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EXHIBIT 10.21
MANAGEMENT AGREEMENT
PARTIES: AMERIPATH TEXAS, INC. ("AmeriPath")
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., P.A. (the "Practice")
EFFECTIVE DATE: SEPTEMBER 30, 1996 (the "Effective Date")
RECITALS:
- AmeriPath is a corporation engaged in the business of operating a
pathology laboratory and is a wholly-owned subsidiary of AmeriPath, Inc., a
corporation engaged in the business of providing administrative and management
services, facilities and equipment to pathology groups;
- The Practice is a professional association comprised of medical
practitioners who engage in the practice of pathology and other medical
specialties ("Practice Providers");
- The Practice desires to enter into this Agreement with AmeriPath for
the provision of comprehensive business management services and facilities to
enhance the efficiency of its operations and to allow its Practice Providers to
concentrate fully on providing quality medical services;
- The Practice has designated a Managing Physician to oversee the day
to day operations of the Practice's business and to make administrative and
certain other decisions on its behalf;
- The Practice and AmeriPath desire to enter into this agreement (the
"Agreement") to provide a statement of their respective rights and
responsibilities during its Term (as defined in Section VI-A herein below).
FOR GOOD AND VALUABLE CONSIDERATION, AmeriPath and the Practice agree
as follows:
I. PRELIMINARY STATEMENTS
A. RECITALS. The recitals set forth above are true and accurate
and are incorporated as part of this Agreement.
B. DEFINITIONS. Many capitalized terms used in this Agreement
are defined in Attachment I to this Agreement; however, capitalized terms used
in this Agreement are also defined in the text of this Agreement, and
Attachments II through VI hereof.
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C. ATTACHMENTS. All attachments to this Agreements are
incorporated into this Agreement by reference. The attachments to this
Agreement are the following:
Attachment I: Definitions
Attachment II: Appointment of AmeriPath as Attorney in Fact
Attachment III: Restrictive Covenants
Attachment IV: Medical Offices
Attachment V: Miscellaneous Contractual Provisions
Attachment VI: Non-Profit Health Corporation
II. AMERIPATH SERVICES
AmeriPath shall on behalf of Practice and as a Practice Expense,
provide the Practice and the Practice Providers with the following services:
A. STRATEGIC PLANNING AND GOALS. AmeriPath shall prepare, in
consultation with the Managing Physician, an annual Operating Plan (as defined
in Section IV-B), reflecting in reasonable detail anticipated Practice
Revenues, Practice Expenses, Allocated Expenses and Practice Provider staffing.
The Operating Plan shall include, among other things, information relating to
the growth and enhancement of the Practice, a budget for the Practice and the
Base Fee and Performance Fee to be paid to AmeriPath..
B. EXPANSION OF PRACTICE. AmeriPath shall assist the Practice in
developing relationships and affiliations with physicians and other
specialists, hospitals, networks, health maintenance organizations and
preferred provider organizations. Subject to the terms of this Agreement, each
of the Practice and AmeriPath shall cooperate and use their respective best
efforts to expand the Practice.
C. MANAGED CARE RELATIONSHIPS. AmeriPath, together with the
Managing Physician, shall evaluate, negotiate, and administer managed care
contracts and other third party payor contracts on behalf of the Practice and
its Practice Providers.
D. FACILITY RELATIONSHIPS. AmeriPath, together with the Managing
Physician, shall evaluate, negotiate, and administer all hospital and other
medical facility contracts on behalf of the Practice and its Practice
Providers.
E. ESTABLISHMENT OF FEES. AmeriPath shall recommend, but shall
not set, fees, charges, premiums or other amounts due in connection with
services and goods provided by the Practice. The Steering Committee (see
Section IV) may adopt recommendations in its reasonable discretion on behalf of
the Practice and its Practice Providers. The Practice shall retain sole
authority to decide how physician compensation will be divided among individual
physicians.
F. PRACTICE MANAGEMENT SERVICES. AmeriPath shall, in
consultation with the Managing Physician, assess business activity including
product line analysis, outcomes monitoring
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and customer satisfaction. AmeriPath shall develop systems to track revenues,
expenses, cost accounting, utilization, quality assurance, physician
productivity and customer satisfaction.
G. PERSONNEL. AmeriPath shall, on behalf of Practice as a
Practice Expense, employ and provide all personnel necessary to provide
Practice services (other than Practice Providers), in accordance with the
Practice's operational needs and the Operating Plan then in effect. AmeriPath
shall employ and provide the AmeriPath benefits package to all personnel (other
than Practice Providers) rendering services in connection with the Practice.
AmeriPath shall provide the following personnel services to the Practice:
1. NON-MEDICAL PERSONNEL. AmeriPath shall employ non-medical
personnel (i.e., managerial, clerical, secretarial,
bookkeeping and collection personnel) as determined by
AmeriPath, and as necessary for the Practice's effective
operation, as contemplated by the Operating Plan.
AmeriPath shall provide personnel for the maintenance of
patient records, billing, collection and maintenance of
the financial records. AmeriPath shall determine the
assignments, salaries and fringe benefits of all the
non-medical personnel. AmeriPath will consult with the
Managing Physician but retains decision-making authority
regarding all such matters. Non-medical personnel may
perform services from time to time for other individuals
or entities. AmeriPath may utilize employees or
independent contractors, in its discretion.
2. LICENSED TECHNICAL PERSONNEL. AmeriPath shall employ and
provide to the Practice licensed technical personnel
other than Practice Providers ("Licensed Technical
Personnel"). Licensed Technical Personnel shall be
retained as determined by the Managing Physician, in
consultation with the Steering Committee, in the exercise
of his professional judgment to be reasonably necessary
for the effective operation of the Practice, as
contemplated by the Operating Plan. AmeriPath shall
facilitate the recruitment and retention of all Licensed
Technical Personnel. Although AmeriPath may employ
Licensed Technical Personnel, the Managing Physician, or
its designee, shall have the right to interview, make
determinations to hire, and terminate Licensed Technical
Personnel. All Licensed Technical Personnel providing
services in connection with the Practice shall be under
the direct control and supervision of the Practice and
its Practice Providers.
3. PRACTICE PROVIDERS. AmeriPath shall perform
administrative services relating to the recruitment of
new Practice Providers and Practice Providers. Selection
of new Practice Providers and Practice Providers shall be
the sole responsibility of the Practice. The hiring of
new Practice Providers shall require the prior written
approval of AmeriPath only with respect to economic and
practice management issues. All Practice Providers shall
be
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employees of the Practice (if such personnel are hired
as employees) and not of AmeriPath. AmeriPath shall
provide technical support to the Practice's risk
management program. Additionally, AmeriPath shall advise,
make arrangements for the purchase of, and manage the
Practice's professional liability coverage program.
