MHM SERVICES INC
S-2, EX-10.4, 2000-08-16
GENERAL MEDICAL & SURGICAL HOSPITALS, NEC
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                                                                    EXHIBIT 10.4


                  AGREEMENT TO PROVIDE MENTAL HEALTH SERVICES

                                    BETWEEN

                          PRISON HEALTH SERVICES, INC.

                                      AND

                        MHM CORRECTIONAL SERVICES, INC.


         THIS AGREEMENT, effective April 1, 1999, is by and between PRISON
HEALTH SERVICES, INC., a Delaware corporation (hereinafter "PHS"), and MHM
CORRECTIONAL SERVICES, INC., a Delaware corporation (hereinafter "MHM").


                                    RECITALS

A.       PHS is under contract to the Florida Department of Correction
         (hereinafter the "Client"), to provide comprehensive medical, dental
         and mental health and psychiatric services according to the terms and
         conditions of such contract and the other Contract Documents (as
         defined therein) (collectively, the "Contract") to offenders under the
         jurisdiction of the Client at the Broward Correctional Institute
         ("Site"). A copy of the Contract is attached hereto and made a part of
         this Agreement by reference. The Contract and this Agreement shall be
         taken as a whole in interpreting the agreement of the parties, but to
         the extent of any conflict or inconsistency, the priority of
         determining resolution of such conflict or inconsistency shall be as
         set forth in the Contract, with this Agreement being last. All
         capitalized terms used but not otherwise defined herein shall have the
         meanings given for such terms in the Contract. The Contract determines
         the effective date of this Agreement.

B.       MHM is authorized to do business in the State of Florida and has, or
         will acquire, the professional expertise and require its employees to
         maintain all requisite professional licenses to provide the psychiatric
         and mental health and psychiatric and mental health services required
         under the Contract.

C.       PHS wishes to utilize the services of MHM and, correspondingly, MHM
         wishes to provide such services on behalf of PHS to satisfy the
         obligations to provide psychiatric and mental health services required
         under the Contract.

         NOW, THEREFORE, in consideration of the foregoing and of the
covenants and agreements contained herein, PHS and MHM do hereby agree as
follows:

1.       PHS' UTILIZATION OF MHM'S SERVICES. For the term of this Agreement, PHS
         will utilize the MHM for the provision of psychiatric and mental health
         services to each offender included under the Contract and the Contract
         Documents, defined as the RFP, the PHS response to the RFP and any
         laws, regulations or policies referred in the RFP.

2.       TERM OF THIS AGREEMENT. This Agreement shall be for the term of the
         Contract Term under the Contract; provided, however, that this
         Agreement may be terminated in accordance with the
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         provisions hereof. PHS may terminate this agreement on one hundred
         eighty (180) days written notice without cause or shall end on the date
         the Contract is terminated.

3.       EXTENT OF SERVICE. During the term of this Agreement, MHM agrees to
         provide the psychiatric and mental health services required by the
         Client as more specifically described in the Contract (more
         particularly described on pages 15-17 [subsections w-ac]of the
         Contract, but MHM will be responsible for all requirements under the
         Contract which may relate to mental health such as, but not limited to,
         SOAP format medical records), as the Contract may be amended or
         modified from time to time by mutual agreement of PHS and the Client
         pursuant to the terms of the Contract. In the event of a modification
         of the Contract affecting psychiatric and mental health services, this
         Agreement may be subject to corresponding modification as mutually
         agreed by the parties. Any failure by MHM to provide the psychiatric
         and mental health services in accordance with this Agreement shall be
         deemed a breach of this Agreement. This Agreement shall only be
         effective if the Contract is effective.

