect Medical Group, Inc.
00000 Xxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx XxXxxxxx, M.D.
with a copy to: Xxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
12.2 GOVERNING LAW. This Agreement has been executed and delivered and
shall be interpreted, construed, and enforced in accordance with the laws of the
State of California.
12.3 ENFORCEMENT. In the event that any party shall be required to
enforce the terms of this Agreement, whether with or without arbitration, the
prevailing party shall be entitled to recover the costs of such action,
including reasonable attorneys' fees.
12.4 NON-LIABILITY OF ENROLLEE . Company shall cause Physician to look
solely to Sierra and contracting health plans for payment for services rendered
to enrollees (excluding non-covered benefits and copayments). In the event that
Sierra or contracting health plans fail to pay for services as provided in this
Agreement, enrollees shall not be liable to Physician for any services owed to
Physician by Sierra or contracting health plans, and no claim or action of law
shall be maintained by Physician against enrollee for such services rendered to
enrollee.
12.5 STATUTORY AND REGULATORY REQUIREMENTS. The parties understand and
agree that they and contracting health plans are subject to the requirements of
Chapter 2.2 of Division 2 of the California Health and Safety Code and of
Subchapter 5.5 of Chapter 3 of Title 10 of the California Code of Regulations,
and that any provision required to be included in this Agreement by such
requirements shall be applicable to this Agreement, whether or not specifically
provided herein.
12.6 MAINTENANCE OF RECORDS. Physician agrees to maintain such records
and provide such information to Sierra, contracting health plans and the
Commissioner of Corporations of the State of California as may be necessary for
compliance with the provisions of the Xxxx-Xxxxx Health Care Service Plan Act of
1975 and all rules and regulations adopted pursuant thereto; such records shall
be retained by Physician for at least two (2) years, and this obligation shall
continue after termination of this Agreement whether by rescission or otherwise.
12.7 ACCESS TO BOOKS, RECORDS AND PAPERS. To the extent required by the
Xxxx-Xxxxx Health Care Service Plan Act of 1975 and all rules and regulations
adopted pursuant thereto,
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Sierra, any contracting health plan and the Commissioner of Corporations of
the State of California shall have access at reasonable times upon demand to
the books, records and papers of Physician relating to the services provided
by Physician to enrollees, to the cost thereof, to payments received by
Physician from enrollees and to the financial condition of the Physician.
12.8 QUALITY ASSURANCE AND PEER REVIEW. Physician shall participate in,
cooperate and comply with all applicable requirements of Sierra's and any
contracting health plan's Quality Assurance/Utilization Review Program, which
shall include a system for monitoring and evaluating quality and accessibility
of care including, but not limited to, waiting times and appointments. If
Physician fails to comply with such quality assurance/utilization review
requirements, Physician agrees that compensation otherwise due Physician
hereunder for the services in question may be subject to forfeiture, in whole or
in part, according to the policies of Sierra or any contracting health plan.
.
12.9 GRIEVANCE PROCEDURES. Physician shall identify and cooperate with
Sierra and any contracting health plans in identifying, processing and resolving
all enrollee complaints and grievances pursuant to the grievance procedures set
forth by Sierra or any contracting health plan.
12.10 ENTIRE AGREEMENT. This Agreement, together with the
Non-Competition Agreement executed on September 25, 1997, by and between Sierra
and Physician, shall constitute the entire agreement of the parties with respect
to the subject matter hereof and may not be amended except in writing signed by
both of the parties hereto. This Agreement shall supersede and replace the
Employment Agreement. No oral statements or prior written materials not
specifically incorporated herein, including but not limited to the Employment
Agreement, with respect to the subject matter hereof, shall be of any force or
effect.
12.11 SEVERABILITY. In the event any provision of this Agreement is held
to be unenforceable or void for any reason, the remainder of the Agreement shall
be unaffected and shall remain in full force and effect in accordance with its
terms, unless such unenforceability or svoidness defeats an essential business
term hereof.
12.12 NO ASSIGNMENT; BINDING EFFECT. Neither Company nor Physician shall
assign this Agreement to any other party or parties without the prior written
consent of Sierra. Except for an assignment to Imperial Bank, a California
banking corporation, pursuant to applicable law, Sierra shall not assign this
Agreement to any other party or parties without the prior written consent of
Company and Physician. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.
12.13 HEADINGS. The headings used herein are for convenience only and do
not limit the contents of this Agreement.
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12.14 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed to be an original, but all of which together will
constitute one and the same agreement.
12.15 CHANGE OF CIRCUMSTANCES. In the event (i) Medicare, Medicaid
(Medi-Cal), any third-party payor or any federal, state or local legislative or
regulatory authority adopts any law, rule, regulation, policy, procedure or
interpretation thereof which establishes a material change in the method or
amount of reimbursement or payment for services under this Agreement, or (ii)
any or all of such payors/authorities impose requirements which require a
material change in the manner of any party's operations under this Agreement
and/or the costs related thereto, then, upon the request of any party materially
affected by any such change in circumstances, the parties shall enter into good
faith negotiations for the purpose of establishing such amendments or
modifications as may be appropriate in order to accommodate the new requirements
and change of circumstances while preserving the original intent of this
Agreement to the greatest extent possible. If, after thirty (30) days of such
negotiations, the parties are unable to reach an agreement as to how or whether
this Agreement shall continue, then any party may terminate this Agreement upon
thirty (30) days prior written notice.
12.16 COMPLIANCE WITH LAW. The parties recognize that this Agreement at
all times is to be subject to applicable state, local and federal law.
12.17 CONTINUING CARE OBLIGATION. As required by the Xxxx-Xxxxx Act,
upon the termination of this Agreement, Physician shall continue to provide
covered services to enrollees who are eligible for covered services under any
contracting health plan's evidence of coverage, or by operation of law, and who
are receiving covered services rendered by Physician as of the date of such
termination until: (a) the covered services being rendered by the Physician are
completed; or (b) the contracting health plan or Physician makes reasonable and
medically appropriate provision for the assumption of such covered services by
another participating provider. Physician shall be compensated for such
services according to the terms of this Agreement.
12.18 WAIVERS. Waivers of any of the provisions hereof may be effective
only if signed by the party intending to be bound thereby.
12.19 JOINT AND SEVERAL LIABILITY. Each of the Company and Physician
shall have joint and several liability for any claims, losses, damages,
liabilities, costs or expenses (including reasonable attorneys' fees) arising or
resulting from a breach or default of any provision of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties on the
day and year first above written.
SIERRA: COMPANY:
SIERRA PRIMARY CARE MEDICAL GROUP, X. X. XXXXXXX, M.D., INC.
A MEDICAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Sinnadurai X. Xxxxxxx
------------------------------ -----------------------------
Xxxxx X. Xxxxxx, M.D. Sinnadurai X. Xxxxxxx, M.D.,
President
PHYSICIAN:
/s/ Sinnadurai X. Xxxxxxx
--------------------------------
Sinnadurai X. Xxxxxxx, M.D.
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