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Exhibit 10.25
CORPORATE PURCHASING AGREEMENT
GROUP MEMBER
This Corporate Purchasing Agreement (the "Agreement") is entered into
by and between PRINCIPAL HOSPITAL COMPANY, (hereinafter "Participant"), located
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ALIGNED BUSINESS
CONSORTIUM GROUP, L.P. a limited partnership (hereinafter "ABC Group"), located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ATTENTION: EXECUTIVE DIRECTOR OF
ABC GROUP.
W I T N E S S E T H:
A. ABC Group maintains agreements and provides access to Columbia/HCA
agreements for purchasing various goods, supplies, materials, dietary products,
pharmaceuticals and equipment (collectively, "Supplies and Equipment") used by
hospitals on a national basis. These purchase agreements, as amended or modified
from time to time, together with such additional purchase agreements as ABC
Group and Columbia/HCA and their affiliates may hereafter enter into and which
are designated by ABC Group as accessible by Participant, are herein
collectively referred to as the "Supply Contracts."
B. Participant desires to purchase Supplies and Equipment under the
Supply Contracts in accordance with the terms and conditions of those Supply
Contracts; subject however to limitations imposed on Participant under its
existing supply agreements and technological limitations related to
Participant's equipment and operations. The current Supply Contracts are
described on Exhibit A attached hereto.
C. Participant and its affiliates own, operate and/or manage the
hospitals or other health care related facilities and services described on
Exhibit B attached hereto (the "Facilities").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth, it is agreed as follows:
1. PURPOSE. Participant hereby engages ABC Group to assist in the
purchasing of Supplies and Equipment through access to
Columbia/HCA contracts at Columbia/HCA pricing and through ABC
Group contracts at ABC Group pricing used in the normal and
customary operations of the Facilities of the Participant and
ABC Group agrees to assist in the purchasing of such Supplies
and Equipment, all as more fully set forth below.
2. TERM. Subject to prior termination under Paragraph 7 below,
the term of this Agreement shall be for a period of five (5)
years commencing on 1st day of April, 1997, and ending on 31st
day of December, 2002 (the "Term"). Upon the completion of the
term of this Agreement, or upon the end of Brim Healthcare's
participation in the ABC Group Limited Partnership as a
Limited Partner, or upon the dissolution of the ABC Group,
which ever comes first, The Principal Hospital Corporation
shall continue to have access to the portfolio contracts of
Columbia/HCA at Columbia/HCA pricing and (if the ABC Group
continues to exist) access to ABC Group contracts at ABC Group
pricing for a minimum of five years thereafter.
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3. ABC GROUP'S RESPONSIBILITIES.
a. Upon execution of this Agreement, ABC Group will deliver, or
cause to be delivered, to Participant a copy (or brief summary
hereof) of all Supply Contracts which ABC Group and
Columbia/HCA has in effect at that time. Additionally, ABC
Group will, during the Term hereof and any extension or
renewal, provide Participant with copies of any additional
amendments, changes or termination to such agreements on a
timely basis so that Participant can be advised thereof.
b. ABC Group will provide consultation with Participant to effect
a smooth transition to the purchasing program.
c. ABC Group shall notify each of the suppliers under the Supply
Contracts that Participant and its affiliates are
participating in those agreements. Participant and its
affiliates shall be entitled to purchase Supplies and
Equipment under the Supply Contracts for the normal and
customary use of such Supplies and Equipment in the operation
of the Facilities and, in connection therewith, Participant
and its affiliates shall receive the same discounts thereunder
as ABC Group or as Columbia/HCA receives, as may be
appropriate.
d. Participant acknowledges that ABC Group has certain
subsidiaries and affiliates that operate in the health care
field. Certain of these subsidiaries or affiliates may, from
time to time, make proposals to or do business with
Participant and/or its affiliates. Participant and its
affiliates shall not be required to accept any such future
proposals as a result of this Agreement or any other business
relationship between ABC Group and Participant and its
affiliates.
e. ABC Group shall consult with Participant and its affiliates
regarding the monitoring and evaluation of the implementation
and utilization of the Supply Contracts.