         MHM agrees that the psychiatric and mental health services will be
         provided by qualified, trained and licensed psychiatric and mental
         health staff appropriate and qualified to perform the same. All
         providers, employees and psychiatric and mental health staff of MHM
         shall satisfy all qualifications and other requirements and shall be
         subject to all background checks and performance standards and other
         terms and conditions set forth in the Contract applicable to PHS
         employees. PHS shall receive copies of all applications received from
         persons who are retained by MHM to perform services under the Contract
         and this Agreement and shall have access to all materials relating to
         the credentials of such applicants.

         The credentialing process of MHM must be satisfactory to PHS, and if it
         is not satisfactory, PHS shall require that such providers complete its
         credentialing process. MHM shall not hire or retain a person if PHS
         determines that the person's credentials are insufficient or that the
         person's prior contacts with the Client have been unsatisfactory.

         MHM further agrees to recruit, hire and maintain employment of
         psychiatric and mental health staff sufficient to fill the positions
         specified in the Contract and reimbursed in accordance with the
         Contract and subject to the approval of PHS and the client. PHS and the
         client may give MHM notice to terminate any staff member who either PHS
         or client so requests of MHM. Any failure by MHM to hire or maintain
         sufficient staff to comply with the Contract shall be deemed a breach
         of this Agreement. The initial minimum staffing provided by MHM shall
         be at the levels as set forth in the Contract. . In addition, any
         vacancy in a psychiatric and mental health staff position which is
         included in the Minimum Staffing Standards (as defined in the Contract)
         which is not filled within 10 days after becoming vacant and upon
         notice of the Client that such vacancy will result in damages under
         section III, M (page 33) of the Contract, shall constitute a default
         under this Agreement, enabling PHS to immediately terminate this
         Agreement; provided, however, that if MHM' failure to fill such vacancy
         within 30 days is due, in whole or in part, to the Client's ofr


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         PHS's clearance and pre-approval procedures or an agreed upon change in
         Minimum Staffing Standards, PHS shall not terminate this Agreement.

         Any fees, costs, expenses, payments, charges, fines, penalties or
         liquidated damages payable to the Client under the Contract or
         otherwise incurred by PHS, together with any and all interest on such
         amounts, as the result of any failure by MHM to (i) provide and
         maintain staffing in accordance with the Contract, (ii) comply or
         enable PHS to comply with the standards set forth in the Contract
         documents as and when required by the Contract, or (iii) to promptly
         fill any personnel vacancy, shall be the sole responsibility of MHM,
         and MHM shall indemnify and hold PHS harmless therefrom. MHM shall not
         terminate any employee, provider or psychiatric and mental health staff
         without prior notice to PHS, where reasonably practical (but in all
         cases, MHM shall notify PHS immediately after any such termination) and
         using best efforts to first consult with PHS.

         MHM shall provide all office supplies and equipment necessary for its
         delivery of the psychiatric and mental health services to be performed
         hereunder. MHM shall maintain and repair all such supplies and
         equipment, maintain proper written records of periodic maintenance and
         repairs and provide written notice of the purchase of any additional
         equipment according to the Contract.

         MHM shall perform psychiatric and mental health services that include,
         but are not limited to, special mental health programs for problems
         including potential suicide and mental health disorders; conduct of a
         sex-offender management program, including a psychosocial education
         program and relapse prevention services; ambulatory mental health
         services, such as crisis intervention services, individual and group
         counseling, post-admission and evaluation reports, and treatment
         referrals and formal treatment plans; and inpatient mental health
         services and as listed in the Contract Documents.. MHM shall also
         ensure that at least one psychiatrist is on call 24 hours a day, 7 days
         a week, to meet any mental health emergency situation.

         MHM shall perform all routine counseling and procedures, any and all
         referrals for offsite hospitalization and specialist services,
         including mental health services, testing and drugs.

         If the Client should change the scope of the psychiatric and mental
         health services required under the Contract, PHS and MHM agree to
         renegotiate in good faith which services are covered under this
         Agreement and reimbursement in connection therewith.

         MHM also agrees to:

         (a)      assist in the development of procedures and policies as they
                  pertain to the responsibility of MHM;

         (b)      monitor and evaluate the quality and appropriateness of
                  psychiatric and mental health care provided;

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         (c)      provide professional assistance on mental health issues to the
                  PHS HSA on an as needed basis;

         (d)      provide in-service education and training for staff members on
                  mental healthon an as needed basis;

         (e)      review, approve and support the treatment protocols,
                  formularies (with input by MHM) and policies established by
                  PHS, including compliance with current prudent clinical
                  documentation standards as they relate to accreditation and
                  regulatory agency requirements;

         (f)      utilize the formulary established by PHS (with input by MHM)
                  and the Client in prescribing medications;

         (g)      maintain unencumbered State licenses and credentials for
                  professional services to be rendered by employees or
                  contractors of MHM under this Agreement. A copy of all such
                  licenses shall be submitted to PHS;

         (h)      make no additional charges to PHS, offenders at the Site, or
                  other third party payors for services rendered except as
                  agreed pursuant to this Agreement.

         (i)      make appropriate referrals to mental health care providers who
                  have a knowledge of PHS and its program and have a cooperative
                  working relationship with PHS;

         (j)      attend administrative meetings on an as needed basis and where
                  appropriate when required by PHS;

         (k)      support and adhere to PHS procedures and policies, including
                  but not limited to, quality improvement, risk management and
                  utilization review and the protocol and performance standards
                  established by and pursuant to the Contract and provided by
                  PHS;

         (l)      perform in compliance with the Contract, the RFP for Contract
                  #C1599, standards required by the Contract and other relevant
                  national and local standards and the general delivery of
                  correctional health care;

         (m)      exercise independent professional judgment in the provision of
                  appropriate psychiatric and mental health care; and

         (n)      provide to PHS monthly reports of psychiatric and mental
                  health services provided pursuant to this Agreement during the
                  prior month for the Site.

         MHM agrees to abide by the provisions and requirements of the Contract,
         as they may be applicable.

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         MHM agrees not to discriminate in any manner against an employee or
         applicant for employment because of race, color, religion, creed, age,
         sex, marital status, national origin, ancestry or physical or mental
         handicap.

4.       WORKERS' COMPENSATION. MHM agrees to provide and maintain workers'
         compensation insurance if and to the extent required by law, for its
         psychiatric and mental health employees.

5.       TAXES AND UNEMPLOYMENT INSURANCE. MHM is responsible for any tax
         payments due to federal, state or local authorities as a result of this
         Agreement. PHS shall not withhold any taxes from payments made to MHM
         under this Agreement, nor shall PHS be responsible for providing
         unemployment insurance coverage for MHM's officers, directors or
         employees.

6.       PEER REVIEW. As independent medical professionals, the services
         rendered by officers, directors, employees or contractors of MHM are
         subject to review by the appropriate committee appointed by PHS to
         review the services provided by professionals such as MHM.

7.       SUBCONTRACTOR STATUS. During the term of this Agreement, MHM will act
         as a subcontractor to PHS in performing the duties and responsibilities
         described in this Agreement. PHS will act as the primary contractor to
         the Client. As the primary contractor, nothing in this Agreement is
         intended to relieve PHS from its contractual obligations to the Client
         in the provision of psychiatric and mental health services at each
         Client Facility.

         The administration of psychiatric and mental health services shall at
         all times remain under the ultimate control and direction of PHS. The
         policies and standards of PHS shall govern the provision of such
         services. PHS shall monitor the services performed by MHM and direct
         MHM, through its designated representatives under this Agreement as it
         deems necessary. Directions and communication shall generally be from
         the PHS HSA through MHM's clinical coordinator, who shall direct the
         daily activities of psychiatric and mental health staff. In the absence
         of the clinical coordinator, or if PHS for other reasons determines
         such action to be necessary, PHS may directly communicate with the
         psychiatric and mental health staff as needed. However, PHS shall not
         interfere or in any way or direct the exercise of professional judgment
         or the professional practice of MHM's psychiatric and mental health
         staff. The services provided by MHM pursuant to this Agreement shall
         satisfy Contract Documents, as required by the Contract, or other
         standards established by PHS.

