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EXHIBIT 10(ss)
FORM OF ADMINISTRATIVE/MANAGEMENT SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement"), effective
the ___ day of _______, 199_, by and between ___________ a ____________
corporation ("the Manager"), and __________________________________________, a
__________ professional 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 the administration of practices similar to the Practice;
WHEREAS, the P.C. desires to obtain from the Manager, and the
Manager desires to provide to the P.C., certain physical assets, furniture and
equipment needed to operate the Practice; and
WHEREAS, the Manager and the P.C. wish to enter into this
Administrative Services 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 business,
administrative and non-professional services (as further described in this
Agreement). Nothing contained in this Agreement shall be construed as permitting
or providing for the provision by the Manager of the professional services of
the Practice, which services shall at all times be the sole responsibility of
the P.C.; provided, however, that pursuant to its engagement hereunder, the
Manager shall
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be the exclusive provider of all administrative services and shall 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, including with respect to the
licensing and certification of its providers.
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 (such services are hereinafter referred to collectively as the "Covered
Services"):
a. General. Supervision, conduct and administration of the
general business administrative services required by the P.C. in connection with
the P.C.'s operation of its Practice.
b. Personnel. The Manager will employ the personnel (other
than dentists, dental hygienists and dental auxiliaries, collectively, the
"Professional Personnel") needed to operate and support the business aspects of
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 Administrative 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 Agreement. The Manager will make every effort consistent with sound
business practices to honor the
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specific requests of the P.C. with regard to the assignment of the Manager's
employees to the performance of services for the P.C. 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. The
Manager will advise the P.C. on the establishment of, and participation in,
incentive and profit sharing plans for the P.C.'s staff to reward them for
increased productivity in the Practice.
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
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 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 performance
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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, insurance companies, self-insured
employer health plans and other 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) 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 negotiate and secure 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 use the
services that the P.C. is qualified to provide and may seek the input of the
P.C. in such negotiations as needed or appropriate.
j. Supplies, Inventory and Equipment. Provision of purchasing
services on behalf of the Practice for inventory and supplies reasonably
necessary for the efficient operation of the Practice. The Manager shall be
responsible for maintaining the P.C.'s inventory on behalf of the P.C.;
provided, however, that title to and control over all dental inventory,
equipment and supplies shall be in the name of the P.C. All equipment or
furnishings not used in the provision of professional services (the "Leased
Assets") required by the Practice shall be made available by the Manager to the
P.C. The Manager shall secure maintenance and repair services for the dental
equipment.
k. Janitorial and Maintenance Service. Arrangement of
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.
m. Contracts with Facilities/Programs. Contracts with
facilities and programs serviced by the Practice shall be in the name of the
P.C. The Manager shall serve as contracting agent for the P.C. in connection
with such facility or program contracts.
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n. Protecting Goodwill. Take all necessary steps to preserve
and protect the reputation and goodwill associated with the P.C., including
assistance, if requested, 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 the professional aspects of the Practice or the
Professional Personnel.
o. 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 Practice or the P.C. The P.C. shall review and approve all such
required reports and/or information before any dissemination of the same.
p. 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.
q. 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 Practice or the P.C. 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.
r. Advances to the P.C. The Manager shall make advances to the
P.C. as provided by Section 5.6 herein. Such advances shall bear a reasonable
rate of interest, as mutually agreed to by the Manager and the P.C., payable
monthly.
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 the P.C. The Manager may perform the Covered
Services directly or by reimbursing the P.C. for the cost of any Covered
Services.
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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 business 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 services rendered to
patients of the Practice. Without limiting the generality of the foregoing, the
parties acknowledge that the P.C. shall be responsible for setting 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 the 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 the proprietary names owned by the
Manager and used by the Practice and their accompanying symbols, including, but
not limited to, rights relating to trademarks, service marks, patents and
copyrights 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. 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
amounts payable to the Manager pursuant to Section 5.1 hereof and any amounts
advanced to the P.C. pursuant to Section 5.3 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 revenues and amounts to be paid to
the Manager pursuant to Section 5.1 hereof.
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
FEES
5.1 Fees Payable to the Manager. The P.C. agrees to pay the Manager
for the provision of the Covered Services and the License and all other services
provided hereunder as follows:
a. A monthly license fee for the License in the amount
of $______ per clinic location;
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b. Monthly reimbursement of all of the Manager's direct
costs (i.e. payroll, supplies, travel, etc.) allocated to the P.C.,
in the Manager's discretion;
c. Monthly reimbursement of all of the Manager's direct
costs of acquiring and/or leasing and maintaining the Leased Assets
provided to the Practice;
d. Monthly reimbursement of all of the Manager's direct
costs incurred in the provision of purchasing services and
maintaining furniture, fixtures and equipment provided to the
Practice;
e. Monthly reimbursement of all of the Manager's direct
costs incurred in the provision of the Marketing Services, with a
ten percent (10%) markup for overhead and administration and a
fifteen percent (15%) markup for profit on such costs; and
f. A per clinic location administrative fee (the
"Administration Fee") of $_______ per year payable in equal monthly
installments of $______ per month on the first day of each month of
this Agreement and subject to renegotiation by either party hereto
on each anniversary of this Agreement. The Administration Fee is
intended to compensate the Manager for its unallocated overhead and
a reasonable profit.
5.2 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 between the P.C., in consultation with the Manager,
and the Professional Personnel.
5.3 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 5.2 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 5.3, 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.
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5.4 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 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., 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.
ARTICLE 6
TERM AND TERMINATION
6.1 Term. Unless sooner terminated in accordance with Section 6.2
hereof, 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(e) 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 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
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(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 in any material
respect 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 remains 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 Personnel (in the case of the P.C.),
Administrative Personnel (in the case of the Manager) 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
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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 five (5) 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 other party hereto to carry out and consummate the transactions
contemplated by this Agreement.
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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, without regard to any
conflict of laws principles which would apply the laws of any other
jurisdiction.
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:
