MEDICAL DIRECTOR AND
ADMINISTRATIVE SERVICES AGREEMENT
This Medical Director and Administrative Services Agreement
("Agreement") is entered into as of July 30, 1997 ("Effective Date") by and
among LIGHT TOUCH VEIN & LASER, INC., an Ohio corporation ("Light Touch") and
VEIN & LASER CENTER, INC., an Ohio professional association ("Physician
Group").
RECITALS
A. Physician Group operates a medical practice (the "Practice") and
has entered into and throughout the term of this Agreement may continue to
enter into arrangements with insurers, HMOs and other third-party payors
("Payors") to provide or arrange for the provision of health care services to
persons covered by those Payors ("Enrollees").
B. Physician Group has entered into written employment agreements with
physicians and other health care providers and health care professionals
("Employed Providers") licensed to practice in the State of Ohio and the
Commonwealth of Kentucky. Physician Group may also enter into independent
contractor agreements with various physicians and other health care providers
and health care professionals ("Contracting Providers") to assist Physician
Group in providing or arranging for the provision of health care services to
Enrollees and other patients of Physician Group (collectively, "Patients").
C. Light Touch engages in the business of owning laser centers and
providing certain administrative and support services concerning the
day-to-day affairs of medical practices, and has established existing laser
centers ("Centers") at the sites listed on EXHIBIT A.
D. Light Touch desires to engage Physician Group to serve as medical
director of the Centers, and Physician Group desires to obtain the use of the
Centers for its Employed Providers.
E. Physician Group desires to secure certain administrative services
from Light Touch in connection with its operation of the Practice.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
I. RESPONSIBILITIES OF PHYSICIAN GROUP
1.1 MEDICAL DIRECTOR. Physician Group shall assume responsibility for
the professional medical services rendered at the Centers, and shall appoint
one of its Employed Providers as the medical director of each Center.
Physician Group and the medical directors shall, to the best of their
ability, assist Light Touch in the proper
operation and management of the Centers. Physician Group agrees to provide,
and shall cause its Employed Providers to provide, professional medical
services to Patients at the Centers, and provide medical direction services
at the Centers during the hours of operation of the Centers. Physician Groups
duties as medical director of the Centers shall include the responsibilities
listed on EXHIBIT B.
1.2. SOLE RESPONSIBILITY FOR ALL MEDICAL AND PROFESSIONAL MATTERS. All
medical and professional matters relating to the operations of the Practice
and the Centers, and the performance of medical services for Patients shall
be the sole responsibility of Physician Group. Physician Group shall use and
occupy the Centers exclusively for the practice of medicine. Physician Group
expressly acknowledges that the medical practice or practices conducted at
these facilities shall be conducted solely by Employed Providers and
Contracting Providers.
1.3. EMPLOYED PROVIDERS AND CONTRACTING PROVIDERS. Unless otherwise
agreed to by the parties, Physician Group shall have complete control of and
responsibility for the hiring, engagement, compensation, supervision
evaluation, and termination of all Employed Providers and Contracting
Providers, although at the request of Physician Group, Light Touch shall
consult with Physician Group respecting such matters. With respect to
physicians, Physician Group shall only employ and contract with licensed
physicians meeting applicable credentialing guidelines established by
Physician Group. Physician Group shall be responsible for the payment of
salaries and wages, compensation, payroll taxes, employee benefits, and all
other taxes and charges now or hereafter applicable to Employed Providers,
Contracting Providers and other licensed health care professional personnel
employed by Physician Group. Physician Group shall consult with Light Touch
with regard to the terms of contracts entered into between Physician Group
and Employed Providers, Contracting Providers, or other licensed health care
professional employees and the terms and conditions of their employment or
engagement as independent contractors, as applicable.
1.4. FEES, CHARGES AND PAYOR AGREEMENTS. Physician Group shall, after
consultation with Light Touch, determine the fees, charges, premiums, or other
amounts due in connection with its delivery of health care services to
Patients. Such fees, charges, premiums, or other amounts, regardless of
whether determined on a fee-for-service, capitated, prepaid, or other basis,
shall be reasonable and consistent with the fees, charges, premiums and other
amounts due to health care providers for similar services within the community
under the type of reimbursement program involved.
1.5. COMPLIANCE WITH LAW. Physician Group shall require all of its
Employed Providers and Contracting Providers to comply with all laws,
regulations, and ethical and professional standards applicable to the
practice of medicine. Employed Providers and Contracting Providers who are
physicians shall at all times be licensed to practice medicine in the State
of Ohio and all other states in which a Center is located and at which such
physician provides patients medical services is located.
