MEDICAL DIRECTOR AGREEMENT
THIS MEDICAL DIRECTOR AGREEMENT ("Agreement") made as of April 30, 1999
Between Vineland Dialysis Professionals, LLC
a ------------- professional limited liability company with offices
at 000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
hereinafter referred to as the "P.A."
And DCA of Vineland, LLC
a New Jersey limited liability company with offices at
c/o Dialysis Corporation of America
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
hereinafter referred to as the "Company."
The P.A. and the Company may hereafter be referred to individually as a "Party"
and collectively as the "Parties."
WITNESSETH:
WHEREAS, the Company intends to develop, own and operate a renal dialysis
facility to be located within the vicinity of Vineland, State of New Jersey,
with such specific location as the Parties may select ("Facility");
WHEREAS, the P.A. is a limited liability company wholly owned by Xx. Xxxxx
Xxxxxxx.
WHEREAS, the P.A. retains duly licensed physician(s) under the laws of the State
of New Jersey, specializing in the treatment of kidney disease and experienced
in the medical administration of a renal dialysis facility;
WHEREAS, the Company through the operation of the Facility seeks to operate a
free standing dialysis center to provide all levels of outpatient dialysis care,
including but not limited to chronic maintenance dialysis, home treatment
through hemodialysis or peritoneal dialysis, either continuous and insulatory
peritoneal dialysis or continuous cycling peritoneal dialysis, chronic dialysis,
and inpatient dialysis services and related services to hospitals, nursing
homes, healthcare facilities, and similar institutions, as well as ancillary
services to End Stage Renal Disease ("ESRD") patients ("Dialysis Treatments");
to provide to persons having ESRD and other forms of renal failure the care they
need; to encourage proper distribution and effective utilization of ESRD
treatment while maintaining or improving the quality of care; and to promote the
efficient delivery of ESRD care;
WHEREAS, the Company desires to contract with the P.A. to provide certain
services as defined herein and the P.A. desires to render such services to the
Company; and
WHEREAS, the Parties desire to enter into this Agreement in order to provide a
full statement of their respective responsibilities as they exist in connection
with the provision of services during the term of this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and promises contained
in and intending to be legally bound by this Agreement the Parties agree as
follows:
1. CONTRACT FOR SERVICES
The Company hereby contracts with the P.A. to assist in the Facility's
Dialysis Treatments and provide services at the Facility as required by 42 CFR
405.2100 et seq., or any successor regulations, including those services as
provided in Section 3 of this Agreement. P.A. represents, warrants and agrees
that there will be available to the Facility during its operations, the services
of a qualified, licensed Medical Director as per Section 2. P.A., subject to the
terms of this Agreement and, in particular, Section 8 hereof, shall be
responsible for planning, organizing, conducting and directing the professional
ESRD services at the Facility. All services to be provided by the P.A. in this
Agreement are hereinafter sometimes collectively referred to as "Services." The
P.A. hereby agrees to provide such Services under and subject to the terms and
conditions as provided in this Agreement.
2. MEDICAL STAFF AND COVERAGE
2.1 PHYSICIANS. The Services of the P.A. shall be coordinated by Xx.
Xxxxx Xxxxxxx, who is hereby appointed by the Company to serve as the Medical
Director of the Facility throughout the term of this Agreement, unless the P.A.
shall designate some other qualified physician to assume the duties of Medical
Director. Any candidate recommended or designated by the P.A. to serve as
Medical Director will be subject to the approval of Company which approval will
not be unreasonably withheld. The Medical Director may hereinafter also be
referred to as the "Physician."
2.2 COVERAGE. The P.A. or the Medical Director need not devote
full-time to the Dialysis Treatments or the provision of Services but shall
devote sufficient time as necessary to fulfill its and his or her
responsibilities as required in this Agreement. The P.A. shall provide for
Physician coverage for all hours of Facility's operation and 24 hour emergency
on-call coverage.
The Company acknowledges that P.A. and Medical Director are engaged in
the practice of medicine in the Vineland, New Jersey area, in particular, the
private practice of nephrology and/or internal medicine, and that each such
persons may continue to be so engaged during the term of this Agreement and may
perform services for and on behalf of their respective patients in addition to
but non-competitive with those Dialysis Treatments of and those Services which
are required of him to be performed for the Facility as provided for in this
Agreement, provided, the same does not unreasonably interfere with the
performance of their respective obligations hereunder. Services deemed
non-competitive include and are limited to treatment of patients other than for
Dialysis Treatments and other than acute dialysis treatments which the Facility
may perform.
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2.3 MEDICAL DIRECTOR.
