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EXHIBIT 10.19
AMERIPATH MANAGEMENT AGREEMENT
BY AND BETWEEN
AMERIPATH CINCINNATI, INC.
AND
AMERIPATH OHIO, INC.
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MANAGEMENT AGREEMENT
PARTIES: AMERIPATH CINCINNATI, INC. (the "Practice")
AMERIPATH OHIO, INC. ("Ameripath")
EFFECTIVE DATE: SEPTEMBER 30, 1996 (the "Effective Date")
RECITALS:
- AmeriPath is a Delaware corporation engaged in the business
of providing administrative and management services, to
pathology groups;
- The Practice is a professional association comprised of
medical practitioners who engage in the practice of pathology
("Practice Providers");
- The Practice desires to enter into this Agreement with
AmeriPath for the provision of comprehensive business
management services to enhance the efficiency of its
operations and to allow its Practice Providers to concentrate
fully on providing quality medical services;
- The Practice has designated a Managing Physician to oversee
the day to day operations of the Practice's business and to
make administrative and certain other decisions on its
behalf;
- The Practice and AmeriPath desire to enter into this
agreement (the "Agreement") to provide a statement of their
respective rights and responsibilities during its Term (as
defined in Section VI-A herein below).
FOR GOOD AND VALUABLE CONSIDERATION, AmeriPath and the Practice agree
as follows:
I. PRELIMINARY STATEMENTS
A. RECITALS. The recitals set forth above are true and accurate and
are incorporated as part of this Agreement.
B. DEFINITIONS. Many capitalized terms used in this Agreement are
defined in Attachment I to this Agreement; however, capitalized terms used in
this Agreement are also defined in the text of this Agreement, and Attachments
II and III hereof.
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C. ATTACHMENTS. All attachments to this Agreements are incorporated
into this Agreement by reference. The attachments to this Agreement are the
following:
Attachment I: Definitions
Attachment II: Attorney in Fact
Attachment III: Miscellaneous Contractual Provisions
II. AMERIPATH SERVICES
AmeriPath shall on behalf of Practice and as a Practice Expense,
provide the Practice and the Practice Providers with the following services:
A. STRATEGIC PLANNING AND GOALS. AmeriPath shall prepare, in
consultation with the Managing Physician, an annual Operating Plan (as defined
in Section IV-B), reflecting in reasonable detail anticipated Practice Revenues,
Practice Expenses, Allocated Expenses and Practice Provider staffing. The
Operating Plan shall include, among other things, information relating to the
growth and enhancement of the Practice, a budget for the Practice and the
Management Fee to be paid to AmeriPath.
B. EXPANSION OF PRACTICE. AmeriPath shall assist the Practice in
developing relationships and affiliations with physicians and other specialists,
hospitals, networks, health maintenance organizations and preferred provider
organizations. Subject to the terms of this Agreement, each of the Practice and
AmeriPath shall cooperate and use their respective best efforts to expand the
Practice.
C. MANAGED CARE RELATIONSHIPS. AmeriPath, together with the Managing
Physician, shall evaluate, negotiate, and administer managed care contracts and
other third party payor contracts on behalf of the Practice and its Practice
Providers.
D. FACILITY RELATIONSHIPS. AmeriPath, together with the Managing
Physician, shall evaluate, negotiate, and administer all hospital and other
medical facility contracts on behalf of the Practice and its Practice
Providers.
E. ESTABLISHMENT OF FEES. AmeriPath shall recommend, but shall not
set, fees, charges, premiums or other amounts due in connection with services
and goods provided by the Practice. The Board shall retain sole authority to
decide how physician compensation will be divided among individual physicians.
F. PRACTICE MANAGEMENT SERVICES. AmeriPath shall, in consultation with
the Managing Physician, assess business activity including product line
analysis, outcomes monitoring and customer satisfaction. AmeriPath shall
develop systems to track revenues, expenses, cost accounting, utilization,
quality assurance, physician productivity and customer satisfaction.
