EXHIBIT 10-34
MANAGEMENT AND SERVICES AGREEMENT
This Agreement entered into as of the 23 day of March 1998, by
and between CAT-ECG, LLC, a New York limited liability with an office
located at 2771 Nostrand Avenue, Brooklyn, New York 11210 (hereinafter
referred to as "Manager") and Lynbrook Cardiac Testing, P.C., a New York
professional services corporation with an office located at 1335 Ocean
Parkway, Brooklyn, New York 11230 (hereinafter referred to as "P.C.").
WITNESSETH:
WHEREAS, Manager wishes to provide to P.C. certain medical
equipment, including cardiac testing equipment, as well as ancillary
equipment which are more fully described on Exhibit "A") (collectively, the
"Equipment"); and
WHEREAS, Manager wishes to provide to P.C. the right to use
certain premises, and certain other personal property (including, without
limitation, furniture, fixtures, and office equipment) which are more
fully described on Exhibit "B" (the "Premises"), where the Equipment is
situated (hereinafter the Equipment and the Premises shall sometimes
collectively be referred to as the "Office");
WHEREAS, Manager wishes to furnish certain administrative services
and non-medical personnel on behalf of P.C.; and
WHEREAS, P.C. employs or retains certain physicians who are
qualified and licensed to practice medicine in the specialty of cardiology
and who possess the skill, training, experience and ability to perform the
professional cardiology services customarily provided by physicians using the
Equipment (collectively "Cardiology Services"), and such physicians are
licensed to practice medicine in New York and desire to provide professional
medical services at or on behalf of the Office (the medical practice
conducted by the P.C. at the Office is sometimes referred to herein as the
"Practice"); and
WHEREAS, the P.C. wishes to obtain the use of the Office, personnel
and administrative services from Manager.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants, terms, conditions, and agreements hereafter
provided, the parties mutually agree as follows:
1. TERM. The term of this Agreement shall commence on March 23, 1998
("Commencement Date"), and shall terminate one (1) year after the Commencement
Date (the "Term"), unless sooner terminated as provided herein. The previous
sentence notwithstanding, this Agreement shall automatically renew for
additional one (1) year terms unless one party provides the other party, no less
than three (3) months prior to the termination of the current term of this
Agreement, of its intent not to renew.
2. RESPONSIBILITIES OF MANAGER. The parties hereby agree that, during the
Term, Manager shall provide to P. C. the following licenses and services, and
shall have the general responsibility for management of the non-professional
aspects of the P.C., including but not limited to the following
responsibilities:
(a) License of Equipment. Manager hereby licenses to P.C., on an
exclusive basis, the Equipment described on Exhibit A, together with such
upgrades and/or replacements which the Manager reasonably determines to be
appropriate and/or necessary. All of the Equipment shall be situated at the
Premises. The provisions and obligations relating to the Equipment are subject
and subordinate to the provisions and obligations contained in any financing,
security interest, mortgage, lien or other encumbrance Manager may, in its
reasonable discretion, place upon the Equipment through an unaffiliated third
party.
(b) License of Premises. Manager hereby licenses to P.C., on an
exclusive basis, the Premises, as described on Exhibit B, together with
necessary and appropriate fixtures and furnishings for the conduct by P. C. of
its medical practice through the Office, as reasonably determined by Manager and
P.C. The provisions and obligations contained in this Agreement are subject and
subordinate to the provisions and the obligations contained in the real property
leases) for the Premises, which leases) may be amended or otherwise modified
during the term of this Agreement without the prior written consent of P.C.
Manager reserves the right to rearrange the use of the Premises to utilize the
space in a more efficient manner. Except as otherwise provided herein, all
expenses of maintaining the Office shall be borne by Manager, in accordance with
this Agreement.
(c) LICENSE OF NEW NAME. Manager hereby grants to P.C. the limited use
of the name "CAT-ECG" (the "New Name"). P.C. shall have no right to the use of
the New Name except in connection with health care services furnished at the
Office by P.C. pursuant to this Agreement. The license of the New Name does not
extend to any use or purpose other than as expressly provided herein, and
nothing contained herein shall be construed as a grant or assignment to P.C. of
(a) any proprietary right or other interest in the New Name; or (b) any other
license, right or interest of any nature whatsoever in the name "CAT-ECG".
(d) SERVICING OF EQUIPMENT. Manager shall cause service and
maintenance to be provided for the Equipment by qualified service personnel, and
shall use its best efforts to cause the Equipment to be maintained as is
necessary for the P.C. to render quality cardiac testing. Moreover, Manager
shall provide such hardware and software upgrades as are provided without charge
by the equipment manufacturer/servicing agent. All upgrades or alterations
required by law shall be performed at the expense of Manager or the
manufacturer, or at the option of Manager, the relevant Equipment may be retired
or replaced.
2
(e) UTILITIES. Manager shall provide necessary utilities and other
services, including, without limitation, heat, water, gas, electricity, air
conditioning, and telephone necessary for the purposes of P.C. to conduct the
Practice at the Office.
(f) MEDICAL SUPPLIES. Manager shall provide all medical supplies
reasonably requested by P. C., for the conduct by P.C. of the Practice at the
Office.
(g) MARKETING. Manager, or its designee, shall with the assistance of
the P, C., develop, design and implement a marketing program to promote the
Practice.
(h) LICENSES AND PERMITS. Manager shall assist P.C. in maintaining all
licenses and permits required for the operation of the Practice, and the
securing and maintenance of its contracts with third party payors and other
similar governmental and non-governmental agencies and intermediaries.
(i) BUDGET AND SUPPORTING INFORMATION. Manager, with the assistance of
P.C., shall prepare for P.C. an annual budget for the Practice for each fiscal
year (the "Budget"), which shall include, but not be limited to projected
salaries for all physicians and technicians employed by P.C. and projected
overhead and other expenses for the P.C. at the Office. Manager shall further
develop and provide supporting information relating to the provision of medical
services at the Office (such as non-Physician staffing schedules and
requirements, census statistics, supply requirements and related information) to
P.C. as is reasonably necessary to prepare operating and capital budgets, and
cash flow projections for the Practice. The initial budget for the Term is
attached hereto and incorporated herein as Exhibit "D" (the "Budget"). Neither
party may change or modify the Budget without the prior written consent of the
other party.
(j) MANAGEMENT MEETINGS. Manager shall schedule periodic management
meetings, not less than once each quarter, to be attended by representatives of
Manager and P.C. Discussions at these joint meetings shall include, but not be
limited to a review of the Budget and proposed modifications or changes, if any,
to the Budget.
(k) INSPECTION OF RECORDS. Upon request and reasonable notice by P.C.,
Manager shall make available for inspection and copying by P.C. or its
designee(s), any books, records and financial data maintained by Manager which
relate to the Practice and compensation due to Manager hereunder.
