Exhibit 10.16
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made and entered into effective the 31M
day of March, 2005 (the ("Effective Date"), by and between Concentra Integrated
Services, Inc. ("CIS") and Amerisafe Risk Services, Inc. ("ARS").
WHEREAS, CIS offer workers' compensation payors a variety of health care
management and cost containment services;
WHEREAS, ARS is a health care payor that requires certain health care
management and cost containment services; and
WHEREAS, ARS desires to engage CIS to perform certain health care
management and/or cost containment services upon its request and CIS desires to
provide such services, pursuant to and in accordance with the terms of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants conditions contained herein, the parties agree as follows:
1. SERVICES
1.1 DESCRIPTION OF SERVICES. ARS hereby engages CIS, by itself and
through its affiliated organizations including Concentra Preferred Systems,
Inc. ("CPS"), to perform the specific health care management and/or cost
containment services (collectively, the "Services") described on Exhibit A.
1.2 REPORTS. CIS hereby agrees to provide ARS with monthly and/or
quarterly reports that ARS and CIS mutually agree upon, which summarize and
describe the Services that were provided to ARS by CIS for the previous
period. If ARS requests additional reports, CIS will make commercially
reasonable efforts to provide the reports requested by ARS in a format that
ARS and CIS mutually agreed upon.
2. FINANCIAL MATTERS.
2.1 COMPENSATION. ARS will pay CIS for the performance of Services in
accordance with Exhibit A CIS will provide invoices to ARS each month that
itemizes the Services provided by CIS for ARS. ARS will notify CIS of any
disputed amounts within 15 days of the date ARS receives the invoice. ARS
will pay each undisputed invoice within thirty (30) days of receipt. Any
payment of undisputed amounts that is not made by ARS within thirty (30)
days of receipt of CIS' invoice will bear interest at the rate of one and
one-half percent (1.5%) per month or, if lesser, the maximum rate permitted
by applicable law.
2.2 RESPONSIBILITY FOR BILL PAYMENT. Both parties acknowledge and
agree that the adjudication and payment of benefits for health care
services is solely ARS's right and its responsibility and that CIS has no
authority or responsibility for such payment Both parties agree not to make
any representation to the contrary to any person.
3. INSURANCE. CIS will procure and maintain at CIS' sole cost and expense all
insurance coverage required by applicable law and by customary business
practices for the performance of the Services. At a minimum, such coverage
will include:
(a) workers' compensation insurance at statutory limits;
(b) general liability insurance with limits of not less than $1
million per claim and $3 million in the aggregate, and
(c) professional liability insurance with limits of not less
than $1 million per medical incident and $3 million in the
aggregate.
Upon receipt of its written request, CIS will provide a certificate of
insurance evidencing the foregoing coverage.
4. COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. In performing their respective
obligations under this Agreement and the activities contemplated hereby,
each party and its respective officers, directors, employees, agents,
subcontractors, and independent contractors will comply fully with all
applicable laws, rules and regulations.
5. TERM AND TERMINATION.
5.1 The term of this Agreement will be one (1) year commencing on the
Effective Date. This Agreement will automatically renew for successive one
(1) year terms, subject to earlier termination by either of the parties as
the terms of this Agreement provide.
5.2 This Agreement, and all rights and duties hereunder, will
terminate if any of the following events occur:
(a) The parties mutually agree to terminate this Agreement in
writing;
(b) One of the parties provides the other, at anytime, without
cause, sixty (60) days prior written notice of its intention
to terminate this Agreement;
(c) Upon notice if a government body with regulatory authority
over either of the parties' activities notifies ARS that it
no longer approves its use of CIS' Services or there is a
change in an applicable state or federal law or regulation,
or an administrative or judicial order or decision
significantly reduces or prevents either of the parties from
fulfilling CIS' obligations under this Agreement; or
(d) Either of the parties materially breaches or defaults in its
performance under this Agreement, and fails to cure or
commence to cure such breach or default to the other's
satisfaction within thirty (30) days after receipt of
written notice of such breach or default. Failure to obtain
and maintain any required licenses, certifications or
accreditations necessary to conduct business under this
Agreement will be considered to be a material default;
(e) In the event ARS and MedRisk, Inc. ("MedRisk") terminate
their relationship, this contract will be renegotiated
within 30 days after the data CIS is notified in writing by
ARS of said termination In the event of such termination,
ARS will notify CIS within five (5) business days.
