Exhibit 10.2

 

AMENDED AND RESTATED

 

OCCUPATIONAL MEDICINE CENTER

MANAGEMENT AND CONSULTING AGREEMENT

 

BY AND BETWEEN

 

CONCENTRA HEALTH SERVICES, INC.

A Nevada Corporation

 

AND

 

OCCUPATIONAL HEALTH CENTERS OF THE SOUTHWEST,

P.A.

A Texas Professional Association

 

July 30, 2003

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Exhibit 10.2

 

AMENDED AND RESTATED

OCCUPATIONAL MEDICINE CENTER

MANAGEMENT AND CONSULTING AGREEMENT

 

This Occupational Medicine Center Management and Consulting Agreement (the
“Agreement”) is made and entered into effective as of this the date set forth on
the signature page hereto (the “Effective Date”) by and between CONCENTRA HEALTH
SERVICES, INC., a Nevada corporation (the “Corporation”), and OCCUPATIONAL
HEALTH CENTERS OF THE SOUTHWEST, P.A., a Texas professional association (the
“Association”).

 

W I T N E S S E T H:

 

WHEREAS, the Association is a professional association formed for the purpose of
providing medical services; and

 

WHEREAS, the Corporation is a corporation formed for the purpose of developing
and operating occupational medicine centers that provide occupational medicine
services through various locations (whether one or more hereinafter individually
and collectively referred to as the “Centers”); and

 

WHEREAS, the Association intends to practice occupational medicine at various
Centers operated by the Corporation; and

 

WHEREAS, the Association desires to engage the Corporation to manage the
Association’s practice of occupational medicine at the Centers, and the
Corporation is willing to accept such engagement, both subject to the terms and
conditions set forth below;

 

NOW, THEREFORE, in consideration of the foregoing, and in accordance with the
terms and conditions set forth below, the parties hereto agree as follows:

 

ARTICLE I

 

ENGAGEMENT AND SERVICES

 

1.1 Engagement. The Association hereby engages the Corporation to serve as the
Association’s manager and administrator of non-medical functions and
non-physician services related to the Association’s practice in the Centers and
to perform the functions and to provide the services described in this
Agreement, and the Corporation hereby accepts the engagement under the terms and
conditions set forth in this Agreement.

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1.2 Authority and Responsibilities of the Corporation.

 

(a) General. Subject to the limitations and conditions set forth in this
Agreement, the Corporation, as manager of the Centers, shall have the authority
and responsibility to conduct, supervise and manage the day-to-day non-medical
operations of the Centers and provide all developmental, management and
administrative services attendant to the Association’s practice. In the absence
of oral or written directions by the Association or written policies of the
Association, the Corporation shall be expected to exercise reasonable judgment
in its management activities. The Corporation shall have responsibility and
commensurate authority, subject to the direction of the Association and the
written policies of the Association, for all activities described in the
foregoing including, but not limited to, the following:

 

  (1)   Bookkeeping and Accounting. The Corporation will provide the Association
with all bookkeeping and accounting services necessary or appropriate as the
Association shall determine to support the Association’s medical practice
including, without limitation, maintenance, custody and supervision of all of
the Association’s business records, papers, documents, ledgers, journals and
reports, and the preparation, distribution and recordation of all bills and
statements for professional services rendered by the Association, including the
billing and completion of reports and forms required by insurance companies,
governmental agencies, or other third-party payors; provided, however, it is
understood that all such business records, papers and documents will be
available for inspection by the Association at all times.

 

  (2)   General Administrative Services. The Corporation will provide the
Association with overall supervision and management (including maintenance and
repair) of all facilities, and all furniture, fixtures, furnishings, equipment
and leasehold improvements located in or upon all of the Centers.

 

  (3)   Non-Physician Personnel. The Corporation will hire, employ, train,
compensate and provide to the Association all non-medical personnel (other than
physical therapists, who shall be employed by the Association) including, but
not limited to, all non-physician technical personnel, receptionists,
secretaries, clerks, purchasing and marketing personnel, janitorial and
maintenance personnel, and non-physician supervisory personnel, who are now or
may hereafter be needed to effectively and efficiently operate the Association’s
medical practice at the Centers. All personnel whom the Corporation provides to
work with the Association shall not be the employees of the Association, and the
Association shall not be responsible for the payment to all such persons of all
compensation, including salary, fringe benefits, bonuses, health and disability
insurance, workers compensation insurance, and any other benefits that may be
made available to such employees. The Association shall have no responsibility
for hiring, discharging or supervising the non-medical functions of all
non-medical personnel who are provided to work with the Association pursuant to
this Agreement; provided, however, that the Association shall be solely
responsible for the

 

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supervision of all such personnel in connection with any medical functions and
responsibilities performed by such personnel.

