EXHIBIT 10.8
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OCCUPATIONAL MEDICINE CENTER MANAGEMENT
AND
CONSULTING AGREEMENT
BETWEEN
OCCUCENTERS, INC.
(a Nevada corporation)
AND
OCCUPATIONAL HEALTH CENTERS OF NEW JERSEY, P.A.
(a New Jersey professional association)
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TABLE OF CONTENTS
PAGE
ARTICLE I ENGAGEMENT, SERVICES AND AUTHORITY
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1.1 Engagement 1
1.2 Authority 1
1.3 Authority and Responsibilities of Company 2
1.4 Relationship of Parties 6
1.5 Medical and Professional Matters 7
ARTICLE II FISCAL MATTERS
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2.1 Accounting Records 7
2.2 Budgets 7
2.3 Prior Approvals 8
ARTICLE III LICENSE
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3.1 Grant of License 8
3.2 Trade Secrets, Proprietary and Confidential
Information 9
ARTICLE IV MAINTENANCE OF STANDARDS
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4.1 Standards of Health Care 10
4.2 Consultants 11
4.3 Government Regulations 12
4.4 Licenses and Permits 10
4.5 Confidentiality of Records 10
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4.6 Medical Services 10
ARTICLE V ASSOCIATION MEDICAL PERSONNEL
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5.1 General 10
5.2 Pay Scales and Personnel Policies 11
5.3 Association's Rights 11
ARTICLE VI MANAGEMENT FEES
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6.1 Compensation of Company 11
ARTICLE VII COMPETITION
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7.1 General 12
7.2 Non-Competition by Association 12
7.3 Restrictions on Soliciting Business of Company 13
7.4 Further Covenants 13
7.5 Consideration for Protective Covenants 14
7.6 Survival of Protective Covenants 14
7.7 Extension of Restrictive Periods 14
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ARTICLE VIII TERMS AND TERMINATION
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8.1 Term 15
8.2 Termination for Cause 15
8.3 Termination Without Cause 15
8.4 Rights Cumulative 16
8.5 Obligations Not Excused 16
8.6 Renewal 16
8.7 Remedies Upon Termination 16
8.8 Property 16
ARTICLE VIII MISCELLANEOUS
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9.1 Assignment 17
9.2 Sales of Assets 17
9.3 Indemnification 17
9.4 Changes in Applicable Law 17
9.5 Notices 17
9.6 Entire Agreement; Modification and Change 18
9.7 Warranties 18
9.8 Headings 18
9.9 Severability 18
9.10 Governing Law 18
9.11 Rights Cumulative; No Waiver 18
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9.12 Counterparts 18
OCCUPATIONAL MEDICINE CENTER
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MANAGEMENT AND CONSULTING AGREEMENT
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THIS MANAGEMENT AND CONSULTING AGREEMENT (the "Agreement") is made
and entered into effective as of this the date set forth on the signature page
hereto (the "Commencement Date") by and between OCCUCENTERS, INC., a Nevada
corporation ("Company"), and OCCUPATIONAL HEALTH CENTERS OF NEW JERSEY, P.A., a
New Jersey professional association (the "Association").
W I T N E S S E T H:
WHEREAS, the Association is a professional association formed for the
purpose of providing medical services;
WHEREAS, one of purposes of the Company is developing and managing
(including both strategic management and onsite management) occupational
medicine centers which provide occupational medicine services through various
clinic locations (the "Centers");
WHEREAS, the Association intends to practice occupational medicine in
various locations; and
WHEREAS, the Association desires to engage Company to manage the
Centers, such management being limited to strategic management services at
certain Centers as specified in this Agreement, and Company is willing to accept
such engagement, both subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing and, in accordance
with the terms and conditions set forth below, the parties hereto agree as
follows:
ARTICLE I
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ENGAGEMENT, SERVICES AND AUTHORITY
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Section 1.1 Engagement. Subject to the limitations set forth in this
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Agreement, the Association hereby engages Company to serve as Association's
manager and administrator of non-medical functions and non-physician services
related to Association's practice and to
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perform the functions and to provide the services described in this Agreement,
and Company hereby accepts the engagement under the terms and conditions set
forth in this Agreement.
Section 1.2 Authority.
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(a) The Association warrants that the Association has the right,
power, legal capacity and authority to enter into and perform the Association's
obligations under this Agreement. The Association and further warrants that no
approval or consent of any person or entity other than the Association is
necessary in connection with the execution of this Agreement. The execution and
delivery of this Agreement by the Association has been duly authorized by the
Association's Board of Directors.
(b) Company and its Board of Directors warrant that Company has the
right, power, legal capacity, and authority to enter into and perform its
obligations under this Agreement, and further warrant that no approval or
consent of any person or entity other than Company is necessary in connection
with the execution of this Agreement. The execution and delivery of this
Agreement by Company has been duly authorized by Company's Board of Directors.
Section 1.3 Authority and Responsibilities of Company.
