PRACTICE MANAGEMENT SERVICES AGREEMENT
BY AND BETWEEN
NORTHERN METROPOLITAN RADIOLOGY ASSOCIATES, P.C.,
NORTHERN METROPOLITAN RADIOLOGY ASSOCIATES, P.A.,
PERSONAL BREAST SERVICES AND ULTRASOUND OF NORTHERN
WESTCHESTER, P.C.,
NMRA OF CONNECTICUT, P.C.,
JEFFERSON VALLEY DIAGNOSTIC IMAGING, P.C.,
AND
NORTHERN WESTCHESTER DIAGNOSTIC PARTNERS, P.C.
AND
ADVANCED ALLIANCE MANAGEMENT CORP.
DATED AS OF SEPTEMBER 17, 1996
PRACTICE MANAGEMENT SERVICES AGREEMENT
AGREEMENT, made as of September 17, 1996, by and between NORTHERN
METROPOLITAN RADIOLOGY ASSOCIATES, P.C., a professional corporation organized
under the laws of the State of New York ("NMRA"), NORTHERN METROPOLITAN
RADIOLOGY ASSOCIATES, P.A., a professional corporation organized under the laws
of the State of New Jersey, PERSONAL BREAST SERVICES AND ULTRASOUND OF NORTHERN
WESTCHESTER, P.C., a professional corporation organized under the laws of the
State of New York, NMRA OF CONNECTICUT, P.C., a professional corporation
organized under the laws of the State of Connecticut, JEFFERSON VALLEY
DIAGNOSTIC IMAGING, P.C., a professional corporation organized under the laws of
the State of New York, and NORTHERN WESTCHESTER DIAGNOSTIC PARTNERS, P.C., a
professional corporation organized under the laws of the State of New York (each
individually hereinafter called a "P.C." and collectively the "P.C.s")) and
ADVANCED ALLIANCE MANAGEMENT CORP., a New York corporation, (hereinafter the
"Company").
RECITALS
WHEREAS, the P.C.s are under common control and have heretofore operated as
a combined business entity; and
2
WHEREAS, the Company has heretofore provided certain management services to
the P.C.s and from and after the date hereof wishes to provide comprehensive
medical practice management services, including the leasing or subleasing of
space and equipment, consulting, billing, collection and related services
(collectively, the "Practice Management Services") and financial services to the
P.C.s; and
WHEREAS, the P.C.s desire to retain the Company to provide Practice
Management Services and financial services to the P.C.s.
NOW, THEREFORE, in consideration of mutual covenants and other good and
valuable consideration contained herein, the parties agree as follows:
1. RECITALS
1.1 The Recitals set forth above are incorporated herein as though set
forth in their entirety.
2. COMPREHENSIVE PRACTICE MANAGEMENT SERVICES
During the term of this Agreement, the Company will provide to the P.C. a
comprehensive range of non-medical Practice Management Services, all as
described in this Agreement, which the parties agree are sufficient to enable
the P.C. to conduct their medical practice (hereinafter the "P.C.s' Practice")
and the P.C. shall retain the Company on an exclusive basis (exclusive as to the
P.C. themselves as well as to any other person or entity) to provide such
services. For purposes of clarification, it is understood that all services, of
any nature whatsoever including, without limitation, the providing of clerical,
managerial, consulting and receivables processing services, that
3
are to be provided by the Company to the P.C., whether or not specifically
described in this Agreement, shall not include services which relate to the
providing of medical services.
2.1 Office Space
(a) The P.C.s and the Company acknowledge that as of the date of this
Agreement, each P.C. is leasing medical office space at such location or
locations as is set forth next to such P.C.'s name on Exhibit A annexed hereto
(each a "P.C. Office" and collectively the "P.C. Offices") each pursuant to the
terms of a lease, a copy of each of which has previously been delivered to the
Company (individually an "Existing Lease" and collectively the "Existing
Leases").
(b) Each P.C. agrees that, at the request of the Company, it will seek to
obtain the consent of the lessor under its Existing Lease to the assignment of
such Existing Lease to the Company for the purposes of the Company providing
such P.C. Office to the P.C.s.
(c) To the extent that the Company should at any time in the future provide
the P.C.s with office space (including, without limitation, any P.C. Office)
which is available to the Company as owner, lessee, sublessee or assignee, for
use by the P.C.s as a medical office (all such office space being hereinafter
called "Licensed Office Space"), the P.C.s agree that all of the obligations
contained in each such lease, sublease or assignment (an "▇▇▇▇▇▇▇▇▇") which are
imposed upon the Company will be assumed by the P.C.s which hereby agree to
assume the same. The P.C.s covenant and agree to fully and faithfully perform
the terms and conditions of the Overleases and
4
this Agreement. The P.C.s shall not do or cause to be done or suffer or permit
any act to be done which would or might cause any of the Overleases or the
rights of the Company, as lessee, sub-lessee or assignee, as the case may be,
under the Overleases, to be endangered, canceled, terminated, forfeited,
amended, modified or surrendered, or which would or might cause the Company to
be in default thereunder or liable for any damage, claim or penalty. The Company
shall have no obligation to take any action to enforce or compel performance by
any of its landlords and/or lessors and/or assignors of any provision of any
▇▇▇▇▇▇▇▇▇ or other agreement and the Company shall not be liable to the P.C.s in
the event of its landlords' or lessors' or assignors' default or failure to
perform any obligations. The P.C.s agree that if there is any conflict between
any of the Overleases and the provisions of this Agreement which would permit
the P.C.s to do or cause to be done or suffer or permit any act or thing to be
done which is-prohibited by any of the Overleases, then the provisions of the
respective ▇▇▇▇▇▇▇▇▇ shall prevail.
(d) Upon the termination of any Existing Lease, the Company will either (i)
advise the P.C.s that it will not provide such space to the P.C.s, in which
event the P.C.s shall be free to enter into such office space leases as they, in
their sole discretion, shall determine or (ii) advise the P.C.s that it will
provide space to the P.C.s in which event the Company will either provide the
P.C.s with the office space now provided under such Existing Lease or select and
provide to the P.C.s comparable Licensed Office Space at a comparable location.
5
(e) The Company's provision of Licensed Office Space to the P.C.s, if any,
shall include:
(i) electricity and water for typical medical office requirements;
(ii) heat or air conditioning, during the appropriate seasons, in
conformity with any local, state or federal regulations; and
(ii) janitorial services as is customary in the location of each such
Licensed Office Space.
(f) The Company agrees that notwithstanding anything contained in
sub-paragraph (c) and (d) above, the P.C.s shall not be required to accept any
Licensed Office Space from the Company if the rental to be charged to the P.C.
for such Licensed Office Space, as provided in this Agreement, is in excess of
the then prevailing market rental for substantially similar office space in the
area in which such proposed Licensed Office Space is located.