1.6. CENTERS; HOURS OF OPERATION; STAFFING. Physician Group shall
conduct the Practice from the current location(s) set forth in EXHIBIT A and
any future Centers. Changes in or additions to the Centers at which Physician
Group provides medical director services and conducts the Practice shall
require the consent of both parties which consent shall not be unreasonably
withheld. Any additional or substitute Center
shall be deemed to be part of the Practice for the purposes of this
Agreement. The hours of operation and the medical staffing of the Centers
shall be established by the agreement of Physician Group and Light Touch from
time to time hereafter.
1.7. QUALITY ASSURANCE. Physician Group shall rigorously monitor
utilization and quality of services provided by Employed Providers and
Contracting Providers, shall develop, maintain and administer quality
assurance programs and performance standards and shall take all steps
necessary to remedy any and all deficiencies in the efficiency or the
quality of medical care provided.
1.8. PATIENT REFERRALS. The parties agree that the benefits to Physician
Group hereunder do not require, are not payment for, and are not in any way
contingent upon the admission, referral or any other arrangements for the
provision of any item or service offered by Light Touch or any Affiliate of
Light Touch to any of Physician Group's Patients in any facility or laboratory
controlled, managed or operated by Light Touch or any Affiliate of Light Touch.
1.9. PROFESSIONAL DUES AND EDUCATION EXPENSES. Physician Group and its
Employed providers shall be solely responsible for the cost of membership in
professional associations, and continuing professional education. Physician
Group shall ensure that each of its Employed Providers participates in such
continuing medical education as is necessary for such provider to remain
current with professional licensure and community standards.
1.10. PROFESSIONAL INSURANCE ELIGIBILITY. Physician Group shall obtain
and retain professional liability insurance by assuring that its Employed
Providers and Contracting Providers are insurable or instituting proceedings
to terminate any Employed Provider who is not insurable or loses his or her
insurance eligibility. Termination shall be effective no more than thirty
(30) days from such determination. Physician Group shall require all Employed
Providers and Contracting Providers to participate in an on-going risk
management program. It is understood that Physician Group and its Employed
Providers and Contracting Providers who are physicians shall, at Physician
Group's cost, at all times be covered by malpractice insurance with coverage
in usual and customary amounts for practitioners of the same profession and
specialties in Ohio and, if applicable, other states. Physician Group shall
ensure that its written agreements with Contracting Providers and Contracting
Providers who are physicians require such physicians to at all times be
covered by malpractice insurance in amounts that are usual and customary for
practitioners of the same profession and specialty in Ohio and, if applicable,
other states. Such malpractice policies shall name Light Touch as
an additional insured.
1.11. FEES FOR PROFESSIONAL SERVICES. Physician Group shall be solely
responsible for legal, accounting and other professional services incurred by
Physician Group in operating the Practice absent a violation by Physician
Group of any provisions of this Agreement.
1.12. ACCOUNTING. Physician Group shall direct and maintain the
operation of an appropriate accounting system with respect to Physician
Group's operation of the
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Practice and shall perform all bookkeeping and accounting services required
for the operation of the Practice, including the maintenance, custody and
supervision of business records, ledgers and reports; the establishment,
administration and implementation of accounting procedures, controls and
systems.
II. RESPONSIBILITIES OF LIGHT TOUCH
2.1. GENERAL RESPONSIBILITY. Light Touch shall have general
responsibility for staffing, equipping and operating the Centers, including
fiscal services, administrative services, and other strategic and tactical
support services with respect to the Centers, except as otherwise provided in
this Agreement. Light Touch shall perform all required functions in
accordance with sound management techniques. Notwithstanding Light Touch's
general and specific rights and responsibilities set forth in this Agreement,
Physician Group shall have full authority and control with respect to all
medical, professional and ethical determinations over Physician Group's
Practice and the provision of medical services at the Centers to the extent
required by federal, state and local laws, rules and regulation. Light Touch
shall not engage in activities which constitute the practice of medicine
under applicable law. Light Touch shall neither exercise control over nor
interfere with the physician-patient relationship, which shall be maintained
strictly between the physicians of Physician Group and their Patients.
2.2. RESPONSIBILITIES WITH REGARD TO SELECTED PATIENT- RELATED MATTERS.
(a) PATIENT RELATIONS, SCHEDULING, ETC. Light Touch shall assist
Physician Group in maintaining positive Patient relations by, among other
things, in conjunction with and at the direction of Physician Group:
scheduling Patient appointments; responding to Patient grievances and
complaints in matters other than medical evaluation, diagnosis, and treatment.
(b) RECORDKEEPING. Light Touch shall assist Physician Group in
maintaining Patient medical records in accordance with applicable laws
concerning their confidentiality and retention, and promptly making such
records available to Physician Group's Employed Providers, Contracting
Providers and other appropriate recipients. Notwithstanding the foregoing
sentence, Patient medical records shall be and shall remain the property of
Physician Group, and the content thereof shall be solely the responsibility
of Physician Group.
