EXHIBIT 10.7
FORM OF
PHYSICIAN ENGAGEMENT AGREEMENT
THIS PHYSICIAN ENGAGEMENT AGREEMENT (the "AGREEMENT"), is made and
entered into this _____ day of ____________________, 1997, by and between ______
___________, D.P.M. (hereinafter "PHYSICIAN STOCKHOLDER"), whose mailing address
is ; _________________________, a Texas professional limited liability company
(hereinafter the "GROUP PRACTICE") having its principal office at
___________________________________, and American Medical Providers, Inc., a
Delaware corporation, or one of its affiliates, successors or assigns
(hereinafter "ADMINISTRATOR") as a designated third party beneficiary hereof
whose mailing address is 0000 Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
W I T N E S S E T H:
This Agreement is made and entered into under the following
circumstances:
(1) Whereas the Group Practice is engaged in the business of owning and
operating a medical practice; and
(2) Whereas the Group Practice desires, on the terms and conditions
stated herein, to engage the Physician Stockholder as a clinic physician
specializing in podiatric medicine and all related medical fields to the fullest
extent permitted by Physician Stockholder's license; and
(3) Whereas the Physician Stockholder desires, on the terms and
conditions stated herein, to participate in the Group Practice; and
(4) Whereas Group Practice and Administrator have entered into a
Management Services Agreement, attached hereto as Exhibit A (the "Management
Services Agreement"); and capitalized terms used herein but not defined shall
have the meanings ascribed to those terms in the Management Services Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and of the
promises, covenants, terms and conditions contained herein, the parties hereto
agree as follows:
1. MEMBERSHIP TERM. The Group Practice hereby engages Physician
Stockholder, and Physician Stockholder hereby accepts the engagement with the
Group Practice commencing ____________________ (hereinafter the "EFFECTIVE
DATE") and continuing for a period of five (5) years and unless cancelled in
accordance with the terms of this Agreement continuing for successive two (2)
year renewal periods thereafter (hereinafter the "TERM OF ENGAGEMENT"). The Term
of Engagement shall automatically renew unless either party gives written notice
of intent not to renew not less than two (2) years prior to the applicable
renewal date (the fifth anniversary of the Effective Date and each odd year
anniversary date thereafter). The Term of Engagement provided for in this
Section 1 shall be subject to earlier termination as provided for elsewhere in
this Agreement.
The parties agree that with respect to the initial renewal of the Term
of Engagement, either party may initiate renewal discussions and negotiations at
any time after the end of the 27th month of the Term of Engagement and the
parties will agree to mutually schedule an initial negotiating meeting prior to
the 30th month of the Term of Engagement and to proceed with negotiations in an
expeditious manner until the end of the 36th month or until notice of intent not
to renew is given by either party.
2. DUTIES AND QUALIFICATIONS. Physician Stockholder shall provide
medical services to patients at the Group Practice's office or offices located
at as listed on SCHEDULE A, or such other locations in the county or counties
listed on SCHEDULE A (the "COUNTY") or surrounding area as requested by Group
Practice and agreed to by Physician Stockholder, in accordance with the laws of
the state listed on SCHEDULE A (the "State") and the principles of medical
ethics of the American Podiatric Medical Association.
During the Term of Engagement, Physician Stockholder will practice
medicine only as a participant in the Group Practice, will practice medicine on
a full-time basis and will perform such other duties as are reasonably assigned
to and accepted by Physician Stockholder from time to time by the Group
Practice. Such duties shall include, without limitation:
a. Physician Stockholder is, and will continue to be, duly
licensed to practice medicine in the State, is Board certified in podiatric
medicine or if not currently certified then will obtain such certification
within two (2) years of the Effective Date, agrees to participate and does
participate in a continuing medical education program, and agrees to obtain and
maintain an American Podiatric Medical Association C.M.E. certificate or its
equivalent.
b. Physician Stockholder shall devote Physician Stockholder's
full professional time, attention, and energies to rendering professional
services at the Premises and at such other places in the County and its
surrounding areas as may be designated from time to time by Group Practice and
consented to by Physician Stockholder and to performing administrative duties
related to such professional practice;
c. Physician Stockholder shall provide "on duty" and "on call"
services on an equal rotating basis with other physician members of Group
Practice, and shall provide "on call" services at those hospitals and other
facilities that are designated from time to time in Group Practice's business
plan and as agreed to by Physician Stockholder;
d. Physician Stockholder agrees to keep and maintain (or cause to
be kept and maintained) on a timely basis appropriate records relating to all
professional services rendered by Physician Stockholder hereunder and to attend
to all billing reports, claims, and correspondence required in connection with
Physician Stockholder's services rendered under this Agreement;
2
e. Physician Stockholder shall notify Group Practice immediately,
but in no event later than one business day after receipt by Physician
Stockholder of any notice, claim or petition that might be covered under any
medical professional liability insurance covering Physician Stockholder or, in
any event, that might claim damages in excess of five percent (5%) of Physician
Stockholder's net worth.
