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EXHIBIT 10.111
MENTAL HEALTH PARTIAL HOSPITALIZATION
SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is entered into for reference purposes only as
of the Eighteenth (18th) day of September, 1998, by and between CITRUS VALLEY
MEDICAL CENTER, a California nonprofit public benefit corporation ("Hospital")
and OPTIMUMCARE CORPORATION, a Delaware corporation ("Manager").
Recitals
A. Hospital operates a duly licensed acute care facility located in
West Covina, California and desires to develop an outpatient partial
hospitalization program (the "Program") for the treatment of psychiatric
disorders.
B. Manager is in the business of providing management services for
the treatment of patients with psychiatric disorders. Manager presently manages
a partial hospitalization program pursuant to an affiliation with another acute
care hospital at a facility located at ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ "▇", ▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Facility"), the space for which Manager is the sole lessor.
Manager desires to terminate its relationship with said other hospital and
desires to continue operating such partial hospitalization program at the
Facility pursuant to a relationship with Hospital.
C. Manager presently leases the Facility pursuant to a lease
("Lease"). Pursuant to a sublease of even date herewith ("Sublease"), Hospital
will sublease the Facility from Manager thereby satisfying Hospital's obligation
hereunder to provide space for the Program.
D. Hospital desires to establish the Program at the Facility, and
Hospital desires to retain Manager, and Manager desires to be retained, to
provide management services with respect to the Program.
E. Hospital and Manager desire to enter into this Agreement to
provide a clear understanding of their respective rights, duties and obligations
with respect to the subject matter hereof.
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Agreement
SECTION 1. DEFINITIONS.
1.1 "Confidential Information." "Confidential Information" shall
mean all confidential information and trade secrets of Manager, including
without limitation financial statements, internal memoranda, reports, patient
lists, memoranda, manuals, handbooks, pamphlets, production books and audio and
visual recordings, models, techniques, formulations, procedures and other
materials or records of a confidential and/or proprietary nature which relate to
the Program and which are used by Manager in providing psychiatric services to
Program patients.
1.2 "Employee Benefits." "Employee Benefits" shall include, by way
of illustration and not limitation, an employer's contribution under the Federal
Insurance Contributions Act, unemployment compensation and related insurance,
payroll and other employment taxes, pension and retirement plan contributions,
workers' compensation and related insurance, group life, health, disability, and
accident insurance, severance, and other benefits.
1.3 "Patient Day." A "Patient Day" shall be deemed to exist with
respect to each outpatient visit to the Program.
SECTION 2. TERM.
This Agreement shall commence on such date as Hospital becomes
appropriately licensed to operate the Program at the Facility, and shall expire
two years from such date, unless earlier terminated in accordance with the
provisions of Section 10 of this Agreement. Notwithstanding the provisions of
this Section 2, upon the execution of this Agreement, Manager shall be obligated
to take all commercially reasonable efforts in accordance with Section 4.3
hereof to assist Hospital in becoming so licensed. In the event Hospital remains
unlicensed as of February 1, 1999, this Agreement shall be deemed to have
expired.
SECTION 3. COVENANTS OF HOSPITAL.
3.1 Ultimate Control. Hospital shall have and maintain throughout
the period hereof ultimate control and authority for the operation and
administration of the Program.
3.2 Space. Pursuant to the Sublease, Hospital shall lease the
Facility from Manager, which consists of approximately Five Thousand Thirty One
(5,031) square feet of office space, which Manager agrees is sufficient in size
and quality for the proper operation of this Program.
3.3 Hospital's Employees. Hospital shall employ, or shall
independently contract with, and shall be financially responsible for staffing
the Program with all personnel necessary for the proper and efficient
administration and clinical operation of the Program as set forth in Schedule
3.3. All personnel employed or otherwise contracted for (including the office
manager) shall be required to
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comply with the Program policies and procedures as mutually developed and agreed
upon in writing by Hospital and Manager.
3.4 Diagnostic Facilities. Hospital shall make available to Program
patients the Hospital's inpatient, diagnostic, and other facilities as requested
from time to time by such patients' attending physicians or by Program staff.
3.5 General Services. Hospital shall provide the following support
services for the efficient and proper operation of the Program:
3.5.1 Dietary services for patients of the Program (including
one mid-day meal to be served to each patient at the Facility and the part-time
services of the Hospital's nutritionist/dietician).
3.5.2 Housekeeping services for the Facility.
3.5.3 Janitorial and physical upkeep of the Facility.
3.5.4 All utilities for the Facility. Manager acknowledges
that utilities ultimately will be supplied by the Facility's landlord under the
terms of the Lease.
3.5.5 All clerical support, office supplies and general
supplies necessary for the proper operation of the Program.