(c) QUALITY ASSURANCE. Light Touch shall assist Physician Group,
in accordance with criteria established by Physician Group, in the
development and implementation of appropriate quality assurance programs,
including development of performance and utilization standards, sampling
techniques for case review, and preparation of appropriately documented
studies. Notwithstanding the foregoing, Light Touch shall not perform any
duties that constitute the corporate practice of medicine.
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2.3. BILLING. Light Touch shall submit on a timely basis all bills and
necessary documentation required by Patients and Payors in order to obtain
payment in connection with Physician Group's delivery of health care services
at the Practice or its arrangement for the delivery of such services. In
seeking such payment, Light Touch shall act as Physician Group's exclusive
agent in billing and collecting professional fees, charges and other amounts
owed to Physician Group for services rendered by it and its Employed Providers
at the Centers. In this connection, Physician Group hereby appoints Light
Touch, during the term of this Agreement, as Physician Group's true and lawful
attorney-in-fact, with power of substitution, for the following purposes
relating to the Practice:
(i) To xxxx Physician Group's Patients on Physician Group's
behalf.
(ii) To collect accounts receivable generated by such xxxxxxxx
on Physician Group's behalf, including, where deemed appropriate by Light Touch
and approved in advance by Physician Group, settling and compromising claims,
assigning such accounts receivable to a collection agency or the bringing of
legal action against a Patient or Payor on Physician Group's behalf.
(iii) To receive payments on behalf of Physician Group from
Patients and Payors, to cause such payments to be deposited into appropriate
depository accounts (each such depository account, a "Collections Account").
2.4. OTHER RESPONSIBILITIES.
(a) INSURANCE. PROPERTY AND LIABILITY INSURANCE. Light Touch shall
obtain and maintain during the term of this Agreement (a) property damage
insurance protecting the Centers' premises and the personal property located
therein against such hazards and in such amounts as Light Touch determines
are reasonably prudent; and (b) general liability insurance in such amounts
as Light Touch determines are reasonably prudent.
(b) PERSONNEL. Light Touch shall furnish the services of all
personnel other than physicians, nurses, physician assistants or other health
care professionals required for the operation of the Practice. Except as
specifically provided in this SECTION 2.4(b) Light Touch has the power to
recruit, hire, train, promote, assign, set the compensation level for, and
discharge all nonprofessional personnel. Any nonprofessional personnel
employed by Light Touch who perform patient care services shall perform such
services under the exclusive direction, supervision and control of Physician
Group, while all other services of Light Touch personnel shall be performed
under the exclusive direction, supervision and control of Light Touch. If
Physician Group is dissatisfied with the services of any personnel employed
by Light Touch, Physician Group shall consult with Light Touch. Light Touch
shall in good faith determine whether the performance of that employee could
be brought to acceptable levels through counsel and assistance, or whether,
if requested by Physician Group (provided that such employee is not an
officer or senior manager of Light Touch), such employee should be removed
from providing services
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for Physician Group. Employee assignments shall be made with the intention of
assuring consistent and continued rendering of high quality medical support
services and to ensure prompt availability and accessibility of individual
medical support personnel to physicians in order to develop constant,
familiar and routine working relationships between individual physicians and
individual members of the medical support personnel.
III. FINANCIAL ARRANGEMENTS
3.1. FEES FOR PROFESSIONAL SERVICES. Physician Group shall xxxx
Patients for the services of its Employed Providers and Contracting Providers
at the rates and/or fees established by Physician Group from time to time,
which rates and fees may be incorporated into the overall global fees charged
to Patients for services and procedures performed at the Centers. Light Touch
shall xxxx and collect for its services and the technical fees related to the
Centers. Physician Group's initial fees and rates are attached hereto as
EXHIBIT 3.1. Light Touch acknowledges that the services provided by
Physicians Group are unlikely to be covered by insurance plans, health
maintenance organizations and other similar Payors, and that Patients will
primarily be financially responsible for Physician Groups' fees. Physician
Group agrees to charge reasonable fees for its services, and may adjust its
fees from time to time, subject to the provisions of Section 1.4.
Light Touch shall pay to Physician Group the amount Light Touch collects
on behalf of Physician Group hereunder. In recognition of the services of
Physician Group hereunder, including services as medical director, Light
Touch shall pay to Physician Group a minimum weekly payment equal to the
Guaranteed Payment. The Guaranteed Payment shall equal the sum of the minimum
compensation listed on EXHIBIT C for the Employed Providers, total CME
expenses, malpractice insurance, physicians' assistants, nurses, accounting
and miscellaneous expenses, and Contracting Providers. Within thirty (30)
days of the end of each calendar quarter, Light Touch will reconcile the
amount due to, or payable from, Physician Group for such quarter, determined
by comparing the amount paid to Physician during such quarter (including the
Guaranteed Payments) against the actual collections by Light Touch on
Physician Group's behalf (based on xxxxxxxx in accordance with Exhibit 3.1).
