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EXHIBIT 10.3
AGREEMENT TO TERMINATE THE MANAGEMENT AGREEMENT
This Agreement to Terminate the Management Agreement ("Termination
Agreement"), effective as of December 31, 1999 (the "Effective Date"), is made
by and between IOI MANAGEMENT SERVICES OF COLORADO, a Colorado business
corporation (the "IOI Management Corporation") and FROC, P.C., a Colorado
professional corporation ("FROC II") (the parties, at times, are collectively
referred to herein as the "Parties").
RECITALS
WHEREAS, currently there is that certain Management Services Agreement
dated March 11, 1998 pursuant to which IOI Management Corporation provides
management services to Front Range Orthopedic Clinic, P.C., a Colorado
professional corporation ("FROC I") (the "Initial Management Agreement"), as
amended by that certain Recruitment Agreement and Modification to Management
Services Agreement dated April 13, 1999 (the "Recruitment and Modification
Agreement"; the Initial Management Agreement as modified by the Recruitment and
Modification Agreement is referred to as the "Management Agreement");
WHEREAS, FROC I has assigned or contemporaneously with the execution
hereof will assign the Management Agreement to FROC II; and
WHEREAS, FROC II desires to, and IOI Management Corporation agrees to,
terminate the Management Agreement, and in consideration thereof FROC II agrees
to, and shall, pay to IOI Management Corporation Seven Hundred Fifty Thousand
Dollars ($750,000) pursuant to a promissory note payable in twenty-five (25)
consecutive and equal monthly payments (the "Promissory Note"), as described
further in Section 2, below;
WHEREAS, subsequent to the termination of the Management Agreement, IOI
Management Corporation shall assign all of its rights in the Promissory Note to
Integrated Orthopaedics, Inc., a Texas corporation ("IOI"), and FROC II shall
agree to such assignment.
NOW, THEREFORE, for and in consideration of the mutual covenants and
consideration set forth herein, the receipt and sufficiency of which is
acknowledged by all the Parties hereto, the Parties hereto agree as follows:
TERMS AND CONDITIONS
1. Recitals. The above recitals are true and correct as stated and are
incorporated herein by this reference.
2. Termination of Management Agreement. Each of IOI Management Corporation and
FROC II agree that effective as of the Effective Date, the Initial Management
Agreement, as amended and modified by the Recruitment and Modification Agreement
shall be terminated, null and void and of no further force and effect. In
consideration for IOI Management Corporation's agreement to terminate the
Initial Management Agreement, as amended and modified by the Recruitment and
Modification Agreement, FROC II agrees to pay to IOI Management Corporation
Seven Hundred Fifty Thousand Dollars ($750,000), payable in twenty-five (25)
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consecutive and equal monthly payments of Thirty Thousand Dollar ($30,000)
installments pursuant to a promissory note substantially in the form of Exhibit
A attached hereto. FROC II consents to the assignment of the Promissory Note
from IOI Management Corporation to IOI as provided for at the end of the
Promissory Note. FROC II understands and agrees that as of the Effective Date,
neither IOI Management Corporation nor IOI has any duty or obligation to provide
any services of any nature whatsoever to FROC II.
3. Miscellaneous.
3.1 Attorneys' Fees. If any Party institutes litigation or arbitration
to interpret or enforce this Termination Agreement, or to recover damages for
breach of this Termination Agreement, the non-prevailing party shall bear the
attorneys' fees and litigation costs (including any attorneys' fees and costs
for appeals) incurred by the prevailing party.
3.2 Further Acts. Each Party will do such further acts, including
executing and delivering additional agreements or instruments as the other may
reasonably require, to consummate, perform, evidence or confirm the covenants
and conditions contained in this Termination Agreement.
3.3 Applicable Law and Venue. This Termination Agreement shall be
construed, interpreted and enforced according to the laws of the State of
Colorado without giving effect to the laws of the domicile of any nonresident
party, and venue for any action arising hereunder shall be in Colorado.
3.4 Integration. The making, execution and delivery of this Termination
Agreement by the Parties has not been induced by any representations,
statements, warranties, or agreements other than those expressed in this
Termination Agreement. Except as otherwise set forth in this Termination
Agreement and the documents and agreements executed by the Parties hereto in
connection with this Termination Agreement, this Termination Agreement embodies
the entire understanding of the Parties with respect to the subject matter of
this Termination Agreement.
3.5 Preparation of Agreement. Each Party represents and warrants that it
was represented by, or had the opportunity to be represented by, counsel in
connection with the negotiation of this Termination Agreement and each party
hereto and its or his, as applicable, counsel participated in the negotiation
and drafting of this Termination Agreement. Accordingly, this Termination
Agreement shall not be construed more favorably for any party hereto regardless
of who is responsible for its preparation.
3.6 Parties in Interest. This Termination Agreement and all of the
terms, covenants and conditions herein shall bind and inure to the benefit of
the Parties hereto and their respective permitted successors and assigns. This
Termination Agreement may not be assigned by any Party hereto without the other
Party's written consent.
3.7 Severability. If any provision of this Termination Agreement is
found to violate any statute, regulation, rule, order or decree of any
governmental authority, court, agency or exchange, such invalidity shall not be
deemed to affect any other provision hereof or the validity of the remainder of
this Termination Agreement, and such invalid provision shall be deemed
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deleted from this Termination Agreement to the minimum extent necessary to cure
such violation.
3.8 Headings. The section and other headings contained in this
Termination Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Termination Agreement.
3.9 Waiver. A waiver of any breach or violation of any term, provision,
or covenant contained herein shall not be deemed a continuing waiver, or a
waiver of any future or past breach or violation, or a waiver of any other term,
provision or covenant of this Termination Agreement.
3.10 Confidentiality. Each of the Parties hereto agrees to keep all
terms of this Termination Agreement and all terms of the documents and
agreements executed pursuant to the terms of this Termination Agreement
confidential, except with respect to communications the undersigned has with:
(i) its advisors, such as accountants or attorneys, to assist in interpreting or
enforcing the terms of this Termination Agreement and the documents and
agreements executed pursuant to the terms of this Termination Agreement; and
(ii) third parties as necessary to carry out the terms of this Termination
Agreement as long as the undersigned divulges only the minimal information
necessary to carry out the terms of this Termination Agreement.
3.11 No Disparagement. FROC II agrees that it shall not make any
disparaging statements about IOI Management Corporation, any of IOI Management
Corporation 's affiliated corporations, or any directors, officers or employees
of IOI Management Corporation or the IOI Management Corporation's affiliated
corporations. FROC II agrees that IOI Management Corporation has a legitimate
business interest justifying such no disparagement condition and agreement. IOI
Management Corporation agrees it shall not make any disparaging statements about
FROC II. IOI Management Corporation agrees that FROC II has a legitimate
business interest justifying such no disparagement condition and agreement.
[SIGNATURES FOLLOW ON THE NEXT PAGE]
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In witness whereof, the Parties hereto have executed this Termination
Agreement as of the day and year above written.
THE MEDICAL PRACTICE:
FROC, P.C., a Colorado professional
corporation
By:
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Print Name:
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Print Title:
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IOI MANAGEMENT CORPORATION:
IOI MANAGEMENT SERVICES OF
COLORADO, INC., a Colorado business
corporation
By:
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Print Name:
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Print Title:
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EXHIBITS
EXHIBIT DESCRIPTION
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Exhibit A Promissory Note