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(a) General. Subject to the limitations and conditions set forth in
this Agreement, Company, as manager of the Centers, shall have the authority and
responsibility to conduct, supervise and manage the day-to-day non-medical
operations of the Centers and provide all developmental, management and
administrative services attendant to Association's practice. In the absence of
oral or written directions by the Association or written policies of the
Association, Company shall be expected to exercise reasonable judgment in its
management activities. Company shall have responsibility and commensurate
authority, subject to the direction of the Association and the written policies
of the Association, for all activities described in the foregoing including, but
not limited to, the following:
(1) Bookkeeping and Accounting. Company will provide
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Association with all bookkeeping and accounting services
necessary or appropriate as Association shall determine to
support Association's medical practice including, without
limitation, maintenance, custody and supervision of all of
Association's business records, papers, documents, ledgers,
journals and reports, and the preparation, distribution and
recordation of all bills and statements for professional
services rendered by Association, including the billing and
completion of reports and forms required by insurance
companies or governmental agencies, or other third-party
payors; provided, however, it is understood that all such
business records, papers and documents will be available
for inspection by Association at all times.
(2) General Administrative Services. Company will provide
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Association with overall supervision and management of,
including the maintenance and repair of all
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facilities, and all furniture, fixtures, furnishings, equipment and
leasehold improvements located in or upon all of the facilities
provided by Company for the use of Association.
(3) Non-Physician Personnel. Company will hire, employ, train,
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compensate and provide to Association all non-medical
personnel including, but not limited to, all non-physician
technical personnel, receptionists, secretaries, clerks,
purchasing and marketing personnel, janitorial and
maintenance personnel, and non-physician supervisory
personnel, which is now or may hereafter be needed to
effectively and efficiently operate Association's medical
practice at the facilities provided by Company for the use
of Association. All personnel which Company provides to
work with Association shall be the employees of Company and
Company shall be solely responsible for the payment to all
such persons of all compensation, including salary, fringe
benefits, bonuses, health and disability insurance, workers
compensation insurance, and any other benefits which
Company may make available to its employees. Company shall
have the sole and exclusive responsibility of hiring,
discharging and supervising the non-medical functions of
all non-medical personnel which are provided to work with
Association pursuant to this Agreement; provided, however,
that Association shall be solely responsible for the
supervision of all such personnel in connection with any
medical functions and responsibilities performed by such
personnel.
(4) Supplies. Subject to Association approval, Company will
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acquire and supply to Association all medical and
non-medical supplies of every kind, name or nature, which
Association may require in order to conduct and operate its
medical practice at the facilities provided by Company for
the use of Association.
(5) Security and Maintenance. Subject to Association approval,
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Company will provide Association with all services and
personnel necessary to provide Association with proper
security, maintenance and cleanliness of the facilities
provided by Company for the use of Association, and the
furniture, fixtures, furnishings and equipment located at
such facilities. Additionally, Company will furnish to, or
obtain for, Association all laundry, linen, uniforms,
printing, stationery, forms, telephones, postage,
duplication services, and any and all other supplies and
services of a similar nature which are necessary, in
Association's opinion, in connection with the day-to-day
operation of Association's medical practice at the
facilities provided by Company for the use of Association.
(6) General Liability and Casualty Insurance. Company will
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obtain and maintain in full force and effect during the
term of this Agreement, and all extensions and renewals
thereof, all general liability and casualty insurance of
every kind, name and nature which the parties agree is
appropriate to protect them against loss in
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the nature of fire, other catastrophe, theft, public liability and
non-medical negligence, in such amounts as the parties shall mutually
determine is appropriate.
(7) Billing, Collection and Patient Scheduling. Company will, as
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Association's agent, prepare, mail and collect all bills and
statements for all professional medical services rendered by
Association, and shall be responsible for all patient scheduling at
the facilities provided by Company for the use of Association. All
fees for professional services rendered by Association shall be billed
by Company in the name of the Association and shall be payable to the
Association. All collections made and received by Company for or on
account of medical professional services rendered by Association shall
be held by Company for Association's benefit and deposited in one or
more accounts in the name of the Association, subject to the
compensation provisions contained in Section 6.1 below.
(8) Marketing. Company will assist Association in the marketing
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and distribution of the health care services provided by
Association at the facilities provided by Company for the
use of Association; and in this respect, shall hire, employ
and train marketing personnel sufficient to accomplish this
task as well as produce and distribute such written
descriptive materials concerning Association's professional
services as may be necessary or appropriate to the conduct
of Association's medical practice; provided, however, that
all of such marketing and services shall be conducted
strictly in accordance with law and the rules, regulations
and guidelines of all affected governmental and
quasi-governmental agencies.
(9) Management and Planning Reports. Company will supply to
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Association on a regular, periodic basis such internal
reports as may be necessary or appropriate for the parties
to assist each other in evaluating the non-medical aspects
of the performance and productivity of their respective
employees as well as in evaluating the efficiency and
effectiveness of the rendition of their respective
management and medical services.
