MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement"), is made and entered into
this the 13th day of October, 2000, by and between Texas Lithotripsy Limited
Partnership VIII, a limited partnership formed under the laws of the State of
Texas (the "Partnership"), and Lithotripters, Inc., a North Carolina corporation
(the "Management Agent'").
W I T N E S S E T H :
--------------------
WHEREAS, the Partnership is in the business of owning and operating one
or more mobile extracorporeal shock-wave lithotripters for the treatment of
kidney stones (the "Lithotripsy Systems") at various locations in Xxxxxx County,
Texas and the surrounding counties (the "Service Area"); and
WHEREAS, the Partnership desires to engage the Management Agent upon
the terms and conditions hereinafter set forth, to supervise and coordinate the
management and administration of the day-to-day operations of the Partnership's
Lithotripsy Systems, and the Management Agent desires and is willing to accept
such engagement upon such terms and conditions.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Partnership and the Management Agent agree as follows:
1. Engagement. The Partnership hereby engages the Management Agent to coordinate
and supervise the management and administration of the day-to-day operations of
the Lithotripsy Systems during the term hereof. The Management Agent hereby
accepts the engagement offered by the Partnership for and in consideration of
the compensation hereinafter provided, and agrees to use its best efforts in
coordinating and supervising the management and administration of the day-to-day
operations of the Lithotripsy Systems.
2. Term. The initial term of this Agreement shall be for a period of five (5)
years beginning on the date hereof. Thereafter, the term of this Agreement shall
be extended automatically, without any further action by the Partnership or the
Management Agent, for three (3) successive five-year terms. If either party
desires to terminate this Agreement at the end of the initial term or any
succeeding five-year term, such party shall give written notice of such desire
to the other party at least sixty (60) days prior to the expiration of the
initial term or any succeeding five-year term, and after such notice and at the
expiration of the then existing term, this Agreement shall become of no further
force or effect whatsoever, and each of the parties shall be relieved and
discharged therefrom.
3. Compilation of Partnership Data. The Partnership hereby agrees to provide any
and all patient data concerning the Partnership's Lithotripsy Systems treatment
services (the "Partnership Data") to the Management Agent and grants to the
Management Agent the right to compile the Partnership Data for the creation and
maintenance of an outcome analysis program database (the "Database"). The
Management Agent covenants that the Partnership Data will be used for the
creation of the Database and that such use will be in compliance with all
applicable state laws and regulations, including those relating to
physician-patient confidentiality. As a part of the services to be rendered by
the Management Agent hereunder, the Management Agent will use the Database to
provide outcome analysis reports to the Partnership solely for use by the
Partnership in maintaining and improving its quality of care to its patients.
The Partnership shall have no ownership interest in the Database and may not
disclose any information or data contained in the Database to any third party
except for the express purpose of treatment of patients of the Partnership.
4. Specific Management Duties.
--------------------------
(a) The Management Agent shall perform, or shall contract with third
parties (including Affiliates) for the performance of the following services:
(i) Coordinating, the marketing and advertising of the Lithotripsy Systems.
(ii) Managing billing and collection services for the Lithotripsy Systems'
operations. The fees charged to patients for different urological
services provided by the Lithotripsy Systems shall be established by
the mutual agreement of the Partnership and the Management Agent. The
Management Agent will not xxxx the professional urological component of
the services provided by the Partnership as the same will be the
responsibility of each treating urologist.
(iii) Engaging all nonphysician personnel reasonably necessary to staff and
operate the Lithotripsy Systems, including without limitation, drivers,
technicians, nurses, physicians' assistants, secretaries, office
managers and receptionists. It is understood and agreed that the
Partnership shall pay the wages or other compensation of such personnel
and that the Management Agent shall in no way be liable to such persons
for their wages or other compensation, nor to the Partnership or others
for any action or omission on the part of such persons.
(iv) Making or causing to be made all repairs, replacements, alterations,
additions and improvements to the equipment comprising or used in
connection with the Lithotripsy Systems.
