EXHIBIT 10.10
MANAGEMENT/LICENSING AGREEMENT
This MANAGEMENT/LICENSING AGREEMENT (this "AGREEMENT") is made and entered into
by and between Xxx.Xxx., Inc., a Texas corporation ("Manager") ("Licensor "and
MEDICAL IMAGING OF PLANO, INC. d.b.a. PHYMED DIAGNOSTIC IMAGING CENTER PLANO,
(the "Center") ("Licensee")
WHEREAS, Manager is in the business of operating medical diagnostic imaging
Centers and providing management services to medical and other health care
practitioners in the conduct of their professional operations; and
WHEREAS, Center is engaged in the operation of an outpatient medical diagnostic
imaging center doing business in the State of Texas; and Center desires to
secure the management expertise of Manager in order to conduct its Center in a
more cost-effective manner;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
AGREEMENTS contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. TERM. This AGREEMENT shall be for a term of ten (10) years commencing on the
effective date set forth below, unless sooner terminated as provided elsewhere
in this AGREEMENT (the "Initial Term"). At the end of the Initial Term, the term
of this AGREEMENT shall be extended for consecutive twelve (12) month periods
(each such period is referred to as a "renewal term'), upon the same terms and
conditions, unless either party gives the other party written notice to the
contrary at least thirty (30) days prior to the end of the Initial Term or any
renewal term.
2. MANAGEMENT SERVICES. The Center hereby grants to Manager the right to
supervise and direct the day-to-day management and operation of the Center, and
Manager agrees to provide such services, upon the terms and conditions of this
Agreement. Without limiting the generality of the foregoing, the Center grants
to Manager the right, and Manager agrees, to perform the following services on
behalf of the Center;
(a) to manage the administrative and business operations of the Center as
Manager determines to be customary and usual in the operation of comparable
medical diagnostic imaging center rendering comparable services;
(b) to hire, promote, discharge, and supervise the work of such medical,
technical, business, administrative, and maintenance personnel as Manager shall
deem necessary or advisable in the management of the Center pursuant to this
AGREEMENT;
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(c) to hire, promote and discharge as shall be appropriate and reasonably
required by the nature of the Center such physician and non-physician medical
and technical personnel as Manager shall deem necessary or advisable in the
operation of the Center; provided, however, that the Center shall maintain
complete responsibility for supervising the actions of nursing personnel and
medical technicians. Center agrees to save and hold Manager harmless for all
acts or omissions of nursing personnel and medical technicians under the
direction or supervision of a physician. Manager shall exercise reasonable care
in the initial selection of such personnel and technicians; however, Center will
not be obligated to accept the services of individuals deemed by the Center to
be unqualified to perform technical or patient care services.
(d) to adopt such reasonable rules, policies and procedures as may be
appropriate for the orderly operation of the Center and the delivery of
administrative, clerical and other management services. Center hereby agrees to
abide by such rules, policies and procedures and to cooperate with Manager in
causing all personnel to abide by same;
(e) to procure medical and non-medical supplies and equipment which Manager and
Center deem necessary for the operation of the Center from such suppliers and on
such terms as Manager may determine; Center shall promptly notify Manager if any
supplies or equipment are defective or otherwise unsatisfactory for their
intended use. Manager expressly disclaims any warranties of merchantability or
fitness for a particular use with respect to supplies and equipment provided.
(f) to install and maintain systems for accounting, auditing, and medical
records maintenance;
(g) as agent for the Center, to promptly deposit in banking institutions
selected by Center, in a separate account, in the Center's name and for the
Center's benefit, all moneys received by Manager as revenues from the Center or
otherwise for or on behalf of the Center;
(h) to fulfill the obligations of Center under any existing lease affecting
medical or business equipment located in the Center, including payment of rental
when due, and to secure insurance as required by any such lease AGREEMENT, but
only to the extent of the funds in the Center. Any such lease shall be reviewed
and acknowledged in writing by Manager prior to the execution of this AGREEMENT;
(i) to make or install, or cause to be made or installed, at the expense of
Center, and in the name of the Center, all mutually agreed alterations,
replacements, additions and improvements in and to the office facilities
excluding, however, extraordinary capital replacements, additions or repairs;
(j) to assist in the application for all licenses and permits required of the
Center or Manager in connection with the management and operation of the Center;
(k) to cause, at the request and expense of Center, such other acts and things
to be done as shall be reasonable and necessary for the efficient and
cost-effective operation of the Center.