IV. REPRESENTATIONS AND WARRANTIES; COVENANTS
4.1 REPRESENTATIONS AND WARRANTIES AND COVENANTS OF PHYSICIAN GROUP.
(a) Physician Group hereby represents and warrants to Light Touch
as follows:
(i) Physician Group is and shall remain during the term of
this Agreement a professional corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio, actively engaged in
the practice of
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medicine, and possessing full corporate power and authority to own its
properties and to conduct the business in which it engages.
(ii) Physician Group has full corporate power and authority
to execute and deliver this Agreement and to engage in the transactions and
obligations contemplated by this Agreement. Upon its execution, this
Agreement shall constitute a valid and binding obligation of Physician Group,
enforceable in ACCORDANCE WITH ITS TERMS, EXCEPT as limited by applicable
BANKRUPTCY, INSOLVENCY, MORATORIUM, OR OTHER SIMILAR LAWS affecting generally
the rights of creditors and by principles of equity. The party executing this
Agreement on behalf of Physician Group is duly authorized to do SO.
(iii) The consummation of the transactions contemplated by
this Agreement will not: result in a breach of the terms, provisions, or
conditions of or constitute a default under the Articles of Incorporation,
By-Laws or other enabling or governing instruments of Physician Group or any
agreement to which Physician Group is a party or by which it is bound; or, to
the best knowledge of Physician Group, constitute a violation of any
applicable law or regulation.
(b) Physician Group hereby covenants to Light Touch that it shall
not, without the prior written consent of Light Touch, take any action to
terminate or nullify, or release any Employed Provider from, the terms of any
noncompetition covenant set forth in any employment agreement between
Physician Group and such Employed Provider.
4.2. COVENANTS AND WARRANTIES OF LIGHT TOUCH. Light Touch hereby
represents and warrants to Physician Group as follows:
(a) Light Touch is and shall remain during the term of this
Agreement a corporation which is duly organized, validly existing and in good
standing under the laws of the State of Ohio, possessing full corporate power
and authority to own its properties and to conduct the business in which it
engages.
(b) Light Touch has full corporate power and authority to execute
and deliver this Agreement and to engage in the transactions and obligations
contemplated by this Agreement. Upon its execution, this Agreement shall
constitute a valid and binding obligation of Light Touch, enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting generally the rights
of creditors and by principles of equity. The party executing this Agreement
on behalf of Light Touch is duly authorized to do so.
(c) The consummation of the transactions contemplated by this
Agreement will not: result in any breach of the terms, provisions or
conditions of or constitute a default under the Certificate of Incorporation,
By-Laws or other enabling or governing instruments of Light Touch or any
agreement to which Light Touch is a party or by which it is bound; or, to the
best knowledge of Light Touch, constitute a violation of any applicable law
or regulation.
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V. TERM AND TERMINATION
5.1. TERM. This Agreement shall commence on the Effective Date and
shall continue for a period of ten (10) years (the "Initial Term"), unless
sooner terminated pursuant to this Article V. Thereafter, this Agreement shall
automatically continue in effect for additional terms of five (5) years each
(each such additional term, a "Renewal Term"), unless Light Touch notifies
Physician Group in writing not less than twelve (12) months or more than
fifteen (15) months prior to the expiration of the Initial Term or any then
current Renewal Term of its intent to terminate this Agreement at the end of
such term, or unless this Agreement is terminated pursuant to Section 5.2,
Section 5.3 or Section 8.11 hereof.
5.2. EVENTS OF DEFAULT. Each of the following shall constitute an "Event
of Default" (the party causing such default is referred to as the "Breaching
Party" and the other party is referred to as the "Non-Breaching Party"):
(a) The Breaching Party fails to make any payment required under
this Agreement.
(b) The Breaching Party admits in writing its inability to pay its
debts as they mature, makes any general assignment for the benefit of
creditors, or seeks to avail itself of any law for the release of insolvent
debtors.
(c) Insolvency, bankruptcy, dissolution, liquidation, or
receivership proceedings are commenced by or with the consent of the
Breaching Party, or are pending for more than sixty (60) days against the
Breaching Party.
(d) The Breaching Party fails to observe or otherwise breaches any
material term, condition, covenant, or warranty of this Agreement.
5.3. TERMINATION. Subject to the provisions of this Article V, the
Non-Breaching Party may terminate this Agreement upon the occurrence of an
Event of Default in accordance with the following:
(a) In the event of the occurrence of an Event of Default referred
to in Section 5.2(a) above, upon the expiration of thirty (30) days after
written notice, which notice shall specify the amount of such payment and
when it was due, unless the amount due is paid within such thirty (30) days.
(b) In the event of the occurrence of any other Event of Default,
upon the expiration of ninety (90) days after written notice, which notice
shall specify the nature and extent of such Event of Default to the Breaching
Party, unless such Event of Default is remedied within such ninety (90) days
or, in the case of an Event of Default which cannot reasonably be remedied
within ninety (90) days, unless the Breaching Party has made a good faith
effort to begin to cure such Event of Default within such ninety (90) days.
