Services Agreement
Services Agreement (the "Agreement") dated August __, 1996, between
Physicians Quality Care, Inc., a Delaware corporation ("PQC"), with its
principal offices located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx and
Medical Care Partners, P.C., a Massachusetts professional corporation ("MCP"),
with its principal offices located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx.
Whereas MCP engages in the provision of medical and surgical services
through its physicians and has agreed to provide certain services to such
physicians in connection with its employment of physicians pursuant to MCP's
General Terms and Conditions of Physician Employment in effect as of the date
hereof (the "Terms and Conditions"); and
Whereas, MCP wishes to retain PQC to provide certain of such services on
MCP's behalf and PQC wishes to provide such services;
Now, therefore, MCP and PQC hereby agree as hereinafter provided.
1. Terms defined in the Terms and Conditions and not otherwise defined
herein shall be used herein with the meanings so defined.
2. MCP hereby appoints and engages PQC to provide the services
contemplated by Article II of the General Terms and Conditions of Member
Physician Employment and PQC accepts such appointment and engagement on and
subject to the terms and conditions set forth in this Agreement.
3. In consideration for the services to be provided by PQC pursuant to
Section 2, MCP hereby assigns to PQC all amounts allocated to MCP, including
without limitation Stage One Gross Margins, Stage Two Gross Margins, Stage Three
Gross Margins and IHS Profits, pursuant to Article VII of the Terms and
Conditions.
4. PQC shall review the payables of MCP and shall cause payment thereof to
be' made out of the funds of MCP. All Operating Revenues and IHS Revenues shall
be deposited in a bank account maintained in the name of and owned by MCP with a
banking institution selected by PQC and approved by MCP, (the "Account") but
managed solely by PQC in accordance with the terms of this Agreement. A
representative of PQC shall be the authorized signatory for the Account. The
Shareholder of MCP shall also be, and MCP hereby appoints the Shareholder as, an
authorized signatory for the Account. MCP covenants that it will not permit any
funds to be withdrawn from the Account except as authorized by PQC. In addition
to billing, collecting and payment services, PQC shall manage the cash and cash
equivalents of MCP.
5. MCP hereby exclusively authorizes PQC to take the following actions for
and on behalf of and in the name of MCP throughout the term of this Agreement
and thereafter in accordance with Section 7:
(a) xxxx, in MCP's name, under its provider number when obtained and on
its behalf, and until such time as MCP has obtained its provider
number, xxxx, in the Physicians' names under their respective provider
numbers and on their behalf, all claims (including co-payments due from
patients) for reimbursement or indemnification from all other Managed
Care Payors, fiscal intermediaries or patients for all covered items
and services provided by MCP or by the Physicians to patients;
(b) take possession of and endorse in the name of the Physicians or
MCP, all cash, notes, checks, money orders, insurance payments, and any
other instruments received as payment of accounts receivable (and MCP
will cause an individual Physician who receives any payments for the
benefit of MCP directly, to deliver such amounts promptly to PQC for
deposit in the Account, and MCP covenants to transfer and deliver
promptly to PQC for deposit in the Account, all funds received by MCP
from patients or Managed Care Payors for medical services), all such
funds to be deposited directly into the Account and to be applied in a
manner consistent with this Agreement;
(c) deposit all collections directly into the Account and to make
withdrawals from the Account for such purposes as are consistent with
this Agreement;
(d) in MCP's name and on its behalf, and in the Physicians' names and
on behalf of each of them, as necessary, collect and receive all
accounts receivable generated by such xxxxxxxx and claims for
reimbursement, place such accounts for collection, settle and
compromise claims and institute legal action for the recovery of
accounts; MCP shall cooperate fully with PQC in facilitating such
collections and in collecting accounts receivable transferred to PQC
for deposit in the Account by MCP, including endorsement of checks and
delivery to PQC for deposit in the Account of all revenues in whatever
form, received from patients or Managed Care Payors on their behalf,
and completion of all forms necessary for the collection of said
monies; and
(e) sign checks on behalf of MCP and make withdrawals from the Accounts
for payments specified in this Agreement and as requested from time to
time by MCP for purposes not inconsistent with this Agreement.
In addition to the foregoing, MCP, to the extent not prohibited by law,
hereby grants to PQC an exclusive power of attorney and appoints PQC its
exclusive true and lawful attorney in fact to take each of the actions specified
in Sections (a) through (e) above for and
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on behalf of and in the name of MCP throughout the term of this Agreement and
thereafter in accordance with Section 7.
Upon request of PQC, MCP shall, and shall cause each of the Physicians to,
execute and deliver to PQC and to each financial institution wherein MCP or PQC
maintains an account, such additional documents or instruments (including one or
more powers of attorney naming PQC as its or their, as the case may be,
exclusive true and lawful attorney in fact) as may be necessary or desirable to
evidence or effect the authority or the power of attorney or both granted to PQC
pursuant to this Section.