(l) to contract, on behalf of the Center, with a qualified radiologist for the
performance of procedures, for the supervision of physician and non-physician
technical staff and to perform the duties and responsibilities of a medical
director.
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(m) to act as an agent for the Center in the conduct of all financial and legal
affairs, to include the engagement of legal, accounting and other professionals,
execution of binding contracts and agreements, loan documents, pledging of
center assets for purposes of loan and other financial arrangements as the
Manager deems appropriate in the operation of the Center.
3. Employees. Manager shall not be liable to employees employed by Center for
their wages, fringe benefits or other compensation. Center shall be responsible
for payment of the total aggregate compensation, including fringe benefits,
payable with respect to such employees. The term "fringe benefits" as used
herein shall mean and include Center's contribution of FICA, FUTA, unemployment
compensation and other employment taxes, worker's compensation, group life and
accident and health insurance premiums, incentive bonuses and other similar
benefits agreed to by Manager on behalf of the Center.
4. Fee. As compensation for all services rendered by Manager under this
AGREEMENT, the Center shall pay to Manager at its principal office (or at such
other place, if any, as Manager from time to time may designate in a written
notice to the Center) a monthly management fee (the "Management Fee") equal to
THREE PERCENT (3%) OF THE NET SALES, said amount to be paid in arrears on or
before the tenth (10th) day of the month following, every month during the term
of this AGREEMENT. The formula for determining the Management Fee is not
intended and shall not be interpreted or applied as permitting the Manager to
share in the Center's fees. It is acknowledged as the parties' negotiated
AGREEMENT as to the reasonable fair market value of the services furnished by
Manager pursuant to this AGREEMENT, considering the nature and volume of the
services required and the risks assumed by the Manager.
5. Payment of Expenses. Center shall be responsible for making payment of all
operating expenses attributable to the operation of Center unless payment is
specifically assumed by Manager as an obligation pursuant to this AGREEMENT.
6. Performance of Duties of Manager. (a) Manager is an independent contractor,
and not an employee or partner of the Center. As an independent contractor,
Manager shall not act or attempt to act, or in any manner assume or create any
obligation on behalf of or in the name of the Center or any of its affiliates,
or otherwise bind the Center or any of its affiliates in any manner, other than
as specifically authorized in this AGREEMENT or otherwise authorized in writing
by the Center.
(b) Manager shall devote its best efforts to the operation of the Center in a
reasonable manner and shall perform its services and obligations hereunder
diligently and according to the local standards. It is expressly acknowledged
that Manager is engaged in operating a similar medical diagnostic imaging center
in Dallas and is providing management services to the medical profession and is
in no way restricted or restrained from pursuing such other business activities.
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7. Books and Records. (a) Business Records. Manager shall prepare and furnish to
the Center an unaudited statement of revenue and expenses of the Center for each
calendar month during the term of this AGREEMENT on or before the 25th day of
the calendar month immediately following the month for which the statement is
being prepared. Manager shall accord to the Center, and its accountants,
attorneys and agents, the right to examine or inspect any and all books or
records relating to the Center at all reasonable times during the term of this
AGREEMENT. Books and records of the Center may be kept at the Center or at such
other location as Manager may determine.
(b) Medical Records. Manager and Center shall cooperate with the Center to
assure preparation of appropriate medical records concerning medical services
provided by the Center. Manager shall maintain such medical records at the
Center in accordance with prudent record keeping procedures and as required by
law.
(c) Confidentiality of Records. Manager and Center agree to take all reasonable
precautions to prevent the unauthorized disclosure of any and all books and
records kept and/or maintained by Manager under the terms of this AGREEMENT and
to keep such books and records confidential except as otherwise provided by law
or in subparagraph (d) of this Paragraph.