G. BUSINESS OFFICE AND SUPPORT SERVICES AmeriPath may, in consultation
with the Managing Physician, provide computer, bookkeeping, billing and
collection, accounts receivable and
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accounts payable services necessary for the management of the Practice pursuant
to this Agreement and in accordance with the Operating Plan. AmeriPath may also
order and purchase on behalf of the Practice medical and office supplies
required in the day-to-day operation of the Practice as determined by the
Managing Physician consistent with the Operating Plan. However, the Practice
shall order, purchase, stock, and monitor the inventory of pharmaceuticals and
other medical supplies, substances, or items whose purchase, maintenance, or
security require licensure as a health-care provider or require a permit,
registration, certification, or identification number that requires licensure
or certification as a health-care provider. AmeriPath shall provide access to
management information systems services to the Practice, including risk
contracting systems services. AmeriPath may also arrange laundry, waste
collection, and other necessary operational services in accordance with
applicable laws.
H. PROFESSIONAL AND CONSULTING SERVICES. AmeriPath shall arrange for or
render business and financial management consultation and advice reasonably
requested by the Managing Physician and directly related to the operations of
the Practice pursuant to this Agreement. Except as contemplated by the Operating
Plan, AmeriPath shall not be responsible for any services requested by or
rendered to any individual, employee or agent of the Practice, or any Practice
Provider, not directly related to Practice operations.
I. FINANCIAL STATEMENTS. AmeriPath shall prepare Practice profit and
loss and income statements, in accordance with the manner and form in which
AmeriPath normally keeps its accounts, books and records, and in accordance with
applicable laws. The statements shall reflect Practice Revenues generated by or
on behalf of the Practice and shall contain a comparison of actual and budgeted
Practice Revenues and expenses. AmeriPath shall provide the Managing Physician
with monthly statements within thirty (30) days after the end of each month and
shall provide a year-end statement within ninety (90) days after the end of the
calendar year.
III. PRACTICE OBLIGATIONS
A. EXCLUSIVITY. The Practice and the Practice Providers agree that
during the Term of this Agreement they will not retain, engage or employ,
directly or indirectly, any other entity or individual to provide the services
for which it is contracting with AmeriPath.
B. PROFESSIONAL STANDARDS. Medical services shall be performed solely
by, or under the direct supervision of, the Practice Providers. The Practice
shall have complete and absolute control over the methods by which the Practice,
and Practice Providers practice medicine and/or render the professional services
which they are licensed to provide under the laws of the states in which they
are practicing and Federal Law. The Practice shall require that Practice
Providers comply with applicable ethical standards, laws and regulations. The
Practice shall, with the assistance of AmeriPath (if so requested by the
Managing Physician), resolve utilization review or quality assurance issues
which may arise. In the event that disciplinary actions or professional
liability actions are initiated against any Practice Provider, the Practice
shall immediately inform AmeriPath of the action and the underlying facts and
circumstances. The Practice shall implement and maintain a program to monitor
the quality and utilization of medical care, and AmeriPath shall render
administrative assistance to the Practice, as requested by the Managing
Physician.
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C. MANAGED CARE ARRANGEMENTS. The Practice shall cooperate with
AmeriPath in the development and operation of managed care arrangements. The
Practice shall participate as a provider and in the administrative operation of
integrated delivery systems and managed care arrangements. The Practice and its
Practice Providers agree to comply with the quality assurance and utilization
review programs of managed care arrangements.
D. CONTINUING MEDICAL EDUCATION. The Practice shall ensure that each
of its Practice Providers participates in continuing medical education
activities, as necessary to remain current in their respective specialties,
including, but not limited to, the minimum continuing medical education
requirements imposed by applicable laws and policies of applicable specialty
boards.
E. PHYSICIAN POWERS OF ATTORNEY AND BILLING. The Practice shall appoint
AmeriPath to act as agent in the billing and collection of all Practice
Revenues, and shall require all Practice Providers to appoint AmeriPath as
attorney-in-fact for the Practice and each Practice Provider, as more
specifically set forth in Attachment II. The Practice shall cooperate and shall
cause its Practice Providers to cooperate with AmeriPath in all matters relating
to the billing and collection of all Practice Revenues. In this regard, each
Practice Provider shall review and approve the reports and other information
required to support complete and accurate bills. Additionally, the Practice and
its Practice Providers will provide such necessary support to appeal or contest
any denials of claims or other regulatory issues.
F. ADDITIONAL PRACTICE PROVIDERS. When the Practice desires to add or
change a Practice Provider, AmeriPath shall provide a business analysis of the
prospective change in the composition of the Practice. Additional Practice
Providers (the "Additional Practice Providers") shall be added to the Practice
as follows: the Practice shall review and approve the credentials and the
medical practices of the prospective Additional Practice Provider. AmeriPath
shall review the business operations, financial condition and results of
operations of the prospective Additional Practice Provider and shall provide
such information to the Managing Physician. The decision to admit an Additional
Practice Provider shall be subject to the approval of the Steering Committee.
