EXHIBIT 10.29
SERVICES AGREEMENT
THIS SERVICES AGREEMENT entered into this 22nd day of September, 1999 by
and between Autologous Wound Therapy, Inc. ("AWT"), Xxxxxxx Medical, LLC ("BMI")
and Xxxxx Xxxxxxx, M.D. ("Xxxxxxx").
WITNESSETH:
WHEREAS, AWT has developed patent pending technology, including products
and services, to be used in wound treatment and continues to further develop the
same (the "Technology"), and AWT desires to engage a third party to evaluate the
effectiveness of the Technology; and
WHEREAS, AWT desires to engage BMI and Xxxxxxx to perform certain case
studies and tests utilizing the Technology on patients meeting certain test
criteria designated by AWT and BMI and Xxxxxxx desire to provide such therapy on
behalf of AWT in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. SCOPE OF AGREEMENT. As part of the Technology, AWT has developed
AuTolo-TM--Gel for use in wound care treatments and certain equipment, prepacked
supplies and know-how in the application of the Technology to wound care. AWT
desires to provide treatment for approximately 75 wound cases (each wound being
a "Case" regardless of the actual number of patients) for patients that meet
AWT's criteria in order to further evaluate the effectiveness of the Technology.
BMI has agreed to provide acceptable patients and administer the AuTolo-TM--Gel
wound therapy under the terms of this Agreement to assist AWT in the further
evaluation and potential exploitation of the Technology.
2. TERM. The obligations of the parties under this Agreement shall
commence as of the date of execution and shall continue until the completion of
75 Cases using the Technology. The foregoing notwithstanding, no initial
treatment for a new Case shall commence after the first (1st) anniversary date
of this Agreement and all such Cases shall be completed on or before December
31, 2000. For purposes of this Agreement, the terms "completion" or "completed"
shall mean the application of at least one (1) AuTolo-TM--Gel wound treatment to
a Case.
3. OBLIGATIONS OF AWT. AWT shall provide to BMI, at AWT's sole cost and
expense, the following:
(a) TECHNOLOGY; AUTOLO-TM--GEL PRODUCTS. All AuTolo-TM--Gel
compounds, disposables, pharmaceuticals and other supplies necessary for the
production of AuTolo-TM--Gel paste necessary for the treatment of 75 Cases and
training of BMI's personnel shall be provided at no cost to BMI. Delivery shall
be as needed based upon the timing of the treatments. The parties acknowledge
that the objective of AWT is to qualify the AuTolo-TM--Gel wound therapy for
separate reimbursement and billing and that any revenues for the use of the
Technology shall
belong to AWT, subject to the provisions of Paragraph 5 below as it relates to
the compensation of BMI and Xxxxxxx under this Agreement.
(b) AUTOLO-TM--CURE UNIT. AWT shall provide one full AuTolo-TM--Cure
unit, which shall include the machine, training and certification of BMI's
personnel, technical support and licensing of all software and other proprietary
information used in connection with the Technology. During the term of this
Agreement, AWT shall provide the Unit to BMI at no cost on a user demonstration
basis. Additional AuTolo-TM--Cure units may be acquired by BMI from AWT or its
affiliates at current market rates for the leasing or sale of said units.
(c) TRAINING. AWT will provide training and instruction in wound
care therapy using the AuTolo-TM--Gel treatment. Initial cases shall be
performed jointly between BMI and AWT personnel; provided, however, that all
decisions as to the medical treatment of the patient shall be Xxxxxxx'x.
(d) PROTECTED TERRITORY. AWT will protect BMI's right to the State
of Arkansas as BMI's protected territory for purposes of providing treatment
using the AuTolo-TM--Gel wound therapy. The exclusivity granted to BMI under
this Agreement shall be subject to BMI's performance of BMI's obligations set
forth under Paragraph 4 below, including, but not limited to, the opening of an
AuTolo-TM--Cure Center on or before December 31, 2000, if required by AWT.
(e) RESPECT MEDICAL JUDGMENT. AWT shall at all times respect
Xxxxxxx'x independent medical judgment and control over Xxxxxxx'x professional
services. At no time shall AWT knowingly issue to Xxxxxxx any direction or
impose any requirement that would require Xxxxxxx to violate professional ethics
or mandates of Xxxxxxx'x profession.
(f) STOCK WARRANTS. At the time of the execution of this Agreement,
AWT shall deliver to Xxxxxxx a warrant representing the right to acquire up to
the five percent (5%) of the issued and outstanding common stock of AWT
(determined on a fully diluted basis after giving effect to the private
placement currently in place and the shares reserved for management and key
personnel; provided, however, that the shares represented by the warrants shall
be included as part of the shares reserved for management and stock option
plans). The warrants may be exercised at anytime after March 31, 2000, but on or
before the fifth (5th) anniversary of the date issued and the exercise price
shall be $0.01 per share. The warrant shall be in the form of that attached
hereto as Exhibit A and made a part hereof. In the event that BMI has not
completed seventy-five (75) Cases prior to December 31, 2000, then the
unexercised warrants shall be forfeited back to AWT and shall become null, void
and unexerciseable. To the extent that all or a portion of the warrant has been
exercised prior to the completion of seventy-five (75) Cases, such stock shall
be subject to forfeiture if, at the time of the termination of this Agreement,
BMI shall not have completed the required seventy-five (75) Cases. The foregoing
notwithstanding, in the event the Agreement is terminated by AWT without cause
pursuant to Paragraph 11(c) below prior to December 31, 2000 or in connection
with any sale, licensing, merger or reorganization transaction in which this
Agreement will not survive, the warrants granted to Xxxxxxx shall immediately be
fully vested and not subject to forfeiture, regardless of the number of Cases
then completed.