2.2 Furnishings and Equipment.
(a) The Company will provide the P.C.s, at the P.C. Offices, with the use
of such office furniture and fixtures as have heretofore been provided to the
P.C.s, which furniture and fixtures are customary in medical practices similar
to that conducted by the P.C.s as the same may hereafter be altered from time to
time (the "Furnishings");
(b) The Furnishings provided by the Company to the P.C.s at the P.C.
Offices shall remain at all times the property of the Company whether owned or
leased by the Company and the P.C.s shall not pledge, lend, create a security
interest in,
6
assign, sublease or part with possession of the Furnishings or any part thereof
or attempt in any other manner to altar, modify, dispose of the Furnishings or
remove the Furnishings or any part thereof from the P.C. Offices, without the
Company's prior written consent, or take any other action which would adversely
affect the Company's title to or interest in the Furnishings. The P.C.s will
promptly discharge, at theirs own expense, any lien or encumbrance on the
Furnishings which shall arise, unless same shall have been created by the
Company. The P.C.s agree to sign a UCC Form 1 Financing Statement and any
applicable future continuation statements to reflect that the Furnishings are
the property of the Company and also authorizes the Company to file such
statements without its signature.
(c) The Company will provide the P.C.s at the P.C. Offices with use of such
equipment as has heretofore been provided to the P.C.s, which equipment is
customary in medical practices similar to that conducted by the P.C.s as the
same may hereafter be altered from time to time (the "Equipment").
(d) The Equipment provided by the Company to the P.C.s at the P.C. Offices
shall remain at all times the property of the Company even if installed in or
attached to real property and whether owned or leased by the Company. The P.C.s
shall not pledge, lend, create a security interest in, assign, sublease or part
with possession of, the Equipment or any part thereof or attempt in any other
manner to alter, modify, dispose of or remove the Equipment or any part thereof
from the P.C. Offices, without the Company's prior written consent, or take any
other action which would adversely affect the Company's title to or interest in
the Equipment. The P.C.s
7
shall promptly discharge, at its own expense, any lien or encumbrance on the
Equipment which shall arise, unless the same shall have been created by the
Company. The P.C.s agree to sign a UCC Form 1 Financing Statement and any
applicable future continuation statements to reflect that the Equipment is the
property of the Company.
(e) The P.C.s shall cause the Equipment to be operated in accordance with
any applicable manufacturer's manual of instructions and only by competent and
qualified personnel.
(f) THE COMPANY HEREBY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES WITH
RESPECT TO THE EQUIPMENT, AND THE FURNISHINGS, EXPRESS, IMPLIED OR OTHERWISE,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(g) The P.C.s agree to use the Furnishings and Equipment only for the
purposes described in this Agreement and in accordance with applicable laws and
regulations.
(h) The Company shall be responsible, at its expense, to repair and/or
maintain the Furnishings and Equipment in good working order except for repairs
caused by the willful misconduct, negligence or misuse of the Furnishings or
Equipment by the P.C.s or their agents or subcontractors. All such repairs and
maintenance shall be provided by the Company, by its own employees, agents or
subcontractors, upon the request of the P.C.s.
8
2.3 Supplies
The Company will provide the P.C.s with such medical and office supplies
(hereinafter the "Supplies") that are reasonably necessary for the day-to-day
operation of the P.C.s.
2.4 Personnel Services
(a) The Company will provide the P.C.s with such clerical personnel and
other non-medical personnel such as, for example, secretaries, receptionists,
file clerks, administrators, etc. ("Non-Medical Personnel") as may be reasonably
required to perform necessary services for the P.C.s.
(b) Non-Medical Personnel will be selected and assigned to the P.C.s on an
as-needed basis as reasonably agreed to by the parties.
(c) The Company will be responsible for the salary, withholding taxes,
compensation insurance, disability insurance, medical/health insurance and other
fringe benefits of the Non-Medical Personnel provided by the Company to the
P.C.s.
(d) The P.C.s acknowledge that the Non-Medical Personnel provided by the
Company under this Agreement may, from time to time, perform services for other
clients of the Company. Nothing in this Agreement, express or implied, shall
prevent the Company from providing the services of such personnel to its other
present or future clients or using them for its own purposes.
(e) The Company will not provide Non-Medical Personnel on the holidays
listed below and also reserves the right to modify or substitute on five (5)
days notice the list of holidays on which services will not be provided:
9
1. New Year's Day 6. Independence Day
2. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Day 7. Labor Day
3. President's Day . 8. Yom Kippur
4. Good Friday 9. Thanksgiving Day
5. Memorial Day 10. Christmas Day
Should the P.C.s require Non-Medical Personnel on any of the 10 holidays
set forth above, it shall notify the Company in writing seven (7) business days
in advance of the P.C.s' clerical needs. In such event, the Company will use its
best efforts to supply holiday Non-Medical Personnel as requested by the P.C.s.
2.5 Managerial and Administrative Services.
Unless otherwise set forth in this Agreement, the Company will provide all
non-medical managerial and administrative services as may be reasonably required
by the P.C.s such as, for example, office administrative services, general
administrative services and fiscal management services.
3. CONSULTING SERVICES
3.1 The Company may provide to the P.C.s the following services
("Consulting Services") as may be agreed to in the future by the parties:
(a) review and analysis of available health insurance plans with special
emphasis on managed care/self insurance plans (hereinafter "Managed Care") which
can utilize the services of a P.C. as a provider;
(b) personal contact with representatives of Managed Care payors to advise
them of the expertise and quality of a P.C.'s Practice;
10
(c) preparation of a P.C.'s applications to the Managed Care and Indemnity
payers including preparation of such P.C.'s clinical outcome data needed by
payers to determine whether to contract with such P.C.;
(d) consultation with the P.C.s regarding the fees the P.C.s should accept
from Managed Care, Indemnity and capitated payors; and, subject to the P.C.s'
approval, negotiation of such reimbursement rates;
(e) assistance to a P.C. in negotiation of Managed Care and Indemnity
Provider Agreements;
(f) assistance to the P.C.s in evaluating potential additional sources of
patients;
(g) assistance to the P.C.s in evaluating and developing areas in which the
P.C.s can expand the P.C. s' Practice;
(h) evaluation of new technologies, methods and equipment;
(i) assistance in developing Quality Assurance and Utilization Review
programs;
(j) development of programs, including, but not limited to, the formulation
and production of seminars and/or lectures, whereby the expertise of the P.C.'s
physicians and its quality practice can be made known to the medical professions
and the communities in which the P.C. practices;
(k) consultation with the P.C.s concerning the feasibility/profitability of
establishing new office locations for the P.C.s and assistance in (i)
identifying suitable
11
locations; (ii) negotiating purchase contracts or leases; (iii) supervising
renovations/constructions; and (iv) integrating new offices into the P.C.'s
operation;
(l) consultation with the P.C.s regarding practice acquisition targets
including (i) identification of medical practices available for purchase; (ii)
due diligence reviews; (iii) negotiation of the purchase contract; and (iv)
assistance in the integration of the acquired practice;
(m) production of strategic business plans for the P.C.s; and
(n) assistance in the development of community service programs.