4. REPRESENTATIONS AND COVENANTS BY PARTICIPANT. Participant
hereby represents and warrants to and covenants with ABC Group
as follows:
a. All purchasing by Participant and its affiliates of Supplies
and Equipment under said Supply Contracts shall be in the name
of Participant or its affiliates, who shall be solely
responsible for payment therefore.
b. Any purchase under the Supply Contracts by Participant and its
affiliates for Supplies and Equipment for any of the
Facilities will be between Participant or its affiliates, on
the one hand, and the respective contractor, on the other
hand. ABC Group shall have no liability under such agreements
or with respect to any such purchases, or any Supplies and
Equipment furnished thereunder. Without limiting the
generality of the foregoing, ABC Group does not make any
warranty, express or implied, as to such Supplies and
Equipment.
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c. Participant and its affiliates shall indemnify and hold
harmless ABC Group and Columbia/HCA, their affiliates,
subsidiaries, agents, officers, directors and employees (the
"Indemnified Parties") from any liability, claim, judgment
penalty, cost or expense (including attorneys fees and
litigation expenses) incurred by, brought or asserted against
them or any of them arising out of this purchasing program,
including without limitation any claims resulting the failure
to pay for any Supplies and Equipment purchased, any product
liability claims associated with the Supplies and Equipment
purchased, and any claims resulting from ABC Group's acts or
omissions (except to the extent that any such claims result
from the gross negligence or intentional misconduct of ABC
Group).
d. During the Term of this Agreement and any extension or renewal
hereof, neither Participant nor any of its affiliates shall
enter into or utilize any other similar group purchasing
agreement or arrangement for purchasing hospital goods,
supplies, materials, dietary products, pharmaceutical and/or
equipment except with ABC Group or a subsidiary or affiliate
of ABC Group. The parties intend that this Agreement shall be
the exclusive arrangement that Participant utilizes for the
Purchase of Supplies and Equipment through a group purchasing
organization or similar entity.
e. Participant shall ensure that the Facilities will not utilize
or maintain membership in any other group purchasing
organization except for the group purchasing organization of
ABC Group.
f. Participant covenants, represents and warrants that the
Facilities will maintain a compliance rate of 80% for the
Supply Contracts accessed by the Participant and its
facilities.
g. Participant shall cause the Facilities to comply with the
payment terms of the Supply Contracts.
5. COMPENSATION.
a. Participant acknowledges that, as a result of Participant's
participation in the group purchasing program, ABC Group may
receive administrative fees in connection with certain
Supplies and Equipment that are purchased, licensed or leased
by Participant and its affiliates for the Facilities. Such
payment shall not exceed 3% of the purchase price of the goods
or services provided by the participating vendor. All
administrative fees collected by ABC Group, with respect to
purchases made by Participant and its affiliates for the
Facilities will be returned to Participant on a one hundred
percent (100%) basis. ABC Group shall disclose to Participant,
on a quarterly basis, ABC Group's receipt of these fees and
will submit to Participant in writing, on an annual basis, and
to the Secretary of Health and Human Services upon his or her
request, the amount received from each vendor with respect to
purchases made by or on behalf of Participant. Participant is
responsible for disclosing this information to each Facility
and for the payment of any portion of such fees which is due
to Participant's affiliates or the Facilities.
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b. All rebates generated as a result of the Participant's
facilities accessing Supply Contracts available directly or
accessible through ABC shall be paid directly to the
Participant's facility whose purchasing activity generated
said rebate.
7. TERMINATION.
a. Upon termination of this Agreement, whether by expiration of
its Term or otherwise, ABC Group shall have no further
obligations hereunder, including without limitation, no
obligation to maintain, update or advise Participant or its
affiliates concerning any system or procedure provided
hereunder.
b. ABC Group may terminate this Agreement on one hundred eighty
(180) days notice to Participant or its affiliates if
Participant and it affiliates fail to meet the compliance
level described in Section 4.f. for any one or more of the
Facilities or if Participant otherwise breaches the terms of
this Agreement and if Participant fails to cure its lack of
compliance upon written notice from ABC Group.
8. SUCCESSORS AND ASSIGNS.
a. Neither party may assign its interest in or delegate the
performance of its obligations under this Agreement to any
other person without obtaining the prior written consent of
the other party, except that ABC Group may assign its interest
or delegate the performance of its obligations to a any
affiliate of ABC Group or any other party that is qualified to
do business in the states in which the Facilities are located
(if such qualification is required pursuant to the laws of
those states).
b. Participant shall not have the right to sell, hypothecate,
convey, assign or otherwise transfer this Agreement or assign
any of its interest or the benefits hereunder to any other
party without the prior written consent of ABC Group; provided
however that the affiliates of Participant who are operating
the facilities may participate in this purchasing program to
the extent required for the normal and customary usage of
Supplies and Equipment for those Facilities.
c. The terms, provisions, covenants, obligations and conditions
of this Agreement shall be binding upon and shall inure to the
benefit of the successors in interest and the assigns of the
parties hereto, provided that no assignment, transfer, pledge
or mortgage by or through either party, as the case may be, in
violation of the provisions of this Agreement, shall vest any
rights in the assignee, transferee, pledgee or mortgagee.