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(g) STOCK OPTION PLAN. Upon the exercise of the warrant described in
subparagraph (f) above, BMI shall be eligible to participate in a stock option
plan that would permit BMI to acquire one (1) additional share of common stock
for each share of common stock then owned by BMI or Xxxxxxx. The exercise price
of the options shall be $1.00 per share, the options may be exercised anytime
after the later of (i) the date or awarding or (ii) March 31, 2000, and the
options shall be immediately vested upon granting by AWT. The options must be
exercised no later than the fifth (5th) anniversary of the date granted.
4. OBLIGATIONS OF BMI AND XXXXXXX. During the term of this Agreement, BMI
and Xxxxxxx shall provide, at BMI's and Xxxxxxx'x sole cost and expense, the
following:
(a) FACILITIES AND SUPPORT. BMI shall provide appropriate
examination and treatment facilities, personnel, utilities and all other
overhead and operating costs associated with the creation of an AuTolo-TM--Cure
Center either within Xxxxxxx'x existing facility or elsewhere, including the
personnel necessary to provide the wound therapy in accordance with the
standards set forth by AWT. To that end, BMI will develop one (1) or more
AuTolo-TM--Cure Centers on or before December 31, 2000. The Center can either be
owned entirely by BMI or can be a joint venture with another party, subject to
AWT's approval, which may be withheld in AWT's sole and absolute discretion and
which approval shall, among other things, be subject to such party executing
such confidentiality, nondisclosure and noncompetition agreements as AWT may
require. The foregoing notwithstanding, in the event AWT is unable to obtain
separate reimbursement and compensation from third party insurers, Medicare,
Medicaid and/or any other third party payor for the AuTolo-TM--Gel wound
treatment applied in a free standing wound treatment facility, then the
obligations of BMI to open an AuTolo-TM--Care Center shall be modified or
eliminated based upon AWT's revised marketing strategy.
(b) IDENTIFICATION OF CASES. BMI shall identify and present
approximately 75 acceptable patients that meet AWT's criteria for wound
treatment using the AuTolo-TM--Gel wound therapy. The acceptable patients should
be presented for approval by AWT as soon as commercially practicable after the
execution of this Agreement and prior to the expiration date set forth in
Paragraph 2 above.
(c) ABIDE BY AWT'S POLICIES, ETC. BMI shall be subject to and shall
abide by all policies, and guidelines established by AWT that are applicable to
application and use of the AuTolo-Gel Treatment. Nothing in any of AWT's
policies and guidelines roles shall be construed to create any rights in favor
of BMI or Xxxxxxx that are contrary to the provisions of this Agreement or
interfere with the exercise of Xxxxxxx'x independent medical judgment.
(d) MAINTAIN LICENSURE & CERTIFICATION. Throughout the term of this
Agreement, Xxxxxxx shall maintain (i) a currently valid and unlimited license to
practice medicine in the State of Arkansas; (ii) a currently valid and unlimited
Drug Enforcement Administration ("DEA") Registration Number; and (iii) full
participation in the Medicare and Medicaid programs. Xxxxxxx shall provide AWT
with a copy of Xxxxxxx'x State license and DEA Registration upon request.
Xxxxxxx shall deliver immediately to AWT, upon receipt, a copy of any final
decision or pending or threatened administrative or judicial action adverse to
Xxxxxxx'x (i) license to practice medicine in the State of Arkansas or any other
state, (ii) DEA Registration, or (iii) Medicare/Medicaid participation status or
provider number(s). Xxxxxxx agrees that AWT
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may access any data bank or other source of information in order to verify
Xxxxxxx'x compliance with these requirements.
(e) MAINTAIN THIRD-PARTY PAYOR STATUS. Xxxxxxx shall make diligent
efforts to procure, maintain and be subject to contracting provider status in
such health maintenance organizations, preferred provider organizations and
other third party payors as deemed necessary by AWT.
(f) MAINTAIN MEDICAL STAFF MEMBERSHIP. Xxxxxxx shall maintain
appropriate medical staff membership and clinical privileges, as determined by
AWT in AWT's sole discretion, at St. Joseph's Regional Medical Center ("SJRMC")
located in Hot Springs, Arkansas, and may maintain medical staff membership and
clinical privileges at such additional hospital(s) as Xxxxxxx so determines, in
Xxxxxxx'x sole discretion. AWT may at its option require that Xxxxxxx be
credentialed by a credentialing firm selected by AWT in its sole discretion.
(g) EXERCISE INDEPENDENT MEDICAL JUDGMENT. Xxxxxxx shall at all
times exercise independent medical judgment and control over all Xxxxxxx'x
professional activities and services. Nothing in this Agreement shall be
construed to give AWT any authority over Xxxxxxx'x medical judgment or to direct
the means or methods by which Xxxxxxx practices medicine.
(h) MAINTAIN PROFESSIONAL SKILLS. Xxxxxxx shall at all times
maintain professional competence and skill commensurate with prevailing
standards of medical practice in Xxxxxxx'x specialty, and shall attend and
participate in continuing education courses designed to maintain and enhance
such skills, at Xxxxxxx'x expense.
(i) MEDICAL RECORDS. BMI and Xxxxxxx shall maintain standard medical
records for each patient treated by Xxxxxxx pursuant to this Agreement,
containing such information and preserved for such time period as may be
required by AWT and by law. Xxxxxxx shall have custody of and shall be the sole
owner of all medical records concerning all patients treated pursuant to this
Agreement. Xxxxxxx shall be responsible for maintaining detailed patient
histories of the accepted patients and shall maintain diligent records regarding
the application of the AuTolo-TM--Gel wound therapy, the progress of the
patients utilizing the wound therapy and the outcome of the cases. Such records
shall be kept and maintained in accordance with sound medical practices and
reports shall be prepared for delivery to AWT in the format requested by AWT.