4. BILLING AND COLLECTION AND ARBITRATION SERVICES
4.1 The Company will provide the P.C.s with billing and collection services
for all medical services rendered by the P.C.s.
(a) The P.C.s agree that during the term of this Agreement, they will
provide the Company with billing and collection information relevant to all
claims and/or ▇▇▇▇▇▇▇▇ for all medical services rendered by the P.C.s (the
"Claims").
(b) The Company will be responsible for the complete processing of all
Claims in connection with the P.C. s' Practice. Where appropriate, the Company
shall establish internal procedures at the P.C. Offices for the purpose of
assuring the accurate and timely gathering of billable information.
(c) The Company agrees, in a manner consistent with industry practices, to
render bills on behalf of the P.C.s and thereafter seek to collect said
accounts, exercising due care, skill and ability. The Company will also ▇▇▇▇ and
use appropriate efforts to collect all patient deductibles and co-payment
amounts.
12
(d) The Company shall maintain accurate records of all transactions which
will be available during normal business hours for inspection by the P.C.s or
its duly authorized representative upon reasonable notice to the Company.
(e) The Company shall at all times conform with all applicable federal,
state and local laws, rules and regulations and shall modify its service in the
event of any change in such laws, rules and regulations.
(f) The Company agrees to keep all information obtained from the P.C.s
concerning identifiable patients and their diagnosis/treatment/evaluation
confidential except for disclosures required for billing purposes or where
required by law or subpoena.
(g) All Claims submitted by the Company will be in the name of a P.C. The
P.C.s agree that remittances and all other proceeds of accounts receivable
generated by the P.C.s shall be remitted to a post office box maintained by the
Company on behalf of the P.C.s or to such other address as the parties may
hereafter agree upon. All monies and instruments collected by the Company on
behalf of the P.C.s will be deposited into a segregated operating account for
the P.C.s (the "Segregated Account") (it being understood that a separate
account may be required for each P.C. (a "Separate Account") in which case the
funds deposited in each such account will be immediately transferred to the
Segregated Account); and in connection therewith, the P.C.s hereby authorize the
Company to endorse all such checks with the appropriate P.C. name for deposit to
the Segregated Account (or, if required, a Separate Account). In the event any
payment, proceed or instrument in payment of
13
services or accounts receivable related to the P.C.s' Practice is received
directly by the P.C.s, the same shall be immediately remitted to the Company for
deposit into the Segregated Account.
(h) The P.C.s agree that the Company may designate two individuals who will
have signature authority over the Segregated Account and the P.C.s further agree
that the Company may make payments on behalf of the P.C.s from the Segregated
Account for obligations of the P.C.s, which obligations shall include the fees
to be paid to the Company pursuant to this Agreement.
(i) The Company hereby agrees with the P.C.s that, to the extent that at
any time the cash in the Segregated Account is insufficient to pay the currently
due obligations of the P.C.s, the Company will pay such obligations in the
following order: (1) all operating expenses of the P.C.s (including, without
limitation salaries of non-shareholders employees of the P.C.s, malpractice
insurance, and the amount due to the Company pursuant to Section 6.1(a) hereof)
and all debt obligations to third parties, (2) the salaries and benefits due to
those employees of the P.C.s who are also shareholders of the P.C.s (the
"Shareholder Employees") but only up to the amount due to such Shareholder
Employees pursuant to the employment agreements between NMRA and such
Shareholder Employees, copies of which are annexed hereto, (3) the Initial Fee
or the New Fee, as the case may be, due to the Company, and (4) all other
obligations, if any, of the P.C.s. Notwithstanding the foregoing, the obligation
of the P.C.s to pay to the Company any and all fees due to the Company pursuant
to this
14
Agreement, including, without limitation, the Initial Fee and/or the New Fee,
shall remain an obligation of the P.C.s until paid.
4.2 The Company shall, at the request of the P.C.s, submit claims of the
P.C.s for payment of its services to arbitration, prepare all documents
necessary in connection therewith and interface on behalf of the P.C.s with
counsel if same is retained in connection with any such arbitration.
5. WORKING CAPITAL ADVANCE
5.1 Upon written request of the P.C.s, the Company may, in its sole
discretion, advance monies to the P.C.s for purposes of working capital (the
"Working Capital Advance").
5.2 Upon written request for the Working Capital Advance, the P.C.s will
provide the Company with:
(a) a statement that the proceeds of the Working Capital Advance will be
used solely by the P.C.s for their medical practice; and
(b) a statement as to the exact use of the Working Capital Advance.
5.3 Upon review of a request for a Working Capital Advance and the
financial records and reports of the P.C.s, the Company will determine whether
and upon what terms it will approve such Working Capital Advance. The Company's
determination to make the Working Capital Advance requested will be based upon
such factors as it determines are reasonable and appropriate, including but not
limited to, the following: (i) the purpose of the request; (ii) the financial
condition of the P.C.s at the time of the request; (iii) the prevailing economic
conditions; (iv) interest rates; (v) the
15
availability of capital to the Company on reasonable terms and (vi) a business
plan and budget of the P.C.s for the following calendar year. If the request for
the Working Capital Advance is granted, the parties agree to negotiate in good
faith mutually agreeable terms for the repayment of the Working Capital Advance
and the P.C.s agree to execute such documents as are customary to document such
transaction. If the request for a Working Capital Advance is denied, such denial
will not constitute a breach of this Agreement. The repayment of a Working
Capital Advance will be in addition to any fees due the Company pursuant to
Paragraph 6 of this Agreement.
6. COMPENSATION
6.1 For the services to be provided by the Company to the P.C.s pursuant to
Sections 2 and 4 of this Agreement at, or in respect of, the operation of the
P.C. Office, the P.C.s will pay to the Company (a) on a weekly basis, in
arrears, an amount equal to the actual cost to the Company of providing all such
services to the P.C.s, which costs shall include, without limitation, the
salaries and benefits of the Non-Medical Personnel, the cost of Supplies, the
rent payable for Licensed Office Space if any, etc. plus (b) on a monthly basis
in advance $133,000 per month (such $133,000 being hereinafter called the
"Initial Fee").
