SERVICE AGREEMENT
BY AND BETWEEN
SPECIALTY CARE NETWORK, INC.,
SCN OF PRINCETON, INC.,
PRINCETON ORTHOPEDIC ASSOCIATES II, P.A.
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., M.D.
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
C. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Dated as of November 1, 1996
TABLE OF CONTENTS Page
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ARTICLE I.
RELATIONSHIP OF THE PARTIES
1
1.1. Independent Relationship....................................... 1
1.2. Responsibilities of the Parties................................ 2
1.3. Princeton II Matters........................................... 2
1.4. Patient Referrals.............................................. 2
1.5. Professional Judgment.......................................... 2
1.6. Conduct of Professional Medical Practice....................... 2
ARTICLE II.
DEFINITIONS
4
2.1. Definitions.................................................... 4
ARTICLE III.
PRACTICE OFFICES TO BE PROVIDED BY COMPANY
8
3.1. Practice Offices............................................... 8
3.2. Use of Practice Offices........................................ 9
ARTICLE IV.
DUTIES OF THE POLICY BOARD
9
4.1. Formation and Operation of the Policy Board.................... 9
4.2. Duties and Responsibilities of the Policy Board................ 9
4.2.1. Capital Improvements and Expansion..................... 9
4.2.2. Annual Budgets......................................... 9
4.2.3. Marketing.............................................. 9
4.2.4. Patient Fees; Collection Policies...................... 9
4.2.5. Princeton II and Payor Relationships.................. 10
4.2.6. Strategic Planning.................................... 10
4.2.7. Capital Expenditures.................................. 10
4.2.8. Restrictive Covenants for Physician................... 10
4.2.9. Grievance Referrals................................... 10
ARTICLE V.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY
10
5.1. Performance of Management Functions........................... 10
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5.2. Financial Planning and Goals.................................. 10
5.3. Audits and Financial Statements............................... 11
5.4. Inventory and Supplies........................................ 11
5.5. Management Services and Administration........................ 11
5.6. Personnel..................................................... 14
5.7. Events Excusing Performance................................... 14
5.8. Compliance with Law and Business Standards.................... 15
5.9. Quality Assurance............................................. 15
5.10. New Medical Services and Additional Practice Offices.......... 15
5.11. Collection of Certain Patient Receipts and Payment of
Clinic Expenses............................................. 15
5.12. Other Princeton II Accounts................................... 16
ARTICLE VI.
OBLIGATIONS OF PRINCETON II AND PHYSICIAN OWNERS
16
6.1. Professional Services......................................... 16
6.2. Medical Practice.............................................. 16
6.3. Employment of Physician Employees............................. 16
6.4. Professional Dues and Education Expenses...................... 17
6.5. Professional Insurance Eligibility............................ 17
6.6. Events Excusing Performance................................... 17
6.7. Fees for Professional Services................................ 17
6.8. Peer Review................................................... 17
6.9. Princeton II Employee Benefit Plans........................... 18
ARTICLE VII.
RESTRICTIVE COVENANTS AND ENFORCEMENT
19
7.1. Exclusive Arrangement......................................... 19
7.2. Restrictive Covenants......................................... 20
7.2.1. By Current Physician Employees........................ 20
7.2.2. By Current and Future Physician Owners................ 20
7.2.3. Limitations on Restrictive Covenants.................. 21
7.3. Restrictive Covenants By Future Physician Employees........... 21
7.4. Rights of Company............................................. 21
7.5. Enforcement................................................... 21
7.6. Modification of Restrictive Covenants......................... 22
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ARTICLE VIII.
FINANCIAL ARRANGEMENTS
22
8.1. Service Fees.................................................. 22
8.2. Payment of Service Fee........................................ 26
8.3. Purchase of Accounts Receivable............................... 26
8.4. Payment of Clinic Expenses.................................... 27
ARTICLE IX.
RECORDS
28
9.1. Patient Records............................................... 28
9.2. Records Owned by Company...................................... 28
9.3. Access to Records............................................. 28
9.4. Government Access to Records.................................. 28
ARTICLE X.
INSURANCE AND INDEMNITY
29
10.1. Insurance to be Maintained by Princeton II.................... 29
10.2. Insurance to be Maintained by Company......................... 29
10.3. Additional Insureds........................................... 29
10.4. Indemnification............................................... 29
ARTICLE XI.
TERM, TERMINATION AND RETIREMENT
30
11.1. Term of Agreement............................................. 30
11.2. Extended Term................................................. 30
11.3. Termination by Princeton II for Cause......................... 30
11.4. Termination by Company for Cause.............................. 31
11.5. Early Termination by Princeton II or Company Without
Cause Upon Third (3rd) Anniversary of Agreement............. 32
11.6. Consequences of Princeton II Termination...................... 33
11.7. Closing of purchase by Princeton II and Effective Date of
Termination................................................. 33
11.8. Tail Policy................................................... 34
11.9. Restrictions Applicable to Physician Owners................... 34
11.9.1 Early Retirement...................................... 34
11.9.2 Retirement............................................ 36
11.9.3 Physician Owner Change in Practice/Group Affiliation
...................................................... 36
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11.9.4 Death or Disability................................... 37
ARTICLE XII.
DAMAGE AND LOSS; CONDEMNATION
37
12.1. Use of Insurance Proceeds.................................... 37
12.2. Temporary Space.............................................. 37
ARTICLE XIII.
REPRESENTATIONS AND WARRANTIES
OF PRINCETON II AND PHYSICIAN OWNERS
37
13.1. Validity..................................................... 37
13.2. Litigation................................................... 38
13.3. Permits...................................................... 38
13.4. Authority.................................................... 38
13.5. Compliance with Applicable Law............................... 38
13.6. Health Care Compliance....................................... 39
13.7. Fraud and Abuse.............................................. 39
13.8. Princeton II Compliance...................................... 39
13.9. Rates and Reimbursement Policies............................. 40
13.10. Accounts Receivable.......................................... 40
13.11. Full Disclosure.............................................. 42
13.12. Exhibits..................................................... 42
ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES OF COMPANY
43
14.1. Organization................................................. 43
14.2. Authority.................................................... 43
14.3. Absence of Litigation........................................ 43
14.4. Transactions with Affiliates................................. 43
ARTICLE XV.
COVENANTS OF PRINCETON II AND PHYSICIAN OWNERS
43
15.1. Merger, Consolidation and Other Arrangements................. 43
15.2. Necessary Authorizations/Assignment of Licenses and Permit... 43
15.3. Transaction with Affiliates.................................. 44
15.4. Compliance with All Laws..................................... 44
15.5. Third-Party Payor Programs................................... 44
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15.6. Change in Business or Credit and Collection Policy........... 44
15.7. Treatment of Accounts Receivable............................. 44
15.8. Security Interest............................................ 45
ARTICLE XVI.
GENERAL PROVISIONS
45
16.1. Assignment................................................... 45
16.2. Whole Agreement; Modification................................ 46
16.3. Notices...................................................... 46
16.4. Binding on Successors........................................ 47
16.5. Waiver of Provisions......................................... 47
16.6. Governing Law................................................ 47
16.7. No Practice of Medicine...................................... 47
16.8. Severability................................................. 47
16.9. Additional Documents......................................... 48
16.10. Attorneys' Fees.............................................. 48
16.11. Time is of the Essence....................................... 48
16.12. Confidentiality.............................................. 48
16.13. Contract Modifications for Prospective Legal Events.......... 48
16.14. Remedies Cumulative.......................................... 48
16.15. Language Construction........................................ 48
16.16. No Obligation to Third Parties............................... 49
16.17. Communications............................................... 49
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SERVICE AGREEMENT
THIS SERVICE AGREEMENT ("Agreement") dated as of November 8, 1996, by and
between SPECIALTY CARE NETWORK, INC., a Delaware corporation, SCN OF PRINCETON,
INC., a New Jersey corporation, PRINCETON ORTHOPEDIC ASSOCIATES, II, P.A., a New
Jersey professional association ("Princeton II") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., M.D., W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., C.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., M.D., and ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. ("Physician Owner[s]"),
citizens and residents of New Jersey.
W I T N E S S E T H:
WHEREAS, Company is in the business of managing medical clinics and
providing support services to and furnishing orthopedic care medical practices
with the necessary equipment, personnel, supplies and support staff; and
WHEREAS, Princeton II and Physician Owners desire to obtain the services
of Company in performing such management functions so as to permit Princeton II
and Physician Owners to devote Princeton II's and Physician Owners' efforts on a
concentrated and continuous basis to the rendering of medical services to
patients.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements herein set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed by the parties as follows:
ARTICLE I.
RELATIONSHIP OF THE PARTIES
1.1. Independent Relationship. Princeton II, Physician Owners and Company
intend to act and perform as independent contractors, and the provisions hereof
are not intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, Princeton II, and Physician Owners agree that Princeton
II and Physician Owners shall retain all authority to direct the medical,
professional, and ethical aspects of Princeton II's and Physician Owners'
medical practice including but not limited to the admission of new patients and
providing care to indigent patients. Each party shall be solely responsible for
and shall comply with all state and federal laws pertaining to employment taxes,
income withholding, unemployment compensation contributions and other employment
related statutes applicable to that party.
1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide Princeton II with offices and facilities,
equipment, supplies, certain support personnel,
management and financial advisory services for its medical and physical therapy
practices. As more specifically set forth herein, Princeton II shall be
responsible for the recruitment and hiring of physicians and all issues related
to the professional practice of medicine, medical practice patterns and
documentation thereof. Notwithstanding anything herein to the contrary, no
"designated health service," as defined in 42 U.S.C. ss. 1395nn, including any
amendments or successors thereto, shall be provided by Company under this
Agreement.
1.3. Princeton II Matters. Matters involving the internal agreements and
finances of Princeton II, including the disposition of professional fee income,
tax planning, and investment planning (and expenses relating solely to these
internal business matters) shall remain the sole responsibility of Princeton II.
1.4. Patient Referrals. The parties agree that the benefits to Princeton
II and Physician Owners hereunder do not require, are not payment for, and are
not in any way contingent upon the admission, referral or any other arrangement
for the provision of any item or service offered by Company to any of Princeton
II's patients in any facility operated by Company.
1.5. Professional Judgment. Each of the parties acknowledges and agrees
that the terms and conditions of this Agreement pertain to and control the
business and financial relationship between and among the parties but do not
pertain to and do not control the professional and clinical relationship between
and among Princeton II, Physician Employees, Princeton II Employees, and
Princeton II's patients. Nothing in this Agreement shall be construed to alter
or in any way affect the legal, ethical, and professional relationship between
and among Princeton II, Physician Owners, Physician Employees, and Princeton
II's patients, nor shall anything contained in this Agreement abrogate any
right, privilege, or obligation arising out of or applicable to the
physician-patient relationship.
1.6. Conduct of Professional Medical Practice. Notwithstanding any other
statement contained in this Agreement to the contrary, both Princeton II and
Company understand and agree that:
(1) Princeton II will have complete and exclusive control with respect to
the provision of professional medical services, the supervision of its
Physician Employees and Technical Employees and with respect to all
medical decisions, such as the administration of patient care, and such
other decisions as may be required by Applicable Law;
(2) Princeton II is solely responsible for determining the salaries or
other compensation to be paid to its Physician Employees;
(3) Princeton II, through its physicians, shall be responsible for
assuring that quality control and assurance mechanisms required by
Applicable Law shall be implemented and observed by the practice. These
physicians shall assure that an appropriate licensed health care
professional determines and carries out all of the following services and
medical care policies:
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(a) Review and approval of the hiring of Physician Employees and
timely demand for and verification of current licensing credentials
and any other educational credentials required by Applicable Law;
(b) Medical policies;
(c) Cleanliness of Office Locations;
(d) Maintenance, registration and inspection of professional
equipment as necessary;
(e) Standards for record keeping as to patient medical records,
billing records and such other records as may be required by law or
rule, including controlled dangerous substance inventories, as
applicable;
(f) Security, including drug storage, prescription pad control,
confidentiality of patient records;
(g) Periodic audit of patient records and of professional services
to assure quality professional care on the premises;
(h) Responsibility for the professional propriety of billing,
including retention of sole discretion regarding establishment of
patient fees and modification or waiver thereof in an individual
case;
(i) Responsibility for the professional propriety of advertising or
other representations including disclosure of financial interest in
health care services offered to the public;
(j) Preparation and maintenance of a written list of current fees
for standard services, which list shall be available to patients on
request; and
(k) Posting a conspicuous notice in the waiting room that
professional fee information is available to patients on request.
ARTICLE II.
DEFINITIONS
2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:
"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.
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"Accounts Receivable" means, with respect to Princeton II, all accounts
and any and all rights to payment of money or other forms of consideration of
any kind now owned or hereafter acquired (whether classified under the Uniform
Commercial Code as accounts, chattel paper, general intangibles or otherwise)
for goods sold or leased or for services rendered by Princeton II, including,
but not limited to, accounts receivable, proceeds of any letters of credit
naming Princeton II as beneficiary, chattel paper, insurance proceeds, contract
rights, notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any other Person; provided
that, cash, checks and credit card purchases are not included in the definition
of Accounts Receivable.
"Affiliate" means, with respect to any Person, any entity which directly
or indirectly controls, is controlled by, or is under common control with, such
Person or any Subsidiary of such Person or any Person who is a director, officer
or partner of such Person or any Subsidiary of such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to (a) vote ten percent (10%) or more of the securities having ordinary voting
power for the election of directors of such Person, or (b) direct or cause the
direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations, ordinances and orders of all Governmental
Authorities and all orders and decrees of all courts, tribunals and arbitrators,
and shall include, without limitation, Health Care Law.
