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Exhibit 10(rr)
FORM OF ADMINISTRATIVE/MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT AGREEMENT, effective the ____ day of _______, 199_,
by and between _________________________, a ________ corporation, (the
"Manager"), and _____________________________, a ________ professional services
corporation (the "P.C.").
W I T N E S S E T H:
WHEREAS, the P.C. is engaged in the business of providing, among
other things, dental services and related activities in the State of ________
(the "Practice");
WHEREAS, the P.C. desires to obtain the benefit of the Manager's
expertise in operating, directing, managing and supervising the non-professional
aspects of the operations of the Practice;
WHEREAS, the P.C. desires to obtain from the Manager, and the
Manager desires to provide to the P.C., certain premises and certain physical
assets, furniture and equipment needed to operate the Practice; and
WHEREAS, the Manager and the P.C. wish to enter into this Management
Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
RELATIONSHIP OF PARTIES
1.1 Responsibilities of Parties. The parties agree that the P.C.
will provide, and shall be solely responsible for providing, all professional
services for the Practice and the Manager will be responsible only for
administrative services (as further described in this Agreement). Nothing
contained in this Agreement shall be construed as permitting or providing for
the ownership, establishment, operation or management by the Manager of the
professional services of the Practice, which services shall at all times be the
sole responsibility of the P.C.
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provided, however, that pursuant to its engagement hereunder, the Manager shall
be the exclusive provider of all administrative services and control all aspects
of the P.C.'s business other than those aspects which relate directly to the
provision of dental services. Without limiting the generality of the foregoing,
the P.C. shall be solely responsible for all activities described in Section 2.4
of this Agreement.
1.2 Relationship of Parties. The P.C. and the Manager are not joint
venturers, partners, employees or agents of each other and, except as provided
herein, neither party shall have any authority to bind the other.
1.3 Practice. The P.C. agrees to conduct the Practice in compliance
with all applicable laws, rules and ordinances.
ARTICLE 2
SERVICES OF THE MANAGER
2.1 Covered Services. The Manager, unless otherwise prohibited by
law, shall control all aspects of, and provide to the P.C. the following
services, premises and assets (such services, premises and assets are
hereinafter referred to collectively as the "Covered Services"):
a. General Administrative Services. Overall day-to-day
supervision, conduct and management of the general administrative services
required in connection with the Practice, including supervision of the
non-professional services and personnel described below.
b. Personnel. Provision of all personnel (other than licensed
or certified professionals, technicians or hygienists, collectively, the
"Professional Personnel") needed to operate and support the Practice, such as
receptionists and secretarial, clerical, purchasing and marketing personnel
(collectively, the "Administrative Personnel"). The Manager shall have the sole
and exclusive responsibility for determining the salaries and fringe benefits of
all Administrative Personnel provided hereunder, and for paying such salaries
and providing such fringe benefits. In recognition of the fact that the
Manager's personnel provided to the P.C. under this Agreement may from time to
time perform services for others, this Agreement shall not prevent the Manager
from performing such services for others or restrict the Manager from so using
the Administrative Personnel provided to the P.C. under this
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Agreement. The Manager will make every effort consistent with sound business
practices to honor the specific requests of the P.C. with regard to the
assignment of its employees to the P.C.; however, the Manager reserves the sole
right to determine the assignment of its employees. Further, the Manager, in its
sole discretion, may require each of its employees assigned to the P.C. to
perform several of the aforedescribed functions and duties simultaneously.
c. Professional Personnel. Establish guidelines for the
selection, hiring and firing of the Professional Personnel by the P.C. and
recruit and evaluate prospective Professional Personnel; provided, however, that
all of the Professional Personnel shall be employees of, or independent
contractors to, the P.C.
d. Training. Training of all Administrative Personnel and
assistance to the P.C. in arranging for training and continuing education for
Professional Personnel.
e. Administrative and Fiscal Services. Provision of general
administrative, business and fiscal services to the P.C. in connection with the
operation of the Practice, including patient xxxxxxxx, collecting xxxxxxxx,
accounting, auditing (by a certified public accountant selected by the Manager
with the approval of the P.C., which approval shall not be unreasonably withheld
or delayed), bookkeeping, budgeting, record keeping, accounts receivable and
accounts payable processing, electronic data processing and such other services
as the P.C. may from time to time require.
f. Annual Budget. Prepare, in reasonable detail, annual
operating and capital budgets for the P.C. which shall be delivered to the P.C.