8.       INSURANCE. MHM and each individual psychiatrist or doctorate-level
         psychologist employed or retained to perform services under this
         Agreement shall maintain professional liability insurance, or satisfy
         the coverage requirements of Florida's medical malpractice law and
         contribute to any fund established thereunder, in either case in
         accordance with and in the minimum amounts required by the Contract.
         All such insurance shall be written with minimal deductibles and shall
         provide coverage on a per-occurrence basis, and not on a claims-made
         basis, shall specifically provide primary coverage, and shall not be
         altered, amended or cancelled without 30 days prior written


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         notice to PHS. MHM agrees that PHS shall have the right to review its
         operations and offer suggestions to decrease its liability exposure.
         MHM agrees to report to PHS all incidents that are reasonably likely or
         probable to result in litigation as soon as such an incident occurs. In
         addition, any written or verbal claims for compensation due to acts or
         omissions of MHM or any of its employees, contractors or agents
         performing services under this Agreement, as well as any lawsuits filed
         against MHM or such individuals will be immediately reported to PHS.
         MHM further agrees to cooperate fully with PHS and its representatives
         in investigating and defending any such claims that may be filed
         against it.

         PHS shall have the right to insist that MHM comply with all Quality
         Improvement and Utilization Review programs that PHS may conduct.

         MHM agrees to meet periodically with representatives of PHS at its
         request to discuss matters relating to potential liability exposure and
         other concerns.

         MHM will cause PHS to receive a copy of the professional liability
         insurance policies and of certificates of insurance naming, to the
         extent possible, PHS as an additional insured and indicating coverage
         and inclusion in such policies of MHM and of the individual
         psychiatrists and doctorate-level psychologists performing under this
         Agreement.

9.       FEES. MHM shall be compensated for the psychiatric and mental health
         services to be provided pursuant to this Agreement at the following
         rates: as specified in the Contract on page 29 for CSU, TCU and S-3.

         Offenders shall include only those persons included in the Client's
         daily official offender count and shall not include any persons who are
         not included in the Per Diem under the Contract.

         MHM understands and agrees that it shall be entitled to receive
compensation for psychiatric and mental health services under this Agreement if
and only if the offender to whom such psychiatric and mental health services are
provided is, at the time of such psychiatric and mental health services, located
at the Site.


         Payments shall be in arrears commencing on the thirtieth day (30) after
         the effective date hereof, and shall be made within five (5) business
         days after PHS receives payment from the Client pursuant to the
         Contract (provided MHM has provided to PHS all documentation required
         hereunder with respect to such payment), and shall be adjusted, as
         necessary. If charges are not fully earned, appropriate deductions will
         be made from subsequent payments.

         The compensation provided for herein is intended to cover all inpatient
         and out patient mental health services, all medication prescribed by an
         MHM practitioner, and any medication or off site treatment prescribed
         by the attending physician upon the admission of an offender to the
         Site for emergency treatment and/or management of any mental health
         condition until such offender can be treated by a MHM practitioner. The
         designated MHM practitioner shall be notified by PHS as soon as


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         practicable after any emergency mental health treatment is initiated by
         a non-MHM physician or staff member. The actual cost of all such
         medications shall be deducted from amounts due to MHM hereunder.

         Notwithstanding any other provision of this Agreement to the contrary,
         payments from PHS to MHM shall be adjusted to the extent any
         adjustments are made by the Client in payments to PHS under the
         Contract due to the acts or omissions of MHM or its officers,
         employees, contractors or agents, including but not limited to any
         adjustments for penalties or liquidated damages imposed by the Client
         pursuant to the Contract. The last payment of the Agreement will be
         withheld until all pending adjustments have been determined and
         reconciled.