"Assigned Lease" shall have the meaning as defined in Section 3.1.
"Base Service Fee" shall equal [xxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxx] per year, payable in monthly payments of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].
"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.
"Change in Control" shall mean any transaction pursuant to which Company
(a) consummates the sale of substantially all of the assets of Company to an
entity which is publicly traded in exchange for voting stock in such publicly
traded entity or (b) merges with a publicly traded corporation, entity or
corporation or entity controlled by a publicly traded corporation or entity in a
transaction where unrelated persons own at least fifty-one percent (51%) of the
issued and outstanding securities of the surviving entity or corporation
controlling the merged entity.
"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Company" shall mean collectively Specialty Care Network, Inc., a Delaware
corporation, together with its successors and assigns and its wholly-owned
subsidiary, SCN of Princeton, Inc., together with its successors and assigns.
"Company Expenses" shall have the meaning as defined in Section 8.1.7.
"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.
"Direct Lease" shall have the meaning as defined in Section 3.1.
"Disabled" or "Disability" shall mean that a Physician suffers from a
mental or physical condition resulting in such Physician Employee's inability to
perform the essential functions of his job as required by Section 6.1.1 (and as
may be described with greater specificity in written job descriptions prepared
and maintained by Princeton II and approved by the Policy Board) without
significant risk to the health or safety of others, even with such reasonable
accommodation as may be available under the circumstances, and the Policy Board
may reasonably anticipate that such Physician Employee will remain disabled for
at least two years following the commencement of such disability.
"Exchange" shall mean the acquisition of Princeton Orthopaedic Associates,
P.A. ("Princeton") pursuant to the Exchange Agreement.
"Exchange Agreement" means that certain Stock Exchange Agreement, dated
October 21, 1996 by and between Company and Physician Owners.
"Exchange A/R" means the accounts receivable acquired from Princeton by
Company pursuant to the Exchange Agreement.
"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.
"GAAP" shall mean generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity or other practices and procedures as may be
approved by a significant segment of the accounting profession. For purposes of
this Agreement, GAAP shall be applied in a manner consistent with the historic
practices used by Company or Princeton II as applicable.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, board, body, agency, bureau or entity or any arbitrator with
authority to bind a party at law.
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"Governmental Receivables" means an Account Receivable of Princeton II
which (i) arises in the ordinary course of business of Princeton II, (ii) has as
its Third-Party Payor the United States of America or any state or any agency or
instrumentality of the United States of America or any state which makes any
payments with respect to Medicare or Medicaid or with respect to any other
program (including CHAMPUS) established by federal or state law, and (iii) is
required by federal or state law to be paid or to be made to Princeton II as a
healthcare provider. Governmental Receivables shall not, however, refer to
amounts payable by private insurers under contract to provide benefits under the
Federal Employee Health Benefit Program.
"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.
"Health Care Law" means any Applicable Law regulating the acquisition,
construction, operation, maintenance or management of a health care practice,
facility, provider or payor, including without limitation, 42 U.S.C. ss.1395nn
and 42 U.S.C. ss. 1320a-7b.
"Lease" shall mean the Assigned Lease, Direct Leases, and the New Leases,
including all amendments thereto, described in Section 3.1 hereof.
"Leased Premises" shall mean the real property described in the Lease.
"Lender" shall have the meaning as defined in Section 7.2.
"Main Office" shall mean the Leased Premises and all equipment and
facilities owned or operated by Company and utilized by Princeton II or any of
its employees within said Leased Premises.
"Medicaid" means any state program pursuant to which health care providers
are paid or reimbursed for care given or goods afforded to indigent persons and
administered pursuant to a plan approved by the Health Care Financing
Administration under Title XIX of the Social Security Act.
"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.
"Necessary Authorizations" means with respect to Princeton II, all
certificates of need, authorization, certifications, consents, approvals,
permits, licenses, notices, accreditations and exemptions, filings and
registrations, and reports required by Applicable Law, including, without
limitation, Health Care Law, which are required, necessary or reasonably useful
to the lawful ownership and operation of Princeton II's business.
"New Lease" shall have the meaning as defined in Section 3.1.
"Office Locations" shall have the meaning as defined in Section 3.1.
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"Person" shall mean an individual, corporation, partnership, association,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof including, without limitation, Third-Party Payors.
"Physician Employees" shall mean the term as defined in Section 8.1.6.
"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.
"Physician Owners" shall mean those Physician Employees who own an
interest, directly or indirectly, in the equity of Princeton II.
"Plans" shall have the meaning as defined in Section 6.9.1.
"Policy Board" shall mean a board established pursuant to Section 4.1.
"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.
"Practice Offices" shall mean (i) the Main Office and (ii) all of the
Satellite Offices.
"Professional Services Revenues" shall mean the term as defined in Section
8.1.2.
"Purchase Price" shall mean the term as defined in Section 8.3.2.
"Purchased A/R" means, with respect to Princeton II, the Accounts
Receivable purchased pursuant to Section 8.3 of this Agreement.
"Princeton II Operating Account" shall mean that certain operating account
established by Princeton II at a bank selected by Princeton II in Princeton II's
sole discretion as more fully described in Section 5.11.
"Princeton II Plan" shall mean the term as defined in Section 6.9.1.
"Satellite Offices" shall mean each location at which one or more of
Princeton II's employees provide services as described on Exhibit 3.1 and all
equipment and facilities owned or operated by Company and utilized by any of
said persons at such location.
"Settlement Date" shall mean the term as defined in Section 8.3.3.
"Service Agreement" means this Agreement.
"Subsidiary" means a Person of which an aggregate of 51% or more of the
voting stock of any class or classes or 51% or more of other voting or equity
interests is owned of record or beneficially by another Person, or by one or
more Subsidiaries of such Person.
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"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).
"Technical Employees" shall mean the term as defined in Section 8.1.4.
"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.
"Third-Party Payor Programs" means Medicare, Medicaid, CHAMPUS, insurance
provided by Blue Cross and/or Blue Shield, managed care plans, and any other
private health care insurance programs and employee assistance programs as well
as any future similar programs.
ARTICLE III.
PRACTICE OFFICES TO BE PROVIDED BY COMPANY
3.1. Practice Offices. (a) Company has received a leasehold interest in
certain offices and locations which comprise the Practice location ("Main
Office") and/or satellite offices ("Satellite Offices") as identified on Exhibit
3.1 (collectively the "Office Locations") through (i) an assignment of any
existing leases on said Office Locations (the "Assigned Leases") or (ii)
entering into a new lease with respect to one or more of the Office Locations
(the "Direct Leases") with a copy of the Assigned Leases and Direct Leases
attached hereto as Exhibit 3.1.
(b) Company agrees to provide offices and facilities at the Office
Locations (or at comparable facilities on the termination of the Assigned Leases
or Direct Leases) to Princeton II. Such facilities shall include all personal
property necessary to operate the facility. If any Assigned Leases or Direct
Leases are terminated by their terms, Company shall enter into a lease of a new
facility comparable to the Office Location whose lease is terminated (the "New
Lease") with the consent of the Policy Board. Company shall not enter into a
lease for a new Main Office or Satellite Office for Princeton II without the
approval of the Policy Board.
(c) Princeton II agrees to comply with all terms and provisions of the
Assigned Leases, Direct Leases and New Leases.
3.2. Use of Practice Offices. Princeton II shall not use or occupy the
Main Office or Satellite Offices for any purpose which is prohibited by the
Assigned Leases, Direct Leases or New Leases, by this Agreement or which is
directly or indirectly forbidden by law, ordinance, or governmental or municipal
regulation or order, or which may be dangerous to life, limb or property, or
which would increase the fire and extending coverage insurance rate in any
Practice Office or contents.
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ARTICLE IV.
DUTIES OF THE POLICY BOARD
4.1. Formation and Operation of the Policy Board. The parties shall
establish a Policy Board which shall be responsible for developing management
and administrative policies for the overall operation of any Practice Office.
The Policy Board shall consist of six (6) members. Company shall designate, in
its sole discretion, three (3) members of the Policy Board. Princeton II shall
designate, in Princeton II's sole discretion, three (3) members of the Policy
Board. Any matter decided by a majority of the members of the Policy Board shall
constitute the decision of the Policy Board with respect to the matter.
4.2. Duties and Responsibilities of the Policy Board. The Policy Board
shall have the following duties and obligations:
4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by Princeton II for any renovations, capital improvements,
expansions and new equipment purchases or leases. The Policy Board shall
determine whether such expenditures are appropriate based upon economic
feasibility, physician support, productivity, market conditions, and the annual
budget formulated pursuant to this Agreement. If the Policy Board determines
that the acquisition of additional equipment or facilities is appropriate, then
Company shall use its best efforts to arrange for the financing and acquisition
of the property. Governance issues affecting the Policy Board shall be addressed
in accordance with the rules set forth in Exhibit 4.1.
4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the review of the Policy Board.
4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.
4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with Princeton II and Company, to the extent
allowed by Applicable Law, the Policy Board shall review and advise Princeton II
as to an appropriate fee schedule for all physician and ancillary services
rendered by Princeton II, which fee schedule shall ultimately be determined by
Princeton II in Princeton II's sole discretion. In addition, the Policy Board
shall approve the credit collection policies of Princeton II.
4.2.5. Princeton II and Payor Relationships. Decisions regarding the
establishment or maintenance of relationships with institutional health care
providers and payors, or with parties under arrangements for setting up new
Satellite Offices of Princeton II in the future, shall be made by the Policy
Board in consultation with Princeton II.
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4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.
4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.
4.2.8. Restrictive Covenants for Physician. The approval of the Policy
Board shall be required for any variations to the restrictive covenants
prescribed for any physician employment contract as set forth in Article VII or
Exhibit 11 of this Agreement.
4.2.9. Grievance Referrals. The Policy Board shall consider and make final
decisions regarding grievances pertaining to matters not specifically addressed
in this Agreement as referred to it by the Physician Employees.
ARTICLE V.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY
5.1. Performance of Management Functions. Company shall use its best
efforts to manage the day-to-day operations of the Main Practice Office and any
Satellite Offices in a business-like manner. Company shall provide or arrange
for the services set forth in this Article V, the cost of all of which shall be
included in Clinic Expenses. Subject to Section 1.6, Company is hereby expressly
authorized to perform its services hereunder in whatever manner it deems
reasonably appropriate to meet the day-to-day requirements of Practice Office
operations in accordance with the general standards approved by the Policy Board
and to maintain the lease agreements for each of the Practice Offices,
including, without limitation, performance of some of the business office
functions at locations other than the Main Practice Office. Princeton II will
not act in a manner which would prevent Company from efficiently managing the
day-to-day operations of the Main Practice Office and maintaining the operations
of the Satellite Offices in a business-like manner.
5.2. Financial Planning and Goals. Subject to Section 4.2.2. of this
Agreement, Company shall prepare annual capital and operating budgets reflecting
in reasonable detail anticipated revenues and expenses, and sources and uses of
capital for growth in Princeton II's practice and medical services rendered at
the Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board and the Company shall agree upon a budget for the
upcoming fiscal year. The budget, as described in Section 4.2.2., shall be
binding upon Company and Princeton II. Company shall consult with Princeton II
and the Policy Board in the preparation of all budgets. Company and Princeton II
acknowledge and agree that once a budget has been approved, neither Company nor
Princeton II shall make expenditures or incur expenses in excess of budgeted
amounts without the prior approval of the Policy Board.
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5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of Princeton II and, in its sole
discretion, may cause the financial statements to be audited by a certified
public accountant selected by Company. Princeton II shall cooperate fully in
such audit. The cost of such audit shall be included in Clinic Expenses. If
Company elects to have the financial statements audited by a certified public
accountant with a big six accounting firm, the resulting audited financial
statements shall be binding on Princeton II and Company. If Company elects not
to have Princeton II's financial statements so audited, Princeton II shall have
the option to obtain such an audit, by a certified public accountant with a
mutually acceptable accounting firm. Company shall fully cooperate in such
audit. The cost of such audit shall be included in Clinic Expenses. In such
event, Company and Princeton II shall be bound by the resulting audited
financial statements. All parties shall be entitled to copies of any information
provided to or by the auditors by or to any party. Additionally, Company shall
prepare monthly unaudited financial statements containing a balance sheet and
statements of income from Practice Office operations, which shall be delivered
to Princeton II within thirty (30) business days after the close of each
calendar month.
5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by Princeton II
and are within the budget for the applicable fiscal period. Company shall not
purchase inventory, goods or supplies from any Affiliate of Company without
approval of the Policy Board and after full disclosure of all terms to the
Policy Board.
5.5. Management Services and Administration.
5.5.1. Princeton II hereby appoints Company as Princeton II's sole and
exclusive manager and administrator of all day-to-day business functions.
Princeton II agrees that the purpose and intent of this Agreement is to relieve
Princeton II and Physician Employees to the maximum extent possible of the
administrative, accounting, personnel and business aspects of their practice,
with Company assuming responsibility and being given all necessary authority to
perform these functions. Company agrees that Princeton II and only Princeton II
will perform the medical functions of Princeton II's practice. Company will have
no authority, directly or indirectly, to perform, and will not perform, any
medical function. Company may, however, advise Princeton II as to the
relationship between Princeton II's performance of medical functions and the
overall administrative and business functioning of Princeton II's practice. To
the extent that a Company employee assists Physician Employees in performing
medical functions, such employees shall be subject to the professional direction
and supervision of Physician Employees and in the performance of such medical
functions shall not be subject to any direction or control by, or liability to,
Company, except as may be specifically authorized by Company.