(d) Disclosure of Records to Governmental Agencies. to the extent required by
section 1861(v)(1)(l) of the Social Security Act, the parties hereto, upon
proper request, shall allow the United States Department of Health and Human
Services, the Comptroller General of the United States, or their duly authorized
representatives access to this AGREEMENT, and to all books, documents and
records necessary to verify the nature and extent of the cost of services
provided by either party under this AGREEMENT at any time during the term of
this AGREEMENT and for an additional period of four (4) years following the last
date services are furnished under this AGREEMENT. In the event that either party
carries out any of its obligations under this AGREEMENT through an AGREEMENT
with an organization related to it, such party shall require that a clause
substantially to the effect of this subparagraph be included in that AGREEMENT.
8. Liability Insurance. (a) Manager shall maintain throughout the term of this
AGREEMENT, at its sole expense, professional liability insurance coverage on
Manager and its employees in the minimum amount $500,000.00 for each occurrence
and One Million Dollars $1,000,000.00 in the aggregate.
(b) The Center shall maintain, at its sole expense, throughout the term of this
AGREEMENT and for a period not less than three (3) years commencing on the date
of the termination of this AGREEMENT, professional liability insurance covering
(i) the Center in the minimum amount of $1,000,000 dollars for each occurrence
and $3,000,000 dollars in the aggregate, and (ii) covering each physician
rendering medical services at the Center, whether they are members of the Center
or employees of the Center, or independent contractors, in the minimum amount of
$1,000,000 dollars for each occurrence and $3,000,000 dollars in the aggregate.
Such insurance shall be obtained from an insurance carrier whose A.H. Best
rating is A or better and contain an endorsement to the effect that the policy
shall not be canceled or materially changed without at least 30 days prior
written notice to Manager. The Center shall provide to Manager upon request a
certificate of insurance of such coverage.
9. Events of Default. (a) The Center shall be in default under this AGREEMENT
upon the occurrence of any of the following events:
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(i) failure of the Center to comply with any term or condition of this
AGREEMENT within fifteen days after written notice of such
noncompliance by Manager.
(ii) dissolution of the Center.
(iii) bankruptcy of the Center.
(b) Manager shall be in default under this AGREEMENT upon the occurrence of any
of the following events:
(i) failure of Manager to comply with any term or condition of this
AGREEMENT within fifteen days after written notice of such noncompliance to
Manager by the Center; and
(ii) bankruptcy of Manager.
(c) For purposes of this paragraph (the bankruptcy of an entity shall be deemed
to have occurred when that entity(i) makes a general assignment for the benefit
of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the
subject of an order for relief or is declared insolvent in any federal or state
bankruptcy or insolvency proceeding; (iv) files a written petition or answer
seeking a reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law; (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against that entity in a proceeding of the type described in parts (i)
through (iv) of this subparagraph; (vi) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator (vii) or 120 days expire after
the date of the commencement of a proceeding against that entity seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any law if the proceeding has not been
previously dismissed, or 90 days expire after the date of the appointment,
without the entity's consent or acquiescence, of a trustee, receiver, or
liquidator of that entity if the appointment has not previously been vacated or
stayed, or 90 days expire after the date of expiration of a stay, if the
appointment has not previously been vacated.
(d) Upon the occurrence of an event of default of the Center as provided in
subparagraph (a) of this paragraph, Manager shall have the right to terminate
its obligations under this AGREEMENT and to pursue any other remedies available
at law or equity, and Manager's termination of its obligations under this
AGREEMENT shall not constitute a waiver or forfeiture of any rights or remedies
that Manager may have including Manger's right to compensation.
(e) Upon the occurrence of an event of default of Manager as provided in
subparagraph (b) of this paragraph, the Center shall have the right to terminate
this AGREEMENT and to pursue any other remedies available at law or equity
against Manger.
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10. Termination. Either party may terminate this AGREEMENT at any time, without
cause, upon 45 days' advance written notice to the other. Upon termination of
this AGREEMENT, either at the expiration of its term as provided in Paragraph 1,
or upon an event of default as provided in Paragraph 9, or as provided in this
Paragraph:
(a) Manager shall deliver to the Center as received any moneys due the Center
under this AGREEMENT but received by Manager more than 30 days after such
termination, less any amounts due Manager, including the Management Fee;
(b) Manager shall deliver to the Center all materials and supplies, copies of
books and records, keys, contracts and documents, and such other accountings,
paper and records pertaining to the Center and this AGREEMENT as the Center
shall reasonably request;
(c) The obligations of the parties hereto with respect to this AGREEMENT shall
cease and terminate, except as to obligations of either party which shall have
heretofore accrued or arisen, or except as otherwise herein provided.