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9. NOTICES. Any notice by any party to the other shall be in
writing and shall be deemed to have been given on the earlier
of (a) the date on which it is personally received or (b) four
(4) days after it is deposited in the U.S. mail, postage
prepaid, certified with return receipt requested and addressed
to the party at its address as set forth on page 1 of this
Agreement (or at such other address as may have been
designated by the party pursuant to this Paragraph 9).
10. APPLICABLE LAW. This Agreement is entered into in the State of
Tennessee and shall be governed by the laws of the State of
Tennessee and all actions concerning this Agreement shall be
brought in the courts of the State of Tennessee with exclusive
venue in Davidson County, Tennessee.
11. ACCESS TO BOOKS AND RECORDS OF ABC GROUP, BY SECRETARY OF HHS
OR AUTHORIZED REPRESENTATIVE. Upon written request of the
Secretary of Health and Human Services or the Comptroller
General or any of their duly authorized representatives, ABC
Group or any other related organization providing services
with a value or cost of ten thousand dollars ($10,000.00) or
more, over a twelve (12) month period, shall make available
to the Secretary the contract, books, documents and records
that are necessary to certify the nature and extent of the
costs of providing such services. Such inspection shall be
available up to four (4) years after the rendering of such
services. This paragraph is not intended to prohibit or
impede any state audits pursuant to state law.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject
matter hereof and correctly sets forth the rights, duties and
obligations of the parties as of the date set forth above. Any
and all prior agreements, promises, proposals, negotiations or
representations, whether written or oral, which are not
expressly set forth in this Agreement are hereby superseded
and are of no force or effect. No modification, amendment or
change hereof shall be effective or binding on any party
unless set forth in writing, duly executed by the parties.
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13. MISCELLANEOUS. The parties acknowledge that this Agreement is
the result of mutual negotiation. Accordingly, this Agreement
shall not be construed against the party preparing and
drafting it, but shall be construed as if both parties jointly
prepared and drafted it. Any uncertainty or ambiguity shall
not be interpreted against either party by virtue of such
party's actual role in the preparation and drafting hereof.
The waiver by any party hereto of any requirement or
obligation arising hereunder shall be in writing to be
effective and shall not operate or be construed as a
subsequent waiver thereof. The headings in this Agreement are
for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in one or
more counterparts, each of which shall be an original but all
of which shall constitute one instrument. If any provision
contained in this Agreement shall for any reason be held
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not
invalidate this entire Agreement. Such provision shall be
deemed to be modified to the extent necessary to render it
valid and enforceable, and if no such modification shall
render it valid or enforceable, then this Agreement shall be
construed as if not containing such provision. The term
"affiliate" shall mean with respect to any party any entity or
person controlling, controlled by or under common control with
such party. This Agreement is intended solely for the benefit
of the parties hereto and is not intended to, and shall not,
create any enforceable third party beneficiary rights.
14. CONFIDENTIALITY. All information, documents and instruments
(including, without limitation, all information relative to
the terms and conditions of the Supply Contracts) delivered to
Participant and its affiliates or their agents, directors,
officers and employees are of a confidential and proprietary
nature. Participant agrees that throughout the term of this
Agreement and for a period of five (5) years following the
expiration of this Agreement it will maintain the
confidentiality of all such confidential information,
documents or instruments and will only disclose such
information, documents and instruments to its duly authorized
officers, directors, representatives and agents and its
affiliates who operate the Facilities. Participant shall
communicate to each of such parties the confidentiality
obligations required under this Agreement and shall be
responsible for those parties compliance with these
confidentiality obligations. Participant acknowledges and
agrees that any breach of this section would result in
irreparable harm to ABC Group and its affiliates and that
therefore each of them shall be entitled to an injunction to
prohibit any such breach or anticipated breach, without the
necessity of posting cash or otherwise, in addition to all of
their other legal and equitable remedies.
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IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed
by their authorized representatives this 21st day of April, 1997.
ALIGNED BUSINESS PRINCIPAL
CONSORTIUM GROUP HOSPITAL COMPANY
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Signature Signature
C. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
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Print Name Print Name
Executive Director Senior Vice President
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