6.2 The parties agree that the Initial Fee has been determined based upon
the management services required by the current operations of the P.C.s and,
therefore, the parties agree that the Initial Fee shall be subject to adjustment
on each January 1st during the term of this Agreement beginning on January 1,
1998. In contemplation thereof, the parties agree that at least thirty (30) days
prior to each January 1st during
16
the term of this Agreement (beginning with January 1, 1998) the P.C.s and the
Company shall meet for the purposes of agreeing upon a new Initial Fee for the
ensuing calendar year (the "New Fee"). If the P.C.s and the Company cannot agree
on a New Fee then, and in such event, the Initial Fee or the New Fee, as the
case may be, then being charged by the Company to the P.C.s shall be increased
for the following year by the greater of (a) 15% or (b) the cost of living
adjustment as determined by the U.S. Labor Department, Bureau of Labor
Statistics for All Urban Consumers for the New York Metropolitan Area for
"Medical Care" for the previous calendar year.
6.3 If any of the P.C.s should open an additional office and if the P.C.s
and the Company shall not have previously agreed to amend this Agreement to
cover the providing of Practice Management Services to the P.C.s at such office,
then, and in such event, the Company may, at its sole discretion, advise the
P.C.s that it has elected to provide to the P.C.s those Practice Management
Services which the Company is then providing to the P.C.s and the P.C.s shall
pay to the Company for the provision of such Practice Management Services the
actual cost to the Company for the providing of such services plus 20%.
6.4 In connection with the Company providing to the P.C.s Consulting
Services pursuant to Section 3 of this Agreement, the parties agree that the
P.C.s will pay the Company the amount which has been agreed upon by the P.C.s
and the Company with respect to the provision of any such Consulting Services
within ten (10) days of the Company rendering an invoice to the P.C.s. with
respect thereto; it being understood that if the P.C.s and the Company cannot
agree on the amount to be paid by
17
the P.C.s for the provision of any of such Consulting Services, then the Company
shall not be obligated to provide such Consulting Services to the P.C.s.
7. TERM
This Agreement shall be effective for a term of thirty (30) years,
commencing the 1st day of September, 1996 and ending the 31st day of August,
2026, unless earlier terminated in accordance with this Agreement.
8. TERMINATION BY THE COMPANY
8.1 Notwithstanding Paragraph 7 above and subject to the notice and cure
provisions of sub-paragraph (k) hereof, the Company has the option to terminate
this Agreement upon or following the occurrence of any of the following events:
(a) the failure of the P.C.s to make timely payment of any Fee due the
Company as set forth in Paragraph 6;
(b) the failure of the P.C.s to make timely repayment of the Working
Capital Advances as set forth in Paragraph 7.3;
(c) failure of the P.C.s to maintain professional liability insurance as
provided in Paragraphs 19.4, l9.5 and 19.6 of this Agreement;
(d) final action by the New York State Board of Regents resulting in the
revocation or suspension of the license to practice medicine in New York of a
majority of the shareholders of NMRA;
(e) the surrender of license to practice medicine in New York by all
shareholders of NMRA.;
(f) the death of all shareholders of NMRA;
18
(g) the failure of NMRA to practice medicine for a period of ten (10)
consecutive business days;
(h) the dissolution of NMRA;
(i) the bankruptcy or insolvency of NMRA;
(j) assignment other than as permitted by Paragraph 30.1;
(k) material breach of this Agreement by the P.C.s with such breach
continuing for forty-five (45) days after written notice to the P.C.s by or on
behalf of the Company stating the nature of the breach, provided however, that
if the breach is not capable of cure within said forty-five (45) day period,
then the P.C.s shall have such time as is reasonably necessary to cure such
breach provided that the P.C.s commence action to cure the breach within the
forty-five (45) day notice period and continues diligently to attempt to cure
such breach.
9. DAMAGES
If any act described in Paragraph 8 above shall occur and if the same shall
result in the Company terminating this Agreement, the P.C.s shall (a) be liable
to the Company in an amount equal to the sum of all amounts which remain payable
by the Company for any contractual obligations which the Company incurred or for
which it may remain liable in order to meet the Company's performance
obligations under this contract and (b) pay the Company liquidated damages in
the agreed upon amount of (i) $5,950,000 if the termination occurs prior to
September 1, 1997, (ii) $5,100,000 if the termination occurs on or after
September 1, 1997 and prior to September 1, 1998, (iii) $4,250,000 if the
termination occurs on or after September 1, 1998 and prior to
19
September 1, 1999, (iv) $3,400,000 if the termination occurs on or after
September 1, 1999 and prior to September 1, 2000; (v) $2,550,000 if the
termination occurs on or after September 1, 2000 and prior to September 1, 2001,
(vi) $1,700,000 if the termination occurs on or after September 1, 2001 and
prior to September 1, 2002, and (vii) $850,000 if the termination occurs on or
after September 1, 2002 and prior to September 1, 2003. The liquidated damages
are predicated upon (i) the initial significant investment made by the Company
in staffing and providing the services described in this Agreement; (ii) the
loss of future profits; (iii) the loss of other corporate opportunity; and (iv)
shall in no event be deemed to be a penalty.
10. RIGHTS UPON TERMINATION
10.1 Upon termination or non-renewal of this Agreement, the P.C.s shall:
(a) quit and peacefully vacate all Licensed Office Space and surrender to
the Company any and all Furnishings, Equipment, or other items provided by the
Company in good order and condition (reasonable wear and tear resulting from
their proper use alone excluded). Upon or at any time after any such termination
or non-renewal, the Company may, without further notice, enter upon and re-enter
all Licensed Office Space and possess and repossess itself thereof, by force,
summary proceedings, ejectment or otherwise, and may dispossess and remove the
P.C.s, their property and personnel and all other persons and property from the
Licensed Office Space. The P.C.s. hereby expressly waive, so far as permitted by
law, the service of any notice of intention to re-enter provided for in any
statute, or of the institution of legal proceedings to that end.
20
(b) cease and desist from all use of the Company's logo and Confidential
Information (as defined in paragraph 16.1) in any way, and deliver to the
Company, or its duly authorized representatives, all materials and papers which
may contain the Company's logo or constitute the Company's Confidential
Information.
(c) refrain from using, without the Company's prior written consent, the
Company logo, or name or any word or ▇▇▇▇ which is likely to be similar to or
confusing with the Company's logo or name.
10.2 The P.C.s agree that continued use of the Company's logo or the use by
the P.C.s of the Company's Confidential Information at the termination or
expiration of this Agreement will result in immediate and irreparable damage to
the Company and to the rights of other clients of the Company for which there is
no adequate remedy at law. In this regard, the P.C.s agree that the Company
shall be entitled to equitable relief by way of injunction and such other relief
any court with jurisdiction may deem just and proper. Additionally, the P.C.s
agree that pending such a hearing and the decision on the application for such
permanent injunctive relief, the Company shall be entitled to a temporary
restraining order, without prejudice to any other remedy available to the
Company. Furthermore, all such remedies hereunder shall be at the expense of the
P.C.s.
