1
EXHIBIT 10.47
RADIOLOGY SERVICES AGREEMENT
THIS RADIOLOGY SERVICES AGREEMENT ("Agreement") is made this 1st day of August
1997, by and between BRANDON DIAGNOSTIC CENTER, LTD.,and SUNPOINT DIAGNOSTIC
CENTER, INC., a corporation incorporated under the laws of the State of Florida
("Corporation"), and NANCY C. LAWHON, M.D., P.C., a Florida professional
corporation, duly authorized to do business in Florida ("PC").
WITNESSETH
WHEREAS, Corporation requires the services of a radiologist licensed to practice
medicine in the State of Florida; and
WHEREAS, PC is organized to engage in the practice of medicine, specializing in
radiology; and
WHEREAS, PC desires to provide radiology services to Corporation through its
shareholder, Nancy C. Lawhon, M.D. ("Physician"); and
WHEREAS, PC desires to contract with Corporation upon the terms and conditions
set forth herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section 1. Term.
The initial term of this Agreement shall be for a period of three (3) years
commencing on August 1, 1997, (the "Commencement Date") and shall be
automatically renewed for an additional three (3) year term, unless PC's
services are terminated sooner pursuant to the provisions of Section 7 hereof.
Section 2. Services.
2.1 PC and Physician Duties. During the term of this Agreement, PC
shall provide Physician to deliver professional radiology services (the
"Services") on behalf of Corporation. PC agrees that either PC, Physician, or
both, as Corporation may require and to the extent permissible by law, shall
(a) devote such time and effort as is required to perform the duties required
of the radiologist by the Corporation; (b) provide the Services at locations
approved by Corporation; (c) participate in managed care arrangements entered
into by Corporation and affiliated parties; (d) cooperate with, participate in,
and comply with, the quality assurance, risk management and peer review
programs, grievance procedures and utilization control mechanisms implemented
by
1
2
Corporation and its respective affiliates; (e) participate in the Medicare and
Medicaid programs and to provide nondiscriminatory medical treatment for
Medicare and Medicaid patients; (f) provide medical care in a nondiscriminatory
manner to charity and indigent patients of Corporation in accordance with the
policies and guidelines established by Corporation; (g) promote and market the
services of Corporation; and (h) perform such other duties relating to the
provision of services as may be requested from time to time by the Chief
Executive Officer ("CEO") of Corporation.
2.2 On-Call Scheduling. Corporation shall use its best efforts
to take into account the input of Physician in developing an on-call schedule.
2.3 Services Provided. Corporation shall determine which
radiological activities shall be undertaken by Physician on behalf of
Corporation.
2.4 Physician Coverage. Corporation shall provide, on a periodic
basis, a coverage schedule, which may include Saturday coverage, detailing
times Physician shall provide the Services. Physician shall receive 30 days
advance notice of each coverage schedule. Physician shall be subject to
providing additional coverage as needed on a non-discriminatory basis with
other physicians providing professional radiology services for Corporation.
2.5 Pensacola Facility. Corporation agrees that in the event it
enters into an Agreement to provide Services in Pensacola, Florida, PC shall be
entitled to the first right of refusal to provide Services under such
Agreement.
Section 3. Professional Income.
To the extent permitted by law, Physician hereby assigns all charges and income
derived from the Services accepted or undertaken by Physician on behalf of
Corporation at Corporation's diagnostic imaging facility during the term of
this Agreement. Charges, fee schedules, and coding for the Services rendered to
patients by Physician shall be established by Corporation. Physician shall
record, daily and accurately, the Services rendered by Physician and the
charges therefor on forms supplied by Corporation. Corporation shall be
responsible for all billing and collection activities relating to the Services
performed by Physician pursuant to this Agreement.
Physician agrees that all fees and charges arising out of Physician's Services
on behalf of Corporation during the term of the Agreement, as well as payments
for services rendered to the patients of the Corporation prior to the
commencement Date hereof for which Physician has not yet been compensated are
hereby assigned by Physician to Corporation. Physician hereby assigns and
transfers to Corporation all right, title and interest of Physician to any fees
or charges (whether in cash, accounts, goods or other property of value)
resulting from or incident to Physician's provision of Services pursuant to the
Agreement and Physician does hereby appoint Corporation as Physician's agent
and attorney-in-fact to bill and collect the same.