 

  (4)   Supplies. Subject to the Association approval, the Corporation will
acquire and supply to the Association all medical and non-medical supplies of
every kind, name or nature, that the Association may require in order to conduct
and operate its medical practice at the Centers.

 

  (5)   Security and Maintenance. Subject to the Association approval, the
Corporation will provide the Association with all services and personnel
necessary to provide the Association with proper security, maintenance and
cleanliness of the Centers, and the furniture, fixtures, furnishings and
equipment located at such facilities. Additionally, the Corporation will furnish
to, or obtain for, the Association all laundry, linen, uniforms, printing,
stationery, forms, telephones, postage, duplication services, and any and all
other supplies and services of a similar nature that are necessary, in the
Association’s opinion, in connection with the day-to-day operation of the
Association’s medical practice at the Centers.

 

  (6)   Insurance. The Corporation will obtain and maintain in full force and
effect during the term of this Agreement, and all extensions and renewals
thereof, all general liability and casualty insurance of every kind, name and
nature that the parties agree is appropriate to protect them against loss in the
nature of fire, other catastrophe, theft, public liability and non-medical
negligence, in such amounts as the parties shall mutually determine is
appropriate. The Association shall, at its expense, maintain general and
professional liability insurance with an endorsement naming the Corporation (as
agent for the Association) as an additional insured thereunder. The Corporation
is authorized to obtain such general and professional liability insurance on the
Association’s behalf.

 

  (7)   Billing, Collection and Patient Scheduling. The Corporation will, as the
Association’s agent, prepare, mail and collect all bills and statements for all
professional medical services rendered by the Association, and shall be
responsible for all patient scheduling at the Centers. All fees for professional
services rendered by the Association shall be billed by the Corporation in the
name of the Association and shall be payable to the Association. All collections
made and received by the Corporation for or on account of medical professional
services rendered by the Association shall be held by the Corporation for the
Association’s benefit and deposited in one or more accounts in the name of the
Association, subject to the compensation provisions contained in Section 6.1
below.

 

  (8)   Marketing. The Corporation will assist the Association in the marketing
and distribution of the health care services provided by the Association at the
Centers; and in this respect, shall hire, employ and train marketing personnel
sufficient to accomplish this task as well as produce and distribute such
written descriptive

 

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materials concerning the Association’s professional services as may be necessary
or appropriate to the conduct of the Association’s medical practice; provided,
however, that all of such marketing and services shall be conducted strictly in
accordance with law and the rules, regulations and guidelines of all affected
governmental and quasi-governmental agencies.

 

  (9)   Management and Planning Reports. The Corporation will supply to the
Association on a regular, periodic basis such internal reports as may be
necessary or appropriate for the parties to assist each other in evaluating the
non-medical aspects of the performance and productivity of their respective
employees as well as in evaluating the efficiency and effectiveness of the
rendition of their respective management and medical services.

 

  (10)   Payment of Accounts and Indebtedness.

 

  (i)   General. The Corporation shall be responsible for effecting the payment
of payroll, trade accounts, amounts due on short-term and long-term
indebtedness, taxes and all other obligations of the Association from the
Association’s accounts; provided, however, that the Corporation’s responsibility
shall be limited to the exercise of reasonable diligence and care to apply the
Association’s funds collected to the Association’s obligations in a timely and
prudent manner. The Corporation shall have no separate liability with respect to
any obligation of the Association. The Association shall authorize the
Corporation to draw checks on the Association’s accounts as necessary to perform
its obligations under this Agreement.

 

  (ii)   Payroll. The Corporation shall have the authority to utilize a payroll
agent for the Association, should the Corporation determine the use of such an
agent to be desirable.

 

  (iii)   The Corporation Funds. In no event shall the Corporation have any
obligation to supply out of its own funds working capital for the Association or
its operations.