(10) Payment of Accounts and Indebtedness.
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(i) General. Company shall be responsible for effecting the
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payment of payroll, trade accounts, amounts due on short-
term and long-term indebtedness, taxes, and all other
obligations of the Association and from the Association's
accounts; provided, however, that Company's
responsibility shall be limited to the exercise of
reasonable diligence and care to apply the Association's
funds collected to the Association's obligations in a
timely and prudent manner. Company shall have no separate
liability with respect to any obligation of the
Association. The Association shall authorize
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Company to draw checks on the Association's accounts as
necessary to perform its obligations under this
Agreement.
(ii) Payroll. Company shall have the authority to utilize a payroll
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agent for the Association, should Company determine the
use of such an agent to be desirable.
(iii)Company Funds. In no event shall Company have any obligation
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to supply out of its own funds working capital for the
Association or its operations.
(iv) Accounting and Financial Records. Subject to the written
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policies of the Association, and at the expense of the
Association, Company shall cause to be prepared and
presented to the Association the following financial
reports:
(a) Within thirty (30) days after the end of each
calendar month, a balance sheet dated as of the
last day of that month, and a statement showing
the income and expenses of the Association for
that month and for the fiscal year to date;
(b) Within ninety (90) days after the end of each
fiscal year of the Association, a balance sheet,
dated as of the last day of that fiscal year, and
a statement of the income and expenses of the
Association for the fiscal year then ended; and
(c) Such other reports as Company considers
appropriate to keep the Association informed as
to its status and condition.
(11) Patient Charges. Company and the Association recognize the importance
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of maintaining patient charges which will enable the Association to
meet its obligations while containing the cost of health care. The
Association, in consultation with Company, shall establish schedules
of patient charges for medical services and supplies provided by the
Association which takes into account the financial obligations of the
Association, the level of patient charges at other clinics, centers
or nearby hospitals for similar services and the importance of
providing quality health care at a reasonable cost.
(12) Ancillary and Other Arrangements. Company shall, at the Association's
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expense, make, install, or cause to be made or installed, all
necessary and proper repairs, replacements, additions and
improvements in and to the property and equipment
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used in connection with the Association's practice, in order to keep
and maintain the facilities in good repair, working order and
condition, and outfitted and equipped for operation consistent with
the goals and objectives set forth in this Agreement. Company shall
negotiate and enter into such agreements as it may deem necessary or
advisable for the furnishing of utilities, services and supplies for
the maintenance and operation of the Association's practice.
(13) Capital Improvements. Company shall, with Association's consent,
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provide professional office space to operate Association's various
practice locations.
(14) Insurance. The Association shall, at its expense, maintain general
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and professional liability insurance with an endorsement naming
Company (as agent for the Association) as an additional insured
thereunder. Company is authorized to obtain such insurance on
Association's behalf.
(15) Authority and Responsibility of Company for Centers in Certain
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Locations. Notwithstanding any provision in this Agreement to the
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contrary, for all Centers located within the State of New Jersey,
Company's authority and responsibilities shall be strictly limited to
strategic management and other services that Company shall provide
from its office located in Secaucus, New Jersey. Such services shall
include, but not be limited to, business planning, forecasting,
budgeting, consultation and other similar services. All services
shall be performed by the Company at its corporate offices in Dallas,
Texas. The Association shall be responsible for the conduct,
supervision and management of the day-to-day medical and non-medical
operations of the Centers and for all developmental, management and
administrative services attendant to Association's practice at
Centers located in the State of New Jersey which Company cannot
reasonably perform from its office in Dallas, Texas. Nothing in this
Agreement shall be construed as creating an agency relationship
between Company and the Association for the performance of services
at Centers located in the State of New Jersey, or for Company having
any authority or responsibility for providing management or any other
services at Center locations in the State of New Jersey.
Notwithstanding any other provision in this Agreement, Company and
the Association shall not have the authority to bind one another in
contractual or other agreements with other parties with respect to
Centers located in the State of New Jersey.
(b) Reliance. In furtherance of the objectives of this Agreement,
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Company shall be entitled to rely upon formal action taken by the Association as
reflected and recorded in the records of the Association or, in the absence
thereof, upon instructions received from the Association, or such representative
of the Association as the Association may designate, as to any and all acts to
be performed by Company.
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(c) Construction. The grant of express authority to Company with
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regard to specific matters by this Agreement is not intended by the Association
to be narrowly construed for the purpose of restricting the authority of
Company.
Section 1.4 Relationship of Parties. The Association shall at all
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times exercise control over the medical services rendered at the Centers, and
Company shall perform its functions to manage the Centers as described in this
Agreement in accordance with policies and directives adopted by the Association.
By entering into this Agreement, the Association does not delegate to Company
any of the powers, duties and responsibilities vested in the Association by law.
The Association may, consistent with the terms of this Agreement, direct Company
to implement existing policies and may adopt policy recommendations or proposals
made by Company. Company and the Association each expressly disclaim any intent
to form a partnership, association, or any other entity, or to become joint
venturers in the operation of the Centers by virtue of the execution of this
Agreement, and shall not be agents of each other except with respect to agency
for billing and collections.