3.5.6 Record keeping services, in accordance with state and
federal laws and regulations.
3.5.7 Daily transportation of all patients from their homes to
the Facility in the morning, and from the Facility to patients' homes in the
evenings, but only for such patients who reside within twenty five (25) miles of
Hospital.
Nothing in this Agreement is intended to or shall be construed to limit
or restrict the Hospital's ability to outsource the provision of the goods and
services contemplated in this Section 3.5.
3.6 Policies and Procedures. Hospital shall provide all Program
staff (including employees and independent contractors of Manager) with copies
of all relevant hospital and Program policies and procedures, as amended from
time to time.
3.7 Health Screenings. Hospital shall provide to all Program staff
(including employees and independent contractors of Manager) such appropriate
pre-employment and periodic diagnostic and health screening procedures as are
customarily provided by Hospital for Hospital employees.
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3.8 Accreditation. Hospital shall maintain accreditation by the
Joint Commission on the Accreditation of Health Care Organizations, and shall be
financially responsible for paying all such fees related to such accreditation.
3.9 Quality Improvement Review. Hospital shall provide appropriate
utilization review and quality improvement services with respect to services
provided by the Program.
3.10 Insurance. Hospital shall procure and maintain, at its sole cost
and expense, throughout the term hereof, a policy or policies of comprehensive
general liability insurance covering itself and its employees for patient care
services from an insurance carrier licensed and authorized to sell or approved
to place liability insurance policies of this nature in this State with limits
of not less than Five Million Dollars ($5,000,000.00) per occurrence. Hospital
shall cause to be issued to Manager, by the insurance carriers issuing such
coverage, certificates of insurance evidencing that the foregoing covenants of
this Agreement have been complied with and stating that said insurance carriers
shall provide ten (10) calendar days prior written notice to Manager of any
cancellation or material modification of the policy or coverage described
herein, or, if any such carrier shall not agree to provide such notice, then
Hospital shall agree to provide notice to Manager of any such cancellation or
modification immediately upon their receipt of notice of same from the carrier.
Any deductible, co-insurance, or aggregate limits shall be subject to Manager's
approval, which shall not be unreasonably withheld. Manager agrees that
co-insurance or deductible amounts of $100,000 or less, per occurrence, is an
acceptable co-insurance or deductible.
3.10.1 Extended Reporting Period. If any liability insurance policy
procured pursuant to Section 3.10 is on a "claims made" rather than "occurrence"
basis, then such policy shall include an option to purchase a "tail" or an
extended reporting period, which option shall be exercisable upon termination or
cancellation of said policy or upon any material modification of said policy
that has the effect of causing the coverage of said policy to fail, in any
respect, to meet the requirements of Section 3.10, regardless of whether such
termination, cancellation or modification shall occur during the term hereof or
thereafter. The tail or extended reporting period shall provide coverage meeting
all of the requirements set forth in Section 3.10, for a period of at least
seven (7) years after termination, cancellation or modification of the
underlying policy. Such policy shall provide that the carrier shall give
Hospital or Manager thirty (30) calendar days advance written notice of the date
upon which the option may be exercised regardless of whether such date shall
occur during the term hereof or thereafter and shall specifically provide that
Manager shall be permitted to exercise the option upon the failure of Hospital
to do so. Upon such notice, Hospital shall take all steps, including the payment
of money, necessary to exercise such option, and if Hospital shall fail to
effectively exercise such option, then Manager may do so, and Hospital shall
fully and immediately reimburse Manager, within ten (10) calendar days notice
thereof by Manager, for all monies expended by Manager in connection therewith.
3.11 Billing and Collections. Hospital has in effect a schedule of
fees and patient charges for the administrative and technical component of all
services rendered by the Program. Said fees and charges may be modified by
Hospital from time to time in its sole and absolute discretion, but
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Hospital shall give prior notice of such modification to Manager. Hospital shall
▇▇▇▇ all patients and third party payors for Hospital's fees and charges with
reference to services provided by the Program in accordance with such schedule.
3.12 Indemnification by Hospital. Hospital shall protect, indemnify,
hold harmless, and defend Manager, its legal representatives, employees, agents,
officers, trustees, affiliates and assigns, and each of them, from and against
any and all claims, actions, demands, proceedings, losses, damages, costs,
expenses and liabilities (including reasonable attorneys' fees) arising out of
or related to the performance or nonperformance by Hospital of any obligations
to be performed or services to be provided hereunder. This indemnification
obligation shall survive the expiration or termination of this Agreement.
SECTION 4. COVENANTS OF MANAGER.