(l) NON-MEDICAL AND CLERICAL PERSONNEL. Manager shall furnish to P.C.,
all necessary and appropriate clerical and non-medical personnel required to
operate the Office and Practice. The number and type of such personnel required
shall be determined by Manager, upon consultation with P.C. Such personnel shall
provide services to the Practice which include, but shall not be limited to,
receptionist services, transcription of dictated interpretations of cardiac
testing, administration, bookkeeping, scheduling, maintenance of managed care
contracts, third party payor enrollments and creating and maintaining patient
medical files under the supervision of P.C., maintaining the confidentiality of
such files in accordance with all applicable rules, laws and regulations. All
such
3
clerical staff providing services hereunder shall be hired by and be employees
or agents of Manager and shall not be deemed employees or agents of P.C. Manager
shall determine and pay the salaries and fringe benefits of all such clerical
personnel.
3. RESPONSIBILITIES OF P.C. The parties agree that, during the Term, P.C.
shall provide the following services and have the following responsibilities
pursuant to this Agreement:
(a) USE OF EQUIPMENT. The P.C. shall use the Equipment only in
connection with its Practice, and shall have no right to alter, repair, augment
or remove this Equipment from the Premises without the prior written consent of
Manager.
(b) ALTERATIONS OF PREMISES. P.C. shall not make or permit any changes
or alterations to the Premises without the prior written consent of Manager,
except for alterations or upgrades of the Equipment required by the manufacturer
for public safety or for compliance with the published specifications of the
manufacturer for such Equipment to the extent such alterations or upgrades are
not made by Manager. All accessories, replacements, parts and substitutions for,
or which are added or attached to, the Equipment shall become the property of
Manager and not property of P.C. and be within the definition of Equipment, and
subject to this Agreement.
(c) USE OF THE NEW NAME. P.C. agrees to change the name of the P.C. to
the New Name. At all times while P.C. conducts the Practice at the Office, P.C.
shall operate and conduct its business under the New Name. P. C. recognizes that
Manager owns and has exclusive title to the New Name, and P.C. shall not claim
adversely to Manager any right, title or interest in or to the New Name. P.C.
shall not at any time reproduce, use or exploit the New Name or any name,
incorporating the New Name other than in connection with cardiac testing and
medical services rendered at the Office. P.C. hereby expressly waives all claims
to any rights in the New Name beyond the limited license granted in Section 2(c)
hereof.
(d) PHYSICIANS. Subject to the terms hereof, P.C. shall be responsible
for hiring, supervising, evaluating and terminating all physicians for the
Practice (each, a "Physician"), provided that P.C. at all times employ Warren
Wexelman, M.D. ("Wexelman") as a Physician providing Cardiology Services at the
Office pursuant to the Employment Agreement attached hereto and incorporated
herein as Exhibit "E". The P.C. agrees that it will not amend the Employment
Agreement without the prior written consent of the Manager unless required to do
so in order to comply with applicable federal and/or state law. Nothing herein
shall obligate P.C. to hire any particular other individuals as Physicians. The
Physicians shall provide Cardiology Services at the Office, including, but not
limited to supervising of all professional medical, technical and patient care
components of services rendered at the Office, including supervising of
administrative personnel with respect to patient care services and providing
directions to Manager to make improvements or changes in Equipment or personnel
if such changes are required for P.C. to meet the professional standards
reasonably required to render the Cardiology Services at the Office.
4
(i) P.C. shall ensure that qualified Physicians shall be
available, and shall be on-site as required by law, during the business hours of
operation of the Office, which generally are between the hours of 7:00 AM and
7:00 PM, Monday through Friday, except for any weekday that is a holiday for
officially observed in the State of New York ("Normal Business Hours").
Notwithstanding the foregoing, upon mutual agreement of the parties, based upon
demand for the services of the Office, P.C. shall provide Cardiology Services
beyond Normal Business Hours and consent by P.C. to provision of such additional
Cardiology Services shall not be unreasonably withheld or delayed by P.C.; and
(ii) To be qualified to render services at the Office, each
Physician shall at all times during the term of this Agreement: (a) possess a
valid and unlimited license to practice medicine in New York; (b) (with the
exception of Wexelman) be board certified in cardiology; (c) never have lost a
medical license or otherwise have been restricted from the practice of medicine
for clinical or other patient care reasons; (d) never have been excluded from
participation in Medicare, Medicaid or the Maternal and Child Health Services
Program (Title 11) or any program funded under the Block Grants to States for
Social Services Program (Title XX); and (e) never have been convicted of (A) any
offense related to the delivery of any item or service under the Medicare or
Medicaid programs; (B) a criminal offense related to neglect or abuse of
patients in connection with the delivery of a health care item or service; (C)
obstructing an investigation of any crime referred to in subparagraphs (e)(A)
through (e)(B) above; or (D) unlawful manufacture, distribution, prescription or
dispensing of a controlled substance.
(e) MEDICAL DIRECTOR. P.C. shall be responsible for appointing a duly
qualified Physician to serve as medical director of the Office ("Medical
Director") who shall serve as liaison to interface with a representative
appointed by Manager ("Manager Representative"). The initial Medical Director
shall be Wexelman, who shall remain Medical Director until and unless an
alternative Physician is agreed upon by P.C. and Manager, and also provide other
physician services to the P.C., as set forth in Section 3(d) hereof and Exhibit
"E". The Medical Director shall be available to the P. C. for administrative
matters with respect to provision of services by P.C., as reasonably necessary
and as determined jointly by the Medical Director and the Manager
Representative. The Medical Director shall be responsible for supervising and
directing all Physicians and other licensed professionals at the Office, and
shall oversee the clinical functions of the Office, including the services of
physician and non-physician personnel in the scope of their duties on behalf of
the Practice.
(f) MONITOR QUALITY OF CARE. P.C. shall be responsible for monitoring
the quality of medical care furnished by Physicians to assure that such care
meets currently accepted standards of medical competence, and is rendered in
accordance with currently approved methods and practices in the medical
profession within the community where such services are provided.
(g) ESTABLISH PHYSICIAN SCHEDULES. P. C. shall, in consultation with
Manager, establish schedules for all Physicians. Without limiting the generality
of the foregoing, P.C. shall assure that medical services are promptly available
to patients.
5
(h) TECHNICIANS. P.C. shall employ its own cardiology technicians to
provide such services to the Practice as dictated by the patient needs of the
Practice. Throughout the Term, all such technicians shall, if required by law,
be duly licensed and registered and in good standing to engage in their
specialty in the State of New York.
(i) ASSET AGREEMENT. P.C, shall comply with all applicable terms and
conditions and give all applicable representations, covenants and warranties as
set forth in that asset sale agreement between the Manager and Dr. Sterling
Jonas, CAT-ECG Medical Services, P.C., and CAT-ECG, Inc., dated as of December
16, 1997 (the "Asset Agreement") including, but not limited to, the obligations
to enter into a Service Agreement and restrictive Covenant with Dr. Sterling
Jonas in the forms attached to the Asset Agreement. A copy of the Asset
Agreement, with attachments, is annexed to this Agreement as Schedule _, and as
applicable, incorporated herein.