H. FACILITIES, UTILITIES, LICENSES, PERMITS AND OTHER RELATED
EXPENSES. AmeriPath shall own, lease or sublease on behalf of the Practice,
Medical Offices necessary for the operation of the Practice pursuant to the
Operating Plan.. The Medical Offices provided as of the Effective Date shall
be those listed on Attachment IV. AmeriPath shall provide, manage and maintain
the Medical Offices in good condition and repair, including the provision of
routine janitorial and maintenance services. AmeriPath shall provide on behalf
of the Practice utilities and shall pay other related expenses, consistent with
the Operating Plan. AmeriPath shall assist the Practice and its Practice
Providers in obtaining required laboratory permits and licenses. The Practice
shall have exclusive use of both existing and new Medical Offices during the
Term.
I. FURNITURE, FIXTURES AND EQUIPMENT. AmeriPath shall provide
necessary and appropriate furniture, fixtures and equipment ("FF&E") on behalf
of the Practice in accordance with the Operating Plan. Nothing in this
Agreement shall be construed to affect or limit in any way the professional
discretion of the Practice to select and use equipment, furnishings, inventory,
and supplies which the Managing Physician deems necessary and appropriate for
the practice of medicine. AmeriPath shall, on behalf of the Practice, provide
for all repairs and maintenance of the FF&E and shall, at the reasonable
request of the Managing Physician, acquire new or replacement FF&E. Title to
existing, new and replacement FF&E shall be in the name of AmeriPath or a
leasing company. The Practice shall have exclusive use of both existing and
new FF&E provided by AmeriPath during the Term.
THE PRACTICE ACKNOWLEDGES THAT AMERIPATH MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE FITNESS, SUITABILITY OR ADEQUACY
OF ANY FURNITURE, FIXTURES, EQUIPMENT, INVENTORY, OR SUPPLIES LEASED OR
PROVIDED PURSUANT TO THIS AGREEMENT FOR THE CONDUCT OF A MEDICAL PRACTICE OR
FOR ANY OTHER PARTICULAR PURPOSE.
J. BUSINESS OFFICE AND SUPPORT SERVICES. AmeriPath shall, in
consultation with the Managing Physician, provide computer, bookkeeping,
billing and collection, accounts receivable and accounts payable services
necessary for the management of the Practice pursuant to this Agreement and in
accordance with the Operating Plan. AmeriPath shall also order and purchase on
behalf of the Practice medical and office supplies required in the day-to-day
operation of the Practice as determined by the Managing Physician consistent
with the Operating Plan. However, the Practice shall order, purchase, stock,
and monitor the inventory of pharmaceuticals and other medical supplies,
substances, or items whose purchase, maintenance, or security require licensure
as a health-care provider or require a permit, registration, certification, or
identification number that requires licensure or certification as a health-care
provider. AmeriPath shall provide access to
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management information systems services to the Practice, including risk
contracting systems services. AmeriPath shall also arrange laundry, waste
collection, and other necessary operational services in accordance with
applicable laws.
K. PROFESSIONAL AND CONSULTING SERVICES. AmeriPath shall arrange
for or render business and financial management consultation and advice
reasonably requested by the Managing Physician and directly related to the
operations of the Practice pursuant to this Agreement. Except as contemplated
by the Operating Plan, AmeriPath shall not be responsible for any services
requested by or rendered to any individual, employee or agent of the Practice,
or any Practice Provider, not directly related to Practice operations.
L. PATIENT AND FINANCIAL RECORDS. AmeriPath shall maintain files
and records relating to the operation of the Practice, including, but not
limited to, customary financial records and patient files. The management of
all files and records shall comply with applicable Federal, state and local
statutes and regulations, regarding their confidentiality and retention. Files
and records shall be located to be readily accessible for patient care,
consistent with customary records management practices. AmeriPath shall have
reasonable access to files and records, and, subject to applicable laws, shall
be permitted to retain copies of them. The Practice shall be responsible for
the preparation of, and direct the contents of, patient medical records. All
patient medical records shall remain the property of the Practice. The
Practice shall be responsible for proper documentation of medical services
provided by the Practice and the Practice Providers.
M. FINANCIAL STATEMENTS. AmeriPath shall prepare Practice profit
and loss and income statements, in accordance with the manner and form in which
AmeriPath normally keeps its accounts, books and records, and in accordance
with applicable laws. The statements shall reflect Practice Revenues generated
by or on behalf of the Practice and shall contain a comparison of actual and
budgeted Practice Revenues and expenses. AmeriPath shall provide the Managing
Physician with monthly statements within thirty (30) days after the end of each
month and shall provide a year-end statement within ninety (90) days after the
end of the calendar year.
III. PRACTICE OBLIGATIONS
A. EXCLUSIVITY. The Practice and the Practice Providers agree
that during the Term of this Agreement they will not retain, engage or employ,
directly or indirectly, any other entity or individual to provide the services
for which it is contracting with AmeriPath.
B. PROFESSIONAL STANDARDS. Medical services shall be performed
solely by, or under the direct supervision of, the Practice Providers. The
Practice shall have complete and absolute control over the methods by which the
Practice, the Practice Providers and Non-Independent Professional Personnel
practice medicine and/or render the professional services which they are
licensed to provide under the laws of the states in which they are practicing.
The Practice shall require that Practice Providers comply with applicable
ethical standards, laws and regulations. The Practice shall, with the
assistance of AmeriPath (if so requested by the Managing Physician), resolve
utilization review or quality assurance issues which may arise. In the event
that disciplinary
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actions or professional liability actions are initiated against any Practice
Provider, the Practice shall immediately inform AmeriPath of the action and the
underlying facts and circumstances. The Practice shall implement and maintain a
program to monitor the quality and utilization of medical care, and AmeriPath
shall render administrative assistance to the Practice, as requested by the
Managing Physician.
C. MANAGED CARE ARRANGEMENTS. The Practice shall cooperate with
AmeriPath in the development and operation of managed care arrangements. The
Practice shall participate as a provider and in the administrative operation of
integrated delivery systems and managed care arrangements. The Practice and
its Practice Providers agree to comply with the quality assurance and
utilization review programs of managed care arrangements.