2
3
4. PC Warranties. PC represents and warrants to Corporation that Physician is
duly licensed to practice medicine in the State of Florida. PC further
represents and warrants to that (i) Physician's license to practice medicine in
any state (and Physician's permit to dispense or prescribe drugs and other
controlled substances) has never been suspended, restricted or revoked (ii)
Physician has never been reprimanded, sanctioned or disciplined by any
government entity, licensing board or state or local medical society or
specialty board; (iii) Physician has never been denied membership or
reappointment of membership on the medical staff of any hospital, that no
hospital medical staff membership or clinical privileges of Physician have ever
been suspended, curtailed or revoked, and that Physician has never voluntarily
withdrawn an application for appointment or reappointment to the medical staff
of any hospital ; (iv) all information provided by Physician or PC to
Corporation and all information contained in any application for clinical
privileges at the Corporation's diagnostic center or other health care provider
is true and correct; (v) no application of Physician or PC for professional
liability insurance or renewal thereof has ever been denied, and no such
insurance policy has ever been terminated; and (vi) Physician has never been
convicted of or pled guilty, including, but not limited to, a plea of nolo
contendere, to a crime except for minor traffic offenses. PC shall update all
such information as needed to maintain its accuracy when and if any change to
such information occurs.
Section 5. Performance Standards.
In performing Services under this Agreement, PC agrees that Physician shall (i)
use diligent efforts and professional skill and judgement; (ii) perform
professional services in accordance with recognized standards of the medical
professional, (iii) act in a manner consistent with the Principles of Medical
Ethics of the American Medical Association; (iv) comply with the by-laws,
policies, rules and regulations of Corporation; (v) comply with applicable
standards of the Joint Commission on Accreditation of Healthcare Organizations
("JCAHO"); and (vi) comply with all applicable federal, state and local laws
and regulations. Notwithstanding the foregoing, Physician shall exercise
independent professional judgement in performing medical services related to
the medical condition of patients, and Physician shall be solely responsible
for the provision of medical services to patients in accordance with the
standard of practice of the community in which Physician renders medical
services and in a manner that will assure quality of care and treatment.
Nothing in this Agreement shall be construed as giving Corporation control over
the professional, clinical judgement of Physician.
Section 6. Compensation.
6.1 Compensation.
(i) Compensation. PC shall be compensated in the amount of
$220,000.00 annually during the term of the Agreement.
(ii) Medical Directorship. PC shall be compensated in the amount
of $15,000.00 annually during the term of the Agreement. PC will be
responsible for scheduling and managing all physician services and all other
independent contractors.
3
4
(iii) CME Allowance Annually. PC shall receive $8,000.00 during
the term of the Agreement.
(iv) Health, Disability and Life Insurance Allowance Annually.
PC shall receive $7,000.00 allowance to help defray cost of health, disability
and life insurance coverage.
(v) Malpractice Insurance Allowance Annually. PC shall receive
$12,000.00 allowance.
6.2 Office Space. During the term of this Agreement,
Corporation shall provide PC with professional office space at no cost to PC,
which PC may use for the performance of its duties hereunder.
6.3 Equipment and Supplies. During the term of this agreement,
Corporation shall provide expendable and non-expendable medical equipment,
drugs, supplies, furniture, and fixtures which Corporation determines, in its
sole discretion, to be necessary for the proper operation of the Corporation's
diagnostic center.
6.4 Utilities and Support Services. Corporation shall provide
all utilities, housekeeping, laundry and other non-medical support services as
may be required, in the discretion of Corporation, for the proper operation of
the Corporation's diagnostic center.