10.      REPRESENTATIONS AND WARRANTIES.

         a.       MHM'S REPRESENTATIONS AND WARRANTIES.

                  MHM represents and warrants (1) that it will comply with all
                  Florida, federal and local laws and licensing requirements and
                  that its compliance shall continue in full force and effect
                  during the term of this Agreement. If, at any time, any
                  license held by MHM or any of its members, employees or
                  contractors, is terminated, qualified, suspended or in any
                  other way detrimentally affected, MHM shall immediately notify
                  PHS, and its failure to do so shall constitute a material
                  breach of this Agreement; (2) that its duly authorized
                  representative signing this Agreement has the necessary
                  authority to enter into this Agreement on behalf of MHM; and
                  (3) that MHM is a Delaware corporation duly organized,
                  existing and in good standing, and is qualified to do business
                  in the State of Florida.

         b.       PHS REPRESENTATIONS AND WARRANTIES.

                  PHS represents and warrants (1) that it will comply with all
                  Florida, federal and local laws and licensing requirements and
                  that its compliance shall continue in full force and effect
                  during the term of this Agreement. If, at any time, any
                  license held by PHS is terminated, qualified, suspended or in
                  any other way detrimentally affected, PHS shall immediately
                  notify MHM; (2) that its duly authorized representative
                  signing this Agreement has the necessary authority to enter
                  into this Agreement on behalf of PHS; and (3) that PHS is
                  qualified to do business in the State of Florida.

11.      NOTICES. All notices or other writings required under this Agreement
         shall be deemed to have been made when sent by certified mailed to the
         following:


                  To MHM:       MHM Correctional Services, Inc.
                                8000 Towers Crescent Drive, Suite 810
                                Vienna, Virginia 22182

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                  To PHS:           Prison Health Services, Inc.
                                    105 Westpark Drive, Suite 300
                                    Brentwood, TN 37027
                                    Attn: Gerard Boyle, President

                  With a Copy to:   Prison Health Services, Inc.
                                    105 Westpark Drive, Suite 300
                                    Brentwood, TN 37027
                                    Attn: General Counsel


12.      REPRESENTATIVES. MHM hereby designates Steven Wheeler or his/her
         successor, to be available to service this Agreement and resolve any
         problems that relate thereto. Similarly, PHS designates the PHS
         Regional Vice President to represent it in all matters relating to this
         Agreement. Either party may change the designated representative upon
         notification to the other party.

13.      ASSIGNMENT. Neither party may assign, sell or transfer, either directly
         or indirectly, any of its rights or responsibilities under this
         Agreement without the prior written consent of the other party;
         provided however, that PHS may assign all of its rights and
         responsibilities under this Agreement to America Service Group, Inc.,
         its affiliates and subsidiaries. PHS agrees to provide MHM with written
         notice of any such assignment. Such assignment shall include a change
         in ownership or control (normal public stock trading shall not trigger
         this provision) of any party.

14.      TERMINATION. This Agreement shall terminate immediately: (1) upon the
         termination or dissolution of MHM; (2) if MHM loses the authority to do
         business in the State of Florida; (3) upon cancellation, termination,
         or reduction of insurance coverage required by this Agreement; (4) upon
         the expiration or earlier termination by the Client of the Contract;
         (5) upon notice by PHS of a material breach of this Agreement
         (including, without limitation, a material breach of the Contract) by
         MHM, including but not limited to the commission of malpractice, gross
         misconduct, or the continuing failure after notice by PHS to perform
         required duties property, which is not cured within ten (10) business
         days of such notice from PHS, except to the extent such breach creates
         an emergency situation in which event no such notice from PHS shall be
         required nor shall any cure period be provided; (6) upon request of the
         Client in accordance with the Contract (24 hour notice per section VI C
         of the Contract).

