Support Services Agreement
between
Gentle Dental Service Corporation
and
Xxxx Xxx, P.C.
Date: August 29, 1997
TABLE OF CONTENTS
Section Page
1. Facilities 3
2. Furniture, Fixtures and Equipment 4
3. Use of Trade Names and Trademarks 4
4. Administrative Services 5
5. Duties of Group 9
6. Relationship of Parties 10
7. Confidential Information and Trade Secrets 11
8. Working Capital 12
9. GDSC's Compensation 13
10. Definitions 13
11. Miscellaneous Authority and Duties of the Parties 14
12. Term and Termination 14
13. Indemnification 16
14. Assignment 16
15. Governing Law 16
16. Waiver 16
17. Amendment 16
18. Entire Agreement 16
19. Notice 17
20. Arbitration 17
21. Miscellaneous Provisions 18
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SUPPORT SERVICES AGREEMENT
This Agreement is effective as of August 29, 1997 (the "Effective Date") by and
between Gentle Dental Service Corporation, a Washington corporation ("GDSC"),
and Xxxx Xxx, P.C., a Washington professional services corporation, ("Group"),
and is made with reference to the following facts:
A. Group is a Washington professional service corporation able to practice
dentistry in and pursuant to the laws of the State of Washington.
B. Group delivers dental services to enrolled members of health care plans
and to the public at large. Group's dental services are performed by employed
dentists, and by independent dentists under contract with Group.
C. Group employs dentists, hygienists, nurses and dental assistants only.
Group does not employ and is not desirous of employing administrative and
management staff or any other personnel. Group desires to confine its operations
to the delivery of dental care services free from concern over administrative
matters. Group therefore desires to contract with GDSC to provide business
support services which will enable Group to concentrate on the development and
management of the professional aspects of its dental practice.
D. Group wishes to lease or utilize certain offices and facilities,
equipment, furnishings and supplies which are owned or leased by GDSC and which
are necessary for Group to operate dental clinics.
E. GDSC has special expertise and experience in the operation and marketing
of dental clinics of the type intended to be operated by Group. GDSC has
developed and will continue to develop expertise in the non-dental aspects of
dental facilities where professional dental care has been and will be provided
at low cost because of efficiencies of scale and administrative expertise.
F. Group wishes to engage GDSC to provide Group with certain personnel and
all necessary and appropriate services relating to the development, marketing,
operations, and administration of all non-dental facets of Group's dental
clinics.
NOW, THEREFORE, Group hereby exclusively engages GDSC, and GDSC agrees with
Group, to provide Group the following described facilities, equipment, and
services so as to enable Group to deliver to its patients efficient and
cost-effective dental care, in accordance with the following terms and
conditions:
1. Facilities.
During the term of this Agreement, and all renewals and extensions hereof, GDSC
shall lease to Group, for Group's use, suitable facilities (hereafter referred
to individually as a "Clinic" and
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collectively as the "Clinics") for Group to perform its dental care services.
The Clinics will be provided in those locations designated by Group and shall
include those tenant improvements that are reasonably required by Group. GDSC
shall bear all development costs, acquisition costs, or lease costs associated
with the provision of these facilities and shall assume the economic risk for,
and shall otherwise be fully liable under, all leases or property development
agreements. Title to, or rights of tenancy to, the Clinics shall remain in GDSC,
and upon termination of this Agreement, Group shall immediately surrender the
Clinics to GDSC. Group shall comply with all reasonable requirements concerning
use of Clinics as may be established by GDSC from time to time. Without limiting
the generality of the foregoing, Group shall not take or fail to take any action
that would cause a breach or default under the terms of any lease between GDSC
and any third party with respect to any Clinic.
2. Furniture, Fixtures and Equipment.
During the term of this Agreement, and all renewals and extensions hereof, GDSC
shall lease to Group, at each Clinic at which Group performs its dental care
services, the dental equipment, office equipment, furniture, fixtures,
furnishings and leasehold improvements reasonably necessary for Group to perform
its dental care services.
The use by Group of such furniture, fixtures, furnishings, and equipment shall
be subject to the following conditions:
a. Title to all such furniture fixtures, furnishings, and equipment
shall remain in GDSC and upon termination of this Agreement,
Group shall immediately return and surrender all such furniture,
fixtures, furnishings, and equipment to GDSC in as good condition
as when received, normal wear and tear excepted. Group expressly
agrees to execute any appropriate UCC-1 Financing Statement and
UCC-1 Fixture Filings, if so requested in writing by GDSC.
b. GDSC shall be fully and entirely responsible for all repairs and
maintenance of all such furniture, fixtures, furnishings, and
equipment; provided, however, that Group agrees that it will use
its best efforts to prevent damage, excessive wear, and breakdown
of all such furniture, fixtures, furnishings, and equipment and
shall advise GDSC of any and all needed repairs and equipment
failures.