4.1 Clinical Management. Subject to Hospital's ultimate retention of
control and authority, Hospital hereby appoints Manager as its sole and
exclusive manager of the clinical operation of the Program and Manager accepts
such appointment. Manager shall have full responsibility for the efficient and
proper administration of the Program and for the care and treatment of Program
patients while at the Facility. Manager shall have overall authority and
responsibility to conduct, supervise, manage, and direct the day-to-day clinical
operation of the Program.
4.2 Manager's Employees. Manager shall employ and/or independently
contract with, and shall be financially responsible for staffing the Program
with, the full-time equivalent of (a) one program director, (b) one licensed
clinical social worker, (c) Marriage, Family and Child Counselors (or,
alternatively, social workers who have been awarded a Master's Degree in
clinical social work, or a combination thereof), (d) activity therapists, and
(e) one medical director ("Medical Director") in accordance with Schedule 4.2,
based upon the anticipated Program census for each day of operation. Manager
shall not, without Hospital's prior written consent, which shall not be
unreasonably withheld, deviate from, change, or decrease the agreed staffing as
set forth in Schedule 4.2. In addition, Manager shall be financially responsible
for staffing the Program with all such additional professional counseling staff
and therapists as may be reasonably necessary for the proper operation of the
Program and as may be ordered by patients' attending physicians.
4.2.1 Medical Director Qualifications. Manager represents,
warrants, covenants and agrees that Medical Director shall be a physician duly
licensed to practice medicine in the State of California, shall be a member of
the Hospital's Active Medical Staff with clinical privileges sufficient to
permit Medical Director to perform all services reasonably required of him/her
as Medical Director of the Program, and shall be in legitimate possession of all
customary narcotics and controlled substances numbers and licenses. Manager
represents, warrants, covenants and agrees that Medical Director's license to
practice medicine in any state has never been suspended, revoked, or restricted,
that Medical Director has never been reprimanded, sanctioned or disciplined by
any licensing board or state or local medical society or specialty board, and
Medical Director has never
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been denied membership or reappointment of membership on the medical staff of
any hospital and no hospital medical staff membership or clinical privileges of
Medical Director have ever been suspended, curtailed or revoked for a medical
disciplinary cause or reason.
4.2.2 Medical Director Duties. Manager shall provide the
professional services of Medical Director as an independent management
consultant and advisor to perform certain administrative functions as hereafter
set forth. The Medical Director shall furnish the following for the operation of
the Program:
4.2.2.1 Medical Director shall serve as Medical Director
of the Program. Medical Director shall, during the entire term of this
Agreement, supervise the clinical, medical and psychiatric operation of the
Program and shall devote such time as necessary to carry out such duties and
ensure efficient and effective medical administration of the Program. The
primary objective is to provide optimal utilization of the Program's facilities,
equipment and staff and to provide quality services to all patients.
4.2.2.2 Manager shall assure that Medical Director shall
be available at reasonable times for consultation with the Board of Directors,
the Chief Operational Officer ("C.O.O.")/Administrator, the Chief of Staff,
individual members of the medical staff, committees of the professional staff
and nursing and administrative employees of Hospital. Medical Director shall be
available by electronic pager for emergency consultation during all hours that
the Program is in operation and Medical Director is offsite, provided, however,
that Medical Director may arrange for coverage of this on-call obligation, which
coverage shall be provided by a physician licensed to practice medicine in the
State of California and shall be at Manager's or Medical Director's sole cost
and expense. Medical Director shall actively participate in the affairs of the
professional staff of the Hospital and shall perform such tasks and provide such
services as the professional staff or any committee may from time to time
appropriately request. Manager acknowledges and agrees that the Hospital's
medical staff committees shall conduct at regular intervals ongoing monitoring
and reviewing of the professional performance of Medical Director and that the
results of these reviews shall be transmitted to Hospital administration.
4.2.3 Acceptability of Staff Members. Manager shall use
reasonable efforts to resolve any issues regarding the acceptability to Hospital
of Program staff employed or otherwise contracted for by Manager.
4.2.4 Removal of Staff Member. At the request of Hospital, in
its sole and absolute discretion, Manager shall immediately remove any employee
or independent contractor of Manager providing services at the Facility or to
the Program.
4.3 Licensure. With the cooperation assistance of the Hospital and
its administration, Manager shall be responsible for and shall undertake all
activities necessary to obtain and maintain all necessary licenses and approvals
from governmental and accrediting agencies, including without limitation the
California Department of Health Services, and shall be responsible for and shall
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undertake all activities necessary to obtain and maintain all certifications and
approvals necessary to participate in the Medi-Cal and Medicare programs.
Manager shall prepare, file and supplement all regulatory applications, reports,
and forms required by any local, state or federal regulatory agency and shall
prepare the Facility for, and monitor, regulatory surveys and inspections.