 

  (iv)   Accounting and Financial Records. Subject to the written policies of
the Association, and at the expense of the Association, the Corporation shall
cause to be prepared and presented to the Association the following financial
reports:

 

  (a)   Within thirty (30) days after the end of each calendar month, a balance
sheet dated as of the last day of that month, and a statement showing the income
and expenses of the Association for that month and for the fiscal year to date;

 

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  (b)   Within ninety (90) days after the end of each fiscal year of the
Association, a balance sheet, dated as of the last day of that fiscal year, and
a statement of the income and expenses of the Association for the fiscal year
then ended; and

 

  (c)   Such other reports as the Corporation considers appropriate to keep the
Association informed as to its status and condition.

 

  (11)   Patient Charges. The Corporation and the Association recognize the
importance of maintaining patient charges that will enable the Association to
meet its obligations while containing the cost of health care. The Association,
in consultation with the Corporation, shall establish schedules of patient
charges for medical services and supplies provided by the Association that takes
into account the financial obligations of the Association, the level of patient
charges at other clinics, centers or nearby hospitals for similar services and
the importance of providing quality health care at a reasonable cost.

 

  (12)   Ancillary and Other Arrangements. The Corporation shall, at the
Association’s expense, make, install, or cause to be made or installed, all
necessary and proper repairs, replacements, additions and improvements in and to
the property and equipment used in connection with the Association’s practice,
in order to keep and maintain the Centers in good repair, working order and
condition, and outfitted and equipped for operation consistent with the goals
and objectives set forth in this Agreement. The Corporation shall negotiate and
enter into such agreements as it may deem necessary or advisable for the
furnishing of utilities, services and supplies for the maintenance and operation
of the Association’s practice.

 

  (13)   Centers. The Corporation shall provide professional office space to
operate the Centers.

 

(b) Reliance. In furtherance of the objectives of this Agreement, the
Corporation shall be entitled to rely upon formal action taken by the
Association as reflected and recorded in the records of the Association or, in
the absence thereof, upon instructions received from the Association, or such
representative of the Association as the Association may designate, as to any
and all acts to be performed by the Corporation.

 

(c) Construction. The grant of express authority to the Corporation with regard
to specific matters by this Agreement is not intended by the Association to be
narrowly construed for the purpose of restricting the authority of the
Corporation.

 

1.3 Relationship of Parties. The Association shall at all times exercise control
over the medical services rendered at the Centers, and the Corporation shall
perform its functions to manage the Centers as described in this Agreement. By
entering into this Agreement, the Association does not delegate to the
Corporation any of the powers, duties and responsibilities vested in the
Association by law. The Association may, consistent with the terms of this

 

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Agreement, direct the Corporation to implement existing policies and may adopt
policy recommendations or proposals made by the Corporation. The Corporation and
the Association each expressly disclaim any intent to form a partnership,
association, or any other entity, or to become joint venturers in the operation
of the Centers by virtue of the execution of this Agreement, and shall not be
agents of each other except with respect to agency for billing and collections.

 

1.4 Medical and Professional Matters. Under no circumstances shall the
Corporation be responsible for any medical matters. The Corporation may,
however, consult with the Association and make recommendations concerning such
matters. The Association shall be responsible for maintaining all medical
records.

 

ARTICLE II

 

FISCAL MATTERS

 

2.1 Accounting Records. The Corporation shall supervise, direct and maintain at
the Association’s expense, a suitable accounting system on the accrual method of
accounting and shall furnish monthly compilations to the Association.

 

2.2 Budgets.

 

(a) Duties of the Corporation. If requested by the Board of Directors of the
Association, the Corporation shall submit to the Association, not less than
forty-five (45) days prior to the end of the fiscal year, the following budgets
covering the Association’s next fiscal year. These budgets, and any material
changes in these budgets during the fiscal year, shall only become effective
upon approval of the Association’s Board of Directors and shall be subject to
any written policies of the Association.

 

  (1)   Capital Expenditures Budget. A capital expenditure budget setting forth
a program of capital expenditures for the Corporation Centers for the next
fiscal year;

 

  (2)   Operating Budget. A budget setting forth an estimate of the
Association’s operating revenues and expenses for the coming fiscal year,
together with an explanation of anticipated changes in the Association’s
utilization and any changes in services offered by the Association to patients,
charges to patients, payroll rates and positions, non-wage cost increases, and
all other factors differing significantly from the current year;

 

  (3)   Cash-Flow Projection. A projection of the Association’s cash receipts
and disbursements based upon the proposed operating and capital budgets,
together with recommendations as to the use of projected cash-flow in excess of
short-term operating requirements and as to the sources and

 

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amounts of additional cash-flow that may be required to meet the Association’s
and the Corporation’s operating requirements and capital requirements.

