MANAGEMENT AGREEMENT
(CAREMATRIX/DEDHAM, MA)
This MANAGEMENT AGREEMENT (the "Agreement") is dated as of the 25th day of
June, 1996, by and among CareMatrix of Massachusetts, Inc., a Delaware
corporation, with its principal place of business in Needham, Massachusetts
("CareMatrix"), and Continuum Care of Dedham, Inc., a Delaware corporation, with
its principal place of business in Needham, Massachusetts (the "Owner").
WHEREAS, the Owner is the owner and operator of a one hundred forty-two
(142) bed skilled nursing facility located in Dedham, Massachusetts (the
"Facility");
WHEREAS, the Owner has determined that the hiring of a management company
to provide day-to-day management of the Facility is necessary for the efficient
operation of the Facility;
WHEREAS, the Manager has represented that it is experienced in the
management of similar health care facilities, is knowledgeable as to the state
and federal requirements governing the licensure, operation, accreditation and
reimbursement of health care facilities and that the owners and employees of
Manager are qualified health care professionals;
WHEREAS, based upon the Manager's representations set forth herein, the
Owner has determined that the hiring of the Manager is cost-effective and
consistent with the Owner's desire to provide high quality care to the patients
at the Facility at the lowest cost;
WHEREAS, the Owner has determined that the services to be provided by the
Manager will augment the services provided by it and the employees of the
Facility so as to increase productivity;
WHEREAS, the Owner has determined that the hiring of the Manager on the
terms and conditions hereinafter set forth will not prevent the Owner from
exercising ultimate control over the policies and operations of the Facility;
and
WHEREAS, the Manager is willing to manage the day-to-day operations of the
Facility on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. General Duties. The Owner engages the Manager to manage, supervise and
operate the Facility with the objective of providing quality care to patients of
the Facility and to carry out the general duties with respect to the Facility
under the general supervision and direction of the Owner which include, but are
not limited to, the following:
Supervise on behalf of the Owner, the performance of all such
administrative functions as may be necessary in the management of the Facility;
select, hire (or contract with), train, supervise,
monitor the performance of, and discipline, promote, terminate or fire
(subject to the rights of the Owner under Section 2.1 of this Agreement to
approve the hiring, disciplining and termination of the Administrator, and
Director of Nursing Services) all personnel involved in the administration and
day-to-day operation of the Facility, including, without limitation, management,
medical, nursing and other health care personnel, custodial, food service,
cleaning, maintenance and other operational personnel, and secretarial or
bookkeeping personnel, each of whom shall be employees of the Owner; provide
centralized accounting, billing, purchasing and xxxx payment functions for the
Facility; establish systems of accounts and supervise the maintenance of ledgers
and other primary accounting records by the personnel of the Facility; supervise
the financial affairs of the Facility; establish and supervise the
implementation of operating and capital budgets, including those required to
establish reimbursement rates with respect to state or federal entitlement
programs as well as self-pay rates; prepare and maintain true, complete and
accurate records necessary for the preparation of such operating budgets;
determine which items of cost and expense properly relate to patient care;
establish and administer financial controls over the operation of the Facility,
develop and establish financial standards and norms by which the income, costs
and operations of the Facility may be evaluated; serve as advisor and consultant
in connection with policy decisions to be made by the Owner; furnish reports to
the Owner as the Owner may reasonably request and provide the Owner with
economic and statistical data in connection with or relative to the operations
of the Facility; represent the Facility in its day-to-day dealings with
regulatory and rate-setting authorities (including preparation and submission of
reports for reimbursement), creditors, patients, personnel, agents for
collection, and insurers; act as agent for the Owner in disbursing or collecting
the funds of the Facility and in paying the debts and fulfilling the obligations
of the Facility; coordinate and supervise a marketing plan for the Facility to
insure that the Facility obtains full occupancy as soon as possible and, after
the Facility has achieved full occupancy, assist in the development of an annual
marketing plan and budget to maintain the patient census at a proper level; and
do all other things necessary or proper for the daily operation and management
of the Facility, including everything necessary to ensure compliance with the
rules and regulations all applicable governmental agencies, with Medicare and
Medicaid requirements applicable to nursing homes, and with any other local,
state, federal or JCAHO requirements governing or applicable to nursing
facilities. In addition, in order to plan for future operations and to establish
long range policies and goals for the Facility, the Manager will, under the
general supervision of the Owner, meet on at least a monthly basis with Owner's
representatives and the Administrator to review financial and operational
statistics of the Facility. The Administrator also will attend monthly regional
administrator meetings and educational programs.