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5.4. DUTIES UPON TERMINATION OR EXPIRATION OF THIS AGREEMENT.
(a) If this Agreement is terminated upon expiration of its term,
or earlier as provided in Sections 5.3 or 8.11:
(i) Neither party shall be released or discharged from any
obligation, debt or liability which has previously accrued or been incurred
and remains to be performed upon the date of termination or expiration;
(ii) Any sums of money owing by one party to the other shall
be paid immediately;
(iii) Physician Group shall return to Light Touch all
originals and copies of the Proprietary Information of any of the Protected
Parties (as those terms are defined in Article VI) which are in the
possession of Physician Group or any other person or entity to whom it has
delivered such originals and copies; and
(iv) Damages and any other remedies available at law or in
equity may be sought and collected by the Non-Breaching Party from the
Breaching Party in the event of a termination pursuant to Section 5.3 hereof.
VI. RESTRICTIVE COVENANTS
6.1. COVENANT REGARDING PROPRIETARY INFORMATION. In the course of the
relationship created pursuant to this Agreement, Physician Group will have
access to certain methods, trade secrets, processes, ideas, systems,
procedures, inventions, discoveries, concepts, software in various stages of
development, designs, drawings, specifications, models, data, documents,
diagrams, flow charts, research, economic and financial analysis,
developments, procedures, know-how, policy manuals, financial data, form
contracts, marketing ad other techniques, plans, materials, forms,
copyrightable materials and trade information regarding the operations of
Light Touch and/or of its Affiliates (collectively, the "Protected Parties").
The foregoing, together with the existence and terms of this Agreement, are
referred to in this Agreement as "Proprietary Information". Physician Group
shall maintain all such Proprietary Information in. strict secrecy and shall
not divulge such information to any third parties, except as may be necessary
for the discharge of its obligations under this Agreement. Physician Group
shall take all necessary and proper precautions against disclosure of any
Proprietary Information to unauthorized persons by any of its officers,
directors, employees or agents. All officers, directors, employees and agents
of Physician Group who will have access to all or any part of the Proprietary
Information may be required to execute an agreement, at the reasonable
request of Light Touch, valid under the law of the jurisdiction in which such
agreement is executed, and in a form acceptable to Light Touch and its
counsel, committing themselves to maintain the Proprietary Information in
strict confidence and not to disclose it to any unauthorized person or
entity. The Protected Parties not party to this Agreement are hereby
specifically made third party beneficiaries of this Section 6.1, with the
power to enforce the provisions hereof. Upon termination of this Agreement
for any reason, Physician Group and
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each of its Employed Providers and Contracting Providers shall cease all use
of any of the Proprietary Information and, at the request of Light Touch,
shall execute such documents as may be necessary to evidence Physician
Group's abandonment of any claim thereto. The parties recognize that a breach
of this Section 6.1 cannot be adequately compensated in money damages and
therefore agree that injunctive relief shall be available to the Protected
Parties as their respective interests may appear.
The obligations of Physician Group under this Section 6.1 shall not
apply to information: (i) which is a matter of public knowledge on or becomes
a matter of public knowledge after the Effective Date of this Agreement,
other than as a breach of the confidentiality terms of this Agreement or as a
breach of the confidentiality terms of any other agreement between Physician
Group and Light Touch or its Affiliates; or (ii) was lawfully obtained by
Physician Group on a nonconfidential basis other than in the course of
performance under this Agreement and from some entity other than Light Touch
or its Affiliates or from some person other than one employed or engaged by
Light Touch or its Affiliates, which entity or person has no obligation of
confidentiality to Light Touch or its Affiliates.
6.2. COVENANTS NOT TO COMPETE DURING THE TERM. The parties recognize
that the services to be provided by Light Touch shall be feasible only if
Physician Group operates an active medical practice to which Physician Group
and Employed Providers devote full time and attention. To that end:
(a) RESTRICTIVE COVENANTS BY PHYSICIAN GROUP. During the term of
this Agreement, Physician Group shall not establish, operate or provide
physician or other health care services at any medical office, clinic or
other health care facility providing services substantially similar to those
provided by Physician Group pursuant to this Agreement anywhere other than at
the Centers and as may be approved in writing by Light Touch. Physician Group
shall also not enter into any medical director or management or
administrative services agreement or arrangement with any person or entity
other than Light Touch without Light Touch's prior written approval.
(b) RESTRICTIVE COVENANTS BY EMPLOYED PHYSICIANS. Physician Group
shall obtain and enforce noncompetition agreements with its Employed
Providers who are physicians the substance and form of which is set forth as
EXHIBIT D hereto and which Physician Group shall not revise without the prior
written consent of Light Touch.