3. Use of Trade Names and Trademarks.
During the term of this Agreement, Group shall have a non-exclusive license to
use the name "Gentle Dental," together with such insignia, logos, slogans and
other trademarks as GDSC may develop in association with such name. Group shall
comply with all guidelines and restrictions concerning use of such name and
trademarks as GDSC may reasonably impose from time to time. Ownership of such
name and trademarks and the sole right to license the use of such name and
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all related trademarks shall remain in GDSC. In the event of termination of this
Agreement, Group shall cease all use of such name and all associated trademarks
unless GDSC otherwise agrees in writing.
4. Administrative Services.
During the term of this Agreement, and all renewals and extensions hereof, Group
hereby engages GDSC as the exclusive provider of all non-dental functions and
non-dentist services relating to the operation of the Clinics; and GDSC agrees
to furnish to Group all of the non-dental functions and services that may be
reasonably needed by Group in connection with the operation of the Clinics. Such
non-dental services and functions shall include the following:
a. Bookkeeping and Accounts.
GDSC shall provide all bookkeeping and accounting services reasonably
necessary or appropriate to support the Clinics, including, without
limitation, maintenance, custody and supervision of all of business
records, papers, documents, ledgers, journals and reports (the "Books and
Records"), the preparation, distribution and recording of all remittances
by Group for accounts payable or payroll, and the preparation, distribution
and recording of all bills and statements for professional services
rendered by Group, including the billing and completion of reports and
forms required by insurance companies, governmental agencies or other
third-party payors (such records, papers, documents, ledgers, journals and
reports shall not be deemed to include patient records and other records,
reports and documents which relate to patient treatment by Group's
dentists). The Books and Records at all times shall be materially correct
and complete and contain correct and timely entries made with respect to
transactions entered into pursuant hereto in accordance with generally
accepted accounting principles ("GAAP") as in effect at such time.
It is understood, however, that all such business records, papers and
documents are the sole property of Group, shall be available for inspection
by Group at all times, and shall be delivered to Group upon termination of
this Agreement. Group shall provide GDSC with a complete copy of all such
documents, records, and papers at Group's expense upon termination of this
Agreement.
b. Contract Administration.
GDSC shall provide Group with administrative services reasonably necessary
to enable Group to perform on a timely basis all non-dental aspects of
prepaid dental care contracts and other dental care contracts of Group.
Such services shall include the preparation and analysis of reports to
enable Group to provide dentist staffing and supervision at the Clinics for
the rendering of efficient and appropriate dental care to patients.
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c. Non-dentist Personnel.
GDSC shall employ and provide such support personnel to Group as may be
reasonably necessary to enable Group to perform its dental services at the
Clinics subject to the following:
i. GDSC shall provide all personnel at the Clinics excluding
dentists, dental assistants, nurses and dental hygienists.
This shall include, but is not limited to, the provision of
all receptionists, secretaries, clerks, purchasing and
marketing personnel, janitorial and maintenance personnel,
and nondentist supervisory personnel as may be deemed
reasonably necessary by GDSC for the proper and efficient
operation of the Clinics;
ii. GDSC shall be responsible for hiring and firing all such
support personnel, and shall determine compensation for all
such personnel, including the determination of the salaries,
fringe benefits, bonuses, health and disability insurance,
workers' compensation insurance, and any other benefits that
each such employee shall receive; and
iii. GDSC shall manage and supervise all licensed support
personnel employed on behalf of Group at the Clinics,
including, but not limited to all nurses, dental assistants,
and dental hygienists, regarding those aspects of their
employment that do not involve performance under the scope
of their licensure; provided, however that Group shall
manage and supervise all activities of such licensed support
personnel performed under the scope of their licensure.
Group shall be solely responsible for management and
supervision of dentists.
Provision of dental services during extended hours of operation, generally
including at least 60 hours per week during which Clinics are open to the
public, is a central feature of Group's operations and competitive
strategy. GDSC agrees to provide staffing as reasonably required to permit
operation of the Clinics during extended hours of operation.
d. Supplies.
GDSC shall acquire and supply to Group all dental and other supplies of
every kind, name or nature, which may reasonably be required by Group for
the operation of the Clinics, provided that Group shall be responsible for
ordering, receiving and handling all pharmaceuticals and related supplies
for which state or federal certification, registration or licensure is
required.
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e. Security and Maintenance.
GDSC shall provide to Group all services and personnel reasonably necessary
to provide Group with proper security, maintenance, and cleanliness of the
Clinics and the furniture, fixtures, equipment, and leasehold improvements
located thereat. Additionally, GDSC shall furnish to or obtain for Group
all laundry, linens, uniforms, printing, stationery, forms, telephone
service, postage, duplication services, and any and all other supplies and
services of a similar nature which are reasonably necessary in connection
with the day-to-day operation of the Clinics.
f. Dentist Recruiting.