Xxxxxxx acknowledges that AWT may request that Xxxxxxx provide photographs or
other imaging of wounds throughout the treatment to document a patient' s
progress using the wound therapy. To the extent necessary or requested by AWT,
Xxxxxxx shall obtain the patient's waiver and release of medical records to AWT
in connection with the AuTolo-TM-)-Gel wound treatment. Upon termination of this
Agreement, subject to the requirements of applicable law, AWT shall be entitled
to obtain copies of the records of patients who have released in writing that
Xxxxxxx may release said records to AWT and any records that are necessary or
desirable to enable AWT to defend any products liability or malpractice action
or other claim against AWT as a result of use of the Technology pursuant to the
terms of this Agreement.
(j) DEVELOPMENT OF REIMBURSEMENT METHODOLOGIES, BILLING. BMI and
Xxxxxxx will assist AWT in developing billing, reimbursement and physician-based
add-on
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procedures and methodologies and cooperate with AWT in its efforts to obtain
separate reimbursement and compensation from third party insurers, Medicare,
Medicaid and any other third party payor for the wound therapy provided using
the Technology.
(k) DEVELOPMENT OF OTHER CUSTOMERS. Xxxxxxx will assist AWT in
identifying potential end users for AuTolo-TM--Gel full contracts and cooperate
and assist AWT in direct discussions with other potential customers, physician
users, corporate clients, pharmaceutical companies and/or any other company that
may wish to exploit the use of the AuTolo-TM--Gel wound therapy. For purposes of
determining the compensation due and payable under Paragraph 5(c) below for
customers outside of the Protected Area, AWT and Xxxxxxx shall agree in advance
of Xxxxxxx cooperating and assisting AWT under this provision whether or not any
revenue or sales derived from such customer or its affiliates (a "Protected
Customer") will give rise to Xxxxxxx being entitled to compensation hereunder.
Such agreement shall be in writing in the form of that attached as EXHIBIT B and
signed by both parties.
The initial Exhibit B shall be executed at the time of the execution of
this Agreement and shall identify those Protected Customers as of the date of
this Agreement. On a going forward basis, it is the intention and desire of the
parties that Xxxxxxx receive compensation for all sales and revenues described
in Paragraph 5(c) below to customers where Xxxxxxx has been involved with such
customer either through telephone consultation at the request of AWT, attendance
at or participation in meetings with such prospective customers or persons
responsible for originating the customer (i.e., medical conferences or
association presentations, muti-site operations, etc.), on-site visits by such
customer to Xxxxxxx'x or BMI's wound therapy treatment centers or other direct
contact between Xxxxxxx and the customer. AWT intends to maximize the use of
Xxxxxxx'x services in its marketing efforts. All direct communications or
inquiries received by Xxxxxxx should be referred to AWT for review and
evaluation in coordination with AWT's marketing efforts. If AWT establishes a
relationship with such referral, then Xxxxxxx would be entitled to the
compensation described under Paragraph 5(c) below with respect to such referral,
regardless of the additional contact by Xxxxxxx after the date of the initial
referral.
(l) NONDISCRIMINATION. BMI and Xxxxxxx shall not discriminate in the
provision of clinical services to patients based on race, color, national
origin, ancestry, religion, sex, marital status, disability, sexual orientation,
age, or any other legally prohibited basis, except as may be medically
indicated.
5. COMPENSATION.
(a) COMPENSATION FOR CASES; AUTOLO-TM--GEL PRODUCTS. For services
rendered under this Agreement, Xxxxxxx shall be entitled to retain all
professional fees associated with the patient care and wound therapy treatments
provided under this Agreement. To the extent that the AuTolo-TM--Gel wound
therapy qualifies for separate reimbursement distinct from the professional
fees, the first Three Hundred Eighty-Five Dollars ($385.00) per Case received by
Xxxxxxx shall be paid to AWT to cover the hard costs of producing the
AuTolo-TM--Gel wound therapy pack (disposables, pharmaceuticals, etc.). Any
reimbursement in excess of $385.00 per Case, exclusive of professional services,
shall be retained by Xxxxxxx. Xxxxxxx shall remit payment for the consumed
AuTolo-TM--Gel wound therapy packs within thirty (30) days of the receipt of
payment from the patient or third party payor for the same. In the event
separate reimbursement
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is not obtained for the AuTolo-TM--Gel wound therapy pack, then AWT shall bear
the cost and expense of providing the treatment pack. Additionally, any cost or
out-of-pocket expenses incurred by BMI or Xxxxxxx in connection with the
recruitment efforts described in Paragraph 4(k) above shall be reimbursed by AWT
to the extent the same were approved in advance by AWT.
(b) SALES TO CUSTOMERS WITHIN PROTECTED AREA.
(i) SALES OF EQUIPMENT, LICENSING FEES, ETC. BMI shall
receive an amount equal to twenty-five percent (25%) of the gross profit earned
by AWT from the sale of equipment, licensing fees, training services and any
other revenues derived by AWT from any customer that is located within BMI's
protected area (but specifically excluding any revenues from the sale of
AuTolo-TM--Gel wound therapy packs described in subparagraph 5(b)(ii) below),
which initially is the State of Arkansas. For purposes of this Agreement, "gross
profit" shall be defined as all revenues generated from sales, net of sales
taxes and freight, less the direct costs of such sales (excluding corporate
overhead, i.e. cost of goods sold). Commissions shall be due and payable within
thirty (30) days of the date that AWT receives payment from the customer for the
items giving rise to the compensation being due and payable under this
subparagraph 5(b).