10.3 The parties agree that subsequent to the termination of this Agreement
and until all sums due to the Company from the P.C.s have been paid in full, the
Company shall have the option to collect the P.C.s' outstanding receivables up
to the amount due and payable to the Company by the P.C.s and to apply the
proceeds thereof
21
to the payment of all sums due to the Company from the P.C.s. Upon such payment
in full, the Company shall terminate its security interest in the remaining
accounts receivable of the P.C.s.
10.4 The provisions of this Paragraph 10 shall survive termination of this
Agreement and shall in no event be construed to be an exclusive remedy of the
Company and such remedy shall be held and construed to be cumulative and not
exclusive of any rights or remedies, whether in law or in equity, otherwise
available under the terms of this Agreement or under federal, state and local
statutes, rules and regulations.
11. SECURITY INTEREST
11.1 As security for the full and timely payment of all amounts which may
at any time and from time to time be owed by the P.C.s to the Company pursuant
to this Agreement or otherwise, the P.C.s hereby grant to the Company (a) a
first senior and continuing security interest in all of the P.C.s' past, present
and future accounts, accounts receivable, contract rights and reimbursement
rights (the "General Receivables and Rights") and (b) the proceeds thereof. The
General Receivables and Rights are collectively referred to herein as the
"Collateral." In order to implement the foregoing, the P.C.s agrees to sign a
UCC Form 1 Financing Statement and any future updates and/or continuation
statements and also authorizes the Company to file such instruments without its
signature.
22
11.2 The P.C.s shall at all times keep the Collateral free and clear of all
liens and encumbrances except liens created by the Company's security interest
in the General Receivables and Rights.
11.3 The P.C.s agree from time to time, at the sole expense of the P.C.s,
to promptly execute and deliver all further instruments and documents, and take
all further action that may be necessary, or that the Company may request, in
order to perfect any security interest granted by the P.C.s herein or to enable
the Company to exercise and enforce its rights and remedies hereunder with
respect to the Collateral. Without limiting the generality of the foregoing, the
P.C.s shall execute and file such security agreements, financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Company may request, in order to perfect
and preserve the security interests granted herein by the P.C.s to the Company.
Notwithstanding the foregoing, the P.C.s also authorize the Company to file any
such instruments without their signature.
11.4 The occurrence of any of the events set forth in Paragraph 10 which
gives rise to the Company's right to terminate this Agreement, shall constitute
a default hereunder (a "Default"). So long as no Default has occurred, the P.C.s
shall be entitled to receive all proceeds received in respect to the Collateral.
Upon the occurrence of a Default, all rights of the P.C.s with the respect to
the Collateral shall cease and the Company shall have the exclusive right and
authority to receive all amounts paid in respect of the Collateral. In
connection therewith, the P.C. irrevocably
23
authorizes the Company to notify any or all of the P.C.s' obligors (including,
but not limited to, patients and third-party payers) to make payment directly to
the Company.
11.5 Upon Default, in addition to all rights and remedies set forth in this
Agreement, the Company may exercise from time to time any rights and remedies
available to it by law or in equity, including the rights and remedies set forth
in the Uniform Commercial Code as in effect from time to time in New York.
11.6 In the event of Default, the Company shall have the right, in the
name, place and stead of the P.C.s, to execute the necessary endorsements,
assignments or other instruments of conveyance or transfer with respect to all
or any of the Collateral and the proceeds thereof. The foregoing grant of
authority is irrevocable and coupled with an interest.
11.7 If the Company and the P.C.s should reasonably determine that the
P.C.s require a loan for the purposes of working capital (a "Working Capital
Loan") and if the Company shall have elected not to provide the P.C.s with a
Working Capital Advance, then, and in such event, as long as no Default shall
have occurred and then be continuing, the Company agrees with the P.C.s that the
Company will subordinate its security interest in the Collateral to any person
or entity which provides the P.C.s with a Working Capital Loan.
12. MEDICAL RECORDS
12.1 The P.C.s will maintain medical records regarding all patients of the
P.C.s' Practice as required by the laws of the State of New York and by the
rules and regulations of third-party payers, commercial insurers, health care
plans or
24
organizations and in accordance with good medical practice. All records at the
P.C. Offices relating to the P.C.s' practice and its patients shall remain the
sole property of the P.C.s. All records relating to the services of the Company
which are created and maintained by the Company, shall remain the sole property
of the Company. The parties shall permit each other access during normal
business hours to such books and records upon reasonable notice.
13. FISCAL MATTERS
13.1 The P.C.s shall have no responsibility or liability for any taxes or
governmental obligations imposed upon the Company, which shall be the sole
obligation of the Company.
13.2 The Company shall have no responsibility or liability for any taxes or
governmental obligations imposed upon the P.C.s, which shall be the sole
obligation of the P.C.s.
14. INDEPENDENT CONTRACTOR
14.1 The Company and the P.C.s acknowledge that the relationship between
them is that of independent contracting parties whereby the P.C.s are purchasers
and the Company is an independent contractor engaged in the business of selling
non-medical, practice management and financial services. Nothing contained
herein shall be construed to create an employer-employee or master-servant
relationship.
14.2 The P.C.s acknowledge that the Company has the right as an independent
contractor to affiliate or contract with any other person or entity and nothing
contained herein shall be construed as limiting that right.
25
15. INTENT OF THE PARTIES; CHANGE IN LAW
15.1 Neither the Company nor any of its personnel shall undertake or be
deemed to undertake the practice of medicine or provide medical services or
medical advice to the P.C.s or their patients in the performance of services and
other obligations under this Agreement. The Company is not authorized to engage
in any activity which may be construed or deemed under any existing or future
law or regulation to constitute the practice of medicine, the ownership or
operation of a medical practice, or the operation of a health care facility. To
the extent that any acts of the Company required by any provision of this
Agreement shall be construed or deemed to constitute the practice of medicine,
the ownership or operation of a medical practice, or the operation of a health
care facility or if any acts of the P.C.s under any provision of this Agreement
shall be construed or deemed to involve an act or service which may only be
performed by a clinic, diagnostic and treatment center or other health facility,
said provision shall be void ab initio or from the date of adoption of such law
or regulation, as the case may be, and the performance of said act or service
shall be deemed waived.