The Manager further agrees that it will:
(i) perform its duties and responsibilities hereunder in compliance with
all applicable laws, subject to the responsibilities of the Owner as the
licensee of the Facility;
(ii) supervise and direct the management and operation of the Facility,
exercising the degree of care used by an experienced management company, given
the financial resources available to the Facility, the location of the Facility,
the restrictions of applicable laws, and other existing circumstances; and
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(iii) consult with the Owner and keep the Owner advised as to all major
policy and business matters relating to the Facility.
1.1 Opinion of Counsel. The Manager shall have the duty to consult with
counsel for the Owner whenever questions arise as to the meaning and
interpretation of the phrase "relating to patient care" as such phrase is used
above with reference to the submission of expenses for reimbursement pursuant to
applicable state or federal statutes or regulations relating to entitlement
programs. The Manager shall be entitled to rely upon any such opinion when
rendered by counsel.
2. Specific Duties. Without limiting the generality of the foregoing, the
Manager shall have the following specific duties:
2.1 Employees. The Manager shall recruit, evaluate, select, and hire, on
behalf of the Owner, a qualified and properly licensed Administrator who shall
be responsible for the functional operation of the Facility and supervision of
personnel at the Facility on a day-to-day basis, as well as all on-site medical,
nursing, custodial, food service, cleaning, maintenance, secretarial and
bookkeeping personnel for the day-to-day operations of the Facility. The
Administrator and all such other personnel shall be employees of the Owner, and
the Owner shall retain full responsibility for payment of their wages, salaries
and other compensation and benefits. The Manager shall, subject to approval by
the Owner, establish necessary and desirable personnel policies and procedures,
wage structures and staff schedules. The Manager, subject to approval by Owner,
shall have authority to hire, discipline, promote and discharge employees of the
Owner who participate in the day-to-day operation and administration of the
Facility. Both the Manager and the Owner must approve the hiring and/or firing
of the Administrator, the Executive Director and the Director of Nursing
Services, which approval shall not be unreasonably withheld or delayed. The
Manager shall: (i) maintain payroll records and prepare weekly and monthly
payrolls, withholding taxes and Social Security taxes; (ii) prepare and submit
all required state and federal tax or benefit returns required with respect to
employees, including, without limitation, the returns required by FICA, FUTA and
all applicable unemployment compensation laws; (iii) maintain in force all
required levels of workers' compensation insurance; and (iv) prepare and submit
to the Owner any certificates of payroll expenses as may be reasonably
requested. The Manager shall not be liable to any employee of the Facility for
wages, salaries and other compensation and benefits, or to the Owner, unless the
Manager was specifically required to obtain the approval of the Owner before
committing to a salary or benefit and such approval was not obtained. The
Manager shall not be liable to the Owner or others for any action or omission on
the part of any employee of the Owner of the Facility, unless the employee was
acting under the express direction of the Manager or unless such employee was
following an express policy or procedure of the Manager, which policy or
procedure is substantially determined to be incorrect. The Manager shall provide
the Owner with monthly reports of all hiring, disciplinary actions, promotions
and firings at the Facility for the month.
2.2 Purchasing. The Manager shall purchase, for the account of the Owner,
all necessary foodstuffs, supplies, materials, appliances, tools and equipment
necessary for the
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operation of the Facility. The Manager shall arrange contracts on behalf of
the Owner for electricity, gas, telephone, cable television and any other
utility or service necessary for the operation of the Facility. The Manager
shall, on behalf of the Owner, contract for and supervise the making of any
necessary repairs, alterations, and improvements to the Facility; provided that
in the case of any capital expenditure, alteration or improvement, the cost of
which exceeds Three Thousand ($3,000) Dollars, the Manager shall obtain the
prior written approval of the Owner; and provided further, that no such prior
written approval shall be required if the expenditure is made under
circumstances reasonably requiring emergency action (so long as the Manager
attempts to notify the Owner on a concurrent basis). The Manager shall prepare
and submit to the Owner any certificates of purchasing expenses incurred for the
Facility as may be reasonably requested.
