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EXHIBIT 10.9
FULL SERVICE FACILITY AND MANAGEMENT AGREEMENT
THIS FULL SERVICE FACILITY AND MANAGEMENT AGREEMENT, entered into
effective as of May 1 1996, is by and between MEDICAL DIAGNOSTIC IMAGING CENTER
a Texas corporation ("FACILITY")and DOCTORS PRACTICE MANAGEMENT , INC., a Texas
corporation ("COMPANY").
WITNESSETH:
WHEREAS, FACILITY is a duly incorporated and validly existing Texas
corporation that is engaged in the business of providing Professional Technical
Services, specifically including diagnostic imaging services, in Texas
("Professional Technical Services"); and
WHEREAS, COMPANY is a duly incorporated and validly existing Texas
corporation, qualified to do business in Texas, that is experienced in providing
management and related items and services including, without limitation,
capital, personnel, facilities and equipment to licensed health care personnel,
professional associations, and other professional health care entities and
individuals; and
WHEREAS, FACILITY's employees and/or independent contractors provide
professional diagnostic imaging services in Texas and desire and intend to
continue to operate a technical component professional health care operation to
provide Professional Technical Services and related health care services in
facilities designed and equipped for such services,
WHEREAS, FACILITY further desires and intends to provide Professional
Technical Services and related health care services at various locations in the
Houston, Texas Standard Metropolitan Statistical Area, as defined by the U.S.
Department of Commerce, Bureau of the Census, including, without limitation, the
provision of such services at 0000 Xxxxxxx Xxxxxxx, , Xxxxxxxx, Xxxxx 00000
(Used Premises");
WHEREAS, FACILITY prefers to devote substantially all of its time to
the practice of providing diagnostic imaging services and the delivery of
medical services to its clients and, therefore, desires and intends to obtain
such management, administrative, and business services as are reasonably
necessary and appropriate for FACILITY to efficiently provide Professional
Technical Services at the Leased Premises and other locations and Company
desires to provide and is fully capable of providing all such management,
administrative and business services; and
WHEREAS, COMPANY desires to and is capable of making Leased Premises
available to FACILITY and COMPANY desires to and is capable of providing the
management, administrative, and business services necessary and appropriate for
FACILITY'S provision of Professional Technical Services at the Leased Premises
and other locations; and
WHEREAS, FACILITY and COMPANY mutually desire an arrangement that:
(a) facilitates consistency of service, both in the medical care provided
by FACILITY and in the administrative and business services provided by COMPANY;
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(b) facilitates effective utilization of FACILITY'S resources;
(c) facilitates appropriate staffing and scheduling of personnel for and by
FACILITY, as the case may be;
(d) facilitates the management and administration of the day-to-day
business operations of FACILITY;
(e) ensures that each party will receive the total revenue attributable to
such party's services, capital investment, and business risks, and no portion of
the revenue attributable to the services, capital investment, and business risks
of the other party; and
(f) ensures that (1) FACILITY and licensed health care personnel employed
by FACILITY shall (a) owe their first duty to their clients; and (b) preserve
the confidential nature of the FACILITY-patient relationship; (2) FACILITY
controls patient care in the medical and administrative procedures to be
followed; and (3) that COMPANY does not commit any act constituting the practice
of medicine or use any licensed health care practitioner's license to practice
medicine all for the benefit of those seeking services as clients.
NOW, THEREFORE, for and in consideration of the agreements contained
herein and other good and valuable consideration, the receipt and adequacy all
of which are forever acknowledged and confessed, the parties hereto agree as
follows:
Article I DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
following meanings ascribed thereto, unless otherwise clearly required by the
context in which such term is used.
1.1 Agreement. The term "Agreement" shall mean this FULL SERVICE
FACILITY AND MANAGEMENT AGREEMENT between FACILITY and COMPANY and any
amendments hereto, as may from time to time be adopted, as hereinafter provided.
1.2 Professional Technical Services. The term "Professional
Technical Services" shall mean the Professional Technical Services, specifically
including diagnostic imaging services, and related health care services provided
by FACILITY.
1.3 FACILITY. The term "FACILITY" shall mean MEDICAL DIAGNOSTIC
IMAGING CENTER,., a Texas corporation.
1.4 FACILITY'S Account. The term "FACILITY'S Account" shall mean
the bank account of COMPANY established as described in Section 3.12 hereof.
1.5 Facility. The term "Facility" shall mean the offices owned or
leased by COMPANY where Professional Technical Services are provided by
FACILITY.
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1.6 COMPANY. The term -"COMPANY" shall mean Doctors Practice
Management, Inc..
1.7 Management Fee. The term "Management Fee" shall mean COMPANY's
compensation as described in Article V hereof.
1.8 State. The term "State" shall mean the State of Texas.
1.9 Term. The term "Term" shall mean the initial and any renewal
periods of duration of this Agreement as described in Section 6.1 hereof.
1.10 Location. The term "Location" shall mean the Facility(s) in
the Houston, Texas, Standard Metropolitan Statistical area and such Facility(s)
as may exist in the future.
ARTICLE II APPOINTMENT AND AUTHORITY .
2.1 Appointment. FACILITY hereby appoints COMPANY as its sole and
exclusive agent for the management and administration of the business functions
and services related to FACILITY'S provision of Professional Technical Services,
and COMPANY hereby accepts such appointment, subject at all times to the
provisions of this Agreement.
2.2 Authority of COMPANY. Consistent with the provisions of this
Agreement, COMPANY shall have the responsibility and commensurate authority to
provide full service management services for FACILITY, including, without
limitation, equipment, supplies, support services, personnel (but specifically
excluding licensed medical personnel), marketing, billing and collection
services, management, administration, financial record keeping and reporting,
and other business office services as provided herein. COMPANY, subject to the
ultimate control and direction of FACILITY, is hereby expressly authorized to
provide all such services in any reasonable manner COMPANY deems appropriate to
meet the day-to-day requirements of the business functions of FACILITY. To the
extent practicable, COMPANY, at its discretion, shall perform some or all of the
services specified hereunder for FACILITY.