G. ADDITIONAL PRACTICES. AmeriPath may, in its discretion, seek to add
additional practices (each such Practice being an "Additional Practice") to this
Agreement. If AmeriPath desires to add an Additional Practice, AmeriPath shall
provide the with a business analysis of the Additional Practice, including
business operations, financial condition and results of operations. The decision
to admit an Additional Practice shall be subject to the approval of the Board.
After an agreement to add an Additional Practice has been reached, the Practice
and AmeriPath shall enter into an amendment (the "New Practice Amendment") to
this Agreement. The New Practice Amendment shall include the understanding of
the parties with respect to AmeriPath's compensation and other issues agreed
upon by the Board and the Additional Practice. The New Practice Amendment shall
obligate the Additional Practice to be bound by the New Practice Amendment.
H. PRACTICE EXPENSES. The Practice shall be solely responsible for the
payment of all Practice Expenses.
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I. PRACTICE ORGANIZATIONAL DOCUMENTS. The Practice agrees that it shall
not, without the written consent of AmeriPath: (a) modify or amend the Practice
Organizational Documents (as defined in Attachment I); (b) admit New Practice
Providers, except as provided for in this Agreement; (c) remove the Managing
Physician; or (d) terminate or cancel any hospital contracts (or similar
contracts for the provision of services) under this Agreement. Further, the
Practice agrees that it shall consult with AmeriPath prior to the termination or
release of any Practice Provider from his or her obligations.
J. STAFFING OF FACILITIES BY THE PRACTICE. To the extent that the
Practice or the Practice Providers are responsible for staffing facilities
provided by AmeriPath, the Practice shall provide adequate staffing to ensure
that medical services are provided in a manner consistent with applicable
community and medical specialty standards. From time to time AmeriPath may
acquire new facilities that it wishes the Practice to staff. The Practice agrees
that in the event AmeriPath acquires or develops a new facility that it wishes
the Practice to staff, the Practice will use its best efforts to staff the
facility. The parties agree that the Operating Plan will be revised as necessary
to accommodate staffing of the new facility.
K. EQUIPMENT. The Practice shall advise AmeriPath on the maintenance,
repair and proper operation of medical equipment. This obligation shall relate
to the medical functionality of the equipment. Upon receipt of such advice,
AmeriPath shall cause the medical equipment to be maintained in good operating
condition.
L. MEDICAL RECORDS. The Practice shall be responsible for the
preparation of, and direct the contents of, patient medical records. All
patient medical records shall remain the property of the Practice. The Practice
shall be responsible for proper documentation of medical services provided by
the Practice and the Practice Providers.
FINANCIAL MATTERS
H. AMERIPATH COMPENSATION.
1. GENERAL. The compensation provided herein is
expected to provide AmeriPath with fair market value
payment commensurate with the services it provides,
its capital investment, use of its tradename and its
expertise in laboratory and professional practice
management. AmeriPath shall receive compensation
equal to all Practice Revenues in excess of Practice
Expenses.
2. PRACTICE EXPENSES AND ALLOCATED EXPENSES. All
Practice Expenses (as defined in Attachment I
hereto), including the compensation of Practice
Providers, shall be the sole responsibility of
Practice and shall be paid by the Practice out of
its first available Practice Revenues. Allocated
Expenses (as defined in ATTACHMENT I hereto)
incurred by AmeriPath in the course of the
performance of its duties under this Agreement on
behalf of or as agent for the
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Practice shall be paid to AmeriPath. Allocated
Expenses may include an allocable portion of
reasonable corporate overhead of AmeriPath.
Allocated Expenses shall be billed to the Practice
at their actual cost to AmeriPath. An operating
budget for Practice Expenses and Allocated Expenses
shall be reviewed at least annually and shall be
set forth in the Operating Plan.
I. REIMBURSEMENT OF EXPENSES. AmeriPath may, from time to time, incur
Practice Expenses which are a part of the Operating Plan, a Revised Operating
Plan, or are Practice Expenses incurred in the ordinary course of business.
AmeriPath shall be entitled to be reimbursed by the Practice for these expenses
when incurred.