 

(b) Duties of the Association. The Association shall take action to approve or
disapprove the budgets proposed by the Corporation not later than twenty-one
(21) days after submission of the budgets to the Association. Notice of the
action by the Association with regard to the budgets shall be delivered to the
Corporation and Concentra if all aspects of the budgets as proposed by the
Corporation are not approved by the Association. If such notice of disapproval
is not delivered to the Corporation and Concentra within fourteen (14) days
prior to the commencement of the Association’s fiscal year, the budgets shall be
deemed to be approved by the Association as proposed by the Corporation.

 

ARTICLE III

 

LICENSE

 

3.1. Grant of License. During the term of this Agreement, and all renewals and
extensions hereof, the Corporation hereby grants a non-exclusive license to the
Association to use the “Concentra” trade name and related trademarks or service
marks (collectively, the “Trade Names”) and Confidential Information (as
hereinafter defined) lawfully owned and used by the Corporation in connection
with the Association’s medical practice conducted at the Centers, while and so
long as the Association is in full compliance with all the terms, covenants and
conditions of this Agreement, and any lease or sublease that the Association has
with the Corporation in connection with such facilities. Because the license
granted to the Association is not exclusive, the Corporation retains the right
to license the Trade Names and any and all other trade names and/or service
marks and Confidential Information (as hereinafter defined) lawfully owned and
used by the Corporation to others or to use any such names, marks and
Confidential Information (as hereinafter defined) itself. Upon termination of
this Agreement, or upon termination of this license because of the Association’s
breach of this Agreement, the Association shall immediately cease and
discontinue the use of any and all trade names, trademarks, service marks and
Confidential Information (as hereinafter defined) then lawfully used and/or
owned by the Corporation.

 

3.2. Trade Secrets, Proprietary and Confidential Information. It is understood
that during the course of this engagement, the Corporation will have access to
and become familiar with certain management information systems and other trade
secrets and proprietary and confidential information of the Association (the
“Confidential Information”) that includes, by way of illustration, and not by
way of limitation, (i) lists containing the names of past, present and
prospective accounts, customers, employees, principals and suppliers; (ii) the
past, present and prospective methods, procedures and techniques utilized in
identifying prospective referral sources, patients, customers and suppliers and
in soliciting the business thereof; (iii) the past, present and prospective
methods, procedures and techniques used in the operation of the Association’s
occupational health products and services, including the methods, procedures and

 

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techniques utilized in marketing, pricing, applying and delivering the
Association’s occupational health products and services; and (iv) compilations
of information, records and processes that are owned by the Association and/or
that are used in the operation of the business of the Corporation or the
Association, including, without limitation, computer software programs.
Confidential Information shall be used only in furtherance of the business of
the Corporation and not for any other purpose unless authorized in writing by
the Association.

 

ARTICLE IV

 

MAINTENANCE OF STANDARDS

 

4.1. Consultants. The Corporation shall be the non-medical consultant for the
Association and shall use its administrative and managerial experience and
expertise to carry out this Agreement. If other non-medical consultants are
needed, the Corporation may employ such non-medical consultants at its expense.

 

4.2. Government Regulations. The Corporation and the Association shall each use
their respective best efforts to assure that the Centers comply with the
requirements of any statute, ordinance, law, rule, regulation, or order of any
governmental or regulatory body having jurisdiction respecting the Centers.

 

4.3. Licenses and Permits. On behalf of the Association, the Corporation shall
apply for, and use its best efforts to obtain and maintain, in the name of and
at the expense of the Association, all licenses and permits required in
connection with the management and operation of the Centers. The Association
shall cooperate with the Corporation and use its best efforts in applying for,
obtaining and maintaining such licenses and permits.

 

4.4. Confidentiality of Records. The Corporation shall use its best efforts to
protect the confidentiality of the records of the Association and shall comply
with all applicable federal, state and local laws and regulations relating to
the medical and financial records of the Association.

 

4.5. Medical Services. From time to time and as appropriate, the Corporation may
make written recommendations to the Association concerning changes in the
medical services offered by the Centers. Prior to instituting any proposed
changes, the Corporation shall obtain the written approval of the Association.