Section 1.5 Medical and Professional Matters. Under no circumstances shall
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Company be responsible for any medical matters. Company may, however, consult
with the Association and make recommendations concerning such matters. The
Association shall be responsible for maintaining all medical records.
ARTICLE II
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FISCAL MATTERS
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Section 2.1 Accounting Records. Company shall supervise, direct and
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maintain at the Association's expense, a suitable accounting system on the
accrual method of accounting and shall furnish monthly compilations to the
Association. This section shall apply with respect to Centers located in the
State of New Jersey only to the extent that Company can reasonably provide such
services from its offices in Dallas, Texas.
Section 2.2 Budgets.
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(a) Duties of Company. If requested by the Board of Directors of the
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Association, Company shall submit to the Association, not less than forty-five
(45) days prior to the end of the fiscal year, the following budgets covering
the Association's next fiscal year. These budgets, and any material changes in
these budgets during the fiscal year, shall only become effective upon approval
of the Association's Board of Directors and shall be subject to any written
policies of the Association.
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(1) Capital Expenditures Budget. A capital expenditure budget
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setting forth a program of capital expenditures for the
Company Center's for the next fiscal year;
(2) Operating Budget. A budget setting forth an estimate of the
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Association's operating revenues and expenses for the coming
fiscal year, together with an explanation of anticipated
changes in the Association's utilization and any changes in
services offered by the Association to patients, charges to
patients, payroll rates and positions, non-wage cost
increases, and all other factors differing significantly from
the current year;
(3) Cash-Flow Projection. A projection of the Association's cash
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receipts and disbursements based upon the proposed operating
and capital budgets, together with recommendations as to the
use of projected cash-flow in excess of short-term operating
requirements and as to the sources and amounts of additional
cash-flow that may be required to meet the Association's and
Company's operating requirements and capital requirements.
(b) Duties of the Association. The Association shall take action to
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approve or disapprove the budgets proposed by Company not later than twenty-one
(21) days after submission of the budgets to the Association. Notice of the
action by the Association with regard to the budgets shall be delivered to
Company if all aspects of the budgets as proposed by Company are not approved by
the Association. If such notice of disapproval is not delivered to Company
within fourteen (14) days prior to the commencement of the Association's fiscal
year, the budgets shall be deemed to be approved by the Association as proposed
by Company.
Section 2.3 Prior Approvals. Except with respect to Centers located
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in the State of New Jersey, Company shall have full authority to make
non-medical management decisions during the normal course of the Association's
daily operations; provided, however, that prior specific approval of the
Association's Board of Directors or such officer or officers of the Association
as the Association's Board of Directors may designate shall be obtained before
Company may take any of the following actions (i) commitment of the
Association's funds for any single operating or capital expenditure exceeding
Twenty-Five Thousand Dollars ($25,000.00); (ii) binding the Association to any
contract exceeding Twenty-Five Thousand Dollars ($25,000.00) in value, or
exceeding a term of three (3) years; (iii) material alteration of the services
offered or engaged in by the Association; and/or (iv) alteration in the prices
charged for medical services offered by the Association.
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ARTICLE III
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LICENSE
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Section 3.1. Grant of License. During the term of this Agreement, and
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all renewals and extensions hereof, Company hereby grants a non-exclusive
license to the Association to use any and all trade names, trademarks or service
marks (collectively, the "Trade Names") and Confidential Information (as
hereinafter defined) lawfully owned and used by Company in connection with the
Association's medical practice conducted at various facilities owned and/or
managed by Company, and any amendment thereof, while and so long as the
Association is in full compliance with all the terms, covenants and conditions
of this Agreement, and any lease or sublease which Association has with Company
in connection with such facilities. Because the license granted to the
Association is not exclusive, Company retains the right to license the Trade
Names and any and all other trade names and/or service marks and Confidential
Information (as hereinafter defined) lawfully owned and used by Company to
others or to use any such names, marks and Confidential Information (as
hereinafter defined) itself. Upon termination of this Agreement, or upon
termination of this license because of the Association's breach of this
Agreement, the Association shall immediately cease and discontinue the use of
any and all trade names, trademarks, service marks and Confidential Information
(as hereinafter defined) then lawfully used and/or owned by Company.
Section 3.2. Trade Secrets, Proprietary and Confidential Information.
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It is understood that during the course of this engagement, the Association will
have access to and become familiar with certain trade secrets, proprietary and
confidential information of Company (the "Confidential Information") which
includes, by way of illustration and not by way of limitation (i) lists
containing the names of past, present and prospective accounts, customers,
employees, principals and suppliers; (ii) the past, present and prospective
methods, procedures and techniques utilized in identifying prospective referral
sources, patients, customers and suppliers and in soliciting the business
thereof; (iii) the past, present and prospective methods, procedures and
techniques used in the operation of Company's businesses, including the methods,
procedures and techniques utilized in marketing, pricing, applying and
delivering Company's occupational health products and services; and (iv)
compilations of information, records and processes which are owned by Company
and/or which are used in the operation of the business of Company or
Association, including, without limitation, computer software programs.