5.3 Sections 5, 6, 7, 8, 9, 11 and 12 will survive the termination of
this Agreement.
6. WORK PRODUCT.
6.1 For the purposes of this Agreement, "Work Product" is defined as
all inventions, improvements, computer programs, discoveries, ideas,
processes, systems, writings, or other works made or conceived by CIS, CIS'
employees, agents, or independent contractors which are (a)(i) produced
directly in the course of performing the Services under this Agreement but
that are outside the normal scope of such performance; or (ii) developed or
made during the term of this Agreement with the use of any of its
proprietary systems; and (b) are directly related to a specific service or
product development ARS requests; and (c) are unique to ARS and not
developed for use generally with CIS' other clients. CIS hereby assigns to
ARS all rights, title and interest it may have in the Work Product at all
stages of development and upon completion, and all patents and copyrights
in the Work Product. CIS will render all reasonably required assistance to
ARS to protect the rights described above.
6.2 CIS has not and will not assign, license or otherwise transfer
ownership, rights, title, or interest in the Work Product to any third
party.
6.3 The parties agree that Work Product does not include any
inventions, improvements, computer programs, discoveries, ideas, processes,
systems, writings, or other works (a) that existed prior to the Effective
Date, or (b) that CIS, or any third party CIS has hired, developed,
conceived or existed prior to the Effective Date, or (c) that CIS, or any
third party CIS has hired, independently develop without its dedicated
financial assistance after the Effective Date.
7. OWNERSHIP OF INFORMATION AND DATA REQUIREMENTS
7.1 All ARS specific information, data, documents, records, reports
will at all times be considered its property. CIS may, however, retain
copies of any documents, including but not limited to the Work Product,
that might be necessary to defend any suit relating to CIS' Services under
this Agreement or in the normal course of CIS' business.
7.2 AI data analysis and evaluation tools, including information
systems, technology, report formats, computer programs, processes, efforts
and methods developed or used by CIS in performing this Agreement will
remain CIS' sole property.
7.3 If this Agreement is terminated, CIS will provide ARS or its
successor with those records reasonably required for subsequent
administration in the standard format then used by CIS for storage of
records subject to applicable laws. ARS and/or
such successor provider will make records serviced by CIS reasonably
available to CIS for litigation, pre-litigation and for conflict resolution
purposes.
8. CONFIDENTIALITY.
8.1 "Confidential Information" means all written and oral information,
documents and data previously or hereafter obtained by one of CIS or CIS'
representatives from the other, or its affiliates or representatives, in
connection with this Agreement and the transactions it contemplates, and
includes proprietary services and methodologies, negotiated contract rates,
technical data, programs, customer lists, lists of employees and agents,
sales and marketing plans, operating procedures, agreements and related
information, the past, present, and prospective methods, procedures, and
techniques utilized in identifying prospective referral sources,
compilations of information, records, and processes which are used in the
operation of CIS' respective businesses, and all confidential medical
information.
8.2 Each of the parties acknowledges that the other's Confidential
Information constitutes valuable property and trade secrets, which are
entitled to protection. Each of the parties will hold all Confidential
Information in strict confidence, and neither of the parties nor any of
CIS' affiliates or representatives will directly or indirectly (a) use or
permit the use of any of the other's Confidential Information for or in
connection with any purpose other than the performance of this Agreement
(b) disclose or permit the disclosure of any of the other's Confidential
Information to any person or entity other than the other's representatives,
or (c) duplicate, copy or reproduce any of the Confidential information
except with the prior consent of the owner, except as necessary for the
performance of this Agreement or for review by CIS' respective officers or
shareholders or their representatives However, the obligation o hold
Confidential Information in confidence and not to use, copy or disclose it
will not extend to the following information that may otherwise constitute
Confidential Information:
(i) Information that, at the time of the use, copying or
disclosure, was readily ascertainable from public
sources or was known by or available to competitors,
clients or customers of either of the parties by
publication or otherwise, sources which arise by virtue
of this Agreement;
(ii) Information that comes from a third party and was not
acquired by such third party in violation of any
obligation of confidentiality;
(iii) Information required to be disclosed by law, provided
that disclosure of such information will be limited to
only such disclosure that is required to be made by
applicable law;
(iv) Information that has been used for statistical purposes
only, with all identifying information as to its origin
or source removed; or
(v) Information that the parties have agreed to share to
advance joint projects between Concentra and ARS.
