SURGERY CENTERS OF AMERICA, INC.
AFFILIATION AGREEMENT
This Affiliation Agreement (the "Agreement") is made effective the 1 st day
of July, 1999, by and between SURGERY CENTERS OF AMERICA, INC., an Oklahoma
corporation ("SCOA") and BELLAIRE SURGICARE, INC., a Texas corporation
("Owner"), a wholly owned subsidiary of SurgiCare. Inc. a Delaware corporation.
Recitals
A. Owner owns and operates a multi-specialty ambulatory surgery center in
Houston, Texas (the "Center"), and the Owner desires to retain certain services
of SCOA to assist Owner in conducting the business and services of the Center.
B. SCOA desires to provide such services upon the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the foregoing mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
DEFINITIONS
1.1 Certain Defined Terms -As used in this Agreement, the following terms shall
have the following meaning unless otherwise provided.
"SCOA " -Surgery Centers of America, Inc. an Oklahoma corporation.
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"Owner" -Bellaire SurgiCare, Inc., a Texas corporation.
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"Center" -a multi-specialty ambulatory surgery center to be located at
6699 Chimney Rock, Houston, Harris County, Texas 77081.
GENERAL
2.1 Appointment
The Owner hereby retains SCOA and SCOA hereby accepts such
retention, to provide certain management-related materials and consulting
services to Owner, to assist Owner in the course of the conduct of the business
of the Center, all as hereinafter set forth.
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2.2 Term
The term of this Agreement shall be for of twelve (12) months
from the date set forth on the first page hereof, and continue until termination
by mutual consent of SCOA and the Owner, or until otherwise terminated as
hereinafter set forth.
2.3 Termination
Notwithstanding the provisions of the foregoing Section 2.2,
termination of this Agreement may occur pursuant to the following provisions:
2.3.1 Termination by PartyWithout Cause
.
This Agreement may be terminated by either party without cause
at any time after twelve months upon thirty (30) day prior written notice from
the terminating party to the non-terminating party, such termination to take
effect upon the expiration of such notice.
2.3.2 Termination for Cause
Either party to this Agreement may immediately terminate this
Agreement for cause in the event of a material breach of the Agreement by the
non-terminating party , which breach is not cured prior to expiration of a ten
(30) day written notice from the terminating party to the non-terminating party,
identifying the alleged breach. Termination will become effective upon
expiration of such notice, in the absence of cure by the non-terminating party.
Provided, however, if such breach cannot be reasonably cured within such thirty
(30) day period, SCOA may in good faith commence performance to cure the breach
within such thirty (30) day period and shall diligently proceed therewith to
completion.
2.3.3 Termination by Bankruptcy
This Agreement shall expire and automatically terminate if
either party shall file or have filed against it a petition in bankruptcy or any
petition seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state, or
other statute or law, or seeking or consenting to acquiescing in the appointment
of any trustee, receiver, or liquidation of all or any substantial part of its
properties and such filing remains unresolved or is not dismissed within ninety
(90) days.
SERVICES AND MATERIALS TO BE PROVIDED BY SCOA
3.1 General Services
In that Owner intends to operate Center in substantial
conformity with the policies and procedures utilized by SCOA in the operation of
SCOA's own ambulatory surgery centers, SCOA agrees to designate Center as a
SCOA-affiliated center, and to include Center and Owner in any and all managed
care contracts entered into by SCOA with third party payors, either by (a)
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including Owner's Center in the appendix listing centers included in the
contracts negotiated with third party payors, or (b) naming Owner's Center as a
SCOA affiliate in the text of the contract itself. Further SCOA agrees to name
Owner's Center as an affiliate center in any and all agreements it has, or will
enter into, with any group purchasing organizations. These designations of
affiliation will remain in effect throughout the term of this Agreement.
3.2 Clinical Policies and Procedures
SCOA agrees to provide Owner with copies of all of its
written clinical policies and procedures manuals, either in text form or via
editable computer files, at Owner's option, and further SCOA agrees to provide
Owner with any and all updates revisions, etc., to such policies and procedures
in like form throughout the term of this Agreement. ,
3.3 Business Policies and Procedures
SCOA agrees to provide Owner with copies of all of its
written business clinical policies and procedures manuals, either in text form
or via editable computer files, at Owner's option, and further SCOA agrees to
provide Owner with any and all updates revisions, etc., to such policies and
procedures in like form throughout the term of this Agreement.
3.4. Retention of Title
It is expressly understood and agreed that all systems,
methods, manuals, procedures and controls provided by SCOA will be kept for the
exclusive use by Owner for its Center. All right title and interest in these
systems, methods, manuals, procedures and controls provided by SCOA shall remain
the property of SCOA. SCOA agrees to leave systems, methods, manuals, procedures
and controls in place for at least one hundred and twenty (120) days subsequent
to the termination of this Agreement. Owner shall ultimately return to SCOA all
such material including all manuals and copyrighted materials.
