FACILITY USE AGREEMENT
This Facility Use Agreement (hereinafter referred to as the
"Agreement") is made and executed as of the close of business on the 1st day of
September, 2000 by and among Vision Correction Centers of Kansas City, P.C., a
Missouri professional corporation, (hereinafter referred to as "VCC"), Kansas
City Laser Vision Correction Centers, L.L.C., a Missouri limited liability
company ("KCL"), Xxxxxxx Xxxxx, M.D. (hereinafter referred to as "Provider") and
Prime Refractive - Kansas City, a Delaware limited liability company
(hereinafter referred to as "Prime").
Preliminary Statements:
Provider, a licensed medical professional, together with VCC and KCL
provides Refractive Surgery (as hereinafter defined) and related services in the
area of Kansas City, Missouri.
Prime owns certain equipment and assets (none of which include the
practice of medicine) used in the performance of Refractive Surgery and related
services.
Provider, KCL and VCC desire to use Prime's facilities to render
medical services to their patients.
Statement of Agreement
In consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and on the terms and subject to
the conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
Certain Defined Terms
Unless otherwise defined in Section 1.1 or elsewhere in this Agreement,
all capitalized terms used in this Agreement shall have the meanings ascribed to
them in that certain Contribution Agreement (the "Contribution Agreement") dated
as of September 1, 2000, among Prime Medical Services, Inc., a Delaware
corporation, Prime RVC, Inc., a Delaware corporation, Prime, Provider, KCL and
VCC.
ARTICLE II
Relationship of the Parties
The relationship under this Agreement between Prime, on the one hand,
and Provider, KCL and VCC, on the other hand, shall be that of independent
contractors. The provisions hereof are not intended to create any partnership,
joint venture, agency or employment relationship between the parties. Prime
acknowledges and agrees that Provider, KCL and VCC shall retain the exclusive
authority to direct the medical, clinical professional, and ethical aspects of
their respective medical practices. Prime shall neither exercise control over
nor interfere with the physician-patient relationships of Provider, KCL or VCC,
which shall be maintained strictly between Provider, KCL, VCC and their
respective patients.
ARTICLE III
Services to be Provided by Prime
Section 3.1 General. No party will act in a manner that would prevent
the other parties from performing their duties hereunder, and each party will
provide such information and assistance to each other party as is reasonably
required to enable such other party to perform its services hereunder. Prime
shall, and shall use its best efforts to cause its employees to, comply with all
applicable federal, state and local laws, rules and regulations in its provision
of services hereunder.
Section 3.2 Facilities. Prime shall make available to KCL, VCC and
Provider the real property located at 0000 X.X. Xxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, and the improvements, facilities and assets located thereon,
including without limitation, the Assets, the Assets Related Business and
personnel, for the use of KCL, VCC and Provider in the performance of Refractive
Surgery and related services (together with any future locations, property,
improvements, facilities or assets acquired or established by Prime in
replacement of or in addition to the foregoing, the "Facilities"). Prime agrees
to maintain the Facilities in a commercially reasonable manner in light of the
intended use of the Facilities. Prime agrees that licensed physician employees
of KCL shall be entitled to use the Facilities (subject to any applicable
requirements contained in any other agreement to which KCL and Prime are both
parties). Prime, KCL, VCC and Provider agree that Prime may make the Facilities
available to any other licensed physician, but only after Provider has, in
Provider's sole discretion, approved each such licensed physician to use the
Facilities (regardless of location).
Section 3.3 Management. The parties intend and agree that KCL, VCC and
Provider shall continue to manage and administer all aspects of their individual
practices, unless and only to the extent Prime specifically undertakes a certain
aspect of such management and administration in connection with its provision of
the Facilities or as otherwise expressly provided in this Agreement. Such
management and administration shall include, without limitation, all
administration, accounting, purchasing, payroll, legal services, record keeping,
bookkeeping, computer services, information management, printing, postage,
duplication services, provision of non-professional personnel, quality assurance
programs, and billing and collecting from, and contracting with, patients,
insurance companies, managed care payors, governmental entities and other
third-party payors with respect to all professional, medical and other services
provided by KCL, VCC or Provider.
Notwithstanding any provision of this Agreement to the contrary:
(a) Prime shall not engage in the practice of medicine, and Provider shall
at all times be responsible for all activities that constitute the practice of
medicine;
(b) this Agreement shall not be construed to require Provider,
or any other medically trained or licensed medical professionals under the
direction or control of Provider, to perform Refractive Surgery at the
facilities of, or use the equipment of, Prime, if in the professional medical
judgment of a reasonable ophthalmologist practicing LASIK surgery, such use
would be detrimental to Provider's patients; and
(c) none of KCL, VCC and Provider shall be required to hire or
retain any third party to manage any aspect of its practice.