15.      MHM AS INDEPENDENT CONTRACTOR. The parties acknowledge that MHM is
         providing the services contemplated hereunder as an independent
         contractor and is neither an agent, employee, officer, director nor
         joint venturer of or with PHS.

16.      INDEMNIFICATION. MHM covenants and agrees that it will indemnify and
         hold harmless PHS and all of PHS' officers, agents, or employees from
         any claim, loss, damage, cost, charge or expense arising out of or in
         connection with any act, action, neglect or omission by MHM or any of
         its agents, members, representatives or employees in connection with
         the performance of this



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         Agreement, whether direct or indirect. PHS shall have no responsibility
         or liability resulting from any criminal or intentional acts or
         omissions of MHM or any of its agents, members, representatives or
         employees. PHS covenants and agrees that it will indemnify and hold
         harmless MHM and all of MHM' officers and employees from any claim,
         loss, damage, cost, charge or expense arising out of or arising out of
         or in connection with any act, action, neglect or omission by PHS or
         any of its agents, members, representatives or employees in connection
         with the performance of this Agreement, whether direct or indirect. MHM
         shall have no responsibility or liability resulting from any criminal
         or intentional acts or omissions of PHS or any of its agents, members,
         representatives or employees. PHS shall have no responsibility or
         liability resulting from any acts or omissions of any third party,
         including, without limitation, the Client or any subcontractor or
         independent contractor or any employees, officers, agents,
         representatives or members of the Client, subcontractor, independent
         contractor or any other third party.

17.      AMENDMENT TO AGREEMENT. No amendment to this Agreement shall be valid
         or enforceable unless in writing and executed by duly authorized
         representatives of both parties.

18.      THIRD-PARTY BENEFICIARIES. The parties agree that they have not entered
         into this Agreement for the benefit of any third person or persons and
         it is their express intention that the Agreement is for their
         respective benefits only and not for the benefit of others who might
         otherwise be deemed to constitute third-party beneficiaries thereof.

19.      SEVERABILITY. The terms and conditions of this Agreement shall be
         deemed to be severable. Consequently, if any clause, term or condition
         hereof shall be held to be illegal or void, such determination shall
         not affect the validity or legality of the remaining terms and
         conditions hereunder.

20.      CAPTIONS. The captions appearing in the paragraphs in this Agreement
         are for convenience only. They are not a part of this Agreement and do
         not, in any way, limit or amplify the terms and provisions of the
         Agreement.

21.      COUNTERPARTS. This Agreement may be executed simultaneously or in two
         or more counterparts each of which shall be deemed an original, but all
         of which shall constitute one and the same instrument.

22.      GOVERNING LAW. This Agreement is governed by the laws of the State of
         Florida and any disputes that arise herefrom shall be determined
         exclusively within the Florida courts. Each party consents to the
         Florida court's jurisdiction.

23.      CONFIDENTIAL INFORMATION. Both PHS and MHM agree not to disclose or in
         any way use, or allow any other person to disclose or use confidential
         information of or concerning the Client or the other party to this
         Agreement either during or after the term of this Agreement without the
         other party's or the Client's prior express written consent.
         Confidential information includes, but is not limited


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         to, cost and pricing data, legal or claim data, financial data, methods
         of operation, and policies and procedures. Neither PHS nor MHM shall
         copy or remove any of the other party's documents for its own use or
         for the use of others, nor make use of or allow or assist any other
         person or company to make use of any the other party's procedure or
         program, including but not limited to those relating to Utilization
         Review or Quality Improvement, except as authorized in writing by the
         other party hereto. Neither PHS nor MHM shall disclose, or allow others
         to disclose, the terms of this Agreement, except as it is necessary to
         perform this Agreement or to obtain accounting, legal or tax advice
         from professional advisors. Both PHS and MHM acknowledge and agree to
         comply with all terms and provisions of the Contract concerning
         ownership and confidentiality of information.