ARTICLE IV
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MAINTENANCE OF STANDARDS
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Section 4.1. Standard of Health Care. Company shall use its best
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efforts to assure that the Association meets a high standard of health care in
accordance with the written policies adopted by the Association and the
resources available.
Section 4.2. Consultants. Company shall be the non-medical consultant
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for the Association and shall use its administrative and managerial experience
and expertise to carry out this Agreement. If other non-medical consultants are
needed, Company may employ such non-medical consultants at its expense.
Section 4.3. Government Regulations. Company and the Association
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shall each use its best efforts to assure that the Center complies with the
requirements of any statute, ordinance, law, rule, regulation, or order of any
governmental or regulatory body having jurisdiction respecting the Center.
Section 4.4. Licenses and Permits. On behalf of the Association,
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Company shall apply for, and use its best efforts to obtain and maintain, in the
name of and at the expense of the Association, all licenses and permits required
in connection with the management and operation of the Centers. The Association
shall cooperate with Company and use its best efforts in applying for, obtaining
and maintaining such licenses and permits.
Section 4.5. Confidentiality of Records. Company shall use its best
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efforts to protect the confidentiality of the records of the Association and
shall comply with all applicable federal, state and local laws and regulations
relating to the medical and financial records of the Association.
Section 4.6. Medical Services. From time to time and as appropriate,
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Company may make written recommendations to the Association concerning changes
in the medical services offered by the Centers. Prior to instituting any
proposed changes, Company shall obtain the written approval of the Association.
ARTICLE V
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ASSOCIATION MEDICAL PERSONNEL
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Section 5.1. General. The Association shall retain responsibility for
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all decisions related to the employment of all medical personnel including
hiring, promotion, discharge, compensation, training and professional
assignments. Company shall review all personnel matters and make recommendations
to the Association on appropriate actions or policies. Consistent with the
directions of the Association, Company shall recruit medical personnel,
including physicians and physician assistants, for employment by the
Association; provided, however, no such services shall be performed by Company
within the State of New Jersey. All such medical personnel shall be the
employees of, and shall be carried on, the payroll of the
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Association and shall not be the employees of Company. The Association shall be
solely liable to such medical personnel for their wages, compensation and
benefits, if any. For purposes of this Section 5.1, the term "benefits" shall
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include the Association's employer contribution to FICA, unemployment
compensation and any other employment taxes, workers' compensation, pension plan
contributions, group life and accident and health insurance premiums,
retirement, disability and other similar benefits.
Section 5.2. Pay Scales and Personnel Policies. Company shall review
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and make recommendations to the Association regarding the pay scales of the
Association's employees and the number of physicians required for the
Association's operations. With the approval of the Association, Company shall
institute and implement any changes or recommendations so approved.
Section 5.3. Association's Rights. The Association shall have the
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right to demand by written notice delivered to Company that any employee of
Company be terminated, but only if the termination is reasonably and legally
supportable in the opinion of Company as a termination for cause. Otherwise, the
termination of an employee at the instance of the Association shall only be
completed upon the Association's agreement to indemnify Company with respect to
any liability for such termination, including but not limited to, unemployment
insurance taxes, and such indemnity shall be in a form and under terms
satisfactory to Company.
ARTICLE VI
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MANAGEMENT FEES
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Section 6.1. Compensation of Company. The Association shall retain from Adjusted
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Gross Revenues (as hereinafter defined) (i) an amount sufficient to pay on a
monthly basis those physicians, physician assistants, and other medical
personnel who are employed by or under contract to the Association; (ii) an
amount sufficient to pay all benefits provided to such physicians, physician
assistants, and other medical personnel including, but not limited to, FICA,
unemployment taxes and any other employment taxes, group life, accident and
health insurance premiums and other similar benefits; (iii) amounts sufficient
to pay license/certification fees, professional organization dues, professional
publication subscriptions; (iv) an amount sufficient to pay any additional
compensation to the Association's employees pursuant to any bonus or incentive
arrangement between the Association and its employees; (v) for Centers located
in the State of New Jersey, amounts sufficient to pay all costs for necessary
management of the day-to-day non-medical operations of such Centers and for all
necessary developmental, management and administrative services attendant to the
Association's practice, as detailed in Section 1.3 of this Agreement, to the
extent that, pursuant to Subsection 1.3(15)(a) of such section, they are not
provided by Company at such locations; (vi) any remaining revenues (after
payment of compensation to Company); and (vii) other amount(s) as agreed to
between the parties; provided, however, that the aggregate amount retained by
the Association in any fiscal year shall never
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exceed the sum of amounts received pursuant to subsection 6.1(v) herein, and
thirty percent (30%) of Adjusted Gross Revenues (as hereinafter defined). Any
Adjusted Gross Revenues (as hereinafter defined) in excess of the amounts to be
retained by the Association shall be paid to and belong to Company as
compensation for the services provided under this Agreement. "Adjusted Gross
Revenues" shall mean an amount equal to all xxxxxxxx for medical services,
ancillary charges, facility charges, and supplies, less discounts and bad debt
allowance.