2.3 Authority of FACILITY. FACILITY, through licensed health care
personnel, shall be solely responsible for and have sole and complete authority,
supervision and control over the provision of Professional Technical Services
and other related health care services performed for clients of FACILITY, and
procedures, and other professional health care services shall be provided and
performed exclusively by or under the supervision of licensed health care
personnel retained by FACILITY, as FACILITY, in its sole discretion, deems
appropriate and in accordance with all laws. FACILITY will have the ultimate
authority in the hiring and termination of all Licensed clinical staff. FACILITY
also has the right to request COMPANY to replace any COMPANY personnel assigned
to the clinic. This Agreement shall in no way be construed to mean or suggest
that COMPANY is engaged in the practice of medicine.
ARTICLE III COVENANTS OF COMPANY.
3.1 Leased Premises and Equipment. COMPANY shall, at COMPANY's
expense, provide to FACILITY the Locations and all equipment that is deemed by
the parties hereto to
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be reasonably necessary and appropriate for the provision of Professional
Technical Services at the Locations.
3.1.1 Retention of Title. FACILITY shall have access to and use of
the Locations and all equipment located therein throughout the Term, provided,
however, that title to the Locations and all equipment other than items placed
in the Locations by FACILITY shall, at all times, be and remain in COMPANY, or
if applicable, the entity from which COMPANY leases the Locations and/or
equipment.
3.1.2 Repair and Maintenance. COMPANY shall be responsible for the
repair and maintenance of the Locations, and for the repair, maintenance, and
replacement of all equipment located at the Locations, as well as other
obligations under the Lease Agreement regarding the Locations comparable to the
effective date hereof.
3.1.3 Additional Equipment. Should FACILITY, from time to time
during the Term request COMPANY to provide additional patient care equipment,
office, or other equipment for use at the Locations or to replace used or
obsolete equipment, COMPANY and FACILITY shall consult with each other on the
matter. Should COMPANY be unwilling or unable to provide such requested
equipment, FACILITY may acquire and maintain such equipment and title to same
shall be and remain in FACILITY; provided, however, that COMPANY agrees to
provide and maintain all equipment which is usual and customary in a facility
similar to the Locations, throughout the Term hereof.
3.1.4 Disclaimer of Warranty. COMPANY MAKES NO WARRANTY, EITHER
EXPRESSED OR IMPLIED, WITH RESPECT TO THE LOCATIONS, PREMISES OR ANY EQUIPMENT
PROVIDED BY COMPANY PURSUANT TO THIS AGREEMENT, AND ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY EXPRESSLY
DISCLAIMED.
3.2 Utilities and Related Services. COMPANY shall, at COMPANY's
expense arrange for and shall timely pay when due all charges relating to the
provision of necessary electricity, gas, water, telephone, sewage, cleaning and
decorating (interior and exterior), pest extermination, heating and
air-conditioning maintenance, and similar services reasonably necessary and
appropriate for the provision of Professional Technical Services at the
Locations.
3.3 Supplies. COMPANY shall obtain and provide, in its name and
for its own account, all reasonable patient care, office, and other supplies,
and shall ensure that the Leased Premises are at all times adequately stocked
with such supplies as are reasonably necessary and appropriate for the provision
of Professional Technical Services at the Leased Premises. Patient care supplies
shall be provided in accordance with the specifications of FACILITY with respect
to brand names, dosages, quantities and other specifications.
3.4 Waste Disposal. COMPANY shall, at COMPANY's expense, arrange
for the proper disposal of all medical and non-medical wastes generated by
FACILITY. Such waste disposal shall include disposal of any bio-hazardous waste
and any other medical waste that requires special disposal, provided that all
Physicians and non-physician personnel employed by
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FACILITY comply with all guidelines established by COMPANY for waste disposal.
FACILITY shall at all times comply with guidelines set forth by COMPANY for all
waste disposal, including the disposal of sharps, bio-hazardous waste and any
other waste products. FACILITY shall also comply with any guidelines set forth
by COMPANY with respect to the operation and maintenance of any equipment or
other item that has environmental law implications.
3.5 Support Services. COMPANY, at COMPANY's expense, shall arrange
for the provision of all laundry, linen, printing, stationery, forms, postage,
duplication or photocopying services, patient record transcribing services, and
other similar support services as are reasonably necessary and appropriate for
the provision of Professional Technical Services.
3.6 Licenses and Permits. COMPANY shall, at COMPANY's expense and
on behalf of and in the name of FACILITY, coordinate all development and
planning processes, and apply for and use COMPANY's best efforts to obtain and
maintain all federal, State and local licenses and regulatory permits required
for or in connection with the operation of the Facility and the equipment
(existing and future) located therein, other than those relating to the practice
of medicine.
3.7 PERSONNEL.
3.7.1 Provision of Company Personnel. COMPANY shall employ or
otherwise retain, at COMPANY's expense, and shall be responsible for selecting,
training, supervising, and terminating all management, administrative, clerical,
secretarial, bookkeeping, accounting, payroll, billing and collection, and other
non-professional personnel as COMPANY deems reasonably necessary and appropriate
for COMPANY's performance of its duties and obligations under this Agreement.
COMPANY shall have the sole responsibility for determining the salaries and
fringe benefits of personnel retained by COMPANY, for paying such salaries and
providing such fringe benefits, or for withholding, as required by law, any sums
of income tax, unemployment insurance, social security, or any other withholding
pursuant to any applicable law or governmental requirement.
3.7.2 Non-Exclusivity. In recognition of the fact that the personnel
retained by COMPANY to provide services pursuant to this Agreement may from time
to time perform services for others, this Agreement shall not prevent COMPANY
from performing such services for others or restrict COMPANY from using its
personnel to provide services to others, provided such activity does not cause
any material detriment to FACILITY. In recognition of the professional
obligations of FACILITY, FACILITY shall have the right and obligation to-
retain, at FACILITY's expense, any additional professional or other personnel as
FACILITY deems necessary or appropriate for the provision of health care
services.