f. Physician Stockholder agrees to promote, to the extent
permitted by law and the applicable canons of professional ethics and applicable
parts of this Agreement, the professional practice of Group Practice;
g. Physician Stockholder will, to a reasonable extent, attend
professional conventions and post-graduate seminars and participate in
professional societies in conjunction with the covenants and agreements
contained herein, and will do all things reasonably desirable to maintain and
improve Physician Stockholder's professional skills;
h. Physician Stockholder shall be and remain duly licensed by the
State(s) to practice medicine without restriction and shall comply with and be
controlled and governed by, and otherwise perform services hereunder in
accordance with, applicable law and the ethics and standards of care of the
medical community or communities in which Physician Stockholder shall from time
to time provide services; and
i. For the purpose of permitting the Group Practice and/or its
management services provider to purchase key man life insurance covering
Physician Stockholder and naming Group Practice and/or its management services
provider as exclusive beneficiaries, Physician Stockholder agrees to any action
reasonably required to obtain such insurance, including submitting to a physical
examination if required by any carrier proposing to provide such insurance.
j. Physician Stockholder shall at all times comply with the
reasonable and necessary policies and procedures adopted by the Group Practice
from time to time, and shall perform such other duties as Group Practice and
Physician Stockholder may from time to time mutually agree, which agreement
shall not be unreasonably withheld.
k. Nothing herein shall authorize Group Practice to impose duties
or constraints of any kind which would require Physician Stockholder to infringe
the ethics of the medical profession or violate any local ordinance or other
law. Further, Physician Stockholder shall be permitted to invest Physician
Stockholder's personal assets and manage Physician Stockholder's personal
investment portfolio in such a form and manner as will not require any
professional or business services on Physician Stockholder's part to any third
party, or conflict with the provisions of Sections 17, 18 or 19 of this
Agreement.
l. Physician Stockholder has full power and authority to enter
into this Agreement and perform all obligations hereunder. The execution and
performance of this Agreement by Physician Stockholder will not constitute a
breach or violation of any covenant,
3
agreement or contract to which Physician Stockholder is a party or by which
Physician Stockholder is bound.
3. PROFESSIONAL JUDGMENT. Physician Stockholder will be free to exercise
Physician Stockholder's own judgment regarding the treatment of any particular
patient. Physician Stockholder, however, agrees to observe and comply with the
rules, regulations, policies and procedures of Group Practice as adopted from
time to time by the Group Practice.
4. TAX STATUS OF PHYSICIAN STOCKHOLDER. The parties expressly
acknowledge that Physician Stockholder, in the performance of services
hereunder, is a Member of the Group Practice which is taxed as a partnership for
federal income and employment tax purposes. Physician Stockholder has received a
copy of the Professional Limited Liability Company Regulations of the Group
Practice and understands his or her share of the income taxes of the Group
Practice.
5. PROFESSIONAL FEES. Physician Stockholder acknowledges that Group
Practice shall be entitled to all fees generated by Physician Stockholder
pursuant to professional services rendered by Physician Stockholder, and all
such fees shall be and remain the property of Group Practice. Physician
Stockholder expressly and irrevocably transfers, assigns, and otherwise conveys
to Group Practice all right, title, and interest of Physician Stockholder in and
to any fees, whether in cash, goods, or other items of value, resulting from or
incident to Physician Stockholder's practice of medicine pursuant to this
Agreement during the term hereof and hereby appoints Group Practice as
attorney-in-fact for collection of same or otherwise enforcing Physician
Stockholder's interests therein.
6. OUTSIDE PROFESSIONAL ACTIVITIES. Any fees or other honoraria received
by Physician Stockholder for speaking engagements or other outside professional
activities shall be the property of Group Practice, unless specifically excluded
on SCHEDULE A attached hereto or otherwise agreed to in writing.