2.3.1 LICENSE AND CERTIFICATION. Each Medical Director (i)
represents to and shall be licensed to practice medicine and to dispense
narcotics and other pharmaceuticals in accordance with the laws of the State of
New Jersey; (ii) represents to and shall be Board certified in internal medicine
or in nephrology; (iii) represents to and shall have at least 12 months of
experience or training in the care of patients at ESRD facilities; (iv)
represents to and shall have experience in medical administration of a renal
dialysis facility; and (v) represents that he or she is not subject to any
pending or threatened litigation or professional discipline relating to his or
her medical practice or licensure for the prescribing and/or dispensing of
narcotics and pharmaceuticals, for the last five years has not been subject to
any such litigation or professional discipline except as disclosed in EXHIBIT
2.3.1, nor has any knowledge of facts or circumstances that could give use to
any such litigation or professional discipline other than as disclosed in
EXHIBIT 2.3.1.
2.3.2 MEDICAL STAFF APPOINTMENT. Each Medical Director shall
apply for, be awarded and maintain appointment in good standing on the medical
staff of the Facility in accordance with Facility's policies as well as
applicable Facility and medical staff bylaws, rules and regulations.
2.3.3 PROGRAM ELIGIBILITY. Each Medical Director shall be and
remain eligible to participate in the Medicare program and the state medical
assistance program.
2.3.4 AGREEMENT TO BE BOUND. The P.A. and the Medical Director
represent and warrant that they shall use their best efforts and skills in
fulfilling their responsibilities and duties as provided in this Agreement. The
P.A. shall not utilize any Physician to provide Services under this Agreement
unless such Physician has been appointed Medical Director as provided in Section
2.1, and has executed a document, legally obligating such Physician individually
to abide by the terms and conditions of this Agreement in form as provided in
EXHIBIT 2.3.4 or as otherwise reasonably requested by Company.
2.3.5 NO CONFLICT. The P.A. and each Medical Director
represent and warrant that it, he and/or she has no affiliation, contract,
agreement or other arrangement with any other person or entity that would
prohibit the P.A. or Physician from performing under this Agreement or otherwise
conflict with the terms and provisions of this Agreement. The P.A. and each
Medical Director hereby indemnify and hold the Company, the Facility and their
respective shareholders, officers, directors, successors and assigns
(collectively "Representatives") harmless from any and all claims, suits,
obligations restrictions, liabilities and other causes of action (collectively
"Claims") which may arise from a breach of this representation as set forth in
this Section 2.3.5, which indemnification includes but is not limited to any and
all costs and fees incurred by the Company, Facility and/or Representatives in
defending any such Claims as indemnified herein, including reasonably counsel
fees.
3. SERVICES
The Services of the P.A. and Medical Director shall include:
3.1 Being in charge of and responsible for all medical aspects of the
Facility's operation to provide high quality medical treatment, providing the
proper coordination and functioning of all medical services, and being
responsible for adequate supervision of dialysis
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treatments in accordance with federal regulation and/or any and all other
applicable state and/or local regulations now in existence or hereafter passed
applicable to the operation of the Facility;
3.2 Consulting with and advising the executive management of the
Facility on matters including, but not limited to, the hiring and firing of
medical, para-medical and technical personnel employed by the Facility and the
type of equipment and supplies to be used in the Facility for patient care;
3.3 Assuring adequate monitoring of the patient and the dialysis
process (minimum in-center rounds once per week), including for self-dialysis
patients, assuring periodic assessment of patient performance of dialysis tasks;
3.4 Assuring the development and availability of a patient care policy
and procedures manual and its implementation; at a minimum, the manual shall
describe the types of dialysis used in the Facility and the procedures followed
in performance of such dialysis; hepatitis prevention and procedures for
handling an individual with hepatitis; and a disaster preparedness plan (e.g.,
patient emergency, fire, flood);
3.5 Assuring that patient teaching materials are available for the use
of all trainees during training and at times other than during the dialysis
procedure when self-dialysis training or home dialysis training is offered;
3.6 Supervising in the development and implementation of a system of
patient care evaluation (quality assurance) including peer review and audit;
3.7 Aiding in the recruitment of qualified doctors and nurses to be
associated with and/or employed by and as required by the executive management
of the Facility;
3.8 Supervising the nursing, technical and medical staff;
3.9 Establishing and supervising a training program in dialysis
techniques for medical, nursing and technical employees of the Facility;
3.10 Serving as the chairman of the Medical Review Board of the
Facility;
3.11 Consulting with other medical and governmental agencies and
facilities needed to further the interests, operating and progress of the
Facility;
3.12 Supervising the maintenance of all appropriate medical records
relating to medical services rendered at the Facility;
3.13 Developing and supervising a preventative maintenance training
program for staff personnel pertaining to the maintenance of all equipment;
3.14 Using its, his and her best efforts to be available and present at
the Facility during times of inspection by regulatory agencies;
3.15 Acting as spokesperson and coordinator for the Facility during any
Certificate of Need process in connection with the establishment and approval
processes for the Facility and any future expansion thereof and assisting the
Facility in obtaining all necessary approvals and consents for additional
dialysis stations;
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3.16 Establishing review and monitoring of water quality for dialysis;
3.17 Instituting and supervising a dialyzer re-use program in
compliance with recognized medical standards;
3.18 Evaluating laboratory procedures and services;
3.19 Establishing, maintaining and monitoring infection control
policies;
3.20 Assuring and warranting that the Medical Director, any Assistant
Medical Director(s) and Physician(s) have the proper credentials and maintain
the necessary licenses and/or approvals to participate in all federal, state and
local kidney disease programs governing the operation and/or reimbursement for
the Facility in which the Facility participates; and
3.21 Helping to establish hospital inpatient dialysis agreements and
other affiliation agreements with acute-care hospitals, nursing homes and
similar healthcare facilities and transplant centers; assuring that the Facility
meets all licensing and other requirements for any hospital or other entity in
which the Facility has an affiliated inpatient agreement, and promote the goals
of the Company and the Facility in maintaining such agreements.