(j) MARKETING. P.C. shall assist Manager, in the business development
and marketing conducted by Manager, pursuant to Section 2(g) hereof, on behalf
of the Office and the Practice, including, without limitation, attendance, upon
reasonable notice, at marketing sessions for physicians and other potential
referral sources and assistance in development of marketing strategies.
(k) FINANCIAL INFORMATION. P.C. shall provide all financial
information reasonably requested by banks providing financing in connection with
services provided under this Agreement or a landlord providing space on behalf
of the Manager in connection with space licensed under this Agreement.
(l) BUDGET AND SUPPORTING INFORMATION. P.C., pursuant to Section 2(i)
hereof, shall cooperate with Manager in the preparation by Manager of the
Budget. P.C. shall not change the Budget without consent of Manager.
(m) RECORDS OF THE P.C. P.C. shall maintain an up-to-date personnel
file on the Premises with documentation of the following credentials of the
respective medical personnel providing services at such Office, and this
information will be available to Manager for inspection upon its request: (i)
medical licenses; (u) medical board certifications; (iii) malpractice insurance;
(iv) DEA certification; and (v) no fault/compensation rating.
4. COMPENSATION TO MANAGER.
(a) FEES. P.C. and Manager hereby acknowledge that Manager shall incur
substantial costs and expenses in providing the Equipment, Premises, New Name
and services, and that such costs and expenses may vary during the term of this
Agreement. In consideration therefor, P.C. hereby agrees to pay to Manager
annual fees (the "Fee"), in accordance with the schedule set forth on Exhibit C
attached hereto, which shall include all applicable taxes, if any, for the use
of the Office. Such portion of the Fee which represents taxes, if any, shall be
submitted by Manager, on behalf of P.C., to the appropriate taxing authorities.
6
(b) SCHEDULE FOR PAYMENT OF FEES. The Fees shall be due in equal
installments, as calculated by Manager and an invoice shall be provided to P.C.
twice every calendar month based on the installment due for the preceding
semi-monthly period. The Fees shall be due and payable thirty (30) days after
the invoice is presented to P.C. provided however, that the initial payment
shall be due and payable one hundred twenty (120) days after the effective date
of this Agreement or sooner if funds are available. Notwithstanding the
foregoing, if funds are not available in the P.C. Account (as defined
hereinafter) after application of Section 4(e) hereof, then no Fees shall be due
hereunder and no interest shall accrue on any unpaid Fees. The deferral of the
payment of Fees as contemplated by this Section 4(b) and Section 4(e) hereof
shall not be cause for termination as contemplated by Section 8 hereof or the
lock box as contemplated by Section 4(c) hereof, unless the failure by P.C. to
pay timely the Fees after application of Section 4(e) hereof is caused by the
negligence or wilful misconduct of P.C.
(c) FAILURE TO PAY FEES. If P.C. shall fail to make payments of Fees
hereunder in accordance with the terms of this Agreement, and provided funds are
available after application of Section 4(e) and provided further that payment is
not deferred as contemplated by Section 4(b) hereof, any such Fees required to
be paid under this Section 4 if not paid by P.C. to Manager when due, in
derogation of this Agreement by P.C., shall accrue interest beginning ten (10)
days after its due date at a rate equal to one (1%) percent per month or the
highest interest rate permitted by law, whichever is less. Further, after notice
by Manager to P.C. of non-payment and the failure by P.C. to cure such
non-payment within the applicable cure period as set forth in Section 8(b)(i)
hereof, then upon further written notice by Manager to P.C., a lock box shall be
established at a FDIC insured bank located in the County of Nassau and,
thereafter, all monies received by P.C. for professional and other services
furnished by P.C. at the Office shall be directed to be and shall be deposited
to such lock box (the "Lock Box Election"). Funds deposited in the lock box
shall be distributed in accordance with Section 4(e) hereof, to pay Fees as well
as to pay all of other expenses of P.C. including, without limitation, salaries
of Physicians. The disbursement of funds shall be made upon the instructions of
a certified public accountant mutually agreed upon by the parties or, if the
parties cannot agree upon the selection of an accountant, an accountant shall be
selected by an arbitrator who shall be selected and act in accordance with the
Rules of Procedure for Arbitration of the NHLA Alternative Dispute Resolution
Service. The cost of the certified public accountant or the arbitration fees, as
the case may be, shall be borne equally by Manager and P.C. No other rights of
Manager hereunder shall be waived by making a Lock Box Election.
(d) NO REDUCTION IN FEES. P.C. shall not be entitled to any abatement
of any Fees payable under this Agreement to Manager or to any counterclaim,
recoupment, reduction or offset against such amount, on account of any present
or fixture claim of P.C. against Manager, the manufacturer or supplier of the
Equipment or any other person or entity. Except as otherwise expressly provided
herein, the amounts payable under this Agreement to Manager shall not be
affected by reason of any defect in or damage to or loss or destruction of all
or part of the Equipment from any cause whatsoever, or by interference with use
by P.C. of the Equipment by any persons, or for any other
7
reason whatsoever. The amounts payable to Manager hereunder shall be paid
when due and shall be payable in all events, and neither party shall
interfere with such payments.
(e) PRIORITY OF PAYMENT. In the event that in any given month
sufficient cash is not available to pay all of the obligations of P.C., Manager
and P.C. hereby agree that P.C. shall be allowed to pay its obligations, in
accordance with the Budget, in the following order of priority: (i) to pay the
salaries of the cardiology technicians; (ii) to pay for the services of the
Physicians providing services to the P.C. hereunder; (iii) to issue patient and
third party payor refunds; (iv) to repay the loans of the P.C. due to Manager
pursuant to the Letter Agreement between Manager and P.C. (the "Letter
Agreement") and Promissory Note in favor of Manager (the "Note"), each of which
are dated as of 1998; (v) to repay the Line of Credit (as defined below); and
(vi) to pay the Fees due to Manager hereunder, including any Fees deferred under
this Paragraph 4.
(f) Manager agrees to extend to P.C. a line of credit (the "Line of
Credit) during the term of this Agreement, said Line of Credit to be extended
only after P.C. first expends in full its other available revenue, and shall be
limited to an amount, based on the Budget, not to exceed the funds necessary to
enable P. C, to pay the salaries of the Technicians and the Physicians during
this given month. The Line of Credit shall be repaid to Manager commencing the
month succeeding the month, provided sufficient funds are available as
determined in accordance with this Paragraph and Paragraph 4(e) above, in which
the funds under the Line of Credit were advanced pursuant to the terms and
conditions set forth in Exhibit F attached to this Agreement, the Letter
Agreement and the Security Agreement between the parties, each dated as of March
23 1998. If sufficient funds are not available in the next succeeding month,
then subject to this Paragraph 4, payment shall be deferred until such funds are
available.
