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EXHIBIT 10.38
AMERIPATH MANAGEMENT AGREEMENT
BY AND BETWEEN
COLAB, INC.
AND
AMERIPATH INDIANAPOLIS, L.L.C.
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MANAGEMENT AGREEMENT
PARTIES: AMERIPATH INDIANAPOLIS, L.L.C. ( the "Practice")
COLAB, INC. ("AmeriPath")
EFFECTIVE DATE: September 1, 1997 (the "Effective Date")
RECITALS:
- AmeriPath is an Indiana corporation engaged in the business of
providing administrative and management services, to pathology
groups;
- The Practice is a limited liability company that provides,
through its medical practitioners ("Practice Providers"),
pathology services;
- 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 Director 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
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 Director, an annual Operating Plan reasonably
acceptable to the Managing Director 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. 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. AmeriPath shall determine the aggregate of the
annual salaries of the Practice Providers. On the date hereof, the Practice
employs 15 Practice Providers. The maximum aggregate of the annual salaries of
such 15 Practice Providers shall be $3,750,000. The Managing Director shall
determine the individual annual salary of each Practice Provider and shall give
notice of such determination to AmeriPath concurrently with the execution of
this Agreement. The Managing Director may change the allocation of the annual
salaries upon written notice to AmeriPath; provided, however, that such notice
may be given only once in any twelve month period (except as may be needed due
to deletions or additions of Practice Providers from the Practice), and must be
received no later than two weeks prior to the effective date of such change;
provided, further, that no such individual annual salary shall exceed $350,000.
Upon termination of the employment of a Practice Provider or the employment of
an Additional Practice Provider, AmeriPath and the Practice shall adjust the
aggregate maximum sum allocated to Practice Provider salaries in accordance with
this Agreement.
D. PRACTICE MANAGEMENT SERVICES. AmeriPath shall, in consultation with
the Managing Director, assess business activity including product line analysis,
outcomes monitoring and customer satisfaction. AmeriPath shall develop systems
to track revenues,
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expenses, cost accounting, utilization, quality assurance, physician
productivity and customer satisfaction.
E. BUSINESS OFFICE AND SUPPORT SERVICES AmeriPath may, in consultation
with the Managing Director, provide computer, bookkeeping, billing and
collection, accounts receivable and 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 Director 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.
F. PROFESSIONAL AND CONSULTING SERVICES. AmeriPath shall arrange for or
render business and financial management consultation and advice reasonably
requested by the Managing Director 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.
G. 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 Director
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.
H. MEDICAL DIRECTOR SERVICES. AmeriPath shall engage a medical director
("Medical Director") who shall be responsible for establishing the operating
procedures to be utilized by the Practice; provided, however, that the Managing
Director shall have the right to require the Medical Director to amend or revise
the operating procedures to be utilized by the Practice to the extent that such
procedures interfere with or restrict the rights of the Practice Providers to
practice medicine or provide professional medical services.
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.
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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 Director), 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
Director.
C. MANAGED CARE RELATIONSHIPS. The Practice, together with AmeriPath,
shall evaluate, negotiate, and administer managed care contracts and other third
party payor contracts on behalf of the Practice and its Practice Providers. 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. FACILITY RELATIONSHIPS. The Practice, together with the AmeriPath,
shall evaluate, negotiate, administer and enter into all hospital and other
medical facility contracts pursuant to which the Practice and its Practice
Providers shall provide services.
E. 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.
F. 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 reasonable
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. AmeriPath,
together with the Managing Director, shall establish reasonable policies and
procedures with respect to billing and collection matters.
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G. 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 Director. The decision to admit an Additional
Practice Provider shall be subject to the approval of the Managing Director.
H. 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 Practice 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 Managing Director, which approval shall not be unreasonably withheld. 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.
I. PRACTICE EXPENSES. The Practice shall be solely responsible for the
payment of all Practice Expenses.
J. 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 Additional
Practice Providers, except as provided for in this Agreement; (c) remove the
Managing Director; 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.
K. 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.
L. EQUIPMENT. The Practice shall advise AmeriPath on the maintenance,
repair and proper operation of medical equipment. This obligation shall relate
to the medical functionality
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of the equipment. Upon receipt of such advice, AmeriPath shall cause the medical
equipment to be maintained in good operating condition.
M. 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.
IV. FINANCIAL MATTERS
A. 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 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.
B. 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.
C. 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 IV. 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
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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 Director.
D. 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 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.
E. 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
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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.
F. 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.
G. 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.
V. TERMS AND TERMINATIONS
A. TERM. The initial term of this Agreement shall be for a period
of forty (40) years commencing on September 1, 1997 and ending on September 1,
2037 (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 Director, breaches any material term of
this Agreement, which breach is not cured within 10 days of the receipt of
notice from AmeriPath.
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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.
VI. 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.
VII. 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.
Notwithstanding anything to the contrary contained herein, nothing shall impair
the independent medical judgment of the Practice Providers.
Practice and AmeriPath have duly executed this Agreement on the day and
year indicated above.
AMERIPATH INDIANAPOLIS, L.L.C.
By:
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Name:
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Its:
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COLAB, INC.
By:
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Name:
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Its :
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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
Managing Director, all as permitted to be incurred in
accordance with this Agreement.
MANAGING DIRECTOR means Xxxxxxx X. Xxxxxxx, M.D., for so long as he is
employed by the Practice pursuant to the Employment
Agreement dated the date hereof. In the event Xx.
Xxxxxxx should die, resign or otherwise cease to be
the Managing Director, then Xxxxx X. Xxxxxx, M.D.
shall be the successor Managing Director if Xx.
Xxxxxx is then employed by the Practice. In the event
neither of these named individuals serve as Managing
Director, the Practice shall elect and designate,
subject to approval of AmeriPath, which consent shall
not be unreasonably withheld, a physician then
employed by the Practice to serve as Managing
Director for such terms as then designated by the
Practice.
OPERATING PLAN means the Practice Operating Plan referred to in
Section II.A.
PRACTICE BANK ACCOUNT means the bank account referred to in Section IV.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 Managing Director,
all as permitted to be incurred in accordance with
this Agreement and any New Practice Amendment (as
defined in Section IV.H.).
Attachment I-1
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PRACTICE ORGANIZATIONAL
DOCUMENTS means the operating agreement of the Practice and any
other related documents governing the operation of
the Practice.
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 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. Practice covenants
to transfer and deliver to AmeriPath for deposit into Practice
Attachment II-1
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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
15
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, 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 Indiana, 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 made in consultation
with the Managing Director and 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 Indianapolis, L.L.C.
-------------------------------
-------------------------------
-------------------------------
If to AmeriPath:
AmeriPath Indiana, Inc.
-------------------------------
-------------------------------
-------------------------------
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
Attachment III-2
17
the method or amount of reimbursement or
compensation for either party provided 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,
Attachment III-3
18
agent or independent contractor (other than
AmeriPath) of the Practice. Each party shall
be solely responsible for compliance 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
Director, 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