5.5.2. Company shall, on behalf of Princeton II, ▇▇▇▇ patients and collect
the professional fees for medical services rendered by Princeton II or any
Physician Employee, regardless of when or where such services are rendered. All
▇▇▇▇▇▇▇▇ for Physician Employee's services shall be made in the name of and
under the provider number of Princeton II. Princeton II hereby appoints Company
to
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be Princeton II's true and lawful attorney-in-fact, for the following purposes:
(i) to ▇▇▇▇ patients in Princeton II's name and on Princeton II's behalf; (ii)
to collect Accounts Receivable resulting from such billing in Princeton II's
name and on Princeton II's behalf; (iii) to receive payments from insurance
companies, prepayments from health care plans, and all other Third-Party Payors;
(iv) to take possession of and endorse in the name of Princeton II (and/or in
the name of an individual physician, such payment intended for purpose of
payment of a physician's ▇▇▇▇) any notes, checks, money orders, insurance
payments and other instruments received in payment of Accounts Receivable; and
(v) to initiate legal proceedings in the name of Princeton II to collect any
accounts and monies owed to Princeton II or any Physician Employee, to enforce
the rights of Princeton II as creditors under any contract or in connection with
the rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from Princeton II by Company, Company shall deposit any cash receipts collected
on behalf of Princeton II into the Princeton II Operating Account described in
Section 5.11.
5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of Princeton II, including but not
limited to accounting, billing, patient medical records, and collection records.
While the Company shall maintain custody, patient medical records shall at all
times be and remain the property of Princeton II and shall be located at the
Practice Offices so that they are readily accessible for patient care. The
Physician Employees shall have the obligation to oversee the preparation and
maintenance of patient medical records, and to provide such medical information
as shall be necessary and appropriate to the records' clinical function and to
sustain and ensure the availability of Third-Party Payor reimbursement for
services rendered. The management of all files and records shall comply with
applicable state and federal statutes. Company shall use its best efforts to
preserve the confidentiality of patient medical records and use information
contained in such records only as permitted by law, to the extent necessary to
perform the services set forth herein.
5.5.4. Company shall supply to Princeton II necessary clerical,
accounting, bookkeeping and computer services, printing, postage and duplication
services, medical transcribing services and any other ordinary, necessary or
appropriate service for the operation of the Practice Offices.
5.5.5. Subject to the overall guidance of the Policy Board, Company shall
design and implement an adequate and appropriate public relations program on
behalf of Princeton II, with appropriate emphasis on public awareness of the
availability of services at the Practice Offices. The public relations program
shall be conducted in compliance with Applicable Law and regulations governing
advertising by the medical profession and applicable canons of principles of
professional ethics of Princeton II and Physician Employees of Princeton II.
5.5.6. Company shall provide the data necessary for Princeton II to
prepare Princeton II's annual income tax returns. Company shall have no
responsibility for the preparation of Princeton II's federal or state income tax
returns or the payment of such income taxes. Company shall prepare or cause to
be prepared on Princeton II's behalf, necessary employment tax returns.
Princeton II shall
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be obligated to pay any taxes due on such employment tax returns with respect to
the Physician Owners.
5.5.7. Company shall assist Princeton II in recruiting additional
physicians, carrying out such administrative functions as may be appropriate,
such as advertising for and identifying potential candidates, obtaining
credentials, and arranging interviews; provided, however, Princeton II shall
interview and make the ultimate decision as to the suitability of any physician
to become associated with Princeton II. All physicians recruited by Company and
accepted by Princeton II shall be the sole employees of Princeton II, to the
extent such physicians are hired as employees.
5.5.8. Company shall negotiate managed care contracts on behalf of
Princeton II and shall administer all managed care contracts in which Princeton
II participates.
5.5.9. Company shall arrange for legal and accounting services related to
operations of the Practice Offices and Physician Employee's practice at the
Practice Offices incurred traditionally in the ordinary course of business,
including the cost of enforcing any contract with a Physician Employee
containing restrictive covenants, provided such services shall be approved in
advance by the Policy Board. Notwithstanding the foregoing, Princeton II shall
have the authority to arrange for legal and accounting services relating to
matters other than day-to-day management of Princeton II; such other matters
including but not limited to issues relating to Princeton II governance issues,
compensation of Physician Owners, and issues which arise between Princeton II
and Company.
5.5.10. Company shall provide for the proper cleanliness of the premises,
and maintenance and cleanliness of the equipment, furniture and furnishings
located upon such premises.
5.5.11. Upon receipt of dues, statements or license notices from the
Physician Employees, Company shall make payment for the cost of professional
licensure fees and board certification fees of physicians associated with
Princeton II.
5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.
5.6. Personnel. Company shall provide Physician Extender Employees and
other non-physician professional support (administrative personnel, clerical,
secretarial, bookkeeping and collection personnel) reasonably necessary for the
conduct of the operations at the Practice Offices. Company shall determine and
cause to be paid the salaries and fringe benefits of all such personnel. Such
personnel shall be employees of Company, with those personnel performing patient
care services subject to the professional direction and supervision of Physician
Employees. If Princeton II is dissatisfied with the services of any person,
Princeton II shall consult with Company. Company shall in good faith determine
whether the performance of that employee could be brought to acceptable levels
through counsel and assistance, or whether such employee should be terminated.
Company shall not unreasonably refrain from terminating any such employee which
Princeton II requests terminated. All of Company's obligations regarding staff
shall be governed by the overriding principle
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and goal of providing quality medical care. Employee assignments shall be made
to assure consistent and continued rendering of quality medical support services
and to ensure prompt availability and accessibility of individual medical
support staff to physicians in order to develop constant, familiar and routine
working relationships between individual physicians and individual members of
the medical support staff. Company shall not unreasonably refrain from making
employee assignments as requested by Princeton II. If Princeton II disagrees
with an assignment, Princeton II may appeal such assignment to the Policy Board.
Company shall maintain established working relationships wherever possible and
Company shall make every effort consistent with sound business practices to
honor the specific requests of Princeton II with regard to the assignment of
Company's employees. Notwithstanding any other provision of this Agreement to
the contrary, Company and Princeton II acknowledge and agree that Company shall
not employ any individual who provides billable procedures.
5.7. Events Excusing Performance. Company shall not be liable to Princeton
II or Physician Owners for failure to perform any of the services required
herein in the event of strikes, lock-outs, calamities, acts of God,
unavailability of supplies or other events over which Company has no control for
so long as such events continue, and for a reasonable period of time thereafter.
5.8. Compliance with Law and Business Standards. Company shall comply with
Applicable Law, including without limitation, Health Care Law, including without
limitation, federal, state, and local laws and regulations affecting billing and
reimbursement, referrals, patient privacy and confidentiality, and management of
hazardous materials and infectious waste. Company shall discharge its
obligations under this Agreement consistent with applicable business and
industry standards and practices.
5.9. Quality Assurance. Company shall assist Princeton II in fulfilling
Princeton II's obligations to patients to maintain professionally recognized
quality of medical and professional services.
5.10. New Medical Services and Additional Practice Offices. Except as
provided below, if Princeton II desires to have a new medical service provided
at any of the Practice Offices or desires to establish a new clinic, a proposal
of such service or the establishment of such new clinic shall be submitted to
the Policy Board. Should the Policy Board approve the expansion of service or
the establishment of such new clinic, Company, at its option, shall have the
exclusive right to provide services necessary to support Princeton II in
Princeton II's delivery of such new medical services at the Practice Office or
new clinic, as applicable; provided, however, if the type of service is an
ancillary service that would be improper under any rules, regulations or laws
for Company to offer to Princeton II patients, then Company shall not have the
option to provide such service. Should Company decline to provide the necessary
support service for the new service or new clinic, Princeton II shall be
entitled to perform such service at Princeton II's own expense and the revenues
therefrom shall not be included in the calculation of Company's service fees
under Article VIII of this Agreement; provided, however, that Company shall have
the option to assume performance of the necessary support services for providing
such new service or new clinic by buying out Princeton II's
- 14 -
investment in the service at Princeton II's Book Value at anytime within
eighteen (18) months of the date such new service is first provided, which Book
Value shall be based on the price of the assets purchased by Princeton II less
depreciation accrued to the date of acquisition of such service by Company, as
determined under GAAP. Notwithstanding any other provision of this Agreement to
the contrary, Company and Princeton II acknowledge and agree that Princeton II
or its Affiliates shall have the right to develop, own and operate ambulatory
surgery centers and Company shall not have the right to limit Princeton II's
authority or rights to continue developing, operating or owning such ambulatory
surgery centers.
5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. Princeton II agrees to establish and maintain a bank account, which
shall be referred to as the Princeton II Operating Account, for the purpose of
(a) depositing proceeds from the sale of Princeton II's Accounts Receivable
pursuant to Section 8.3 and (b) paying (i) any Service Fees owed pursuant to
Article VIII of this Agreement, (ii) expenses which are solely the obligation of
Princeton II (Excluded Expenses), and (iii) compensation or distributions to
Physician Owners , and the distributions shall be made in that order of payment.
Princeton II shall designate a Company employee as a signatory on the Princeton
II Operating Account. After the payment of any Service Fees owed pursuant to
Article VIII of this Agreement, and expenses which are solely the obligation of
Princeton II, Princeton II may withdraw amounts for distributions to Physician
Owners.
5.12. Other Princeton II Accounts. Princeton II shall have the right to
open or create bank accounts in addition to the Princeton II Operating Account
described in Section 5.11 of this Agreement.
ARTICLE VI.
OBLIGATIONS OF PRINCETON II AND PHYSICIAN OWNERS
6.1. Professional Services.
6.1.1. Princeton II, its Physician Owners and Physician Employees shall
provide professional services to patients.
6.1.2. Princeton II, its Physician Owners and Physician Employees shall
provide the professional services to patients described in Section 6.1.1 above
in compliance at all times with ethical standards, laws and regulations applying
to Princeton II's professional practice. Princeton II shall also make all
reports and inquiries to the National Practitioners Data Bank and/or any state
data bank required by Applicable Law. Princeton II shall use its best efforts to
ensure that each Physician Employee and Technical Employee associated with
Princeton II who provides medical care to patients of Princeton II is licensed
by the state or states in which he or she renders professional services. If any
disciplinary or medical malpractice action is initiated against any such
individual, Princeton II shall immediately provide Company with copies of any
third-party documents (not otherwise privileged) served on Princeton II or
letters delivered to Princeton II. Such information
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shall be deemed confidential information and shall, notwithstanding such
disclosure, remain subject to all privileges and immunities provided by
Applicable Law. Company shall take all steps reasonably necessary to assure that
such privileges and immunities remain intact. Princeton II shall carry out a
program to monitor the quality of medical care practiced at the Practice Offices
to promote a high quality medical care.
6.2. Medical Practice. Princeton II shall use and occupy the Practice
Offices exclusively for the practice of medicine and shall comply with all
Applicable Law and standards of medical care. It is expressly acknowledged by
the parties that the medical practice or practices conducted at the Main Office
shall be conducted solely by physicians or medical practitioner associated with
Princeton II, and no other physician or medical practitioner shall be permitted
to use or occupy the Main Office without the prior written consent of Company.
6.3. Employment of Physician Employees. Princeton II shall have complete
control of and responsibility for the hiring, compensation, supervision,
evaluation and termination of Physician Employees, although at the request of
Princeton II, Company shall consult with Princeton II respecting such matters.
Princeton II shall be responsible, subject to Section 8.4, for the payment of
such Physician Employees' salaries and wages, payroll taxes, Physician Employee
benefits and all other taxes and charges now or hereafter applicable to them.
With respect to physicians, Princeton II shall only employ and contract with
licensed physicians meeting applicable credentialing guidelines established by
Princeton II.
6.4. Professional Dues and Education Expenses. Except to the extent
provided in Section 8.1.3(k), Physician Owners shall be solely responsible for
the cost of membership in professional associations and the cost of continuing
professional education. Princeton II shall ensure that each Physician Employee
participates in such continuing medical education as is necessary for such
physician to remain licensed.
6.5. Professional Insurance Eligibility. Princeton II shall cooperate in
the obtaining and retaining of professional liability insurance by assuring that
all Physician Employees are insurable and participating in an on-going risk
management program.
6.6. Events Excusing Performance. Princeton II and Physician Owners shall
not be liable to Company for failure to perform any of the services required
herein in the event of strikes, lock-outs, calamities, acts of God,
unavailability of supplies or other events over which Princeton II has no
control for so long as such events continue, and for a reasonable period of time
thereafter.
6.7. Fees for Professional Services. Princeton II shall be solely
responsible for legal, accounting and other professional services fees (Excluded
Expenses) incurred by Princeton II, except as otherwise determined by the Policy
Board.
6.8. Peer Review. Princeton II agrees to cooperate with Company in
establishing a system of peer review within and among the provider practices as
necessary to obtain provider contracts.