3.7.3 Equal Employment Opportunity. COMPANY shall abide and provide
assistance to FACILITY, and abide by any and all applicable federal and/or State
equal employment opportunity statutes, rules, and regulations, including,
without limitation, Title VII of the Civil Rights Act of 1964, the Equal
Employment Opportunity Act of 1972, the Age Discrimination in Employment Act of
1967, the Equal Pay Act of 1963, the National Labor Relations Act, the Fair
Labor Standards Act, the Rehabilitation Act of 1973, and the Occupational Safety
and Health Act
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of 1970, all as may from time to time be modified or amended.
3.7.4 Labor Reports. COMPANY shall appropriately prepare, maintain,
and file all requisite reports and statements regarding income tax withholdings,
unemployment insurance, social security, workers' compensation, equal employment
opportunity, or other reports and statements required with respect to personnel
provided by COMPANY or FACILITY pursuant to this Agreement.
3.8 Consultants. COMPANY shall render such business and financial
management, consultation, and advice as may from time-to-time be requested by
FACILITY in connection with the business operations of FACILITY and FACILITY's
provision of Professional Technical Services. In addition, COMPANY shall make
available to FACILITY, for consultation and advice, to the extent available and
as reasonably necessary, COMPANY's specialists in such areas as accounting,
auditing, budgeting, medical practice management, finance, law, government
programs, housekeeping, insurance, management development, patient records,
nursing, recruitment, quality assurance, systems and procedures, and third party
reimbursement.
3.9 Contract Negotiations. Upon the request of FACILITY, COMPANY
shall advise with respect to and negotiate on FACILITY's behalf, all contractual
arrangements with third parties as are reasonably necessary and appropriate for
FACILITY's provision of Professional Technical Services, including, without
limitation, negotiated price agreements with third party payors, managed care
providers, or the purchasers of group health care services.
3.10 Marketing. In accordance with applicable law and ethical
standards and restrictions, COMPANY shall establish and implement a marketing
and public relations program promoting FACILITY'S provision of Professional
Technical Services to the general public and to other health care professionals
and suppliers. In connection with such marketing program and in accordance with
applicable law and ethical standards and restrictions, COMPANY shall establish
signs on or about the Facility identifying the operations of the Facility and
the provision of Professional Technical Services therein. COMPANY shall
implement all marketing programs at the direction of FACILITY.
3.11 License to Use Trade names and Trademarks of COMPANY. COMPANY,
at some time in the future may grant to FACILITY, but only subject to the terms
and conditions of this Agreement, a license to use certain names in connection
with the provision of Professional Technical Services in combination with such
color schemes, patterns, appearances, characteristics and words as are
specifically approved by COMPANY. FACILITY'S use of any trademarks, trade names,
service marks, insignia, slogans, emblems, symbols, designs or other identifying
characteristics owned by or associated with COMPANY or any of its subsidiaries
or affiliates (collectively, "COMPANY MARKS") shall be subject to the prior
written approval of COMPANY. FACILITY acknowledges that such names and COMPANY
Marks have acquired a secondary meaning in connection with COMPANY's operations.
FACILITY may also apply to COMPANY for permission to use any other COMPANY Marks
which permission may or may not be granted in the absolute discretion of
COMPANY. The use of any COMPANY Marks in any signs, advertising or any
promotional material shall be subject to the prior approval of COMPANY.
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The restrictions imposed hereunder shall extend to all other COMPANY
Marks licensed to FACILITY by COMPANY. Except as specifically authorized by this
Agreement, FACILITY will not use COMPANY Marks nor use, imitate or infringe upon
any of the foregoing in whole or in part. On the termination of this Agreement
for whatever cause, including COMPANY's breach, FACILITY shall forthwith, at its
expense, make whatever changes may be necessary in any signs, advertising and
promotional material in order to comply with the provisions of this Section and
cease using the name and any COMPANY Marks. FACILITY's covenants under this
Section are unconditional and in no way dependent upon the performance of
COMPANY of any of its agreements hereunder.
FACILITY will always acknowledge and recognize both before and after
the expiration of this Agreement the exclusive right of COMPANY to use or to
grant to others the right or license to use, whether separately or as a part of
or in connection with other words, any COMPANY Xxxx. If FACILITY utilizes any
COMPANY Xxxx, FACILITY shall take all actions which are necessary to maintain
COMPANY's good will and reputation or cease utilizing, at COMPANY's demand, the
name and any and all COMPANY Marks.
3.12 Billing and Collection. On behalf of FACILITY and for the
purpose depositing all receipts arising from FACILITY's patient activities,
COMPANY shall maintain the FACILITY'S account.. Such account will Such
FACILITY'S account will be under the COMPANY FEIN . COMPANY shall establish and
maintain credit and billing and collection policies and procedures, and shall
use COMPANY's best efforts to timely xxxx and collect all professional and other
fees for all billable Professional Technical Services provided by FACILITY; it
being understood, however that FACILITY, in his sole discretion, shall establish
the fees for all billable Professional Technical Services provided by FACILITY.
FACILITY shall timely advise COMPANY of any changes in FACILITY'S fee schedule
to permit COMPANY to implement such changes. In connection with this Section
3.12 and throughout the Term, FACILITY hereby grants a special power of attorney
to and appoints COMPANY as FACILITY's true and lawful agent and
attorney-in-fact, and COMPANY hereby accepts such special power of attorney and
appointment, for the following purposes:
3.12.1 To xxxx FACILITY'S clients, in FACILITY'S name and on
FACILITY'S behalf, for billable Professional Technical Services provided by
FACILITY.
3.12.2 To xxxx, in FACILITY'S name and on FACILITY'S behalf, all
claims for reimbursement or indemnification from Blue Shield/Blue Cross,
Medicare, Medicaid and all other third party payors for covered billable
Professional Technical Services provided by FACILITY.