 

ARTICLE V

 

ASSOCIATION MEDICAL PERSONNEL

 

5.1. General. The Association shall retain responsibility for all decisions
related to the employment of all medical personnel including hiring, promotion,
discharge, compensation,

 

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training and professional assignments. The Corporation shall review all
personnel matters and make recommendations to the Association on appropriate
actions or policies. Consistent with the directions of the Association, the
Corporation shall recruit medical personnel, including physicians and physician
assistants, for employment by the Association. All such medical personnel shall
be the employees of, and shall be carried on, the payroll of the Association and
shall not be the employees of the Corporation. The Association shall be solely
liable to such medical personnel for their wages, compensation and benefits, if
any. For purposes of this Section 5.1, the term “benefits” shall include the
Association’s employer contribution to FICA, unemployment compensation and any
other employment taxes, workers’ compensation, pension plan contributions, group
life and accident and health insurance premiums, retirement, disability and
other similar benefits.

 

5.2. Pay Scales and Personnel Policies. The Corporation shall review and make
recommendations to the Association regarding the pay scales of the Association’s
employees and the number of physicians required for the Association’s
operations. With the approval of the Association, the Corporation shall
institute and implement any changes or recommendations so approved

 

5.3. The Association’s Rights. The Association shall have the right to demand by
written notice delivered to the Corporation that any employee of the Corporation
be terminated, but only if the termination is reasonably and legally supportable
in the opinion of the Corporation as a termination for cause. Otherwise, the
termination of an employee at the instance of the Association shall only be
completed upon the Association’s agreement to indemnify the Corporation with
respect to any liability for such termination, including but not limited to,
unemployment insurance taxes, and such indemnity shall be in a form and under
terms satisfactory to the Corporation.

 

ARTICLE VI

 

MANAGEMENT FEES

 

6.1. Compensation to the Corporation. As compensation to the Corporation for its
management services hereunder, the Association shall pay the Corporation the
amounts set forth on Schedule I attached hereto.

 

6.2. Reasonable Value. Payment of amounts to the Corporation is not intended to
be and shall not be interpreted or applied as permitting the Corporation to
share in the Association’s fees for medical services, but is acknowledged as the
parties’ negotiated agreement as to the reasonable fair market value of the
Corporation’s services hereunder, considering the nature and volume of the
services required and the risks assumed by the Corporation.

 

6.3. Audit of the Corporation’s Records. The Association shall have a right,
upon reasonable prior written notice to the Corporation and at the Association’s
cost, to audit the Corporation’s records with respect to its costs of providing
management services hereunder.

 

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ARTICLE VII

 

PROTECTIVE COVENANTS

 

7.1. General. The Association expressly acknowledges that the Association and
the Association’s employees will be given access to, and be provided with,
business methods, trade secrets and other proprietary information in connection
with the Corporation’s business and the Association’s practice of occupational
medicine. the Association expressly acknowledges and agrees that the
Confidential Information (as defined in Section 3.2), is proprietary and
confidential and if any of the Confidential Information was imparted to or
became known by any persons, including the Association and its employees,
engaging in a business in any way competitive with that of the Corporation’s
and/or the Association’s, such disclosure would result in hardship, loss,
irreparable injury and damage to the Corporation, the measurement of that would
be difficult, if not impossible, to determine. Accordingly, the Association
expressly agrees that the Corporation has a legitimate interest in protecting
the Confidential Information and its business goodwill, that it is necessary for
the Corporation to protect its business from such hardship, loss, irreparable
injury and damage, that the following covenants are a reasonable means by which
to accomplish those purposes, and that violation of any of the protective
covenants contained herein shall constitute a breach of trust and is grounds for
immediate termination of this Agreement and for appropriate legal action for
damages, enforcement and/or injunction.

 

7.2. Noncompetition by the Association. The Association covenants that, during
the term of this Agreement and for a period of two (2) years immediately
thereafter, irrespective of which party terminates this Agreement and whether
such termination is for cause or otherwise, it will not directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder (other than ownership of securities of publicly held the
Corporations of which the Association owns less than one percent (1%) of any
class of outstanding securities), corporate officer, director, investor or
financier or in any other individual or representative capacity, engage or
participate in any business within the Prohibited Area (as hereinafter defined)
that is in competition in any manner whatsoever with the Corporation businesses
and the products or services offered by the Corporation in such areas,
including, without limitation, the operation or staffing of any occupational
medicine center or clinic, without the prior written consent of the Corporation.
Notwithstanding the foregoing, in the event of the termination of this Agreement
for whatever reason, the Association may engage in such activities solely for
the purpose of providing such services to its members and/or physician
employees. For purposes of this subsection, the term “Prohibited Area” means
within twenty (20) miles of any Clinic owned, operated or managed by the
Corporation at the time of such termination. The Association further agrees that
the Association will require all professional employees to execute employment
agreements containing provisions substantially similar to this Article VII
protecting the Corporation and the Association from competition by such
employees.