D. CONTINUING MEDICAL EDUCATION. The Practice shall ensure that
each of its Practice Providers participates in continuing medical education
activities, as necessary to remain current in their respective specialties,
including, but not limited to, the minimum continuing medical education
requirements imposed by applicable laws and policies of applicable specialty
boards.
E. PHYSICIAN POWERS OF ATTORNEY AND BILLING. The Practice shall
appoint AmeriPath to act as agent in the billing and collection of all Practice
Revenues, and shall require all Practice Providers to appoint AmeriPath as
attorney-in-fact for the Practice and each Practice Provider, as more
specifically set forth in Attachment II. The Practice shall cooperate and
shall cause its Practice Providers to cooperate with AmeriPath in all matters
relating to the billing and collection of all Practice Revenues. In this
regard, each Practice Provider shall review and approve the reports and other
information required to support complete and accurate bills. Additionally, the
Practice and its Practice Providers will provide such necessary support to
appeal or contest any denials of claims or other regulatory issues.
F. ADDITIONAL PRACTICE PROVIDERS. When the Practice desires to
add or change a Practice Provider, AmeriPath shall provide a business analysis
of the prospective change in the composition of the Practice. Additional
Practice Providers (the "Additional Practice Providers") shall be added to the
Practice as follows: the Practice shall review and approve the credentials and
the medical practices of the prospective Additional Practice Provider.
AmeriPath shall review the business operations, financial condition and results
of operations of the prospective Additional Practice Provider and shall provide
such information to the Managing Physician. The decision to admit an
Additional Practice Provider shall be subject to the approval of the Steering
Committee.
G. ADDITIONAL PRACTICES. AmeriPath may, in its discretion, seek
to add additional practices (each such Practice being an "Additional Practice")
to this Agreement. If AmeriPath desires to add an Additional Practice,
AmeriPath shall provide to the Steering Committee a business analysis of the
Additional Practice, including business operations, financial condition and
results of operations. The decision to admit an Additional Practice shall be
subject to the approval of the Steering Committee. After an agreement to add
an Additional Practice has been reached, the Practice and AmeriPath shall enter
into an amendment (the "New Practice Amendment") to this Agreement. The New
Practice Amendment shall include the understanding of the parties with
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respect to AmeriPath's compensation and other issues agreed upon by the
Steering Committee and the Additional Practice. The New Practice Amendment
shall obligate the Additional Practice to be bound by the New Practice
Amendment.
H. RESTRICTIVE COVENANTS. The Practice and each Practice
Provider shall comply with the terms, conditions and provisions of the
Restrictive Covenants set forth in Attachment III. AmeriPath and its parent
company, AmeriPath, Inc., shall be third party beneficiaries of the Restrictive
Covenants and shall have the right to enforce them independently and without
the consent, action or approval of the Practice or any Practice Provider.
Additionally, the Practice and the Practice Providers agree to fully cooperate
with AmeriPath should it desire to enforce the Restrictive Covenants.
I. PRACTICE EXPENSES. The Practice shall be solely responsible
for the payment of all Practice Expenses.
J. PRACTICE ORGANIZATIONAL DOCUMENTS. The Practice agrees that
it shall not, without the written consent of AmeriPath: (a) modify or amend
the Practice Organizational Documents (as defined in Attachment I); (b) admit
New Practice Providers, except as provided for in this Agreement; (c) remove
the Managing Physician; (d) sell all or substantially all its assets or capital
stock; or (e) terminate or cancel any hospital contracts (or similar contracts
for the provision of services) under this Agreement. Further, the Practice
agrees that it shall consult with AmeriPath prior to the termination or release
of any Practice Provider from his or her obligations.
K. STAFFING OF FACILITIES BY THE PRACTICE. To the extent that
the Practice or the Practice Providers are responsible for staffing facilities
provided by AmeriPath, the Practice shall provide adequate staffing to ensure
that medical services are provided in a manner consistent with applicable
community and medical specialty standards. From time to time AmeriPath may
acquire new facilities that it wishes the Practice to staff. The Practice
agrees that in the event AmeriPath acquires or develops a new facility that it
wishes the Practice to staff, the Practice will use its best efforts to staff
the facility. The parties agree that the Operating Plan will be revised as
necessary to accommodate staffing of the new facility.
L. EQUIPMENT. The Practice shall advise AmeriPath on the
maintenance, repair and proper operation of medical equipment. This obligation
shall relate to the medical functionality of the equipment. Upon receipt of
such advice, AmeriPath shall cause the medical equipment to be maintained in
good operating condition.
M. SUPERVISION OF LICENSED TECHNICAL PERSONNEL. The Practice
shall be responsible for the supervision of Licensed Technical Personnel. As
such, it shall provide Licensed Technical Personnel with appropriate training
and medical supervision. The Practice shall determine the responsibilities of
Licensed Technical Personnel and the manner in which they provide services.
Licensed Technical Personnel shall report to such Practice Providers as
designated by the Practice.
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IV. STEERING COMMITTEE
A. CREATION AND GENERAL DUTIES OF STEERING COMMITTEE. AmeriPath
and the Practice shall establish a Steering Committee composed of two members,
one of which shall be the Managing Physician and one of which shall be a
physician designated by AmeriPath. The Steering Committee shall meet
periodically and at the reasonable request of either party. The Steering
Committee shall consider, review, determine and approve the following matters
as they relate to the operation of the Practice: (i) the Operating Plan; (ii)
employment and recruitment of additional Practice Providers; (iii) long term
strategic planning; (iv) establishment and maintenance of relationships with
health care providers and payors; (v) the fee schedule for services and items
provided by the Practice; and (vi) approval of all marketing and advertising of
services performed by the Practice or Practice Providers.