3.12.3 To collect and receive, in FACILITY'S name and on FACILITY'S
behalf, all accounts receivable generated by such xxxxxxxx and claims for
reimbursement or indemnification, and to deposit all amounts collected in the
FACILITY'S Account, which account shall be and remain in COMPANY'S name. In
connection herewith, FACILITY covenants to transfer and deliver to COMPANY all
funds received by FACILITY from clients or third party payors for Professional
Technical Services. Upon receipt by COMPANY of any funds from clients or third
party payors or from FACILITY pursuant hereto for Professional Technical
Services, COMPANY shall deposit same into the FACILITY'S Account.
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3.12.4 To take custody of, endorse in the name of FACILITY, and
deposit into the FACILITY'S Account any notes, checks, money orders, insurance
payments, and any other instruments received in payment of the accounts
receivable for Professional Technical Services.
Upon request of COMPANY, FACILITY shall execute and deliver to COMPANY
or the financial institution wherein the FACILITY'S Account is maintained, such
additional documents or instruments as may be reasonably necessary to evidence
or effect the special power of attorney granted to COMPANY by FACILITY and the
conditions pursuant to this Section 3. 11 or pursuant to Section 3.12 hereof.
3.13 FACILITY'S Account. COMPANY shall operate the FACILITY'S
Account for the purpose's stated herein. In connection herewith and throughout
the Term, FACILITY hereby appoints COMPANY as FACILITY'S true and lawful agent
and attorney-in-fact, and grants COMPANY a special power of attorney and COMPANY
hereby accepts such special power of attorney and appointment, to deposit in the
FACILITY'S Account all funds, fees, and revenues generated from the provision of
Professional Technical Services and collected by COMPANY, and to make
withdrawals and sign checks for disbursements from the FACILITY'S Account solely
for the purpose of withdrawing the Collected Revenues to be applied to the
Management Fee and FACILITY's Expenses. FACILITY shall execute any and all
additional documents required by the bank where the FACILITY'S Account is held
to effectuate the power of attorney and conditions of the account granted
herein. Notwithstanding the limited power of attorney granted to COMPANY
hereunder. COMPANY shall furnish to FACILITY, on a monthly basis, its normal
Cash Receipts and Disbursements Report.
3.14 FISCAL MATTERS.
3.14.1 Accounting and Financial Records. COMPANY shall establish and
administer accounting procedures, controls, and systems for the development,
preparation, and safekeeping of records and books of account relating to the
provision of Professional Technical Services at the Leased Premises, all of
which shall be prepared and maintained in accordance with generally accepted
accounting principles consistently applied on a cash basis. COMPANY shall
prepare and deliver to FACILITY, within ninety (90) days of the end of each
fiscal year of FACILITY, a balance sheet, a profit and loss statement, and a
statement of changes in cash flow reflecting the financial status of the
provision of Professional Technical Services as of the end of such prior fiscal
year, all of which shall be prepared in accordance with generally accepted
accounting principles. COMPANY shall also prepare and deliver to FACILITY
unaudited-audited, monthly financial statements for management purposes only.
Additionally, COMPANY shall prepare and deliver to FACILITY such other financial
statements or records as COMPANY may from time to time deem appropriate or
FACILITY may reasonably from time-to-time request.
3.14.3 Access. FACILITY shall have the right at all reasonable times
during normal business hours to audit, examine, and make copies of books of
account maintained by COMPANY pursuant to this Agreement. COMPANY shall maintain
such records for FACILITY's access upon request for a period of four (4) years
following the Term hereof.
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3.15 REPORTS AND RECORDS.
3.15.1 Patient Records. COMPANY shall establish, monitor, and
maintain procedures and policies for the timely filing and maintenance of all
patient records generated by FACILITY in connection with FACILITY'S provision of
Professional Technical Services. All patient records shall be treated in
accordance with all applicable State and federal laws relating to the
confidentiality of patient records. All patient records shall be the property
of, maintained by, and in the custody of FACILITY, but FACILITY expressly agrees
that COMPANY shall have access to such patient records, at all reasonable times
during normal business hours, to the extent necessary for COMPANY to fulfill its
obligations under this Agreement and that COMPANY, to the extent lawfully
permitted, shall have access to such patient records, for the purpose of making
necessary copies, in the event this Agreement is terminated. COMPANY shall
maintain the confidentiality of all patient records in accordance with all
applicable laws and shall establish written policies and procedures for such
which are to be approved by FACILITY for the protection of confidential
information.
3.15.2 Other Management Reports and Records. COMPANY shall timely
create, prepare, and file such additional reports and records as are reasonably
necessary and appropriate hereunder, and shall analyze and interpret such
reports and records upon FACILITY's request.
3.16 Legal Actions. As requested by FACILITY, COMPANY shall advise
and assist FACILITY in instituting or defending, in the name of FACILITY, all
legal actions or proceedings by or against third parties arising out of
FACILITY'S provision of Patient Care Service, including, without limitation,
those actions to collect fees for billable Professional Technical Services or
other billable services provided to clients by FACILITY, and those actions
necessary for the protection and continued operation of FACILITY. Both parties
shall agree in advance upon the selection of counsel.
3.17 Indemnification by COMPANY. FACILITY, its officers, its
employees, and its agents will incur no liability in connection with the conduct
of COMPANY prior to the effective date of this Agreement. Accordingly, COMPANY
shall and hereby does indemnify, hold harmless, and agrees to defend FACILITY
and its officers, employees, and agents from and against any claims,
obligations, demands, causes of action, losses, liabilities, damages, costs and
expenses, including reasonable attorney's fees (collectively " Claims ") arising
out of or connected with the conduct of COMPANY prior to the effective date of
this Agreement.