7. ACCOUNTING CENTER. Physician Stockholder's services, and the services
of such other physicians as may be agreed to by Physician Stockholder, shall
become the basis for an accounting center within the Group Practice (the
"Accounting Center"). Earnings Before Taxes for the Accounting Center and the
physicians to be included therein shall be calculated according to Schedule C,
attached hereto and the Management Services Agreement. Physician Stockholder
agrees to fully participate in the preparation of annual plans and budgets.
8. COMPENSATION. Physician Stockholder's compensation shall be based
upon Net Earnings Before Taxes of the Accounting Center calculated according to
Schedule C, multiplied by __%. Physician Stockholder shall receive actual
compensation according to this share of Net Earnings Before Taxes of the
Accounting Center as divided among all physicians related to the Accounting
Center according to Schedule D attached hereto (individually, his or her
"Compensation"). Such Compensation will be payable in the form of an estimated
monthly draw, payable on the 15th day of each calendar month, adjusted quarterly
by an estimated
4
distribution or assessment and yearly by a final distribution or assessment made
after the Group Practice has filed its annual tax return.
9. OPTIONAL DISTRIBUTIONS; LOANS TO PHYSICIAN STOCKHOLDER.
Notwithstanding Section 8 above, in the first year of this Agreement the actual
distributions to Physician Stockholder shall be subject to adjustment as
follows:
a. If Physician Stockholder has so indicated on SCHEDULE D, he or
she will receive an Advance on the first monthly draw as a loan payable in
accordance with this Section 9.
b. Physician Stockholder shall have the option to receive
additional distributions during each month of the first three months of the
first year of this Agreement in the amount of the difference between the actual
compensation under Section 8 and ninety percent (90%) of 1/12th of the actual
distributions received by Physician Stockholders during the twelve (12) months
immediately preceding the commencement of this Agreement and reflected on
SCHEDULE D.
c. Physician Stockholder shall have the option to receive
additional distributions during each month of the second three months of the
first year of this Agreement in the amount of the difference between the actual
compensation under Section 8 and eighty percent (80%) of 1/12th of the actual
distributions received by Physician Stockholder during the twelve (12) months
immediately preceding the commencement of this Agreement and reflected on
SCHEDULE D.
All such distributions in excess of Physician Stockholders actual Compensation
under Section 8 above shall be a loan to Physician Stockholder, repayable to the
Group Practice as of the second anniversary of this Agreement in twenty-four
(24) monthly installments, plus interest at an annual percentage rate equal to
the prime rate as published in The Wall Street Journal on the date of said loan,
to be withheld on a prorated basis from the monthly draw.
10. ANCILLARY PROFITS. During each year of the Term of Engagement,
Physician Stockholder may receive a monthly distribution of the profit or loss
from Ancillary Services offered by the Group Practice and related to the
Accounting Center, the frequency and amount of which shall be determined in the
sole discretion of the Group Practice.
11. VACATION/PERSONAL TIME. Physician Stockholder shall be entitled to
leave for vacation, illness, disability, holiday and educational purposes as
provided on the attached SCHEDULE B. Physician Stockholder shall not be entitled
to any additional absences for any reason unless the Group Practice specifically
approves additional leave in writing. Unused holidays and days of vacation may
not be carried over from one fiscal year to another. Group Practice and
Physician Stockholder shall mutually agree on the scheduling of Physician
Stockholder's vacation, holiday and leave time, and all vacation, holiday and
leave time shall
5
be subject to Physician Stockholder's obligation to make arrangements with Group
Practice's other professional employees for on-call coverage.
12. BENEFITS. In addition to any other rights Physician Stockholder may
have hereunder, Group Practice shall provide to Physician Stockholder, as an
Excluded Group Practice Expense, the benefits listed on the attached SCHEDULE B.
Additionally, key man life insurance may be maintained on Physician Stockholder
but the cost of such insurance shall be a Group Practice Expense.
13. PROFESSIONAL MEETINGS AND CONTINUING MEDICAL EDUCATION. Physician
Stockholder shall be able to attend professional meetings and continuing medical
education conferences as provided on SCHEDULE B, but the cost of such meetings
or conferences shall be an Excluded Group Practice Expense.