(ii) SALE OF AUTOLO-TM--GEL TREATMENT PACKS. BMI shall receive
compensation equal to Forty Dollars ($40.00) per AuTolo-TM--Gel wound therapy
pack sold to those customers described in subparagraph 5(b)(i) above during the
term of this Agreement and for so long as BMI operates an AuTolo-TM--Cure Center
(either directly or indirectly). The $40.00 per pack sold is based upon the end
user price of $385.00. To the extent that the price is less than $385.00, the
compensation due and payable to BMI under this Agreement shall be adjusted on a
pro rata basis in proportion to the final selling price to $385.00 per unit.
Additionally, in the event the end user price is greater than $385.00, the
amount paid to BMI shall be increased by twenty-five percent (25%) of the excess
of the end user price above $385.00. For example, if the end user price is
$500.00, then the amount payable to BMI would be $68.75 per pack sold. The
compensation due and payable to BMI pursuant to this Subparagraph 5(b)(ii) shall
be paid within thirty (30) days of AWT's receipt of payment for the product sold
which gives rise to the compensation being due and payable under this
subparagraph. The compensation due and payable hereunder shall apply solely to
those products sold within the State of Arkansas.
(c) SALES TO PROTECTED CUSTOMERS.
(i) SALES OF EQUIPMENT, LICENSING FEES, ETC. BMI shall
receive an amount equal to five percent (5%) of the gross profit (as defined in
subparagraph 5(b)(i) above) earned by AWT from the sale of equipment, licensing
fees, training services and any other revenues derived by AWT from any Protected
Customer (as defined in Paragraph 4(k) above) (but specifically excluding any
revenues from the sale of AuTolo-TM--Gel wound therapy packs described in
subparagraph 5(c)(ii) below). Commissions shall be due and payable within thirty
(30) days of the date that AWT receives payment from the customer for the items
giving rise to the compensation being due and payable under this subparagraph
5(c).
(ii) SALE OF AUTOLO-TM--GEL TREATMENT PACKS. BMI shall receive compensation
equal to Eight Dollars ($8.00) per AuTolo-TM--Gel wound therapy pack sold to
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those Protected Customers described subparagraph 5(c)(i) above during the term
of this Agreement. The $8.00 per pack sold is based upon the end user price of
$385.00. To the extent that the price is less than $385.00, the compensation due
and payable to BMI under this Agreement shall be adjusted on a pro rata basis in
proportion to the final selling price to $385.00 per unit. Additionally, in the
event the end user price is greater than $385.00, the amount paid to BMI shall
be increased by five percent (5%) of the excess of the end user price above
$385.00. For example, if the end user price is $500.00, then the amount payable
to BMI would be $13.75 per pack sold. The compensation due and payable to BMI
pursuant to this subparagraph 5(c)(ii) shall be paid within thirty (30) days of
AWT's receipt of payment for the product sold which gives rise to the
compensation being due and payable under this subparagraph.
6. EXCLUSIVE TERRITORY. BMI shall have the exclusive right to open and
operate AuTolo-TM--Cure Centers within the State of Arkansas and shall have a
first right of refusal with respect to any location to be established within the
State of Arkansas. To the extent that BMI does not desire to open and operate
more than the one (1) AuTolo-TM--Cure Center if required under Paragraph 4 above
within the State of Arkansas, BMI shall be entitled to compensation described in
Paragraph 5 above with respect to the products and services and revenues derived
by AWT from such centers not owned or operated by BMI located within the State
of Arkansas and any Protected Customer. Additionally, the parties shall
negotiate in good faith for the expansion of BMI's protected territory based
upon AWT's marketing plan which is currently under development. The decision by
AWT to expand BMI's exclusive territory shall be based upon an assessment of
BMI's ability to manage and operate the cure centers, a review of BMI's
performance under this Agreement and the outcomes reached in the patient cases
under the direction of Xxxxxxx.
7. INSURANCE.
(a) PROFESSIONAL LIABILITY INSURANCE. Xxxxxxx shall at all times
during the term of this Agreement be and remain insurable for professional
liability (malpractice) coverage with such policy limits and subject to such
deductibles and retentions as Xxxxxxx, in Xxxxxxx' s sole discretion, determines
to be reasonable and prudent for the protection of AWT and Xxxxxxx, but not less
than as specified herein. During the term hereof, Xxxxxxx shall maintain
professional liability coverage with limits of not less than $1 million per
occurrence and $3 million annual aggregate, and shall upon termination hereof
Xxxxxxx shall provide tail coverage for the period this Agreement was in effect
covering Xxxxxxx and AWT. Xxxxxxx shall deliver promptly to AWT, upon receipt, a
copy of any notice of claim against Xxxxxxx involving Xxxxxxx'x liability
insurance or any adverse action, change or modification to the terms and
conditions of Xxxxxxx'x insurance coverage. Xxxxxxx shall furnish AWT with a
Certificate of Insurance and the declaration page of such policies evidencing
such coverage. Such insurance shall provide for not less than thirty (30) days
notice to AWT prior to cancellation. Following the termination of this
Agreement, Xxxxxxx shall provide continuing tail coverage for Xxxxxxx and AWT
covering the Cases.