J. PRACTICE BANK ACCOUNT, PAYMENT OF FEES AND PAYMENT OF EXPENSES. The
Practice shall establish a bank account for the deposit of all Practice Revenues
(the "Practice Bank Account"). AmeriPath shall have a security interest in the
Practice Bank Account pursuant to this Section V. Additionally, it is understood
and agreed that AmeriPath may assign its security interest and all other
interests that it may have in the Practice Bank Account to its lender or
lenders. Should AmeriPath assign its interest, its assignee shall have a first
lien on the Practice Bank Account. AmeriPath shall have access to the Practice
Bank Account solely for the purposes stated herein. In connection herewith and
throughout the Term, Practice hereby grants to AmeriPath an exclusive special
power of attorney for the purposes herein and appoints AmeriPath as Practice's
exclusive true and lawful agent and attorney-in-fact, and AmeriPath hereby
accepts such special power of attorney and appointment, to deposit into the
Practice Bank Account all funds, fees, and revenues generated from the
Practice's provision of medical services and collected by AmeriPath, and to make
withdrawals from Practice Bank Account for payments specified in this Agreement
and as requested from time-to-time by Practice. Notwithstanding the exclusive
special power of attorney granted to AmeriPath hereunder, Practice may, with
notice to AmeriPath, draw checks on the Practice Bank Account; provided,
however, that Practice shall neither draw checks on the Practice Bank Account
nor request AmeriPath to do so if the balance remaining in the Practice Bank
Account after such withdrawal would be insufficient to enable AmeriPath to pay
on behalf of Practice any Practice Expense attributable to the operations of
Practice or to the provision of medical services, and/or any other obligations
of Practice. Disbursements made from the Practice Bank Account consent shall be
consistent with the type and amount of expenditures authorized by the Operating
Plan. Limits on authority to sign checks and purchase orders shall be mutually
agreed upon by AmeriPath and the Managing Physician.
K. COLLATERAL. As collateral security for the payment of all amounts
owed to AmeriPath pursuant to this Agreement, Practice grants to AmeriPath a
security interest in all tangible and intangible assets of the Practice,
including Practice Revenues which may be created or arise during the Term,
together with all proceeds regardless of the manner in which the entitlement to
payment for Practice Revenues exists whether as accounts, accounts receivable,
notes receivable or other evidence of entitlement to the Practice Revenues and
all of its rights, title and interest (including right to control the same), if
any, in the Bank Account and the sums on deposit (collectively, the
"Collateral") to the extent the same are not otherwise assigned to AmeriPath. In
granting this security interest, the Practice agrees to the following: (i) this
Agreement shall create and constitute a valid and perfected first priority
security interest in the Collateral enforceable against all parties; (ii) the
Practice has and shall continue
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to have good indefeasible and merchantable title to and ownership of the
Collateral free and clear of all liens, other than liens created by AmeriPath
or any AmeriPath Affiliate; (iii) this grant of a security interest in the
Collateral shall not result in a violation of any other agreement to which
Practice is or becomes a party; and (iv) the Practice shall take all action
necessary to perfect AmeriPath's security interest in the Collateral, including
the execution of financing statements and authorization to file the same in the
appropriate recording office. AmeriPath and the Practice agree to execute such
further documents and instruments as may be deemed necessary or desirable, in
AmeriPath's sole discretion, to effect the provisions of this Section.
L. REMEDIES FOR NON-PAYMENT. AmeriPath shall have all rights and
remedies of a secured party and all rights, remedies, securities and liens of
the Practice with respect to the Collateral including, but not limited to,
extending the time of payment of, compromising, or settling for cash, credit, or
otherwise upon any terms, any part or all of the Collateral, but shall not be
liable for any failure to collect or enforce the payment thereof. AmeriPath is
authorized by the Practice, except as otherwise prohibited by applicable law, to
take possession of, and endorse in the name of the Practice any notes, checks,
money orders, drafts, cash, insurance payments and any other instruments
received in payment of the Collateral, or any part thereof; to collect, xxx for
and give satisfactions for moneys due on account of the Collateral; and to
withdraw any claims, suits or proceedings pertaining to, or arising out of,
AmeriPath's and/or the Practice's rights to the Collateral. AmeriPath's costs of
collection and enforcement, including attorneys' fees and out-of-pocket
expenses, shall be borne solely by the Practice. The Practice agrees that
AmeriPath shall be permitted to place its representatives in the Medical
Offices, with full authority to take possession of and retain for AmeriPath the
books and records of the Practice with reference to the Practice's operations
pursuant to this Agreement with respect to the Collateral.