4. COMPENSATION
4.1 AMOUNT OF COMPENSATION. For the P.A.'s services as provided in this
Agreement, which are and include the services of the Medical Director, the
Company will pay the P.A. and the P.A. accepts as full and sufficient
compensation the amounts set forth in EXHIBIT 4.1 ("Compensation"), incorporated
herein by reference.
4.2 PAYMENT. The Company shall pay Compensation under this Agreement to
P.A. on the last day of each month in each Agreement Year (incremental periods
of 12 months starting from the Commencement Date), allowing for ten business
days check processing time, an amount equal to one twelfth (1/12th) of the
Compensation required to be paid to P.A. pursuant to this Article 4 in such
Agreement Year, by check drawn to the order of P.A. and mailed to the address
specified for P.A. set forth on EXHIBIT 12.8 attached hereto, or such other
address as designated in writing.
4.3 PHYSICIAN'S FEES. It is agreed and understood that P.A., the
Medical Director and all other Physicians involved in patient care at the
Facility shall do their own billing of fees for Physician's services to the
appropriate party, which services and fees shall not be billed to or be the
responsibility of the Company or the Facility.
4.4 ECONOMICAL SERVICES. The P.A. and Medical Director represent and
warrant that the Services shall be performed in an economical and professional
manner, and that each of them shall use their best efforts to maintain the costs
of Dialysis Treatments at reasonable and efficient levels subject to the
exercise of good medical judgment. This representation and warranty is a
material inducement to the Company in entering into this Agreement.
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5. INSURANCE
5.1 REQUIRED COVERAGE. The P.A. shall maintain for itself and shall
require any Physician who provides Services pursuant to this Agreement to
maintain basic limits professional malpractice liability insurance during the
term of this Agreement and thereafter covering all Services provided pursuant to
this Agreement in amounts not less than $1,000,000 per occurrence and $3,000,000
per annual aggregate. The P.A.'s and Medical Director's obligations under this
Section 5.1 shall survive for three (3) years following termination of this
Agreement. Upon failure of P.A. or any Physician to obtain such professional
malpractice liability insurance, in addition to being a breach of the Agreement,
the Company shall have the option, not the obligation, to obtain the same for
the P.A. and any such Physician(s), to pay the premiums and charge the same
together with any administrative and service fees and charges to the P.A. and/or
Physician and P.A. and/or Physician shall immediately pay such sum to the
Company.
5.2 CERTIFICATE OF INSURANCE. The P.A. and/or Physician shall provide
to the Company prior to commencing or continuing Services hereunder certificates
of insurance evidencing the professional malpractice liability insurance
coverage required in Section 5.1 as well as a certificate of insurance
evidencing the P.A.'s workmen's compensation coverage and to notify the Company
immediately of any modifications or cancellation or termination of such
insurance coverage.
5.3 COMPANY INSURANCE. The Company shall provide and maintain liability
insurance for itself and its employees who perform services at or in connection
with the Facility.
5.4 INDEMNIFICATION. Each Party (including any Physician providing
Services) shall hold harmless and indemnify the other and their Representatives,
and any person or entity that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
it, including their officers, directors and shareholders, hereinafter
"Affiliates," from and against any and all Claims, expenses and attorney's fees
resulting from or attributable to any and all acts and omissions of such
Indemnifying Party.
6. RULES AND REGULATIONS
6.1 LAWS, RULES AND REGULATIONS. The P.A. and each Physician shall at
all times render Services in compliance with all applicable federal, state and
local laws, rules and regulations and in compliance in all material respects
with the Facility's bylaws, rules and regulations.