(g) RENEGOTIATION. The parties agree that upon each anniversary of the
Commencement Date, the parties shall meet to consider a prospective adjustment
in the Fees. In the event that the parties cannot agree on an adjustment to the
Fees, then the Fees as set forth on Exhibit C attached hereto and incorporated
herein shall remain in full force and effect until and unless the parties agree
on such an adjustment. Any adjustment to the Fees shall be set forth in writing
signed by both parties. The parties agree that in considering changes to the
Fees and other charges, if any, the following criteria (with the first criteria
listed being given the greatest weight) will be given consideration by the
parties:
(i) the services to be provided by the respective parties to
ensure the success of the Office;
(ii) the capital investment and risk taken by the respective
parties in opening the Office and the Practice;
(iii) the capital and operating costs incurred by the
respective parties in operating the Office and the Practice; and
8
(iv) appropriate professional cardiological interpretation
fees paid in the county in which the Office is situated.
5. BILLING AND COLLECTIONS.
(a) BILLING AGENT. Manager (or its designee) ("Billing Agent") shall
furnish billing and collection services on behalf of P.C. Billing Agent shall
bill and collect on a timely basis, in the name of P.C., all professional and
technical fees on a global basis for services rendered during the Term by P.C.
at the Premises ("Professional Fees"), in accordance with the terms of this
Section 5.
(b) BANK ACCOUNTS.
(i) P.C. ACCOUNT. Upon collection by Manager of funds for
medical services provided by P.C. at the Premises, and in accordance with the
terms of Section 5(c) hereof, all funds shall be deposited in a bank account,
which account has been opened and at all times shall remain, in P.C.'s name and
control (the "P.C, Account"). In the event that P.C. directly receives any funds
as payment for services rendered by P.C. at the Premises, such funds shall also
be deposited in the P.C. Account. The P.C. Account shall initially be at Fleet
Bank or, at the joint selection of the parties hereto, at such other FDIC
insured bank with offices in the State of New York. The signature of one
designee of Manager and one designee of P.C. shall be on file with the bank
where the P.C. Account is C maintained, and the signature of either may be used
to make withdrawals or write checks on the P. C. Account. Manager and P.C. are
authorized to draft checks and make withdrawals on the P.C. Account only to the
extent such checks are issued or withdrawals are made in accordance with the
provisions of Sections 5(b)(ii), and Section 5(c)(v) and only for the purposes
set forth herein, but it is the intention of the parties that Manager shall
undertake the disbursement of funds in compliance with Section 5(c)(v) hereof.
The parties further agree that any single check in excess of Five Hundred
Dollars ($500) shall require the signature of an authorized representative from
each of the Manager and the P.C.
(ii) SECOND ACCOUNT. To streamline the implementation and
review of the payment of Fees under Section 4(a) hereof and the administration
of the priority of payment provisions of Section 4(d) hereof, P.C. agrees that
all sums to be retained by P.C. for all compensation and benefits of physician
owners and employees or independent contractor physicians shall be withdrawn
from the P.C. Account and will be placed in a separate bank account belonging to
P.C. or otherwise ("Second Account"). The Second Account shall be used for
further payments and disbursements by P.C.
(iii) BANK STATEMENTS. Copies of all banking statements for
the P.C. Account will be sent directly to Manager at the Office, and a copy
shall be maintained at the Office.
(c) BILLING AND COLLECTION AUTHORITY. In connection with billing and
collection by Billing Agent on behalf of P.C., P.C. hereby grants Billing Agent
the following limited authority and Manager accepts the obligation to cause
Billing Agent to:
9
(i) To bill, in the name of P.C. and on its behalf, the
patients of P.C. who have received services at the Premises.
(ii) To collect in the name of P.C, and on its behalf, and
deposit in the P.C. Account, receivables generated by direct patient billings.
(iii) To bill and collect, in the name of P.C. and on its
behalf, all claims for reimbursement or indemnification from Blue Cross/Blue
Shield, commercial insurance companies, Medicare, Medicaid, and all other third
party payors, to the extent such reimbursement is available during the Term, and
to deposit same in the P. C. Account. All patients and third party payors shall
be required to direct all payments to P.C. at the Premises.
(iv) To take possession of, where applicable to endorse in the
name of P.C., and deposit in the P.C. Account, any notes, checks, money orders,
cash, insurance payments, and any other instruments received as fees from the
Practice and collected by Billing Agent.
(v) To disburse funds to pay direct expenses of P. C. in
accordance with Sections 4(f) and 5(b) hereof, including, without limitation,
Fees due to Manager.
(d) THIRD PARTY REFUNDS. Billing Agent and Manager shall have the
right to investigate and appeal on behalf of P.C. any third party claims made by
any governmental agency, insurance company or other entity ("Third Party Payor")
for refunds of reimbursement paid to the P.C. for services rendered at the
Office based upon an audit or other review of reimbursement paid to P.C.
(e) COOPERATION BY P.C. P.C. agrees to cooperate with the Manager to
effectuate billing by Manager for such items and services, including, but not
limited to, the completion of necessary forms and documents. P.C. shall exercise
such supervision over billing as required of physician providers under the
Federal Medicare and Medicaid programs or by other third party payors, or under
this Agreement, for those items which are not delegable to outside billing and
practice management companies, such as Manager. The parties acknowledge that the
cost of engaging an outside collection firm or attorney, if necessary, shall be
payable out of the net collections of P. C.
(f) BILLING AND COLLECTION RECORDS. All billing information on
patients of P.C. shall be made available to P.C. and its advisors. During the
Term, and following termination of this Agreement, Manager agrees to provide
P.C. access to all books and records in connection with services provided by
P.C., including without limitation, billing and collection records, and P.C,
shall also have access to billing and collection personnel. Manager shall permit
P.C. to copy any of such books and records, at the cost and expense of P.C., if
P.C. so requires, upon seven (7) days' notice by P.C. to Manager. During the
Term and following termination of this Agreement, Manager, and upon seven (7)
days' notice by P.C., will download computer records, in a form reasonably
requested by P.C., regarding billing and collection and will provide same to
P.C. If Manager cannot reasonably
10
comply with any of requests by P.C. for records pursuant to this Section 5(f)
within seven (7) days, then Manager shall have an additional seven (7) days to
comply with requests of P.C.
(g) BANK ACCOUNTS. Copies of all banking statements will be sent
directly to P.C. and Manager at the Premises and shall be maintained at the
Office.
6. REPRESENTATIONS AND COVENANTS.
(a) REPRESENTATIONS AND COVENANTS OF P.C. P.C. hereby makes the
following representations, warranties and covenants to Manager, each of which is
material and is being relied upon by Manager, and each of which shall be true as
of the date hereof to the best of its knowledge:
(i) CORPORATE STATUS OF P.C. P.C. is, and shall continue to be
throughout the Term, a professional corporation duly organized and validly
existing and authorized to engage in the practice of medicine under the laws of
the State of New York.