M. RIGHT OF OFFSET. Notwithstanding any other provision in this
Agreement, AmeriPath is entitled to offset against any sums owed by AmeriPath
to the Practice any amounts payable or reimbursable to AmeriPath under this
Agreement.
N. LEGAL LIMITATION ON ASSIGNMENT. This Agreement shall not constitute
an assignment of Practice Revenues to the extent that such assignment is
prohibited under applicable law. To the extent Practice Revenues are not
assignable, the Practice agrees that it shall promptly deliver non-assigned
Practice Revenues to AmeriPath.
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IV. TERMS AND TERMINATIONS
A. TERM. The initial term of this Agreement shall be for a period of
forty (40) years commencing on September 30, 1996 and ending on September 29,
2036 (the "Initial Term"). This Agreement shall be extended for separate and
successive five (5) year periods (each such five (5) year period shall be
referred to as an "Extended Term" and the Initial Term and any Extended Term
shall be referred to in this Agreement as the "Term") unless either party
provides the other party notice not less than sixty (60) days prior to the end
of the Initial Term or an Extended Term, unless the Practice has defaulted under
the terms of this Agreement. The same terms and conditions of this Agreement
shall apply to an Extended Term unless the Practice and AmeriPath mutually agree
to alter the terms and conditions hereof with a writing signed by each party
hereto. All New Practice Amendments shall terminate at such time as this
Agreement terminates.
B. TERMINATION. A party (the "Terminating Party") may terminate this
Agreement on the basis of the following:
1. The other party breaches any material term or condition of this
Agreement, and the breach continues for sixty (60) days after the receipt of
written notice specifying the breach by the party which did not perform or
breached.
2. AmeriPath may terminate this Agreement if the Practice is
suspended or prohibited from participating in the Medicare or Medicaid programs
or excluded from entering into healthcare provider agreements with any material
portion of the managed care or healthcare insurance industry; or (ii) the
Practice or the Managing Physician, breaches any material term of this
Agreement, including the restrictive covenants provided in Attachment III.
C. EFFECTS OF AND OBLIGATIONS UPON TERMINATION. Upon the termination or
expiration of this Agreement: (i) neither party shall be discharged from any
previously accrued obligation which remains outstanding; (ii) any sums of money
owing by one party to the other shall be paid immediately, prorated through the
effective date of termination or expiration; (iii) the Practice shall return to
AmeriPath all originals and copies of any Confidential Information in the
possession of the Practice or any other person or entity to whom it has
delivered originals and/or copies; (iv) the Practice and AmeriPath shall perform
matters as are necessary to wind up their activities under this Agreement in an
orderly manner, including providing to the Practice patient billing records on
paper or electronic data; and (v) each party shall have the right to pursue
other legal or equitable relief as may be available depending upon the
circumstances of the termination.
V. LEGAL COUNSEL
The Practice agrees to retain legal counsel recommended by AmeriPath
with respect to matters in which the interests of the Practice are not adverse
to AmeriPath or its business in any significant respect and further agrees to
waive any conflicts of interest in transactional matters which may exist for
such recommended legal counsel with respect to AmeriPath.
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VI. PRACTICE OF MEDICINE. The parties acknowledge that AmeriPath is not
authorized or qualified to engage in any activity which constitutes the practice
of medicine and nothing required herein to be shall be construed as the practice
of medicine by AmeriPath. To the extent any act or service required to be
performed or provided by AmeriPath is construed or deemed by any governmental
authority, agency or court to constitute the practice of medicine, AmeriPath
shall be released from any obligation to provide such act or service and the
provision for such required act or service shall be deemed waived and forever
unenforceable without otherwise affecting the terms of this Agreement.
Practice and AmeriPath have duly executed this Agreement on the day and
year indicated above.
AMERIPATH CINCINNATI, INC.
/s/ Xxxxx X. Xxxxxx, M.D.
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AMERIPATH OHIO, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Its: Vice President
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ATTACHMENT I
DEFINITIONS
AGREEMENT means this agreement and any subsequent amendments
thereto.