FEES FOR SERVICES
4.1------Fees for Materials and Services
In consideration for all materials and services provided by
SCOA to Owner for its Center hereunder, Owner shall pay to SCOA a fee equal to
two percent (2%) of the "net monthly collected revenues" from the Center's cash
collections, with said monthly fees to be paid on the 15th day of each month
following the month earned. For purposes of this section, "net monthly collected
revenues" shall be defined as actual gross collections of Center deposited in
its bank, received from its gross charges placed on the books, adjusted for all
patient allowances, discounts, fixed fee write -downs and bad debts.
4.2 Proration
In the event that this Agreement is effective on a day other
than the first day of the calendar month, the monthly fee payable hereunder
shall be prorated for such month.
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4.2 Termination Payment
In the event of tern1ination of this Agreement, the final
payment due SCOA hereunder shall be the payment due on the l5th day of the month
next subsequent to completion of the last full calendar month of the tern1 of
this Agreement.
INDEMNIFICATION
5.1 Indemnification
In that Owner is responsible for management of its Center' and
SCOA is not, engaged, nor is it responsible, hereunder to provide actual
management services to the Center, Owner agrees to hold SCOA harmless, and fully
indemnify SCOA, from all loss or harm arising out of or related to the,
operations of the Center, from and after the effective date of this Agreement;
however, this grant of indemnity shall not extend to any claim of Center which
results from the failure of SCOA to provide materials under Sections 3.2 and 3.3
hereof which are in compliance with all laws applicable to the procedures and
policies set forth in such materials.
MISCELLANEOUS
6.1 Disclosure of Relationships
SCOA agrees to fully inforn1 the Owner if at any time during
the term of this Agreement, SCOA, its Officers or Directors, have an ownership
interest in any entity which provides goods or services to the Center.
6.2 Related Party Transactions
Subject to the disclosure requirements of Section 6.1, this
Agreement shall not prohibit SCOA from dealing or contracting with related or
affiliated entities in providing goods and/or services to the Center, provided,
such goods and/or services are offered at the prevailing market rates to the
Center .
6.3 Notices
All notices, requests, demands or other communications
pursuant to this Agreement or contemplated hereby shall be in writing and shall
be deemed to have been given when personally delivered or if mailed, by
registered or certified US Mail, postage prepaid, return receipt requested upon
such mailing to the parties at the addresses set forth below. Any party may
change the address to which such notices are given by giving notice in the
manner provided herein:
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Notice to the Owner shall be addressed as follows:
Bellaire SurgiCare, Inc.
6699 Chimney Rock Road
Houston, Texas 770801
Attn: David Blumfield, D PM, President
Notice to SCOA shall be addressed as follows: .
Surgery Centers of America, Inc. 1601 S. State Street
Edmond, OK 73013
Attn: Dr. Joe H. Huffmyer, President
6.4 Entire Agreement
This Agreement represents the entire agreement between the
parties hereto and all prior understandings and agreements are hereby merged
into this Agreement. This Agreement may not be modified except by an instrument
in writing signed by the parties hereto.
6.5 Governing Law
This Agreement and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of Texas.
This Agreement is performable in Harris County, Texas.
6.6. Binding Effect
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, representatives, successors
and permitted assigns.
6.7 Severability
If any of the provisions of this Agreement shall be construed
to be illegal or invalid, such construction shall not affect the legality or
validity of any of the other provisions hereof and the illegal or invalid
provisions hereof shall be deemed stricken and deleted herefrom to the same
extent as if never herein but all provisions hereof shall remain in full force
and effect.
6.8 Assignability
This Agreement may not be assigned by either party hereto without the
prior written consent of the other party .
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Attorneys' Fees
The prevailing party in an action arising under this
Agreement or as a result of its termination may recover reasonable attorneys'
fees and costs from the non-prevailing party, to include arbitration.
EXECUTED the 29th day of July, 1999, but effective the 1st day of July,
1999.
"SCOA" SURGERY CENTERS OF AMERICA, INC.
ATTEST:
Rick Mason By: /s/ Joe H. Huffmyer
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Assistant Secretary Joe H. Huffmyer, President
"OWNER" BELLAIRE SURGICARE, INC.
ATTEST:
By: Sharon Negler By: /s/ David Blumbield,
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Secretary David Blumfield, DPM, President
"OWNER" SURGICARE, INC.
ATTEST:
By: Sharon Negler By: /s Michael Mineo
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Secretary Michael Mineo, Vice-President
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