ARTICLE VII
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PROTECTIVE COVENANTS
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Section 7.1. General. The Association expressly acknowledges that the
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Association and the Association's employees will be given access to, and be
provided with, business methods, trade secrets and other proprietary information
in connection with Company's business and the Association's practice of
occupational medicine. Association expressly acknowledges and agrees that the
Confidential Information (as hereinafter defined), is proprietary and
confidential and if any of the Confidential Information was imparted to or
became known by any persons, including Association and its employees, engaging
in a business in any way competitive with that of Company's and/or
Association's, such disclosure would result in hardship, loss, irreparable
injury and damage to Company, the measurement of which would be difficult, if
not impossible, to determine. Accordingly, the Association expressly agrees that
Company has a legitimate interest in protecting the Confidential Information and
its business goodwill, that it is necessary for Company to protect its business
from such hardship, loss, irreparable injury and damage, that the following
covenants are a reasonable means by which to accomplish those purposes, and that
violation of any of the protective covenants contained herein shall constitute a
breach of trust and is grounds for immediate termination of this Agreement and
for appropriate legal action for damages, enforcement and/or injunction.
Section 7.2. Noncompetition by Association. Association covenants
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that, during the term of this Agreement and for a period of two (2) years
immediately thereafter, irrespective of which party terminates this Agreement
and whether such termination is for cause or otherwise, it will not directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder (other than ownership of securities of publicly held
corporations of which Physician owns less than one percent (1%) of any class of
outstanding securities), corporate officer, director, investor or financier or
in any other individual or representative capacity, engage or participate in any
business within the Prohibited Area (as hereinafter defined) that is in
competition in any manner whatsoever with Company businesses and the products or
services offered by Company in such areas, including, without limitation, the
operation or staffing of any occupational medicine center or clinic, without the
prior written consent of Company. Notwithstanding the foregoing, in the event of
the termination of this Agreement for whatever reason, the Association may
engage in such activities solely for the purpose of providing such services to
its members and/or physician employees. For purposes of this subsection, the
term
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"Prohibited Area" means within twenty (20) miles of any Clinic owned, operated
or managed by Company at the time of such termination. The Association further
agrees that the Association will require all employees to execute employment
containing provisions substantially similar to this Article VII protecting
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Company and the Association from competition by such employees.
Section 7.3. Restrictions on Soliciting Employees of Company. The
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Association covenants that, during the term of this Agreement and for a period
of two (2) years immediately thereafter, irrespective of which party terminates
this Agreement, and whether such termination is for cause, the Association and
the Association's members, directors, employees, agents and representatives will
not, either for itself or for any other person, firm, corporation or other
entity, except as may be required in the course of rendering services as
contemplated under this Agreement, either directly or indirectly (i) induce, or
attempt to induce, any employee of Company to terminate his or her employment or
hire away or attempt to hire away, any employee of Company; (ii) induce, or
attempt to induce, any present or future supply or service resource (including
investment and other financing resources) to withdraw, curtail, or cancel the
furnishing of supplies or services (including investment and other financing
resources) to Company; or (iii) engage in any act or activity which would
interfere with or harm any business relationship Company may have with any
employee, principal or supplier.
Section 7.4. Further Covenants. The Association acknowledges that the
----------- -----------------
Confidential Information gives Company an advantage over its competitors, and
that the same is not available to or known by Company's competitors or the
general public. The further acknowledges that Company and the Association have
devoted substantial time, money and effort in the development of the
Confidential Information and in maintaining the proprietary and confidential
nature thereof. The further acknowledges its position with Company is one of the
highest trust and confidence by reason of the Association's knowledge of, access
to, and contact with the Confidential Information. The agrees to use its best
efforts and exercise utmost diligence to protect and safeguard the Confidential
Information. The Association covenants that, during the term of this Agreement
and for a period of two (2) years immediately thereafter, regardless of which
party terminates this Agreement and whether such termination is for cause, the
Association will not disclose, disseminate or distribute to another, nor induce
any other person to disclose, disseminate or distribute, any Confidential
Information of Company, directly or indirectly, either for the Association's own
benefit or for the benefit of another, whether or not acquired, learned,
obtained or developed by the Association alone or in conjunction with others,
nor will the Association use or cause to be used any Confidential Information in
any way except as is required in the course of the Association's performance
pursuant to the terms of this Agreement. The Association acknowledges and
covenants that all Confidential Information relating to the business of Company,
whether prepared by the Association or otherwise coming into its possession,
shall remain the exclusive property of Company, shall not be copied or otherwise
reproduced in whole or in part, and shall not be removed from the premises of
Company under any circumstances whatsoever without the prior written consent of
Company. The Association further covenants that all memoranda, notes, records,
drawings or other documents made, compiled, acquired or received by the
Association during the term of this
17
Agreement, concerning any business activity, including, but not limited to,
management techniques, names of referral sources, names of customers, marketing
and sales techniques, and the pricing of products and services, shall, together
with all copies, be delivered, in good condition, to Company, immediately upon
termination of this Agreement by either party, or at any time, upon Company's
request.