(b) PRODUCTS LIABILITY INSURANCE. To the extent available in
connection with the Technology, AWT shall use reasonable commercial efforts to
obtain general liability and/or products liability insurance coverage on the
AuTolo-TM--Gel and other products provided by AWT hereunder with such policy
limits and subject to such deductibles and retentions as AWT, in its
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sole discretion, determines to be reasonable and prudent for the protection of
AWT, BMI and Xxxxxxx. AWT shall deliver promptly to BMI, upon receipt, a copy of
any notice of claim against AWT involving AWT's product liability insurance or
any adverse action, change or modification to the terms and conditions of AWT's
insurance coverage. AWT shall furnish Xxxxxxx with a Certificate of Insurance
and the declaration page of such policies evidencing such coverage. Such
insurance shall provide for not less than thirty (30) days notice to AWT prior
to cancellation.
8. XXXXXXX'X REPRESENTATIONS & WARRANTIES. Xxxxxxx hereby represents and
warrants to AWT that, as of the date of execution of this Agreement:
(a) LICENSE. Xxxxxxx is, and during the term hereof shall remain,
duly licensed to practice medicine in the State of Arkansas, and is in good
standing with the Medical Board thereof;
(b) MEDICAL STAFF MEMBERSHIP. Xxxxxxx has, and during the term
hereof shall maintain, appropriate medical staff membership and clinic
privileges, as requested by AWT in its sole discretion, at SJRMC located in Hot
Springs, Arkansas;
(c) NO MISREPRESENTATIONS. All statements made by Xxxxxxx in this
Agreement are true and correct in all material respects;
(d) NO VIOLATION. Xxxxxxx is not subject to or bound by any
noncompetition or other restrictive covenant that would be violated or
contravened by Xxxxxxx'x execution of this Agreement or that would impede or
interfere with the performance of Xxxxxxx'x duties hereunder;
(e) PARTICIPATION IN FEDERALLY FUNDED HEALTH CARE PROGRAMS. Xxxxxxx
is not and at no time has been suspended or excluded from participation in any
federally funded health care program, including without limitation Medicare or
Medicaid. Xxxxxxx shall immediately notify AWT of any threatened or actual
exclusion from any federally funded health care program including Medicare or
Medicaid. Xxxxxxx shall indemnify and hold AWT harmless against all actions,
claims, demands and liabilities, and against all loss, damage, costs and
expenses, including reasonable attorneys' fees, arising out of or related to,
directly or indirectly: (i) any breach by Xxxxxxx of the representation and
warranty of this Section 8(e), and/or (ii) the suspension or exclusion of
Xxxxxxx from any federally funded health care program, including without
limitation Medicare or Medicaid. The foregoing notwithstanding, Xxxxxxx shall
not be liable for any indemnification obligations related to the billing and
reimbursements for AuTolo-TM--Gel wound therapy treatments that are made by
Xxxxxxx or BMI in good faith and in reliance upon, and in compliance with, the
advice provided by AWT or any third party reimbursement specialist engaged by
BMI or Xxxxxxx with respect to the billing and reimbursement strategies for the
wound therapy.
(f) QUALITY OF SERVICE WARRANTY. Xxxxxxx represents and warrants
that the Services to be furnished by Xxxxxxx hereunder shall be in accordance
with all applicable standards of care including, but not limited to, community
and medical specialty standards, and as provided in this Agreement. Xxxxxxx
shall, at Xxxxxxx'x sole expense, defend, indemnify, and
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hold harmless AWT, its directors, officers, agents, employees, members,
subsidiaries, joint venture partners, and predecessors and successors in
interest from and against any claim, action, proceeding, liability, loss,
damage, cost or expense, including, without limitation, reasonable attorneys'
fees (collectively referred to for purposes of this Section as "Claims(s)")
arising out of any act or failure to act by Xxxxxxx, including, without
limitation, negligent or willful misconduct, arising from a breach of the
warranties provided herein, by paying all amounts that a court finally awards or
that Xxxxxxx agrees to pay in settlement of any Claim(s) as well as any and all
reasonable expenses or charges as they are incurred by AWT or any other party
indemnified under this Section in cooperating in the defense of any Claim(s).
9. NONCOMPETITION AND NONSOLICITATION. The party acknowledges that AWT
will provide, and BMI and Xxxxxxx will use, the Technology and other
confidential business information, trade secrets, patient information and other
valuable information belonging to AWT. The noncompetition and nonsolicitation
provisions in this Agreement are intended to protect the integrity of AWT and
its affiliates. Except as stated otherwise in this Paragraph 9, during the term
of this Agreement and for a period of two (2) years thereafter (the "Restricted
Period"), neither BMI or Xxxxxxx shall, directly or indirectly:
(a) NONCOMPETITION. Own in whole or in part, manage or control, or
participate in the ownership, management or control of, any corporation,
partnership, limited liability company, sole proprietorship or other business
entity which now or hereafter engages in the practice of medicine in competition
with the autologous wound therapy services provided by AWT or its licensees
within the State of Arkansas, or, if larger, the protected area described in
Paragraph 6 above in which BMI or Xxxxxxx has previously enjoyed certain
preferential and exclusive rights to provide services and or receive
compensation from the services provided therein utilizing the Technology (the
"Restricted Territory"); or
(b) NONSOLICITATION. Take any action to disrupt or attempt to
disrupt the relationship, contractual or otherwise, between AWT and any patient,
supplier, or employee of AWT, including without limitation sending
announcements or publications regarding new offices or employment affiliations
to patients treated utilizing the Technology during the term of this Agreement.