14. PROFESSIONAL LIABILITY INSURANCE.
a. MINIMUM POLICY. Group Practice shall, at Physician
Stockholder's expense, at all times during the Term of Engagement, maintain and
keep in force professional liability insurance "claims made" (or occurrence)
policies of standard form in the State providing coverage for Physician
Stockholder, Group Practice and Administrator (if possible) with limits of not
less than Two Hundred Thousand Dollars ($200,000.00) per occurrence, and not
less than Six Hundred Thousand Dollars ($600,000.00) in the aggregate, or such
higher amount as may be deemed reasonable and/or necessary for each single year.
The policy shall be placed with insurance companies authorized and licensed to
issue such policies in the State with an "A" or higher A.M. Best Rating and
reasonably acceptable to Group Practice, and shall name Physician Stockholder,
Group Practice and Administrator (if possible) as insured parties. Physician
Stockholder shall cooperate fully with Group Practice and such insurance
companies in order to obtain such professional liability insurance policy.
b. TAIL COVERAGE. Upon termination of Physician Stockholder's
engagement with Group Practice for any reason, other than death, disability,
termination without cause or retirement at age 65 or older, Physician
Stockholder shall obtain at Physician Stockholder's expense an extended
reporting period or "tail" professional liability insurance policy in an amount
of not less than Two Hundred Thousand Dollars ($200,000.00) per occurrence and
Six Hundred Thousand Dollars ($600,000.00) in the aggregate, or such higher
amount as may be deemed reasonable and/or necessary for not less than 5 years,
such tail coverage policy to provide coverage of Physician Stockholder, Group
Practice and Administrator (if possible) for all occurrences and events during
Physician Stockholder's engagement with Group Practice.
c. INDEMNIFICATION. Physician Stockholder hereby agrees to
defend, indemnify and hold Group Practice harmless from and against any loss,
claim, suit, expense or obligation arising out of or resulting from Physician
Stockholder's actual or alleged malpractice in the performance of medical
services pursuant to this Agreement.
6
d. LOSS OF PROFESSIONAL LIABILITY INSURANCE. Group Practice may
immediately suspend Physician Stockholder from practice under this Agreement if,
due to any act or omission of Physician Stockholder, medical professional
liability insurance as specified in (a) above cannot be obtained for Physician
Stockholder or if Physician Stockholder's medical professional liability
insurance is cancelled, suspended, revoked or terminated, and Physician
Stockholder shall not be reinstated or permitted to practice at Group Practice's
business until such time as the medical professional liability insurance for
Physician Stockholder is reinstated to the satisfaction of Group Practice.
Physician Stockholder will notify Group Practice, immediately, but in no event
later than twenty-four (24) hours after receipt by Physician Stockholder of any
notice or information that Physician Stockholder's professional liability
insurance has been or may be cancelled, terminated, revoked or suspended.
15. TERMINATION. Notwithstanding any other provisions of this Agreement,
the Term of Engagement shall terminate upon:
a. the death of Physician Stockholder; or,
b. upon Physician Stockholder's "disability" (for purposes of
this Agreement, the term "disability" shall mean the inability of Physician
Stockholder, arising out of any medically determinable physical or mental
impairment, to perform the services required of him hereunder for a period of
sixty (60) consecutive days during which sixty (60) day period Physician
Stockholder's compensation hereunder shall continue); or,
c. at Group Practice's option, immediately upon the existence of
"cause." For purposes of this Agreement, the term "cause" shall be defined as:
(1) failure of Physician Stockholder to perform the duties
required of him in this Agreement in a manner reasonably satisfactory to
Group Practice, in Group Practice's sole discretion upon a vote of not
less than 2/3 of the Board of Managers of the Group Practice; provided,
however, that the Term of Engagement shall not be terminated pursuant to
this subparagraph (1) unless Group Practice first gives Physician
Stockholder a written notice ("Notice of Deficiency"). The Notice of
Deficiency shall specify the deficiencies in Physician Stockholder's
performance of his duties. Physician Stockholder shall have a period of
thirty (30) days, commencing on receipt of the Notice of Deficiency, in
which to cure the deficiencies contained in the Notice of Deficiency. In
the event Physician Stockholder does not cure the deficiencies to the
satisfaction of Group Practice, in its sole discretion, within such
thirty (30) day period, the Group Practice shall have the right to
immediately terminate the Term of Engagement and this Agreement. The
provisions of this subparagraph (1) may be invoked by Group Practice any
number of times and the cure of deficiencies contained in any Notice of
Deficiency shall not be construed as a waiver of this subparagraph (1)
nor prevent the Group Practice from issuing any subsequent Notices of
Deficiency;
7
(2) any material dishonesty by Physician Stockholder in
his dealings with the Group Practice, the commission of fraud by
Physician Stockholder, or gross negligence in the performance of the
medical duties of Physician Stockholder, all as determined by the Group
Practice in accordance with adopted procedures;
(3) the conviction (or plea of guilty or nolo contendere)
of Physician Stockholder of any felony or other crime involving moral
turpitude;
(4) any violation of any covenant or restriction contained
in Section 18 or Section 19 hereof;
(5) unlawful use of narcotics or other controlled
substances, or use of alcohol or other drugs in a manner the Group
Practice determines to be adverse to the best interests of the Group
Practice;
(6) failure of Physician Stockholder to maintain Physician
Stockholder's license and authorization to practice as a physician in
the State;
(7) failure of Physician Stockholder to (a) obtain within
two (2) years of the Effective Date, and/or (b) maintain Physician
Stockholder's status as Board certified in podiatric medicine by a
certifying organization acceptable to the Group Practice;
(8) if, due to any act or omission of Physician
Stockholder, the medical professional liability insurance required by
Section 14(a) of this Agreement cannot be obtained by Group Practice, or
if, due to any act or omission of Physician Stockholder, such medical
professional liability insurance is cancelled, terminated or revoked and
cannot be replaced within 60 days.
