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EXHIBIT 10.31
MANAGEMENT SUPPORT AND MARKETING AGREEMENT
This MANAGEMENT SUPPORT AND MARKETING AGREEMENT ("Agreement,") entered
into and effective as of the 1st day of October, 1998 (notwithstanding the date
of actual execution) by and between DOCTORS PRACTICE MANAGEMENT, INC., A Texas
business corporation ("DPM"), and ULTRAMED, L.C., a Texas limited liability
company ("ULTRAMED")
WITNESSETH:
WHEREAS, ULTRAMED is a duly and validly existing Texas limited
liability company that has been organized for the purpose of providing
management support and marketing services for medical and related healthcare
providers ("Healthcare Services") to the general public in the Greater Houston,
Texas area;
WHEREAS, DPM is experienced in providing management and related items
and services to physicians, professional associations, and other professional
healthcare entities and individuals and has been engaged as manager by VISTA
HEALTHCARE, INC.,("VISTA") a Texas business corporation organized for the
purpose of operating an outpatient surgical and diagnostic clinic and providing
medical and related healthcare services ("Healthcare Services") to the general
public in the Greater Houston, Texas area; pursuant to a Full Services
Management Agreement of even date herewith;
WHEREAS, DPM desires and intends to obtain such management,
administrative, and business services necessary and appropriate for Vista's
business operations and the provision of Healthcare Services by Vista, and
ULTRAMED is capable of assisting DPM in providing, all such management,
administrative, and business services; and
WHEREAS, DPM and ULTRAMED mutually desire an arrangement that:
(1) ensures consistency of service, quality of care, and safety of
Vista's patients;
(2) facilitates effective utilization of Healthcare services;
(3) ensures consistent and Customary patterns for the provision of
Healthcare Services;
(4) facilitate the management and administration of the day-to-day
business operations of Vista; and
(5) facilitate the establishment and maintenance of a public image of
excellence and high quality for Vista,
all for the benefit of those persons seeking Healthcare Services as
patients of the Vista.
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NOW, THEREFORE, for and in consideration of the mutual covenants set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed, the parties agree as
follows:
I. Covenants of ULTRAMED:
1.1 ULTRAMED covenants that it will provide assistance to DPM in
support of the management agreement between DPM and VISTA, including:
(a) Subject to the approval of DPM, the day-to-day operation of the
Ambulatory Surgical Center (ASC), including but not limited to the following:
(i) scheduling of procedures;
(ii) approval of procedures to be performed;
(iii) approval of physicians to perform the procedures;
(iv) supervision of the nursing staff and other support
staff personnel;
(v) physician staffing; and
(vi) nurse staffing.
(b) It is expressly agreed that all billing, collection, and
accounting responsibilities shall remain the responsibility of DPM.
1.2 ULTRAMED agrees that it has the primary responsibility for the
marketing of the facilities, including but not limited to the following:
(a) recruitment of physicians as tenants in the professional building
(b) recruitment of physicians to use and otherwise employ the services
of the ASC
(c) general efforts to improve the reputation and market the benefits
of Vista Health Care, Inc.
1.3 ULTRAMED agrees to spend at least $25,000.00 quarterly,
($100,000.00 annually,) directly on advertising, entertainment, and general
marketing of Vista Health Care Inc , the ASC, and the associated services of
the Vista Medical Center at 1401 and 0000X Xxxxx, Xxxxxxxx, Xxxxx. Further,
ULTRAMED will provide to DPM a written report and verification of these
expenditures for each quarter, with said report being due not later than thirty
(30) days after the end of each respective quarter.
1.4 ULTRAMED, as an express condition of this contract, agrees not to
change its managers, Xx. Xxxxx Xxxxx and Xx. Xxxx X. Xxxxx, during the term of
this agreement. A breach of this condition by ULTRAMED shall constitute an
event of default and a material breach of the contract, entitling DPM to
terminate this agreement immediately.
1.5 Supplies: ULTRAMED shall obtain and provide all necessary office
supplies, and shall ensure that it is at all times adequately stocked with such
supplies as are reasonably necessary and appropriate for its day to day
operation.