10. CONFIDENTIAL AND PROPRIETARY INFORMATION. The parties acknowledge and
agree that they are subject to a Confidentiality and Non-Disclosure Agreement
dated May 18,1999, the terms of which are incorporated herein and expressly made
a part hereof (the "Nondisclosure Agreement"). Neither party shall disclose the
terms of this Agreement, the outcomes of any patients treated using the
AuTolo-TM--Gel wound therapy or any other information concerning the other
party, patients or Technology covered hereunder without the express written
consent of the other party and in compliance with the terms of the Nondisclosure
Agreement. Furthermore, the parties acknowledge that during the term of this
Agreement, BMI and Xxxxxxx shall have access to confidential and proprietary
information of AWT and the Technology. Xxxxxxx recognizes and acknowledges that
all of AWT's confidential and proprietary information shall remain confidential
and shall remain the sole property of AWT. For purposes of this Agreement, the
terms "confidential and proprietary information" shall include in addition to
the information described in the Nondisclosure Agreement and AWT's technology,
treatment methods, trademarks, service marks, patient lists, patients (including
those
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generated by BMI or Xxxxxxx under this Agreement), computer programs, business
strategies for developing new patient and new business relationships, including
utilization review techniques, medical management, quality assurance protocols,
patents, trade secrets, know-how and other proprietary processes, and such
proprietary information included in manuals or memoranda, as they may now exist
or may be developed during the term of this Agreement. Xxxxxxx shall not, during
or after the term of this Agreement, in whole or in part, disclose such
confidential and proprietary information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, nor shall
Xxxxxxx make use of any such property for Xxxxxxx'x own purposes or for the
benefit of any person, firm, corporation or other entity (except AWT) under any
circumstances during or after the term hereof; provided, however, that after the
term of employment these restrictions shall not apply to secrets, know-how and
processes which are then generally known to the public, (provided that the
Xxxxxxx was not responsible, directly or indirectly, for such secrets, know-how
or processes entering the public domain without AWT's consent). The foregoing
restrictions are in addition to, and not in limitation of the restrictions
imposed on the parties under the Nondisclosure Agreement.
11. TERMINATION.
(a) IMMEDIATE TERMINATION BY AWT. AWT may at its option terminate
this Agreement immediately upon the occurrence of any of the following:
(i) Suspension, curtailment, or revocation of Xxxxxxx'x XXX
Registration or Xxxxxxx'x license to practice medicine in the State of Arkansas,
regardless of the pendency of any appeal of such suspension, curtailment, or
revocation;
(ii) Expulsion, suspension, or other final disciplinary action
against Xxxxxxx by a professional medical organization as a result of
professional misconduct, or resignation by Xxxxxxx from any professional medical
organization under threat of disciplinary action for professional misconduct;
(iii) Xxxxxxx'x failure or inability to qualify or continue
eligibility for professional liability insurance covering those elements of
Xxxxxxx'x professional services covered by this Agreement;
(iv) Imposition of any sanctions, including exclusion,
suspension, or other limitation, relating to Xxxxxxx'x participation in any
federally-funded health care program giving rise to Xxxxxxx'x indemnification
obligations under Paragraph 8(e) above, including without limitation Medicare
and Medicaid;
(v) Xxxxxxx'x death;
(vi) Gross inattention or willful neglect of Xxxxxxx'x duties;
or
(vii) Failure by Xxxxxxx to comply with any other material term
and/or condition of this Agreement, subject to such notice and a reasonable
opportunity to cure (in no event less than thirty (30) days from the date of
notice).
10
(b) IMMEDIATE TERMINATION BY XXXXXXX Xxxxxxx may at Xxxxxxx'x
option terminate this Agreement immediately upon the occurrence of any of the
following:
(i) AWT's failure or inability to qualify or continue
eligibility for products liability insurance covering those elements of
Xxxxxxx'x professional services covered by this Agreement;
(ii) Imposition of any sanctions, including exclusion,
suspension, or other limitation, relating to AWT's participation in any
federally-funded health care program, including without limitation Medicare and
Medicaid;
(iii) The issuance of any material restriction or limitation on
the use of the Technology;
(iv) The final determination of the inability to obtain
separate reimbursement for the AuTolo-TM--Gel wound therapy by at least one
third party payor prior to June 30, 2000; or
(v) Failure by AWT to comply with any other material term
and/or condition of this Agreement, subject to such notice and a reasonable
opportunity to cure (in no event less than thirty (30) days from the date of
notice).
(c) TERMINATION WITHOUT CAUSE. This Agreement may be terminated at
any time by either party, without cause, upon sixty (60) days' prior written
notice to the other.
(d) COOPERATION UPON TERMINATION. In the event of the termination of
this Agreement, the parties shall cooperate to assure the orderly transfer of
patients treated by Xxxxxxx and continued treatment of the Cases covered by this
Agreement. Such cooperation shall include, without limitation, taking all steps
necessary or convenient to enable AWT to effect an orderly transfer of charts,
records and information pertaining to patients that have been treated by Xxxxxxx
utilizing the Technology.
12. NO OBLIGATION TO REFER. Nothing in this Agreement shall be deemed
or construed to require Xxxxxxx to make any referral or otherwise utilize the
Technology or any other health care service in which Xxxxxxx would be
precluded by law from participating, such as, without limitation, services
that are "designated" health care services under the "Xxxxx" anti-referral
legislation 42 U.S.C. Section1395nn (and services that would be deemed
designated health services if reimbursed by the Medicare program), if and to
the extent such laws, rules or regulations are applicable.
13. MISCELLANEOUS.
(a) REFORMATION. In the event that any state or federal law or
regulation now existing, or enacted or promulgated after the Effective Date of
this Agreement, is interpreted by judicial decision or regulatory agency, or by
legal counsel for AWT, in such way as to indicate that this Agreement or any
portion hereof, including any compensation provisions now or hereafter in effect
between the parties, may be in violation of such law or regulation, or in AWT's
sole judgment, after consultation with counsel, may be subject to undue risk of
legal
11
challenge, or exposure to legal liability (whether civil or criminal), the
parties shall meet and confer within 30 days of the date AWT notifies Xxxxxxx in
writing of such violation in an attempt to reform this Agreement so as to comply
with such laws and/or regulations. Should the parties be unable to agree upon
reformation hereof within forty-five (45) days of the date of AWT's notice,
either party may terminate this Agreement.