24.      RELINQUISHMENT OF RECORDS. Upon termination of this Agreement, MHM
         shall promptly return to PHS all files, data and materials belonging to
         or relating to the operations and business of the Contract and shall
         deliver to PHS copies of all files, data and materials of MHM relating
         to this Agreement which relate to the Contract and the provision of
         services by MHM hereunder. PHS agrees to allow MHM reasonable access,
         upon at least 24 hours prior notice, to PHS' files and records relating
         to this Agreement and the provision of services hereunder for purposes
         of MHM' defense of claims, MHM' submission and collection of third
         party payment for services rendered, and other reasonable purposes
         approved by PHS.

25.      NON-SOLICITATION AND NON-COMPETITION COVENANT. During the term of this
         Agreement and for a one (1) year period following the expiration or
         earlier termination of this Agreement, MHM agrees not to solicit for
         employment, attempt to employ, employ or otherwise engage the services
         of any person who has been employed by PHS or retained in any way by
         PHS in connection with providing services to the Client during the
         preceding one (1) year period

         MHM agrees that during the term of this Agreement and for a one (1)
         year period following the expiration or earlier termination of this
         Agreement, unless acting with the prior written consent of PHS, MHM
         will not directly or indirectly, whether individually or as owner,
         partner, shareholder, member, joint venturer, manager, agent,
         consultant, contractor, subcontractor, formal or informal advisor or in
         any other capacity, propose, offer to provide, provide or engage in the
         management or administration of medical or mental health (including,
         without limitation, sexual offender and substance abuse treatment)
         services to the Site.

         During the term of this Agreement, unless acting with the prior written
         consent of MHM, PHS will not directly provide or engage any third party
         to provide the services to be provided by MHM under this Agreement,
         except for temporary emergency situations, to cure a default of MHM, or
         at the direction of the Client. PHS agrees not to hire employees of MHM
         who MHM recruited to the Site , who did not previously work at the Site
         for a period of one year after the termination of this Agreement.


         MHM and PHS each acknowledge and agree that any violation or threatened
         violation of the confidentiality, non-solicitation and non-competition
         provisions of this Agreement will cause irreparable harm, the damage
         resulting from which would be incapable of precise measurement, and




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         as a result, the remedies at law will be inadequate to redress the harm
         caused by such violation or threatened violation. Therefore, in the
         event of such violation or threatened violation, MHM and PHS each agree
         that a party shall be entitled to obtain temporary and permanent
         injunctive relief against the other party with respect to any such
         violation or threatened violation of such provisions without any
         requirement for posting a bond or other security. However, nothing
         stated in this Agreement shall be construed as prohibiting either PHS
         or MHM from pursuing any other remedies available at law or in equity,
         and PHS and MHM shall be entitled to recover its attorneys' fees and
         all out-of-pocket costs and disbursements in enforcing the
         confidentiality, non-solicitation and non-competition provisions of
         this Agreement. Each specific restriction in the confidentiality, non-
         solicitation and non-competition provisions of this Agreement shall be
         construed as an agreement independent of any other provision of this
         Agreement, and the existence of any claim or cause of action which a
         party may have against the other party, whether based on this Agreement
         or otherwise, shall not constitute a defense to the enforcement of the
         confidentiality, non-solicitation and non-competition provisions of
         this Agreement.

26.      BUSINESS ETHICS PROGRAM. MHM agrees to conduct its operations hereunder
         in compliance with the America Service Group, Inc.'s Business Ethics
         Program and hereby acknowledges receipt of the Business Ethics Program
         Policy Manual.

         IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of that commencement date documented above.

PRISON HEALTH SERVICES, INC.            MHM CORRECTIONAL SERVICES, INC.
By:      [SIG]                          By:              [SIG]
   ---------------------------               -----------------------------
Date:                                   Date:         3/24/99
    --------------------------                ----------------------------



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