within thirty (30) days after the end of each fiscal year, with the Manager
retaining final authority with respect to budget items including, without
limitation, with respect to compensation and payments to the Professional
Personnel and the Administrative Personnel.
g. Patient Records. Maintenance of patient records (which
shall at all times remain the property and under the control of the P.C.) and
provision of record retrieval and monitoring services to assist the P.C. in
utilization and quality assurance reviews in accordance with instructions and
guidelines issued by the P.C.
h. Quality Control. Development of appropriate quality control
programs, including development
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of performance standards, sampling techniques for case review, and preparation
of appropriately documented studies.
i. Marketing, Development and Program Negotiation. Marketing
of the professional services provided by the P.C. to potential patients,
facilities, health maintenance organizations, self-insured employer health plans
and various third-party payors (the "Marketing Services"). The Marketing
Services to be provided by the Manager may include, but are not necessarily
limited to, (i) assistance and support in the preparation of marketing material
and brochures and responses to requests for proposals, (ii) the placing of
advertisements or articles in magazines, newspapers, other publications and any
and all media determined by the Manager to be beneficial to the P.C., (iii)
undertaking telemarketing campaigns and (iv) the holding of seminars. The
Manager shall also assist the P.C. in negotiating and securing contracts with
self-insured employer health plans, third-party payors, health maintenance
organizations, managed care companies and any other institution, facility or
organization that may be in need of services that the P.C. is qualified to
provide.
j. Equipment and Supplies. Provision of all inventory,
equipment, furnishings and supplies reasonably necessary for the efficient
operation of the Practice. Title to such inventory, equipment, furnishings and
supplies shall at all times remain in the Manager. At the end of the term of
this Agreement, the Manager shall retain such inventory, equipment, furnishings
and supplies as shall not have been consumed in the day-to-day operations of the
Practice.
k. Janitorial and Maintenance Service. Arranging for
janitorial, grounds and maintenance and repair services for the P.C. and its
equipment and furnishings.
l. Malpractice Insurance. Assistance to the P.C. in obtaining
malpractice coverage for the P.C., its employees and agents in an amount not
less than One Million Dollars ($1,000,000). The Manager shall also assist the
P.C. in obtaining general liability and property insurance in usual and
customary amounts for the P.C. The Manager shall, on behalf and in the name of
the P.C., pay the premiums for all such insurance and shall provide the P.C.
with evidence of payment on a periodic basis or as requested.
m. Contracts with Facilities/Programs. Contracts with
facilities and programs serviced by the Practice shall be by and in the name of
the P.C. The
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Manager shall serve as contracting agent for the P.C. in connection with such
facilities or programs contracts.
n. Protecting Goodwill. Take all necessary steps to preserve
and protect the reputation and goodwill associated with the P.C., including
assistance in the monitoring of utilization and quality of services provided by
the P.C., and shall assist the P.C. to take all steps necessary to remedy any
and all deficiencies in the efficiency or the quality of the services provided.
This section shall not be construed as permitting the Manager to influence or
control Professional Personnel.
o. Facilities. Facilities occupied by the P.C. for the
Practice shall be made available to the P.C. by the Manager.
p. Operations and Regulatory Reports. Deliver to the P.C.
operations reports containing such information as the P.C. may reasonably
request. The Manager shall prepare all written reports and information that
shall be lawfully required by any government body or agency having jurisdiction
over the P.C. or the Practice. The P.C. shall review and approve all such
required reports and/or information before any dissemination of the same.
q. Processing Disputes. Administer and process all disputes,
grievances and complaints between the P.C. and all third parties, subject at all
times to the review and final approval of the P.C.
r. Government Regulations; Licenses. To the extent known and
material to the operation of the P.C. and the Practice, the Manager shall
promptly notify the P.C. of any changes which may occur in relevant laws or
regulations of any government, governmental body or agency having jurisdiction
over the P.C. or the Practice. The foregoing shall not in any way limit the
P.C.'s continuing professional and legal responsibility to comply with, and be
aware of, all licensing, regulatory, professional or other requirements
applicable to individuals licensed to provide dental services.
s. Advances to the Manager. The Manager shall make advances to
the P.C. as required by Section 5.6. Such advances shall bear a reasonable rate
of interest, as mutually agreed to by the Manager and the P.C.
The Covered Services shall include assumption of all obligations of
the P.C. to provide administrative services to professional personnel who are
not employed by
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the P.C. The Manager may perform the Covered Services directly or by reimbursing
the P.C. for the cost of any Covered Services. The parties acknowledge and agree
that the services to be provided by the Manager to the P.C. are to be provided
on a non-exclusive basis. The Manager is in the independent business of
providing these services to other third parties.