(b) FURTHER ASSURANCES. The parties shall execute and deliver such
other documents and perform such further acts as shall be reasonably necessary
or convenient to carry out and effectuate all the terms and conditions of this
Agreement.
(c) APPLICABLE LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Arkansas.
(d) ASSIGNMENT. This Agreement is personal to each of the parties
and no rights or duties hereunder may be assigned or delegated by either party
without the prior written consent of the other.
(e) SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, administrators,
executors, successors and permitted assigns.
(f) CAPTIONS. The captions contained herein are not a part of this
Agreement, are only for the convenience of the parties and do not in any way
modify or amplify any of the terms, covenants, or conditions of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
(h) EXPENSES. Unless otherwise expressly provided herein, each party
hereto shall bear sole responsibility for all expenses incurred by such party in
connection with this Agreement, including legal fees, whether or not the
transactions contemplated by this Agreement are consummated.
(i) NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed to have been duly given upon personal
delivery; or twenty-four (24) hours following deposit for overnight delivery
with a bonded xxxxxx holding itself out to the public as providing such service,
or following transmission by electronic facsimile, if subsequently mailed as
provided herein; or forty-eight (48) hours following deposit in the U.S. Mail,
registered or certified mail, postage prepaid, and in any case addressed as
follows, or to such other addresses as the parties may designate from time to
time:
If to Xxxxxxx: Xxxxxxx Medical, LLC
Xxxxx Xxxxxxx, M.D.
000 Xxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
If to AWT: Autologous Wound Therapy, Inc.
0000 Xxxxxx Xxxx, Xxxxx X
Xxxxxx Xxxx, XX 00000
Attention: President and CEO
Fax: (000) 000-0000
12
(j) WAIVER. Failure by either party to insist upon strict
compliance with any of the terms, covenants, or conditions of this Agreement
shall not be deemed a continuing waiver of such term, covenant, or condition,
nor shall any waiver or relinquishment of any right or power herein at any time
be deemed a waiver or relinquishment of the same or any other right or power,
whether or not similar.
(k) ENTIRE AGREEMENT; AMENDMENT. This Agreement (including
any exhibits and schedules attached hereto) and the Nondisclosure Agreement
contain the entire agreements between the parties concerning the subject matter
hereof, and supersede all other and prior terms, covenants, representations, and
agreements, whether oral or written. This Agreement may be modified or amended
only by a writing signed by both parties.
(l) SURVIVAL. The provisions of Paragraphs 3(f), 3(g), 5, 6,
7, 9 and 10 hereof shall survive the termination of this Agreement. The
foregoing notwithstanding, in the event the parties, or their successors in
interest, enter into a separate written agreement following the termination of
this Agreement which deals with the subject matter of this Agreement contained
in Paragraphs 3(f), 3(g) 5, 6, 7, 9 or 10, the provisions of the new agreement
shall be controlling and. the provisions of this Agreement to the extent covered
therein shall not survive the termination of this Agreement.
(m) TIME FOR PERFORMANCE. Time is of the essence in this
agreement.
(n) SEVERABILITY. In the event any provision of this
Agreement is determined to be invalid or unenforceable, the remaining provisions
shall nevertheless remain in full force and effect and shall be binding upon the
respective parties hereto.
(o) ARBITRATION OF DISPUTES. It is the policy of the
undersigned parties to avoid disputes, if possible, and in the event a dispute
should occur, to resolve the dispute in a peaceable and expeditious manner. In
keeping with this policy and to avoid the time and expense involved in lengthy
litigation, the undersigned parties pledge to use their best efforts to
negotiate and resolve any dispute arising hereunder through binding arbitration.
The parties jointly covenant and agree: (a) the parties will then submit the
matters to arbitration to be conducted in Little Rock, Arkansas by an arbitrator
mutually agreed upon by the parties or if no arbitrator is selected within ten
(10) business days, the parties agree jointly to request that the American
Arbitration Association select an arbitrator; (b) all fees and costs of the
arbitration will be assessed and paid, in the absence of the arbitrator's award
to the contrary, equally by all parties; and (c) the parties agree to
participate in the arbitration procedure to its conclusion. The arbitration
hearing shall be held within thirty (30) days of the appointment of the
arbitrator and conducted in accordance with the limited discovery rules imposed
by the arbitrator and a decision shall be rendered by the arbitrator within
thirty (30) days of the last day of the arbitration hearing. The arbitration
shall be terminated (i) by the execution of a settlement agreement by the
parties or (ii) the delivery of the arbitrator's findings. Any decision reached
by the arbitrator shall be final and binding upon the
13
parties, absent manifest error, and may be entered and enforced in the same
manner as a judgment rendered by a court of competent jurisdiction over the
subject matter of the dispute.
WHEREFORE, the parties hereto have executed this Agreement as of the date
first above written.
AUTOLOGOUS WOUND THERAPY, INC.
By:
-----------------------------
BMI:
Xxxxxxx Medical, LLC
By:
-----------------------------
XXXXXXX:
By:
-----------------------------
14
EXHIBIT A
FORM OF WARRANT
15
EXHIBIT B
Covered Customers
For purposes of the compensation due and payable under Paragraph 5(c) of
that certain Services Agreement dated effective September 22, 1999, the parties
agree that BMI shall be entitled to compensation on sales and revenues
attributable to the following customers and their affiliates:
For purposes of the Agreement, "affiliate" shall mean any person or entity
practicing in the same group or under common control with the individuals,
entity, corporation or organization listed above regardless of geographic
location.