- 16 -
In connection therewith, Princeton II agrees to assist in the formulation of
provider guidelines for each treatment or surgical modality, and agrees to abide
by said guidelines, and further agrees to submit to periodic reviews by a third
party to monitor compliance with said guidelines. Princeton II acknowledges that
the establishment of provider guidelines may be necessary to obtain PPO, HMO,
IPA and other similar provider contracts, both private and government funded. To
the extent that said provider guidelines must be filed or registered with any
Third-Party Payor, Princeton II agrees to cooperate with Company in making such
filings or registrations. It is agreed and acknowledged that all such peer
review guidelines shall be established and monitored by medical personnel on the
staff of Princeton II and other practices that are part of the peer review
process, and shall not be promulgated, established or enforced independently by
Company. To the extent possible, all information obtained through the peer
review process shall remain confidential and the parties shall take all steps
reasonably necessary to assure that all privileges and immunities provided by
Applicable Law remain intact.
6.9. Princeton II Employee Benefit Plans.
6.9.1. Effective as of the date of the closing under the Exchange
Agreement, Princeton II shall amend the tax-qualified retirement plan(s)
described on Exhibit 6.9.1 (the "Princeton II Plan") to provide that employees
of Company who are classified as "leased employees" (as defined in Code Section
414(n)) of Princeton II shall be treated as Princeton II employees for purposes
described in Code Section 414(n)(3). Not less often than annually, Princeton II
and Company shall agree upon and identify in writing those individuals to be
classified as leased employees of Princeton II (the "Designated Leased
Employees"). Princeton II and Company shall establish mutually agreeable
procedures with respect to the participation of Designated Leased Employees in
the Princeton II Plan. Such procedures shall be designed to avoid the tax
disqualification of the Princeton II Plan, similar plans of practices similarly
situated, (collectively, the "Plans").
6.9.2. If the Policy Board determines that the relationship between
Company and Princeton II (and other practices similarly situated) constitutes an
"affiliated service group" (as defined in Code Section 414(m)), Company and
Princeton II shall take such actions as may be necessary to avoid the tax
disqualification of the Plans. Such actions may include the amendment, freeze,
termination or merger of the Princeton II Plan.
6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. Princeton II shall not enter into any new "employee benefit plan"
(as defined in Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") without the consent of Company. In addition,
Princeton II shall not offer any retirement benefits or make any material
retirement payments other than under the Princeton II Plan to any stockholder of
Princeton II without the express written consent of Company. Except as otherwise
required by law, Princeton II shall not materially amend, freeze, terminate or
merge the Princeton II Plan without the express written consent of Company. In
the event of either of the foregoing, Company's consent shall not be withheld if
such action would not jeopardize the qualification of any of the Plans.
Princeton II agrees to make such changes to the Princeton II Plan, including the
amendment freeze, termination or merger of the
- 17 -
Princeton II Plan, as may be approved by the Policy Board and Company but only
if such changes are necessary to prevent the disqualification of any of the
Plans.
6.9.4. Expenses incurred in connection with the Princeton II Plan or other
Princeton II employee benefit plans, including, without limitation, the
compensation of counsel, accountants, corporate trustees, and other agents shall
be included in Clinic Expenses.
6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in Princeton II's operating budget. Princeton
II and Company shall not make employee benefit plan contributions or payments to
Princeton II for their respective employees in excess of such budgeted amounts
unless required by law or the terms of the Princeton II Plan. Company shall make
contributions or payments with respect to the Princeton II Plan or other
Princeton II employee benefit plans, as a Clinic Expense, on behalf of eligible
Designated Leased Employees, and other eligible Princeton II employees. In the
event a Princeton II Plan or other Princeton II employee benefit plan is
terminated, Company shall be responsible, as a Clinic Expense, for any funding
liabilities related to eligible Designated Leased Employees; provided, however,
Company shall only be responsible for the funding of any liability accruing
after the date of the Exchange Agreement.
6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the Princeton
II Plan to avoid disqualification of the Princeton II Plan, in which case any
such action would be subject to the express prior written consent of the Policy
Board. Company shall have the sole and exclusive authority to appoint the
trustee, custodian and administrator of any such plan.
6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by Princeton II must be amended,
terminated, modified or changed as a result of Princeton II or Company being
deemed to be a part of an affiliated service group, the Policy Board will
replace such plan or plans with a plan or plans that provides those benefits
approved by the Policy Board. It shall be the goal of the Policy Board in such
event to provide substantially similar or comparable benefits if the same can be
provided at a substantially similar cost to the replaced plan.
ARTICLE VII.
RESTRICTIVE COVENANTS AND ENFORCEMENT
The parties recognize that the services to be provided by Company shall be
feasible only if Princeton II operates an active medical practice to which both
Princeton II and the physicians associated with Princeton II devote their full
time and attention. To that end:
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7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be Princeton II's and Physician Owners' sole provider of the management
services described in this Agreement and neither Princeton II, Physician Owners
nor any of Princeton II's or Physician Owners' employees shall provide such
management services during the term of this Agreement. Princeton II and the
Physician Owners agree that during the term of this Agreement, neither Princeton
II nor Physician Owners will enter into any similar agreements with any
physician practice management company or entity. The foregoing restriction shall
not prevent the Physician Owners from entering into separate management
agreements for any ambulatory surgery centers in which they own an interest.
Princeton II and the Physician Owners further agree that during the term of this
Agreement, they will not engage, directly or indirectly, as a principal owner,
shareholder (other than a holder of fewer than 5% of the outstanding shares of a
publicly-traded company), partner, joint venturer, agent, equity owner, or in
any other capacity whatsoever, in any corporation, partnership, joint venture,
or other business association or entity that provides management services of the
nature provided by Company pursuant to this Agreement, within ▇▇▇▇▇▇ County, New
Jersey or contiguous counties or any location within seventy-five (75) miles of
the Main Office or any future facility that replaces the Main Office (wherever
located) or any Satellite Office utilized by Princeton II at any time during the
term of this Agreement.
7.2. Restrictive Covenants.
7.2.1. By Current Physician Employees. Princeton II shall obtain and
enforce formal agreements from current Physician Employees, other than Technical
Employees, pursuant to which the Physician Employees agree not to establish,
operate or provide physician services at any medical office, clinic or
diagnostic facility providing services substantially similar to those provided
by Princeton II, except on Princeton II's behalf, within ▇▇▇▇▇▇ County, New
Jersey or contiguous counties or any location within seventy-five (75) miles
during the first five (5) years of the term of this Agreement or fifty (50)
miles thereafter of the Main Office or any future facility that replaces the
Main Office (wherever located at such time) or any Satellite Office at the time
of termination of employment with Princeton II and for a period of twenty-four
(24) months after any termination of employment with Princeton II. Such
agreements shall be a condition to employment and shall be in a form
satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to Company's lender ("Lender"). This Section 7.2 shall relate solely
to Physician Employees who are not also Physician Owners.
7.2.2. By Current and Future Physician Owners. On the earlier of one
hundred eighty (180) days from the effective date of this Agreement, or on
thirty (30) days after written request by Company, which written request
includes a reasonable explanation or basis for the request, Princeton II shall
obtain and enforce formal restrictive covenants with current and future
Physician Owners, the terms of which shall be substantially similar to the
provisions of Exhibit 11. Such agreements shall provide that Company is a
third-party beneficiary to such agreements. Princeton II agrees to enforce the
restrictive covenants. The cost and expense of such enforcement shall be a
Clinic Expense, and all damages and other amounts recovered thereby shall be
included in
- 19 -
Professional Services Revenue. In the event that after a request by Company,
Princeton II does not pursue any remedy that may be available to it by reason of
a breach or default of a restrictive covenant, upon the request of Company,
Princeton II shall assign to Company such causes of action and/or other rights
it has related to such breach or default and shall cooperate with and provide
reasonable assistance to Company with respect thereto; in which case, all costs
and expenses incurred in connection therewith shall be borne by Company and
shall be included in Company Expenses, and Company shall be entitled to all
damages and other amounts recovered thereby. The above described restrictive
covenants between Princeton II and Physician Owners shall be in addition to and
not in place of the restrictive covenants described in Exhibit 11 between
Company and the Physician Owners.
7.2.3. Limitations on Restrictive Covenants. The foregoing restrictive
covenants shall not limit or prevent a Physician Employee/Physician Owner from
serving in part-time academic positions, working as an expert witness, or
providing services for the Hospital for Special Services, New York, New York, in
a manner consistent with past practices.
7.3. Restrictive Covenants By Future Physician Employees. Princeton II
shall obtain and enforce formal agreements from each future Physician Employee
other than Technical Employees, hired or contracted, pursuant to which such
physicians agree not to establish, operate or provide physician services at any
medical office, clinic or diagnostic facility providing services substantially
similar to those provided by Princeton II except on Princeton II's behalf,
within ▇▇▇▇▇▇ County, New Jersey or contiguous counties or any location within
seventy-five (75) miles during the first five (5) years of the term of this
Agreement or fifty (50) miles thereafter of the Main Office or any future
facility that replaces the Main Office (wherever located at such time) or any
Satellite Office at the time of termination of said Physician Employee's
contract with Princeton II and for a period of twenty-four (24) months
thereafter. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to any Lender. This Section 7.3 shall relate solely to Physician
Employees who are not also Physician Owners. The terms and provisions of Exhibit
11 shall govern restrictive covenants relating to Physician Owners. The
foregoing restrictive covenants shall not limit or prevent a Physician
Employee/Physician Owner from serving in part-time academic positions, working
as an expert witness, or providing services for the Hospital for Special
Services, New York, New York, in a manner consistent with past practices.
7.4. Rights of Company. Except as limited below, Company shall at all
times during the term of this Agreement and thereafter have the right to enter
into additional service agreements with other physicians and practices
regardless of where such physicians and/or practices are located providing for
management services and facilities to such physicians and/or practices.
Notwithstanding the foregoing, and except as set forth in Section 11.9.3, in the
event that Company desires to enter into a Service Agreement with another
practice located within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of Princeton II's
Main Office or any Satellite Office, then the Policy Board must first approve
Company entering into such agreement. In the event that the individuals
representing Company on the Policy Board can reasonably
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demonstrate that entering into such agreement will not have a material adverse
effect on Princeton II's practice operations, earnings or cash flow, then the
individuals representing Princeton II shall consent to Company entering into
such agreement.
7.5. Enforcement. Princeton II acknowledges and agrees that since a remedy
at law for any breach or attempted breach of the provisions of this Article VII
shall be inadequate, Company shall be entitled to specific performance and
injunctive or other equitable relief in case of any such breach or attempted
breach in addition to whatever other remedies may exist by law. All parties
hereto also waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief.
If any provision of Article VII relating to the restrictive period, scope of
activity restricted and/or the territory described therein shall be declared by
a court of competent jurisdiction to exceed the maximum time period, scope of
activity restricted or geographical area such court deems reasonable and
enforceable under Applicable Law, the time period, scope of activity restricted
and/or area of restriction held reasonable and enforceable by the court shall
thereafter be the restrictive period, scope of activity restricted and/or the
territory applicable to the restrictive covenant provisions in this Article VII.
7.6. Modification of Restrictive Covenants. Upon the termination of
employment of a Physician Owner or Physician Employee, the Policy Board shall
have the authority to release or reduce in whole or part the terms of the
restrictive covenants, including but not limited to the mileage radius
limitations set forth above in Sections 7.2 and 7.3. In the event that the
individuals representing Princeton II on the Policy Board can reasonably
demonstrate that a modification to the restrictive covenant will not have a
material adverse effect on Company's or Princeton II's practice operations,
earnings or cash flow, then the individuals representing Company shall consent
to the proposed modifications.
ARTICLE VIII.
FINANCIAL ARRANGEMENTS
8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to the sum of (a) the
greater of (i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]or (ii) the
Base Service Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of
the first thirty-six (36) months of the term of this Agreement, Company shall
receive a service fee equal to [xxxxxxxxxxxxxxxxxxxxxxxx] of Practice Net
Revenue plus the amount of Clinic Expenses. In the event that a Physician Owner
ceases to practice medicine during the first thirty-six (36) months of the term
of this Agreement, such Physician Owner shall be personally liable for any
reduction in Princeton II's service fees payable as further described under
Section 11.9.1 of this Agreement. In the event that a Physician Owner either
dies or becomes Disabled during such thirty-six (36) month period, Princeton II,
or the applicable Physician Owner, as the case may be, shall be entitled to
satisfy the amount owed by transferring to Company an amount of Company common
stock having a fair market value equal to the amount
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owed or pay to Company cash in the amount owed (or a combination thereof). Fair
market value of the Company common stock shall be determined as described below
in Section 11.9.1(d).
8.1.1. "Practice Net Revenue" shall mean Professional Services Revenues,
less Clinic Expenses.
8.1.2. "Professional Services Revenue" shall mean all fees actually
recorded each month (net of any amounts reimbursed to any patients or
Third-Party Payors during the applicable month and net of any adjustments for
contractual allowances, Medicaid, worker's compensation, employee/dependent
health care benefit programs, professional courtesies and other activities that
do not generate a collectible fee) by or on behalf of Princeton II as a result
of professional medical services personally furnished to patients and other fees
or income generated in their capacity as Physician Employees and Technical
Employees, and any revenue from the sale of any goods. Professional Services
Revenue shall not include any ambulatory surgery center facility fees.