2.3 Collection of Accounts. The Manager shall prepare and submit bills and
collect for the account of the Owner any and all moneys owing to the Owner,
whether from patients or third party payors such as Medicare or Medicaid.
2.4 Bookkeeping. The Manager shall establish and maintain a record and
bookkeeping system for the operation and conduct of business of the Facility in
accordance with generally accepted accounting principles consistently applied
and in accordance with all requirements of Medicare and Medicaid or other third
party payors. Books and records at the Facility may be maintained by an employee
of the Owner under the supervision of the Manager. Full books of account with
entries of all receipts and expenditures related to the operation of the
Facility shall be maintained at the offices of the Manager and shall at all
times be open for inspection by representatives of the Owner. The Manager shall
be responsible for filing all local, state and federal tax returns relating to
the operation of the Facility, with the exception of corporate income tax and
pension returns, and shall be responsible for penalties, interest, and audit
costs arising out of late, inaccurate, or incomplete filings or the Manager's
failure to file such tax returns provided, however, that the Owner makes
available sufficient funds for payment of any taxes due).
2.5 Financial Reports. The Manager shall furnish to the Owner the following
financial reports:
(a) as soon as possible and not later than thirty (30) days after the close
of each calendar month, a balance sheet as of the end of the month and a
statement of income and retained earnings for the month and for the
year-to-date, together with a comparison to the budget and a detailed statement
of receipts, disbursements, accounts payable and accounts receivable as of the
end of such monthly period; provided, however, that the computer services
charges connected with the preparation of such information shall not be an
expense of the Owner.
(b) as soon as possible, and not later than sixty (60) days after the close
of each fiscal year, a year-end compilation report, including a balance sheet as
of the end of such year and a statement of income and retained earnings;
(c) as soon as possible after the close of the year for rate-setting
purposes and not later than the applicable deadline, a year-end cost report
showing cost and expenditures relating to
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patient care; such report shall be, in all respects, in compliance with the
requirements of Medicare, Medicaid or any other third party payor to whom the
Owner may be obligated to furnish reports and in a form suitable for submission
to the state or such third party payor;
(d) such other and further reports or calculations as may be required under
any financing terms in accordance with the deadlines set forth in any financing
agreements encumbering the Facility (any such financing agreement or agreements
are collectively referred to herein as a "Financing Agreement").
2.6 Patients. In accordance with the provisions of all applicable state and
federal statutes, as amended from time to time, the Manager shall use its best
efforts to maintain the patient census at the Facility in such numbers and in
such a manner as, in the Manager's judgment, will tend to maintain the financial
stability of the Facility and will comply with the covenants in any Financing
Agreement. The Manager shall recommend to the Owner programs for implementation
with third party payors, such as insurers, federal agencies and state and local
agencies, for care of patients with special medical, care, or rehabilitation
needs on a contract basis, all for the purpose of, in the opinion of the
Manager, improving the financial stability of the Facility; provided, however,
that any such agreement providing for any discount of the Facility's standard
rate shall require the Owner's prior written approval. However, the Manager
shall not introduce any additional function or service into the Facility's
program of health care without first obtaining the consent of the Owner and any
regulatory approvals required by law.
2.7 Budgets. The Manager shall prepare and submit for approval by the Owner
the following: (a) as soon as possible and not later than thirty (30) days
before the close of each fiscal year, or on such earlier date as may be required
under any Financing Agreement, a detailed written capital and operating budget
for the next succeeding fiscal year, broken down by month and showing projected
expenditures and projected revenues for such budget period; and (b) such other
budgets as may be reasonably required of the Owner under any Financing Agreement
or by regulatory authorities showing, inter alia, projected ordinary and
extraordinary expenditures and protected revenues for such budget period.