Manager shall use its best efforts to remedy any deficiencies identified in such
surveys and inspections to the extent such deficiencies are within Manager's
control. Manager shall use its best efforts to ensure that the Program and the
Facility are operated and maintained in compliance with all applicable federal,
state, and local laws, rules, and regulations.
4.4 Policies and Procedures. Manager shall, in conjunction with the
Hospital's administration, develop and implement all policies and procedures
necessary for the safe and efficient operation of the Program and the Facility,
and shall educate Program staff on such policies and procedures. Manager shall
provide orientation and training for all Program staff, irrespective of whether
such staff members are employees or independent contractors of Hospital or of
Manager. Manager shall as reasonably necessary provide program of ongoing
in-service training such as to assure that Program staff have the requisite
knowledge and skill required to deliver quality health care services at the
Facility and through the Program.
4.4.1 Hospital Approval. The implementation of the policies
and procedures required under Section 4.4 shall be subject to prior approval by
the Hospital's administration and, where appropriate, the Hospital's medical
staff.
4.5 Indemnification by Manager. Manager shall protect, indemnify,
hold harmless, and defend Hospital, its legal representatives, employees,
agents, officers, trustees, affiliates and assigns, and each of them, from and
against any and all claims, actions, demands, proceedings, losses, damages,
costs, expenses and liabilities (including reasonable attorneys' fees) arising
out of or related to the performance or nonperformance by Manager of any
obligations to be performed or services to be provided hereunder. This
indemnification obligation shall survive the expiration or termination of this
Agreement.
4.6 Insurance. Manager shall procure and maintain, at its sole cost
and expense, throughout the term hereof, a policy or policies of comprehensive
general liability insurance covering itself and its employees from an insurance
carrier licensed and authorized to sell or approved to place liability insurance
policies of this nature in this State with limits of not less than Five Million
Dollars ($5,000,000.00) per occurrence. Manager shall cause to be issued to
Hospital, by the insurance carriers issuing such coverage, certificates of
insurance evidencing that the foregoing covenants of this Agreement have been
complied with and stating that said insurance carriers shall provide ten (10)
calendar days prior written notice to Hospital of any cancellation or material
modification of the policy or coverage described herein, or, if any such carrier
shall not agree to provide such notice, then Manager shall provide notice to
Hospital of any such cancellation or modification immediately upon their receipt
of notice of same from the carrier. Any deductible, co-insurance, or aggregate
limits shall be subject to Hospital's approval, which shall not be unreasonably
withheld. Hospital agrees that co-insurance or deductible amounts of $100,000 or
less, per occurrence, is an acceptable co-
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insurance or deductible.
4.6.1 Extended Reporting Period. If any liability insurance
policy procured pursuant to Section 4.6 is on a "claims made" rather than
"occurrence" basis, then such policy shall include an option to purchase a
"tail" or an extended reporting period, which option shall be exercisable upon
termination or cancellation of said policy or upon any material modification of
said policy that has the effect of causing the coverage of said policy to fail,
in any respect, to meet the requirements of Section 4.6, regardless of whether
such termination, cancellation or modification shall occur during the term
hereof or thereafter. The tail or extended reporting period shall provide
coverage meeting all of the requirements set forth in Section 4.6, for a period
of at least seven (7) years after termination, cancellation or modification of
the underlying policy. Such policy shall provide that the carrier shall give
Hospital or Manager thirty (30) calendar days advance written notice of the date
upon which the option may be exercised regardless of whether such date shall
occur during the term hereof or thereafter and shall specifically provide that
Hospital shall be permitted to exercise the option upon the failure of Manager
to do so. Upon such notice, Manager shall take all steps, including the payment
of money, necessary to exercise such option, and if Manager shall fail to
effectively exercise such option, then Hospital may do so, and Manager shall
fully and immediately reimburse Hospital, within ten (10) calendar days notice
thereof by Hospital, for all monies expended by Hospital in connection
therewith.
4.7 Access to Documents. For the purpose of implementing Section
1861 (v) (1) (I) of the Social Security Act, as amended, and any regulations
promulgated pursuant thereto, Manager agrees to comply with the following
statutory requirements governing the maintenance of documentation to verify the
cost of services rendered under this Agreement:
"(i) until the expiration of four years after the furnishing of such
services pursuant to such contract, [Manager] shall make available, upon
written request to the Secretary [of the U.S. Department of Health and
Human Services] or upon request to the Comptroller General, or any of
their duly authorized representatives, the contract and books,
documents, and records of such costs, and"
"(ii) if [Manager] carries out any of the duties of the contract through
a subcontract with a value or cost of $10,000 or more over a
twelve-month period, with a related organization, such subcontract shall
contain a clause to the effect that until the expiration of four years
after the furnishing of such services pursuant to such subcontract, the
related organization shall make available, upon written request to the
Secretary, or upon request to the Comptroller General, or any of their
duly authorized representatives, the subcontract and books, documents,
and records of such organization that are necessary to verify the nature
and extent of such costs."