8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of Princeton II arising hereunder unless expressly provided otherwise,
including, without limitation:
(a) salaries, benefits and other direct costs of all Clinic
employees including Company's employees and Physician Extender Employees
as defined in Section 8.1.5 working at the Practice Offices and salaries,
payroll taxes and employee benefits paid to Physician Employees (other
than Physician Owners) under Section 6.3 and to Technical Employees as
defined in Section 8.1.4,
(b) obligations of Company under Leases provided for herein under
Article III,
(c) the expenses and charges incurred for the Practice Offices,
including without limitation utilities, telephone, etc.,
(d) personal property and intangible taxes assessed against
Company's assets utilized by Princeton II in the Practice Offices from and
after the date of this Agreement,
(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of Princeton, if any, assumed under the Exchange
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to Princeton II hereunder, or (iii) purchase equipment,
(f) malpractice insurance premiums, disability insurance premiums to
cover accommodations to the Practice Offices under the definition of
"Disabled" or "Disability," and fire, workers compensation and general
liability insurance premiums, and life insurance premiums, during the
first three (3) years of this Agreement, for life insurance on the lives
of Physician Owners, with Princeton as the death beneficiary,
(g) the cost of any goods purchased for resale,
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(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used in Princeton II's Facility
by Princeton II to be billed to Princeton II on a monthly basis and paid
to Company at the same time Company pays for Princeton II's Accounts
Receivable pursuant to Section 8.3,
(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with Princeton II or who actually
provide services at or in connection with the Clinic for improved
performance, such as quality assurance, reasonable expenses required for
physician accommodations under the definition of "Disabled" or
"Disability," materials management, purchasing program, change in coding
analysis, physician recruitment; provided, however, only the portion of
expenses related to such employee or consultant, without ▇▇▇▇-up, that is
allocable in a fair and reasonable manner to work approved by the Policy
Board which is performed at or for the benefit of Princeton II shall be
included in Clinic Expenses,
(j) expenses related to professional meetings, seminars, dues,
medical books and professional licensing fees for Physician Employees
(other than Physician Owners) provided, however, that such amount shall
not exceed $10,000 during any calendar year for any Physician Employee
(other than Physician Owners). If the cost incurred for such professional
meetings, seminars, dues, medical books and professional licensing fees
exceeds $10,000 during any calendar year, then the Physician Employee
incurring such cost shall be solely liable for the overage;
(k) expenses related to professional meetings, seminars, dues,
medical books and professional licensing fees for Physician Owners;
provided, however, that such amount shall not exceed $10,000 during any
calendar year for any Physician Owner. If the cost incurred for such
professional meetings, seminars, dues, medical books and professional
licensing fees exceeds $10,000 during any calendar year, then the
Physician Owner incurring such cost shall be solely liable for the
overage; and
(l) any and all other ordinary and necessary expenses incurred by
Princeton II, or approved by the Policy Board and reasonably incurred by
the Company for the direct benefit of Princeton II in carrying out their
respective obligations under this Agreement.
Clinic Expenses shall not include Excluded Expenses or Company Expenses.
Excluded Expenses shall be the sole obligation of Princeton II. Company Expenses
shall be the sole obligation of Company.
8.1.4. "Technical Employees" shall mean individuals who provide billable
services on behalf of Princeton II and are employees of Princeton II.
8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons who are employees of Company, but
excluding any Technical Employees.
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8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by
Princeton II or are otherwise under contract with Princeton II to provide
professional services to patients seen in the Main Office or Satellite Offices
and are duly licensed to provide professional medical services in the state or
states in which he or she renders professional services under this Agreement.
8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:
(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to Princeton II or are not directly attributable to
Princeton II, as reasonably determined by Company, including, without
limitation, salaries and benefits of executive officers of Company, except
as otherwise provided for in the definition of Clinic Expenses;
(b) Any amortization of any intangible asset resulting from the
Exchange;
(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Exchange;
(d) Any legal and accounting expenses incurred by Company in
connection with the Exchange; and
(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for Princeton II,
property taxes on assets used by Princeton II and other taxes specifically
included in Clinic Expenses.
8.1.8. "Excluded Expenses" shall be the sole obligation of Princeton II
and shall mean, pursuant to GAAP applied on a consistent basis:
(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;
(b) Any federal, state or other taxes associated therewith;
(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and
(d) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).
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8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays Princeton
II for the Accounts Receivable previously purchased by Company as described in
Section 8.3 below. The amount payable shall be estimated based upon the previous
month's operating results of Princeton II. Adjustments to the estimated payments
shall be made to reconcile actual cumulative amounts due under this Article
VIII, by the end of the following month during each calendar year. Upon
preparation of annual financial statements as provided in Section 5.3, final
adjustments to the service fee for the preceding year shall be made and any
additional payments owing to Company or Princeton II shall then be made to the
party owed the additional sum of money. The adjustment and any amount owed shall
be calculated and paid within ninety (90) days following the close of Company's
fiscal year.
8.3. Purchase of Accounts Receivable.
8.3.1. Princeton II hereby agrees to sell and assign to Company and
Company agrees to buy, all of Princeton II's Accounts Receivable each month
during which this Agreement is in existence which are owing to Princeton II
arising out of the delivery of medical, surgical, diagnostic or other
professional medical goods or services. Accounts Receivable shall not include,
and Company shall not purchase, any cash, checks or receivables created by
credit cards. Company shall bear the risk of collection and any overage or
underage resulting from any purchased Accounts Receivable.
8.3.2. The purchase price for each Accounts Receivable (the "Purchase
Price") will be equal to the face amount of the Accounts Receivable recorded
each month, less any non-allowed contractual adjustments and net of any reserve
for uncollectible Accounts Receivables based on the historical experience of the
practice as determined by the Company. It is the intent of the parties that the
Purchase Price reflect the actual net realizable value of the Accounts
Receivable.
8.3.3. Princeton II will sell all Accounts Receivable to Company, such
purchase to be deemed to be made on the fifteenth (15th) day of the month
following the month in which such Accounts Receivable are created. Company shall
pay for the Accounts Receivable, not later than the fifteenth (15th) day of each
month following the month in which the Accounts Receivable is created (the
"Settlement Date"). Company shall pay to Princeton II for all Accounts
Receivable purchased by check, wire transfer or intrabank transfer to the
Princeton II Operating Account described in Section 5.11. The purchase of
Accounts Receivable shall be evidenced by sending Company (i) a copy of each
invoice with respect to each Third-Party Payor on the Accounts Receivable then
being purchased; and (ii) any other information or documentation (including all
required Uniform Commercial Code releases or financing statements) Company may
reasonably need to identify the Accounts Receivable and obtain payment from the
Account Debtors; provided that such failure to send such documents shall not
affect the obligation of Princeton II to sell such Accounts Receivable or
Company to buy such Accounts Receivable. As consideration for the purchase of
Accounts Receivable by Company pursuant to this Section 8.3, Company promises to
pay and shall be obligated to pay for such Accounts Receivable at the time and
in the manner provided below. To the extent permissible by Applicable Law,
Princeton II will be deemed to have sold to Company all of Princeton II's right,
title and interest in such Accounts Receivable and in any proceeds thereof, and
- 25 -
Company will be the sole and absolute owner thereof and will own all of
Princeton II's rights and remedies represented by such Accounts Receivable
(including, without limitation, rights to payment from the respective Account
Debtors on such Accounts Receivable), and Company will have obtained all of
Princeton II's rights under all guarantees, assignments and securities with
respect to each such Accounts Receivable.
8.3.4. Upon expiration or termination of this Agreement for any reason,
(i) all Accounts Receivable purchased by Company shall remain the property of
Company and (ii) all Accounts Receivable purchased and not paid for at such
expiration or termination shall be paid for by the 10th of the following month
but effective as of the effective date of such expiration or termination date,
less the amount of any service fee earned by Company pursuant to Section 8.1 of
this Agreement.
8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, Princeton II will execute such financing statements or amendments under
the UCC (naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.
8.3.6. Princeton II agrees to cooperate with Company in the collection of
the Accounts Receivable sold by Princeton II, transferred pursuant to Section
8.3. At the option of and upon the request of Company, Princeton II shall
execute any and all documentation necessary for the transfer of amounts
constituting Accounts Receivables and/or the establishment of lockboxes in
accordance with the provisions of Exhibit 8.3.6 attached hereto.
8.3.7. All Accounts Receivable of Princeton II purchased by Company
("Purchased A/R") pursuant to this Section 8.3 hereof will, as such Purchased
A/R are purchased, be treated as Professional Service Revenues for accounting
and financial purposes.
8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless Princeton II is required by law to incur such
expenses, in which case Company shall indemnify Princeton II against any such
expenses. Company shall pay all Clinic Expenses as they become due; provided,
however, that Company may, in the name and on behalf of Princeton II, contest in
good faith any claimed Clinic Expense to which there is any dispute regarding
the nature, existence or validity of such claimed Clinic Expense. Upon receipt
of Princeton II's service fee, Company shall be required to deposit into the
Princeton II Operating Account described in Section 5.11 an amount of money
necessary for Princeton II to pay the compensation and benefits associated with
the Technical Employees and Physician Employees (other than Physician Owners)
employed by Princeton II.
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ARTICLE IX.
RECORDS
9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, Princeton II shall retain all patient medical records
maintained by Princeton II or Company in the name of Princeton II. Princeton II
shall, at Princeton II's option, be entitled to retain copies of financial and
accounting records relating to all services performed by Princeton II. All
parties agree to maintain the confidentiality of patient identifying information
and not to disclose such information except as may be required or permitted by
Applicable Law.
9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of Princeton II
under the provisions of Section 9.1 above, shall at all times be the property of
Company.
9.3. Access to Records. During the term of this Agreement, and thereafter,
Princeton II or Princeton II's designee shall have reasonable access during
normal business hours to Princeton II's and Company's financial records, which
relate to the operation of Princeton II including, but not limited to, records
of collections, expenses and disbursements as kept by Company in performing
Company's obligations under this Agreement, and Princeton II may copy at
Princeton II's expense any or all such records.
9.4. Government Access to Records. To the extent required by Section
1861(v)(1)(I) of the Social Security Act, each party shall, upon proper request,
allow the United States Department of Health and Human Services, the Comptroller
General of the United States, and their duly authorized representatives access
to this Agreement and to all books, documents, and records necessary to verify
the nature and extent of the costs of services provided by either party under
this Agreement, at any time during the term of this Agreement and for an
additional period of four (4) years following the last date services are
furnished under this Agreement. If either party carries out any of its duties
under this Agreement through an agreement between it and an individual or
organization related to it or through a subcontract with an unrelated party,
that party to this Agreement shall require that a clause be included in such
agreement to the effect that until the expiration of four (4) years after the
furnishing of services pursuant to such agreement, the related organization
shall make available, upon request by the United States Department of Health and
Human Services, the Comptroller General of the United States, or any of their
duly authorized representatives, all agreements, books, documents, and records
of such related organization that are necessary to verify the nature and extent
of the costs of services provided under that agreement.
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ARTICLE X.
INSURANCE AND INDEMNITY
10.1. Insurance to be Maintained by Princeton II. Throughout the term of
this Agreement, Princeton II shall maintain comprehensive professional liability
and worker's compensation insurance for Princeton II and all employees of
Princeton II in amounts approved by the Policy Board. Not in limitation of the
foregoing, Princeton II shall maintain excess general liability umbrella
coverage with a One Million Dollars ($1,000,000) limit as currently maintained
by Princeton II (with deductible provisions not to exceed $25,000 per
occurrence), the cost of which shall be paid by Company as a Clinic Expense. In
lieu of the foregoing, Company may provide as a Clinic Expense group insurance
for malpractice and/or worker's compensation insurance. Notwithstanding the
foregoing, in the event that Company procures such group insurance for
malpractice and/or worker's compensation insurance, Princeton II must first
approve the amount of coverage, the carrier and the terms of any such coverage
for Princeton II.
10.2. Insurance to be Maintained by Company. Throughout the term of this
Agreement, Company shall provide and maintain, as a Clinic Expense,
comprehensive professional liability insurance and worker's compensation
insurance as required by Applicable Law for all professional employees of
Company who work at the Practice Offices with limits as determined reasonable by
Company, comprehensive general liability and property insurance covering the
Practice Offices' premises and operations. The deductible provisions on the
personal liability shall not exceed $25,000 per occurrence and the commercial
general liability insurance shall be in amounts customarily maintained by other
businesses in the same or similar business as Company.
10.3. Additional Insureds. Princeton II and Company agree to use their
best efforts to have each other named as an additional insured on the other's
respective professional liability insurance programs at Company's expense.
Further, on any insurance where Company will be named as an additional insured,
Princeton II will assist Company to obtain appropriate riders to insure payment
of any party indemnified by Company.
10.4. Indemnification. Princeton II shall indemnify, hold harmless and
defend Company, its officers, directors and employees, from and against any and
all liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions (other than for any claims for (or in
connection with) malpractice arising from the performance or nonperformance of
medical services) by Princeton II and/or Princeton II's Physician Owners,
agents, employees and/or subcontractors (other than Company) during the term
hereof. Company shall indemnify, hold harmless and defend Princeton II,
Princeton II's officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions by Company and/or its shareholders,
agents, employees and/or subcontractors (other than
- 28 -
Princeton II) during the term of this Agreement. Neither Company nor Princeton
II shall have any obligation to indemnify the other party unless the claim for
indemnification is based upon a liability, loss or damage resulting in the
indemnified party making payments to a third party.
In the event that either party makes a claim for indemnification under
either the Exchange Agreement or this Service Agreement, then the claiming party
shall have the right, to the extent it is owed indemnifications, to pay amounts
owed to the other party under this Agreement into an escrow account (established
pursuant to an escrow agreement to be agreed upon by the parties) to be held by
the escrow agent in an interest bearing account until a determination by either
(i) the parties, (ii) a court of proper jurisdiction or (iii) agreed upon panel
of arbitrators, has been made regarding the claiming party's right to
indemnification. In the event that the claiming party is entitled to
indemnification, then such escrowed funds shall be paid to the claiming party in
partial or complete satisfaction of such indemnification obligation. Any excess
funds remaining in the escrow account after the payment of the indemnification
obligation or any funds held in the escrow account if it is determined that no
indemnification obligation is owed shall be paid to the other party.