(ii) AUTHORITY AND DUE EXECUTION. P.C. has full power and
authority to execute and deliver this Agreement and all related documents and to
carry out the transactions contemplated herein; which actions will not result in
a material default under or a material breach or violation of (a) its Articles
of Incorporation or Bylaws; (b) any law, regulation, court order, injunction or
decree of any court, administrative agency or governmental body; or (c) any
mortgage, note, bond, indenture, contract, agreement, lease, license or permit
or other instrument or obligation to which it is a party or by which it or any
of its assets may be bound or affected. This Agreement constitutes a valid and
binding obligation on P.C. enforceable in accordance with its terms, except to
the extent that its enforceability is limited by applicable bankruptcy,
reorganization, insolvency or other laws of general application or equitable
principles relating to or affecting the enforcement of creditors lights.
(iii) INFORMATION FROM THE P.C. Any and all factual
information furnished or to be furnished by P.C. to Manager, including, but not
limited to, any reports, shall be true and accurate in all material respects as
of the date of which such information is furnished.
(iv) GOVERNMENT PROGRAMS. P. C., to the best of its knowledge,
has never been a excluded from participation as a provider in Medicare, Medicaid
or the Maternal and Child Health Services Program (Title V) or any program
funded under the Block Grants to States for Social Services Program (Title XX),
(v) No Encumbrances. P.C. acknowledges and agrees that title
to the Equipment shall remain with Manager, subject to the interests of the
Equipment lessor and any other party to whom Manager grants a security interest
in the Equipment. P. C. agrees throughout the Term, it will take no action
that it knows would have the likely effect of encumbering the title or interest
of Manager in the Equipment.
11
(b) REPRESENTATIONS AND COVENANTS OF MANAGER. Manager hereby makes the
following representations, warranties, and covenants to P.C., each of which is
material and is being relied upon by P.C., and each of which shall be true as of
the date hereof to the best of its knowledge:
(i) ORGANIZATION STATUS OF MANAGER. Manager is and shall
continue to be throughout the Term, a limited liability company duly organized
and validly existing under the laws of the State of New York.
(ii) AUTHORITY AND DUE EXECUTION. Manager has full power and
authority to execute and deliver this Agreement and all related documents and to
carry out the transactions contemplated herein; which actions will not result in
a material default under or a material breach or violation of (a) its Operating
Agreement or Articles of Organization; (b) any law, regulation, court order,
injunction or decree of any court, administrative agency or governmental body;
or (c) any mortgage, note, bond, indenture, contract, agreement, lease, license
or permit or other instrument or obligation to which it is a party or by which
it or any of its assets may be bound or affected. This Agreement constitutes a
valid and binding obligation on Manager enforceable in accordance with its
terms, except to the extent that its enforceability is limited by applicable
bankruptcy, reorganization, insolvency or other laws of general application or
equitable principles relating to or affecting the enforcement of creditors
rights.
(iii) INFORMATION FROM THE MANAGER. Any and all factual
information furnished or to be furnished by Manager to P.C., including, but not
limited to, any reports, shall be true and accurate in all material respects as
of the date on which such information is furnished.
(iv) NO UNREASONABLE INTERFERENCE. Manager shall not
unreasonably interfere with the use by P.C. of the Office, the operation of the
Practice or the ability of the Practice to render Cardiology Services consistent
with the terms hereof.
(v) NO MATERIAL DEFAULT. Manager represents and warrants that
it is not in material default of any of its obligations under the Premises or
Equipment leases, nor will this transaction result in a material default
thereunder.
7. COMPLIANCE WITH REGULATION. P.C. and Manager in the performance of
their respective obligations hereunder shall comply with all applicable
regulations and laws, including relevant federal and state health care fraud and
abuse laws, to the extent such compliance is their responsibility under such
laws and this Agreement, and use their best efforts to ensure that the conduct
of the professional Practice and the operation of the Office (including the
operation of the Equipment), to the extent such conduct is the responsibility of
each hereunder, is in compliance with the rules of any accrediting or regulatory
body, agency or authority having jurisdiction over the Office.
12
8. TERMINATION.
(a) BY P.C. This Agreement may be terminated by the P.C. at any time
upon written notice to Manager of such termination after the occurrence of any
one of the following events:
(i) Material breach of this Agreement by Manager with such
breach continuing for thirty (30) days after written notice to Manager from PC.
stating the specific default or breach or, in the event such breach is not
susceptible of cure within such thirty (30) day period, within a period not to
exceed ninety (90) days provided that the party in breach commences to cure the
breach within thirty (30) days after written notice and diligently continues to
cure such breach thereafter, provided further that if Manager again commits the
same breach within the applicable cure period, P.C. need not give additional
notice prior to termination;
(ii) Application by Manager for or consent to the appointment
of a receiver, trustee or liquidator of Manager or all or a substantial part of
its assets, filing of a voluntary petition in bankruptcy, or admission in
writing its inability to pay its debts as they come due, making a general
assignment for the benefit of creditors or taking advantage of any insolvency
law, or the entering of any order, judgment or decree by any court of competent
jurisdiction, on the application of creditor, adjudicating the Manager as
bankrupt or insolvent or approving of a petition seeking reorganization of
Manager or appointment of a trust or a receiver, trustee, or liquidator of
Manager or all or a substantial part of the assets of Manager;
(iii) Final action by a state authority or other body having
legal jurisdiction over the Manager resulting in the inability of Manager to
lawfully conduct its business as Manager hereunder; or
(iv) Sixty (60) days after delivery of notice by P.C. to
Manager of termination without cause.