6.5 Vacation, Sick and Continuing Education Leave. Corporation agrees
that PC may provide physician with eight (8) weeks of vacation, sick and
continuing medical education leave during each year of this Agreement. PC
agrees that unused leave may not be carried forward from one year to the next
by physician without the specific permission of corporation. During Physician's
vacation, sick or continuing education leave, Corporation shall arrange for
coverage of the corporation's diagnostic center. PC agrees to provide
Corporation with at least 30 days advance notice of impending vacation or
continuing medical education leave by Physician.
6.6 Malpractice Insurance. During the Term of this Agreement, PC shall
maintain, at its expense, professional malpractice liability insurance covering
PC and Physician for services rendered on behalf of Corporation pursuant to
this Agreement in an amount not less than $1,000,000.00 per claim,
$3,000,000.00 in the aggregate (the "Insurance Limits"). PC shall furnish proof
of such coverage prior to the furnishing of Services pursuant to this
Agreement, and agrees to immediately provide Corporation with notice of any
termination, modification, or amendment of such coverage. If the professional
malpractice insurance provided by PC pursuant to this Section 6.6 is a
"claims-made" policy, then, upon termination of this Agreement, unless PC
obtains a new professional malpractice liability insurance policy which
includes coverage for acts occurring during the term hereof and maintains such
policy in full force and effect for a period following termination of this
Agreement equal to the statute of limitations for medical malpractice actions
then applicable in the State of Florida, PC shall purchase and maintain
reporting endorsement ("tail") coverage for its acts, and the acts of
Physician, while performing services pursuant to this Agreement; provided,
however, that in the event this Agreement is terminated by Corporation without
case, or by PC for cause, then Corporation shall purchase and maintain such
reporting endorsement ("tail") coverage.
4
5
Section 7. Termination.
7.1 Automatic Termination. This Agreement shall automatically
terminate upon the death or permanent disability of the Physician. As used
herein, the term "permanent disability" shall mean a physical or mental
impairment which either (a) satisfies the requirements for instituting payment
under any disability insurance policy covering the Physician; or (b) renders
the Physician incapable, in the judgement of an independent licensed physician
selected by the Corporation, of providing substantially the Services required
of the Physician hereunder for a period in excess of thirty (30) days.
7.2 Termination for Cause by Corporation. Corporation shall have the
right to terminate PC's services under this Agreement immediately, with cause,
upon written notice to PC if:
(i) Physician's license to practice medicine (or permit or license
to dispense or prescribe drugs or controlled substances) in any State shall
have been revoked, suspended or restricted; or
(ii) Physician fails to become credentialed in accordance with
Corporation policy; or
(iii) Physician's or PC's right to participate in the Medicare or
Medicaid programs shall have been revoked, suspended, or restricted; or
(iv) Physician is found to have engaged in unprofessional conduct by
any governmental entity or professional organization; or
(v) PC breaches a warranty contained in this Agreement; or
(vi) Physician makes a material misrepresentation or omission of
information in an application for employment or staff privileges with any
hospital, physician hospital organization, or any other health care provider;
or
(vii) Physician has been adjudicated or pled guilty (by a plea of nolo
contendere or otherwise) of criminal charges filed against her which related to
her professional activities; provided, however, Physician shall be suspended
from her duties hereunder, without pay, so long as such criminal charges are
pending; or
(viii) Physician shall commit an act or omit to take an act that in
the good faith and reasonable belief of Corporation, jeopardized, or could have
jeopardized, patient health or safety; or
(ix) Physician becomes ineligible for professional liability
insurance coverage sufficient to meet the terms of Paragraph 6.6; or
(x) PC materially breaches this Agreement and fails to cure the same
within ninety (90) days after written notice from Corporation specifying the
breach and requesting that it be cured; or
5
6
(xi) Physician possesses, uses, or is under the influence of alcohol
during working time; illegally uses controlled substances; or if Physician's
use of controlled substances or alcohol, legal or illegal, impairs her ability
to perform her duties hereunder as determined by an examination of an
independent licensed physician selected by the Corporation. PC agrees that
Physician shall submit to a medical examination upon the reasonable suspicion
of the Corporation.