ALLOCATED EXPENSES means the expenses relating to the operations of the
facilities of the Practice and the administrative
expenses incurred by AmeriPath on behalf of the
Practice in the performance of AmeriPath's duties under
this Agreement, including the following: billing
services (including personnel), marketing, advertising,
promotion, allocated corporate overhead, legal
expenses, service of laboratory and other expenses as
may be approved from time to time by the Board, all as
permitted to be incurred in accordance with this
Agreement.
DOCUMENTS means the articles of incorporation and bylaws of the
Practice.
MANAGING PHYSICIAN means Xxxxx X. Xxxxxx, M.D., for so long as he is so
designated by Practice's Board of Directors to manage
the administrative and medical functions of the
Practice.
OPERATING PLAN means the Practice Operating Plan referred to in Section
IV.B.
PRACTICE BANK ACCOUNT means the bank account referred to in Section V.C. of
which the Practice is the owner.
PRACTICE EXPENSES means the following expenses: Practice Providers'
compensation expenses, professional liability
insurance, continuing medical education, benefits, dues
and subscriptions, automobiles, facility leases,
repairs and maintenance, telephones and pagers,
utilities, billing services, courier services, legal
expenses, travel and entertainment, outside medical
consultants, license fees and taxes, all expenses
identified in this Agreement as Practice Expenses, all
expenses identified in this Agreement as incurred by
Ameripath on behalf of Practice and other expenses
approved from time to time by the Board, all as
permitted to be incurred in accordance with this
Agreement and any New Practice Amendment (as defined in
Section III.G.).
Attachment I-1
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PRACTICE PROVIDERS means individuals who are duly licensed to practice
medicine and who are employed by the Practice, or other
individuals who are under contract with the Practice to
provide physician services to patients of the Practice.
PRACTICE REVENUES means all revenues generated by or on behalf of the
Practice, after the date hereof, as a result of
professional medical services furnished to patients,
ancillary services provided to patients,
pharmaceuticals and other items and supplies sold to
patients and other fees or income generated by the
Practice or Practice Providers rendered in an inpatient
or outpatient setting and regardless of whether
rendered to health maintenance organization, preferred
provider organization, Medicare, Medicaid or other
patients, including, but not limited to, payments
received under capitation arrangements, less account
adjustments for uncollectible accounts, discounts,
Medicare, Medicaid, workers' compensation, professional
courtesy discounts and other write-offs.
Attachment I-2
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ATTACHMENT II
APPOINTMENT OF AMERIPATH AS ATTORNEY IN FACT
On behalf of and for the account of Practice, AmeriPath shall assist
Practice in Practice's establishment and maintenance of credit and billing and
collection policies and procedures, and shall coordinate and supervise Practice
personnel to ensure the timely billing and collection of all professional and
other fees for all billable pathology services provided by Practice or
Physicians. AmeriPath shall advise and consult with Practice regarding the fees
for pathology services provided by Practice; it being understood, however, that
Practice shall establish the fees to be charged for pathology services and that
AmeriPath shall have no authority whatsoever with respect to the establishment
of such fees. In connection with the billing and collection services to be
provided hereunder, and throughout the term of this Agreement, Practice hereby
grants to AmeriPath an exclusive special power of attorney and appoints
AmeriPath as Practice's exclusive true and lawful agent and attorney-in-fact,
and AmeriPath hereby accepts such special power of attorney and appointment, for
the following purposes:
1. To supervise and coordinate the billing of Practice's
patients, in the name of Practice and on behalf of Practice,
as applicable, for all billable pathology services provided
by Practice to patients.
2. To supervise and coordinate the billing in Practice's name
and on Practice's behalf, as applicable, all claims for
reimbursement or indemnification from Blue Shield/Blue Cross,
insurance companies, Medicare, Medicaid, and all other third
party payors or fiscal intermediaries for all covered
billable pathology services provided by Practice to patients.
3. To ensure the collection and receipt in AmeriPath's name and
for AmeriPath's account all accounts receivable of Practice
purchased by AmeriPath, and to deposit such collections in an
account selected by AmeriPath and maintained in AmeriPath's
name.