ARTICLE XI.
TERM, TERMINATION AND RETIREMENT
11.1. Term of Agreement. This Service Agreement shall be effective as of
November 12, 1996, and shall expire on November 11, 2036 unless earlier
terminated pursuant to the terms hereof.
11.2. Extended Term. Unless earlier terminated as provided for in this
Agreement, the term of this Agreement shall be automatically extended for
additional terms of five (5) years each, unless either party delivers to the
other party, not less than one hundred eighty (180) days prior to the expiration
of the preceding term, written notice of such party's intention not to extend
the term of this Agreement.
11.3. Termination by Princeton II for Cause. Princeton II may terminate
this Agreement without breach as follows:
11.3.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Company, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by Company, except for the filing of a petition in
involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, Princeton II may give notice of the immediate termination of
this Agreement.
11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by Princeton II; or Company shall fail to remit the
payments due as provided in Article VIII hereof and such failure to remit shall
- 29 -
continue for a period of thirty (30) days after written notice thereof,
Princeton II may terminate this Agreement.
11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of Princeton II or commit a similar act which cause
material harm to Princeton II, Princeton II may terminate this Agreement.
11.3.4. In the event that Company shall intentionally or in bad faith
violate Applicable Law resulting in a direct, continuing material adverse effect
on the operations, earnings and cash flow of Princeton II, Princeton II may
terminate this Agreement.
11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:
11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Princeton II, or upon other
action taken or suffered, voluntarily or involuntarily, under any federal or
state law for the benefit of debtors by Princeton II, except for the filing of a
petition in involuntary bankruptcy against Princeton II which is dismissed
within thirty (30) days thereafter, Company may give notice of the immediate
termination of this Agreement.
11.4.2. In the event Princeton II shall materially default in the
performance of any duty or obligation imposed upon it by this Agreement, and
such default shall continue for a period of ninety (90) days after written
notice thereof has been given to Princeton II by Company, Company may terminate
this Agreement.
11.4.3. In the event Princeton II's Medicare or Medicaid Number shall be
terminated or suspended as a result of the action or inaction of Princeton II or
a Physician Employee, and such termination or suspension shall continue for
thirty (30) days, Company may give notice of the immediate termination of this
Agreement, unless Princeton II shall at that time be acting in good faith (and
shall provide reasonable evidence of the action being taken) to reverse such
termination or suspension. Notwithstanding any good faith effort on the part of
Princeton II to reverse such termination or suspension, if such termination or
suspension shall not be reversed within ninety (90) days after occurrence,
Company shall have the right to terminate this Agreement immediately.
11.4.4. In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require Princeton II to purchase from Company all assets, both tangible and
intangible (including the stock of any subsidiary of Company which owns any such
assets), owned by Company and used or made available for Princeton II's use for
the fair market value of such assets on a going concern basis, without regard to
this Agreement. In addition thereto, Princeton II shall assume all contracts,
payables and leases which are obligations of Company which relate to the
performance of Company's obligations which are performed at the Practice
Locations under this Agreement. Company shall be required to sell any such
assets (including the stock of any subsidiary of Company which owns any such
assets) free and clear of any
- 30 -
liens and encumbrances other than any liens or encumbrances being assumed by
Princeton II. The fair market value of the assets and/or stock of any subsidiary
of Company owning such assets shall be determined by an independent appraiser
selected by two (2) independent accountants practicing with "big six" accounting
firms, one (1) selected by Princeton II and one (1) selected by Company and
neither of which is providing or has for a period of two (2) years provided
services to Company or Princeton II. In addition to the payment for the practice
assets, in the event Company terminates this Agreement pursuant to Section
11.4.1, Section 11.4.2 or Section 11.4.3 within the first five (5) years of the
term of this Agreement, then Princeton II's Physician Owners shall (i) pay to
Company an amount of money equal to the fair market value, as of the date of
termination, of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to
Princeton II pursuant to the Exchange Agreement or (ii) surrender to Company for
cancellation [xxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to Princeton II pursuant
to the Exchange Agreement. If there is no public market for the stock, then
Company shall engage an independent appraiser to value Company's stock for
purposes of this Section 11.4.4. All expenses of such appraisal shall be paid by
Princeton II. Such determination of fair market value shall be binding upon
Princeton II's Physician Owners. In the event that Company terminates this
Agreement pursuant to Sections 11.4.1 through 11.4.3, inclusive, and Company
requires Princeton II to purchase the practice assets and/or stock of any
subsidiary of Company owning such assets, then upon the closing of the purchase
of the assets and/or stock of any subsidiary of Company owning such assets,
Princeton II and its Physician Employees shall be released from the restrictive
covenants provided for under Exhibit 11 of this Agreement.
11.5. Early Termination by Princeton II or Company Without Cause Upon
Third (3rd) Anniversary of Agreement. Either party may terminate this Agreement
without cause upon written notice delivered to the other party not less than
nine (9) months or more than ten (10) months or more prior to the end of the
third (3rd) anniversary of the date of this Agreement if the Company has not
filed a registration statement with the United States Securities and Exchange
Commission; provided, however, if the Company files a registration statement,
for an underwritten public offering, with the United States Securities and
Exchange Commission before the end of the date of the third (3rd) anniversary of
this Agreement, then such termination shall be ineffective, and this Agreement
shall continue in force unless otherwise terminated pursuant to the other
provisions of Article XI of this Agreement. In the event that such registration
statement is not effective within one hundred twenty (120) days from filing,
then the early termination rights described in the first sentence of this
Section 11.5 shall be again exercisable; provided, further, that if such
registration statement was filed during the above described notice period for
early termination, then such period shall be extended for thirty (30) days from
and after the date such early termination rights again become exercisable.
Notwithstanding any other provision of this Agreement to the contrary, the
termination rights set forth in this Section 11.5 shall immediately terminate
and no longer be effective upon a Change in Control of the Company. Upon a
termination pursuant to this Section 11.5, Princeton II shall tender to Company
all of the stock issued to Princeton II by Company pursuant to the Exchange
Agreement, and Company shall return to Princeton II the facilities and all
assets, both tangible and intangible (including the stock of any subsidiary of
Company which owns any such assets), used or made available for Princeton II's
use in the Practice Office. Company shall be required to sell any such assets
(including the stock of any subsidiary of Company which owns any such assets)
free and clear of any liens and encumbrances other than any liens or
encumbrances being assumed by Princeton II.
- 31 -
Princeton II shall assume all contracts, payables and leases which are
obligations of Company and which related to Company's obligations which are
performed at the Office Locations under this Agreement. The Company and
Princeton II shall cooperate to structure any exchange consummated pursuant to
this Section 11.5 in a manner designed to minimize the aggregate tax
consequences to the parties arising from the exchange. Closing of the exchange
pursuant to this Section 11.5 shall occur effective as of the third (3rd)
anniversary of this Agreement.
11.6. Consequences of Princeton II Termination. In the event that this
Agreement is terminated by Princeton II under the terms of Section 11.3 or is
terminated on any other basis (other than (i) because of the normal expiration
of its term set forth in Section 11.1, (ii) by Company for cause as set forth in
Section 11.4 or (iii) by early termination as set forth in Section 11.5), then
upon such termination, Princeton II shall purchase from Company all assets, both
tangible and intangible, owned by Company and used or made available for
Princeton II's use for the fair market value of such assets. Company shall be
required to sell any such assets (including the stock of any subsidiary of
Company which owns any such assets) free and clear of any liens and encumbrances
other than any liens or encumbrances being assumed by Princeton II. In addition
thereto, Princeton II shall assume all contracts, payables and leases which are
obligations of Company which relate to the performance of Company's obligations
which are performed at the Office Locations under this Agreement. The fair
market value of the assets shall be determined by an independent appraiser
selected by two (2) independent accountants practicing with "big six" accounting
firms, one (1) selected by Princeton II and one (1) selected by Company and
neither of which is providing or has for a period of two (2) years provided
services to Company or Princeton II.
11.7. Closing of purchase by Princeton II and Effective Date of
Termination. Princeton II shall pay cash for the practice assets purchased
pursuant to the provisions of this Section 11. The amount of the purchase price
shall be reduced, but not below zero (0), by the amount of debt and liabilities
of Company assumed by Princeton II and shall also be reduced by any payment
Company has failed to make under this Agreement, provided that such payments or
obligations are not otherwise accounted for in the liabilities assumed by
Princeton II in connection with the purchase described herein. The closing date
for the purchase shall be determined by Princeton II, but shall in no event
occur later than one hundred eighty (180) days from the date of the notice of
termination. The termination of this Agreement shall become effective upon the
closing of the sale of the assets and Princeton II and Company shall be released
from the restrictive covenants provided for in Article VII on the closing date.
Company shall give Princeton II credit towards the purchase price of the assets
for the fair market value of any Company common stock tendered to the Company in
exchange for such assets. In the event that Princeton II terminates this
Agreement pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections
11.5, 11.6, or 11.7 then upon the closing of the purchase of the assets,
Princeton II and its Physician Employees shall, except as Princeton II may so
elect to limit through separate agreements with Physician Owners and Physician
Employees, be released from the restrictive covenants provided for under Article
VII and Exhibit 11 of this Agreement.
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11.8. Tail Policy. Princeton II shall obtain continuing liability
insurance coverage under either a "tail policy" or a "prior acts policy" with
the same limits and deductibles as set forth in Section 10.1 upon the
termination of this Agreement, or upon a physician's termination of his or her
affiliation with Princeton II.
11.9. Restrictions Applicable to Physician Owners. The Physician Owners
hereby acknowledge that the Exchange and the terms and conditions of this
Agreement were determined based upon numerous factors, including the Physician
Owners continuing to practice medicine in the future. In connection therewith,
each Physician Owner agrees as follows:
11.9.1. Early Retirement. If at any time prior to the fifth (5th)
anniversary of this Agreement, a Physician Owner desires to retire from the
practice of medicine, such Physician Owner shall be obligated as follows:
(a) to give Company at least twelve (12) months prior written notice
of the intent to retire; provided, however, that once such retiring
physician has located a replacement physician satisfying the requirements
of Section 11.9.1(b), Company shall waive the remaining months of said
twelve (12) month notice period, and such retirement shall be effective
upon the earlier of twelve (12) months from the date of notice or
commencement of the replacement physician's employment;
(b) to locate a physician or physicians (which may be Physician
Employees), acceptable to the Policy Board, to replace such Physician
Owner under this Agreement (all costs of locating such replacement
physicians shall be paid by such Physician Owner (the "Substitute
Physician(s)");
(c) to pay to Company any loss of service fees payable under this
Agreement for the remainder of the first five (5) years of this Agreement.
Any loss for any periods of less than twelve (12) months shall be
calculated on an annualized and prorated basis. For purposes of this
Section 11.9.1(c), the amount of the loss shall be calculated as follows:
(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of Princeton II's service
fees during the twelve (12) month period preceding the
retiring Physician Owner's notice of intent to retire.
(ii) In the event the Substitute Physician(s) were Physician
Employees prior to the date upon which notice of intent to
retire was given pursuant to Section 11.9.1(a), the Policy
Board shall calculate such Physician Employee(s) contribution
to the payment of Princeton II's service fees during the
twelve month period preceding the notice of intent to retire.
(iii) On each successive anniversary date of this Agreement (through
the fifth anniversary date) following the effective date of
such retirement, the Policy
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Board shall determine the amount of service fees generated by
the Substitute Physicians between either (x) the effective
date of retirement or (y) the immediately preceding
anniversary date, as applicable, and such successive
anniversary date.
(iv) If the Substitute Physician(s) were Physician Employees prior
to date upon which the notice of intent to retire was given,
the amount of loss shall equal the difference between (i) the
amount calculated pursuant to Section 11.9.1(c)(i) plus the
amount calculated pursuant to Section 11.9.1(c)(ii) and (ii)
the amount calculated pursuant to Section 11.9.1(c)(iii).
(v) If the Substitute Physician(s) were not Physician Employees
prior to the date upon which the notice of intent to retire
was given, the amount of loss shall equal the difference
between (i) the amount calculated pursuant to Section
11.9.1(c)(i) and (ii) the amount calculated pursuant to
Section 11.9.1(c)(iii).
The Policy Board will provide the amount of the loss to the retiring Physician
Owner within thirty (30) days of the applicable anniversary date of this
Agreement and such amount shall be paid by such retiring Physician Owner to
Company within fifteen (15) days of the date of the delivery of the notice of
the amount of loss;
(d) to (i) pay to Company an amount of money equal to the fair
market value, as of the date of retirement, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by the Company to the
retiring Physician Owner pursuant to the Exchange Agreement or (ii)
surrender to Company for cancellation
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to the retiring Physician
Owner pursuant to the Exchange Agreement. (If there is no public market
for Company's stock, then Company shall engage an independent appraiser to
value Company's stock for purposes of this Section 11.9.1(d). All expenses
of such appraisal shall be paid by such Physician Owner. Such
determination of fair market value shall be binding upon such Physician
Owner); and
(e) to honor and comply with the restrictive covenants provided for
under Exhibit 11.