For all purposes of this Agreement, termination for "cause" shall be
deemed to have occurred in the event of Physician Stockholder's resignation
when, because of existing facts and circumstances, subsequent termination for
"cause" can reasonably be foreseen.
Except as otherwise provided in this Agreement, in the event of
termination of this Agreement pursuant to this Section 15, Physician Stockholder
or Physician Stockholder's estate, as appropriate, shall be entitled to receive
(in addition to any benefits payable upon death in the case of Physician
Stockholder's death) the compensation provided for in Section 8 hereof (prorated
on a daily basis) and any Ancillary Profits provided for in Section 10 hereof
(determined as provided in Section 10), up to and including the effective date
of termination. However, Group Practice reserves the right of setoff for any
damages resulting from the termination or for any amounts owed by Physician
Stockholder to Group Practice.
16. EFFECTS OF TERMINATION. In the event of termination of this
Agreement, neither party shall have any further obligations hereunder except for
(i) obligations accruing prior to the date of termination and (ii) obligations,
promises or covenants contained herein which are
8
expressly made to extend beyond the term of this Agreement as provided herein,
including, without limitation, confidentiality of information, indemnities and
Physician Stockholder's covenants not to compete and to pay damages (which
covenants and agreements shall survive the termination or expiration of this
Agreement). No compensation shall be payable to Physician Stockholder following
the effective date of the termination of Physician Stockholder's Term of
Engagement. The termination of this Agreement, for whatever reason, shall not
extinguish those obligations of Physician Stockholder specified in Sections 18
and 19 hereof, nor shall the same extinguish the right of either party to bring
an action, either in law or in equity, for breach of this Agreement by the other
party.
17. TRANSITION FOLLOWING NOTICE OF TERMINATION. Following any notice of
termination of Physician Stockholder's Term of Engagement hereunder, whether
given by Group Practice or Physician Stockholder, Physician Stockholder will
fully cooperate with Group Practice in all matters relating to the winding up of
Physician Stockholder's pending work on behalf of Group Practice and the orderly
transfer of such work to the other professional employees of Group Practice. On
or after the giving of notice of termination hereunder and during any notice
period, Group Practice will be entitled to such full-time or part-time services
of Physician Stockholder as Group Practice may reasonably require.
18. NON-COMPETITION. During the Term of Engagement and for a continuous
period of one (1) year thereafter commencing upon expiration or termination of
the Term of Engagement, regardless of any termination pursuant to Section 15 or
any voluntary termination or resignation by Physician Stockholder, except for
death, disability, full-time retirement, termination without cause or by law,
Physician Stockholder shall not without the written consent of Group Practice,
individually or jointly with others, directly or indirectly, whether for his own
account or for that of any other person or entity, own or hold any ownership or
voting interest in any person or entity engaged in a business the same as or
similar to any business of the Group Practice, or in a business which competes
in any manner whatsoever with the business of Group Practice or Group Practice's
facility (other than Business Interests as disclosed on SCHEDULE A and any
ownership interest in the Administrator) and which is located or intended to be
located anywhere within a radius of twenty (20) miles of the offices of Group
Practice at which Physician Stockholder has practiced podiatry in the last year.