4. To ensure the collection and receipt in Practice's name and
on Practice's behalf, as applicable, of all accounts
receivable generated by such xxxxxxxx and claims for
reimbursement that have not been purchased by AmeriPath, to
administer such accounts including, but not limited to, (i)
extending the time of payment of any such accounts for cash,
credit or otherwise; (ii) discharging or releasing the
obligors of any such accounts; (iii) with the consent of the
Board, suing, assigning or selling at a discount such
accounts to collection agencies; or (iv) with the consent of
the Practice's Board of Directors ("Board"), taking other
measures to require the payment of any such accounts.
5. To deposit all amounts collected in Practice's name and on
behalf of Practice into Practice Bank Account which shall be
and at all times remain in Practice's name.
Attachment II-1
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Practice covenants to transfer and deliver to AmeriPath for
deposit into Practice Bank Account or itself to make such
deposit of all funds received by Practice from patients or
third party payors for pathology services. Upon receipt by
AmeriPath of any funds from patients or third party payors or
from Practice pursuant hereto for pathology services,
AmeriPath shall immediately deposit same into the Practice
Bank Account. AmeriPath shall disburse such deposited funds
to creditors and other persons on behalf of Practice,
maintaining records of such receipt and disbursement of funds
as directed by Practice.
6. To take possession of, endorse in the name of Practice, and
deposit into the Practice Bank Account any notes, checks,
money orders, insurance payments, and any other instruments
received in payment for pathology services.
7. To sign checks, drafts, bank notes or other instruments on
behalf of Practice, and to make withdrawals from the Practice
Bank Account for payments specified in this Agreement and as
requested from time to time by Practice.
Upon request of AmeriPath, Practice shall execute and deliver to the financial
institution wherein the Practice Bank Account is maintained, such additional
documents or instruments as may be necessary to evidence or effect the special
and limited power of attorney granted to AmeriPath by Practice pursuant to this
Agreement. The special and limited power of attorney granted herein shall be
coupled with an interest and shall be irrevocable except with AmeriPath's
written consent. The irrevocable power of attorney shall expire on the later of
when this Agreement has been terminated, when all accounts receivable purchased
by AmeriPath have been collected, or when all management fees due to AmeriPath
have been paid. If AmeriPath assigns this Agreement in accordance with its
terms, then Practice shall execute a power of attorney in favor of the assignee.
Attachment II-2
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ATTACHMENT III
MISCELLANEOUS CONTRACTUAL PROVISIONS
1. ADDITIONAL ACTS. Each party agrees to perform any further acts and to
execute and deliver any documents which may be
reasonably necessary to carry out the provisions of
this Agreement.
2. CONTRACT CONSTRUCTION, INTERPRETATION
AND ENFORCEMENT PROVISIONS.
(a) Assignment Neither party may assign this Agreement
without the other's written consent. Nevertheless:
AmeriPath may assign this Agreement to a parent,
subsidiary or affiliate. This Agreement shall be
binding on and shall inure to the benefit of the
parties to this Agreement, and their successors and
permitted assigns. Subject to the foregoing sentence,
no person or entity not a party to this Agreement shall
have any right under or by virtue of this Agreement,
except for AmeriPath Ohio, Inc. as an intended third
party beneficiary of this Agreement.
(b) Captions The captions or headings in this Agreement are made for
convenience and general reference only and shall not be
construed to describe, define or limit the scope or
intent of the provisions of this Agreement.
(c) Costs of
Enforcement In the event that either party files suit in any
court against the other party to enforce the
terms of or to obtain performance under this
Agreement, the prevailing party shall be entitled to
recover all reasonable costs, including reasonable
attorneys' fees, from the other party as part of any
judgment in the suit. The term "prevailing party"
means the party in whose favor final judgment after
appeal (if any) is rendered with respect to the claims
asserted in the complaint. "Reasonable attorneys'
fees" are those attorneys' fees actually incurred in
obtaining a judgment in favor of the prevailing party.
(d) Counterparts The parties may execute this Agreement in several
counterparts, each of which shall be deemed to be an
original, and counterparts shall constitute and be one
and the same instrument.
(e) Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of
Ohio, applied without giving effect to any conflicts of
law principles.
Attachment III-1
16
(f) Modifications. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and
supersedes any prior or contemporaneous negotiations,
understandings or agreements between the parties,
written or oral, with respect to the transactions
contemplated by this Agreement. This Agreement may not
be changed or terminated orally but may only be changed
by an agreement in writing signed by AmeriPath and the
Practice.
(g) Notices The parties to this Agreement shall give notice under
this Agreement by U.S. mail, postage prepaid, by hand
delivery or by overnight express, charges prepaid.