2.8 Certification, Licenses and Accreditation. The Manager shall prepare on
behalf of the Owner all reports and materials, and follow all procedures
necessary, to obtain and/or maintain all federal and state certificates,
licenses and accreditation necessary to maintain the Facility as a long-term
facility and nursing home.
2.9 Liaison with Agencies. To the extent desired by the Owner, the Manager
shall represent the Owner in all formal or informal proceeding before all state
and federal agencies engaged in the regulation, payment, rate-setting, and/or
licensing of long-term care facilities and nursing homes. The Owner reserves the
right to approve all settlements prior to their finalization.
2.10 Insurance. The Manager shall obtain, at the Owner's expense, on behalf
of the Owner and with the Owner's prior approval, all necessary liability, fire
and extended coverage, workers' compensation, and malpractice insurance covering
the Facility, its equipment, the employees of the Owner, and the employees of
Manager, if any, who relate to the operations of
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the Facility, which policies of insurance shall name the Owner and the
Manager as coinsured and which policies shall comply with the terms of any
Financing Agreement. The Owner shall bear the expense of the above with respect
to the Owner's employees, equipment and the Facility. The Manager shall bear the
expense of the above with respect to the Manager's employees, if any. Such
insurance shall be written by a responsible insurance company or companies
reasonably satisfactory to the Owner in kinds and amounts and a certificate of
insurance shall be provided to the Owner. The Owner shall retain the right to
designate any insurance agent or agency of its choice through which such
insurance shall be obtained.
2.11 Technical and Professional Services. The Manager may, with the prior
approval of the Owner and at the Owner's expense, secure such engineering,
legal, and other specialized technical and professional services as may be
necessary to advise or represent the Owner in connection with any matter
involving or arising out of the ownership and operation of the Facility or the
conduct of affairs of the Facility.
2.12 Marketing. The Manager shall agree to coordinate and supervise the
agreed upon marketing plan for the Facility during the fill-up phase (the
"Marketing Plan"). Monthly statistical census analysis reports will be generated
by the Manager and delivered to the Owner. The Manager will recommend
adjustments in the Marketing Plan as needed to achieve full occupancy. For
purposes of this Agreement, the Facility will be considered to have achieved
full occupancy when ninety percent (90%) of its licensed beds have been occupied
for a continuous thirty (30) day period. The Manager will assist the management
staff in the continued development and coordination of advertising and
promotional materials, internal and external public relations programs, sales
and staff development programs, and customer satisfaction programs. The Manager
shall assist the Facility's management staff to develop a yearly Marketing Plan
and budget based upon the Facility's yearly census program and image.
2.13 Administrative. The Manager shall:
(i) recommend the establishment of, and implement and supervise procedures
to provide staff review of all operational areas, which status shall be reviewed
in regularly scheduled quarterly meetings and at other meetings as may be deemed
necessary or desirable by the Owner or the Administrator; and
(ii) provide on-going review and monitoring of all of the Facility's
compliance with applicable regulatory requirements for licensure reimbursement,
which status shall be reviewed in regularly scheduled quarterly meetings and at
other meetings as may be deemed necessary or desirable by the Owner.
2.14 Plant and Maintenance
(i) attention shall be given to preventive maintenance (this item may be
provided by outside parties if economically feasible) and, to the extent deemed
feasible by the Manager and the Owner, the services of regular maintenance
employees shall be used; and
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(ii) The Manager shall make recommendations to the Owner regarding entering
into contracts with qualified independent contractors for the maintenance and
repair of air conditioning systems and laundry equipment and for extraordinary
repairs beyond the capability of regular maintenance employees.
3. Management Fee.
As compensation for the services to be rendered by the Manager during the
term of this Agreement, the Manger shall pay itself, at its principal office
given below (or at such other place as the Manager may from time to time
designate in writing), and at the times hereinafter specified, a monthly
management fee (the "Management Fee") during the terms of this Agreement equal
to five (5%) percent of Net Revenues (as defined below). The Management Fee will
be paid in equal monthly installments in arrears and shall be due and payable on
or before the fifteenth (15th) day of each month following the month in which
services were rendered.