Section 3.4 Events Excusing Performance. In the event of strikes,
lock-outs, calamities, acts of God, unavailability of supplies or other events
over which the parties have no control (hereinafter, a "Force Majeure Event"),
Prime shall not be liable to KCL, VCC or Provider for failure to provide any of
the Facilities hereunder, and KCL, VCC and Provider shall not have the right to
terminate this Agreement, for so long as such events continue and for a
reasonable period of time thereafter; provided, however, that if such events
continue and Prime is not able to provide any Facilities hereunder for a period
of one hundred and eighty (180) consecutive days or more, Prime, KCL, VCC or
Provider may terminate this Agreement by written notice to the others.
Notwithstanding any provision of the Transaction Documents to the contrary, for
any portion of such periods following a Force Majeure Event in excess of five
(5) business days during which Prime is unable to provide Facilities sufficient
to allow Provider to perform Refractive Surgery, then Provider, KCL and VCC may
perform medical services, including Refractive Surgery at such other locations
within or without the Restricted Area as Provider deems appropriate and Provider
shall be entitled to retain all compensation receive therefrom, until Prime is
again able to provide the Facilities.
Section 3.5 Limitation on Use of Facilities by VCC. Provider, VCC and
KCL acknowledge and agree that Prime is only making the Facilities and related
services available to VCC until such time as KCL has obtained all licenses,
certifications and other qualifications necessary to engage in the practice of
Refractive Surgery. Provider, VCC and KCL further agree that Prime may, in its
sole discretion, restrict use of the Facility and related services by VCC to
only Provider (as an employee of VCC), and may also cease to make the Facilities
and related services available to VCC after the expiration of ninety days
following the date of this Agreement, in either case without causing a default
under any provision of this Agreement or the Contribution Agreement. Prime shall
not have any responsibility to assist in the transfer or procurement by KCL of
any such licenses, certifications or other qualifications.
ARTICLE IV
Obligations of KCL, VCC and Provider
Section 4.1 Facility Fee. The fees payable to Prime by VCC, KCL and
Provider in return for use of the Facilities made available by Prime hereunder
(the "Facility Usage Fee") shall be determined on a per procedure basis and
remitted to Prime by its billing staff (the "Billing Staff") pursuant to the
billing agent appointment procedures provided in Section 4.2. The amount of the
Facility Usage Fee with respect to any procedure shall initially be $1,150. The
Facility Usage Fee shall be subsequently increased or decreased any time the
Patient Fee (as hereinafter defined) is increased or decreased, in each case in
equal proportion to the increase or decrease in the Patient Fee; provided,
however, that the Patient Fee cannot be changed without the unanimous consent of
the managers of Prime. As used herein, "Patient Fee" shall mean the standard,
undiscounted fee generally being charged to patients, determined without
reference to the fee charged for any single procedure.
Notwithstanding the foregoing provisions of this Section 4.1,
or any other contrary provision of any Transaction Documents, Provider shall be
entitled to perform procedures for free, discount procedures and refund amounts
paid for procedures on a limited basis in a manner and to the extent Provider
has done so in the past, or as otherwise consented to by Prime in each instance.
The Facility Usage Fee with respect to such procedures shall be proportionately
reduced, as long as the aggregate Facility Usage Fee paid hereunder equals or
exceeds the fair market value of the use of the Facilities.
Section 4.2 Billing Agent Appointment. With respect to all procedures
done using the Facilities, the Billing Staff shall furnish all billing and
collecting services to Provider, KCL and VCC in the name of Provider, KCL or
VCC, as applicable. Provider, KCL and VCC shall periodically furnish to the
Billing Staff, in a form satisfactory to Prime, information concerning
procedures performed by Provider, KCL and VCC, including, without limitation,
the total fee charged for the procedure, any discount applicable to the
procedure, the name, address and telephone number of the patient, and any
additional information required by the Billing Staff for purposes of proper and
timely billing for Provider's professional medical services in the performance
of Refractive Surgery and related services.
Provider, KCL and VCC hereby designate Prime as their billing
agent during the term of this Agreement, and Prime hereby accepts such
assignment. The Billing Staff shall maintain complete and accurate records of
charges billed and amounts collected, and shall furnish Provider with copies of
all billing statements issued on Provider's behalf, as well as copies of bank
receipts for all payments deposited in an account designated by Prime. When
payments are received, the Billing Staff shall be responsible for recording and
depositing the receipts in Prime's account and making semi-monthly payment to
Provider, KCL and VCC (as applicable) of the difference between the Patient Fee
and the Facility Usage Fees, on a per procedure basis, which difference
constitutes compensation for Provider's, KCL's or VCC's professional services,
as applicable (the "Professional Fees"). The parties to this Agreement
acknowledge and agree that the entire amount of the Professional Fees shall, in
each case, represent the agreed upon fair market value for Refractive Surgery
and related services performed by Provider, KCL or VCC and shall include no
additional payment for any other purpose.