B. OPERATING PLAN. One of the Steering Committee's primary
responsibilities shall be the approval of a Practice Operating Plan (the
"Operating Plan"). AmeriPath shall, not less often than one time each fiscal
year, develop a proposed Operating Plan. The proposed Operating Plan shall be
submitted to the Steering Committee for approval. When Approved by the
Steering Committee, both AmeriPath and the Managing Physician shall, as their
responsibilities are allocated in this Agreement, use their best efforts to
implement the Operating Plan. The Operating Plan shall set forth the estimated
income and expenditures of the Practice for the period covered, such income and
expenditures to be set forth in reasonable detail. The Practice shall retain
sole authority for proposing the compensation levels and manner of distribution
of physician income among individual physicians. Such proposals shall be
included in the budget of the Practice which shall be incorporated into the
Operating Plan as approved by the Steering Committee. The Operating Plan shall
include Practice Expenses, Allocated Expenses and AmeriPath compensation. The
Steering Committee may revise, from time to time, the Operating Plan as it
determines to be necessary or desirable (as revised, the "Revised Operating
Plan"). AmeriPath and the Managing Physician shall be authorized without the
need for further approval by AmeriPath, the Steering Committee or the Practice
Providers, to make the expenditures and incur the obligations provided for in a
Revised Operating Plan. Additionally, AmeriPath or the Managing Physician may
make expenditures and incur obligations that differ from an Operating Plan, but
are incurred in the ordinary course of business. For example, an increase in
professional liability premiums shall create a variance in the Operating Plan
which may be incurred without a revision to the Operating Plan. The Practice
has in the past maintained a fellowship program for the University of Texas
Southwestern Medical Center ("UTSWMC"), which has included up to three
dematopathologists per year. The parties acknowledge that it is important to
the reputation of the Practice to continue the Practice's relationship with
UTSWMC, therefore, the Operating Plan shall include the expenses necessary and
appropriate to continue the Practice's relationship with UTSWMC consistent with
past practices and to expand such relationship as shall reasonably be directed
by the Managing Physician.
V. FINANCIAL MATTERS
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A. AMERIPATH COMPENSATION.
1. GENERAL. The compensation provided herein is expected to
provide AmeriPath with fair market value payment commensurate
with the services it provides, its capital investment, use of
its tradename and its expertise in laboratory and professional
practice management. AmeriPath shall receive compensation, as
provided in the Operating Plan and in accordance with this
Section V.
2. PRACTICE EXPENSES AND ALLOCATED EXPENSES. All Practice
Expenses (as defined in Attachment I hereto), including the
compensation of Practice Providers, shall be the sole
responsibility of Practice and shall be paid by the Practice
out of its first available Practice Revenues. Allocated
Expenses (as defined in ATTACHMENT I hereto) incurred by
AmeriPath in the course of the performance of its duties under
this Agreement on behalf of or as agent for the Practice shall
be paid to AmeriPath. Allocated Expenses may include an
allocable portion of reasonable corporate overhead of
AmeriPath. Allocated Expenses shall be billed to the Practice
at their actual cost to AmeriPath. An operating budget for
Practice Expenses and Allocated Expenses shall be reviewed at
least annually and shall be set forth in the Operating Plan.
3. MANAGEMENT FEE. AmeriPath shall be paid a base management fee
(the "Base Fee") for its services performed and to be
performed pursuant to this Agreement. The Base Fee shall be a
flat amount and shall be reviewed annually and shall be set
forth in the Operating Plan. The Base Fee shall be paid to
AmeriPath as provided in the Operating Plan, subject only to
the prior payment of Practice Expenses and Allocated Expenses.
Any portion of the Base Fee that is not paid when due shall
accrue and be paid with the next available Practice Revenues.
4. PERFORMANCE FEE. On an annual basis, the Steering Committee
shall determine a set of performance goals and objectives for
AmeriPath in the performance of its duties under this
Agreement. Such goals and objectives may include, among other
things, the identification and recruitment of Additional
Practice Providers, the retention of Practice Providers, the
procurement or expansion of managed care or other contracts or
the achievement of operating efficiencies. AmeriPath may be
paid a performance fee (the "Performance Fee") based on the
achievement of such specified goals and objectives. The
amount of such Performance Fee shall be as set forth in the
Operating Plan.
B. REIMBURSEMENT OF EXPENSES. AmeriPath may, from time to time, incur
Practice Expenses which are a part of the Operating Plan, a Revised Operating
Plan, or are Practice
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Expenses incurred in the ordinary course of business. AmeriPath shall be
entitled to be reimbursed by the Practice for these expenses when incurred.
C. PRACTICE BANK ACCOUNT, PAYMENT OF FEES AND PAYMENT OF
EXPENSES. The Practice shall establish a bank account for the deposit of all
Practice Revenues (the "Practice Bank Account"). AmeriPath shall have a
security interest in the Practice Bank Account pursuant to this Section V.
Additionally, it is understood and agreed that AmeriPath may assign its
security interest and all other interests that it may have in the Practice Bank
Account to its lender or lenders. Should AmeriPath assign its interest, its
assignee shall have a first lien on the Practice Bank Account. AmeriPath shall
have access to the Practice Bank Account solely for the purposes stated herein.
In connection herewith and throughout the Term, Practice hereby grants to
AmeriPath an exclusive special power of attorney for the purposes herein and
appoints AmeriPath as Practice's exclusive true and lawful agent and
attorney-in-fact, and AmeriPath hereby accepts such special power of attorney
and appointment, to deposit into the Practice Bank Account all funds, fees, and
revenues generated from the Practice's provision of medical services and
collected by AmeriPath, and to make withdrawals from Practice Bank Account for
payments specified in this Agreement and as requested from time-to-time by
Practice. Notwithstanding the exclusive special power of attorney granted to
AmeriPath hereunder, Practice may, with notice to AmeriPath, draw checks on the
Practice Bank Account; provided, however, that Practice shall neither draw
checks on the Practice Bank Account nor request AmeriPath to do so if the
balance remaining in the Practice Bank Account after such withdrawal would be
insufficient to enable AmeriPath to pay on behalf of Practice any Practice
Expense attributable to the operations of Practice or to the provision of
medical services, and/or any other obligations of Practice. Disbursements made
from the Practice Bank Account consent shall be consistent with the type and
amount of expenditures authorized by the Operating Plan. Limits on authority
to sign checks and purchase orders shall be mutually agreed upon by AmeriPath
and the Managing Physician.
D. COLLATERAL. As collateral security for the payment of all
amounts owed to AmeriPath pursuant to this Agreement, Practice grants to
AmeriPath a security interest in all tangible and intangible assets of the
Practice, including Practice Revenues which may be created or arise during the
Term, together with all proceeds regardless of the manner in which the
entitlement to payment for Practice Revenues exists whether as accounts,
accounts receivable, notes receivable or other evidence of entitlement to the
Practice Revenues and all of its rights, title and interest (including right to
control the same), if any, in the Bank Account and the sums on deposit
(collectively, the "Collateral") to the extent the same are not otherwise
assigned to AmeriPath. In granting this security interest, the Practice agrees
to the following: (i) this Agreement shall create and constitute a valid and
perfected first priority security interest in the Collateral enforceable
against all parties; (ii) the Practice has and shall continue to have good
indefeasible and merchantable title to and ownership of the Collateral free and
clear of all liens, other than liens created by AmeriPath or any AmeriPath
Affiliate; (iii) this grant of a security interest in the Collateral shall not
result in a violation of any other agreement to which Practice is or becomes a
party; and (iv) the Practice shall take all action necessary to perfect
AmeriPath's security interest in the Collateral, including the execution of
financing statements and authorization to file the same in the appropriate
recording office. AmeriPath and the Practice agree to execute such further
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documents and instruments as may be deemed necessary or desirable, in
AmeriPath's sole discretion, to effect the provisions of this Section.