FACILITY shall not, by entering into this Agreement and performing
hereunder, assume or become liable for any of the existing or future Claims made
against COMPANY. COMPANY shall and hereby does indemnify, hold harmless, and
agrees to defend FACILITY, its officers, employees, and agents, from and against
any Claims arising out of or connected with the negligence or fault of COMPANY,
its employees, agents, contractors or COMPANY's performance of its obligations
within its scope of responsibility hereunder.
If any Claim shall arise hereunder FACILITY shall give prompt written
notice of such Claim to COMPANY; except that any delay or failure of notice
shall not relieve COMPANY of the obligations hereunder except to the extent such
delay has materially prejudiced COMPANY.
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ARTICLE IV COVENANTS OF FACILITY.
4.1 Organization/Operation. FACILITY, is a Texas corporation
created under Texas law and shall at all times during the Term (i) be and remain
legally organized to provide Professional Technical Services in a manner
consistent with all State and federal laws; (ii) be duly authorized to conduct
business in the State of Texas; and (iii) have and maintain a physician to
provide Professional Technical Services in the Leased Premises and all other
locations of FACILITY who shall (a) hold a valid and unlimited license to
provide FACILITY services in the State of Texas , and (b) be engaged principally
in the provision of Professional Technical Services at each such location.
4.2 Professional Personnel of FACILITY. FACILITY shall employ, at
FACILITY's expense, all licensed health care personnel, including physicians,
nurses, vocational nurses and physician assistants, as FACILITY deems reasonably
necessary and appropriate for FACILITY's operation of his practice and provision
of Professional Technical Services each of whom shall be subject to the
applicable provisions of this Agreement (collectively, "Professional
Personnel"). FACILITY shall have the sole responsibility for paying the salaries
and fringe benefits of all such personnel, and the sole responsibility to
withhold, as required by law, any sums for income tax, unemployment insurance,
social security, or any other withholding pursuant to any applicable law or
governmental requirements (collectively, "Professional Compensation"). COMPANY
shall, in the name of and on behalf of FACILITY, establish and administer (out
of funds available in the FACILITY'S Account) the compensation with respect to,
such professional personnel and, on behalf of FACILITY and out of funds
available in the FACILITY'S Account, ensure that proper tax withholdings from
such compensation are made and timely remitted to the appropriate governmental
entities.
During the term of this Agreement and any extension hereof, plus two
(2) years thereafter, neither FACILITY nor any employee, agent, partner,
shareholder, director, officer, affiliate or any entity with any beneficial
interest or any control interest in FACILITY, either directly or indirectly, for
himself or herself, or on behalf of or in conjunction with any other person,
persons, partnership, associations or corporations shall (a) divert or attempt
to divert any business of, or any clients of FACILITY to or interest in any
other competitive establishment that is located within a Ten (10) mile radius of
any Location,.
FACILITY shall continuously and uninterruptedly, during the term
hereof, during all business hours and on such days as businesses of like nature
in the area are open for business, provide services in a manner calculated to
produce the maximum volume of revenue which is consistent with the professional
obligation of FACILITY and in the best interest of FACILITY's clients. FACILITY
shall cause the work load, patient load for each of its Professional Personnel
to remain substantially the same as their historical practice during the
immediate past three (3) years.
During the Term hereof and for a period of five (5) years thereafter,
except as may be required by law, FACILITY and its employees, agents, directors,
officers, shareholders and partners shall not disclose, communicate or disclose
to, or use for the direct or indirect benefit of any other person or entity any
confidential information regarding COMPANY's business
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methods, business policies, procedures, techniques, or trade secrets or other
knowledge or processes developed by COMPANY or any other confidential
information relating to or dealing with the business operations or activities of
COMPANY, made known to FACILITY or learned or acquired by FACILITY hereunder.
If any restriction contained in this Section 4.3 is held by any court
to be unenforceable or unreasonable, a lesser restriction shall be enforced in
its place and the remaining restrictions set forth herein shall be enforced
independently of each other.
4.4 FACILITY'S Insurance. FACILITY shall provide, obtain, and
maintain throughout the Term appropriate workers' compensation insurance
coverage for FACILITY'S employed personnel and shall carry professional
liability insurance covering FACILITY and all of FACILITY'S physician
Professional Personnel in the minimum amount of Three Hundred Thousand Dollars
($ _00,000) for each occurrence and Five Hundred Thousand Dollars ($ 500,000)
annual aggregate, and such amounts as may be reasonable for all other
Professional Personnel (collectively, "Professional Insurance"). Such
professional insurance policy or policies maintained by FACILITY shall include
COMPANY as additional insured, if permitted by the insurer. FACILITY shall
provide to COMPANY a certificate of insurance evidencing such coverage on an
annual basis. The insurance policy or policies shall provide for at least thirty
(30) days advance written notice to FACILITY from the insurer as to any
alteration of coverage, cancellation, or proposed cancellation of coverage for
any cause. The certificate of insurance shall require such notice to also be
given to COMPANY. FACILITY shall notify COMPANY of all legal actions or
proceedings instituted by or against FACILITY arising out of or related to
FACILITY'S operation of a medical practice.
4.5 Indemnification by FACILITY. COMPANY, its officers, its
employees, and its agents will incur no liability in connection with the conduct
of FACILITY prior to the effective date of this Agreement. Accordingly, FACILITY
shall and hereby does indemnify, hold harmless, and agrees to defend COMPANY and
its officers, employees, and agents from and against any claims, obligations,
demands, causes of action, losses, liabilities, damages, costs and expenses,
including reasonable attorney's fees (collectively "CLAIMS") arising out of or
connected with the conduct of FACILITY prior to the effective date of this
Agreement.
COMPANY shall not, by entering into this Agreement and performing
hereunder, assume or become liable for any of existing or future Claims made
against FACILITY. FACILITY shall and hereby does indemnify, hold harmless, and
agrees to defend COMPANY, its officers, employees, and agents, from and against
any Claims arising out of or connected with the negligence or fault of
FACILITY, its employees, agents, contractors or FACILITY's performance of its
obligations hereunder.