 

7.3. Restrictions on Soliciting Employees of the Corporation. The Association
covenants that, during the term of this Agreement and for a period of two (2)
years immediately

 

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thereafter, irrespective of which party terminates this Agreement, and whether
such termination is for cause, the Association and the Association’s members,
directors, employees, agents and representatives will not, either for itself or
for any other person, firm, the Corporation or other entity, either directly or
indirectly: (i) induce, or attempt to induce, any employee of the Corporation
(whether leased or otherwise) to terminate his or her employment or hire away or
attempt to hire away, any employee of the Corporation; (ii) induce, or attempt
to induce, any present or future supply or service resource (including
investment and other financing resources) to withdraw, curtail or cancel the
furnishing of supplies or services (including investment and other financing
resources) to the Corporation; or (iii) engage in any act or activity that would
interfere with or harm any business relationship the Corporation may have with
any employee, principal or supplier.

 

7.4. Further Covenants. The Association acknowledges that the Confidential
Information gives the Corporation an advantage over its competitors, and that
the same is not available to or known by the Corporation’s competitors or the
general public. The Association further acknowledges that the Corporation has
devoted substantial time, money and effort in the development of the
Confidential Information and in maintaining the proprietary and confidential
nature thereof. The Association further acknowledges its relationship with the
Corporation involves the highest trust and confidence by reason of the
Association’s knowledge of, access to, and contact with the Confidential
Information. The Association agrees to use its best efforts and exercise utmost
diligence to protect and safeguard the Confidential Information. The Association
covenants that, during the term of this Agreement and for a period of two (2)
years immediately thereafter, regardless of which party terminates this
Agreement and whether such termination is for cause, the Association will not
disclose, disseminate or distribute to another, nor induce any other person to
disclose, disseminate or distribute, any Confidential Information of the
Corporation, directly or indirectly, either for the Association’s own benefit or
for the benefit of another, whether or not acquired, learned, obtained or
developed by the Association alone or in conjunction with others, nor will the
Association use or cause to be used any Confidential Information in any way
except as is required in the course of the Association’s performance pursuant to
the terms of this Agreement. The Association acknowledges and covenants that all
Confidential Information relating to the business of the Corporation, whether
prepared by the Association or otherwise coming into its possession, shall
remain the exclusive property of the Corporation, shall not be copied or
otherwise reproduced in whole or in part, and shall not be removed from the
premises of the Corporation under any circumstances whatsoever without the prior
written consent of the Corporation. The Association further covenants that all
memoranda, notes, records, drawings or other documents made, compiled, acquired
or received by the Association during the term of this Agreement, concerning any
business activity, including, but not limited to, management techniques, names
of referral sources, names of customers, marketing and sales techniques, and the
pricing of products and services, shall, together with all copies, be delivered,
in good condition, to the Corporation, immediately upon termination of this
Agreement by either party, or at any time, upon the Corporation’s request.

 

7.5. Consideration for Protective Covenants. The license granted in Article III
of this Agreement is hereby allocated as separate and additional consideration
to the Association for its adherence to these protective covenants. The
Association acknowledges and agrees that the

 

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license would not be granted were it not agreeing to the protective covenants
referenced in this Article VII.

 

7.6. Survival of Protective Covenants. Each covenant herein on the part of the
Association shall be construed as an agreement independent of any other
provision of this Agreement, unless otherwise indicated herein, and shall
survive the termination of this Agreement, and the existence of any claim or
cause of action of the Association against the Corporation, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Corporation of such covenant.

 

7.7. Extension of Restrictive Periods. If the Association violates the
protective covenants hereunder and the Corporation brings legal action for
injunctive or other relief hereunder, the Corporation shall not, as a result of
the time involved in obtaining the relief, be deprived of the benefit of the
full restrictive periods of the protective covenants contained in this Article
VII. Accordingly, such restrictive periods for the purposes of this Article VII
shall be deemed to have a duration of the respective time periods stated in this
Article VII, computed from the date relief is granted, but reduced by the time
between the period when the restriction began to run and the date of the first
violation of the covenant by the Association.

 

ARTICLE VIII

 

TERM AND TERMINATION

 

8.1. Term. This Agreement shall commence on the Effective Date and shall
continue until terminated upon the earliest of (i) the date for termination for
cause pursuant to Section 8.2 below; (ii) written agreement of the parties to
this Agreement; (iii) forty (40) years from the Effective Date; or (iv) at the
election of the Corporation upon, or at any time after, the termination of that
certain Administrative Services Agreement, of even date herewith, between the
Corporation and Concentra.

 

8.2. Termination for Cause. This Agreement may be terminated prior to the
expiration of the term described in Section 8.1 as follows:

 

(a) If a party shall apply for, or consent to, the appointment of a receiver,
trustee or liquidator of all or a substantial part of its assets, file a
voluntary petition in bankruptcy, make a general assignment for the benefit of
creditors, file a petition or an answer seeking reorganization or arrangement
with creditors or to take advantage of any insolvency law, or if a final order,
judgment or decree shall be entered by a court of competent jurisdiction, on the
application of a creditor, adjudicating such party a bankrupt or insolvent or
approving a petition seeking reorganization of such party or appointing a
receiver, trustee or liquidator of such party of all or a substantial part of
its assets, the other party may terminate this Agreement immediately upon notice
to such party;

 

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(b) Either party may terminate this Agreement immediately upon notice to the
other party in the event of such other party’s breach of a material provision of
this Agreement, which breach remains uncured for a period of thirty (30) days
following receipt of notice specifying the breach complained of; or

 

(c) Upon receipt by either party of a final order of any governmental agency or
court of competent jurisdiction concerning the business, affairs, or practices
of either of the parties that requires such termination, this Agreement shall
terminate.

 

8.3. Rights Cumulative. The various rights and remedies herein provided for
shall be cumulative and in addition to any other rights and remedies the parties
may be entitled to pursue under the law. The exercise of one or more of such
rights or remedies shall not prejudice the rights or remedies of either party to
exercise any other right or remedy at law or in equity or pursuant to this
Agreement.

 

8.4. Obligations Not Excused. Termination of this Agreement shall not release or
discharge either party from any obligation, debt or liability that shall have
previously accrued and remained to be performed upon the date of termination.

 

8.5. Remedies Upon Termination. Upon termination of this Agreement, the
Association shall remove from any Center all property of the Association, and
neither party shall have any further obligations under this Agreement except
pursuant to Article III, Article VII, and Section 9.2 (which provisions shall
survive the termination of this Agreement). The Corporation shall be entitled to
receive payment of all amounts unpaid but earned up to the date of termination,
which payment shall be due on the date on which the Association vacates the
Corporation’s premises and relinquishes to the Corporation sole possession of
any and all property of the Corporation, including, but not limited to,
financial records and all other documents necessary for or related to its
business.

 

8.6. Property Due on Termination. On the termination of this Agreement, each
party shall immediately deliver or cause its employees or agents to deliver in
good condition all property in its possession that belongs to the other party,
ordinary wear and tear and damage by any cause beyond the reasonable control of
either party excepted.

 

ARTICLE IX

 

MISCELLANEOUS

 

9.1. Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party.

 

9.2. Indemnification. The Association shall protect, indemnify and save the
Corporation and the directors, officers, shareholders and employees of the
Corporation harmless from and against any and all liability and expense of any
kind, arising from injuries or damages

 

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to persons or property in connection with the practice of medicine at any
Center, unless such liability results solely from the willful misconduct of the
Corporation and/or its directors, officers, shareholders and employees in the
management of the Centers. Anything herein to the contrary notwithstanding,
however, in no event shall the Corporation’s stockholders or directors have any
liability pursuant to this Section 9.2 other than in the event of their willful
misconduct.

 

9.3. Changes in Applicable Law. The Corporation and the Association understand
that the federal, state and local laws and regulations applicable to this
Agreement may be amended from time to time and agree to execute any amendments
to this Agreement necessary to maintain compliance with those laws and
regulations.

 

9.4. Notices. Any notice or other communication under this Agreement shall be in
writing and shall be delivered in person or sent by pre-paid certified or
registered mail, receipted overnight messenger service receipted hand delivery
or telecopier (with electronic confirmation), as follows:

 

If to the Association:

   Occupational Health Centers of the Southwest, P.A.           5080 Spectrum
Drive, Suite 400 West           Addison, Texas 75001           Attn: W. Tom
Fogarty, M.D.           Facsimile No.: (972) 387-0019     

If to the Corporation

   Concentra Health Services, Inc.           5080 Spectrum Drive, Suite 400 West
          Addison, Texas 75001           Attn:    General Counsel          
Facsimile No.: (972) 387-1938     

 

Each such notice or other communication shall be considered to have been given
when received if delivered in person, three (3) days after being mailed if sent
by certified or registered mail, one (1) day after being given to the overnight
messenger service if sent by that means, or on the date of transmission if sent
by telecopier. For these purposes, Saturdays, Sundays and federal legal holidays
shall be excluded. Any party may change its address for purposes of this
Agreement by notice in accordance with this Section 9.4.

