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EXHIBIT 10.22
AGREEMENT FOR PROFESSIONAL PATHOLOGY SERVICES
BETWEEN
SMITHKLINE XXXXXXX CLINICAL LABORATORIES, INC.
AND
XXXXXXX AND ASSOCIATES PATHOLOGY, P.A.
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AGREEMENT FOR PROFESSIONAL PATHOLOGY SERVICES
THIS AGREEMENT is made this 1st day of April, 1992, by and between
SmithKline Xxxxxxx Clinical Laboratories, Inc., a Delaware corporation, with a
principal office located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000
("SBCL") and Xxxxxxx and Associates Pathology, P.A., a professional corporation
organized under the laws of the state of Florida with a principal office
located at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000
("Association").
WITNESSETH
WHEREAS, SBCL is a corporation organized under the laws of the state
of Delaware which owns and operates or manages clinical laboratories or
provides laboratory services, management support and reference testing to
laboratories which perform various tests for the purpose of providing
information for the diagnosis, prevention or treatment of disease or the
assessment of medical conditions; and
WHEREAS, Association is a professional corporation organized under the
laws of the state of Florida, which employs physicians who are duly licensed to
practice medicine in the state of Florida and specialists that are Board
Certified in the fields of anatomic pathology; and
WHEREAS, SBCL owns laboratory facilities located in the Florida
counties of Brevard, Orange, Osceola and Seminole (the "Laboratories") for
which professional pathology services and other medical services are needed
from time to time to ensure its proper operation; and
WHEREAS, Association owns a licensed laboratory facility located at
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("Orlando Laboratory")
in which anatomic pathology services are provided;
WHEREAS, SBCL desires to contract with Association for the provision
by Association of anatomic pathology services to SBCL at the Orlando Laboratory
and to compensate Association therefor; and
WHEREAS, Association desires to provide anatomic pathology services to
SBCL; and
WHEREAS, Association and SBCL, desire to provide a statement of their
respective rights, obligations and duties in connection with the performance of
services hereunder.
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties agree as follows:
A. RESPONSIBILITIES OF ASSOCIATION
1. Services. Association agrees to provide professional
anatomic pathology services to SBCL in the Florida counties of Brevard, Orange,
Osceola, Seminole and Volusia (Volusia County is subject hereto only to the
extent Volusia County or any part thereof is not subject to a prior pathology
services agreement of SBCL) as shall from time to time be necessary to fulfill
the needs of SBCL as determined by SBCL, including providing such services to
SBCL's clients at the Orlando Laboratory. In the event SBCL requires
professional anatomic pathology services in the Florida counties of Indian
River, Okeechobee, St. Lucie and Volusia (to the extent not covered above) and
SBCL is not restricted to whom it may refer such services, Association agrees
to provide professional anatomic pathology services to SBCL in such counties as
shall from time to time be necessary to fulfill the needs of SBCL as determined
by SBCL. Such medical services will include the professional aspects of tissue
pathology and cytology (with all gynecologic cytology services being performed
on-site at the Orlando Laboratory) and professional consultations. Association
shall at all times have members or engage physicians as more fully described
below in numbers sufficient for such purposes, including particularly those
services performed at the Orlando Laboratory. In addition, Association commits
to at least one pathologist on site at the Orlando Laboratory, from 8:00 a.m.
to 5:00 p.m., Monday through Friday, for consultation regarding cytology and
biopsy services, including, but not limited to, interpretation of results and
explanation of procedures with SBCL or any of SBCL's clients.
2. Licensure and Certification. All members and professional
employees of Association shall be licensed to practice medicine in the state of
Florida and shall be Board Certified pathologists, and shall maintain any other
licensing required by applicable laws or regulations to provide services under
this Agreement. At all times during the term of this Agreement and any renewal
thereof, all cytotechnologists employed by Association, if any, shall be
licensed by the state of Florida, if such licensing exists, and shall meet the
standards set forth in 42 CFR 493.1433-1437 and any amendments or revisions
thereto. The medical services to be provided hereunder shall be rendered in
accordance with the professional standards adopted by the College of American
Pathologists.