2.2 Performance of Services. The Manager is hereby expressly
authorized to perform the Covered Services hereunder in whatever reasonable
manner it deems appropriate to meet the day-to-day administrative needs of the
Practice. It is understood and agreed that the Manager will perform some of the
Covered Services for the P.C. at a centralized location.
2.3 Events Excusing Performance. The Manager will not be liable to
the P.C. for failure to perform any of the services required herein in the event
of strikes, lockouts, calamities, acts of God, unavailability of supplies or
other events over which the Manager has no control for so long as such event
continues and for a reasonable period of time thereafter.
2.4 Excluded Services. The parties hereto expressly acknowledge that
the provision of all professional services, including but not limited to, dental
services by the P.C., shall be separate and independent from the provision of
administrative, fiscal and support services by the Manager, and the P.C. shall
be solely and exclusively responsible for all professional dental services
rendered to patients of the Practice. Without limiting the generality of the
foregoing, the parties acknowledge that the P.C. shall be solely responsible for
setting all professional standards of the Practice and shall be responsible for
the employment and discharge of all Professional Personnel.
2.5 Use of Name. The Manager hereby grants to the P.C. a
nontransferable, nonexclusive license to use any proprietary names owned by the
Manager and used by the P.C. in connection with the Practice along with any and
all trademarked symbols for the term of this Agreement (the "License"). All
applicable common law and statutory rights in any proprietary names owned by the
Manager and used by the Practice and their accompanying symbols, including, but
not limited to, rights relating to trademark, service xxxx, patent and copyright
shall be and remain the sole property of the Manager. The P.C. shall have no
right, title or interest in any such proprietary rights.
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ARTICLE 3
PROPRIETARY INTEREST AND RIGHTS OF THE MANAGER
3.1 Competition. During the term of this Agreement, neither the P.C.
nor any shareholder of the P.C. shall, directly or indirectly, own an interest
in, administer, manage, advise, assist, operate, join, control, participate in,
or be connected in any manner with any corporation, partnership, proprietorship,
firm, association, person or entity providing dental services or administrative
services in competition with the P.C. or the Manager.
3.2 Confidentiality. The P.C. acknowledges and agrees that the
Manager is entitled to prevent its competitors from obtaining and utilizing its
trade secrets. The P.C. agrees to hold the Manager's trade secrets in strictest
confidence and not to disclose them or allow them to be disclosed directly or
indirectly to any person or entity other than persons engaged by the P.C. or the
Manager. The P.C. acknowledges its fiduciary obligations to the Manager and the
confidentiality of its relationship with the Manager and of any information
relating to the services and business methods of the Manager which it may obtain
during the term of this Agreement. The P.C. shall not, either during the term of
this Agreement or at any time after the expiration or sooner termination of this
Agreement, disclose to anyone other than employees or independent contractors of
the P.C. or the Manager any confidential or proprietary information or trade
secret obtained by the P.C. from the Manager. The P.C. also agrees to place any
persons to whom said information is disclosed for the purpose of performance
under legal obligation to treat such information as strictly confidential.
ARTICLE 4
BILLING AGENT AGREEMENT
4.1 Professional and Other Fees. The P.C. shall, in consultation
with the Manager, establish a schedule of fees and charges for the Practice's
professional services or shall comply with the schedule of fees and charges set
forth in the health care contracts pursuant to which the P.C. provides services
through its Professional Personnel.
4.2 Xxxxxxxx. Xxxxxxxx of the Practice for all services rendered by
the P.C. shall be by and in the name of the P.C.
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4.3 Billing and Collection Agent. The Manager shall serve as billing
and collection agent for the P.C. in connection with the Practice. The Manager
shall establish a depository bank account on behalf of the Practice and will
deposit into such account collected fees generated from the Practice. As
provided for in standing instructions issued by the P.C. to the bank where such
depository account is located, the Manager may withdraw all monies daily from
said bank account for processing at a central location to be used for payment of
the P.C.'s expenses, including the administrative services fee set forth in
Section 5.4 hereof and any amounts advanced to the P.C. pursuant to Section 5.6
hereof. Said processing will consist of establishing and maintaining a book
account for the P.C. showing all fee collections and expense disbursements made
by the Manager at the P.C.'s request. The Manager will provide the P.C. with
periodic financial statements for the Practice reflecting such processing.