(v) Purchasing or causing to be purchased all equipment, medical and office
supplies necessary for the efficient maintenance and operation of the
Lithotripsy Systems.
(vi) Making all contracts for electricity, gas, fuel, steam, water,
telephone, rubbish removal, laundry service, and other utilities or
services as are necessary for the efficient maintenance and operation
of the Lithotripsy Systems.
(vii)Supervising and coordinating any necessary training of physicians who will
use the Lithotripsy Systems.
(viii) Consulting with and advising the Partnership, through the Management
Agent's physician personnel, regarding all medical aspects of the
Partnership's practice.
(ix) Monitoring the progress in technological developments in lithotripsy and
advising the Partnership regarding the nature of these developments.
(x) Arranging for the continuing education of the physicians trained to use the
Lithotripsy Systems regarding the latest developments in lithotripsy.
(xi) Supervising the management of the day-to-day operations of the
Lithotripsy Systems through the engagement by the Management Agent of
one or more local physician medical directors as provided in Section 8
herein.
(xii) Determining the travel and location itinerary of the Lithotripsy
Systems in the Service Area, and coordinating and communicating the
same with the physicians responsible for providing professional
urological services for the Partnership.
(xiii) Providing the scheduling of patients for treatment with the Lithotripsy
Systems.
(xiv) Administering any usage agreement between the Partnership and a third
party with aspect to such party's operation of the Lithotripsy Systems.
(xv) Creating and maintaining an outcome analysis program and quality
assurance program, including without limitation, the creation and
maintenance of the Database referenced in Section 2, for monitoring and
improving the efficacy of the Lithotripsy Systems treatment services.
(b) It is specifically understood and agreed that the Management Agent
may contract with one or more hospitals and surgical centers where the
Lithotripsy Systems will be located, or any other third party (including
Affiliates), for the direct provision of the services as provided in Sections
4(a)(i), (ii), (iii), (iv), (v), (vi) and (xiii) above. In such case, all
personnel necessary to provide such services will remain the employees and
responsibility of such third party. Compensation payable to third parties
providing services to the Partnership shall be the sole responsibility of the
Partnership, and the amount of such compensation and terms of such employment
shall be determined in the sole discretion of the Partnership.
5. Fiscal Responsibilities.
-----------------------
(a) All monies furnished by the Partnership as working capital and all
Lithotripsy Systems revenues received by the Management Agent for or on behalf
of the Partnership shall be accounted for separately. Such funds shall be
disbursed by the Management Agent in such amounts and at such times as the same
are required to pay for obligations, liabilities, costs, expenses and fees
(including, without limitation, the compensation of the Management Agent as
hereinafter provided) arising on account of or in connection with the operation
and management of the Lithotripsy Systems. The Management Agent shall remit to
the Partnership upon submission of the monthly statement described in Section
5(b) below, the difference between (i) the Lithotripsy Systems revenues and
other monies received by the Management Agent, and (ii) the expenses paid and
disbursements made by the Management Agent, after deduction of the payment to
the Management Agent of the compensation for its services hereunder.
(b) The Management Agent shall maintain complete books and records of
the management and operation of the Lithotripsy Systems in accordance with
generally accepted accounting principles, which books of account shall at all
times be open to the inspection of the Partnership or any of its partners or
duly authorized agents. The Partnership shall have the right to audit the
Management Agent's books and records for any period during normal business
hours. In the event that any such audit discloses that the Management Agent has
not reported the full amount payable to the Partnership hereunder, the
Management Agent shall promptly pay the deficiency and the Management Agent
shall reimburse the Partnership for the entire cost of the audit. The Management
Agent shall render to the Partnership a monthly statement of receipts and
disbursements, such statements to be furnished on or before the thirtieth day of
each month for the preceding month. The Management Agent may contract with any
third party, including Affiliates, as provided in Section 4(b) above, to
maintain the books and records of the Lithotripsy Systems as provided in this
Section 5(b).
(c) Except as otherwise provided herein, the Partnership shall pay all
obligations, liabilities, costs (including without limitation, overhead,
personnel costs and regional director fees), expenses and fees arising on
account of or in connection with the operation and management of the
Partnership's Lithotripsy Systems.
(d) The Management Agent is the management agent for various medical
services partnerships. As a consequence, many employees of the Management Agent
and its Affiliates provide various management and administrative services for
numerous partnerships, including the Partnership. In order to properly allocate
the costs of the Management Agent's and its Affiliates' employees among all the
partnerships (including the Partnership) for which they provide services, such
costs will be divided among all the partnerships based upon the relative number
of patients treated by each partnership.
(e) The Partnership shall reimburse the Management Agent promptly for
any monies which the Management Agent may elect to advance for the account of
the Partnership. Nothing herein contained, however, shall be construed to
obligate the Management Agent to make any such advances.
6. Independent Contractor. In the performance of its work, duties and
obligations, it is mutually understood and agreed that the Management Agent is
at all times acting and performing as an independent contractor. The Partnership
shall neither have nor exercise any control or direction over the methods by
which the Management Agent or its employees, if any, shall perform their work
and functions. The sole interest and responsibility of the Partnership is to
assure that the services covered under this Agreement shall be performed and
rendered in a competent, efficient and satisfactory manner. Nothing herein
contained shall be construed to limit the Management Agent from providing
similar services to other partnerships as long as the provision of such services
does not infringe upon its ability to perform its duties under this Agreement.
7. Management Fee.
--------------
(a) The Partnership covenants and agrees to pay to the Management Agent
for its services hereunder a monthly fee equal to 7.0% of the Adjusted Gross
Revenues (as defined below) per month (the "Management Fee"). It is intended
that the Management Agent's only compensation for its services rendered pursuant
to this Agreement shall be the Management Fee and the reimbursement of expenses
incurred by the Management Agent as provided in Section 5(e) above. For purposes
of this Agreement, the Partnership's "Adjusted Gross Revenues" for the
applicable period shall be all gross receipts from any source for such period,
other than from Partnership loans, the refinancing, sale, exchange casualty or
other disposition of the Partnership's assets and capital contributions, less
adjustments for contractual reimbursements and bad debts.
(b) The Management Fee for any given month shall be paid on or before
the 30th day of the next succeeding month and shall begin to accrue as of the
date hereof.
8. Medical Directors. The Management Agent may engage one or more local
medical directors to coordinate and supervise the local medical management and
administration of the Mobile Lithotripsy Systems. The Partnership will pay and
be solely liable for the payment of the compensation to be received by the local
medical director(s).
9. Assignment. Except as expressly provided herein, the Management Agent
may not assign this Agreement nor any of its duties or obligations hereunder
without the prior written consent of the Partnership. Subject to the foregoing,
this Agreement shall be binding upon, and inure to the benefit of, the
successors in interest and permitted assignees of the parties hereto.
10. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations or warranties relating to the subject matter of
this Agreement which are not set forth herein. No amendment or modification of
this Agreement shall be valid unless made in writing and signed by the parties
hereto. No term or condition of this Agreement shall be deemed to have been
waived except by written instrument of the party charged with such waiver.
11. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
12. Notices. Any notice to be sent hereunder shall be either hand delivered
or sent by registered mail, return receipt requested, addressed to the
appropriate party at:
To the Partnership: Texas Lithotripsy Limited
Partnership VIII
c/o Lithotripters, Inc.
0000 Xxxxxxx xx Xxxxx
Xxxxxxx, Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx, M.D.
To the Management Agent: Lithotripters, Inc.
0000 Xxxxxxx xx Xxxxx
Xxxxxxx, Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx M.D.
13. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together constitute one and the same instrument.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, this Agreement has been executed on behalf
of the Partnership and the Management Agent on the day and year first above
written.
PARTNERSHIP:
-----------
TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VIII
By: Lithotripters, Inc.,
a North Carolina corporation and the
General Partner of the Partnership
By:
Xxxxxx Xxxxxxx, M.D.
President
MANAGEMENT AGENT
LITHOTRIPTERS, INC.,
a North Carolina corporation
By:
Xxxxxx Xxxxxxx, M.D.
President