3. Quality Assurance and Document/Slide Retention. All services
provided by Association hereunder will be conducted in accordance with the
applicable state and federal laws and regulations pertaining to the services
provided under this Agreement. All services provided by Association hereunder
will be conducted in such a way as to fulfill all SBCL quality assurance
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requirements, and Association agrees to participate in the SBCL quality
assurance audit programs. With respect to all SBCL requirements, said
requirements shall not result in any substantial increase in cost to the
Association. SBCL will advise the Association in advance as to any change in
any said SBCL requirements and SBCL, will work with the Association in regard
to providing for compliance. Further, Association agrees to abide by SBCL's
document and slide retention policies/protocols, and with the requirements of
all applicable laws and regulations pertaining to document/slide retention.
Upon receipt of a request for documents and/or slides, Association shall
immediately notify SBCL of the request and shall not release such documents and
slides or any information pertaining thereto until permission is granted by
SBCL.
4. Nondisclosure of Proprietary Information.
a. Proprietary Information. Association acknowledges
that, this Agreement creates a relationship of confidence and trust between the
parties with respect to any information disclosed by SBCL to Association during
the course of this Agreement including, but not limited to, secret processes,
formulas, trade secrets, techniques, inventions (whether or not patentable) and
know-how (hereinafter collectively called "proprietary information").
Association agrees to hold such proprietary information communicated to it by
SBCL and documents containing it such an customer lists, specifications, sales
and service manuals, samples and correspondence, in trust and confidence at all
times during the term of this Agreement and after its termination and will
refrain from using or disclosing any such proprietary information except when
acting pursuant to this Agreement.
b. Nondisclosure. All proprietary information received
from SBCL either prior to this Agreement or during its existence shall remain
the property of SBCL, shall be treated as proprietary by Association, shall be
treated with the same degree of care with which Association treats its own
proprietary information, and shall not be divulged or disclosed to others
except with the prior written consent of SBCL. Association agrees that it will
not, without prior written consent of SBCL, communicate proprietary information
to any person or organization other than to those of Association's partners,
associates, employees, agents or representatives to whom it shall be necessary
to disclose it in order to carry out the purposes of this Agreement.
Association agrees to use its best efforts to prevent its partners, associates,
employees, agents or representatives from disclosing any proprietary
information to any other person or organization. Association will promptly
return all such proprietary information provided in written form upon the
written demand therefor by SBCL.
c. Exceptions. The provisions of this paragraph 4 shall
not apply to the extent (i) the information in the public domain or is publicly
known, (ii) the Association obtains said
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information from a third party who is not under any duty of confidentiality,
(iii) any disclosure is made with the consent of SBCL or is otherwise required
in order for the Association to fulfill its duties and obligations under this
Agreement, or (iv) the Association is compelled to do so by legal process or
the disclosure is otherwise required by applicable law.
B. RESPONSIBILITIES OF SBCL
1. Fees. a. The schedule of fees not forth in Exhibit A
attached hereto shall represent Association's full compensation for all
services provided by Association under this Agreement. Such fee schedule may
be renegotiated annually to take effect January 1 of each year. Any change in
the fee schedule must be approved in writing by both parties. Such fee
schedule must at all times, comply with all applicable laws, rules, regulations
and contractual arrangements with third-party payors.
b. SBCL and Association agree to renegotiate the fee
schedule in good faith. If SBCL and Association can not agree upon a fee
schedule by December 1 of each year then either party may cancel this Agreement
within thirty (30) days of written notice to the other party of such
cancellation.
c. if this Agreement in not renewed or SBCL
terminates this Agreement to obtain another provider for cytology and histology
testing, other than for reasons of non-performance or quality assurance, SBCL
shall provide Association a right of first. refusal to provide those services
but only if SBCL proposes to pay to the other provider a fee schedule greater
than that which SBCL last proposed to Association prior to the expiration or
termination of this Agreement.
d. Association shall invoice SBCL on a monthly basis.
Within twenty (20) days after SBCL's receipt of each invoice, SBCL will pay
Association at Association's office located at 0000 Xxxxxxxxxx Xxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000, an amount equal to the total professional and
technical fees for services performed during the preceding month in accordance
with the fee schedule set forth in Exhibit A.