(b) BY MANAGER. This Agreement may be terminated by Manager at any
time upon written notice to P.C. of such termination after the occurrence of any
one of the following events:
(i) Material breach of this Agreement by P. C., with such
breach continuing for thirty (30) days after written notice to P.C. stating the
specific default or breach or, in the event such breach is not susceptible of
cure within such thirty (30) day period, within a period not to exceed ninety
(90) days provided that the party in breach commences to cure the breach within
thirty (30) days after written notice and diligently continues to cure such
breach thereafter, provided further that if P.C. again commits the same breach
within the applicable cure period, Manager need not give additional notice prior
to termination;
(ii) Termination of the lease of the Premises or other lease
(or other financing) of the Equipment by its lessor for any reason and clear
title to such asset is not acquired;
13
(iii) Final action by a state licensing authority or other
body having jurisdiction resulting in the termination of P.C. as a professional
entity, or the suspension of its charter in the State of New York;
(iv) Loss of license by Wexelman to practice medicine in the
State of New York, or any other material failure of Wexelman to meet the
requirements of a Physician set forth herein;
(v) Conviction of P.C. or any Physician of any felony;
provided that, in the event this section is violated with respect to any
Physician other than Wexelman, P.C. may, within five (5) days of receipt of
notification from Manager that it intends to terminate pursuant to this
subsection, terminate its relationship with such Physician(s) and, if it does
so, then this Agreement may not be terminated by Manager;
(vi) Transfer by Wexelman of any portion of his ownership
interest in the P.C.;
(vii) The occurrence of an "Event of Default" under the Letter
Agreement (as such term is defined in such Letter Agreement);
(viii) The termination for any reason of the Employment
Agreement between Wexelman and P.C. dated as of March 23, 1998 including, but
not limited to the death or Disability of Wexelman;
(ix) Application by P.C. for or consent to the appointment of
a receiver, trustee or liquidator of P.C. or all or a substantial part of its
assets, filing of a voluntary petition in bankruptcy, or admission in writing
its inability to pay its debts as they come due, making a general assignment for
the benefit of creditors or taking advantage of any insolvency law, or the
entering of any order, judgment or decree by any court of competent
jurisdiction, on the application of creditor, adjudicating P.C. as bankrupt or
insolvent or approving of a petition seeking reorganization of Manager or
appointment of a trust or a receiver, trustee, or liquidator of P.C. or all or
a substantial part of the assets of P.C.; or
(x) Sixty (60) days after delivery of notice by Manager to
P.C. of termination without cause.
(c) CONSEQUENCES OF TERMINATION FOR ANY REASON. Upon the termination
of this Agreement, for any reason, including by expiration, without renewal of
the Term:
(i) The license to use the New Name shall terminate, and P.C.
shall cease any and all use of the New Name and shall have no right to sell,
exploit or in any way deal with any advertising, promotional material or third
party payor contracts utilizing the New Name. At the time of
14
termination, P.C, shall take immediately such action with the Secretary of State
of the State of New York and with third party payors as is necessary to change
the name under which P.C. is conducting business so as not to include the New
Name.
(ii) Manager or its designee, shall be entitled to the
continued use of any telephone numbers obtained for the Office by Manager, or
P.C. during the course of this Agreement without restriction. The P.C. agrees
that upon the termination of this Agreement, it shall have no rights whatsoever
in any telephone numbers obtained for the Office.
(iii) All of the obligations of Manager pursuant to Section 5
hereof shall continue to the extent medical services have been rendered at the
Office by P.C. and have not yet been billed prior to the effective date of
termination and all of the obligations of P.C. under Section 4 shall continue
and P.C. shall remain liable to pay to Manager all such amounts owed to Manager
which have accrued (whether or not invoiced) prior to the effective date of such
termination.
(iv) P.C., at its own expense, shall relinquish control of and
vacate the Premises, and remove all of its personal property, together with all
liens, encumbrances and rights of others created by or suffered to exist by the
actions or inactions of the P.C. Manager shall take possession of the Office and
if the P.C. fails to vacate within seven (7) days of termination, remove the
P.C. with its effects; and dispose of, hold, use, license, or lease the Office,
or any part thereof, as Manager in its sole discretion may determine.
(d) CONSEQUENCES OF TERMINATION PURSUANT TO EXPIRATION OF THE TERM AND
SUBSECTIONS 8(A)(IV) OR 8(B)(I)-(X). In the event that this Agreement is
terminated pursuant to any of Subsections 8(a)(iv) or under 8(b)(i)-(x) or the
Term expires without renewal, or in the event that Manager has the right to
terminate pursuant to Section 8(b), whether or not Manager exercises such right,
then (i) upon notice to P.C. by Manager of its designee who is permitted to own
and operate a medical practice (the "Transferee"), then Wexelman and any other
shareholder of P.C., if any, shall take immediately all necessary and
appropriate steps to assign all of their rights in P.C. (a "Transfer") to such
Transferee; and (ii) the purchase price for such Stock to be paid to P.C. by or
on behalf of the Transferee shall be the outstanding principle of the Loan plus
all accrued and unpaid interest thereon (the "Purchase Price") and shall be
immediately used to repay the Note; and (iii) sums outstanding under the Line of
Credit shall immediately become due and payable in full. In the event that
Manager has the right to terminate pursuant to Section 8(b), but chooses not to
terminate, but wishes to exercise its rights pursuant to this Section 8(d), then
Manager shall provide written notice to P.C., in accordance with the
requirements for termination set forth in Section 8(b) indicating that it
intends to exercise its rights under this Section 8(d), but not pursuant to
Section 8(b). Wexelman and any other shareholder of P.C., if any, shall have no
right in the use of their professional services entity after a Transfer has been
consummated. In the event of a Transfer:
(i) Manager shall, and shall cause the Transferee to, jointly
and severally defend and hold harmless the P.C. against any and all losses,
liabilities, claims, actions, damages and expenses,
15
including without limitation, reasonable attorneys' fees and disbursements
(collectively, "Losses"), arising out of the operation of the Office after the
date of such Transfer so long as such Losses are not the result of the
negligence, willful misconduct, professional malpractice of the P.C, or the
breach by the P.C. of this Agreement.
(ii) P.C. shall defend and hold harmless Manager and
Transferee against any and all Losses arising out of the operation of the Office
on or before the date of such Transfer so long as such Losses are the result of
or arising out of the negligence, acts, or omissions to act of the P.C., or the
professional malpractice of the P.C.
(e) CONSEQUENCES OF TERMINATION DUE TO THE DEATH OR DISABILITY OF
WEXELMAN. In the event that this Agreement is terminated due to the death or
disability of Wexelman, then the Manager shall have the right to cause the
Estate or representative of Wexelman, as the case may be, to sell all of the
rights of Wexelman in the P.C. to the Transferee of Manager, in accordance with
the terms set forth above in Section 8(b), for a price equal to the outstanding
principle of the Loan plus all accrued and unpaid interest thereon plus sums
outstanding under the Line of Credit. Immediately upon the death or disability
of Wexelman and prior to the consummation of a Transfer pursuant to this
Section 8(e) (the "Interim Period"), Manager shall have the right to designate
an individual who is permitted to own and operate a medical practice (the
"Interim Designee") for the purposes of operating the P.C. during the Interim
Period, and the Estate or representative of Wexelman, as the case may be, shall
be obligated to accept the Interim Designee.
9. NON-COMPETITION AND NON-SOLICITATION COVENANT.
(a) NONCOMPETITION. The P.C. covenants and agrees that, during the
term of this Agreement and for a period of two (2) years following the
termination of this Agreement it shall not (i) directly or indirectly, own,
manage, operate, advise (whether or not for compensation), control, invest or
acquire an interest in any business or medical practice or otherwise engage or
participate in, whether as a proprietor, partner, stockholder, director,
officer, employee, joint venturer, lender, advisor, consultant, agent,
investor or other participant, any business or medical practice which,
engages in the practice of performing diagnostic testing in any manner within
twelve (12) miles of any office of the Practice in which the P.C. the
Services during the term of this Employment Agreement provided that the P.C.
may perform such diagnostic testing in connection with, and for patients of,
its private cardiology practice; and (ii) it shall not, directly or
indirectly, employ, contract, associate or engage in any business
relationship with, or participate in, any entity engaging or associating with
any personnel under contract with or employed by the Manager during the
period of this Agreement and for a period of two (2) years after the later of
the termination of his/her contract or this Agreement.