Without limiting any other obligations or liability of either of the
parties under this Agreement, each of the parties will take an appropriate
and reasonable action necessary to prevent the unauthorized use,
disclosure, copying or reproduction and to protect and maintain the
confidentiality of the Confidential Information. Each of the parties will
advise its respective representatives of the terms of this Section and use
reasonable efforts to cause them to comply with its terms. Each of the
parties will immediately notify the other of the circumstances surrounding
any breach of this Section.
8.3 Within ten (10) days after receiving written request from the
owner of Confidential Information to return Confidential Information, all
documents and other materials constituting such Confidential Information,
including all copies, reproductions, extracts, and summaries of such
Confidential Information will be returned to its owner except what may be
necessary to continue to perform the Services.. Any portion of the
Confidential information that consists of analysis, computations, studies
or notes prepared by the receiving party or its representatives, or is
necessary to continue performing the Services will be either held by the
recipient or its representatives and kept confidential subject to the terms
of this Agreement, or destroyed.
8.4 Both parties acknowledge that the breach or attempted breach of
obligations under this Section will cause irreparable injury and that any
remedy at law will be inadequate. Both parties acknowledge that, in
addition to any other relief, each of the parties will be entitled to seek
injunctive and other equitable relief in case of any such breach or
attempted breach. Both parties expressly waive any requirement that the
breaching party could assert for the securing or posting of any bond in
connection with the obtaining of such injunctive or other equitable relief.
8.5 Each of the parties will comply with any applicable federal or
state laws or regulations that are or may become effective during the term
of this Agreement.
9. INDEPENDENT CONTRACTOR.
9.1 Each of the parties is an independent contractor of the other and
neither of the parties is a partner, joint venturer, agent or
representative of the other. There is no employment relationship between
them. Neither of the parties has the right or authority to make any
representation or warranty or incur any obligation or liability on behalf
of the other. Neither of the parties will make any representation to a
third party inconsistent with this paragraph. ARS will have no control over
the employment, discharge, compensation of and service rendered by CIS'
employees or agents.
9.2 CIS reserves the right to outsource, at CIS' sole discretion, some
or all of the Services it is required to perform under this Agreement to
subcontractors of CIS' choice CIS will notify ARS 30 days in advance of any
additions or deletions of PPO networks available to ARS that have been
mutually agreed upon.
10. INDEMNIFICATION.
10.1 Each of the parties hereby covenants and agrees to indemnify,
defend, and hold harmless the other, and its officers, directors,
employees, and affiliates, from and against any and all liability, loss,
cost, or expense (including, without limitation, reasonable attorneys'
fees), arising out of its own material breach, negligence or misconduct in
the performance of its respective duties and obligations in this Agreement
and for any claim by a third party of violation of its intellectual
property rights.
10.2 Written notice will be promptly provided to the indemnifier of
any claim that is being asserted for which such indemnification is sought
That notice will include a true copy of the claim including, and any
summons or other process, pleading, or notice issued in any lawsuit or
other proceeding to assert or enforce such claim If the receiver of the
notice accepts the obligation to indemnify, the receiver reserves the right
to control the investigation, trial, and defense of such lawsuit or action
(including all negotiations to effect settlement) and any appeal arising
there from and to employ or engage attorneys of its own choice.
10.3 The party who is seeking indemnification, may, at its own cost,
participate in such investigation, trial, and defense of such lawsuit or
action and any appeal arising there from. Each of the parties' respective
employees, agents, servants, and representatives will provide full
cooperation to the other at all times during the pendency of the claim or
lawsuit, including without limitation, and all available information with
respect thereto.
11. AUDIT
11.1 CIS will maintain records applicable to the work performed under
this Agreement. CIS will keep these records available for inspection by
ARS, its auditors and advisors as provided under applicable laws for a
period of three (3) years following completion of work or expiration or
termination of this Agreement.
11.2 At any time during the three (3) year period but no more
frequently than twice annually, during which the records are maintained by
CIS, ARS may audit those of CIS' records that are directly related to this
Agreement to determine the accuracy of bills submitted by CIS under the
compensation section hereto. ARS must give CIS at least ten (10) days prior
written notice of its intention to perform an audit.