"Net Revenues" as used herein shall mean Gross Revenues (defined below)
less all contractual adjustments for Medicaid and Medicare thereto.
"Gross Revenues" as used herein shall mean and include all revenues
received or receivable from or by reason of the operation of the Facility,
including, without limitation, all revenue of the Facility for or on account of
any and all goods provided and services rendered or activities during the period
from the date of this Agreement and thereafter, the gross dollar amount of all
such xxxxxxxx by the Facility to or on behalf of patients directly or indirectly
connected with the Facility or the provision of all such goods and services, and
will include, without limitation, such xxxxxxxx to all governmental payors,
including Medicare and Medicaid, such xxxxxxxx to self-paying patients, and such
xxxxxxxx to all other third-party insurance carriers and the gross dollar amount
billed from non-patient care activity but nevertheless arising from the
operation of the Facility including, but not limited to, all revenues received
or receivable by reason of all rooms, beds and other facilities subleased or
goods sold at the Facility, including, without limitation, all revenues received
from any subletting, licensing or other arrangements with third parties relating
to the possession or use of any part of the Facility.
4. Expenses.
4.1 Manager Expenses. The Manager shall bear the following expenses
incurred by it in the management of the business and properties of the Facility:
(a) Salary and expenses (including, without limitation, payroll taxes,
costs of employee benefit plans, travel, insurance, and fidelity bonds) all of
personnel employed by the Manager to carry out all responsibilities detailed
above.
(b) Salary and expenses (including, without limitation, payroll taxes, cost
of employee benefit plans, travel, insurance, and fidelity bonds) of financial
and accounting personnel employed by the Manager to maintain accounting books
and records of the Facility, except as provided below.
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4.2 Owner Expenses. Except as otherwise expressly provided herein, the
Owner shall bear all of the expenses of operating the Facility and rendering
patient care not assumed by the Manager, and without limiting the generality of
the foregoing, it is specifically agreed that the following expenses of the
Facility shall not be borne by the Manager:
(a) Fees and expenses of independent professional persons expressly
retained by the Owner, or retained by the Manager for the account of the Owner
with the prior permission of the Owner, for any purpose; salary, other
compensation or benefits and expenses of administrative, medical, nursing and
other health care personnel; custodial, food service, cleaning, maintenance,
operational, secretarial and bookkeeping personnel employed to administer the
day-to-day operations of the Facility and to perform health care and related
services in the day-to-day operations of the Facility's business.
(b) Interest and discounts on indebtedness incurred or assumed by the
Owner.
(c) Taxes, imposts, levies or other charges on the existence, operation,
receipts, income or property of the Owner, provided, however, that all interest
and penalties incurred as a result of the Manager's failure to timely file all
returns which the Manager is required to file pursuant to this Agreement, or to
make timely payment of all taxes, levies, imposts, or other charges, to the
extent that sufficient funds were available to the Manager as of the date such
payments were due, shall be the responsibility of the Manager.
(d) Medical supplies and equipment, food, fuel, kitchen and food service
equipment, linens, beds, furniture, clothing and all other supplies and
equipment used in supplying nursing home care and services to patients.
(e) Expenses connected directly or indirectly with the design, acquisition,
disposition or ownership of real and personal property devoted, used, or
consumed in the business of the Facility, including, without limitation,
purchase and/or construction of the land and buildings used for such purpose,
maintenance, repair and improvement of property, all real estate and personal
property taxes assessed, premiums for property and liability insurance on
property owned by the Owner, brokerage commissions, and fees and expenses of
consultants, managers, or agents retained directly by the Owner.
(f) The Management Fee.
(g) Legal fees and related expenses pertaining to the acquisition, sale,
mortgaging or leasing of property, litigation and proceedings relating to rates
and charges at the Facility, any other litigation or proceedings to which the
Owner is a party. However, such fees shall not include those fees resulting from
or arising out of negligence by the Manager.
In the event that there are insufficient funds available to the Manager to
pay expenses which the Manager is authorized to incur and pay hereunder,
including, without limitation, any taxes to be
8
paid on behalf of the Owner by the Manager, the Manager shall promptly
notify the Owner of the amount necessary to cure and the reason for such
deficit.