 

9.5. Entire Agreement; Modification and Change. This Agreement contains the
entire agreement between the parties to this Agreement and supersedes any and
all prior agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. This Agreement, and any
provision or time period specified in this Agreement, cannot be changed or
modified except by another agreement in writing executed by both parties.

 

9.6. Warranties. The parties warrant that each has the legal capacity to enter
into this Agreement, that the execution has been duly approved by their
respective board of directors, and that their respective obligations do not
violate any statute, ordinance, ruling of any administrative body, or any
agreement to which either the Association or the Corporation is a party.

 

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9.7. Headings. The headings contained in this Agreement are for convenience of
reference only and are not intended to define, limit or proscribe the scope or
intent of any provision of this Agreement.

 

9.8. Severability. If any provision of this Agreement or its application to any
person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement and application of its provisions to other persons
or circumstances shall not be affected and shall be enforced to the greatest
extent permitted by law.

 

9.9. Governing Law. This Agreement shall be deemed to have been made under, and
shall be construed and interpreted in accordance with, the laws of the State of
Texas.

 

9.10. Rights Cumulative; No Waiver. No right or remedy in this Agreement
conferred upon or reserved to either party is intended to be exclusive or any
other right or remedy, and each right and remedy shall be cumulative and in
addition to any other right or remedy given under this Agreement, or now or
hereafter legally existing upon the occurrence of an event of default under this
Agreement. The failure of either party to insist at any time upon the strict
observance or performance of any of the provisions of this Agreement or to
exercise any right or remedy as provided in this Agreement shall not impair the
right or remedy to be construed as a waiver or other relinquishment of it with
respect to subsequent defaults.

 

9.11. Counterparts. This Agreement may be executed simultaneously in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[The remainder of this page is intentionally blank.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers, effective as of the 30th day of July, 2003.

 

THE ASSOCIATION:

OCCUPATIONAL HEALTH CENTERS OF THE SOUTHWEST, P.A.,

a Texas professional association

By:

 

/s/ W. Tom Fogarty, M.D.

--------------------------------------------------------------------------------

   

W. Tom Fogarty, M.D.

   

President

THE CORPORATION:

CONCENTRA HEALTH SERVICES, INC.,

a Nevada corporation

By:

 

/s/ Richard A. Parr II

--------------------------------------------------------------------------------

   

Richard A. Parr II

   

Executive Vice President, General Counsel

and Secretary

 

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SCHEDULE I

 

As compensation to the Corporation for its services hereunder, the Association
shall pay the Corporation:

 

(a) A billing and collection fee of nine percent (9%) of the Association’s Net
Revenues (as hereinafter defined);

 

(b) Reimbursement of actual expenses for all services provided by the
Association hereunder; and

 

(c) An annual fee of Thirteen Million Five Thousand Three Hundred and
Twenty-Four Dollars ($13,005,324).

 

The Association shall make the foregoing payments to Corporation on a periodic
basis, but in no event less frequently than quarterly. For the purposes of this
Schedule I, Net Revenues shall be calculated as follows:

 

  (i)   All the Association’s collections for medical services, ancillary
charges, facility charges and supplies;

 

  (ii)   Less amounts required by the Association to pay: (a) physicians,
physician assistants, and other medical personnel who are employed by or under
contract to the Association; (b) all benefits provided to such physicians,
physician assistants, and other medical personnel including, but not limited to,
FICA, unemployment taxes and any other employment taxes, group life, accidental
and health insurance premiums and other similar benefits; (c) professional
liability insurance covering the Association and its professional personnel; (d)
license/certification fees, professional organization dues and professional
publication subscriptions; (e) additional compensation to the Association’s
employees pursuant to any bonus or incentive arrangement between the Association
and its employees; and (f) such other amounts as agreed upon by the Association
and the Corporation; and

 

  (iii)   Less compensation paid to the Corporation for its billing and
collection services, as set forth above.

 

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