2. Services. SBCL shall provide the following services or perform
the following obligations on an ongoing basis during the term of this Agreement
and any renewals thereof:
a. all supplies, including but not limited to, glass
slides, slide holders, collection supplies, requisition slips, reporting forms
and other supplies as needed by SBCL clients, at no cost to Association;
b. sell supplies, equipment and requisitions to
Association for its clients at cost;
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c. Distribution services which include courier and report
delivery, at no cost to Association (such courier services shall apply to all
clients of the Association regardless of whether said clients are also SBCL
clients and shall be of such frequency and timing as are customarily required
by the Association to perform its duties and obligations under this Agreement);
d. order entry and accessioning of cytology work to
interface with Association's computer system and providing Association with a
copy of requisition, at no cost to Association;
e. microfilm copy of all cytology and histology
requisitions, at no cost to Association;
f. installation of the necessary telephone lines into
Association to be used solely for the purpose of carrying out the terms of this
Agreement (SBCL shall permit Association to utilize its Florida WATS line for
the purpose of carrying out this Agreement and for Association's other
clients), at no cost to Association;
g. data processing capabilities at no cost to
Association except to the extent SBCL incurs any additional, third party costs
as a direct result of said sharing by Association (and which costs would not
previously have been incurred by SBCL but for this Agreement). SBCL shall
notify Association of such costs and provide evidence to Association
substantiating such costs. Association shall pay such costs within twenty (20)
days of notice. Depreciation and other similar non-cash expenses and SBCL
salaries shall not be considered a cost or expense under this provision; and
h. maintain appropriate licenses and certifications
necessary for SBCL to operate the Laboratories.
3. Nonsolicitation. During the term of this Agreement and any
renewals thereof and continuing for a period of one (1) year following
expiration, nonrenewal or termination of this Agreement, SBCL agrees not to
solicit directly or indirectly the services, including employment or consulting
agreements, of any person employed by Association without the consent of
Association.
4. Primary Vendor. In the counties which are subject to this
Agreement (which would include such additional counties under paragraph A.1. as
may from time to time be subject to this Agreement), the Association shall be
the primary vendor of pathology services to SBCL and SBCL clients. As such,
subject to the further provisions of this paragraph 4, SBCL shall refer to the
Association all specimens for anatomic pathology services in said areas for the
Association to provide said services hereunder. The provisions of this
paragraph 4 are subject to the following terms:
a. if a client of SBCL wishes to utilize cytology and
histology services from another pathology provider, then SBCL shall
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not be obligated to refer or said specimens to the Association hereunder
provided, and
b. In regard to cytology/histology testing, the provisions
of paragraph D.2.e. shall apply as to any substantial increase in volume.
C. PROFESSIONAL LIABILITY INSURANCE AND NOTICE
1. Professional Liability Insurance Coverage. Each party shall
obtain and maintain at its own expense respectively, professional liability
insurance, or in the case of SBCL only self insurance, in the minimum amount.
of One Million Dollars ($1,000,000) per claim/occurrence and Three Million
Dollars ($3,000,000) in the aggregate to cover said party for any and all
liability it may have with respect to the provision of services pursuant to
this Agreement or with respect to its responsibilities hereunder.
2. Notice. Each party hereto shall promptly notify the other in
writing of any claim asserted against the other party, or any of either party's
employees, agents, servants or representatives, relating to the services
provided under this Agreement or the responsibilities hereunder, and further
shall promptly deliver to the other party a true copy of any such claim
including, but not limited to, a true copy of any summons or other process,
pleading or notice issued in any lawsuit or other proceeding to assert or
enforce any such claim.
D. TERM AND TERMINATION
1. Initial Term and Renewal. This Agreement shall commence on
the 1st day of April, 1992 and shall remain in effect for an initial term of
one (1) year. Thereafter, this Agreement shall automatically renew for
successive terms of three (3) years subject to all terms and conditions herein
contained (except that the fees provided for in paragraph B.1, above, are
subject to review and adjustment on an annual basis), unless and until either
the Association or SBCL shall give the other party written notice not less than
ninety (90) days prior to expiration of the then current term of its intention
to terminate this Agreement as of the expiration of the initial yearly term or
any subsequent term.