(b) NON-SOLICITATION. In addition to and separable from the provisions
contained above, P.C, shall, and it shall cause its shareholders to execute an
agreement which provides that, for a period of two (2) years following the date
on which such shareholder ceases providing services to the P.C. at
16
the Office, such physician shall not knowingly, either directly or indirectly,
for themselves or for any other person, or company call upon, solicit, or
induce, or attempt to solicit or induce in any manner whatsoever any past or
present patients of P.C. at the Office, or (ii) take any action whatsoever which
is likely to disturb or interfere or in fact disturbs or interferes with the
existing contractual or other relationship which P.C. or Manager has with any
patient, employee, hospital, managed care group or entity, referral source or
other third party. The P.C. and the Practice recognize that this provision is
subject to the right of a Patient to choose his or her own physician and that it
will not be deemed to be a violation of this provision if, without any act of
solicitation on the part of the P.C., a Patient selects the P.C. to provide his
or her medical services.
(c) REASONABLE RESTRICTIONS. The P.C. acknowledges that each of the
restrictions contained in this Section 9 is reasonable and necessary in order to
protect the legitimate interests of each of the parties hereto and that any
violation thereof would cause irreparable injury to each of the parties hereto.
The P.C. acknowledges and agrees that in the event of any violation thereof, the
Manager shall be authorized and entitled to obtain, from any court of competent
jurisdiction, preliminary and permanent injunctive relief. Not in derogation of
the right of Manager to an injunction, the parties agree that in the event of a
violation of Section 9, damages will be difficult to measure. For this reason,
and not as a penalty, the parties agree that in the event of a violation of
Section 9, the Manager shall be entitled to payment by the P.C. upon violation
such restriction of liquidated damages in the amount of Five Hundred ($500)
Dollars for each day such breach continues. Furthermore, Manager may terminate
any and all payments, whether due under this or any other agreement, to the P.C.
upon violation of Section 9. The aforesaid rights and remedies shall be
independent, severable and cumulative and shall be in addition to any other
rights or remedies to which either party may be entitled under law or in equity,
(d) LIMIT AS REQUIRED BY LAW. The restrictions contained in this
Section 9 are intended to be reasonable. In the event that any restriction
contained herein is held by any court of competent jurisdiction to be in any
respect unreasonable, then the court so holding may limit the territory to which
it pertains or the period of time in which it operates, or effect any other
change to the extent necessary to make it enforceable. The remaining provisions
shall not be affected, but shall, subject to the discretion of such court,
remain in full force and effect, and any invalid and unenforceable provision
shall be deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the .same valid
and enforceable to the maximum extent permissible.
(e) SURVIVAL. All the provisions of this Section 9 shall survive the
termination of this Agreement for any reason whatsoever.
10. INSURANCE.
(a) MALPRACTICE INSURANCE. P.C. shall obtain and maintain at its own
expense professional liability insurance (including malpractice insurance), for
itself, and for each shareholder, Physician and
17
technician providing services hereunder in amounts which are at least the
amounts of $1,000,000 per occurrence and $3,000,000 annually. P.C. shall, from
time to time, furnish appropriate evidence to Manager of the existence of such
insurance with an insurance company licensed in New York.
(b) GENERAL LIABILITY AND CASUALTY INSURANCE. Manager shall obtain and
maintain general liability and casualty insurance for itself (naming P.C. as an
additional insured) respecting the Equipment and Premises, and such other
insurance covering itself and its employees which are of the types and forms
necessary and appropriate for medical offices which are the type and size of the
Office, including workers' compensation insurance. To the extent allowable by
the insurance companies, all said insurance shall name both Manager and P.C. as
parties insured and shall be in form and amounts and with insurers satisfactory
to Manager with the approval of P.C., which approval shall not be unreasonably
withheld. Manager shall, upon the request of P.C., furnish to P.C, certified
copies or certificates of the policies of such insurance and each renewal
thereof. P.C. hereby irrevocably authorizes Manager to make, settle and adjust
claims under such policy or policies and to endorse the name of P.C. on any
check or other item of payment for the proceeds thereof.
11. INDEMNIFICATION. Each party ("Indemnitor") agrees to indemnify, defend
and hold harmless the other ("Indemnitee"), its directors, officers, agents and
employees from any and all liability, including malpractice or billing claims
(whether accrued, absolute, contingent or otherwise), losses, actions, demands,
liabilities, fines, penalties, damages, expenses (including reasonable
attorneys' fees) or deficiencies ("Claims") occurring or resulting from any act
or omission, misrepresentation, breach of warranty or nonfulfillment of any
obligation of Indemnitor hereunder and from any act of negligence of Indemnitor,
its employees, contractors, agent or other representation during the term
hereof. Notwithstanding anything to the contrary herein, the parties agree that:
(i) Indemnitee shall be entitled to indemnification only to the extent to which
the Claims do not relate to or arise from acts or omissions to act of such
Indemnitee; and (ii) any such acts or omissions to act resulting in independent
liability on behalf of Indemnitee shall not negate the obligation of Indemnitor
to indemnify Indemnitee to the extent required hereunder. Notwithstanding the
foregoing, nothing herein shall allow Indemnitee to recover its consequential or
special damages. Notwithstanding anything herein to the contrary, Indemnitor is
not obligated to Indemnitee to the extent, if any, that the loss arising from
the Claims are covered by insurance. The provisions of this Section 11 shall
survive the termination of this Agreement.
12. INDEPENDENT CONTRACTOR. This Agreement is not intended, and shall not
be construed, to create a venture, partnership or association as between Manager
and P.C. Each party is an independent contractor of the other.
13. RETENTION OF INFORMATION. Manager (or its designee) shall be entitled
to the continued use of any information obtained by it during the course of this
Agreement without restriction and such records shall not be removed by P.C.;
provided, however, that all medical records of P.C. shall remain the properly of
P.C., subject to the terms of Section 15(c) hereof. Manager shall have access to
the medical records to the extent necessary to undertake its duties hereunder,
subject to consent of the
18
patients of the P.C. and other legal requirements. Manager shall retain all
billing records following termination of this Agreement, and will provide copies
to P.C. in accordance with the terms of Section 5 hereof. In the event that
following termination hereof, Manager no longer wishes to maintain the billing
records of P.C., Manager shall promptly return such billing records to P.C.
14. ACCESS TO BOOKS, RECORDS AND DOCUMENTS. This Section 14 is included
herein because of the possible application of Section 1861(v)(1)(I) of the
Social Security Act to this Agreement. If such Section 1861(v)(1)(I) should not
be found applicable to this Agreement under the terms of such section and the
regulations promulgated thereunder, then this Section 14 shall be deemed to not
be a part of this Agreement and shall be null and void.