7.3 Termination for Cause by PC. PC shall have the right to
terminate PC's services under this Agreement, immediately, with cause, upon
written notice to Corporation if;
(i) Corporation's right to participate in the Medicare or Medicaid
programs shall have been revoked, suspended, or restricted; or
(ii) Corporation materially breaches this Agreement and fails to cure
the same within ninety (90) days after written notice to Corporation specifying
the breach and requesting that it be cured.
7.4 Termination Without Cause. PC's services under this Agreement
may be terminated without cause if;
(i) Corporation and PC mutually agree in writing; or
(ii) either Corporation or PC gives the other ninety (90) days prior
written notice of its intent to terminate PC's services, or
(iii) either Corporation or PC gives the other written notice no later
than ninety (90) days prior to the end of the initial or any renewal term.
7.5 Effect of Termination. Except as expressly provided otherwise
elsewhere in this Agreement, upon the effective date of termination of PC's
services under this Agreement for any reason or PC's failure or refusal to
perform services hereunder, all obligations of Corporation to make payments to
PC of any form or nature shall cease (except for obligations to make payments
to PC for services performed or reimbursable expenses incurred prior to the
effective date of such termination of PC's services). The provisions of Section
9 and the other provisions of this Agreement relating to the interpretation and
application of such Section shall expressly survive termination of PC's
services under this Agreement, as will PC's and Physician's assignment of
payments for any services rendered to the patients f the Corporation prior to
the Commencement Date hereof for which PC has not yet been compensated by
Corporation.
Section 8. Independent Contractor. PC understands and agrees that neither PC
nor Physician shall be considered to be an employee of the Corporation; during
the term of this Agreement, PC shall be classified as an independent
contractor; and PC shall be wholly and exclusively responsible and shall pay
when due any and all taxes, fees, and assessments (and all interest and
penalties thereon) of every kind and nature arising by reason of, or in
connection with, PC performance hereunder, it being the intention of the
parties that the Corporation shall not be responsible or charged for any such
sums whatsoever. Without limiting the generality of the preceding sentence, and
taxes or contribution Act, Federal Unemployment Tax Act, federal and state
withholding, and
6
7
similar taxes and withholding, shall be paid by and shall be the exclusive
liability of PC and shall in no way be chargeable to the Corporation. Except
for the payments provided herein, PC shall not be eligible for any other
payments or benefits that are or may be provided to Corporation's employees. PC
shall be wholly and exclusively responsible for Physician's medical, life, and
other insurance coverages.
Section 9 Covenants.
PC acknowledges that Corporation may assign this Agreement pursuant to
the terms of Paragraph 10, including the covenants contained in Paragraphs 9.1,
9.2, and 9.3, and that such assignee is hereby expressly authorized to enforce
these covenants.
9.1 Covenant Not to Compete. PC acknowledges and agrees that this
covenant is intended to protect the investment Corporation has made and will
make in the Corporation's radiology business, and that should PC offer
radiology services during the period of time and in the geographic area
hereinafter set forth, such activity shall be harmful to Corporation and shall
cause Corporation irreparable damage and injury.
PC covenants and agrees that for a period of one (1) year following
the termination of PC's services under this Agreement by Corporation pursuant
to Paragraph 7.2, or by PC pursuant to Paragraph 7.4, PC shall not engage in
the provision of radiology services within a territory defined as a five (5)
mile radius surrounding Corporation (the Brandon Diagnostic Center where PC
will engage in the provision of radiology services), without the prior written
consent of Corporation.
PC acknowledges that this covenant is critical to the success of
Corporation's radiology business, and that violation of this covenant would
immeasurably damage Corporation's radiology business.
9.2 Covenant Not To Solicit Patients or Customers. PC covenants and
agrees that, during the term of this Agreement and for a period of two (2)
years immediately following the date of cessation of PC's provision of services
hereunder, PC shall not, on PC's own behalf or on behalf of any person, firm,
partnership, association, corporation, or business organization, entity, or
enterprise engaged in the provision of radiology services ( a "Competitive
Business"), divert, solicit, appropriate, or attempt to divert, solicit, or
appropriate any Patient or Customer for whom PC provided services pursuant to
this Agreement.