Section 7.5. Consideration for Protective Covenants. The license
----------- --------------------------------------
granted in Article III of this Agreement is hereby allocated as separate and
additional consideration to the Association for its adherence to these
protective covenants, the Association acknowledges and agrees that the license
would not be granted were it not agreeing to the protective covenants referenced
in this Article VII.
Section 7.6. Survival of Protective Covenants. Each covenant herein
----------- --------------------------------
on the part of the Association shall be construed as an agreement independent of
any other provision of this Agreement, unless otherwise indicated herein, and
shall survive the termination of this Agreement, and the existence of any claim
or cause of action of the Association against Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Company of such covenant.
Section 7.7. Extension of Restrictive Periods. If the Association
----------- --------------------------------
violates the protective covenants hereunder and Company brings legal action for
injunctive or other relief hereunder, Company shall not, as a result of the time
involved in obtaining the relief, be deprived of the benefit of the full
restrictive periods of the protective covenants contained in this Article VII.
Accordingly, such restrictive periods for the purposes of this Article VII shall
be deemed to have a duration of the respective time periods stated in this
Article VII, computed from the date relief is granted, but reduced by the time
between the period when the restriction began to run and the date of the first
violation of the covenant by the Association.
ARTICLE VIII
------------
TERM AND TERMINATION
--------------------
Section 8.1. Term. This Agreement shall commence on the Commencement
----------- ----
Date and shall continue until terminated upon the earliest of (i) the date for
termination for cause pursuant to Section 8.2 below; (ii) termination without
-----------
cause upon notice described in Section 8.3 below; (iii) written agreement of the
-----------
parties to this Agreement; or (iv) December 30, 2033 (the "Initial Term") or any
successive term (as described in Section 8.5) unless renewed pursuant to the
-----------
terms of Section 8.5.
-----------
Section 8.2. Termination for Cause. This Agreement may be
------------ ----------------------
terminated without notice by either party for any of the following reasons:
18
(a) If either party shall apply for, or consent to, the appointment
of a receiver, trustee or liquidator of all or a substantial part of its assets,
file a voluntary petition in bankruptcy, make a general assignment for the
benefit of creditors, file a petition or an answer seeking reorganization or
arrangement with creditors or to take advantage of any insolvency law, or if a
final order, judgment or decree shall be entered by a court of competent
jurisdiction, on the application of a creditor, adjudicating such party a
bankrupt or insolvent or approving a petition seeking reorganization of such
party or appointing a receiver, trustee or liquidator of such party of all or a
substantial part of its assets;
(b) The breach or default in performance of this Agreement by either
party, provided that such breach or default continues for a period of thirty
(30) days after written notice thereof has been given by the nondefaulting party
to the defaulting party;
(c) Receipt by either party of a final order of any governmental
agency or court of competent jurisdiction concerning the business, affairs, or
practices of either of the parties which require such termination;
(d) Termination of the Association's practice of medicine in the
applicable state; or
(e) Termination or suspension of a physician's license or physicians'
licenses so that the Association is unable to provide medical services in the
state where such physician is duly licensed to practice medicine.
Section 8.3. Termination Without Cause. This Agreement may be
----------- -------------------------
terminated, at any time, without cause by either party (the "Terminating Party")
giving to the other party one hundred eighty (180) days prior written notice of
the Terminating Party's intent to terminate the Agreement.
Section 8.4. Rights Cumulative. The various rights and remedies
----------- -----------------
herein provided for shall be cumulative and in addition to any other rights and
remedies the parties may be entitled to pursue under the law. The exercise of
one or more of such rights or remedies shall not prejudice the rights or
remedies of either party to exercise any other right or remedy at law or in
equity or pursuant to this Agreement.
Section 8.5. Obligations Not Excused. Termination of this Agreement
----------- -----------------------
shall not release or discharge either party from any obligation, debt or
liability which shall have previously accrued and remained to be performed upon
the date of termination.
Section 8.6. Renewal. Unless otherwise agreed by the Association and
----------- -------
Company or earlier termination pursuant to an event described in either Section
-------
8.2 or Section 8.3, upon the expiration of the Initial Term, or any successive
--- -----------
term, this Agreement shall be automatically renewed for successive five (5) year
terms without limitation as to the number of terms and without the necessity of
any further action on the part of the Association and/or Company.