6.3. COVENANT NOT TO COMPETE FOLLOWING TERMINATION. For three (3) years
following the termination of this Agreement by Light Touch pursuant to
Section 5.3 or by either party pursuant to Section 8.11, Physician Group
shall not enter into any medical director or management or administrative
services agreement or any similar arrangement with any person or entity for
the provision of the same or similar services as Light Touch provides to
Physician Group under this Agreement.
6.4. COVENANT NOT TO SOLICIT. During the term of this Agreement and for
three (3) years following the termination of this Agreement, Physician Group
shall not:
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(a) Directly or indirectly solicit, recruit or hire, or induce any
party to solicit, recruit or hire any person who is an employee of, or who
has entered into an independent contractor arrangement with, Light Touch or
any Affiliate of Light Touch (excluding any person who performs patient
services);
(b) Directly or indirectly, whether for itself or for any other
person or entity, call upon, solicit, divert or take away, or attempt to
solicit, call upon, divert or take away any of Light Touch's customers,
business, or clients; or
(c) Disrupt, damage, impair or interfere with the business of
Light Touch.
6.5. ENFORCEMENT. Light Touch and Physician Group acknowledge and agree
that since a remedy at law for any breach or attempted breach of the
provisions of this Article VI or of Article VII shall be inadequate, either
party shall be entitled to specific performance and injunctive or other
equitable relief in case of any such breach or attempted breach, in addition
to whatever other remedies may exist by law. All parties hereto also waive
any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. If any
provision of Article VI or Article VII relating to the restrictive period,
scope of activity restricted and/or other provisions described therein shall
be declared by a court of competent jurisdiction to exceed the maximum time
period, scope of activity restricted or geographical area such court deems
reasonable and enforceable under applicable law, the time period, scope of
activity restricted and/or area of restriction held reasonable and
enforceable by the court shall thereafter be the restrictive period, scope of
activity restricted and/or the territory applicable to the restrictive
covenant provisions in this Article VI or Article VII. The invalidity or
non-enforceability of this Article VI or Article VII in any respect shall not
affect the validity or enforceability of the remainder of this Article VI or
Article VII or of any other provisions of this Agreement.
VII. INFORMATION AND RECORDS
7.1. OWNERSHIP OF RECORDS. At all times during and after the term of
this Agreement, including any extensions or renewals hereof, all business
records, including but not limited to, business agreements, books of account,
general administrative records and all information generated under or
contained in the management information system pertaining to Light Touch's
obligations hereunder, and other business information of any kind or nature,
except for Patient medical records and Physician Group's Records (as defined
in Section 7.2 below), shall be and remain the sole property of Light Touch;
PROVIDED that after termination of this Agreement Physician Group shall be
entitled to reasonable access to such records and information, including the
right to obtain copies thereof, for any purpose related to patient care or
the defense of any claim relating to patient care or the business of Light
Touch or Physician Group.
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7.2. PHYSICIAN GROUP'S BUSINESS AND FINANCIAL RECORDS. At all times
during and after the term of this Agreement, the financial, corporate and
personnel records and information relating exclusively to the business and
activities of Physician Group, as distinguished from the business and
activity of Light Touch, hereinafter referred to as "Physician Group's
Records," shall be and remain the sole property of Physician Group.
7.3. ACCESS TO RECORDS. Each party shall be entitled, upon request and
with reasonable advance notice, to obtain access to all records of the other
party directly related to the performance of such party's obligations
pursuant to this Agreement; provided, however, that such right shall not
allow for access to records that must necessarily be kept confidential.
Either party, at its expense, shall have the right to make copies of any
records to which it has access pursuant to this Section.
7.4. CONFIDENTIALITY OF RECORDS. Light Touch and Physician Group shall
adopt procedures for maintaining the confidentiality of the records relating
to the operations of Light Touch and Physician Group which do not constitute
Proprietary Information, which information is not otherwise available to
third parties publicly or by law, and shall comply with all applicable
federal and state statutes and regulations relating to such records. Patient
medical records and other privileged Patient information shall not be
disclosed or utilized by Physician Group or Light Touch or their agents or
employees except as required or permitted by applicable laws and regulations.
VIII. MISCELLANEOUS
8.1. INDEPENDENT CONTRACTOR STATUS OF PARTIES. In the performance of
the work, duties and obligations under this Agreement, it is mutually
understood and agreed that each party is at all times acting and performing
as an independent contractor with respect to the other and that no
relationship of partnership joint venture or employment is created by this
Agreement. Neither party, nor any other person performing services on behalf
of such party pursuant to this Agreement, shall have any right or claim
against the other party for Social Security benefits, workers' compensation
benefits, disability benefits, unemployment insurance benefits, health
benefits, vacation pay, sick leave or any other employee benefits of any kind.