Dated _________________, _______
AWT:
Autologous Wound Therapy, Inc.
By:
-----------------------------
BMI:
Xxxxxxx Medical, LLC
---------------------------------
Xxxxx Xxxxxxx, M.D., Member
16
EXHIBIT B
Covered Customers
For purposes of the compensation due and payable under Paragraph 5(c) of
that certain Services Agreement dated effective September 22, 1999, the parties
agree that BMI shall be entitled to compensation on sales and revenues
attributable to the following customers and their affiliates:
1. Advanced Therapeutics and related customers referred to AWT from those
sources.
2. Customers resulting from New York trip involving Xxx Xxxxxxx and/or Xxxx
Xxxxx and related customers referred to AWT from those sources.
3. Customers resulting from referrals made to AWT by Xxxxxx Xxxxxxxx and
his affiliates.
4. Platelet Gel Services of South Florida (Xxx Xxxxxxx) and related
customers referred to AWT from those sources. Advanced Therapeutics and
related customers referred to AWT from those sources.
For purposes of the Agreement, "affiliate" shall mean any person or entity
practicing in the same group or under common control with the individuals,
entity, corporation or organization listed above regardless of geographic
location.
Dated September 22, 1999.
AWT:
Autologous Wound Therapy, Inc.
By:
-----------------------------
BMI:
Xxxxxxx Medical, LLC
---------------------------------
Xxxxx Xxxxxxx, M.D., Member
17
FIRST AMENDMENT TO SERVICES AGREEMENT
THIS FIRST AMENDMENT TO SERVICES AGREEMENT entered into this 29th day of
October, 1999 by and between Autologous Wound Therapy, Inc. ("AWT"), Xxxxxxx
Medical, LLC ("BMI") and Xxxxx Xxxxxxx, M.D. ("Xxxxxxx").
WITNESSETH:
WHEREAS, AWT, BMI and Xxxxxxx entered into a Services Agreement dated
September 22, 1999 (the "Services Agreement"), wherein AWT engaged BMI and
Xxxxxxx to perform certain case studies and tests utilizing the Technology (as
defined in the Services Agreement) and BMI and Xxxxxxx have performed more than
75 cases under the terms of the Services Agreement; and
WHEREAS, in anticipation of the merger of AWT and Informatix Holdings,
Inc.("Informatix"), AWT is required to restructure certain compensation
relationships with BMI and Xxxxxxx payable on certain future revenues of AWT
outside of BMI's protected area and BMI and Xxxxxxx have agreed to such
restructuring on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. AMENDMENT OF COMPENSATION FOR SALES TO PROTECTED CUSTOMERS. Subject to
and expressly conditioned upon, the issuance of and BMI's receipt of the options
described in Paragraph 2 below, BMI and Xxxxxxx hereby release and forever waive
any right to the compensation on sales to Protected Customers described in
Paragraph 5(c) of the Services Agreement. The parties acknowledge and agree that
upon BMI's receipt of the option agreement awarding the options, Paragraph 5(c)
shall be deemed deleted in its entirety from the Services Agreement and shall be
null and void. Nothing contained in this First Amendment shall be deemed to
affect BMI's right to the compensation described in Paragraphs 5(a) or (b) of
the Services Agreement, which shall remain in full force and effect. The parties
further acknowledge and agree that the requirements of Paragraph 4(k) as they
relate to the identification of Protected Customers and the execution and
delivery of new Exhibit Bs is now moot based on the foregoing amendment.
2. ISSUANCE OF STOCK OPTIONS. In consideration of BMI and Xxxxxxx'x
release of the compensation rights under Paragraph 5(c) of the Services
Agreement, AWT shall cause Informatix, as successor by merger, to issue to BMI
options representing the right to acquire 135,000 shares of Informatix common
stock at an exercise price of $1.00 per share. The option shall be fully vested
and may be exercised in conjunction with, or at any time after, exercise of the
warrant previously issued to Xxxxxxx by AWT. The number of options is based upon
12 million fully diluted shares and the number of options (and exercise price)
shall be adjusted pro rata in the event there is any increase or decrease in the
number of fully diluted shares prior to the actual issuance of the option.
Thereafter any adjustment in the number of options shall be made in accordance
with the terms of the option agreement. In addition to the 135,000 options to be
issued in connection with the execution of this Amendment, AWT shall
18
cause additional stock options to be issued to BMI during each year the Services
Agreement remains in effect, and for so long as BMI and Xxxxxxx are performing
thereunder. Said options shall be issued on the same terms and conditions as the
options issued to AWT's senior management during said year, with the actual
number of options to be issued equal to an amount that is not less than the
average number of options granted to senior management during said year
(exclusive of any options issued as a recruiting or sign-on bonus to any newly
recruited member of senior management).
3. EFFECT ON SERVICES AGREEMENT. Except as otherwise expressly modified and
amended by this First Amendment, the terms and conditions of the Services
Agreement, expressly including the duties and obligations of the parties
thereunder, shall remain in full force and effect and shall not be modified,
amended or otherwise changed of affected by this First Amendment. Capitalized
terms used in this First Amendment not otherwise defined herein shall have the
definition and meaning ascribed to the same under the Services Agreement.
WHEREFORE, the parties hereto have executed this First Amendment as of the
date first above written.
AUTOLOGOUS WOUND THERAPY, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxxx, President & CEO
BMI:
Xxxxxxx Medical, LLC
By:
----------------------------------
Xxxxx Xxxxxxx, M.D., Member
XXXXXXX:
--------------------------------------
Xxxxx Xxxxxxx, M.D.
19