4.8 Audit Disclosure. If Manager is requested to disclose books,
documents, or records for purpose of an audit, Manager shall notify Hospital of
the nature and scope of such request and Manager shall make available, upon
written request of Hospital, all such books, documents, or
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records, during regular business hours of Manager. The provisions of this
Section 4.8 shall survive the expiration or earlier termination hereof.
4.9 Reports. Manager shall provide monthly written reports to
Hospital administration regarding all aspects of the operation of the Program.
Such reports shall accompany Manager's invoice as required pursuant to Section
7.1 of this Agreement, and the submission of a report which meets with
Hospital's approval, which shall not be unreasonably withheld, shall be an
express condition precedent to Hospital obligation to pay to Manager the
Management Fee as required by Section 7.2 of this Agreement. Such report shall
address, among other things, the therapies provided to patients, any notable
therapeutic successes or failures experienced by patients of the Program, any
changes in Program staff, any complaints received by Manager regarding the
operation and administration of the Program and the Facility, Program census,
and any other items or issues significant to the administration of the Program.
4.10 Adverse Actions. Manager shall commit no act or omission which
adversely affects any licensure or certification of the Hospital.
4.11 Admissions. Manager shall admit patients to the Program only
where such admission is ordered by a physician member of the Hospital's medical
staff with admitting privileges.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF HOSPITAL.
5.1 Corporate Status. Hospital is a nonprofit public benefit
corporation duly organized and validly existing in good standing under the laws
of the State of California with the power and authority to carry on the
activities in which it is engaged and to perform its obligations hereunder
subject to licensure by the California Department of Health Services.
5.2 Execution of Agreement. The execution of this Agreement and the
performance of the obligations of the Hospital hereunder will not result in any
breach of any of the terms, conditions, or provisions of any agreement or other
instrument to which Hospital is a party or by which it may be bound or affected,
or any governmental license, franchise, permit or other authorization possessed
by the Hospital, nor will such execution and performance violate any federal,
state or local law, rule, or regulation. The Hospital is accredited by the Joint
Commission on the Accreditation of Health Care Organizations.
5.3 Litigation. There is no litigation, administrative proceeding or
investigation pending or threatened against Hospital, nor is the Hospital
subject to any judgment, order, decree or regulation of any court or other
governmental or administrative agency which would materially adversely affect
the performance of Hospital's obligations hereunder.
5.4 Certificate of Need. No Certificate of Need is required by
Hospital from any state regulatory agency for the operation of the Program.
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SECTION 6. REPRESENTATIONS BY MANAGER.
6.1 Corporate Status. Manager is a corporation duly organized and
existing under the laws of the State of Delaware, is authorized and qualified to
conduct business in the State of California, and has the power and authority to
carry on the activities in which it is engaged and to perform its obligations
hereunder.
6.2 Execution of Agreement. The execution of this Agreement and the
performance of the obligations of the Manager hereunder will not result in any
breach of any of the terms, conditions, or provisions of any agreement or other
instrument to which Manager is a party or by which it may be bound or affected,
or any governmental license, franchise, permit or other authorization possessed
by the Manager, nor will such execution and performance violate any federal,
state or local law, rule, or regulation.
6.3 Litigation. There is no litigation, administrative proceeding or
investigation pending or threatened against Manager, nor is the Manager subject
to any judgment, order, decree or regulation of any court or other governmental
or administrative agency, which would materially adversely affect the
performance of Hospital's obligations hereunder.
SECTION 7. MANAGEMENT FEE.
7.1 Invoice. Manager shall prepare and submit to Hospital on a
monthly basis an invoice for its services rendered hereunder. Said invoice shall
indicate the name of each patient of the Program and the dates on which each
patient attended the Program and shall reflect each such patient's social
security number, admitting diagnosis, and patient identification number. Within
twenty (20) days of Hospital's receipt thereof, and upon Hospital's approval
thereof, which approval shall not be unreasonably withheld, and subject to the
provisions of Section 4.9, Hospital shall make payment to Manager of all sums
owing hereunder.
7.2 Per Capita Fee. Hospital shall be obligated to pay to Manager a
fee of Ninety Five Dollars and Fifty Cents ($95.50) per patient day for each
patient attending the Program.
7.3 Payments Declined. Hospital shall be entitled to a credit of
Ninety Five Dollars and Fifty Cents ($95.50) per patient day for all Patient
Days in excess of five percent (5%) per day for which payment was denied for
clinical reasons.