8.2. NO WAIVER. The waiver by any party to this Agreement of any breach
of any term or condition of this Agreement shall not constitute a waiver of
subsequent breaches. No waiver by any party of any provision of this
Agreement shall be deemed to constitute a waiver of any other provision.
8.3. NOTICES. If, at any time after the execution of this Agreement, it
shall become necessary or convenient for one of the parties to serve any
notice, demand or communication upon the other party, such notice, demand, or
communication shall be in writing and shall be served personally, by
nationally recognized overnight courier which provides confirmation of
delivery, or by depositing the same in the United States mail, registered or
certified, return receipt requested, postage prepaid and,
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(a) If intended for Physician Group, then the notice shall be
addressed to:
Vein & Laser, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxx, M.D.
(b) If intended for Light Touch, then the notice shall be
addressed to:
Light Touch Vein & Laser, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxx
or to such other address as either party may have furnished to the other
party in writing as the place for the service of notice. Any notice so mailed
shall be deemed to have been given three (3) days after the same has been
deposited in the United States mall; when delivered if the same has been
given personally; or the next business day if the same has been delivered to
a nationally recognized overnight courier service.
8.4. ASSIGNMENT. Neither party may sell, transfer, assign, or otherwise
convey its rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, Light Touch shall have the right to
(a) assign its rights and/or delegate all or any of its obligations to any of
its Affiliates; and/or (b) subcontract some portion of its obligations
hereunder to a third party which is not an Affiliate of Light Touch, in each
case without the consent of Physician Group.
8.5. SUCCESSORS AND ASSIGNS. Subject to the provisions of this
Agreement respecting assignment, the terms, covenants and conditions
contained herein shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto.
8.6. SEVERABILITY . Nothing contained in this Agreement shall be
construed to require the commission of an act contrary to law, and whenever
there is any conflict between any provision of this Agreement and any
statute, law, ordinance or regulation, the latter shall prevail. In such
event, and in any case in which any provision of this Agreement is determined
to be in violation of a statute, law, ordinance or regulation, the affected
provision(s) shall be limited only to the extent necessary to bring it within
the requirements of the law and, insofar as possible under the circumstances,
to carry out the purposes of this Agreement. The other provisions of this
Agreement shall remain in full force and effect, and the invalidity or
unenforceability of any provision hereof shall not affect the validity and
enforceability of the other provisions of this Agreement, nor the
availability of all remedies in law or equity to the parties with respect to
such other provisions.
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8.7. THIRD PARTIES. Except as provided in Article VII, nothing in this
Agreement shall be construed to create any duty to, any standard of care with
reference to or any liability to anyone not a party to this Agreement.
8.8. HEADINGS. The headings used in this Agreement are for convenience
of reference only and shall have no force or effect in the construction or
interpretation of the provisions of this Agreement.
8.9. TIME OF THE ESSENCE. Time is of the very essence of each and all
of the agreements, covenants and conditions of this Agreement.
8.10. GOVERNING . This Agreement shall be interpreted in accordance with
and governed by the laws of the State of Ohio, to the jurisdiction of which
each of the parties hereby submits.
8.11. 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 of both parties in
such a manner as to indicate that the structure of this Agreement may be in
violation of such laws or regulations (a "Structural Issue"), either party
may terminate this Agreement, on not less than ninety (90) days written
notice to the other party, or negotiate and enter into an amendment of the
provisions of this Agreement in such manner as to alleviate such violation.
In the event that the parties are unable to agree upon such amendment within
thirty (30) days after the determination that such amendment is necessary, a
party may elect either to terminate this Agreement, on not less than ninety
(90) days written notice to the other party.
The parties agree that an amendment to accomplish the purposes set forth
in this Section 8.11 may require reorganization of Physician Group or Light
Touch, or both, and may require either or both parties to obtain appropriate
regulatory licenses and approvals. If (a) such reorganization or obtaining
such regulatory licenses and approvals is not reasonably possible, either
party shall have the right to terminate this Agreement on not less than
ninety (90) days written notice to the other party; or (b) such
reorganization or obtaining such regulatory licenses and approvals would
require Light Touch or Physician Group to incur a material economic detriment
or would result in a material economic detriment for Light Touch or Physician
Group, Light Touch or Physician Group, as the case may be, shall have the
right to terminate this Agreement on not less than ninety (90) days written
notice to Physician Group or Light Touch, as the case may be.
In the event that either party elects to terminate this Agreement in
accordance with the provisions of this Section 8.11, Light Touch shall have
the right, exercisable by the delivery of a written notice to Physician Group
at any time within sixty (60) days after the delivery by either party of
notice of termination of this Agreement, to require Physician Group to
purchase from Light Touch all of the assets used by Physician Group in
connection with the conduct of the medical practice at the Centers (the
"Practice Assets"). In the event that Light Touch fails to exercise such
right within the
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first thirty (30) days of such sixty (60) day period, Physician Group shall
have the right, exercisable by delivery of a written notice to Light Touch at
any time during the last thirty (30) days of such sixty (60) day period, to
require Light Touch to sell to Physician Group all of the Practice Assets.