19. NON-DISCLOSURE; NON-SOLICITATION. Except in the performance of his
duties hereunder, at no time during the Term of Engagement or for a period of
one year thereafter shall Physician Stockholder, individually or jointly with
others, for the benefit of Physician Stockholder or any third party, publish,
disclose, use or authorize anyone else to publish, disclose or use, any secret
or confidential material or information relating to any aspect of the business
or operations of the Group Practice or any information regarding the business
methods, business policies, procedures, techniques, or trade secrets, or other
knowledge or processes of or developed by Group Practice (and/or any other
Physician Stockholder or agent of Group Practice), any affiliate of the Group
Practice, any entity in which the Group Practice has an interest, including,
without limitation, any secret or confidential information relating to the
business, customers, financial position, trade or industrial practices, trade
secrets, technology
9
or know-how of the Group Practice. Moreover, during the Term of Engagement,
Physician Stockholder shall not act as an officer, director, employee, partner,
independent contractor, consultant, principal, agent, proprietor, owner or part
owner of, or in any other capacity for, nor lend any assistance (financial,
managerial or otherwise) or cooperation to, any person or entity (other than
Group Practice or the Administrator) which employs any person or hires or
contracts with, as a consultant or other independent agent or independent
contractor, any person or entity (other than Physician Stockholder) who was
employed by or acted as an agent for, consultant to, or independent contractor
of the Group Practice, any affiliate of the Group Practice, or any entity in
which the Group Practice has an interest, at any time during the Term of
Engagement, nor shall Physician Stockholder employ any such person or induce or
attempt to influence any such person to terminate employment with Group
Practice.
20. REASONABLENESS OF RESTRICTIONS; REFORMATION; ENFORCEMENT. The
parties hereto recognize and acknowledge that the geographical and time
limitations contained in Sections 18 and 19 hereof (hereinafter the "RESTRICTIVE
COVENANTS") are reasonable and properly required for the adequate protection of
the Group Practice's interest. Physician Stockholder acknowledges that the Group
Practice will provide to Physician Stockholder confidential information
concerning the Group Practice's business methods and operating practices in
reliance on the covenants contained in the Restrictive Covenants. It is agreed
by the parties hereto that if any portion of the restrictions contained in the
Restrictive Covenants are held to be unreasonable, arbitrary or against public
policy, then the restrictions shall be considered divisible, both as to the time
and to the geographical area, with each month of the specified period being
deemed a separate period of time and each radius mile of the restricted
territory being deemed a separate geographical area, so that the lesser period
of time or geographical area shall remain effective so long as the same is not
unreasonable, arbitrary or against public policy. The parties hereto agree that
in the event any court of competent jurisdiction determines the specified period
or the specified geographical area of the restricted territory to be
unreasonable, arbitrary or against public policy, a lesser time period or
geographical area which is determined to be reasonable, nonarbitrary and not
against public policy may be enforced against Physician Stockholder. If
Physician Stockholder shall violate any of the covenants contained herein and if
any court action is instituted by the Group Practice to prevent or enjoin such
violation, then the period of time during which the Physician Stockholder's
business activities shall be restricted, as provided in this Agreement, shall be
lengthened by a period of time equal to the period between the date of the
Physician Stockholder's breach of the terms or covenants contained in this
Agreement and the date on which the decree of the court disposing of the issues
upon the merits shall become final and not subject to further appeal.
21. NO REMEDY AT LAW. With respect to the covenants and agreements of
Physician Stockholder set forth in the Restrictive Covenants, the parties agree
that a violation of such covenants and agreements will cause irreparable injury
to Group Practice for which Group Practice will not have an adequate remedy at
law, and that Group Practice shall be entitled, in addition to any other rights
and remedies it may have, at law or in equity, to obtain an injunction to
restrain Physician Stockholder from violating, or continuing to violate, such
covenants and agreements. In the event Group Practice does apply for such an
injunction, Physician
10
Stockholder shall not raise as a defense thereto that the Group Practice has an
adequate remedy at law.
22. LIQUIDATED DAMAGES. The parties agree that in the event of
termination of this Agreement by Physician Stockholder other than at the normal
expiration of the Term of Engagement or as a result of the violation of the
terms of this Agreement by the Group Practice, the direct costs and damages to
Group Practice, though substantial, would be difficult to precisely determine.