If any Claim shall arise hereunder COMPANY shall give prompt written
notice of such Claim to FACILITY; except that any delay or failure of notice
shall not relieve FACILITY of the obligations hereunder except to the extent
such delay has materially prejudiced FACILITY.
4.6 FACILITY's Expenses. FACILITY shall be solely responsible and
obligated to pay only the reasonable Professional Compensation including the
compensation benefits and
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employer costs associated with all Physicians and other licensed health care
employees, and Professional Insurance expenses associated with the Professional
Personnel including malpractice and general liability, retained by FACILITY in
addition to such other expenses as may be mutually agreed to by the parties
hereto (collectively, "FACILITY's Expenses").
4.7 Equipment. FACILITY hereby represents and warrants that
sufficient equipment currently exists at each Location as may be required to
provide Professional Technical Services of the type and volume currently
provided by FACILITY as of the effective date of this Agreement and will treat
same with appropriate care.
ARTICLE V MANAGEMENT FEE.
5.1 Amount of Management Fee. FACILITY and COMPANY mutually
recognize and acknowledge that COMPANY will incur substantial costs in arranging
for FACILITY's use of the Locations and in providing the equipment, support
services, personnel, marketing, office space, management, administration, and
other items and services that are subject matter of this Agreement. FACILITY and
COMPANY further recognize that certain of such costs and expenses can vary to a
considerable degree, according to the extent of FACILITY's business and
services. Furthermore, FACILITY and COMPANY agree that it will be impracticable
to ascertain and segregate all of the exact costs and expenses that will be
incurred by COMPANY from time to time in performance of his obligations under
this Agreement. However, it is the intent of the parties that the fees paid to
COMPANY be reasonable and approximate its costs and expenses, plus a reasonable
return, considering the investment and risk taken by COMPANY and the value of
the services provided by COMPANY. FACILITY agrees to pay a Management Fee to
COMPANY in an amount equal to Sixty Five percent of annual collected revenue.
Annual revenue is hereinafter defined as the twelve month period commencing with
the effective date of this agreement.
For purposes hereof, "Revenues Collected" shall be defined as an amount
equal to the total of any moneys received from clients, and/or third-party
payors and deposited in the FACILITY's account, less any refunds, during any
given twelve month or agreement anniversary date..
Either party, not more than Twelve times in any twelve month period,
upon giving notice to the other party hereto shall have the right to inspect the
records of FACILITY to ascertain and audit Revenues Collected, FACILITY's
Expenses, and COMPANY's Expenses, subject to patient confidentiality laws. If
the audit or examination discloses that the Management Fee was incorrectly
computed or any expense improperly classified, the parties shall within twenty
(20) days of such determination reconcile the difference by a cash payment to
the applicable party. In all events, a reconciliation of the preceding year
shall occur following the preparation of annual financial statements.
5.2 Payment of Management Fee. The Management Fee shall be payable
to COMPANY on a monthly basis for each month during the Term of this agreement.
Payment of the Management Fee is not intended to be, and shall not be,
interpreted or
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applied as permitting COMPANY to share in FACILITY's fees for Professional
Technical Services or any other services, but is acknowledged as the parties'
negotiated agreement as to the reasonable, fair market value of the equipment,
support, services, personnel, marketing, office space, management,
administration, and other items and services furnished by COMPANY pursuant to
this Agreement, considering the nature and volume of the services required and
the risks assumed by COMPANY.
ARTICLE VI TERM AND TERMINATION.
6.1 Initial and Renewal Terms. This Agreement shall be effective
as of May 1, 1996 for a period of Fifteen (15) years therefrom.
6.2 Termination. This Agreement may be terminated upon the first
to occur of any of the following events:
6.2.1 Termination by Agreement. In the event FACILITY and COMPANY
shall mutually agree in writing, this Agreement may be terminated on the date
specified in such written agreement.
6.2.2 Damages or Condemnation of Premises. In the event the Leased
Premises are totally or substantially destroyed by fire, explosion, flood,
windstorm, hail, earthquake, or other casualty or act of God, and the owner
landlord of the Leased Premises decides not to repair or rebuild the Leased
Premises, or in the event all or a substantial portion of the Leased Premises
and the Facility are taken or are to be taken by condemnation or eminent domain
proceeding, then either party may by written notice (sent within thirty (30)
days of such event) to the other terminate this Agreement if suitable
alternative premises cannot be secured within sixty (60) days. In the event the
owner/landlord of the Leased Premises decides to repair or rebuild the Leased
Premises to their original size and condition, the Management Fee and the duties
and obligations of COMPANY and FACILITY hereunder shall xxxxx until such time as
the Leased Premises are suitable for COMPANY and FACILITY to resume their
respective duties and obligations hereunder.
6.2.3 Bankruptcy. In the event that either party becomes insolvent,
or if any petition under federal or State law pertaining to bankruptcy or
insolvency or for a reorganization or arrangement or other relief from creditors
shall be filed by or against either party, or if any assignment, trust,
mortgage, or other transfer shall be made of all or a substantial part of the
property of either party, or if either party shall make or offer a composition
in its debts with its creditors, or if a receiver, trustee, or similar officer
or creditor's committee shall be appointed to take charge of any property of or
to operate or wind up the affairs of either party, then the other party may by
written notice immediately terminate this Agreement.
6.2.4 Specific FACILITY Breaches. At COMPANY's option, in the event
of (i) FACILITY or any employee or retained independent contractor of FACILITY
shall fail by omission or commission in any substantial manner to provide
Professional Technical Services in a competent manner, (ii) FACILITY shall fail
to meet any of the qualifications set forth in Section 4.1 hereof, (iv), then
COMPANY may by written notice to FACILITY immediately
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terminate this Agreement.