SECTION 8. CONFIDENTIAL AND PROPRIETARY INFORMATION.
8.1 Acknowledgment. Hospital acknowledges and agrees that
Confidential Information may be disclosed to it in confidence with the
understanding that it constitutes business information developed by Manager.
Hospital further agrees that it shall not use such Confidential Information for
any purpose other than in connection with the Program. Hospital further agrees
not to disclose such Confidential Information to any third party except as
required by law or regulation or in order
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to serve the purposes of the Program or as permitted by written authorization of
Manager.
8.2 License. Manager hereby grants to Hospital for the term of this
Agreement a non-exclusive license to use the registered service marks of Manager
when identifying the Program. These service marks are to remain the exclusive
property of Manager.
8.3 Nondisclosure. Manager agrees not to disclose confidential
information pertaining to the Hospital's business or affairs or the Program or
Program patients except as required by law or regulation or as permitted by
written authorization of the Hospital or the respective Program patients, as the
case may be.
SECTION 9. RECRUITMENT OF EMPLOYEES AND AGENTS.
9.1 Recruitment by Hospital. Hospital acknowledges that it has
expended and will continue to expend substantial time, effort, and money to
train its employees and contracted personnel in the operation of the Program.
The employees and contracted personnel of Manager who will operate the Program
will have access to and possess Confidential Information of Manager. Hospital
agrees that for the earlier of two (2) years after the cessation of the
employment or agency relationship between the Manager and an employee or two (2)
years after termination of this Agreement, it will not knowingly (and it will
not induce any of its affiliates to) employ or solicit the employment of, or in
any way retain the services of , any employee, former employee, or contracted
personnel or former agent of Manager if such individual has been employed by or
retained by Manager in the Program unless Manager gives Hospital express written
consent thereto or unless this Agreement is terminated by Hospital pursuant to
Section 10 of this Agreement.
9.2 Recruitment by Manager. Manager acknowledges that it has
expended and will continue to expend substantial time, effort, and money to
train its employees and contracted personnel in the operation of the Program and
the Hospital. The employees and contracted personnel of Manager who will operate
the Program will have access to and possess Confidential Information of
Hospital. Manager agrees that for the earlier of two (2) years after the
cessation of the employment, independent contractual or agency relationship
between the Hospital and an employee or two (2) years after termination of this
Agreement, it will not knowingly (and it will not induce any of its affiliates
to) employ or solicit the employment of, or in any way retain the services of,
any employee, former employee, or contracted personnel or former agent of
Hospital if such individual has been employed by or retained by Hospital in the
Program unless Hospital gives Manager express written consent thereto or unless
this Agreement is terminated by Manager pursuant to Section 10 of this
Agreement.
SECTION 10. TERMINATION.
10.1 Termination by Manager.
10.1.1 Manager may terminate this Agreement by written notice
to Hospital, if
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Hospital should have a bankruptcy, reorganization, or similar action filed by or
against it, or become insolvent, or sell all or substantially all of its assets.
10.1.2 In the event Hospital fails to comply with the terms of
this Agreement in any material respect, Manager may notify Hospital of such
breach, in writing, and Hospital shall have thirty (30) days to cure such
breach. In the event Hospital fails to cure such breach with said period, the
Agreement may be terminated by Manager.
10.1.3 Manager may terminate this Agreement by written notice
to Hospital in the event Hospital fails to maintain accreditation by the Joint
Commission on the Accreditation of Health Care Organizations, or in the event
Hospital fails to maintain any license or certification granted to it by a
regulatory agency without which the Program would be materially and adversely
affected, unless the responsibility to maintain such license or certification is
a responsibility of Manager pursuant to Section 4.3.
10.1.4 Manager may terminate this Agreement by written notice
to Hospital in the event Hospital fails to maintain commercial general liability
insurance in accordance with the requirements of Section 3.10.
10.2 Termination by Hospital.
10.2.1 Hospital may terminate this Agreement by written notice
to Manager, if Manager should have a bankruptcy, reorganization, or similar
action filed by or against it, or become insolvent, or sell all or substantially
all of its assets.
10.2.2 In the event Manager fails to comply with the terms of
this Agreement in any material respect, Hospital may notify Manager of such
breach, in writing, and Hospital shall have thirty (30) days to cure such
breach. In the event Manager fails to cure such breach with said period, the
Agreement may be terminated by Hospital.
10.2.3 Hospital may terminate this Agreement by written notice
to Manager in the event Hospital fails to maintain accreditation by the Joint
Commission on the Accreditation of Health Care Organizations, or in the event
Hospital fails to maintain any license or certification necessary for the
operation of the Program or the Facility.