15.2 The P.C.s shall be solely responsible for: (a) all aspects of the
medical care delivered by the P.C.s; (b) the selection, supervision, direction,
contracting and employment, hiring and firing of health care professionals,
including all physicians, licensed or certified technicians and providers of
medical or nursing services (hereinafter, collectively the "Health
Professionals"); (c) establishing general operating policies and procedures of
the P.C.s; and (d) all professional and ethical affairs of the
26
P.C. Practice. The P.C.s shall be solely responsible for the determination and
payment of compensation and fringe benefits to Health Professionals who are its
employees or independent contractors. The P.C.s agree to hire or engage only
duly licensed and qualified Health Professionals.
15.3 If in the opinion of counsel to the Company this Agreement, in whole
or in part, is deemed to be in violation of any future federal, state or local
statute, rule or regulation, the Company may, without electing an exclusive
remedy, (i) terminate this Agreement upon written notice which sets forth
counsel's opinion as to the effect of any newly enacted statute, rule or
regulation upon this Agreement and that the Agreement, in whole or in part,
violates such statute, rule or regulation; or (ii) demand that the Agreement be
re-negotiated in order to conform to any newly enacted statute, rule or
regulation.
16. CONFIDENTIALITY/NON-SOLICITATION/NONDISCLOSURE
16.1 The P.C.s recognize and acknowledge that the methods, techniques,
controls, programs, management and financial strategies utilized by the Company
constitutes proprietary information of the Company (and not already in the
public domain) and is hereinafter referred to as Confidential Information.
16.2 The P.C.s agree that without the prior written approval of the
Company, the P.C.s. will not at any time, whether during or after the
termination of this Agreement, disclose to any person or use for its own
benefit, except in the course of duties as contemplated by this Agreement, such
Confidential Information or use or permit any person to examine, copy or
duplicate any Confidential Information
27
furnished to the P.C.s by the Company and at the request of the Company and in
any event upon the termination of this Agreement, the P.C.s will return to the
Company all Confidential Information, as well as any copies or information
derived therefrom. This provision shall survive the termination of this
Agreement.
16.3 During the term of this Agreement and for one (1) year after its
termination for any reason, any person who has been a shareholder any of the
P.C.s at any time during such period shall not, directly or indirectly, induce,
attempt to induce, or aid others in inducing, any person in the employ of the
Company to leave the Company's employment. The P.C.s also agree not to employ or
affiliate or contract with, or enter into any business or financial agreement
with, any employee of the Company during the period which such person is
employed by the Company and for a period of one (1) year following said
employee's termination of employment with the Company. This provision shall
survive the termination of this Agreement.
16.4 The Company agrees that it will not disclose the treatment and/or
diagnosis of any identifiable patient of the P.C.s to any third person except in
the course of its duties or where required by law and the Company agrees to
similarly instruct its employees.
16.5 The parties acknowledge that disclosure of any Confidential
Information or breach of any part of this Paragraph will give rise to
irreparable injury which will be inadequately compensable in damages.
Accordingly, either party may seek and obtain injunctive relief against the
breach or threatened breach of this Paragraph in addition to any and all other
legal remedies that may be available. In addition to any other relief or
28
damages to which a party may be entitled, the successful party shall be entitled
to recoup the expenses of reasonable legal fees in any action brought to enforce
any provision of this Paragraph.
16.6 If any provision contained in this Paragraph or anywhere in this
Agreement shall be deemed by any court of competent jurisdiction to be invalid,
illegal or unenforceable, then such provision shall be modified so as to make it
valid, legal and enforceable to the fullest extent permitted by law, and the
parties agree that such paragraph or provision shall be enforceable to such
extent.
17. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE P.C.s
The P.C.s represent, warrant and covenant to the Company that:
17.1 Each P.C is a professional corporation duly organized, validly
existing and in good standing under the laws of the State of its organization
and duly authorized to practice medicine. The following persons are the only
persons who own shares in any of the P.C.s: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "P.C.
Shareholders").
17.2 The execution and delivery of this Agreement by the P.C.s and the
performance of their duties hereunder (a) have been duly authorized by all
necessary corporate action, and this Agreement constitutes the valid and binding
obligation of the P.C.s, enforceable against the P.C.s in accordance with its
terms and (b) will not
29
violate or conflict with the Certificate of Incorporation or By-laws of any of
the P.C.s and will not result in a breach of or constitute a default under any
agreement or instrument to which the P.C.s or any of their officers, directors
or shareholders may be a party or by which any of them may be bound or affected.
17.3 The P.C.s, their employees and professional subcontractors, if any,
shall, at all times during the term of this Agreement, be duly licensed as
required by the State of New York and comply with all applicable laws and
regulations relating to the operation of its medical practice.
17.4 The P.C.s agree and covenant to maintain, at its sole cost and
expense, medical malpractice insurance in the minimum amount of $1 million per
occurrence and $3 million in the aggregate during the term of this Agreement or
if such insurance is not readily available, the P.C. Shareholders shall name the
P.C.s on their individual malpractice policies as an additional insured. The
P.C.s shall provide the Company with a copy of such policy or policies. The
policy shall provide for at least thirty (30) days advance written notice from
the insurer to the Company of any alteration, cancellation or termination of the
foregoing coverage.
17.5 The P.C. covenant and agree to require all physicians hired or
contracted by it and who perform services for the P.C.s, at their own cost and
expense or at the cost and expense of the P.C., to maintain malpractice
insurance in the minimum amount of $1 million per occurrence and $3 million in
the aggregate. The P.C.s shall require that the malpractice policies maintained
by its physicians provide for thirty (30) days advance written notice to the
P.C.s from the insurer of any
30
alteration, cancellation or termination of the foregoing coverage. In the event
of receipt of such notice, the P.C.s shall immediately advise the Company of any
such alteration, cancellation or termination of malpractice coverage.
17.6 The P.C.s covenant and agree to require all Health Professionals,
other than physicians hired by the P.C.s to perform services for the P.C. to
maintain (at their own cost and expense or at the cost and expense of the P.C.)
professional liability insurance as is customary in the Westchester County area.
The P.C.s shall require that the professional liability insurance policies
maintained by Health Professionals provide for thirty (30) days advance written
notice to the P.C.s from the insurer of any alteration, cancellation or
termination of the foregoing coverage. In the event of receipt of such notice,
the P.C.s shall immediately advise the Company of any such alteration,
cancellation or termination of malpractice coverage.
17.7 The P.C.s covenant and agree to maintain at its expense general
casualty and liability insurance in amounts customary for medical practices such
as the P.C.s which shall cover all risks of physical loss or damage to Licensed
Office Space, Furnishings and Equipment and all risks of liability for bodily
injury and property damage resulting from the operation of any Equipment at the
P.C. Offices and of damages, destruction and loss of use of property of third
parties resulting therefrom and all risks of liability for bodily injury and
property damage from any condition of the Licensed Office Space. The casualty
and liability insurance shall specify the Company as a named insured and provide
for thirty (30) days advance written notice to the Company from the insurer of
any alteration, cancellation or termination of the
31
foregoing insurance coverage. In the event of receipt of such notice, the P.C.s
shall immediately advise the Company of such alteration, cancellation or
termination.