E. REMEDIES FOR NON-PAYMENT. AmeriPath shall have all rights and
remedies of a secured party and all rights, remedies, securities and liens of
the Practice with respect to the Collateral including, but not limited to,
extending the time of payment of, compromising, or settling for cash, credit,
or otherwise upon any terms, any part or all of the Collateral, but shall not
be liable for any failure to collect or enforce the payment thereof. AmeriPath
is authorized by the Practice, except as otherwise prohibited by applicable
law, to take possession of, and endorse in the name of the Practice any notes,
checks, money orders, drafts, cash, insurance payments and any other
instruments received in payment of the Collateral, or any part thereof; to
collect, ▇▇▇ for and give satisfactions for moneys due on account of the
Collateral; and to withdraw any claims, suits or proceedings pertaining to, or
arising out of, AmeriPath's and/or the Practice's rights to the Collateral.
AmeriPath's costs of collection and enforcement, including attorneys' fees and
out-of-pocket expenses, shall be borne solely by the Practice. The Practice
agrees that AmeriPath shall be permitted to place its representatives in the
Medical Offices, with full authority to take possession of and retain for
AmeriPath the books and records of the Practice with reference to the
Practice's operations pursuant to this Agreement with respect to the Collateral.
F. RIGHT OF OFFSET. Notwithstanding any other provision in this
Agreement, AmeriPath is entitled to offset against any sums owed by AmeriPath
to the Practice any amounts payable or reimbursable to AmeriPath under this
Agreement.
G. LEGAL LIMITATION ON ASSIGNMENT. This Agreement shall not
constitute an assignment of Practice Revenues to the extent that such
assignment is prohibited under applicable law. To the extent Practice Revenues
are not assignable, the Practice agrees that it shall promptly deliver
non-assigned Practice Revenues to AmeriPath.
VI. TERMS AND TERMINATIONS
A. TERM. The initial term of this Agreement shall be for a
period of forty (40) years commencing on October 1, 1996 and ending on
September 30, 2036 (the "Initial Term"). This Agreement shall be extended for
separate and successive five (5) year periods (each such five (5) year period
shall be referred to as an "Extended Term" and the Initial Term and any
Extended Term shall be referred to in this Agreement as the "Term") unless
either party provides the other party notice not less than sixty (60) days
prior to the end of the Initial Term or an Extended Term, unless the Practice
has defaulted under the terms of this Agreement. The same terms and conditions
of this Agreement shall apply to an Extended Term unless the Practice and
AmeriPath mutually agree to alter the terms and conditions hereof with a
writing signed by each party hereto. All New Practice Amendments shall
terminate at such time as this Agreement terminates.
B. TERMINATION. A party (the "Terminating Party") may terminate
this Agreement on the basis of the following:
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1. The other party breaches any material term or condition
of this Agreement, and the breach continues for sixty (60) days after the
receipt of written notice specifying the breach by the party which did not
perform or breached.
2. AmeriPath may terminate this Agreement if the Practice
or the Managing Physician is suspended or prohibited from participating in the
Medicare or Medicaid programs or excluded from entering into healthcare
provider agreements with any material portion of the managed care or healthcare
insurance industry; or (ii) the Practice or the Managing Physician, breaches
any material term of this Agreement, including the restrictive covenants
provided in Attachment III.
C. EFFECTS OF AND OBLIGATIONS UPON TERMINATION. Upon the
termination or expiration of this Agreement: (i) neither party shall be
discharged from any previously accrued obligation which remains outstanding;
(ii) any sums of money owing by one party to the other shall be paid
immediately, prorated through the effective date of termination or expiration;
(iii) the Practice shall return to AmeriPath all originals and copies of any
Confidential Information in the possession of the Practice or any other person
or entity to whom it has delivered originals and/or copies; (iv) the Practice
and AmeriPath shall perform matters as are necessary to wind up their
activities under this Agreement in an orderly manner, including providing to
the Practice patient billing records on paper or electronic data; and (v) each
party shall have the right to pursue other legal or equitable relief as may be
available depending upon the circumstances of the termination.
VII. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE PRACTICE. The Practice
represents and warrants to AmeriPath the following:
1. The Practice is a professional association duly
organized, validly existing and in good standing under
the laws of the State of Texas.
2. The Practice has all necessary power to own all of its
properties and assets and to carry on its business as
now being conducted.
3. The Managing Physician has the authority on behalf of
the Practice to execute, deliver and perform this
Agreement and all other agreements and documents
executed and delivered by the Practice pursuant to this
Agreement.
4. The Practice has the authority to execute, deliver and
perform this Agreement and all other agreements and
documents executed and delivered by it pursuant to this
Agreement.
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5. The Practice has taken all action required by law, its
Practice Organizational Documents, or otherwise to
authorize the execution, delivery and performance of
this Agreement and the related documents.
6. The execution and delivery of this Agreement does not
violate any provisions of the Practice Organizational
Documents or any agreement, instrument, order,
arbitration award, judgment or decree to which the
Practice is a party or by which it is bound.
7. This Agreement has been duly executed and delivered by
the Practice and constitutes the legal, valid and
binding obligation of the Practice, enforceable in
accordance with its terms.
B. REPRESENTATIONS AND WARRANTIES OF AMERIPATH. AmeriPath
represents and warrants to the Practice as follows:
1. AmeriPath is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Texas.
2. AmeriPath has all necessary power to own all of its
properties and assets and to carry on its business as
now being conducted.
3. AmeriPath has the corporate authority to execute,
deliver and perform this Agreement and all agreements
executed and delivered by it pursuant to this
Agreement.
4. AmeriPath has taken all action required by its Articles
of Incorporation, its Bylaws or otherwise to authorize
the execution, delivery and performance of this
Agreement and related documents.
5. The execution and delivery of this Agreement does not
and, subject to the consummation of the transactions
contemplated by this Agreement, shall not, violate any
provisions of the Articles of Incorporation or Bylaws
of AmeriPath or any agreement, instrument, order,
arbitration award, judgment or decree to which
AmeriPath is a party or by which it is bound, which
would adversely affect the ability of AmeriPath to
perform its obligations under this Agreement.