6.2.6 COMPANY Breaches. At FACILITY's option, in the event COMPANY
fails to make timely payments of the obligations it has undertaken, (ii) fails
or refuses to account to FACILITY for collection on amounts for services
rendered, or (iii) is in default of any material obligations having an impact
upon FACILITY, then FACILITY may by written notice to COMPANY terminate this
Agreement if COMPANY has failed to cure such default within thirty (30) days of
FACILITY's written notice of such violation, provided if such breach cannot by
its nature be reasonably cured within thirty (30) days then COMPANY shall have
such time as may be reasonable to cure the breach.
6.2.8 Default. In the event either party shall give written notice
to the other that such other party has substantially defaulted in the
performance of any material duty or material obligation imposed upon it by this
Agreement, and such default shall not have been cured within thirty (30) days
following the giving of such written notice, the party giving such written
notice shall have the right to immediately terminate this Agreement unless the
defaulting party shall, within said thirty (30) day period, have made a good
faith effort to initiate corrective action and it is contemplated that such
corrective action will be completed within the following (30) day period.
6.3 Effects of Termination. Upon termination of this Agreement, as
herein above provided, neither party shall have any further obligations
hereunder except for (i) obligations accruing prior to the date of termination,
and (ii) obligations, promises, or covenants set forth herein or in those
collateral agreements of even date herewith that are expressly made to extend
beyond the Term, including, without limitation, indemnities, non-compete and
fees which provisions shall survive the expiration or termination of this
Agreement.
In the event of termination all outstanding loans , interest and
management fees will be due and payable by FACILITY prior to but no later than
effective cancellation date.
6.4 Continued Professional Technical Services. Following any
notice of termination hereunder, whether given by COMPANY or FACILITY, FACILITY
and COMPANY will fully cooperate with each other in all matters relating to the
performance or discontinuance of Professional Technical Services, as
appropriate, at the Locations by FACILITY and the orderly transition of clients.
ARTICLE VII MISCELLANEOUS.
7.1 Exhibits, Schedules and Other Instruments. As used herein, the
expression "this Agreement" means the body of this Agreement and all exhibits,
certificates, and schedules; and the expressions " herein, " " hereof, " and "
hereunder " and other words of similar import refer to this Agreement and such
exhibits, certificates, and schedules as a whole and not to a particular part or
subdivision thereof unless otherwise clearly indicated.
7.2 Independent Relationship. It is mutually understood and agreed
that FACILITY and COMPANY, in performing their respective duties and obligations
under this Agreement, are
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at all times acting and performing as independent contractors with respect to
each other, and nothing in this Agreement is intended nor shall be construed to
create an employer/employee relationship or a joint venture relationship, 6r to
allow COMPANY to exercise control or direction of any nature, kind, or
description over the manner. or method by which FACILITY performs Professional
Technical Services.
7.3 Notices. Any notice, demand, or communication required,
permitted, or desired to be given shall be deemed effectively given (i) when
personally delivered, (ii) upon receipt when delivered by telephonic document
transfer, (iii) three (3) business days next following the day the notice is,
mailed by prepaid certified mail, return receipt requested, or (iv) the next
business day following deposit with a reputable overnight courier, addressed as
follows:
FACILITY Medical Diagnostic Imaging Center
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxx 00000
COMPANY: DOCTORS Practice Management, Inc.
Xxxx Xxxx, CEO
0000 X Xxxxx
Xxxxxxxx, Xxxxx 00000
or to such other address, and to the attention of such other person or officer
as any party may designate, with copies thereof to the respective counsel
thereof as notified by such party. Rejection or other refusal to accept or the
inability to deliver because of a changed address of which no notice was given
in accordance with the provisions hereof, shall be deemed to be receipt of the
notice sent.
7.4 Legal Fees and Costs. In the event either party brings any
action for relief against the other, declaratory or otherwise, arising out of
this Agreement (including actions to enforce and interpret this Agreement), the
losing party shall pay to the prevailing party, in addition to any other relief
to which such party shall be entitled, a reasonable sum for attorneys fees
incurred in bringing such suit and/or enforcing any judgment granted therein,
all of which shall be deemed to have accrued upon the commencement of such
action and shall be paid whether or not such action is prosecuted to judgment.
Any judgment or order entered in such action shall contain a specific provision
providing for the recovery of attorney fees and costs incurred in enforcing such
judgment, in addition to any other relief to which such party shall be entitled.
7.5 Choice of Law and Venue. THIS AGREEMENT HAS BEEN EXECUTED AND
DELIVERED IN AND SHALL BE INTERPRETED, CONSTRUED, ENFORCED AND GOVERNED BY AND
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND THAT THE COURTS OF THAT
STATE IN THE COUNTY OF XXXXXX, AND THE UNITED STATES DISTRICT COURT FOR SOUTHERN
DISTRICT OF TEXAS SHALL BE THE EXCLUSIVE COURTS OF JURISDICTION AND VENUE FOR
ANY LITIGATION, SPECIAL PROCEEDING OR OTHER PROCEEDING AS BETWEEN THE PARTIES
THAT MAY BE BROUGHT, OR ARISE OUT OF, IN CONNECTION WITH, OR BY REASON OF
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THIS AGREEMENT. SELLER HEREBY CONSENTS TO THE JURISDICTION OF SUCH COURTS.
7.6 Assignment. Except as provided above, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors, and assigns; provided, however,
that FACILITY shall not assign, transfer or pledge his rights and obligations
under this Agreement or collaterally assign or hypothecate this agreement
without the prior written consent of COMPANY. COMPANY shall have the right to
(i) assign its rights and obligations hereunder to any affiliated third party
and (ii) collaterally assign its interest in this Agreement and its right to
collect Management Fees hereunder to any financial institution or other third
party without the consent of FACILITY. COMPANY must provide ten days prior
written notice to FACILITY prior to assigning this Agreement .
7.7 Waiver of Breach. The waiver by either party of a breach or
violation of any provision of this Agreement shall not operate as, or be
construed to constitute, a waiver of any subsequent breach of the same or
another provision hereof.