9.3 Covenant Not to Disclose. Independently from the covenants set
forth in Paragraph 9.1 and 9.2, above, PC covenants as follows:
(i) Trade Secrets. PC covenants and agrees that from the date hereof
and for all time PC shall treat as confidential and shall not use, disclose, or
divulge (except in connection with PC's performance of its duties to
Corporation), any and all trade secret information concerning Corporation or
its business obtained by PC during the term of this Agreement. For lists of
actual or potential customers, patients, and referral sources, lists of actual
or potential suppliers, technical and nontechnical data, formulae, patterns,
complications, programs, devices, methods, techniques,
7
8
drawings, processes, financial data, financial plans, and product plans, which
information is known only to Corporation and those of its employees ir
independent contractors in whom the trade secret must be confided in order to
apply the trade secret to its intended use and from which Corporation derives
actual or potential economic value from he nondisclosure of such information to
persons who can obtain economic value from its disclosure or use.
(ii) Other Information. PC covenants and agrees that, during the term
of this Agreement and for a period of two (2) years immediately following the
date of cessation of PC's services under this Agreement, PC shall treat as
confidential and shall not use, disclose, or divulge (except in connection with
PC performance of PC's duties to Corporation), any confidential business
information regarding Corporation that does not fall within the definition of
"trade secret information" as defined above.
(iii) Return of Information. PC shall, immediately upon termination of
this Agreement, return to Corporation any and all books, paper, documents, or
other embodiments of trade secret information or other information, tangible or
intangible, of Corporation in the possession or withing the reasonable control
of PC, including any and all copies thereof and on any medium stored, and shall
execute under oath a statement verifying that such material has been returned
to Corporation.
9.4 Remedies. PC acknowledges that covenants 9.1, 9.2, and 9.3 are
critical to the success of Corporation's radiology business, and that violation
of the covenants would immeasurable damage Corporation's radiology business. PC
acknowledges and agrees that, by virtue of the duties and responsibilities
attendant to PC's provision of services to Corporation and the special
knowledge of Corporation's affairs, business, patients, and operations that PC
has and will have as a consequence of this relationship, and breach or
violation of the covenants contained in Paragraphs 9.1, 9.2 and 9.3 hereof
would cause irreparable loss or damage to Corporation that may not be issued by
any court of competent jurisdiction enjoining and restraining PC from
committing any violation or threatened violation of this Agreement.
9.5 Severability. The covenants set forth in Paragraphs 9.1, 9.2, and
9.3 of this Agreement shall be construed to be separate and distinct from each
other and every other provision set forth in this Agreement. In the event that
any court of competent jurisdiction shall declare any covenant invalid,
prohibited, or unenforceable, the remaining covenants and obligations shall
remain independent, divisible, and enforceable. Any such unenforceable or
prohibited provision or provisions may be modified in a court of law to the
fullest extent allowed by the law of such jurisidiction so as to allow such
provision or provisions to be written in such a manner and to such an extent as
to be enforceable in such jurisdiciton under the circumstances. Without
limitation of the foregoing, with respect to Paragraphs 9.1, 9.2, and 9.3, if
it is determined that any restriction contained in such provision is excessive
as to duration or scope, it is intended that such restriction be enforced for
such shorter duration or with such narrower scope as will render it
endorceable.
8
9
Section 10. Compliance with Corporation Rules and Regulations.
In fulfilling its duties hereunder, PC shall, in every respect, comply
with the policies and procedures of Corporation, and PC shall insure the
compliance of Physician with the policies and procedures of Corporation. During
the term of this Agreement and upon termination hereof for any reason, all
patient records, including, but not limited to, x-rays, charts, and billing
records of any patient attended by Physician shall be and remain the property
of Corporation to the extent permitted by law. PC shall maintain all patient
records in accordance with all applicable laws and regulations pertaining to
the confidentiality thereof.
Section 11. Renegotiation.