(a) Until the expiration of four (4) years after the furnishing of
services pursuant to this Agreement, Manager shall, as provided in Section
1861(v)(1)(I) of the Social Security Act and regulations promulgated thereunder,
make available, upon written request, to the Secretary of Health and Human
Services or the Comptroller General of the United States or any of their duly
authorized representatives, this Agreement, and all books, documents and records
of Manager that are necessary to verify the nature and extent of the costs of
any services furnished pursuant to this Agreement for which payment may be made
under the Medicare program.
(b) If Manager carries out any of its duties under this Agreement
through a subcontract or subcontracts with an aggregate value or cost of $10,000
or more over a twelve (12) month period with a related organization, such
subcontract or subcontracts shall contain a clause to the effect that until the
expiration of four (4) years after the furnishing of such services pursuant to
such subcontract or subcontracts, the related organization shall as provided in
said Section 1861(v)(1)(I) make available, upon written request, to the
Secretary of Health and Human Services or the Comptroller General of the United
States or any of their duly authorized representatives, the subcontract or
subcontracts, and all books, documents and records of such organization that are
necessary to verify the nature and extent of the costs of any services
furnished pursuant to such subcontract or subcontracts for which payment may be
made under the Medicare program.
15. CONFIDENTIALITY/RECORDS. Manager and P.C. hereby covenant as follows:
(a) By virtue of the relationship between P. C. and Manager, the
parties will have access to and will acquire confidential information relating
to the business and operations of each other, including patient listings,
referral relationships and other information relating to the methods of doing
business of each party ("Confidential Information"). Manager and P.C. hereby
agree that all Confidential Information is the sole property of the originating
party and constitutes confidential business information of such party; that the
disclosure thereof would cause substantial loss to such corporation of goodwill
and other valuable assets; that knowledge of the Confidential Information would
enable such other party, upon termination of this Agreement, to compete with
originating party and thereby cause irreparable harm, and that its unauthorized
use or disclosure of the Confidential Information would likewise cause such
harm.
19
(b) Upon termination of the Agreement and during the Term, except as
otherwise provided herein, P.C. and Manager shall promptly return to the other,
upon request, all Confidential Information and at such time, neither P.C. nor
Manager shall retain any copies of, or make excerpts from the Confidential
Information.
(c) The P.C. shall maintain all information contained in the medical
records of patients of the Practice under the strictest confidence and shall
refrain from disclosing such information other than to Manager, with proper
patient consent, or pursuant to a valid court order by a court of competent
jurisdiction, or as otherwise provided by law or this Agreement. P.C. shall
provide Manager with access to medical records of patients and shall, upon
request, allow Manager to copy such medical records at the expense of Manager.
P.C. and Manager shall comply with all applicable state and federal laws
regarding the retention and handling of patient medical records and with any
requirements or limitations described in any written consent or release. The
provisions of this Section 15 shall survive termination of the Agreement.
16. ASSIGNMENTS. This Agreement may not be assigned by P.C. without the
prior written consent of Manager. Manager may, without consent of P.C., assign
this Agreement, and/or delegate certain of its duties hereunder to any entity
with the financial and managerial resources necessary to assume the obligations
of Manager hereunder, including, without limitation, Diversified Diagnostic
Holding Group, LLC, provided that any such assignment or delegation would not
result in a violation of health care fraud and abuse laws by P.C.
17. COMPLETE AND ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subjects covered herein, and
there are no representations, warranties, or prior understandings except as
expressly set forth herein.
18. WAIVER OF BREACH. No waiver of a breach of any provision of this
Agreement shall be construed to be a waiver of any breach of any other
provisions of this Agreement or of any succeeding breach of any provision of
this Agreement.
19. AMENDMENT OF AGREEMENT. This Agreement shall not be altered or amended
except pursuant to any instrument or writing signed by the party against whom
enforcement is sought.
20. NOTICES. All notices permitted or required under this Agreement and
shall be delivered to the parties at the addresses set forth below (or to such
other addresses as the parties may specify by due notice to the other). Notices
or other communications given by certified mail, return receipt requested,
postage prepaid, shall be deemed given three (3) days after the date of mailing.
Notice by Federal Express or other reputable overnight carrier shall be deemed
given one (1) business day after the date deposited with such carrier. The
notices shall be sent to the parties as follows:
20
If to P.C., notice shall be sent to:
Warren Wexelman, M.D.
with an additional copy to:
Ruskin, Moscou, Evans & Faltischek, P.C.
170 Old Country Road
Mineola, NY 11501
Attn: Melvyn B. Ruskin, Esq.
If to Manager, notice shall be sent to:
Attn: Mr. Shaya Ostrov
with an additional copy to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
Attn: Jill L. Cobert, Esq.
Any person to whom notice or copies of notices may be given hereunder may from
time to time change said address by written notice as provided herein.
21. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of New York, without regard to conflict of laws provisions.
(b) BINDING EFFECT. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the Manager,
P,C. and their legal representatives, administrators, successors and assigns.
(c) CAPTIONS. Captions contained in the Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision thereof.
21
(d) COUNTERPARTS. This Agreement may be executed in several
counterparts, and all so executed shall constitute one Agreement, binding on all
parties hereto.
(e) ATTORNEYS' FEES. In the event that either party must engage legal
counsel to undertake arbitration to enforce its tights hereunder, each party in
such arbitration, shall pay its own attorneys' fees and other costs of
enforcement.
(f) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. However, if any provision of this Agreement shall be prohibited
by or invalid under such law, it shall be deemed modified to conform to the
minimum requirements of such law or, if for any reason it is not deemed so
modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
(g) ARBITRATION. Any dispute arising under this Agreement shall be
settled by arbitration under the rules and under the auspices of the NHLA
Alternative Dispute Resolution Service. The site of the arbitration shall be New
York City. The cost of obtaining such arbitration proceeding, including, without
limitation, fees to NHLA and the selected arbitrators, shall be borne equally by
the parties hereto. Any judgment upon an award rendered by the arbitrator shall
be binding upon the parties hereto and may be entered in any court having
jurisdiction thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement, the day,
month, and year first above written.
CAT-ECG, LLC
BY: DIVERSIFIED DIAGNOSTIC HOLDING
GROUP, LLC
By: _____________________________________
Shaya Ostrov
Manager
LYNBROOK CARDIAC TESTING, P.C.
By: _____________________________________
Warren Wexelman, M.D.
President
22
EXHIBITS
1. Premises Exhibit "A"
2. Equipment Exhibit "B"
3. Fees paid to Manager Exhibit "C"
4. P.C. Budget Exhibit "D"
5. Wexelman Employment Agreement Exhibit "E"
6. Promissory Note Exhibit "F"