4.3 Deposit and Disbursement of Funds.
(i) The Manager shall establish and administer the overall rate structure
of the Facility and shall supervise the issuance of bills and the collection of
accounts as the true and lawful attorney-in-fact for the Owner. The Manager
shall take possession of and endorse the name of the Owner on all notes, checks,
money orders, insurance payments, and any other instruments received in payment
of accounts described below.
(ii) The Manager shall establish such accounts for the Facility in the
Manager's name, separate from all other accounts and funds of the Manager, with
a bank or banks whose deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") or with a savings and loan institution or institutions
whose deposits are insured by the Federal Savings and Loan Insurance Corporation
("FSLIC") as it deems necessary or desirable. The Manager, on behalf of the
Owner, shall use reasonable efforts to collect (using legal counsel approved by
the Owner, if necessary) all sums due and owing to the Owner in connection with
the operation of the Facility, whether from patients, third party payors or
others. The Manager and the Owner shall deposit into such accounts all monies
furnished by the Owner as working funds and all receipts and monies arising form
the operation of the Facility or otherwise received by the Owner or by the
Manager for or on behalf of the Owner.
(iii) Draws on such accounts may be made by the sole signature of an
authorized representative of the Manager (or by wiring instructions from such
authorized representative of the Manager) and shall be paid to the Manager to
reimburse the Manager for payments made pursuant to this Agreement by the
Manager from its own accounts. The Owner hereby appoints the Manager, for the
term of this Agreement, as the Owner's true and lawful attorney-in-fact to
withdraw, by writing checks against such accounts, funds for reimbursement of
all amounts payable pursuant to this Agreement in connection with the operation
of the Facility. The Owner agrees to execute from time to time any additional
documents required by any bank wherein such documents are held to effectuate all
powers of attorney referred to herein. The Manager shall make disbursements and
payments from such accounts, on behalf and in the name of the Owner, in such
amounts and at such times as are deemed by the Manager to be appropriate or
required in connection with, first, payments required by any Financing
Agreement, and second, payments of ownership, maintenance and operating expenses
of the Facility and the other costs, expenses and expenditures provided for in
this Agreement including the Management Fee.
5. Duty of Manager. The Manager shall render the services called for
hereunder in the utmost good faith and the Manager acknowledges that it is
acting in a fiduciary capacity with respect to the Owner and owes the Owner the
highest duty of care.
6. Relationship of the Parties. The Owner and the Manager are neither
partners nor joint venturers with each other, and nothing herein shall be
construed so as to make them such partners
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or joint venturers or impose on any of them any liability as partners or
joint venturers. All dealings between the Owner and the Manager are at arms
length as between non-related parties.
7. Term and Termination.
7.1 Period of the Term. This Agreement shall continue for an initial term
of ten (10) years commencing on July 1, 1996 (the "Commencement Date"), and
ending on June 30, 2001. Thereafter, this Agreement shall be renewed
automatically for three (3) additional five (5) year terms unless the Owner
sends the Manager written notice no less than ninety (90) days prior to the then
applicable Expiration Date that it does not wish to have the Agreement renew
beyond the then applicable Expiration Date. As used herein the term "Expiration
Date" shall mean the later of June 30, 2001, or the date to which this Agreement
has been extended as provided in this Section 7.1.
7.2 Termination for Cause. Either party may terminate this Agreement for
"cause" by delivering thirty (30) days written notice to the other. "Cause"
shall include, but not be limited to, each of the following:
(i) the violation by either party of any material provision in, or
obligation imposed by, this Agreement which violation shall not have been cured
to the reasonable satisfaction of the other party within thirty (30) days
following the date on which written notice of termination has been received by
the party who has violated a material provision or obligation imposed by this
Agreement;
(ii) any illegal or improper act engaged in by either party in the
operation of the Facility;
(iii) if either party files or has a petition or complaint in receivership
or bankruptcy filed against it which has not been dismissed within ninety (90)
days of such filing; or
(iv) if the Owner is required, pursuant to the terms and conditions of any
Financing Agreement, to retain new management for the Facility.