11.9.2. Retirement. If at any time after the fifth (5th) anniversary of
this Agreement, a Physician Owner desires to retire, or assume full-time
teaching responsibilities, such Physician Owner shall notify Company in writing
at least twelve (12) months prior to the effective date of such retirement or
start of teaching position; provided, however, that
[xxxxxxxxxxxxxxxxxxxxxxxxxxxx] of the Physician Owners can retire or assume full
time teaching responsibilities within any twelve (12) month period; provided,
further, that if such retiring physician elects to, and has located a
replacement physician, Company shall waive the remaining months of said twelve
(12) month notice period, and such retirement shall be effective upon the
earlier of twelve (12) months from the date of notice or commencement of the
replacement physician's employment. Upon such retirement or start of
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teaching position, such Physician Owner shall have no further obligations under
this Agreement; provided, however, the restrictive covenants provided for under
Section 11.9.1(e) shall remain in force. In fulfilling any such full-time
teaching responsibilities, such Physician Owner would be permitted to attend
patients in a manner normal and customary for such faculty position, provided,
however, such services must be incident to the academic/teaching aspects of the
institution, and not incident to the regular examination of patients for a fee
whether billed in the name of the institution or the name of the attending
physician. It is not the intent of the Parties to permit a retired physician to
conduct a medical practice through an academic institution.
11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with Princeton II, then the terminating Physician Owner may join or
establish another group/practice which has or will enter into a Service
Agreement with Company upon such terminating Physician Owner's affiliation with
such new group/practice. Upon entering into such new Service Agreement, the
terminating Physician Owner shall, except as limited by separate employment
agreements between Princeton II and Physician Owners, be released from any
obligation under this Service Agreement. Company shall have the right to enter
into such new Service Agreement without satisfying the requirements of paragraph
G of Exhibit 11. In the event that (i) Princeton consents to the Company
entering into the new Service Agreement, (ii) entering into the new Service
Agreement will not adversely affect the operations and earnings of the Company,
and (iii) the new group/practice can satisfy the representations and warranties
set forth in Article XIII of this Agreement, then Company will not unreasonably
withhold or refrain from entering into a new Service Agreement with the
terminating Physician Owner's new group/practice. In the event that the
Physician Owner affiliates with a new group/practice that is not a party to a
Service Agreement with Company, then Company, at its option, may terminate this
Agreement solely with respect to the terminating Physician Owner, and the
provisions of Exhibit 11 shall apply. In the event that Company does not enter
into a new Service Agreement, then Company shall terminate this Agreement with
respect to such Physician Owner, and the terminating Physician Owner shall be
obligated as described in Sections 11.9.1(a) and 11.9.1(e) of this Agreement;
provided, however, if such termination is within the first five (5) years of the
term of this Agreement, the terminating Physician Owner shall also be obligated
as described in Section 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and
11.9.1(e).
11.9.4. Death or Disability. In the event that a Physician Owner dies or
becomes disabled, then this Agreement shall be terminated with respect to such
Physician Owner shall have no continuing obligations under this Agreement;
provided, however, in the event of disability, the restrictive covenants
described in Exhibit 11 shall remain in force for a period of thirty-six (36)
months from such termination.
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ARTICLE XII.
DAMAGE AND LOSS; CONDEMNATION
12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with Princeton II, shall review and approve such reconstruction,
repair or replacement.
12.2. Temporary Space. In the event of substantial damage to or the
condemnation of a significant portion of the facilities, Company shall use its
best efforts to provide temporary facilities until such time as the facilities
can be restored or replaced.
ARTICLE XIII.
REPRESENTATIONS AND WARRANTIES
OF PRINCETON II AND PHYSICIAN OWNERS
Princeton II and Physician Owners represent, warrant, covenant and agree
with Company that:
13.1. Validity. Princeton II is a New Jersey corporation. Princeton II has
the full power and authority to own Princeton II's property, to carry on
Princeton II's business as presently being conducted, to enter into this
Agreement, and to consummate the transactions contemplated hereby. Each
Physician Owner is an adult citizen and resident of the State of New Jersey.
Each Physician Owner has the full power and authority to own his or her
property, carry on his or her business as presently being conducted, to enter
into this Agreement, and to consummate the transactions contemplated hereby.
13.2. Litigation. Except as disclosed pursuant to the Exchange Agreement,
there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding pending, or threatened against, or
affecting Princeton II or any Physician Employee, or to the best of Princeton
II's and each Physician Owner's knowledge, any provider or other health care
professional associated with or employed by Princeton II as pertains to any
claim involving the providing of health care related services, and to the best
of Princeton II's and each Physician Owner's knowledge there is no basis for any
of the foregoing.
13.3. Permits. Princeton II and all health care professionals associated
with or employed by Princeton II have all permits and licenses and other
Necessary Authorizations required by all Applicable Law, except where failure to
secure such licenses, permits and other Necessary Authorizations does not have a
material adverse effect; have made all regulatory filings necessary for
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the conduct of Princeton II's business; and are not in violation of any of said
permitting or licensing requirements.
13.4. Authority. The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding Agreement of Princeton II and
each Physician Owner, enforceable in accordance with its terms. Princeton II and
each Physician Owner have obtained all third-party consents necessary to enter
into and consummate the transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor compliance by Princeton II or any Physician Owner with
any of the provisions hereof, will:
13.4.1. violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under any license, agreement or other
instrument or obligation to which either Princeton II or any Physician Owner is
a party;
13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either Princeton II or any Physician Owner.
13.5. Compliance with Applicable Law. To the best of Princeton II's and
each Physician Owner's knowledge and belief, Princeton II and each Physician
Owner has operated in compliance with all federal, state, county and municipal
laws, ordinances and regulations applicable thereto and neither Princeton II nor
any provider associated with or employed by Princeton II has received payment or
any remuneration whatsoever to induce or encourage the referral of patients or
the purchase of goods and/or services as prohibited under 42 U.S.C. ss.
1320a-7b(b), or otherwise perpetrated any Medicare or Medicaid fraud or abuse,
nor has any fraud or abuse been alleged within the last five (5) years by any
Governmental Authority, a carrier or a Third-Party Payor.
13.6. Health Care Compliance. Princeton II is presently participating in
or otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
Princeton II no event has occurred which in itself or with the giving of notice
or the lapse of time or both would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such Third-Party Payor Program.
Princeton II is in full compliance with the material requirements of all such
Third-Party Payor Programs applicable thereto.
13.7. Fraud and Abuse. Princeton II and persons and entities providing
professional services for Princeton II, have not, to the knowledge of Princeton
II and each Physician Owner, after due inquiry, engaged in any activities which
are prohibited by or are in violation of the rules, regulations, policies,
contracts or laws pertaining to any Third-Party Payor Program, or which are
prohibited by rules of professional conduct ("Governmental Rules and
Regulations"), including but not limited to
- 37 -
the following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on Princeton II's own behalf or on behalf of another,
with intent to fraudulently secure such benefit or payment; or (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay or receive such remuneration (i) in return for referring
an individual to a person for the furnishing or arranging for the furnishing or
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing, or ordering or
arranging for or recommending purchasing, leasing, or ordering any good,
facility, service or item for which payment may be made in whole or in part by
Medicare or Medicaid.
13.8. Princeton II Compliance. Princeton II has all licenses necessary to
operate the Practice Offices in accordance with the requirements of all
Applicable Law and has all Necessary Authorizations for the use and operation,
all of which are in full force and effect. There are no outstanding notices of
deficiencies relating to Princeton II issued by any Governmental Authority or
Third-Party Payor requiring conformity or compliance with any Applicable Law or
condition for participation of such Governmental Authority or Third-Party Payor,
and after reasonable and independent inquiry and due diligence and
investigation, Princeton II has neither received notice nor has any knowledge or
reason to believe that such Necessary Authorizations may be revoked or not
renewed in the ordinary course.
13.9. Rates and Reimbursement Policies. The jurisdiction in which
Princeton II is located does not currently impose any restrictions or
limitations on rates which may be charged to private pay patients receiving
services provided by Princeton II. Princeton II does not have any rate appeal
currently pending before any Governmental Authority or any administrator of any
Third-Party Payor Program. Princeton II has no knowledge of any Applicable Law
which has been enacted, promulgated or issued within the eighteen (18) months
preceding the date of this Agreement or any such legal requirement proposed or
currently pending in the jurisdiction in which Princeton II is located which
could have a material adverse effect on Princeton II or may result in the
imposition of additional Medicaid, Medicare, charity, free care, welfare, or
other discounted or government assisted patients at Princeton II or require
Princeton II to obtain any necessary authorization which Princeton II does not
currently possess.
13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:
13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; Princeton II has billed the applicable Account Debtor and Princeton
II has delivered or caused to be delivered to such Account Debtor all requested
supporting claim documents with respect to such Accounts Receivable; all
information set forth in the ▇▇▇▇ and supporting claim documents is true and
correct,
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and, if any error has been made, Princeton II will promptly correct the same
and, if necessary, rebill or, if requested by Company, cooperate with Company to
rebill such Accounts Receivable.
13.10.2. The Purchased A/R are exclusively owned by Princeton II and there
is no security interest or lien in favor of any third party, or the recording or
filing against Princeton II, as debtor, covering or purporting to cover any
interest of any kind in any Accounts Receivable, except as has been released by
each party holding such adverse interest in the Accounts Receivable. Upon
payment of the Purchase Price with respect to the Purchased A/R and with respect
to Governmental Receivables, to the extent permissible by law, all right, title
and interest of Princeton II with respect thereto shall be vested in Company,
free and clear of any lien, security interest, claim or encumbrance of any kind,
and Princeton II agrees to defend the same against the claims of all Persons.
13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by
the Account Debtor identified by Princeton II as being obligated to do so, (ii)
are based on an actual and bona fide rendition of services or sale of goods to
the patient by Princeton II in the ordinary course of business, (iii) are
denominated and payable only in lawful currency of the United States, and (iv)
are accounts or general intangibles within the meaning of the UCC of the state
in which Princeton II has its principal place of business, or are rights to
payment under a policy of insurance or proceeds thereof, and are not evidenced
by any instrument or chattel paper. There are no payors other than the Account
Debtor identified by Princeton II as the payor primarily liable on any Purchased
A/R.
13.10.4. The Purchased A/R are not (i) subject to any action, suit,
proceeding or dispute (pending or threatened), set-off, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction or termination by the
Account Debtors other than routine adjustments and disallowances made in the
ordinary course of business, to the extent of such adjustments and
disallowances, (ii) past or within sixty (60) days of, the statutory limit for
collection applicable to the Account Debtor, (iii) subject to an invoice which
provides for payment more than forty-five (45) days from the date of such
invoice, (iv) an account which arises out of a sale or other transaction by or
between Princeton II to an Affiliate of Princeton II, (v) from an Account Debtor
who is also a creditor of Princeton II, (vi) an account in which the Account
Debtor has commenced a voluntary case, or an involuntary proceeding has been
instituted, under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit or creditors, or if a decree or
order for relief has been entered by a court having jurisdiction in the premises
in respect to the Account Debtor, (vii) an account of which the goods giving
rise to such Accounts Receivable have not been shipped and delivered to and
accepted by the Account Debtor or the services giving rise to such Accounts
Receivable have not been performed by Princeton II and accepted by the Account
Debtor or the Accounts Receivable otherwise does not represent a final sale,
(viii) is evidenced by an instrument or chattel paper unless such instrument or
chattel paper is delivered to Company with all appropriate endorsements in favor
of Company, or (ix) other than a complete bona fide transaction which requires
no further act under any circumstances on the part of Princeton II to make the
Accounts Receivable payable by the Account Debtor.
- 39 -
13.10.5. Princeton II does not have any guaranty of, letter of credit
providing credit support for, or collateral security for, the Purchased A/R,
other than any such guaranty, letter of credit or collateral security as has
been assigned to Company, and any such guaranty, letter of credit or collateral
security is not subject to any lien in favor of any other person.
13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of Princeton II and the
patient received such goods or services.
13.10.7. The face amount of the Accounts Receivable for the services
constituting the basis for the Purchased A/R are consistent with the usual,
customary and reasonable fees charged by other similar medical service providers
in Princeton II's community for the same or similar service.
13.10.8. Each Account Debtor with respect to the Purchased A/R (i) is not
currently the subject of any bankruptcy, insolvency or receivership proceeding,
nor is it generally unable to make payments on its obligations when due, (ii) is
located in the United States, and (iii) is one of the following: (x) a party
which in the ordinary course of its business or activities agrees to pay for
healthcare services received by individuals, including, without limitation,
Medicare, Medicaid, governmental bodies, commercial insurance companies and
non-profit insurance companies (such as Blue Cross and Blue Shield entities)
issuing health, personal injury, workers compensation or other types of
insurance; (y) employers or unions which self-insure for employee or member
health insurance, prepaid healthcare organizations, preferred provider
organizations, health maintenance organizations or any other similar person, or
(z) a Third-Party Payor of the type described in the definition of Governmental
Receivables.
13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of Princeton II. The sale of the Purchased
A/R hereunder is made in good faith and without actual intent to hinder, delay
or defraud present or future creditors of Princeton II.
13.10.10. Except with respect to Governmental Receivables, the insurance
policy, contract or other instrument obligating an Account Debtor to make
payment with respect to the Purchased A/R (i) does not contain any provision
prohibiting the transfer of such payment obligation from the patient to
Princeton II, or from Princeton II to Company, (ii) has been duly authorized by
Princeton II and to the knowledge of Princeton II has been duly authorized by
the Account Debtor and, together, with the Purchased A/R, constitutes the legal,
valid and binding obligation of the Account Debtor in accordance with its terms,
(iii) together with the applicable Purchased A/R, does not contravene in any
material respect any requirement of law applicable thereto, and (iv) was in full
force and effect and applicable to the patient at the time the services
constituting the basis for the Purchased A/R were performed.