6.2 REQUIREMENTS AND STANDARDS. The P.A. and all Physicians shall
maintain such standards and meet such requirements as will, at all times,
continue certification of the Facility as an ESRD dialysis facility under the
federal Medicare program and continuance of any license or operating certificate
of the Facility.
7. RESTRICTIVE COVENANT
7.1 GENERAL AND DEFINITIONS
7.1.1 PURPOSE. The Parties acknowledge that the Dialysis
Treatments and Services are of a special and unique character and that the P.A.
and each Physician has and will
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receive substantial economic benefit and valuable business information as a
result of association with the Company and the Facility; that the Company will
incur expense in the development and promotion of the Facility; and that if the
P.A. or a Physician is permitted to engage in Restricted Activity during the
Restricted Period (as hereinafter defined) the Company will suffer substantial
economic injury.
7.1.2 RESTRICTED ACTIVITY. As used in this Agreement
"Restricted Activity" shall mean participation or involvement, direct or
indirect, either as principal, agent, proprietor, shareholder, P.A., creditor,
subcontractor, administrator, physician, medical director, officer, employee,
consultant or otherwise, in any entity, trade or business (other than for the
Company) providing Dialysis Treatments and/or Services within the "Restricted
Area" as defined in Section 7.1.4; and "Restricted Activity" also includes the
restriction and prohibition of advising, assisting, consulting with, leasing or
selling real property to, provide financing for or aid in the establishment or
operation of any competing business or Restricted Activity in the Restricted
Area during the Restricted Period; provided however such Restricted Activity
shall not include: (i) a Physician's direct patient care services to ESRD, other
dialysis patients or any other patients as otherwise provided for in Section 2.2
of this Agreement; (ii) the ownership of less than five percent (5%) of the
issued and outstanding stock of a public company; or (iii) those activities
listed on EXHIBIT 7.1.2.
7.1.3 SERVICES. The terms "Dialysis Treatments" and "Services"
shall be as defined in this Agreement, as well as generally including the
providing of dialysis equipment and supplies; provided the terms "Dialysis
Treatments" and "Services" do not include dialysis involving a medical problem
which the Facility is unable to handle which requires hospitalization, but
inclusive of those acute and chronic dialysis patients requiring hospitalization
and other patients of an institution or hospital who may require dialysis
treatment if the Facility or the Company has an affiliation agreement to provide
such inpatient dialysis services with such local institution or hospital,
including but not limited to staff assisted hemodialysis, continuous ambulatory
peritoneal dialysis and home training staff assisted dialysis treatments,
exclusive of those facilities listed on EXHIBIT 7.1.3.
7.1.4 RESTRICTED AREA. As used in this Agreement, "Restricted
Area" shall mean any location within a radius of 20 miles of the Facility.
7.1.5 RESTRICTED PERIOD. As used in this Agreement "Restricted
Period" shall mean the Term of this Agreement and one (1) year thereafter,
provided however, in the event of any violation of this Article 7 the Restricted
Period shall be extended by a period of time equal to that period beginning when
the violation commenced and ending when the violation terminated; provided
further that if this Agreement is terminated pursuant to Section 11.3 and the
cause was not due to the P.A. or Medical Director, then the Restrictive Period
shall mean the Term of this Agreement and nothing more.
7.2 COMPETITION. During the Restricted Period the P.A. and/or any
Physician shall not engage in any Restricted Activity.
7.3 EMPLOYEES AND CONTRACTORS. During the Restricted Period, P.A. or
any Physician shall not induce, solicit or attempt to influence, any employee,
contractor, reimbursement sources, providers, suppliers, insurors and other
third-party payors of the Company or the Facility to terminate a relationship
with the Company or the Facility or to enter into any employment or other
business relationship or affiliation or Restricted Activity with any other
person, firm, or corporation, including the P.A. or any Physician.
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7.4 SCOPE OF COVENANTS. It is expressly understood and agreed that the
scope of the various covenants in this Article 7 are reasonable both in time and
area and are fair and necessary to protect the legitimate interests of Company
and the Facility against the material adverse effects which would result from
the violation of any of these covenants.
7.5 DIVISIBILITY OF COVENANTS. The covenants of this Article 7 shall be
regarded as divisible and shall be given the greatest operative effect possible.
If any part of them is declared invalid or unenforceable in any respect, the
validity and enforceability of the remainder shall not be affected. If the
Restricted Activity, Restricted Area and/or Restricted Period, as provided
herein, should be adjudged unreasonable in any judicial proceeding, then the
Restricted Activity, Restricted Area and/or Restricted Period shall be reduced
as is deemed necessary to allow this Article 7 to be enforced.