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1.6 Management and Clerical Personnel. ULTRAMED shall employ or
otherwise retain, and shall be responsible for selecting, training,
supervising, scheduling, and terminating, all management and clerical personnel
as ULTRAMED deems reasonably necessary and appropriate in the performance of
its duties and obligations under this Agreement. ULTRAMED shall have sole
responsibility for determining the salaries, wages, and fringe benefits of all
such management and clerical personnel, for paying such salaries and wages, and
for providing such fringe benefits, and for withholding as required by law, any
sums for income tax, unemployment insurance, social security, or any other
withholding required by applicable law or governmental requirement.
1.7 Insurance: Throughout the Term, ULTRAMED shall, at ULTRAMED's
expense, obtain and maintain with commercial carriers, through captive
insurance companies, through self-insurance, or some combination thereof,
professional, casualty, and comprehensive general liability insurance covering
ULTRAMED, its personnel, and all of its equipment in such amounts, on such
basis, and upon such terms and conditions as DPM deems appropriate.
1.8 Nonphysician Healthcare Personnel: ULTRAMED shall assist DPM in
exercising its duties to employ and be responsible for the salaries, wages,
fringe benefits, and other employment related expenses with regard to all
nonphysician healthcare personnel necessary for the provision of Healthcare
services to patients at the Facility. DPM shall determine the salaries, wages,
and fringe benefits of all such personnel.
1.9 Indemnification by ULTRAMED: ULTRAMED shall indemnify and hold DPM
harmless from and against any and all liability losses, damages, claims, causes
of action, and expenses, including, without limitation, reasonable attorney's
fees and associated costs, associated with or resulting, directly or
indirectly, from any act or omission of ULTRAMED, its employees, agents, or
independent contractors in or about the Facility during the Term. To be
entitled to such indemnification, DPM shall give ULTRAMED prompt written notice
of the assertion by a third party of any claim with respect to which DPM might
bring a claim for indemnification hereunder, and in all events must provide
such written notice to ULTRAMED within the applicable period for defense of
such claim by ULTRAMED. ULTRAMED shall, at its own expense, have the right to
defend and litigate any such third-party claim.
II. Representations and Warranties of DPM. DPM represents and warrants to
ULTRAMED that:
2.1 Organization and Existence. DPM is a Texas corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite legal and corporate power to carry on its business
as now conducted and to enter into and perform this Agreement.
2.2 Compliance with Laws. DPM is in compliance in all material
respects with all applicable foreign, federal, state, municipal and other
political subdivision or governmental agency statutes, ordinances and
regulations, including, without limitation, those imposing taxes, in every
applicable jurisdiction in respect of the ownership of the DPM's properties and
conduct of the DPMs business.
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2.3 Brokers. DPM in not a party to or in any way obligated under any
contract or other agreement for, and there are no outstanding claims against
DPM for the payment of any broker's or finder's fee in connection with the
origin, negotiation, execution or performance of this Agreement.
2.4 DPM's Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement by DPM has been duly authorized and
approved by the Board of Directors and no further corporate action is necessary
on the part of the DPM to make this Agreement valid and binding upon the DPM in
accordance with its terms. Neither the execution, delivery nor performance of
this Agreement by the DPM will result in a violation or breach of any term or
provision under the Articles of Incorporation or Bylaws of DPM or constitute a
default or breach of, or accelerate the performance required under, any
indenture, mortgage, deed of trust or other contract or agreement to which DPM
is a party or by which it or any of its respective assets are bound, or,
violate any order, writ, injunction or decree of any court, administrative
agency or governmental body.
III. Representations and Warranties of ULTRAMED. ULTRAMED represents and
warrants to and agrees with DPM that:
3.1 Organization and Existence. ULTRAMED is a limited liability
company duly organized pursuant to the laws of Texas and in good standing, and
has all requisite legal power to enter into and perform this Agreement.
3.2 Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement has been duly authorized, and no further action
is necessary on the part of ULTRAMED to make this Agreement valid and binding
upon ULTRAMED in accordance of its terms. Neither the execution, deliver nor
performance of this Agreement by ULTRAMED will result in a violation or breach
of any term or provision or constitute a default or breach of, or accelerate
the performance required under any other contract or agreement to which
ULTRAMED is a party or by which it or its properties are bound, or violate any
order, writ, injunction or decree of any court, administrative agency or
governmental body.
3.3 Brokers. ULTRAMED is not a party to or in any way obligated under
any contract or agreement for, and there are no outstanding claims against
ULTRAMED for the payment of any broker's or finder's fee in connection with the
origin, negotiation, execution, or performance of this agreement.