None of the foregoing representations and warranties shall be deemed to
constitute a guaranty by Princeton II that the Purchased A/R will be collected
by Company. Princeton II shall not be responsible for any damages for any breach
of a representation or warranty under this Section 13.10
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until Company has suffered a loss on the purchase of Princeton II's Accounts
Receivable. Damages for such breach shall be limited to the amount of Company's
loss on the purchase of such Accounts Receivable.
13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of Princeton II no representation or warranty
made by Princeton II in this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by Princeton II as though recited in this
Article XIII.
ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents, warrants, covenants and agrees with Princeton II as
follows:
14.1. Organization. Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Company
has the full power to own its property, to carry on its business as presently
conducted, to enter into this Agreement and to consummate the transactions
contemplated hereby.
14.2. Authority. Company has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, as well as the
consummation of the transactions contemplated hereby. The execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
hereby will not, violate any provisions of the charter or the bylaws of Company
or any indenture, mortgage, deed of trust, lien, lease, agreement, arrangement,
contract, instrument, license, order, judgment or decree or result in the
acceleration of any obligation thereunder to which Company is a party or by
which it is bound.
14.3. Absence of Litigation. No action or proceeding by or before any
court or other Governmental Authority has been instituted or is, to the best of
Company's knowledge, threatened with respect to the transactions contemplated by
this Agreement.
14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of Princeton II or Company, other than on
terms and conditions substantially as favorable to Company as would be
obtainable by Company at the time in a comparable arm's-length transaction with
a person not an Affiliate.
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ARTICLE XV.
COVENANTS OF PRINCETON II AND PHYSICIAN OWNERS
15.1. Merger, Consolidation and Other Arrangements. Princeton II shall not
incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up Princeton II's affairs or enter into any
partnerships, joint ventures or sale-leaseback transactions or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any other person
or entity.
15.2. Necessary Authorizations/Assignment of Licenses and Permits.
Princeton II and each Physician Owner shall maintain all licenses, permits,
certifications, or other Necessary Authorizations and shall not assign or
transfer any interest in any license, permit, certificate or other Necessary
Authorization granted to it by any Governmental Authority, nor shall Princeton
II or any Physician Owner assign, transfer, or remove or permit any other
individual or entity to assign, transfer or remove any records of Princeton II
or any Physician Owner, including without limitation, patient records, medical
and clinical records (except for removal of such patient records as required
under any Applicable Law).
15.3. Transaction with Affiliates. Neither Princeton II nor any Physician
Owner shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of Princeton
II or Company, other than on terms and conditions substantially as favorable to
Princeton II or the Physician Owner, as would be obtainable by Princeton II or
the Physician Owner at the time in a comparable arms-length transaction with a
person not an Affiliate.
15.4. Compliance with All Laws. Princeton II and each Physician Owner
shall comply with all laws and regulations relating to Princeton II's practice
and the operation of any facility, including, but not limited to, all state,
federal and local laws relating to the acquisition or operation of a health care
practice. Furthermore, neither Princeton II nor any Physician Owner shall
violate any Governmental Rules and Regulations.
15.5. Third-Party Payor Programs. Princeton II shall maintain Princeton
II's compliance with the requirements of all Third-Party Payor Programs in which
Princeton II is currently participating or authorized to participate.
15.6. Change in Business or Credit and Collection Policy. Princeton II
shall not make any change in the character of Princeton II's business or in the
credit and collection policy, which change would, in either case, impair the
collectibility of any Purchased A/R or any Exchange A/R or otherwise modify,
amend or extend the terms of any such account other than in the ordinary course
of business.
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15.7. Treatment of Accounts Receivable. Princeton II will (i) treat
transfers to Company of Accounts Receivable hereunder as a sale for all
purposes, including tax and accounting (and shall accurately reflect such sale
in its financial statements), and will advise all persons who inquire about the
ownership of such Accounts Receivable that they have been sold to Company; (ii)
not treat any such Accounts Receivable as an asset on Princeton II's books and
records; (iii) record in Princeton II's books, records and computer files
pertaining thereto that such Accounts Receivable have been sold to Company; (iv)
pay all taxes, if any, relating to the transfer of such Accounts Receivable
after the same have been purchased by Company; (v) not impede or interfere with
Company's collection of such Accounts Receivable; (vii) not amend, waive or
otherwise permit or agree to any deviation from the terms or conditions of such
Accounts Receivable; (viii) use all reasonable efforts to obtain all consents
from patients which are required by law in order for Company, or any servicing
entity retained by Company, to secure information needed to obtain or to
expedite payment from the respective Account Debtors; and (ix) have billed such
Accounts Receivable on the same bases and using the same policies and practices
that it has used in the past unless Company has been advised in writing of a
change prior to the purchase of such Accounts Receivable. Company or its
designated representatives from time to time may verify the Accounts Receivable,
inspect, check, take copies or extracts from Princeton II's books, records and
files, and Princeton II will make the same available to Company or such
representatives at any reasonable time for such purposes.
15.8. Security Interest. If, contrary to the mutual intent of Princeton II
and Company, any purchase of Purchased A/R is not characterized as a sale,
Princeton II shall, effective as of the date hereof, be deemed to have granted
(and Princeton II does hereby grant) to Company a first priority security
interest in and to any and all of the Purchased A/R and the proceeds thereof to
secure the repayment of all amounts advanced to Princeton II hereunder with
accrued interest thereon, and this Agreement shall be deemed to be a security
agreement. With respect to such grant of a security interest, Company may at its
option exercise from time to time any and all rights and remedies available to
it under the UCC or otherwise. Princeton II agrees that five (5) days shall be
reasonable prior notice of the date of any public or private sale or other
disposition of all or part of the Purchased A/R. Princeton II represents and
warrants that the location of Princeton II's principal place of business, and
all locations where Princeton II maintains records with respect to its accounts
are set forth under its name in Section 16.3 hereof. Princeton II agrees to
notify Company in writing thirty (30) days prior to any change in any such
location. The exact name of Princeton II is as set forth at the beginning of
this Agreement, and except as set forth on the signature page hereof, Princeton
II has not changed its name in the last five (5) years, and during such period
Princeton II did not use, nor does Princeton II now use, any fictitious or trade
name. Princeton II shall notify Company in writing thirty (30) days prior to any
change in any such name.
ARTICLE XVI.
GENERAL PROVISIONS
16.1. Assignment. Company shall have the right to assign its rights
hereunder to any person, firm or corporation under common control with Company
and to any lending institution from which
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Company obtains financing, including but not limiting the restrictive covenants
included in Article VII (covenant not to compete), for security purposes or as
collateral. Princeton II agrees to, and acknowledges, Company's right to assign
Company's rights under this Agreement to any Lender and further agrees that upon
receipt of written notice from such Lender, Princeton II shall pay to Lender or
cause to be paid to Lender all amounts which are otherwise payable to Company
pursuant to the terms of this Agreement, including, without limitation, all
service fees, and other Clinic Expenses and, until such amounts are delivered to
Lender, hold payments in trust for Lender. Except as set forth above, neither
Company nor Princeton II shall have the right to assign their respective rights
and obligations hereunder without the written consent of the other party.
Without limiting the foregoing, Princeton II acknowledges that, as collateral
for certain obligations, Company has assigned all of its rights hereunder to
NationsBank of Tennessee, N.A. as Agent (the "Agent") for itself and other banks
and institutional lenders from time to time (collectively the "Banks") and has
granted the Agent for the benefit of the Banks a lien and security interest upon
all real and personal property used in the operation of the Office Locations
(the "Pledged Assets"). As an inducement for the Banks to extend or continue the
extension of credit to Company, Princeton II (i) acknowledges that the
collateral assignment to the Agent covers all rights of Company hereunder,
including, but not limited to, rights arising from warranties and
representations made by Princeton II, rights to enforce covenants made by
Princeton II, and rights to receive all payments due Company; (ii) agrees to
regard the Agent as the owner of any or all of the assigned rights upon written
notice to Princeton II of this election from the Agent; (iii) agrees that
neither the Agent nor any of the Banks has obligation for the performance of the
duties of Company hereunder, and shall not assume any such duty by the exercise
of rights as a secured lender; (iv) agrees to give the Agent written notice of
any material default hereunder on Company's part at the address of ▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇, and to allow at least
thirty (30) days thereafter for the cure of such default before Princeton II
terminates this Agreement; (v) agrees that the rights of Princeton II under this
Agreement, including, but not limited to, the right to the use of the Pledged
Assets, are and shall be junior to any security interest that the Agent and the
Banks, their successors or assigns may have in the Pledged Assets at any time;
(vi) agrees that the benefits of the above undertakings in favor of the Agent
and Banks shall further extend to all successors and assigns of the Agents and
Banks, provided that any notices given by Princeton II under this Section shall
be given to the Agent at the foregoing address unless Princeton II has received
written notice of a change thereof; and (vii) agrees that this Section may not
be modified, and no provision of this Section may be waived, absent the written
approval of the Agent.
16.2. Whole Agreement; Modification. This Agreement supersedes all prior
agreements between the parties and there are no other agreements or
understandings, written or oral, between the parties regarding this Agreement,
the Exhibits and the Schedules, other than as set forth herein. This Agreement
shall not be modified or amended except by a written document executed by both
parties to this Agreement.
16.3. Notices. All notices required or permitted by this Agreement shall
be in writing and shall be deemed to have been given (i) when received if given
in person, (ii) on the date of acknowledgment of receipt if sent by telex,
facsimile or other wire transmission, (iii) one business day
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after being sent by overnight delivery service, or (iv) three days after being
deposited in the United States mail, certified or registered mail, postage
prepaid, addressed as follows:
To Company: Specialty Care Network, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
With a copy to: Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
To Princeton II: Princeton Orthopaedic Associates, II P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & Marcus
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address as either party shall notify the other.
16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.
16.5. Waiver of Provisions. Any waiver of any terms and conditions hereof
must be in writing, and signed by the parties hereto. The waiver of any of the
terms and conditions of this Agreement shall not be construed as a waiver of any
other terms and conditions hereof.
16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey.
16.7. No Practice of Medicine. The parties acknowledge that Company is not
authorized or qualified to engage in any activity which may be construed or
deemed to constitute the practice of medicine. To the extent any act or service
required of Company in this Agreement should be construed or deemed by any
Governmental Authority or court to constitute the practice of medicine,
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the performance of said act or service by Company shall be deemed waived and
unenforceable to the minimum extent required to comply with Applicable Law.
16.8. Severability. The provisions of this Agreement shall be deemed
severable and if any portion shall be held invalid, illegal or unenforceable for
any reason, the remainder of this Agreement shall be effective and binding upon
the parties.
16.9. Additional Documents. Each of the parties hereto agrees to execute
any document or documents that may be requested from time to time by any other
party to implement or complete such party's obligations pursuant to this
Agreement.
16.10. Attorneys' Fees. If legal action is commenced by any party to
enforce or defend its rights under this Agreement, the prevailing party in such
action shall be entitled to recover its costs and reasonable attorneys' fees in
addition to any other relief granted.
16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.
16.12. Confidentiality. No party hereto shall disseminate or release to
any third party any information regarding any provision of this Agreement, or
any financial information regarding the other (past, present or future) that was
obtained by the other in the course of the negotiations of this Agreement or in
the course of the performance of this Agreement, including, but not limited to,
any information relating to the internal operations of Princeton II, Princeton
II fees or the terms of any of the managed care contracts, without the other
party's written approval; provided, however, the foregoing shall not apply to
information which (i) is generally available to the public other than as a
result of a breach of confidentiality provisions; (ii) becomes available on a
non-confidential basis from a source other than the other party or its
affiliates or agents, which source was not itself bound by a confidentiality
agreement; (iii) which is required to be disclosed by law or pursuant to court
order. Company shall provide Princeton II with copies of any information
regarding Princeton II provided by Company to any third party; or (iv) except
for disclosure to its bankers, underwriters or lenders, or its advisors to the
extent required by Section 9.4, or as required in connection with reports on
filings with the SEC or State Departments of Securities.
16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations,
Princeton II and Company shall amend this Agreement as necessary. To the maximum
extent possible, any such amendment shall preserve the underlying economic and
financial arrangements between and among Princeton II and Company.
16.14. Remedies Cumulative. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be considered exclusive
of any other remedy available to any
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party, but the same shall be distinct, separate and cumulative and may be
exercised from time to time as often as occasion may arise or as may be deemed
expedient.
16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to Princeton II's fair meaning, and
not for or against either party hereto. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.
16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or Princeton II under this
Agreement shall in any way or in any manner be deemed to create any obligation
of Company or of Princeton II to, or any rights in, any person or entity not a
party to this Agreement.
16.17. Communications. Princeton II and Company agree that good
communication between the parties is essential to the successful performance of
this Agreement, and each pledges to communicate fully and clearly with the other
on matters relating to the successful operation of Princeton II's practice at
the Practice Offices.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY:
SPECIALTY CARE NETWORK, INC.
By:______________________________________________
Title:___________________________________________
SCN OF PRINCETON, INC.
By:______________________________________________
Title:___________________________________________
PRINCETON II:
PRINCETON ORTHOPEDIC ASSOCIATES, II P.A.
By:______________________________________________
Title:___________________________________________
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PHYSICIAN OWNERS:
_________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
_________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
_________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., M.D.
_________________________________________________
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
_________________________________________________
C. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., M.D.
_________________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
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