7.3 Termination for Failure to Pay Fee on a Timely Basis. In addition to
the provisions of Section 7.2 above, the Manager may terminate this Agreement
upon thirty (30) days written notice of the Owner's failure to pay the
Management Fee when due unless the Owner cures the payment default within thirty
(30) days after receiving written notice from the Manager.
7.4 Termination Arising from Unresolved Dispute. In the event that a
dispute arises between the parties regarding the interpretation of a material
provision of this Agreement or the performance by one of the parties of an
obligation hereunder, and the parties are unable to reach a mutual agreement
regarding the dispute within thirty (30) days of written notice of an unresolved
dispute given by one of the parties to the other, which notice shall describe
the nature of the dispute, any party may elect to terminate this Agreement by
giving one hundred twenty (120) days written notice to the other of its intent
to terminate. Unless the parties reach mutual
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agreement regarding the matter in dispute within such one hundred twenty
(120) day period, this Agreement shall terminate on midnight of the one hundred
twentieth (120th) day following the other parties receipt of notice of
termination and all obligations due and owing hereunder shall forever cease,
except to the extent that a right or obligation has accrued prior to the
termination date. The right of a party to terminate this Agreement pursuant to
this section shall be in addition to, and not to the exclusion of, any other
remedies, whether at law or in equity, of the parties hereunder.
8. Indemnification. The Owner shall indemnify the Manager and hold it
harmless of, for, and against all costs, claims, damages or expenses, including
reasonable attorney's fees (collectively "Costs"), incurred or suffered by the
Manager and arising out of acts performed within the scope of this Agreement.
Notwithstanding the foregoing, the Owner shall not have any obligation to
indemnify the Manager or hold it harmless of, from, and against Costs incurred
or suffered by the Manager as a result of the Manager's fraud, willful
misconduct, or gross negligence, or for Costs incurred or suffered by the
Manager as a result of the Manager's failure to submit proper reports to the
appropriate regulatory agencies, to keep true, accurate and complete records or
to obtain any necessary opinion of counsel as required by Section 1.1 of this
Agreement. The Manager shall indemnify the Owner and hold it harmless of, from
and against all Costs incurred or suffered by the Owner as a result of any of
the Manager's fraud, willful misconduct, or negligence, or as a result of the
Manager's failure to submit proper reports to the appropriate regulatory
agencies, to keep true, accurate and complete records or to obtain any necessary
opinion of counsel as required by Section 1.1 of this Agreement.
9. Access to Books and Records. As a subcontractor that may be subject to
Section 1861(v)(l)(i) of the Social Security Act (the "Act"), the Manager shall,
upon written request and in accordance with the above-mentioned section of the
Act and regulations promulgated pursuant thereto, make available to the
Comptroller General, the Secretary of Health and Human Services, and their duly
authorized representatives, a copy of this Agreement and access to the Manager's
books, documents, and records necessary to verify the nature and extent of the
costs of services provided to the Owner. Such access will be available until the
expiration of four (4) years after the services to which the costs are related
have been furnished.
The provision of this Section 9 shall apply only if this Agreement is
covered by the Act and such provisions shall become void and shall be of no
further force or effect if, at the time a request is made, this Agreement is not
subject to the Act. The Manager agrees that if it carries out any of the duties
of this Agreement through a subcontract with a related organization which
subcontract has a value or cost of $10,000 or more over a twelve (12) month
period, the Manager will obtain an identical access requirement in such
subcontract.
10. Fidelity Bond. The Manager agrees to obtain a fidelity bond, employee
dishonesty insurance policy or other similar coverage, in form and amount
satisfactory to the Owner, covering those employees reasonably required to be
covered by the Owner.
11. Amendments. This Agreement shall not be changed, modified, terminated,
or discharged, in whole or in part, except by an instrument in writing signed by
the Owner and the
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Manager, their respective successors or assigns, or otherwise as provided
herein. The Manager agrees to make any reasonable modifications to the Agreement
as may be required by the holder of any Financing Agreement. Such modifications
shall be in writing and signed by the Owner and the Manager.