IV. Trade secrets and non-compete agreement.
4.1 Confidential information. ULTRAMED acknowledge that in the course
of the performance of this Agreement, it has had and will continue to have
access to certain know-how, formulae, processes, data, proprietary information,
supplier and patient records and information and other confidential knowledge
and trade secrets of DPM's and VISTA's business and operations. ULTRAMED
understands that all such information is confidential and has been or will be
conceived or learned by ULTRAMED in confidence, and agrees not to reveal any
such information to any third person for any reason or under any circumstances.
ULTRAMED further
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agrees that it will at no time use any such information for the purpose of
competing with or assisting others in competing with the business of DPM or
VISTA, or for any purpose which may be harmful or detrimental to the business
or interests of DPM or VISTA. The restrictions in this section shall not apply
and shall not prohibit the use or disclosure of such confidential information
(I) to the extent required by law or court order, or other administrative order
in any litigation, arbitration, or similar proceeding; (ii) to the extent such
information becomes publicly available other than through a breach of this
section; or (iii) to the extent such information would become necessary to
support any claim arising between the parties; or (iv) with the written
agreement of DPM and VISTA. The parties agrees that any remedy at law for
actual or threatened breach of the provisions of this section would be
inadequate and that DPM or VISTA shall be entitled to specific performance
thereof or injunctive relief by temporary or permanent injunction or such other
appropriate judicial remedy, writ or order as may be entered by a court of
competent jurisdiction. Any such remedy shall be in addition to any damages
which DPM or VISTA may be legally entitled to recover as a result of any breach
by the other party of the provisions of this section, and ULTRAMED hereby
waives any requirement for the securing or posting of any bond in connection
with obtaining any such injunctive or other equitable relief.
V. Consideration and Disbursement of Funds
5.1 The consideration for this agreement is the payment by DPM of a
Management Fee of 1/3 (one-third) of the net collections resulting from the
contract between DPM and Vista. Provided, however, such collections shall only
be from accounts receivable created on or after the beginning date of this
Agreement, namely, October 1, 1998.
5.2 The Management Fee is not intended and shall not be interpreted or
applied as permitting ULTRAMED to share in Vista's fees for Healthcare Services
or any other services, but is acknowledged as the parties' negotiated agreement
as to the reasonable fair market value of the items and services furnished by
ULTRAMED TO DPM pursuant to this Agreement, considering the nature of the
services required by DPM and the risks assumed by ULTRAMED.
5.3 Payment of Management Fee: The Management Fee shall be due and
payable on or before the fifteenth (15th) calendar day of each month for
services provided in the immediately preceding month.
VI. Term and Termination
6.1 Initial and Renewal Terms. The term of this Agreement will be for
a One (1) year period commencing as of October 1, 1998, and expiring as of
September 30, 1999, unless and until terminated as provided hereinafter ("xxx
Xxxx"). DPM is hereby granted and shall, if not at the time in default under
this Agreement, have at its sole discretion, an option to extend the term of
this Agreement for another year under the same terms contained herein. This
option shall be exercised only by DPM's delivering to ULTRAMED before the
termination of the original term written notice of DPM's election to extend the
term of this Agreement as provided herein
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6.2 Termination
6.2.1 Termination by DPM: DPM may terminate this Agreement upon the
dissolution of Vista.
6.2.2 Termination by ULTRAMED: ULTRAMED may terminate this Agreement
upon the occurrence of the dissolution of DPM, or if DPM fails to pay ULTRAMED
the Fee as provided for in Article V of this Agreement within Ten (10) days of
the date such amounts are due as provided in said Section.
6.2.3 Termination by Agreement: In the event ULTRAMED and DPM shall
mutually agree in writing, this agreement may be terminated on the date
specified in such written agreement.
6.2.4 Damage or Condemnation: In the event the Vista Healthcare
Facility is totally or substantially destroyed by fire, explosion, flood,
windstorm, hail, earthquake, hurricane, tornado, or other casualty or act of
God, or in the event all or a substantial portion of the Facility and the
premises on which it is situated is taken or to be taken by condemnation or
eminent domain proceeding, then either party may by written notice to the other
immediately terminate this Agreement.