Notices shall be addressed as follows:
IF TO THE PRACTICE:
AmeriPath Cincinnati, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx, M.D.
IF TO AMERIPATH:
AmeriPath Ohio, Inc.
0000 X.X. 00xx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
or other addresses as furnished in writing by a party
to the other party. All notices shall be considered
received when received by the addressee, if by mail,
when hand delivered or one business day after
delivery to the overnight courier.
(h) Severability. A determination by a court of competent jurisdiction
that a provision or part of any provision of this
Agreement is invalid or unenforceable shall not affect
the remaining parts or provisions of this Agreement
which shall continue in full force and effect.
3. LEGAL EVENTS TRIGGERING
CONTRACT MODIFICATION OR TERMINATION
(a) Changes in
Reimbursement. In the event that Medicare, Medicaid, Blue Shield or
any other third party payor, or any other Federal,
state or local laws, rules, regulations or
interpretations, at any time during the Term prohibit,
restrict or in any way materially and adversely change
the method or amount of reimbursement or compensation
for either party provided
Attachment III-2
17
for in this Agreement, then the parties shall negotiate
in good faith to amend this Agreement to provide for
payment of compensation in a manner consistent with
such changes, taking into account any materially
adverse change in reimbursement or payment for
physician services. If the parties cannot reach
agreement on an amendment prior to the effective date
of the change, the parties agree to jointly select a
mediator and share equally in the cost of the
mediation. If mediation does not resolve such dispute,
then the matter shall be settled exclusively by binding
arbitration, which shall be conducted in Broward
County, Florida, in accordance with the National Health
Lawyer's Association, Alternative Dispute Resolution
Service, Rules of Procedure for Arbitration. The
expenses of such arbitration shall be borne equally by
the parties, provided that each party shall pay for the
cost and its own experts, evidence, and attorney's fees
(unless otherwise directed by the arbitrator).
(b) Enactment or Interpretation of Relevant
Statutes and Regulations.
In the event any state or federal laws or regulations,
now existing or enacted or promulgated after the date
hereof, are interpreted by judicial decision, a
regulatory agency, or legal counsel acceptable to both
AmeriPath and the Practice in such a manner as to
indicate that this Agreement or any provision hereof
may be in violation of such laws or regulations, the
Practice and AmeriPath shall amend this Agreement as
necessary to preserve the underlying economic and
financial arrangements between the Practice and
AmeriPath and without substantial economic detriment to
any party. If such an amendment is not possible, either
party shall have the right to terminate this Agreement.
4. INDEPENDENT CONTRACTOR STATUS.
The Practice and AmeriPath are to perform and exercise
their rights and obligations under this Agreement as
independent contractors. AmeriPath's sole function
under this Agreement is to provide services, as
requested, in a competent and satisfactory manner,
exercising reasonable care in the performance of all
such duties. AmeriPath shall not become liable for any
of the obligations, liabilities, debts or losses of the
Practice unless otherwise specifically provided by this
Agreement. AmeriPath shall have no liability whatsoever
for damages suffered on account of the willful
misconduct or negligence of any employee, agent or
independent contractor (other than AmeriPath) of the
Practice. Each party shall be solely responsible for
compliance
Attachment III-3
18
with all state and federal laws pertaining to
employment taxes, income withholding, unemployment
compensation contributions and other employment related
statutes regarding their respective employees, agents
and servants. In the event that any court or regulatory
authority (or AmeriPath, in good faith) determines that
the relationship established by this Agreements creates
an employment relationship, the parties shall negotiate
in good faith to reach an arrangement involving
AmeriPath and the then current Practice Providers which
substantially preserves for the parties the benefits of
this Agreement. If such an arrangement cannot be
reached, AmeriPath may terminate this Agreement upon
thirty (30) days prior written notice to the Practice.
5. PROHIBITION AGAINST DISCRIMINATION.
The Practice and AmeriPath agree that, in fulfilling
their respective obligations and duties under this
Agreement, they shall not discriminate against any
individual on the basis of race, religion, age, sex,
disability or national origin.
6. USE OF NAMES.
Subject to the approval of the Managing Physician,
which approval shall not be unreasonably withheld,
AmeriPath may include the name of the Practice, the
Practice Providers and the Practice Providers in any
brochures, promotional materials or the like relating
to AmeriPath.
Attachment III-4