12. Governing Law. The provisions of this Agreement shall be governed by,
construed, and interpreted in accordance with the laws of the Commonwealth of
Massachusetts. Any change in any applicable law which has the effect of
rendering any part of this Agreement invalid, illegal, or unenforceable shall
not render the remainder of this Agreement invalid, illegal, or unenforceable,
and the parties hereto agree that in the event that any part of this Agreement
is rendered invalid, illegal, or unenforceable, that they shall negotiate in
good faith to amend any such part of this Agreement so as to comply with any
such law, as amended, and further the respective objectives of the parties
hereto.
13. Assignment. Neither the Owner nor the Manager will assign its interests
in this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld, delayed or conditioned.
14. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and to their respective successors and assigns.
15. Captions. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope of
intent of this Agreement or the intent of any provision contained in this
Agreement.
16. Notices. Any notice, demand, consent, or other written instrument to be
given or received under this Agreement ("Notice") required or permitted to be
given shall be in writing signed by the party giving such Notice and/or consent
and shall be hand delivered, sent by nationally recognized overnight carrier or
sent, postage prepaid, by Certified or Registered Mail, Return Receipt
Requested, to the other party at the addresses listed below:
As to Owner: Continuum Care of Dedham, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, III, Esq.
As to Manager: CareMatrix of Massachusetts, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
cc: CareMatrix Corporation
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, III, Esquire
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Any party shall have the right to change the place to which such Notice
shall be sent or delivered by similar notice sent in like manner to all other
parties hereto. All notices sent by certified mail shall be deemed received
three (3) days after the date postmarked. All notices that are hand delivered
shall be deemed received upon delivery to the office or address of the
addressee.
17. Property: Trade names, marketing material, marketing ideas and
development material and records developed specifically for and related to this
Facility shall be the property of the Owner. Trade names, ideas and documents,
forms and development material not developed specifically for the Facility are
to be considered proprietary and will remain the property of the Manager. All
operational forms and documents including, but not limited to, policy and
procedure manuals, operational forms, level of care determination systems,
management policy books, inspection control manuals, and nursing management
books are and will remain the property of the Manager. All financial management
forms, documents and software systems including, but not limited to, bookkeeping
manuals, financial forms, financial spreadsheets, database or word processing
forms, and financial accounting packages are and will remain the property of the
Manager. Upon termination of this Agreement, the Owner shall have the option to
purchase operational material belonging to the Manager, except for the financial
accounting packages, at a mutually agreed upon price.
18. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
19. Delivery of Management Services. Notwithstanding anything contained in
this Agreement to the contrary, with the prior written consent of the Owner
(which consent shall not be unreasonably withheld, delayed or conditioned) the
Manager shall have the right to engage another management company which provides
management services to similar skilled nursing facilities to perform all or a
portion of the Manager's duties and obligations under this Agreement. The Owner
acknowledges and agrees that Vanguard Health Services, Inc. would be an
acceptable management company to provide all or a portion of the services to be
provided by the Manager under this Agreement.
20. Lease Option. The Owner hereby agrees that so long as the Manager is
not in default in the performance of any duty or any obligation hereunder, the
Manager shall have the option to lease the Facility at any time during the term
of this Agreement (including any extension thereof) by providing the Owner with
at least ninety (90) days prior written notice of such election. Within thirty
(30) days after receipt of the Manager's notice to lease, the parties shall
enter into a lease agreement containing mutually agreeable terms and conditions
(the "Lease"), which shall include, without limitation, a ten (10) year initial
term (with three (3) 5-year renewal terms) and rental payments equal to the fair
market value as determined immediately prior to the initial term of the Lease
and immediately prior to any renewal terms.
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IN WITNESS WHEREOF, the parties have executed this Management Agreement as
of the date first set forth above.
WITNESS: CAREMATRIX OF
MASSACHUSETTS, INC.
/s/ Xxxxxxxxx Xxxxxxx By: /s/ X X Xxxxx
---------------------------- -------------------------------------
Name: Name:
Title:
WITNESS: CONTINUUM CARE OF
DEDHAM, INC.
/s/ Xxxxxxxxx Xxxxxxx By: /s/ X X Xxxxx
---------------------------- -------------------------------------
Name: Name:
Title:
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