If Light Touch elects to exercise the right to require Physician Group
to purchase the Purchase Assets from Light Touch or if Physician Group elects
to exercise the right to require Light Touch to sell the Purchase Assets to
Physician Group: (a) the purchase price for the practice assets shall be
their appraised fair market value (which shall be determined by appraiser(s)
mutually agreeable to the parties); (b) 25% of such purchase price shall be
payable to Light Touch at the closing for such sale of the Practice Assets in
immediately available funds to such bank account as is designated by Light
Touch, and the balance of such purchase price shall be payable in such
immediately available funds within six (6) months after the closing; and (c)
the closing for such sale of the Practice Assets shall occur on such date as
is designated in writing by Light Touch (if Light Touch elects to exercise
such right) or Physician Group (if Physician Group elects to exercise such
right) which date shall be not later than five (5) business days after the
date of delivery by Light Touch or Physician Group of notice of its exercise
of its right to require Physician Group to purchase or to require Light Touch
to sell all of the Practice Assets, as the case may be.
Light Touch shall have no claim against Physician Group, and Physician
Group shall have no claim against Light Touch, pursuant to the provisions of
Section 4.1(a) (iii) hereof or Section 4.2(c) hereof, respectively, which is
based upon or arises out of a Structural Issue.
8.12. LANGUAGE CONSTRUCTION. The language in all parts of this Agreement
shall be construed, in all cases, according to its fair meaning, and not for
or against either party hereto. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement.
8.13. INDEMNIFICATION. Physician Group shall indemnify, hold harmless
and defend Light Touch, its officers, directors, shareholders, employees,
agents and independent contractors (the "Light Touch Group") from and against
any and all liabilities, losses, damages, claims, causes of action, and
expenses (including reasonable attorneys' fees and disbursements (a "Light
Touch Loss")), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of medical services or any
other acts or omissions by Physician Group, and/or its partners, agents,
employees and/or subcontractors (other than Light Touch) during the term
hereof except with respect to any Light Touch Loss which is the result of any
gross negligence or willful misconduct by a member of the Light Touch Group.
Light Touch shall indemnify, hold harmless and defend Physician Group, its
officers, directors, partners employees, agents and independent contractors
(the "Physician Group") from and against any and all liabilities, losses,
damages, claims, causes of action, and expenses (including reasonable
judgment attorneys' fees and disbursements) (a
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"Physician Group Loss"), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any acts of omissions by
Light Touch and/or its shareholders, agents, employees and/or subcontractors
during the term hereof except with respect to any Physician Group Loss which
is the result of any gross negligence or willful misconduct by a member of
the Physician Group.
8.14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether written or oral, between or among parties regarding the
subject matter of this Agreement.
8.15. INCORPORATION BY REFERENCE. All exhibits and other attachments to
this Agreement are incorporated by reference into this Agreement by such
reference.
8.16. AMENDMENTS ONLY IN WRITING. This Agreement may not be amended or
modified in any respect whatsoever, except by an instrument in writing signed
by the parties hereto.
8.17. COUNTERPARTS. This Agreement may be executed in one or more
Counterparts, each of which shall be considered an original and all of which
shall constitute one and the same agreement. This Agreement shall not become
effective until it has been executed by all of the parties hereto.
8.18. COMMERCIAL IMPRACTICABILITY. No party to this Agreement shall be
liable for any failure to perform its obligations hereunder where such
failure results from any cause beyond that party's reasonable control,
including, for example, an act of God, labor disturbance such as a strike or
walkout, war, riot, fire, storm, accident, government regulation or
interference, or mechanical, electronic or communications failure.
8.19. ELECTION OF REMEDIES. The respective rights of the parties to this
Agreement shall be cumulative. Each party shall have all other rights and
remedies consistent with this Agreement as law and equity may provide. No
exercise by any party of one right or remedy shall be deemed to be an
exclusive election of rights or remedies.
8.20. SURVIVAL. The provisions of Articles III, IV, V, VI, VII and VIII
shall survive any termination of this Agreement.
8.21. THIRD PARTY BENEFICIARIES. Except with respect to Affiliates of
Light Touch, nothing in this Agreement shall be construed to create any duty
to, any standard of care with reference to, or any liability to any Person
not a party to this Agreement. The Affiliates of Light Touch are intended
third party beneficiaries of this Agreement.
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IN WITNESS WHEREOF, Light Touch and Physician Group have caused this
Agreement to be executed by their duly authorized respective officers as of
the Effective Date.
LIGHT TOUCH VEIN & LASER, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: PRESIDENT
-------------------------------
VEIN & LASER CENTER, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------
Title: President
-------------------------------
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