7.6 REMEDIES. It is understood that in the event of any violation of
the covenants of this Article 7, the Company and/or the Facility shall suffer
irreparable injury not compensable by monetary damages and the Company, the
Facility and their Affiliates shall be entitled to seek preliminary and
permanent injunctive relief from any court of competent jurisdiction in addition
to any other remedies available under this Agreement or at law or in equity. The
Company, the Facility and/or the Affiliates shall be entitled to reasonable
attorney's fees and other costs it or they may incur in connection with
protecting their rights in the event of a breach as contemplated and provided
herein.
7.7 BANKRUPTCY. The covenants and restrictions contained in this
Section 7 shall not be applicable upon a final declaration of bankruptcy of the
Company or the abandonment of the Facility by the Company which means the
intentional giving up of the Facility by the Company and not the termination of
operations or this Agreement as otherwise provided herein.
7.8 INDEPENDENT COVENANT. The restrictive covenants, particularly the
covenant not to compete on the part of the P.A. and Physicians, shall be
construed as an agreement independent of any other provision of this Agreement,
and the existence of any claims or cause of action of the P.A. or Physician
against the Company or the Facility, whether based upon this Agreement or
otherwise, shall not constitute a defense to or a repeal or cancellation of the
enforcement by the Company, the Facility or the Affiliates of this covenant not
to compete.
8. CONFIDENTIALITY
8.1 CONFIDENTIAL INFORMATION. In the operation and development of
existing renal dialysis facilities and implementing Dialysis Treatments and
Services by the Company and its parent, Dialysis Corporation of America ("DCA")
and the planning and development of the Company's and DCA's proposed businesses,
the Company and DCA generate information and data which is and will be
proprietary and confidential ("Confidential Information"), the disclosure of
which would be extremely detrimental to the business of the Company and DCA and
of great assistance to its competitors. The Confidential Information includes,
but is not limited to:
(a) DEVELOPMENT. Data, plans and projections regarding the
location, development and expansion of existing and proposed facilities;
(b) MARKETING. Market surveys, studies and analyses;
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(c) SERVICES. Information concerning the identities, locations
and qualifications of professionals and other persons presently, or
prospectively to be, retained or employed by the Company or DCA;
(d) SUPPLIERS, ETC. Information concerning the identities,
locations, prices, costs and other terms of dealings with referral and
reimbursement sources, suppliers, providers and supplier and provider
organizations and entities; administrative and accounting procedures and
policies and information about contractual and other arrangements and
affiliations with any of the foregoing;
(e) REGULATORY MATTERS. Information concerning legislative,
administrative, regulatory and zoning requirements, bodies and officials;
(f) RECORDS. Medical, patient and personnel records;
(g) DATA. Statistical, financial, cost and accounting data;
(h) PATIENTS. Existing and prospective patient lists, names
and addresses; and
(i) MANUALS. Administrative, accounting, operations and
procedures manuals.
8.2 NON-DISCLOSURE. The P.A. and Medical Director understand and agree
that due to the highly competitive nature of the healthcare industry and the
business of the Facility, the Company and DCA, disclosure of any of the
Confidential Information would be extremely damaging to any and all of them. The
P.A. and Medical Director agree that its, he and/or she will not use or divulge
such Confidential Information without the prior written consent of the Company.
The restrictions set forth in this Article 8 shall not apply to any part of the
Confidential Information which (i) is or becomes generally available to the
public or publicly known other than as a result of disclosure by the P.A. or
Medical Director; (ii) becomes available to the P.A. or Medical Director on a
nonconfidential basis from a source which is not itself breaching any
non-disclosure or similar restrictive covenant; (iii) is disclosed pursuant to
the requirement of a governmental agency or court of competent jurisdiction or
as otherwise required under applicable law; or (iv) was known or available to
the P.A. or Medical Director prior to the date of this Agreement without any
obligation of confidentiality; provided as to this subparagraph (iv) such can be
proved through written evidence.
8.3 REMEDIES. It is understood that any violation or breach of the
covenants and provisions of this Article 8 could cause the Company, the Facility
and/or DCA irreparable injury not compensable by monetary damages, and the
Company, the Facility and/or DCA and their Affiliates are entitled to such
injunctive relief and any and all other remedies as provided in Section 7.6 of
this Agreement.
9. TERM
9.1 TERM. The term of this Agreement shall commence on the Commencement
Date as provided in Section 9.2 and continue thereafter (unless sooner
terminated as provided for in this Agreement) for an initial term of ten (10)
years from such date ("Term").