6.2.5 Bankruptcy: In the event that either party become insolvent, or
if any petition under federal or state law pertaining to bankruptcy or
insolvency or for a reorganization or arrangement or other relief from
creditors shall be filed by or against either party, or if any assignment,
trust, mortgage, or other transfer shall be made of all or a substantial part
of the property of either party, or if either party shall make or offer a
composition in its debts with its creditors, or if a receiver, trustee, or
similar officer or creditor's committee shall be appointed to take charge of
any property of or to operate or wind up the affairs of either party, then the
other party may, by written notice, as specified herein, immediately terminate
this Agreement.
6.2.6 Default: In the event either party shall give written notice to
the other that such other party has substantially defaulted in the performance
of any material duty or material obligation imposed upon it by this Agreement,
and such default shall not have been cured within thirty (30) days following
the giving of such written notice, the party giving such written notice shall
have the right to immediately terminate this Agreement unless the defaulting
party shall, within said thirty (30) day period, have made a good faith effort
to initiate corrective action and it is contemplated that such corrective
action will be completed within the following thirty (30) day period.
6.3 Effects of Termination: Upon termination of this Agreement, as
hereinabove provided, 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 set forth herein that are
expressly made to extend beyond the Term, including, without limitation,
indemnities, payment of accrued management Fees, if any. Notwithstanding
anything to the contrary, herein, upon termination of this Agreement for any
reason, all accrued management Fees, if any, shall become immediately due and
payable without demand or notice.
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VII. Miscellaneous
7.1 Independent Relationship: It is mutually understood and agreed
that ULTRAMED and DPM, in performing their respective duties and obligations
under this Agreement, are at all times acting and performing as independent
contractors with respect to each other, and nothing in this Agreement is
intended nor shall be construed to create an employer/employee relationship or
a joint venture relationship, or to allow DPM to exercise control or direction
of any nature, kind, or description over the manner or method by which ULTRAMED
performs its duties.
7.2 Representatives
7.2.1 ULTRAMED Representative: Except as may be herein more
specifically provided, ULTRAMED shall act with respect to all matters hereunder
through its managers.
7.2.2 DPM Representative: Except as may be herein more specifically
provided, DPM shall act with respect to all matters hereunder through its
President.
7.3 Notices: Any notice, demand, or communication required, permitted,
or desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
If to ULTRAMED: XXXXX X. XXXXX M.D.
0000X Xxxxx
Xxxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telefax: (000) 000-0000
If to DPM: XX. XXXXX XXXXXXXXX
0000X Xxxxx
Xxxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telefax: (000) 000-0000
with a copy to: Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone (000) 000-0000
Telefax: (000) 000-0000
or to such other address, or to the attention of such other person or
officer, as either party may by written notice designate.
7.4 Governing Law: This Agreement has been executed and delivered in,
and shall be governed by, and construed and enforced in accordance with, the
laws of the State of Texas. Venue for any legal actions hereunder shall be in
the district courts of Xxxxxx County, Texas.
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7.5 Assignment: This Agreement may not be assigned by any party
hereto.
7.6 Waiver of Breach: The waiver by either party of any condition or
covenant, or of any breach or violation of any provision of this Agreement
shall not operate as, or to be construed to constitute, a waiver of any
subsequent breach of the same or another provision hereof.
7.7 Enforcement: In the event either party resorts to legal action to
enforce or interpret any provision of this Agreement, the prevailing party
shall be entitled to recover costs of such action so incurred, including,
without limitation, reasonable attorney's fees.
7.8 Gender and Number: Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine,
and neuter, and the number of all words herein shall include the singular and
plural.
7.9 Additional Assurance: Except as may be herein specifically
provided to the contrary, the provisions of this Agreement shall be
self-operative and shall not require further agreement by the parties;
provided, however, at the request of either party, the other party shall
execute such additional instruments and take such additional acts as are
reasonable and as the requesting party may deem necessary to effectuate this
Agreement.
7.10 Consents, Approvals, and Exercise of Discretion: Except as may be
herein specifically provided to the contrary, whenever this Agreement requires
any consent or approval to be given by either party, or either party must or
may exercise discretion, the parties agree that such consent or approval shall
not be unreasonably withheld or delayed, and such discretion shall be
reasonably exercised.
7.11 Force Majeure: Neither party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement or other
interruption of service deemed to result, directly or indirectly, from acts of
God, civil or military authority, acts of public enemy, war, accidents, fires,
explosions, earthquakes, floods, failure of transportation, strikes or other
work interruptions by either party's employees, or any other similar cause
beyond the reasonable control of either party.