Therefore, the parties agree that in the event of such termination, Physician
Stockholder shall pay to Group Practice, not as a penalty, but as the parties'
reasonable estimate of the direct costs and other direct damages resulting to
Group Practice in connection with such termination, liquidated damages in an
amount equal to Dollars ($ ), which amount is intended to approximate the twelve
(12) months of Group Practice expenses attributable to Physician Stockholder
next preceding the termination of this Agreement, which amount is the best
estimate of the expenses to continue to be incurred while Physician Stockholder
is fully replaced. Such damages shall be payable on demand by Group Practice.
Physician Stockholder and Group Practice agree that the damages provided for
herein are not the full measure of damages that could be incurred by the Group
Practice as a result of Physician Stockholder's breach of the terms of this
Agreement and nothing contained in this Section 22 shall prevent Group Practice
from seeking injunctive relief to enforce the terms of this Agreement.
23. BILLING SERVICES. Group Practice shall have sole responsibility and
authority for preparation of xxxxxxxx for, and collection of income generated
from, Physician Stockholder's practice of medicine and the operation of
Ancillary Services and, pursuant to this Agreement, the delegated authority to
request, demand, collect, receive and provide receipts for all income on behalf
of Physician Stockholder including any payment or reimbursement from
governmental agencies and insurance carriers on account of medical services
provided to patients. Upon notification by Group Practice, Physician Stockholder
will utilize the Group Practice's provider numbers to xxxx on behalf of
Physician Stockholder for payment and reimbursement from governmental agencies
and insurance carriers. All funds collected from operation of Ancillary Services
and from Physician Stockholder's practice of medicine hereunder shall be the
sole property of Group Practice and shall be deposited into Group Practice's
account and Group Practice shall have sole authority to make disbursements
therefrom, including refunds and repayment of payments received in error.
24. PATIENT RECORDS, BOOKS, OFFICE EQUIPMENT, ETC.
a. PATIENT RECORDS. As between the Physician Stockholder and the
Group Practice, all patient records shall at all times be and remain Group
Practice's property and all possessory rights to the patient records shall
remain with the Group Practice and Physician Stockholder shall have no such
possessory rights to patient records except as required by law and further;
provided, however, that upon termination of this Agreement, Group Practice shall
provide Physician Stockholder, at Physician Stockholder's expense, access to and
copies of such records relating to medical services performed at Group
Practice's business by Physician
11
Stockholder during the term hereof, if so requested by the patient or if
required by Physician Stockholder in defense of any professional liability
claim.
b. EQUIPMENT AND SUPPLIES. Group Practice shall provide for
Physician Stockholder's use of all professional instruments, books, office
equipment and other property reasonably necessary, in Group Practice's
discretion, for Physician Stockholder's practice of medicine under this
Agreement. All instruments, equipment, furniture, furnishings, supplies,
samples, forms, charts, logs, brochures, patient records, policies and
procedures, contracts and any other property, materials or information furnished
by Group Practice are and shall remain the sole property of Group Practice. Upon
termination of this Agreement, Physician Stockholder shall return all such
property to Group Practice. The use of any equipment not provided by the Group
Practice will be subject to the approval of the Group Practice.
25. ASSIGNABILITY. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Physician Stockholder. Group
Practice may, at Group Practice's option and without consent of Physician
Stockholder, assign its rights and duties hereunder to any successor entity or
transferee of Group Practice's assets.
26. NOTICES. All notices or other communications provided for herein to
be given or sent to a party by the other party shall be deemed validly given or
sent if in writing and mailed, postage prepaid, by registered or certified
United States mail or hand delivered or sent by facsimile, addressed to the
parties at their addresses hereinabove set forth. Any party may give notice to
the other parties at any time, by the method specified above, of a change in the
address at which, or the person to whom, notice is to be addressed.
27. SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. In the event that any provision of this Agreement shall be determined to
be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, in the event such a limiting construction is
impossible, such invalid or unenforceable provision shall be deemed severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
28. WAIVER. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
29. PARTIES. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their heirs, personal representatives,
legal representatives, and proper successors and assigns, as the case may be.
12
30. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State, without giving effect to
the principles of comity or conflicts of laws thereof. Each party hereto agrees
to submit to the personal jurisdiction and venue of the state and federal courts
having jurisdiction over the County and the State, for a resolution of all
disputes arising in connection with the interpretation, construction, and
enforcement of this Agreement, and hereby waives the claim or defense therein
that such courts constitute an inconvenient forum.