If Corporation's legal counsel determines that payments or
reimbursements to Corporation or PC, or the ability of the parties hereoto to
fulfill their obligations hereunder, are (or are likely to be) adversely
impacted by any federal, state or local law, rules, regulations, or published
official interpretation of any of the foregoing, as applied to theis Agreement
in a manner which will, if possible, avoid such adverse impact while maintained
the eessential economic benefits intended to be conferred hereby. If this
Agreement is not so amended prior to the effective date of such requirement or
within thirty (30) days after Corporation's notice to negotiate under this
Section, whichever shall first occur, then this Agreement shall terminate, at
the option of Corporation, as of such date and shall be construed as a
termination without cause.
Section 12. Access to Records.
Until the expiration of four (4) years after the furnishing of services
hereunder, PC shall make available, upon written request, to the Secretary of
Health and Human Services, or upon written request, to the Comptroller General
of the United States, or any of their duly authorized representatives, this
Agreement, including all amendments hereto, and books, documents and records of
PC that are necessary to certify the nature and extent of costs for services
provided hereunder.
Section 13. Miscellaneous.
13.1 Successors. All the provisions herein contained shall be binding
upon and inure to the benefit of the respective heirs, personal
representatives, successors and assigns of Corporation and of PC; provided,
however, that nothing contained in this Section 14.1 shall be construed as a
consent by corporation to an assignment of this Agreement or of any interest
herein by PC except as provided in Section 10 above.
13.2 Headings. The headings to the various sections of this Agreement
have been inserted for convenience of reference only and shall not modify,
define, limit or expand the express provisions of this Agreement.
9
10
13.3 Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be an original, and each of such counterparts
shall together constitute but one and the same agreement.
13.4 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been received by the
person to whom it is addressed when delivered if delivered in person or five
(5) days after it is deposited in the United States mail, if mailed by
certified or registered mail, postage prepaid and addressed as follows:
If to PC: Nancy C. Lawhon, M.D., P.C.
5014 Wesley Drive
Tampa, FL 33647
If to Corporation: Brandon Diagnostic Center, Ltd.
SunPoint Diagnostic Center, Inc.
c/o National Diagnostics, Inc.
Attn: Mr. Curtis Alliston, President
755 W. Brandon Blvd.
Brandon, FL 33511
or to such other person and address as either party may designate in writing.
13.5 Effect of Invalidity. Should any part or provision of this
Agreement, for any reason, be declared invalid or illegal, such invalidity or
illegality shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement had
been executed with the invalid or illegal portions thereof eliminated.
13.6 Applicable Law: Rights Cumulative. This Agreement shall be
construed in accordance with the laws of the State of Florida. All rights of
the parties hereunder shall be cumulative with all rights which the parties
hereto may have at law or in equity.
13.7 Amendments. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof. Any
amendments to this Agreement shall be in writing and signed by an authorized
representative of Corporation and PC.
13.8 Confidentiality. Except as otherwise required by law, PC agrees
to keep this Agreement and its contents confidential and not to disclose the
same to any third party, except their respective legal or accounting
representatives. With respect to information provided by Corporation in
connection with this Agreement, PC agrees to keep all such information which in
not in the public domain confidential, exercising the same care in handling
such information as he would his own, subject to the provisions of applicable
law.
10
11
13.9 No Waiver. No waiver of any provision of this Agreement shall be
effective against either party hereto unless it is in writing and signed by the
party granting the waiver. No waiver of any provision hereof shall be deemed a
continuing waiver or a waiver of any other provision hereof.
13.10. Survival. All obligations of the parties which have accrued
as of termination of this Agreement shall survive any termination of this
Agreement. In addition, the provisions of Section 9 and 13 shall survive any
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
CORPORATION:
BRANDON DIAGNOSTIC CENTER, LTD.
SUNPOINT DIAGNOSTIC CENTER, INC.
By:/s/Curtis L. Alliston
-------------------------------
Curtis L. Alliston, President
PC:
NANCY C. LAWHON, M.D., P.C.
By:/s/Nancy C. Lawhon, M.D.
----------------------------------
Nancy C. Lawhon, M.D., President
11