6. This Agreement has been duly executed and delivered by
AmeriPath and constitutes the legal, valid and binding
obligation of AmeriPath, enforceable against AmeriPath
in accordance with its terms.
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VIII. LEGAL COUNSEL
The Practice agrees to retain legal counsel recommended by AmeriPath
with respect to matters in which the interests of the Practice are not adverse
to AmeriPath or its business in any significant respect and further agrees to
waive any conflicts of interest in transactional matters which may exist for
such recommended legal counsel with respect to AmeriPath.
IX. MEDICAL PRACTICE ISSUES
A. PRACTICE OF MEDICINE. The parties acknowledge that AmeriPath
is not authorized or qualified to engage in any activity which constitutes the
practice of medicine and nothing required herein to be shall be construed as
the practice of medicine by AmeriPath. To the extent any act or service
required to be performed or provided by AmeriPath is construed or deemed by any
governmental authority, agency or court to constitute the practice of medicine,
AmeriPath shall be released from any obligation to provide such act or service
and the provision for such required act or service shall be deemed waived and
forever unenforceable without otherwise affecting the terms of this Agreement.
B. INSURANCE. The Practice shall provide, or arrange for the
provision of, and maintain throughout the Term, for the Practice and each
Practice Provider professional liability/malpractice insurance coverage in the
minimum amount of $1,000,000 per occurrence and $3,000,000 annual aggregate (or
such other amount as required by law, prevailing in the community, or required
by managed care companies) and workers' compensation insurance coverage in the
minimum amounts required by applicable law. The Practice shall maintain
general liability insurance and other insurance of the type generally
maintained by business involved in the same business as the Practice. The
Practice shall, at its sole cost and expense, pay the premium costs of all
insurance coverage during the Term of this Agreement and, upon request by
AmeriPath, provide AmeriPath with evidence of such coverage.
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Practice and AmeriPath have duly executed this Agreement on the day
and year indicated above.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., P.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
-------------------------------
Its: President
--------------------------------
AMERIPATH TEXAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Its Vice President
---------------------------------
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ATTACHMENT I
DEFINITIONS
AGREEMENT means this agreement and any subsequent amendments thereto,
including, NEW PRACTICE AMENDMENTS.
ALLOCATED EXPENSES means the expenses relating to the operations of the
facilities of the Practice and the administrative expenses incurred by
AmeriPath on behalf of the Practice in the performance of AmeriPath's duties
under this Agreement, including the following: billing services (including
personnel), marketing, advertising, promotion, allocated corporate overhead,
legal expenses, service of laboratory and other expenses as may be approved
from time to time by the Steering Committee, all as permitted to be incurred in
accordance with this Agreement and any New Practice Amendment (as defined in
Section III.G.)
BASE FEE has the meaning ascribed to it in Section V.A.3.
CONFIDENTIAL INFORMATION has the meaning ascribed to it in Attachment III.
FF&E has the meaning ascribed to it in Section II-I.
MANAGING PHYSICIAN means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., for so long as he remains
employed by the Practice or its successor, and thereafter "Managing Physician"
shall mean the Practice Provider designated by the Practice and AmeriPath in
the Operating Plan to manage the administrative and medical functions of the
Practice.
MEDICAL OFFICES means the medical offices and laboratory facilities listed on
Attachment IV and/or at such other place or places of business as may be agreed
upon by the parties in writing.
NEW PRACTICE AMENDMENT means those individual amendments to this Agreement
executed by the Practice, an Additional Practice and AmeriPath.
OPERATING PLAN means the Practice Operating Plan referred to in Section IV.B.
PRACTICE BANK ACCOUNT means the bank account referred to in Section V.C. of
which the Practice is the owner.
PRACTICE EXPENSES means the following expenses: Practice Providers'
compensation expenses, professional liability insurance, continuing medical
education, benefits, dues and subscriptions, automobiles, facility leases,
repairs and maintenance, telephones and pagers, utilities, billing services,
courier services, legal expenses, travel and entertainment, outside medical
consultants, license fees and taxes, all expenses identified in this Agreement
as Practice Expenses, all expenses identified in this Agreement as incurred by
AmeriPath on behalf of Practice and other expenses approved from time to time
by the Steering Committee, all as permitted to be incurred in accordance with
this Agreement and any New Practice Amendment (as defined in Section III.G.).
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PRACTICE PROVIDERS means individuals who are duly licensed to practice medicine
and who are employed by the Practice, or other individuals who are under
contract with the Practice to provide physician services to patients of the
Practice.
PRACTICE ORGANIZATIONAL DOCUMENTS means the articles of incorporation and
bylaws of the Practice.
PRACTICE REVENUES means all revenues generated by or on behalf of the Practice,
after the date hereof, as a result of professional medical services furnished
to patients, ancillary services provided to patients, pharmaceuticals and other
items and supplies sold to patients and other fees or income generated by the
Practice or Practice Providers rendered in an inpatient or outpatient setting
and regardless of whether rendered to health maintenance organization,
preferred provider organization, Medicare, Medicaid or other patients,
including, but not limited to, payments received under capitation arrangements,
less account adjustments for uncollectible accounts, discounts, Medicare,
Medicaid, workers' compensation, professional courtesy discounts and other
write-offs. Notwithstanding the foregoing, Practice Revenues shall not include
revenues generated by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D. (a) from consulting and related
services as a medical doctor for any medical practice or health care provider
other than the Practice or an affiliate of AmeriPath; (b) from clinical
dermatology services for any patient in a clinic environment or otherwise; (c)
as a member, director, associate director, consultant to, or advisor to The
University of Texas Southwestern Medical Center, (d) as an employee of a local,
federal or state government or agency; (e) in performing duties as a member of
the United States military services or the National Guard; (or) on a locum
tenens basis.
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ATTACHMENT II
APPOINTMENT OF AMERIPATH AS ATTORNEY IN FACT
On behalf of and for the account of Practice, AmeriPath shall
assist Practice in Practice's establishment and maintenance of credit and
billing and collection policies and procedures, and shall coordinate and
supervise Practice personnel to ensure the timely billing and collection of all
professional and other fees for all billable pathology services provided by
Practice or Physicians. AmeriPath shall advise and consult with Practice
regarding the fees for pathology services provided by Practice; it being
understood, however, that Practice shall establish the fees to be charged for
pathology services and that AmeriPath shall have no authority whatsoever with
respect to the establishment of such fees. In connection with the billing and
collection services to be provided hereunder, and throughout the term of this
Agreement, Practice hereby grants to AmeriPath an exclusive special power of
attorney and appoints AmeriPath as Practice's exclusive true and lawful agent
and attorney-in-fact, and AmeriPath hereby accepts such special power of
attorney and appointment, for the following purposes:
1. To supervise and coordinate the billing of Practice's
patients, in the name of Practice and on behalf of Practice,
as applicable, for all billable pathology services provided by
Practice to patients.