10.2.4 Hospital may terminate this Agreement by written notice
to Manager in the event Manager fails to maintain insurance in accordance with
the requirements of Section 4.6.
10.2.5 In the event Hospital terminates this Agreement for any
reason, the Sublease shall be deemed to also have been terminated.
10.3 Termination Without Cause. Either party may terminate this
Agreement without penalty or cause by giving written notice to the other party.
Such termination shall take place upon
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the expiration of one hundred eighty (180) calendar days after the giving of
such written notice.
SECTION 11. COMPLIANCE WITH LAW.
11.1 Applicable Laws. In addition to the obligations of the parties
to comply with applicable federal, state and local laws respecting the use of
the Unit and the conduct of their respective businesses and professions,
Hospital and Manager each acknowledge that they are subject to certain federal
and California laws governing the referral of patients which are in effect or
will become effective during the term of this Agreement. These laws include
prohibitions on:
11.1.1 Payments for referral or to induce the referral of
patients (Social Security Act Section 1128; Cal. Business and Professions Code
Section 650; and Cal. Labor Code Section 3215); and
11.1.2 The referral of patients by a physician for certain
designated health care services to an entity with which a physician (or his/her
immediate family) has a financial relationship (Cal. Labor Code Sections 139.3
and 139.31, applicable to referrals for workers' compensation services; Cal.
Business and Professions Code Sections 650.01 and 650.02, applicable to all
other patient referrals within the State; and Section 1877 of the Social
Security Act, applicable to referrals of Medicare and MediCal patients).
11.2 Acknowledgments. As consideration for each party hereto to enter
into this Agreement, the parties:
11.2.1 Acknowledge that (i) each has had the opportunity to
engage independent counsel of her/its choice for advice as to the requirements
of the anti-referral laws referred to in this Section 11; and (ii) each has had
the opportunity to consult with legal counsel or other experts as each deems
appropriate to assist in the determination by each party that the terms of this
Agreement are commercially reasonable.
11.2.2 Represent to the other that it is the intent that the
terms of this Agreement shall be commercially reasonable.
11.2.3 Represent to the other that it is the intent that
compensation for each of the services which are provided under this Agreement
shall be based on the air market value of such services, including a fair rate
of return.
11.3 No Referral Requirement. Nothing in this Agreement is intended
or shall require any party to violate the California or federal prohibitions on
payments for referrals, and this Agreement shall not be interpreted to:
11.3.1 Require the Medical Director to make referrals to
Hospital, be in a position to make or influence referrals to Hospital, or
otherwise generate business for Hospital.
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11.3.2 Restrict Medical Director from establishing staff
privileges at, referring any service to, or otherwise generating any business
for any other entity of his/her choosing.
11.3.3 To interfere in any way with Medical Director's
professional prerogatives and medical decisions.
11.4 No Gifts to Beneficiaries. As part of its administrative
obligations hereunder, Manager may market the Program to the Hospital's
community. Under no circumstances whatsoever shall Manager offer or make any
gift or payment to any individual as a means of encouraging such person to seek
medical or psychiatric attention from Hospital, Manager, or through the Program,
or from any other provider of health care.
11.5 Audits. Hospital shall have the right, but not the obligation,
to interview patients who receive services through the Program, and to conduct
audits of all types of the Program, for the purpose of determining whether
Manager is in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, as well as Hospital rules, regulations, bylaws,
policies, and procedures and this Agreement.
SECTION 12. MISCELLANEOUS PROVISIONS.
12.1 Compulsory Arbitration. Any controversy, dispute or claim
arising out of or relating to this Agreement, or the breach or alleged breach
thereof, shall be settled by binding arbitration in accordance with the rules of
the American Arbitration Association, and judgment on the award may be entered
in any court having jurisdiction. The provisions of this Section 12.1 shall not
apply with respect to any claim arising out of or relating to bodily injury or
death.
12.2 Attorneys' Fees. If any legal action, including arbitration, is
necessary to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and costs awarded against the other party
in addition to any other relief to which the prevailing party may be entitled.
12.3 Governing Law. The validity of this Agreement and of any of its
terms or provisions, the interpretation of the rights and duties of the parties
hereunder, and the construction of the terms or provisions hereof shall be
governed in accordance with the laws of the State of California.
12.4 Force Majeure. If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations hereunder by force majeure,
said party shall not be liable for said delay or failure. "Force Majeure" shall
mean any cause beyond the reasonable control of a party, including but not
limited to an act of God, act or omission of civil or military authorities,
fire, strike, flood, riot, war, delay of transportation, or inability due to the
aforementioned causes to obtain necessary labor, materials or facilities.