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9.2 COMMENCEMENT DATE. The Term of this Agreement shall commence
("Commencement Date") on the effective date of certification of the Facility as
a Medicare-certified end-stage renal disease facility ("Certification"). If the
Certification does not occur on or before 12 months following the date of this
Agreement, then this Agreement shall be void and of no force and effect and
neither party shall have any right or obligation hereunder.
9.3 RENEWAL. Provided the P.A. and the Medical Director have fulfilled
their obligations and responsibilities under this Agreement and have not
defaulted or breached under the terms and conditions of the Agreement, then this
Agreement is automatically renewed for five additional five year renewals
provided P.A. does not give the Company less than one (1) year written
notification prior to the end of the Term or any particular renewal period, of
its intent to terminate at the expiration of the Term or such renewal period.
10. CONTRACTUAL RELATIONSHIP
10.1 INDEPENDENT CONTRACTOR. The P.A. and any Medical Director shall,
at all times, be independent contractors and not employees of the Company or the
Facility, and the P.A. and any Medical Director shall not hold itself or the
Physicians out as employees of the Company or the Facility. In furtherance
thereof, the Company and Facility and P.A. covenant and agree that one is
neither the employee, employer, principal or agent of the other, except that
each of the P.A. and Medical Director is an independent contractor to the
Company and the Facility. However, it is understood that nothing in this section
or elsewhere in this Agreement shall be deemed not to subject the P.A. and
Medical Director to the supervision of the executive management or the board of
directors of the Company and the administrator of the Facility and to their
directions and control, except such Physicians and professional employees shall
have independent control over the medical practice, unless as to the latter, the
same is determined to be improper and violative of federal, state, local rules,
codes, or regulations, or such medical practices are otherwise unethical.
P.A. and all other Physicians understand and agree that personnel
employed at the Facility are employees of the Company and are not to be
considered or viewed as employees or servants of P.A. No demands or requests
will be made or placed upon such employees for secretarial duties, patient
scheduling, etc., other than for Dialysis Treatment as to be provided by the
Facility.
10.2 OBLIGATIONS. The P.A. and each Physician shall be liable for the
payment or provision for payment of all their required withholding, social
security and other taxes or benefits. It is further understood and agreed that
there is no obligation on behalf of the Company or the Facility to provide to
any Physician benefits such as but not limited to group health insurance, dental
benefits, life insurance, etc.
10.3 WITHHOLDING. Neither the Company nor the Facility shall withhold,
on behalf of the P.A. or any Physician, any sums for income tax, unemployment
insurance, social security or any other withholding or benefit, all of which
shall be the respective obligations of the P.A. or any Physician.
10.4 CONTROL. Nothing in the Agreement is intended, and shall not be
construed, to create an employer/employee relationship, a partnership or a joint
venture relationship. The interest of the Parties is to ensure that the Dialysis
Treatments of and the Services to be performed for the Facility by the P.A. and
the Physicians are rendered and performed in a
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competent, efficient and satisfactory manner and in accordance with this
Agreement and all rules and regulations of the Facility.
10.5 GOVERNMENTAL REVIEW. In the event the Internal Revenue Service or
any other governmental agency shall, at any time, question or challenge the
independent contractor relationship between the Company and the P.A. or the
Physicians, the Company, the P.A. and the Physician, upon receipt by either of
them of notice from the Internal Revenue Service or any other governmental
agency, shall promptly notify the other Parties and afford the other Parties the
opportunity to participate in any discussion or negotiation with the Internal
Revenue Service or other governmental agency, irrespective of whom or by whom
such discussions or negotiations are initiated. The other Parties shall
participate in any such discussions or negotiations to the extent permitted by
the Internal Revenue Service or other governmental agency. The provisions of
this Section 10.5 shall apply only to issues arising from the independent
contractor relationship described herein and not to any other tax matter
involving the Parties.
11. TERMINATION
11.1 TERMINATION WITHOUT FAULT
11.1.1 DEATH. This Agreement shall terminate upon the death of
the Medical Director unless within thirty (30) days of the death of Medical
Director, P.A. has appointed a substitute Medical Director, which is the
obligation of P.A., approved by the Company, and such substitute Medical
Director agrees to be bound by this Agreement and executes EXHIBIT 2.3.4.