17.8 The P.C.s agree and covenant to comply with all OSHA, New York State
Department of Health and other applicable governmental regulations as pertain to
a medical practice.
17.9 The P.C.s agree and covenant to have all patients assign the right of
collection from carriers and participating health care organizations, where
appropriate, to the P.C.s or their agent.
18. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company represents, warrants and covenants to the P.C.s that:
18.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York.
18.2 The execution and delivery of this Agreement by the Company and the
performance of its duties hereunder: (a) have been duly authorized by all
necessary corporate action, and this Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms and (b) will not violate or conflict with any provision of law or of
the Company's Certificate of Incorporation or By-laws and will not result in a
breach of or constitute a default under any agreement or instrument to which the
Company or any of its officers, directors or shareholders may be a party or by
which any of them may be bound or affected.
32
18.3 The Company agrees to maintain or cause to be maintained in the name
of the Company at its expense insurance covering: (a) all risks of physical loss
or damage to the Furnishings and Equipment; (b) liability for bodily injury and
property damage resulting from the operation of any of the Equipment at the P.C.
Offices and for damage, destruction and loss of use of property of third parties
resulting therefrom; and (c) all risks of liability for bodily injury and
property damage from any condition of the Licensed Office Space with such
insurance companies and in such amounts as the Company shall deem appropriate,
naming the appropriate P.C.s as additional insured and furnishing such P.C. with
a Certificate of Insurance upon such P.C. s' request.
18.4 The Company agrees to maintain the Licensed Office Space, Furnishings
and Equipment in good condition and repair, reasonable wear and tear from normal
use excepted. Whenever possible, the Company shall arrange for routine
maintenance, on seven (7) days advance notice to the P.C.s and at a time and
manner that is not disruptive to the P.C.s' Practice, all repairs of Equipment
other than those necessitated by the P.C. s willful misconduct or misuse of the
Equipment will be performed as soon as practicable. The Company shall arrange
for emergency repairs to be performed as promptly as practicable.
19. INDEMNIFICATION
19.1 The P.C.s shall indemnify, protect and hold harmless the Company, its
shareholders, officers, directors, employees, agents, successors, subsidiaries,
affiliates and assigns from and against the defense and any and all losses,
including legal expenses, damages (direct and consequential), injuries, claims,
demands, costs and
33
expenses, including legal expenses, of whatsoever nature, arising out of or in
connection with or incidental to: (a) the conduct of its medical practice, (b)
any breach of this Agreement by the P.C.s or any of its shareholders, and (c)
the use or operation by the P.C.s' employees, agents, patients or invitees of
any item of Equipment, Furnishings or supplies and its use and occupancy of the
Licensed Office Space regardless of where, how and by whom used or operated.
19.2 The Company will indemnify and hold the P.C.s and their shareholders
harmless from and against any and all losses, including legal expenses, damages,
injures, claims, demands, costs and expenses of whatsoever nature arising out of
or in connection with (a) any breach of this Agreement by the Company; and (b)
any gross negligence or willful misconduct of the Company in the performance of
its obligations under this Agreement.
19.3 The provisions contained in this Paragraph shall survive the
termination of this Agreement.
20. NON-COMPETITION AND RESTRICTIVE COVENANT
20.1 Throughout the term of this Agreement including any renewal or other
extension thereof, and for an additional period of three (3) years following
termination of this Agreement for any reason except with the prior written
consent of the Company, neither the P.C.s nor the P.C. Shareholders will
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or have an interest in or a
financial relationship with, or be connected in
34
any manner with any business which is directly or indirectly competitive with
the business of the Company.
20.2 The provisions of Paragraph 20.1 shall not apply if the Company
terminates this Agreement, other than as a result of a breach by the P.C.s.
20.3 In order to give the language in Paragraph 20.1 effect, the P.C.s
agree to place the restrictions contained in Paragraph 20.1 in all contracts and
agreements with the P.C. Shareholders, including, without limitation, any
employment agreements with such P.C. Shareholders.
20.4 The P.C.s agree that it will not issue any shares of its capital stock
to any person unless such person agrees, in writing, with the Company, to be
bound by those provisions of this Agreement which are binding upon the P.C.
Shareholders.
20.5 The parties agree that the provisions of this Paragraph 20 are
necessary and reasonable to protect the Company in the conduct of its business.
The P.C.s agree that any remedy at law for any breach of the foregoing covenants
may be inadequate and that the Company will be entitled, at its election, to
injunctive relief to enjoin any violation, threatened or actual, of this
Paragraph 20.
20.6 The parties agree that if any restriction contained in this Paragraph
20 shall be deemed to be invalid, illegal or unenforceable by reason of the
extent, duration, geographical scope, or other provisions hereof' the court
shall reduce same only to the extent necessary in order for same to be
enforceable, and in its reduced form, such restriction shall then be enforceable
in the manner contemplated hereby.
35
20.7 The provisions contained in this Paragraph 20 shall survive
termination of this Agreement for a period of three (3) years following such
termination.
21. FORCE MAJEURE
Neither party shall be liable for or deemed to be in default for any delay
or failure to perform any act under this Agreement (other than the payment of
money) resulting, directly or indirectly, from Acts of God, civil or military
authority, acts of public enemy, war, accidents fires, explosions, earthquake,
flood, failure of transportation, strikes or other work stoppages by either
party's employees, or any other cause beyond the reasonable control of such
party.
22. REMEDIES OF THE P.C.s
(a) All services provided by the Company pursuant to this Agreement are
furnished without warranty. The P.C.s' sole monetary remedy, and the Company's
sole monetary obligation, for any failure to render any service, or any error or
omission or any delay or interruption with respect thereto, is limited to an
adjustment to the P.C.s of the fee otherwise payable hereunder in an amount
equal to the fair market value of such services for the period during which the
failure, delay or interruption occurred. With the sole exception of the remedy
set forth in the immediately preceding sentence, the P.C.s expressly waive, and
agree not to make any claim for, any damages, direct or consequential, arising
out of any failure to furnish any such services, any error or omission with
respect thereto, or any delay or interruption of the same. In no event shall
there by any adjustment to the fee payable hereunder if the P.C.s are in default
under the Agreement at such time.
36
(b) The P.C. may only terminate this Agreement upon a substantial, material
and continued breach by the Company of its obligations to the P.C. hereunder (a
"Material Breach"). A Material Breach shall only be deemed to have occurred
under the following circumstances:
(i) The P.C. shall deliver to the Company a written notice which
notice shall provide in detail the alleged Material Breach.