7.12 Severability: In the event any provision of this Agreement is
held to be invalid, illegal, or unenforceable for any reason and in any
respect, such invalidity, illegality, or unenforceability shall not affect the
remainder of this agreement, which shall be and remain in full force and
effect, enforceable in accordance with its terms.
7.13 Divisions and Readings: The division of this Agreement into
articles, sections, and subsections and the use of captions and headings in
connection therewith are solely for convenience and shall not affect in any way
the meaning or interpretation of this Agreement.
7.14 Amendments and Agreement Execution: This Agreement and amendments
hereto shall be in writing and executed in multiple copies by the duly
authorized officers of Vista and Manager. Each multiple copy shall be deemed an
original, but all multiple copies together shall constitute one and the same
instrument.
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7.15 Entire Agreement: This Agreement supersedes all previous
contracts and amendments and constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement. Neither party
shall be entitled to benefits other than those specified herein. No oral
statements or prior written material not specifically incorporated herein shall
be of any force and effect, and no changes in or additions to this Agreement
shall be recognized unless incorporated herein by amendment as provided herein,
such amendment(s) to become effective on the date stipulated in such
amendment(s). The parties specifically acknowledged that, in entering into and
executing this agreement, the parties rely solely upon the representations and
agreements contained in this Agreement and no others.
7.16 Specific performance. Each party acknowledges that a remedy at
law for any breach or attempted breach of the provisions of this Agreement will
be inadequate, and agrees that each party shall be entitled to specific
performance and injunctive or other equitable relief in case of any such breach
or attempted breach.
7.17 Successors Bound. Subject to the provisions of Section 7.5, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal legal representatives, and assigns.
7.18 Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. The word "This
Agreement," "this instrument," "herein," "hereto," "hereunder," and words of
similar import refer to this Agreement as a whole and not to a particular
article, section, paragraph, or other subdivision of this Agreement. Whenever
the context requires, the gender of all words used in this Agreement shall
include the masculine, feminine, and neuter, and the number of all words shall
include the singular and the plural.
7.19 Counterparts. This agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute
the same instrument.
7.20 Public disclosure. The parties hereto agree that any disclosure
or press release about the transactions contemplated by this Agreement may only
be made in the manner and at the time mutually determined by the Purchaser and
the Seller.
7.21 Time. Time is of the essence hereof. If the time for performance
of any obligations set forth in this Agreement falls on Saturday, Sunday, or
legal holiday, compliance with such obligation on the next business day
following such Saturday, Sunday or legal holiday shall be deemed acceptable.
For purposes of this agreement, a "business day" is any day other than a
Saturday, Sunday, or legal holiday in Texas.
7.22 Attorney's Fees. In the event of any action at law or in equity
between the parties hereto to enforce any provision or right hereunder or in
any way related hereto or arising herefrom, the unsuccessful party in such
litigation covenants and agrees to pay to the successful party all costs and
expenses, including reasonable attorney's fees, incurred therein by such
successful party. If such successful party shall recover judgment in any such
action or proceeding, such costs and expenses shall be included as part of such
judgment.
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7.23 Language. The language of this Agreement shall be construed as a
whole and in accordance with the fair meaning of the language used. The
language of this Agreement shall not be strictly construed for or against
either of the parties hereto based upon who drafted or was principally
responsible for drafting the Agreement or any specific term or condition
hereof. This Agreement shall be deemed to have been drafted by each party
hereto, and no party may urge otherwise.
7.24. Knowledge. Any representation, warranty or covenant herein which
is limited to a party's "knowledge" is made with the understanding that such
party has examined whatever sources of information that are reasonably
accessible to such party in order to verify the truth and accuracy of such
representation, warranty or covenant.
7.25 Other documents. The parties agree to execute all other documents
or instruments necessary to effect the transfers of property set forth herein
and otherwise to implement the provisions of this Agreement.
IN WITNESS WHEREOF, ULTRAMED and DPM have executed this Agreement in
multiple originals this 1st day of October, 1998.
ULTRAMED: ULTRAMED, L.C.
By: /s/ Xx. Xxxxx
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Xx. Xxxxx, Manager
DPM: Doctors Practice Management, Inc.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
Vice President
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