11.1.2 DISABILITY. If the Medical Director becomes mentally or
physically unable to perform the Services required under this Agreement for a
continuous period of thirty (30) days, or if the P.A. or Medical Director is
professionally disqualified so that it, he or she cannot adequately perform its,
his or her duties and responsibilities as Medical Director, or is absent other
than for a short illness or vacation or similar reason, and the P.A. fails to
promptly appoint a substitute Medical Director, but no later than thirty (30)
days from such occurrence, which is the obligation of P.A., approved by the
Company, which substitute Medical Director agrees to be bound by this Agreement,
such shall be deemed a breach of this Agreement, other than due to failure to
perform based on mental or physical disability due to natural causes, which will
not be deemed a breach but rather a basis for termination, and the Company may
terminate this Agreement on thirty (30) days written notice. Any professional
disqualification of the P.A. or the Medical Director or non-short term absence
of the Medical Director hereby leaving the Facility without a qualified Medical
Director acceptable to the Company, except due to disability or incompetence due
to natural causes as opposed to conditions caused by the Medical Director, such
as but not limited to drug abuse or alcoholism, and any conduct or omission to
act by the P.A. or the Medical Director, that may be deemed unethical or subject
the P.A. or the Medical Director to discipline or to professional
disqualification by standards published from time to time by the Judicial
Council of the American Medical Association, whether or not disciplinary action
is taken, is a basis for the Company in its sole discretion to terminate the
Agreement and shall be deemed a breach of this Agreement.
11.2 RIGHT TO TERMINATE UPON DEFAULT. Except as otherwise provided in
Section 11.1, a Party shall have the right as provided in this Section 11.2, to
terminate this Agreement at any time upon the occurrence of any of the following
events:
11
11.2.1 In the event the P.A. or any of its appointed
Physicians violates Sections 2.3.1, 2.3.3, 2.3.5, 7.2 or Article 8, the Company
may terminate this Agreement immediately; and
11.2.2 In the event a Party materially violates any other term
or condition of this Agreement which violation is not cured within thirty (30)
days after written notice to the breaching Party of such violation or if the
violation cannot reasonable be cured within such thirty (30) days, the breaching
party has not commenced within such thirty (30) days and thereafter diligently
pursued action reasonably necessary to cure such violation, the other Party may
terminate this Agreement.
11.3 LOSS OF LICENSE; FORCE MAJEURE. Either Party may terminate this
Agreement if:
11.3.1 The license for the Facility or its certification to
participate in the ESRD program is lost or suspended for ninety (90) days or
longer not due to nor the fault of that Party seeking to terminate, after
exhaustion of all hearings and appeal rights; or
11.3.2 The Facility is not usable or reasonably relocatable
within one hundred twenty (120) days due to fire, natural disaster, change of
laws or Force Majeure or other cause beyond the Parties' control, and not due to
nor the fault of that Party seeking to terminate.
11.4 CUMULATIVE REMEDIES. The specific remedies provided in this
Agreement shall be in addition to and not in substitution for the rights and
remedies which would otherwise be vested in the Parties under the Agreement, at
law or in equity, all of which rights and remedies are specifically reserved by
the Parties. Failure of a Party to exercise any remedy shall not constitute a
waiver of the Party's rights for that default nor of any further or future
default.
12. GENERAL PROVISIONS
12.1 ASSIGNMENT. The P.A. shall not assign, sell or transfer this
Agreement, its obligations hereunder or any interest herein. This Agreement may
be assigned in whole or in part by the Company.
12.2 GOVERNING LAW. This Agreement shall be deemed to have been made
and shall be construed and interpreted in accordance with the laws of the State
of New Jersey, conflicts of law provisions notwithstanding.
12.3 SEVERABILITY. If any term or provision of this Agreement or in the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement on the application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected thereby, and each term
and provision of the Agreement shall be valid and enforceable to the fullest
extent permitted by law.
12.4 INTEGRATED AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the Parties concerning the subject matter
hereof. This Agreement supersedes all prior written or oral agreements or
understanding existing between the Parties concerning the subject matter hereof.
12.5 CAPTIONS. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit, or extend the scope or
intent of this Agreement or any provision hereof.
12
12.6 GENDER. Any noun or pronoun used in this Agreement shall be
construed in masculine, feminine or neuter as its sense and use may require.
12.7 WAIVERS AND AMENDMENTS. No waiver of any term, provision, or
condition of this Agreement, whether by conduct or otherwise in any one or more
instances, shall be deemed to be or construed as a further and continuing waiver
of any such term, provision or condition of this Agreement. No amendment to any
provision of this Agreement shall be effective unless in writing and signed by
each Party.
12.8 NOTICES. All notices pursuant to this Agreement shall be in
writing and shall be given by hand delivery or by depositing said notices in the
United States registered or certified mails, return receipt requested, addressed
to a party at the addresses as provided in attached EXHIBIT 12.8, or to such
other address as may hereafter be specified in writing by one Party notifying
all other Parties in the manner set forth herein. All notices given in the
manner prescribed in this Section shall be deemed properly served upon receipt.
12.9 ACCESS TO BOOKS AND RECORDS. This Section is included herein
because of the possible application of Section 1861 (v) (1) (I) of the Social
Security Act to this Agreement; if that section should not be found applicable
to this Agreement under the terms of such section then this Section shall be
deemed not to be a part of this Agreement and shall be null and void.