(ii) The Company shall have a period of 120 days in which to cure such
alleged Material Breach. If after the expiration of such 120 day period the
P.C. believes that such alleged Material Breach has not been cured, the
P.C. shall send to the Company a further notice specifying in detail why it
believes that the alleged Material Breach has not been cured.
(iii) The Company shall then have a period of an additional 60 days in
which to cure such alleged Material Breach.
(iv) If after the expiration of such additional period, the P.C. shall
continue to maintain such alleged Material Breach shall not have been
cured, it shall send the Company a notice that it has elected to terminate
this Agreement on account of such alleged Material Breach (a "PC
Termination Notice").
(v) If the Company shall dispute the PC Termination Notice then this
Agreement shall not terminate unless and until a final determination by a
court of competent jurisdiction has determined that such Material Breach
has, in fact, occurred.
37
Notwithstanding anything to the contrary that may be contained herein, if a
Material Breach shall have occurred with respect to a specific service to be
rendered to the Company by the P.C.s hereunder, this Agreement shall only
terminate with respect to such service in which event the Initial Fee or the New
Fee, as the case may be, then in effect shall be proportionately reduced.
23. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding between the parties
hereto and supersedes all other prior agreements between the parties. Each party
to this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, that are not embodied in this Agreement, and that no
other agreement, statement or promise not contained in this Agreement shall be
valid or binding as between the P.C.s and the Company.
24. ARBITRATION
Any controversy or claim arising out of or relating to this contract, or
the breach thereof shall be settled by three arbitrators in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any Court
having jurisdiction thereof. Arbitration will be conducted in New York County,
New York. This paragraph shall not apply to relief sought under Paragraphs 10,
20 or 22 of this Agreement nor shall it restrict the right of either party to
institute proceeding to enable such party to obtain provisional injunctive
relief during the pendency of an arbitration.
38
25. COMPANY'S OPTION TO PURCHASE
In the event that the State of New York in the future permits the corporate
practice of medicine without need to resort to a Certificate of Need, or if, in
the opinion of counsel to the Company, it otherwise becomes lawful in New York
State for the Company to acquire and operate the medical practice of the P.C.s,
the Company shall have the right to purchase the medical practice of the P.C.s
and the P.C.s agree to sell the medical practice of the P.C.s to the Company.
The purchase price shall be $100. In order to make meaningful the foregoing
right, the P.C.s agree that any purchaser of the P.C.s or transferee or other
recipient of shares thereof and any successor P.C.s and shareholders thereof
shall be bound by the provisions of this Paragraph and no sale of the P.C.s or
transfer of any shares of any P.C. shall be effective unless the purchaser or
transferee acknowledges in writing his agreement to the provisions of this
Paragraph.
26. MODIFICATION
This Agreement may not be orally changed or modified. All changes or
modifications to this Agreement shall be in writing signed by the party against
whom enforcement of any waiver, change, modification, extension or discharge is
sought.
27. WAIVER
No delay or failure to exercise any remedy or right occurring upon any
breach or default shall be construed as a waiver of such remedy or right, nor
shall it affect any subsequent default of a same or different nature.
39
28. ASSIGNMENT
28.1 The P.C.s shall not assign this Agreement or any of their rights or
obligations under this Agreement without the prior written consent of the
Company. Any transfer of the profits, losses or cash flow of the P.C.s shall
also constitute an assignment hereunder and constitute a material breach. The
Company shall have a right to assign this Agreement in connection with a
transfer of all or substantially all of the Company's business whether by sale,
merger or otherwise.
28.2 The P.C.s specifically agree that the Company shall have the right to
perform the services to be provided hereunder through any parent, subsidiary,
division or affiliate of the Company without consent from the P.C.s.
29. SUCCESSORS AND ASSIGNS
All of the provisions herein contained shall be binding upon and inure to
the benefit of the respective successors and permitted assigns of the parties
hereto to the same extent as if such successors and permitted assigns were in
each case named as a party to this Agreement.
30. EFFECT OF INVALIDITY
Should any part of this Agreement for any reason be declared invalid, such
decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been executed
with the invalid parties thereof eliminated.
40
31. NOTICES
Any notice or communications required or permitted hereunder shall be
deemed to have been sufficiently given or served for all purposes if in writing
and delivered personally to the party or to an officer of the party, or sent by
registered or certified mail, postage and charges prepaid, return receipt
requested to the parties' addresses as set forth below:
To the P.C.s: Northern Metropolitan Radiology Associates, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
To the Company: Advanced Alliance Management Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
or such other address as may subsequently be provided to the other party in
writing. Unless otherwise expressly set forth in this Agreement, any such notice
shall be deemed to be given on the date on which the same was deposited in a
regularly maintained receptacle for the deposit of United States mail, addressed
and sent as above.
32. FURTHER ACTIONS
At any time and from time to time, each party agrees, without further
consideration, to take such actions and to execute and deliver such documents as
may be necessary to effectuate the purposes of this Agreement.
41
33. CAPTIONS
The paragraph captions contained in this Agreement are inserted only as a
matter of convenience and reference, and in no way define, limit or describe the
scope of this Agreement, nor the intent of any provision thereof.
34. NO PARTNERSHIP/JOINT VENTURE
Nothing contained in this Agreement shall be deemed or construed as
creating a partnership or joint venture between the Company and the P.C.s or
between the Company and any other person, nor cause the Company or the P.C.s to
be responsible in any way for debts or obligations of the other or any person
whomsoever.
35. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but which, taken together, shall constitute one
Agreement.
36. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
37. JOINTLY AND SEVERAL LIABILITY
The P.C.s understand, agree and acknowledge that they are jointly and
severally liable for all of the obligations of any of the P.C.s hereunder.
38. APPOINTMENT
Each of the P.C.s hereby appoints NMRA as its agent to deal with the
Company in connection with any of the rights of obligations of each such P.C.
pursuant to this Agreement including, without limitation, agreeing to (i) an
adjustment to
42
the Initial Fee or the New Fee, as the case may be, or (ii) any modifications,
waivers or amendments to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NORTHERN METROPOLITAN
RADIOLOGY ASSOCIATES, P.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
NORTHERN METROPOLITAN
RADIOLOGY ASSOCIATES, P.A.,
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
PERSONAL BREAST SERVICES AND
ULTRASOUND OF NORTHERN WESTCHESTER, P.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
NMRA OF CONNECTICUT, P.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
JEFFERSON VALLEY DIAGNOSTIC IMAGING, P.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
NORTHERN WESTCHESTER DIAGNOSTIC
PARTNERS, P.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
ADVANCED ALLIANCE MANAGEMENT CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
43