(d) If the Center terminates this AGREEMENT for any; then the Center shall be
obligated to pay Manager the balance of the fees due as if the Agreement was
still in full effect for the time remaining under the original term of ten
years.
11. Power of Attorney. The Center hereby constitutes and appoints Manager and
its authorized representatives (and any successor thereto by assignment,
election, or otherwise and the authorized representatives thereof) with full
power of substitution as its true and lawful agent and attorney-in-fact, with
full power and authority in its name, place, and stead (i) to xxxx patients and
collect accounts receivable, (ii) on behalf of the Center, to receive and give
receipts for all insurance, Medicare, and Medicaid payments payable to the
Center, (iii) to take possession of, endorse in the name of the Center, and
deposit in the Center's bank account any cash, notes, checks, money orders, or
other instruments received by Manager or the Center relating to the operation of
the Center, (iv) to pledge receivables and other Center assets for purposes of
obtaining financing and obtaining equipment for the Center as the Manager solely
deems appropriate, and (v) to contract with third parties on behalf of the
Center for the purposes of procuring equipment, office space, supplies
professional consultants, attorneys an accounting professionals as the Manager
solely deems appropriate.
12. Relationship of the Parties. Nothing in this AGREEMENT shall be construed as
creating a COMPANY between Manager and the Center and in no event shall Manager
participate in or be responsible for the profits or losses of the Center. Except
to the extent that Manager may act as billing, collecting and disbursing agent
for the Center, neither party is the agent of the other. Center shall require
any employee or independent contractor who works in conjunction with Center
under this AGREEMENT to expressly abide by each and every term and condition of
this AGREEMENT and to evidence such AGREEMENT in writing as required by Manager.
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13. Standard of Care. Although Manager's obligation to obtain office facilities,
equipment, supplies and services is limited to the quantity and quality
ordinarily required by members of the same profession as Center, according to
the generally accepted standards of care prevailing in the local community,
Center is not restricted to such standard and is at all times free to equip
Center according to higher or more specialized standards; however, Center shall
be responsible for making separate arrangements for any extraordinary
requirements for office facilities, equipment, services or supplies resulting
from such choice to Center according to such higher or more specialized
standards.
14. Limitation of Liability. Manager shall not be liable for any claim or demand
on account of damages arising out of, or in any manner connected with, any
injuries suffered by persons receiving care provided by, or authorized by
Center, unless such injury is approximately caused by proven negligence on the
part of the Manager. Center shall not be liable for any claim or demand arising
out of the acts or omissions of the Manager, except to the extent, if any, that
Center is negligent in exercising direct professional supervision and direction
of those of the Manager's employees who are assigned to assist the Center in the
care of patients. The amount of Manager's liability for any default in its
obligations hereunder shall be limited to the amount of the consideration paid
or payable by Center to Manager hereunder, and no incidental or consequential
damages in excess of such amount may be recovered.
15. Grant of License. Licensor grants to Licensee a non-exclusive license, to
use the name "PHYMED DIAGNOSTIC IMAGING CENTER" and any logo's existing or
created by Licensor, in connection with its business and advertising until the
expiration or cancellation of this Agreement. Upon written notice to Licensor,
Licensee shall have the right to extend the terms of this Agreement to any other
entity operating under the authority and control of Licensee in accordance with
the provision hereinafter set forth.
16. Approval by Licensor. All operations, training programs, medical procedures,
advertising and promotional materials shall be submitted by Licensee to Licensor
for Licensor's approval prior to any release thereof by Licensee. If disapproval
is not received by Licensee within ten days after receipt of such material or
matters by Licensor, such right of approval shall be deemed waived and such
material shall be considered approved. Licensor's rights are hereby restricted
solely to the material and matter covered by this paragraph. Such approvals by
Licensor shall not be unreasonably withheld, and once such approvals have been
obtained further approval need not be obtained for future or repeat use. No
procedures or materials shall be used or continued without the approval of
Licensor as herein provided.