12. DISPUTE RESOLUTION,
12.1 The parties will work together in good faith to resolve any
disputes about their business relationship In case of any dispute arising
between the parties to this Agreement that the parties cannot resolve
themselves after a good faith attempt, the parties agree to binding
arbitration to resolve any such dispute. Either party may initiate such
binding arbitration to take place at a mutually agreeable location by
notifying the other party in writing. Each party will bear the expense of
its own arbitrator and attorney's fees and both parties will share equally
the expense of the arbitrators and the arbitration. Arbitrators will have
no authority to award punitive or exemplary damages. In addition, their
parties expressly waive and disclaim any right to bring any claim in any
and all forums as a class action or as a private Attorney General. No party
may serve as a class representative or a member of a class in litigation
adverse to another party.
13. MISCELLANEOUS PROVISIONS.
13.1 This Agreement (including the recitals and all exhibits attached
hereto) (i) represents the entire agreement between the parties with
respect to the subject matter of this Agreement (ii) supersedes all prior
and contemporaneous purchase orders, agreements, understandings,
representations and warranties relating to the subject matter of this
Agreement, and (iii) may only be amended, canceled or rescinded by a
writing signed by both of parties.
13.2 All notices and consents permitted or required under this
Agreement must be in writing and will be deemed received upon to the
address set forth below either in person or by commercial courier with
confirmation of receipt or three (3) days after submission by registered or
certified mail:
CIS: Concentra Integrated Services, Inc.
5080 Spectrum Drive, Suite 400 West
Addison, Texas 75001
Fax: (972) 387-1938
Attention: Office of General Counsel
ARS: Amerisafe Risk Services, Inc.
2301 Highway 190 West
DeRidder, Louisiana 70634
Attention: H.O. "Chris" Lestage, IV
13.3 Section and other headings in this Agreement are for convenience
only and will not be used to affect, broaden or limit this Agreement.
13.4 This Agreement will be governed and enforced in accordance with
the laws of the State of Texas, without regard to conflict of law
provisions.
13.5 If any provision in this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, such provision will
be construed, limited or, severed, but only to the extent necessary to
eliminate such invalidity or unenforceability, and the other provisions of
this Agreement will remain unaffected.
13.6 This Agreement represents the wording selected mutually by the
parties to define this Agreement and no rule of strict construction will
apply against either of the parties. Whenever the context reasonably
permits, the singular will include the plural, the plural will include the
singular, and the whole will include any part thereof.
13.7 This Agreement will be binding upon and inure to the benefit of
each of the parties and their respective representatives, successors and
permitted assigns.
13.8 Except for obligations to make payment, neither of the parties
will be liable to the other for any failure of (or delay in performance of)
its respective obligations hereunder due to any cause or circumstance which
is beyond its reasonable control
including, but without limiting the generality of the foregoing, any
failure or delay caused by strike, lockout, labor shortage, fire,
explosion, shipwreck, act of God or the public enemy, war, riot,
interference by the military or governmental authorities, or compliance
with the laws of the United States or with the laws or orders of any other
government or regulatory authority.
13.9 This Agreement may be executed in any number of duplicate
counterparts, each of which will be deemed an original, but all of which
taken together will constitute one and the same instrument.
13.10 Except as provided for herein, neither of the parties may
modify, publish, transfer or assign any material in any media provided by
the other, in whole or part or without the other's express written
permission, nor may either of the parties use the other's name, trademark
or other proprietary material without the other's written permission.
Neither of the parties will use the other's trademarks, trade names or
logos without the prior written permission of the owner of the marks.
13.11 This Agreement or any duty or obligation of performance
hereunder may not be assigned, in whole or in part, by either of the
parties without the prior written consent of the other, except that either
of the parties may assign this Agreement to its parent or any subsidiary or
in the event of a sale or merger of the majority of its assets without the
other's prior consent.
13.12 Acceptance by either of the parties of any performance less than
required hereby will not be deemed to be a waiver or the right to enforce
all of the terms and conditions of this Agreement. No waiver of any such
right will be binding unless either of the parties puts such waiver in
writing and it is signed by both of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate as of the date first herein written.
Concentra Integrated Services, Inc.: Amerisafe Risk Services, Inc.:
By: /s/ Bruce D. Singleton By: /s/ H.O. Lestage, IV
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Name: Bruce D. Singleton Name: H.O. "Chris" Lestage, IV
Title: Vice President Title: Senior Vice President, Claims