2. Termination. This Agreement will immediately and
automatically terminate on and as of the date any of the following occur:
a. Default. Failure of either party to comply with any
of the material terms of this Agreement after thirty (30) days' written notice
of such failure or violation by the other party giving notice of such default
or noncompliance and written notice of its intention to so terminate, unless
within such thirty (30) day period the defaulting party has cured such default;
or
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b. Discontinuance of Operations. Discontinuance of its
operations by either party by law or otherwise for a period of fifteen (15) or
more days; or
c. Bankruptcy. The filing of a petition in bankruptcy
by either party or the making by either party of an assignment for the
benefit of creditors; or if any involuntary petition in bankruptcy or petition
for an arrangement pursuant to the Bankruptcy Act is filed against either
party and is not dismissed within thirty (30) days; or if a receiver is
appointed for the business of either party, or any part thereof.
d. Sale of Association. The sale of the Association or
any part of the Association to a third party.
e. SBCL may terminate this Agreement immediately upon
written notice to Association under the following circumstances;
(1) any shareholder, physician employee or
physician contractor of Association is
charged with gross misconduct of either a
professional or personal nature, or engages
in other conduct which is grounds for
immediate discharge without pay under SBCL's
personnel policies; or
(2) any shareholder, physician employee or
physician contractor of Association is
convicted of a crime other than a minor
traffic violation; or
(3) any shareholder, physician employee or
physician contractor of Association has his
or her right to practice medicine in the
State either suspended, lapsed, revoked, or
placed under probation, or is excluded from
the Medicare or Medicaid programs, or fails
to maintain his or her standing as a Board-
Certified clinical and anatomic pathologist
or licensed cytotechnologist; or
(4) any shareholder, physician employee or
physician contractor has a guardian or
conservator of the person or estate appointed
by a court of competent jurisdiction; or
(5) any shareholder, physician employee or
physician contractor of Association becomes
permanently disabled to the extent he or she
is unable to perform the duties required by
this Agreement.
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This subparagraph e. shall not apply if, within thirty (30) days after the
receipt by the Association of said notice, the Association in regard to said
particular shareholder, physician employee or physician contractor either
terminates said person or undertakes said actions as are necessary so that said
person will no longer be involved in the rendering of services to SBCL under
this Agreement.
f. Association may terminate this Agreement in the event SBCL
does not provide Association with cytology and histology tests in an amount
equal to at least seventy-five (75) percent of the number of tests provided in
1992, during each year of this Agreement and any renewals thereof. In the
event SBCL proposes to furnish to the Association additional cytology and
histology tests resulting in a substantial increase in number over that set
forth herein or from that previously agreed to between SBCL and the
Association, the parties will agree to cooperate and work together so that the
Association shall have time within which to increase its capacity to handle
said increase and once the Association has increased its capacity, said
increase as agreed to shall constitute the revised number of tests under this
subparagraph f.
E. MISCELLANEOUS
1. Nonbreach. Each party represents and warrants that execution
of and performance under this Agreement shall not constitute or cause a breach
of any other agreement between that party and any third party.
2. Entire Agreement: Amendments. This Agreement contains the
entire understanding between the parties hereto and supersedes any and all
prior agreements, understandings and arrangements between the parties relating
to the subject matter hereof. No amendment, change, modification or alteration
of the terms and conditions hereof shall be binding unless evidenced by a
writing signed by all the parties hereto.
3. Waiver. The failure of any party to this Agreement to exercise
or enforce any right conferred upon it hereunder shall not be deemed to be a
waiver of any such right nor operate to bar the exercise or performance thereof
at any time or times thereafter, nor shall a waiver of any right hereunder at
any given time, including rights to any payments, be deemed a waiver thereof
for any other time.
4. Force Majeure. No party to this Agreement shall be liable for
failure to perform any duty or obligation that said party may have under the
Agreement where such failure has been occasioned by any act of God, fire,
strike, inevitable accident, war or any cause outside the reasonable control of
the party who had the duty to perform.