Section 4.3 Compliance With Laws. KCL, VCC and Provider shall provide
professional services to patients in compliance at all times with, and shall
otherwise comply with, all ethical standards, laws, rules and regulations
applicable to the operations of KCL, VCC and Provider. KCL, VCC and Provider
shall use reasonable efforts to ensure that Provider and the employees of KCL,
VCC and Provider have all required licenses, credentials, approvals or other
certifications to perform his or her duties and services for KCL, VCC and
Provider. In the event that any disciplinary actions or medical malpractice
actions are initiated against Provider or any employee of Provider, KCL or VCC,
such party shall promptly inform Prime of such action and the underlying facts
and circumstances.
Section 4.4 KCL's, VCC's and Provider's Internal Matters. KCL, VCC and
Provider shall be responsible for matters involving their respective corporate
governance, employees and similar internal matters, including, but not limited
to, preparation and contents of such reports to regulatory and tax authorities
governing KCL, VCC and Provider that such party is required by law to provide,
distribution of professional fee income among Provider or the shareholders of
KCL or VCC, disposition of KCL's, VCC's and Provider's property and stock and
hiring and firing of their employees and licensing. The legal, accounting and
other professional services fees incurred by Provider, KCL or VCC in connection
with the internal matters of KCL and VCC, the distribution of the fee income
among Provider or shareholders of KCL or VCC and the personal accounting of KCL,
VCC and Provider and similar internal and personal matters, shall be borne
exclusively by KCL, VCC and/or Provider (as applicable).
ARTICLE V
Term and Termination
This Agreement shall commence on the date hereof and shall expire on
the earlier of (a) the 40th anniversary hereof or (b) the expiration or
termination of the Restricted Period; provided, however, that PMSI may elect to
have Prime terminate this Agreement at any time following any breach by Provider
of the provisions of ARTICLE VIII of the Contribution Agreement.
ARTICLE VI
General Provisions
Section 6.1 Collateral Agreements, Amendments, and Waivers. This
Agreement (together with the Contribution Agreement and all Transaction
Documents) supersedes all prior documents, understandings, and agreements, oral
or written, relating to this transaction and constitutes the entire
understanding among the parties with respect to the subject matter hereof. Any
modification or amendment to, or waiver of, any provision of this Agreement (or
any document delivered pursuant to this Agreement unless otherwise expressly
provided therein) may be made only by an instrument in writing executed by each
party thereto.
Section 6.2 Successors and Assigns. No party's rights or obligations
under this Agreement may be assigned without the prior written consent of all
parties hereto. Any assignment in violation of the foregoing shall be null and
void. Subject to the preceding sentences of this Section, the provisions of this
Agreement (and, unless otherwise expressly provided therein, of any document
delivered pursuant to this Agreement) shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors, and assigns.
Section 6.3 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. In the event any provision of this Agreement is severed, the parties
to this Agreement agree to negotiate in good faith to preserve the intended
economic results of this Agreement.
Section 6.4 Waiver. No failure or delay on the part of any party in
exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege; nor shall any single or partial exercise of
any such right, power, or privilege preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.
Section 6.5 Notices. Unless specifically provided otherwise herein, any
notices required or permitted to be given under this Agreement shall be given
and deemed received in the manner provided in the Contribution Agreement.
Section 6.6 Construction. This Agreement and any documents or
instruments delivered pursuant hereto or in connection herewith shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Agreement and such
other documents and instruments shall be construed as though all of the parties
participated equally in the drafting of the same. Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable either to this
Agreement or such other documents and instruments.
Section 6.7 Other Agreements. Each party hereto agrees that any
material breach by it of any of the terms and provisions of another Transaction
Document (as defined in the Contribution Agreement) to which it is a party shall
also be deemed to have been a material breach by it of this Agreement, for all
purposes.
Section 6.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri.
Section 6.9 Arbitration. Any controversy between the parties regarding
this Agreement or any other Transaction Document, any claims arising out of any
breach or alleged breach of this Agreement or any other Transaction Document,
and any claims arising out of the relationship between the parties created
hereunder, shall be submitted to binding arbitration by all parties involved in
accordance with the terms of the Contribution Agreement.
Section 6.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument. Any party hereto may
execute this Agreement by signing any one counterpart.
[Signature page follows]
S-1
SIGNATURE PAGE
TO
FACILITY USE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Prime: Prime Refractive - Kansas City, L.L.C.
Xxxxxx Xxxxxxxx, Vice President
Xxxxxxx Xxxxx, Vice President
Provider: _______________________________________________
Xxxxxxx Xxxxx, M.D.
VCC: Vision Correction Centers of Kansas City, P.C.
By:
Xxxxxxx Xxxxx, M.D., President
KCL: Kansas City Laser Vision Correction Centers, L.L.C.
By:
Xxxxxxx Xxxxx, M.D., Manager