2. To supervise and coordinate the billing in Practice's name and
on Practice's behalf, as applicable, all claims for
reimbursement or indemnification from Blue Shield/Blue Cross,
insurance companies, Medicare, Medicaid, and all other third
party payors or fiscal intermediaries for all covered billable
pathology services provided by Practice to patients.
3. To ensure the collection and receipt in AmeriPath's name and
for AmeriPath's account all accounts receivable of Practice
purchased by AmeriPath, and to deposit such collections in an
account selected by AmeriPath and maintained in AmeriPath's
name.
4. To ensure the collection and receipt in Practice's name and on
Practice's behalf, as applicable, of all accounts receivable
generated by such ▇▇▇▇▇▇▇▇ and claims for reimbursement that
have not been purchased by AmeriPath, to administer such
accounts including, but not limited to, (i) extending the time
of payment of any such accounts for cash, credit or otherwise;
(ii) discharging or releasing the obligors of any such
accounts; (iii) with the consent of the Steering Committee,
suing, assigning or selling at a discount such accounts to
collection agencies; or (iv) with the consent of the Steering
Committee, taking other measures to require the payment of any
such accounts.
5. To deposit all amounts collected in Practice's name and on
behalf of Practice into Practice Bank Account which shall be
and at all times remain in Practice's name.
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Practice covenants to transfer and deliver to AmeriPath for
deposit into Practice Bank Account or itself to make such
deposit of all funds received by Practice from patients or
third party payors for pathology services. Upon receipt by
AmeriPath of any funds from patients or third party payors or
from Practice pursuant hereto for pathology services,
AmeriPath shall immediately deposit same into the Practice
Bank Account. AmeriPath shall disburse such deposited funds
to creditors and other persons on behalf of Practice,
maintaining records of such receipt and disbursement of funds
as directed by Practice.
6. To take possession of, endorse in the name of Practice, and
deposit into the Practice Bank Account any notes, checks,
money orders, insurance payments, and any other instruments
received in payment for pathology services.
7. To sign checks, drafts, bank notes or other instruments on
behalf of Practice, and to make withdrawals from the Practice
Bank Account for payments specified in this Agreement and as
requested from time to time by Practice.
Upon request of AmeriPath, Practice shall execute and deliver to the financial
institution wherein the Practice Bank Account is maintained, such additional
documents or instruments as may be necessary to evidence or effect the special
and limited power of attorney granted to AmeriPath by Practice pursuant to this
Agreement. The special and limited power of attorney granted herein shall be
coupled with an interest and shall be irrevocable except with AmeriPath's
written consent. The irrevocable power of attorney shall expire on the later
of when this Agreement has been terminated, when all accounts receivable
purchased by AmeriPath have been collected, or when all management fees due to
AmeriPath have been paid. If AmeriPath assigns this Agreement in accordance
with its terms, then Practice shall execute a power of attorney in favor of the
assignee.
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ATTACHMENT III
RESTRICTIVE COVENANTS
The Practice shall cause each Practice Provider to enter into an
agreement with respect to restrictive covenants, such as the confidentiality of
information relating to the Practice or AmeriPath, restrictions on solicitation
of employees or customers of the Practice or AmeriPath and restrictions on such
Practice Provider's right to compete with the Practice after termination of the
Practice Provider's employment by the Practice. Such agreement shall be in a
form reasonably satisfactory to AmeriPath and shall provide that AmeriPath
shall be a third party beneficiary of such agreements.
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ATTACHMENT IV
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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ATTACHMENT V
MISCELLANEOUS CONTRACTUAL PROVISIONS
1. ADDITIONAL ACTS. Each party agrees to perform any further acts
and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.
2. CONTRACT CONSTRUCTION, INTERPRETATION AND ENFORCEMENT PROVISIONS.
(a) Assignment. Neither party may assign this Agreement without
the other's written consent. Nevertheless: 1) AmeriPath may
assign this Agreement to a parent, subsidiary or affiliate, and;
2) the Practice may assign this Agreement to a non-profit
organization organized to conduct the business of the Practice, as
provided in Attachment VII. This Agreement shall be binding on
and shall inure to the benefit of the parties to this Agreement,
and their successors and permitted assigns. Subject to the
foregoing sentence, no person or entity not a party to this
Agreement shall have any right under or by virtue of this
Agreement, except for AmeriPath, Inc. as an intended third party
beneficiary of this Agreement.
(b) Captions. The captions or headings in this Agreement are
made for convenience and general reference only and shall not be
construed to describe, define or limit the scope or intent of the
provisions of this Agreement.
(c) Costs of Enforcement. In the event that either party files
suit in any court against the other party to enforce the terms of
or to obtain performance under this Agreement, the prevailing
party shall be entitled to recover all reasonable costs, including
reasonable attorneys' fees, from the other party as part of any
judgment in the suit. The term "prevailing party" means the party
in whose favor final judgment after appeal (if any) is rendered
with respect to the claims asserted in the complaint. "Reasonable
attorneys' fees" are those attorneys' fees actually incurred in
obtaining a judgment in favor of the prevailing party.
(d) Counterparts. The parties may execute this Agreement in
several counterparts, each of which shall be deemed to be an
original, and counterparts shall constitute and be one and the
same instrument.
(e) Governing Law. This Agreement shall be interpreted,
construed and enforced in accordance with the laws of the State of
Texas, applied without giving effect to any conflicts of law
principles.
(f) Modifications. This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and
supersedes any prior or contemporaneous negotiations,
understandings or agreements between the parties, written or oral,
with respect to the transactions contemplated by this Agreement.
This Agreement may not be changed
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or terminated orally but may only be changed by an agreement in
writing signed by AmeriPath and the Practice; provided, however,
that this Agreement shall not be modified without the consent of
the Managing Physician for so long as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.,
shall be the Managing Physician and AmeriPath, Inc., shall have
continuing contingent financial obligations owing to ▇▇. ▇▇▇▇▇▇▇▇▇
pursuant to that certain Stock Purchase Agreement dated as of the
date hereof.