12.9.1 P.A. Until the expiration of four (4) years after the
furnishing of Services pursuant to this Agreement, the P.A. shall make available
upon written request of the Secretary of Health and Human Services or the United
States Controller General or any of their duly authorized representatives, this
Agreement, and any books, documents and records of the P.A. that are necessary
to certify the nature and extent of costs incurred by the Company under this
Agreement.
12.9.2 SUBCONTRACTORS. If the P.A. carries out any of the
duties of this Agreement with a value of Ten Thousand Dollars ($10,000) or more
over a twelve (12) month period through a subcontract with a related
organization or person, such subcontract must be approved by the Company and
must contain a clause similar to that set forth in Section 12.9.1 above.
12.10 NO DISCRIMINATION. Each Party agrees that, in the performance of
this Agreement, services will be provided without discrimination toward any
patients, employees, or other persons regardless of their race, creed, color or
ethnic background. Both the Company and P.A. are equal opportunity employers.
All Parties shall comply with all requirements and provisions of the Civil
Rights Act of 1964, 42 U.S.C.A. Section 2000 ET SEQ. and other applicable
federal and state law.
12.11 RECOVERY OF LITIGATION COSTS. Subject to Articles 7 and 8 of this
Agreement, if any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
13
12.12 CONFIDENTIALITY. This Agreement and its terms and provisions
shall be kept confidential and shall not be disclosed to any other party, nor
shall this Agreement or any part thereof be reproduced or summarized, except to
the extent as required by law.
12.13 BINDING AGREEMENT. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
each of the Parties hereto, their respective legal representatives and their
permitted successors and assigns.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as
of the day and year first above written.
VINELAND DIALYSIS PROFESSIONALS, LLC
By: /s/ XXXXX XXXXXXX, M.D.
-----------------------------------------
Name: XXXXX XXXXXXX, M.D.
Title: President
DCA OF VINELAND, LLC
By: /s/ DIALYSIS CORPORATION OF AMERICA
-----------------------------------------
Member: DIALYSIS CORPORATION OF AMERICA
Name: XXXX XXXXXXXXX
Title: President
14
EXHIBIT 2.3.1
LITIGATION AND PROFESSIONAL DISCIPLINE
15
EXHIBIT 2.3.4
MEDICAL DIRECTOR
I, Xxxxx Xxxxxxx, M.D., Medical Director
of DCA of Vineland, LLC
================================================================================
In order to induce the Company to execute this Agreement, to appoint the
undersigned as Medical Director and to permit the undersigned to assist in
providing Dialysis Treatments and Services; in consideration of the amounts to
be paid as provided in this Agreement to P.A.; and intending to be legally bound
hereby, the undersigned agrees to be bound personally by the Agreement,
including the restrictions set forth in Article 7 of this Agreement.
Date:---------------------, 1999 /s/ XXXXX XXXXXXX
-----------------------------------
XXXXX XXXXXXX, M.D.
ACKNOWLEDGED and AGREED
this 13 day of SEPT., 1999
/s/ XXXXXXX X. XXXXXXX
------------------------------
By:
--------------------------
16
EXHIBIT 4.1
COMPENSATION
For P.A.'s services under this Medical Director Agreement, the Company
will pay the P.A. Thirty Five Thousand and 00/100 ($35,000.00) Dollars per
Agreement Year; or Two Thousand Nine Hundred Sixteen and 67/100 ($2,916.67)
Dollars per month.
The P.A.'s Compensation shall be renegotiated in good faith on or about
the end of each Agreement Year and shall be competitive with the national
standard in the industry. Failure to reach an acceptable renegotiated
Compensation shall not be deemed a breach of nor a basis for termination of this
Medical Director Agreement.
17
EXHIBIT 7.1.2
EXCLUSIONS FROM RESTRICTED ACTIVITY
1. Xxxxx Xxxxxxx, M.D., as Medical Director of the dialysis unit ("Unit")
at Xxxxxxx Memorial Hospital ("KMH").
2. Should KMH offer to P.A., Xx. Xxxxxxx or any of their Affiliates
(collectively "P.A.") all or a percent of its Unit, P.A. shall be entitled to
purchase such interest in the Unit, provided P.A. uses its best efforts to
obtain for Dialysis Corporation of America, the parent of the Company ("DCA") an
equal percentage ownership interest in the KMH Unit as may be offered to the
P.A. If DCA declines any such interest or KMH declines to sell any ownership
interest in the Unit to DCA, then P.A. is entitled to acquire the entire
ownership interest in the Unit as offered.
18
EXHIBIT 7.1.3
Facilities Excluded From Restricted Area:
See Exhibit 7.1.2