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12.5 Severability. If any part of this Agreement is held to be void
or unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part found void or
unenforceable, unless the severed part contains an essential economic term.
12.6 Waiver. A waiver by either party of a breach or failure to
perform shall not constitute a waiver of any provision hereof or of any other
breach or failure whether or not similar. There shall be no waiver unless in
writing signed by the party against whom the waiver is sought to be enforced.
12.7 Binding Effect. This Agreement shall be binding on the
successors and assigns of the respective parties, provided however that neither
party may assign or otherwise transfer this Agreement or delegate obligations
hereunder without the other's written consent.
12.8 Complete Agreement. Except for the Sublease, this Agreement
constitutes the complete understanding of the parties hereto with respect to the
subject matter hereof, and no other agreement, representation, statement, or
promise relating to the subject matter of this Agreement which is not contained
herein shall be valid or binding. There shall be no amendment hereof unless such
amendment is in writing and is signed by both parties.
12.9 No Agency or Partnership. The relationship between Manager and
Hospital is that of independent contractors and nothing in the Agreement shall
be deemed to create an agency, joint venture, partnership or similar
relationship between the parties hereto. Neither party shall have the right to
bid for the other or enter into any contract or commitment in the name of, or on
behalf of, the other.
12.10 Notices. All notices hereunder shall be in writing, delivered
personally or by U.S. Certified or Registered postal mails, postage prepaid,
return receipt requested, and shall be deemed given when delivered personally or
upon the earlier of actual receipt or five (5) days after deposit in said United
States mail, addressed as below with proper postage affixed, but each party may
change its address by written notice in accordance with this Section.
If to Hospital: Citrus Valley Medical Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: C.O.O./Administrator
If to Manager: OptimumCare Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇▇▇
12.11 Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs, or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation or determination of validity of
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this Agreement or any provision hereof.
12.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
12.13 Assistance in Litigation. Manager and Medical Director shall, at
no charge, provide information and testimony and otherwise assist Hospital in
defending against litigation brought against Hospital, its directors, officers,
shareholders, members or employees based upon a claim of negligence, malpractice
or any other cause of action, arising under this Agreement, except where Manager
and/or Medical Director is a named adverse party.
12.14 Tax Exempt Financing. In the event Hospital intends to seek
tax-exempt financing, Manager agrees to amend this Agreement as may be
reasonably necessary in order for Hospital to obtain such financing. Immediately
upon request by Hospital, Manager shall execute any and all such amendments
reasonably presented by Hospital and shall return promptly said fully executed
original amendments to Hospital.
12.15 Gender and Number. Whenever the context hereof requires, the
gender of all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
12.16 Legal Counsel. Each party understands the advisability of
seeking legal counsel and has exercised its own judgment in this regard.
12.17 Interpretation. No provision of this Agreement shall be
interpreted or construed for or against either party because that party's legal
representatives drafted such provision.
12.18 Facilitation. Each party agrees promptly to perform further acts
and to execute, acknowledge and deliver any provisions of this Agreement or
effect its purposes.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"HOSPITAL":
CITRUS VALLEY MEDICAL CENTER, a California Nonprofit
public benefit corporation
By:
----------------------------------------------------
Its: Administrator
---------------------------------------------------
(Title)
"MANAGER":
OPTIMUMCARE CORPORATION, a Delaware Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Its: CEO
---------------------------------------------------
(Title)
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SCHEDULE 3.3
STAFFING TO BE PROVIDED BY HOSPITAL
FTE CATEGORY CENSUS CENSUS CENSUS CENSUS CENSUS
10-16 17-20 21-25 26-30 31-40
---------------------------------------------------------------------------------------------------------
Office Manager 1 1 1 1 1
Registered Nurse 1 1 1 1 1
Licensed Vocational 0 0 0.5 1 1
Nurse/LPT
Mental Health Worker 1 1 1 1 2
TOTAL 3 3 3.5 4 5
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SCHEDULE 4.2
STAFFING TO BE PROVIDED BY MANAGER
FTE CATEGORY CENSUS CENSUS CENSUS CENSUS CENSUS
10-15 16-20 21-25 26-30 31-40
-------------------------------------------------------------------------------------------------------------------------
Program Director 1 1 1 1 1
Clinical Social Worker 1 1 1 1 1
Master/Social Worker or Marriage, 0 0.5 1 1 1.5
Family, Child Counselor
Activity Therapist 1 1.5 1.5 2 2
Corporate Clinical Director/Corporate 0.5 0.5 0.5 0.5 0.5
UR-Educational Director
Medical Director 0.25 0.25 0.25 0.25 0.25
TOTAL FTE/DAY 3.75 4.75 5.25 5.75 6.25
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