31. CAPTIONS. The captions of this Agreement have been assigned thereto
for convenience only, and shall not be construed to limit, define or modify the
substantive terms hereof.
32. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the
entire agreement between the parties hereto concerning the subject matter
hereof, and supersedes all prior agreements, memoranda, correspondence,
conversations and negotiations. This Agreement may be executed in several
counterparts that together shall constitute but one and the same Agreement.
33. COSTS OF ENFORCEMENT. In the event it is necessary for any party to
retain the services of an attorney or to initiate legal proceedings to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party, in addition to all other remedies, all costs of
such enforcement, including reasonable attorneys' fees and costs and including
trial and appellate proceedings.
34. GENDER, ETC. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
35. THIRD-PARTY BENEFICIARY. The parties acknowledge and agree that the
Administrator has entered into a Management Services Agreement with the Group
Practice and that Physician Stockholder and Administrator, together with certain
other parties, have entered into a Business Purchase Agreement, with Group
Practice in reliance on the covenants of Physician Stockholder contained in
Sections 18 and 19 hereof. Physician Stockholder acknowledges and agrees that
Administrator has entered into the Business Purchase Agreement, purchased assets
and incurred expenses in order to fulfill its obligations pursuant to the
Management Services Agreement, and otherwise detrimentally relied upon Physician
Stockholder's agreement to perform his obligations pursuant to terms of this
Agreement, and that the Administrator's agreement to pay Physician Stockholder
the consideration described in the Business Purchase Agreement was made in
reliance on Physician Stockholder's commitment to provide services as a
participant in the Group Practice pursuant to terms of this Agreement for the
Term of Engagement. Accordingly, Group Practice and Physician Stockholder agree
that Administrator is a specific intended third-party beneficiary of such
covenants, who shall be independently entitled to the benefit thereof and shall
have an independent right to enforce same. In addition, Group Practice and
Physician Stockholder covenant and agree for the benefit of
13
Administrator that this Agreement shall not be terminated, modified or amended
nor any of the Group Practice's rights hereunder waived without the prior
written consent of Administrator.
Physician Stockholder acknowledges and agrees that in the event of
termination of this Agreement, and in connection with any violation of this
Agreement on the part of Physician Stockholder, Group Practice may, upon request
of Administrator, assign any cause of action and/or rights that it may have
hereunder to the Administrator, including Group Practice's rights, if any, to
recover liquidated damages from Physician Stockholder. Physician Stockholder
acknowledges and agrees that in the event of any such assignment, Administrator
shall be entitled to set off liquidated damages and other amounts payable by
Physician Stockholder hereunder which have been assigned to Administrator
against amounts paid or to be paid by Administrator to Physician Stockholder
under the terms of the Business Purchase Agreement, subject to any defenses
against the assignor thereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the
date first written above.
PHYSICIAN STOCKHOLDER:
__________________________________
GROUP PRACTICE:
_____________________, a Texas
professional limited liability company
By: ______________________________
_________________, President
ACKNOWLEDGED:
AMERICAN MEDICAL PROVIDERS, INC.,
a Delaware corporation
By: _________________________________
Printed Name: _________________________________
Title: _________________________________
14
SCHEDULE A
A. STATE _____________________________________
B. COUNTY(IES) _____________________________________
C. OFFICE LOCATION(S) _____________________________________
_____________________________________
_____________________________________
D. LIST OF OUTSIDE _____________________________________
PROFESSIONAL ACTIVITIES _____________________________________
_____________________________________
E. LIST OF BUSINESS _____________________________________
INTERESTS _____________________________________
_____________________________________
A - 1
SCHEDULE B
A. VACATION/PERSONAL TIME ______ weeks/year
B. BENEFITS
Retirement Plan
Stock Purchase Plan
Insurance - Life
Insurance - Health
Insurance - Disability
C. PROFESSIONAL MEETINGS/ ______ weeks/year
CONTINUING MEDICAL EDUCATION
B - 1
SCHEDULE C
C - 1
SCHEDULE D
COMPENSATION
Salary or Percentage Advance on First
Of Net Earnings Before Taxes Month Draw (Y/n)
---------------------------- ----------------
PHYSICIAN EMPLOYEE:
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
PHYSICIAN STOCKHOLDER: BASE
Y/N
_______________________ _______________________ __________
_______________________ _______________________ __________
_______________________ _______________________ __________
_______________________ _______________________ __________
D - 1
SCHEDULE E
PENDING LITIGATION
[NONE]
E - 1