(g) Notices. The parties to this Agreement shall give notice
under this Agreement by U.S. mail, postage prepaid, by hand
delivery or by overnight express, charges prepaid. Notices shall
be addressed as follows:
If to the Practice:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., P.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇.▇▇▇▇▇▇▇▇▇, M.D.
If to AmeriPath:
AmeriPath Texas, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to:
AmeriPath, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or other addresses as furnished in writing by a party to the other
party. All notices shall be considered received when received by
the addressee, if by mail, when hand delivered or one business day
after delivery to the overnight courier.
(h) Severability. A determination by a court of competent
jurisdiction that a provision or part of any provision of this
Agreement is invalid or unenforceable shall not affect the
remaining parts or provisions of this Agreement which shall
continue in full force and effect.
3. LEGAL EVENTS TRIGGERING CONTRACT MODIFICATION OR TERMINATION
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(a) Changes in Reimbursement. In the event that Medicare,
Medicaid, Blue Shield or any other third party payor, or any other
Federal, state or local laws, rules, regulations or
interpretations, at any time during the Term prohibit, restrict or
in any way materially and adversely change the method or amount of
reimbursement or compensation for either party provided for in
this Agreement, then the parties shall negotiate in good faith to
amend this Agreement to provide for payment of compensation in a
manner consistent with such changes, taking into account any
materially adverse change in reimbursement or payment for
physician services. If the parties cannot reach agreement on an
amendment prior to the effective date of the change, the parties
agree to jointly select a mediator and share equally in the cost
of the mediation. If mediation does not resolve such dispute,
then the matter shall be settled exclusively by binding
arbitration, which shall be conducted in Broward County, Florida,
in accordance with the National Health Lawyer's Association,
Alternative Dispute Resolution Service, Rules of Procedure for
Arbitration. The expenses of such arbitration shall be borne
equally by the parties, provided that each party shall pay for the
cost and its own experts, evidence, and attorney's fees (unless
otherwise directed by the arbitrator).
(b) Enactment or Interpretation of Relevant Statutes and
Regulations. In the event any state or federal laws or
regulations, now existing or enacted or promulgated after the date
hereof, are interpreted by judicial decision, a regulatory agency,
or legal counsel acceptable to both AmeriPath and the Practice in
such a manner as to indicate that this Agreement or any provision
hereof may be in violation of such laws or regulations, the
Practice and AmeriPath shall amend this Agreement as necessary to
preserve the underlying economic and financial arrangements
between the Practice and AmeriPath and without substantial
economic detriment to any party. If such an amendment is not
possible, either party shall have the right to terminate this
Agreement.
4. INDEPENDENT CONTRACTOR STATUS. The Practice and AmeriPath are to
perform and exercise their rights and obligations under this
Agreement as independent contractors. AmeriPath's sole function
under this Agreement is to provide services, as requested, in a
competent and satisfactory manner, exercising reasonable care in
the performance of all such duties. AmeriPath shall not become
liable for any of the obligations, liabilities, debts or losses of
the Practice unless otherwise specifically provided by this
Agreement. AmeriPath shall have no liability whatsoever for
damages suffered on account of the willful misconduct or
negligence of any employee, agent or independent contractor (other
than AmeriPath) of the Practice. Each party shall be solely
responsible for compliance with all state and federal laws
pertaining to employment taxes, income withholding, unemployment
compensation contributions and other employment related statutes
regarding their respective employees, agents and servants. In the
event that any court or regulatory authority (or AmeriPath, in
good faith) determines that the relationship established by this
Agreements creates an employment relationship, the parties shall
negotiate in good faith to reach an arrangement involving
AmeriPath and the then current Practice Providers which
substantially preserves for the parties the benefits of this
Agreement. If such an arrangement cannot be reached,
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AmeriPath may terminate this Agreement upon thirty (30) days prior
written notice to the Practice.
5. PROHIBITION AGAINST DISCRIMINATION. The Practice and AmeriPath
agree that, in fulfilling their respective obligations and duties
under this Agreement, they shall not discriminate against any
individual on the basis of race, religion, age, sex, disability or
national origin.
6. USE OF NAMES. Subject to the approval of the Managing Physician,
which approval shall not be unreasonably withheld, AmeriPath may
include the name of the Practice, the Practice Providers and the
Practice Providers in any brochures, promotional materials or the
like relating to AmeriPath.
7. INDEMNIFICATION.
(a) AmeriPath agrees to indemnify and hold the Practice and its
directors, officers, agents employees, Practice Providers and
affiliates (collectively, the "Practice Group") harmless from and
against any and all filings, suits, proceedings, claims,
penalties, damages, costs and expenses (including, but not limited
to, court costs and reasonable attorney and paralegal fees)
incurred by the Practice Group, resulting or arising from any
breach in any representation or warranty of AmeriPath contained
herein or any default in the performance of any covenant or
agreement of AmeriPath contained herein.
(b) The Practice agrees to indemnify and hold AmeriPath and its
directors, officers, agents employees, stockholders and
affiliates, and the directors, officers, agents and employees of
its stockholders and affiliates (collectively, the "AmeriPath
Group"), harmless from and against any and all filings, suits,
proceedings, claims, penalties, damages, costs and expenses
(including, but not limited to, court costs and reasonable
attorney and paralegal fees) incurred by the AmeriPath Group,
resulting or arising from any breach in any representation or
warranty of the Practice contained herein or any default in the
performance of any covenant or agreement of the Practice contained
herein.
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ATTACHMENT VI
1. ORGANIZATION OF NON-PROFIT HEALTH CORPORATION
The parties shall cause to be formed a Non-Profit Health
Corporation organized pursuant to Section 5.01(a) of the Texas Medical Practice
Act (the "Corporation"). The Corporation shall be named AmeriPath Pathology
Group, Inc. and shall have articles and bylaws as attached to this Attachment
VI. The parties shall fully cooperate with each other to effectuate the
organization of the Corporation, and its qualification to engage in the
practice of medicine. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D. agrees, on behalf of the
Practice and of himself to become a director of the Corporation. AmeriPath
shall bear all reasonable costs associated with the organization and
qualification of the Corporation.
2. ASSIGNMENT OF INTERESTS
The parties agree that the following agreements shall be assigned
to the Corporation on or promptly after the Corporation becomes qualified: 1)
this Agreement; 2) all Physician Employment Agreements entered into by the
Practice, including Agreements Not To Compete 3) Managed Care Agreements and 4)
all other agreements for the provision of pathology services. The Corporation
shall assume all of the liabilities of the Practice and shall be entitled to
receipt of all of its assets.
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