6. This Agreement shall continue in effect for forty (40) years
commencing with the date of this Agreement as noted above. Unless terminated
earlier as provided for in section 7 of this Agreement, the term of this
Agreement shall be automatically extended for additional terms of five (5) years
each.
7. Termination.
(a) Termination on Default.
i. Either party shall be entitled to terminate this Agreement if the
other party fails to perform in any material respect any material
obligation required of it hereunder, and such default continues
for sixty (60) days after the giving of written notice by the
non-defaulting party, specifying the nature and extent of such
default; provided, however, that the non-defaulting party shall
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not be entitled to terminate this Agreement if the defaulting
party commences the cure of such default within the first sixty
(60) day period and thereafter diligently and in good faith
continues to cure such default until completion.
ii. Termination at election of PQC. PQC shall be entitled to
terminate this Agreement upon written notice to MCP if:
(x) a law firm with nationally recognized expertise in
healthcare law and acceptable to PQC and the Joint Policy
Board renders an opinion to PQC, with a copy provided to the
Joint Policy Board stating that a material provision of this
Agreement is in violation of applicable law, and the parties
do not agree to amend this Agreement pursuant to Section 10
to cure such violation; or
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(y) any court or regulatory agency enters an order finding a
material provision of this Agreement is in violation of
applicable laws; or
(z) PQC is prevented by MCP or any person under the MCP's
direction or control, from entering any of the Physician
Responsibility Centers, and such inability to enter such
premises continues for more than forty-eight (48) hours
after notice thereof to the Joint Policy Board.
iii. Termination by MCP. MCP may terminate this Agreement if and only
if such termination has been approved by the Joint Policy Board
and:
(x) upon written notice to PQC of the failure of PQC to make any
payments required under this Agreement when due and
continued failure to pay such compensation after thirty (30)
days notice of such failure to PQC unless the amount of such
payment is being contested in good faith; or
(y) a law firm with a nationally recognized expertise in health
care law and acceptable to PQC and the Joint Policy Board
renders an opinion to MCP, with a copy provided to the Joint
Policy Board, stating that a material provision of this
Agreement is in violation of applicable law, and the parties
do not agree to amend this Agreement pursuant to Section 10
hereof to cure such violation; or
(z) any court or regulatory agency enters an order finding a
material provision of this Agreement is in violation of
applicable laws.
(b) Effect of Termination. Upon termination of this Agreement
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pursuant to this Section 7:
i. PQC and MCP shall cooperate and continue to perform their
obligations under this Agreement as may be necessary to ensure
the provision of proper care to patients under treatment until
appropriate alternative arrangements are made.
ii. MCP and PQC shall cooperate to ensure the appropriate billing and
collection for all health care items and services provided by
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MCP prior to the effective date of termination, and any such
monies collected shall be retained by MCP and/or paid to PQC in
accordance with the terms of this Agreement.
iii. Any amounts due and owing to PQC under any loan to MCP shall
become immediately due and payable.
iv. MCP shall reimburse PQC for all drug and pharmaceutical inventory
retained by MCP following termination to the full extent of funds
advanced by PQC for the purchase of such inventory.
v. Provisions of this Agreement shall survive any termination if so
provided herein or if necessary or desirable fully to accomplish
the purposes of such provision.
8. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party at the address shown above, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 8.
9. This Agreement constitutes the entire agreement between the parties
and supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement.
10. This Agreement may be amended or modified only by a written instrument
executed by PQC and MCP, provided, however, in the event (a) any state or
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federal laws or regulations, now existing or enacted or promulgated after the
Effective Date are interpreted by judicial decision, a regulatory agency, or
legal counsel in such a manner as to indicate that this Agreement or any
provision hereof may be in violation of such laws or regulations, or (b) the
Financial Accounting Standards Board or other applicable accounting standard
setting entity promulgates standards that would prevent PQC from consolidating
for financial statement presentation purposes all revenues of MCP on PQC's
consolidated financial statements, then PQC shall propose to the Joint Policy
Board and the MCP Shareholder for their approval such amendments to this
Agreement as necessary to preserve the underlying economic and financial
arrangements between PQC and MCP and without substantial economic detriment to
either PQC or MCP. Any such amendment approved by the Joint Policy Board and
MCP Shareholder shall be binding upon MCP, and MCP hereby consents to any such
amendment. To the extent any act or service required of PQC should be construed
or deemed, by any governmental authority, agency or court, to constitute the
practice of medicine by PQC, the performance of said act or service by PQC shall
be deemed waived and forever unenforceable and the provisions of this Section 10
shall be applicable. MCP hereby waives and agrees not to assert illegality as a
defense to the enforcement of this
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Agreement or any provision hereof; instead, any such purported illegality shall
be resolved pursuant to the terms of this Section 10.
11. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
PHYSICIANS QUALITY CARE, INC.
By:
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MEDICAL CARE PARTNERS, P.C.
By:
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