4.4 Reports. The Manager shall provide the P.C. with financial
statements for the Practice, stating Gross Xxxxxxxx (as hereafter defined) and
the Manager's Administrative Fees (as hereafter defined).
4.5 Security for the Manager's Compensation. To secure the prompt
and orderly payment of any amounts owing by the P.C. to the Manager pursuant to
this Agreement, the P.C. hereby agrees to grant, at the request of the Manager,
a security interest to the Manager or to a third party designated by the
Manager, in all its existing and hereafter created accounts receivable, all cash
or non-cash proceeds therefrom, all insurance policies and proceeds relating
thereto, and all of the P.C.'s rights as an unpaid provider of services, whether
now existing or hereafter created or acquired (collectively, the "Collateral").
The P.C. agrees to execute any and all documents necessary to perfect such
security interest, including but not limited to, UCC financing statements.
ARTICLE 5
COMPENSATION
5.1 Gross Xxxxxxxx. The term "Gross Xxxxxxxx" as used in this
Agreement shall mean all xxxxxxxx by the P.C. in connection with the Practice
for dental services, including any other income or receivables relating thereto,
less contractual allowances, if any, and an allowance for bad debts, to be
determined from time to time by the Manager, in its discretion, based upon the
actual experience
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of the P.C., plus all other cash payments and miscellaneous revenues received by
the P.C. in connection with the Practice.
5.2 Intention of the Parties. It is the intention of the parties
hereto that from the Gross Xxxxxxxx of the P.C. in connection with the Practice,
the P.C. shall be entitled to fairly and reasonably compensate its Professional
Personnel, and the Manager shall be entitled to receive from the P.C. fair and
reasonable compensation for (i) the provision of the Covered Services pursuant
to this Agreement, (ii) the License provided for in Section 2.5 hereof, and
(iii) the expenses, obligations, and risks assumed by the Manager in connection
therewith.
5.3 Fair and Reasonable Compensation of the P.C. for Services of
Professional Personnel. The parties hereto agree that the P.C. shall have the
right to fairly and reasonably compensate its Professional Personnel for their
professional services. Compensation for the Professional Personnel shall be
determined in accordance with employment agreements and other employment
arrangements entered into by the P.C., in consultation with the Manager, and the
Professional Personnel.
5.4 Fair and Reasonable Compensation to the Manager.
a. The Manager's Administrative Fees. The term "Manager's
Administrative Fees" as used in this article shall mean Gross Xxxxxxxx less
compensation payable by the P.C. as set forth in Section 5.3.
b. For Services of the Manager. The parties hereto agree that
the Manager shall be fairly and reasonably compensated for its administrative
services. The Manager's Administrative Fees shall be paid to the Manager as
compensation for (i) the provision of the Covered Services under this Agreement,
(ii) the License and (iii) its expenses, obligations, and risks in connection
therewith. The Manager shall pay all expenses of the Practice, except for
compensation to the Professional Personnel, (including interest expenses payable
with respect to any indebtedness of the P.C. to which the Manager shall have
consented in writing) out of the Manager's Administrative Fees or out of funds
advanced to the P.C. by the Manager.
5.5 Periodic Adjustment of Compensation. The parties hereto
recognize that the Practice may change in size and scope over the term of this
Agreement which may
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necessitate adjusting the fees provided for herein. Therefore, the parties shall
review the compensation to the Manager no less frequently than annually and more
frequently at the request of the Manager or the P.C., if changes in the business
of the P.C. or services by the Manager warrant such more frequent review, and
may agree in writing to modification of the compensation. Such review shall
consider the scope of operations pursuant to this Agreement at the time of
review, the financial success of the Manager and the P.C. in connection with the
Practice, changes in the purchasing power of money, the size and number of
facilities being supplied by the Manager, the scope of the Marketing Services,
the size of the Administrative Personnel workforce and the expenses and risks to
the respective parties of performing this Agreement.
5.6 Remittances. To the extent the P.C. shall not generate adequate
revenues to meet the P.C.'s ongoing operating expenses, including the
compensation for professional services pursuant to Section 5.3 of this
Agreement, the Manager shall advance to the P.C. or arrange for such amounts as
may be required. To the extent that the Manager advances any funds to the P.C.
pursuant to this Section 5.6, such advances shall be evidenced by
interest-bearing demand note(s) from the P.C. in favor of the Manager and shall
be secured by the Collateral as provided in Section 4.5 hereof.