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5. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, the
parties shall, if possible, agree on a legal, valid and enforceable substitute
provision which is as similar in effect to the deleted provision as possible.
The remaining portion of the Agreement not declared illegal, invalid or
unenforceable shall, in any event, remain valid and effective for the term
remaining unless the provision found illegal, invalid or unenforceable goes to
the essence of this Agreement.
6. Assignment. Without prior written consent of the other party
hereto, neither party may assign any of its rights or delegate any of its
obligations hereunder. Notwithstanding anything to the contrary herein
contained, SBCL may assign its rights hereunder to SmithKline Xxxxxxx
Corporation or any of its affiliated companies without the consent of
Association. Subject to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
7. Legislative/Regulatory Modification. In the event Medicare,
Medicaid or any third-party payor, or any other federal, state or local law,
rule, regulation or interpretation thereof at any time during the term of this
Agreement prohibits, restricts or in any way substantially changes the method
or amount of reimbursement or payment for services under this Agreement, then
this Agreement shall, in good faith, be amended by the parties to provide for
payment of compensation in a manner consistent with any such prohibition,
restriction or limitation. If as a result of any such prohibition, restriction
or change Association incurs additional costs, SBCL shall compensate
Association for such additional costs. However, if as a result of any such
prohibition, restriction or change Association's costs are reduced, Association
shall pay SBCL an amount equal to such reduction. With respect to any such
prohibitions, restrictions or changes that require amendment of this Agreement,
if this Agreement is not so amended in writing prior to the effective date of
said change, this Agreement shall terminate, unless otherwise agreed upon.
8. Notice. All notices hereunder shall be in writing, personally
delivered or sent by certified mail, return receipt requested, addressed to
the other party as follows:
If to Association: Xxxxxxx & Associates Pathology, P.A.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, CEO
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If to SBCL: SmithKline Xxxxxxx Clinical
Laboratories, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Xx.,
Vice President and
General Manager
With a copy to: SmithKline Xxxxxxx
Law Department (FP2225)
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
and
Akerman, Senterfitt & Xxxxxx
17th Floor, Firstate Tower
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxxx, Esq.
Either party may change its address to which notices shall be sent by a notice
similarly sent.
9. Execution in Counterpart. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
10. Section Headings. Section headings contained in this Agreement
are for reference purposes only and shall not affect, in any way, the meaning
and interpretation of this Agreement.
11. Parties as Independent Contractors. The parties to this
Agreement understand and agree that no agency, employment, partnership or joint
venture is created by this Agreement, and the businesses operated by SBCL and
Association are separate. The parties further agree that neither party is the
general agent of the other and no representation shall be made by either party
that would create apparent agency, employment, partnership or joint venture.
Neither party will have the authority to act for the other in any manner, nor
to create obligations or debts that would be binding upon the other.
12. Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall in all respects be governed by the substantive
law of the state of Florida, including all matters of construction, validity
and performance, but without
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giving effect to Florida choice-of-law or conflict-of-law principles.
13. No Third Party Beneficiaries. This Agreement is solely
between SBCL and the Association, and no other parties shall have any rights or
privileges hereunder either as third party beneficiaries or otherwise.
14. Cross Default/Cross-Termination. This Agreement has been
entered into simultaneous with the parties also entering into a certain
Agreement for Medical Directorship (the "Medical Directorship Agreement"). This
Agreement and the Medical Directorship Agreement shall be subject to cross
default and cross termination provisions such that a default under either
agreement shall be and constitute a default under the other agreement and the
termination or expiration of one agreement shall also constitute the
termination or expiration of the other agreement.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement in duplicate effective as of the date first above
written, each party to retain a duplicate original.
SMITHKLINE XXXXXXX CLINICAL
LABORATORIES, INC. ("SBCL")
By: /s/Xxxx X. Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
---------------------------------
Title: Vice President/General Manager
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XXXXXXX & ASSOCIATES PATHOLOGY
P.A. ("ASSOCIATION")
By: /s/Xxxx X. Xxxxxx, M.D.
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Name: Xxxx X. Xxxxxx, M.D.
---------------------------------
Title: President
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