7.8 Enforcement. All claims and disputes relating to this
Agreement shall be subject to confidential arbitration in accordance with the
National Health Lawyers Association Alternative Dispute Resolution Rules of
Procedure for Arbitration then obtaining and with individuals knowledgeable of
the medical industry serving as arbitrators. Written notice of demand for
arbitration shall be filed with the other party to the Agreement and with the
National Health Lawyers Association in Washington, D.C., within a reasonable
time after the dispute has arisen. In the event either party resorts to legal
action to enforce the arbitration results or any other provision of this
Agreement, the prevailing party shall be entitled to recover the costs of such
action so incurred, including, without limitation, reasonable attorneys' fees.
7.9 Gender and Number. Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine,
and neuter, and the number of all words herein shall include the singular and
plural. The term "person" when used herein shall mean an individual,
partnership, joint venture, corporation, trust, government entity, and
association.
7.10 Additional Assurances. Except as may be herein specifically
provided to the contrary, the provisions of this Agreement shall be
self-operative and shall not require further agreement by the parties; provided,
however, at the request of either party, the other party shall execute such
additional instruments and take such additional acts as are reasonable and as
the requesting party may deem necessary to effectuate this Agreement.
7.11 Consents, Approvals, and Exercise of Discretion. Except as may
be herein specifically provided to the contrary, whenever this
Agreement-requires any consent or approval to be given by either party, or
either party must or may exercise discretion, the parties agree that such
consent or approval shall not be unreasonably withheld or delayed, and such
discretion shall be reasonably exercised in good faith.
7.12 Force Majeure. Neither party shall be liable or deemed to be
in default for any delay or failure in performance under this Agreement or other
interruption of service deemed to
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result, directly or indirectly, from acts of God, civil or military authority,
acts of public enemy, war, accidents, fires, explosions, earthquakes, floods,
failure of transportation, strikes or other work interruptions by either party's
employees, or any other similar cause beyond the reasonable control of either
party.
7.13 Severability. In the event any provisions of this Agreement is
held to be invalid, illegal, or unenforceable for any reason and in any respect,
if the extent of such invalidity, illegality or unenforceability does not
destroy the basis of the bargain herein such invalidity, illegality, or
unenforceability shall in no event affect, prejudice, or disturb the validity of
the remainder of this Agreement, which shall be in full force and effect,
enforceable in accordance with its terms as if such provisions had not been
included, or had been modified as provided below, as the case may be. To carry
out the intent of the parties hereto as fully as possible, the invalid, illegal
or unenforceable provision(s), if possible, shall be deemed modified to the
extent necessary and possible to render such provision(s) valid and enforceable.
In the event this Agreement cannot be modified to the satisfaction of the
parties hereto, then either party may terminate this Agreement upon ten (10)
days written notice.
7.14 Divisions and Heading-s. The division of this Agreement into
articles, sections, and subsections and the use of captions and headings in
connection therewith are solely for convenience and shall not affect in any way
the meaning or interpretation of this Agreement.
7.15 Amendments and Agreement Execution. This Agreement and
amendments thereto shall be in writing and executed in multiple copies on behalf
of FACILITY by its duly authorized representative and on behalf of COMPANY by
its duly authorized representative. Each multiple copy shall be deemed an
original, but all multiple copies together shall constitute one and the same
instrument.
7.16 Time of Essence. Time shall be of the essence with respect to
this Agreement.
7.17 Entire Agreement/Amendment. This Agreement and collateral
agreements of even date herewith supersede all previous agreements (written or
oral), and constitutes the entire agreement of whatsoever kind or nature
existing between or among the parties respecting the within subject matter and
no party shall be entitled to benefits other than those specified herein. As
between or among the parties, no oral statements or prior written material not
specifically incorporated herein shall be of any force and effect; the parties
specifically acknowledge that in entering into and executing this Agreement, the
parties rely solely upon the representations and agreements contained in this
Agreement and no others. All prior representations or agreements, whether
written or verbal, not expressly incorporated herein are superseded. This
Agreement may not be amended, supplemented, canceled or discharged except by
written instrument executed by all parties hereto. This Agreement may be
executed in two or more counterparts, each and all of which shall be deemed an
original and all of which together shall constitute one instrument. It shall not
be necessary that the signatures of all of the parties appear on each
counterpart; it shall be sufficient that the signature of each party appear on
one or more counterparts.
7.18 Rules of Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement, and the parties hereby
agree that the normal rule of
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construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits, certificates and schedules hereto. The term "
include " or " including " shall mean without limitation by reason of
enumeration. All references in this Agreement to Dollars or monetary payment
shall be deemed to refer to U.S. Dollars.
7.19 Reproduced Copies of Documents. This Agreement and all
documents relating hereto other than promissory notes, including without
limitation, (a) consents, waivers, and modifications which may hereinafter be
executed, (b) documents received by any party at the Closing, (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any means or process including electronic or
mechanical means. Any reproduction shall be admissible into evidence as the
original itself in any Litigation without regard to whether the original is in
existence. If a party signs this Agreement and then transmits an electronic
facsimile of the signature page the recipient may rely upon the electronic
facsimile as a signed original of this Agreement without modification or change
unless same is noted thereon.
7.20 Third Parties. None of the provisions of this Agreement shall
be for the benefit of third parties or enforceable by any third party except as
otherwise contained herein. Any agreement to pay an amount and any assumption of
a liability herein contained, expressed or implied, shall only be for the
BENEFIT of the parties hereto and such agreement or assumption shall not inure
to the benefit of the any third party, including an obligee.
IN WITNESS WHEREOF, FACILITY and COMPANY have executed this Agreement in
multiple originals as of the date written above.
FACILITY:
MEDICAL DIAGNOSTIC IMAGING CENTER
By: /s/ Xxxxx Xxxxx
-------------------------------
COMPANY:
DOCTORS PRACTICE MANAGEMENT, INC.
By: /s/ Xxxx Xxxx
-------------------------------
Xxxx Xxxx, President
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