ARTICLE 6
TERM AND TERMINATION
6.1 Term. The term of this Agreement shall be for a period of forty
(40) years and thereafter this Agreement shall continue indefinitely until
terminated in accordance with Section 6.2 hereof.
6.2 Termination. Notwithstanding any provision of this Agreement to
the contrary, this Agreement may be terminated as set forth below:
a. In the event of a material breach of this Agreement by
either party as a result of such party's gross negligence or fraud, the other
party may, at any time commencing sixty (60) days after written notice of the
breach has been given to the breaching party, terminate this Agreement by
delivery to the breaching party of a further written notice of termination;
provided, however, that if the breaching party, prior to receiving such notice
of termination, has begun and is diligently continuing good
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faith efforts to cure such breach, this Agreement shall remain in full force and
effect;
b. If either party is determined by a court, administrative
body or peer review organization having jurisdiction, to have engaged in conduct
that results in material harm to the P.C. and constitutes (i) a felony or other
crime involving moral turpitude, including fraud, theft, or embezzlement or (ii)
a failure to act in an ethical or professional manner, in keeping with accepted
dental care standards, then immediately upon notice by the other party;
c. If either party has engaged in any practice that results in
material harm to the P.C. and violates any federal, state or local law or
regulation that is aimed at protecting the public from coercion into treatment
and preventing fraud upon or abuse of public funding of health services, then
immediately upon notice by the other party;
d. If either party commences a voluntary case under
bankruptcy, insolvency or similar law, or any involuntary case is commenced
against either party under any bankruptcy, insolvency or similar law and such
involuntary case is not dismissed within thirty (30) days after filing, then
immediately upon notice from the other party; or
e. After the initial forty (40) year term of this Agreement,
either party may also terminate this Agreement, with or without cause, by giving
the other written notice of termination not less than one (1) year prior to the
effective date of termination.
6.3 Rights Upon Termination. The termination of this Agreement shall
not release or discharge either party from any obligation, debt or liability
which shall have previously accrued and remain to be performed upon the date of
termination.
ARTICLE 7
GENERAL PROVISIONS
7.1 Indemnification. Each party shall indemnify, hold harmless and
defend the other party from and against any liability, loss, claims, lawsuits,
damages, injury, cost, expense or other detriment arising out of or incident to
the performance or nonperformance under this Agreement by such indemnifying
party, its employees, Professional
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Personnel, and agents, including, without limitation, all consequential damages
and attorneys' fees, provided, however, neither party shall be liable to the
other under this Section 7.1 for any claim covered by insurance, except to the
extent liability of the party exceeds the amount of the coverage.
7.2 Assignment. The rights conferred upon the P.C. hereunder may not
be transferred or assigned without the prior written consent of the Manager and
any assignment in violation of this Section 7.2 shall be void. This Agreement
shall be assignable by the Manager.
7.3 Notices. All notices, requests or instructions hereunder shall
be in writing and delivered personally or sent by registered or certified mail,
postage prepaid, as follows:
(1) If to the P.C.:
(2) If to the Manager:
c/o Valley Forge
Dental Associates, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
Either of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, and two business days after the date of mailing, if mailed.
7.4 Entire Agreement. This Agreement and the documents referred to
herein contain the entire agreement between the parties hereto with respect to
the transactions contemplated hereby, and no modification hereof shall be
effective unless in writing and signed by the party against which it is sought
to be enforced.
7.5 Further Assurances. Each of the parties hereto shall use such
party's best efforts to take such actions as may be necessary or reasonably
requested by the
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other party hereto to carry out and consummate the transactions contemplated by
this Agreement.
7.6 Attorneys Fees. Each of the parties hereto shall bear such
party's own expenses in connection with this Agreement and the transactions
contemplated hereby.
7.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of ________ applicable to agreements
made and to be performed entirely within such State.
7.8 Article and Section Headings. The article and section headings
in this Agreement are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision hereof.
7.9 Waiver. The waiver of any covenant, condition or duty hereunder
by either party shall not prevent that party from later insisting upon full
performance of the same.
7.10 Amendment. No amendment in the terms of this Agreement shall be
binding on either party unless in writing and executed by the duly authorized
representatives of each party.
7.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and both of which taken together
shall constitute one and the same instrument.
7.12 Severability. In the event that any provision of this Agreement
shall be held to be void or unenforceable for any reason, the parties shall
negotiate in good faith for a period of up to one hundred eighty (180) days in
order to arrive at a mutually acceptable substitute provision.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first above
written.
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