19
Section 8.7. Remedies Upon Termination. Upon termination of this
----------- -------------------------
Agreement, the Association shall remove from any Center all property of the
Association, and neither party shall have any further obligations under this
Agreement except pursuant to Article VIII and Sections 8.5 and 9.3 of this
------------ --------------------
Agreement. Company shall be entitled to receive payment of all amounts unpaid
but earned up to the date of termination, which payment shall be due on the date
on which the Association vacates Company's premises and relinquishes to Company
sole possession of any and all property of Company, including, but not limited
to, financial records and all other documents necessary for or related to its
business.
Section 8.8. Property Due on Termination. On the termination of this
----------- ---------------------------
Agreement, each party shall immediately deliver or cause its employees or agents
to deliver in good condition all property in its possession which belongs to the
other party, ordinary wear and tear and damage by any cause beyond the
reasonable control of either party excepted.
ARTICLE IX
----------
MISCELLANEOUS
-------------
Section 9.1. Assignment. This Agreement may not be assigned by
----------- ----------
either party without the prior written consent of the other party.
Section 9.2. Sales of Assets. Company warrants that it will not
----------- ---------------
sell all or substantially all of its assets without the prior written consent of
the Association.
Section 9.3. Indemnification. The Association shall protect,
----------- ---------------
indemnify, and save Company and the directors, officers, shareholders and
employees of Company harmless from and against any and all liability and expense
of any kind, arising from injuries or damages to persons or property in
connection with the practice of medicine at any Center, unless such liability
results solely from the gross negligence or willful misconduct of Company and/or
its directors, officers, shareholders and employees in the management of the
Center. Company shall protect, indemnify and save the Association and its
members, directors, officers, shareholders and employees harmless from and
against any and all liability and expense of any kind, arising from injuries or
damage to persons or property in connection with the operation of any Center,
unless such liability results solely from the gross negligence or willful
misconduct of the Association and/or its members, directors, officers,
shareholders, employees, its agents and/or representatives in the management of
the Association's practice.
Section 9.4. Changes in Applicable Law. Company and the Association
----------- -------------------------
understand that the federal, state, and local laws and regulations applicable to
this Agreement may be amended from time to time and agree to execute any
amendments to this Agreement necessary to maintain compliance with those laws
and regulations.
20
Section 9.5. Notices. Any notice or other communication by the
----------- -------
parties to each other shall be in writing and shall be given, and be deemed to
have been given, if either delivered personally or mailed, postage prepaid,
registered or certified mail and addressed as follows:
If the Association: Occupational Health Centers of
New Jersey, P.A.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, M.D.
If to Company: OccuCenters, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxx
or to such other address, and to the attention of such other person or officer,
as either Company or the Association may designate in writing.
Section 9.6. Entire Agreement; Modification and Change. This
----------- -----------------------------------------
Agreement contains the entire agreement between the parties to this Agreement
and supersedes any and all prior agreements, arrangements, or understandings
between the parties relating to the subject matter of this Agreement. This
Agreement, and any provision or time period specified in this Agreement, cannot
be changed or modified except by another agreement in writing executed by both
parties.
Section 9.7. Warranties. The parties warrant that each has the legal
----------- ----------
capacity to enter into this Agreement, that the execution has been duly approved
by their respective board of directors, and that their respective obligations do
not violate any statute, ordinance, ruling of any administrative body, or any
agreement to which either the Association or Company is a party.
Section 9.8. Heading. The headings contained in this Agreement are
----------- -------
for convenience of reference only and are not intended to define, limit or
proscribe the scope or intent of any provision of this Agreement.
Section 9.9. Severability. If any provision of this Agreement or its
----------- ------------
application to any person or circumstance shall be invalid or unenforceable to
any extent, the remainder of this Agreement and application of its provisions to
other persons or circumstances shall not be affected and shall be enforced to
the greatest extent permitted by law.
Section 9.10. Governing Law. This Agreement shall be deemed to
------------- --------------
have been made under, and shall be construed and interpreted in accordance with,
the laws of the State of New Jersey.
21
Section 9.11. Rights Cumulative; No Waiver. No right or remedy in
------------ ----------------------------
this Agreement conferred upon or reserved to either party is intended to be
exclusive or any other right or remedy, and each right and remedy shall be
cumulative and in addition to any other right or remedy given under this
Agreement, or now or hereafter legally existing upon the occurrence of an event
of default under this Agreement. The failure of either party to insist at any
time upon the strict observance or performance of any of the provisions of this
Agreement or to exercise any right or remedy as provided in this Agreement shall
not impair the right or remedy to be construed as a waiver or other
relinquishment of it with respect to subsequent defaults.
Section 9.12. Counterparts. This Agreement may be executed
------------ ------------
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers, effective as of December 31, 1993
(the "Commencement Date").
ASSOCIATION:
-----------
OCCUPATIONAL HEALTH CENTERS OF NEW JERSEY,
P.A., a New Jersey professional association
By: /s/ Xxxxx Xxxxxxxx, M.D.
-------------------------------
Xxxxx Xxxxxxxx, M.D., President
COMPANY:
-------
OCCUCENTERS, INC., a Nevada corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx, President and Chief
Executive Officer
22