17. Inspection. The Licensee will permit duly authorized representatives of the
Licensor to inspect, on the premises of the Licensee, at all reasonable times,
the operations of the Licensee.
18. Indemnity. the Licensor assumes no liability to the Licensee or to third
parties with respect to the performance of the procedures, training or treatment
conducted under the license, and the Licensee hereby indemnifies and holds
harmless the Licensor against all losses, damages and expenses, including
attorneys' fees, incurred as result of or related to claims of third persons
involving the delivery of health care to patients or training to health care
providers.
19. Miscellaneous.
(a) Prohibited Activities. Manager shall not provide or otherwise engage in
services which constitute the unauthorized practice of medicine under applicable
Texas Law.
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(b) Communications to be given under this AGREEMENT by any party to the other
shall be deemed to have been duly given if given in writing and personally
delivered, sent by telegram, telex, or telecopy, or sent by mail, registered or
certified, postage prepaid with return receipt requested, at the address
specified beside each party's signature at the end of this AGREEMENT. Notices
delivered personally or by telegram, telex, or telecopy shall be deemed
communicated as of 10:00 a.m. on the third business day after mailing. Any party
may change its address for notice hereunder by giving notice of such change in
the manner provided in this paragraph.
(c) Entire AGREEMENT. This AGREEMENT supersedes any and all other Agreements,
either oral or written, between the parties with respect to the subject matter
hereof and contains all of the covenants and agreements between the parties.
(d) Modification and Waiver. No change or modification of this AGREEMENT shall
be valid or binding upon the parties unless such change or modification shall be
in writing and signed by all the parties. No waiver of any term or condition of
this AGREEMENT shall be enforceable unless it shall be in writing signed by the
party against which it is sought to charged. The waiver by any party of a breach
of any provision of this AGREEMENT by any other shall not operate or be
construed as a waiver of any subsequent breach by such other party.
(e) Governing Law. This AGREEMENT, and the rights and obligations of the parties
hereto, shall be governed by and construed in accordance with the laws of the
State of Texas and shall be performable in Dallas County, Texas. Venue of any
litigation arising hereunder shall be in a court of competent jurisdiction in
Dallas County, Texas.
(f) Counterparts. This AGREEMENT may be executed in counterparts, each of which
shall constitute an original, but all of which shall constitute one and the same
document. Any counterpart evidencing signature by one party that is delivered by
telecopy by such party to the other party hereto shall be binding on the sending
party when such telecopy is sent, and such sending party shall within ten days
thereafter deliver to the other party a hard copy of such executed counterpart
containing the original signature of such party or its authorized
representative.
(g) Costs. If any action at Law or in equity is necessary to enforce or
interpret the terms of this AGREEMENT, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which it may be entitled.
(h) Assignment. No party may assign any rights or delegate any duties under this
AGREEMENT without the prior written consent of the other party hereto, which
consent may be withheld in that party's sole discretion.
(i) Binding Effect. This AGREEMENT shall be binding upon the parties hereto,
together with their respective successors, and permitted assigns.
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(j) Severability. If any provision of this AGREEMENT is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
hereof, such provision shall be fully severable and this AGREEMENT shall be
construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part of this AGREEMENT; and the remaining provisions of this
AGREEMENT shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as part of this AGREEMENT, a provision as similar
in its terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
(k) Language. Whenever the context requires, references in this AGREEMENT to the
singular number shall include the plural, the plural number shall include the
singular, and words denoting gender shall include the masculine, feminine, and
neuter. Section headings in this AGREEMENT are for convenience of reference only
and shall not be considered in construing or interpreting this AGREEMENT.
(l) Further Actions. Each party to this AGREEMENT shall perform any and all
further acts and execute and deliver any and all documents and instruments that
may be reasonably necessary to carry out the provisions of this AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed and
effective this 14th day of January, 1998.
FOR THE MANAGER: FOR THE CENTER:
By: By:
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Xxxxxx X. Xxxxxx, President
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