GDSC shall assist Group in recruiting and screening prospective dentists
and licensed support personnel as employees or contractors for Group. Group
shall be solely responsible for hiring, supervision, training, evaluation
and termination of dentists. Group shall be responsible for hiring and
termination of licensed support personnel and for all supervision, training
and evaluation of such personnel with respect to all activities performed
under the scope of their licensure.
g. Insurance.
GDSC shall use all reasonable efforts to obtain for Group and maintain in
full force and effect during the term of this Agreement, and all extensions
and renewals thereof, comprehensive commercial liability and property
insurance which GDSC reasonably determines to be appropriate to protect
against loss in the nature of fire, other catastrophe, theft, business
interruption, public liability, and non-dental negligence, with minimum
coverage limits of $1,000,000 per occurrence. GDSC shall assist Group in
obtaining dental malpractice insurance for Group and its dentist employees.
h. Billing and Collection
In order to relieve Group of the administrative burden of handling the
billing and collection of sums due for the delivery of dental services,
GDSC shall be responsible, on behalf of and for Group and any contract
dentists or independent dentists or other organizations practicing
dentistry for or on behalf of Group, on their respective billheads as their
agent, for billing and collecting the charges with respect to all dental
and other services provided at the Clinics. Group agrees that it will keep
and provide to GDSC all documents, opinions, diagnosis, recommendations,
and other evidence and records necessary for the purpose of supporting the
fees charged for all dental and other services from time to time.
It is expressly understood that the extent to which GDSC will endeavor to
collect such charges, the methods of collecting, the settling of disputes
with respect to charges and the writing off of charges that may be or
appear to be uncollectible shall at all times be within
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the sole discretion of GDSC (but subject to all applicable governmental
regulations and the terms and conditions of applicable provider agreements)
and that GDSC does not guarantee the extent to which any charges billed
will be collected.
Group or its duly authorized agent shall have the right at all reasonable
times and upon the giving of reasonable notice to examine, inspect and copy
the records of GDSC pertaining to such fees, charges, xxxxxxxx, and
collections. At Group's request, GDSC will re-assign to Group, for
collection by Group, any accounts which GDSC has determined to be
uncollectible.
i. Bank Accounts and Disbursements.
During the term of this Agreement, GDSC is hereby expressly authorized to,
and shall, disburse from one or more bank accounts of Group sums for the
payment of Group's expenses as described in Section 5, GDSC's compensation
as described in section 9, and all other costs, expenses and disbursements
which are required or authorized by this Agreement. For administrative
convenience, GDSC shall maintain said bank accounts.
j. Market Research.
GDSC shall conduct market research with respect to rates, charges,
competitive conditions, competition and business opportunities for GDSC and
Group. GDSC shall compile such information and provide marketing reports
and analyses to Group. All such marketing services shall be conducted in
accordance with the laws, rules, regulations and guidelines of all
applicable governmental and quasi-governmental agencies.
k. Contract Negotiations.
GDSC shall negotiate on Group's behalf contracts with health plans,
preferred provider organizations, other group plans, independent provider
associations, employers, hospitals, dentists and others for Group's
services at the Clinics, for admission of Group's patients for
hospitalization, and for the provision of dental care services for Group's
patients by other dentists with specialties not available at Group. Group
shall have final approval and authority with respect to such contracts, and
Group shall have the sole and absolute right not to enter into any such
contracts.
l. Management and Planning Reports.
GDSC shall supply Group on a regular, periodic basis such internal reports
as may be necessary or appropriate for the parties to assist each other in
evaluating the non-dental aspects of the performance and productivity of
their respective employees and contractors as well as in evaluating the
efficiency and effectiveness of the rendition of their respective
management and other nonprofessional services. GDSC shall provide Group
with data and reports for Group's exclusive use in conducting Group's
dental practice, evaluating the
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performance of Group's dentists and for other purposes related to
maintaining and improving patient care quality and improving the efficiency
of Group's dentists.
5. Duties of Group
a. Conduct of Dental Practice.
Group shall be solely and exclusively in control of all aspects of the
practice of dentistry and the delivery of dental services at the Clinics.
The rendition of all dental professional services, including, but not
limited to, diagnosis, treatment, surgery, therapy and the prescription of
medicine and drugs, and the supervision of preparation of dental reports
shall be the responsibility of Group. Group shall have the sole right and
authority to hire, employ, train, supervise, terminate, and compensate all
of its dentist-contractors and dentist-employees, dental assistants, and
dental hygienists.
GDSC shall have no authority whatsoever with respect to such activities,
and shall have no authority with respect to the establishment of fees or
charges for the rendition of such services.
b. Staffing of Clinics
Group agrees to assign a dentist to act as Clinical Director at each
Clinic. Group will assure that each Clinic is adequately staffed during
operating hours, including extended hours of operation, with such dental
personnel as may be necessary to efficiently carry out the practice of
dentistry at each Clinic.
c. Professional Personnel.
Group shall ensure that dentists and other licensed personnel employed or
contracted by Group are properly licensed and trained. Group shall be
responsible for monitoring quality of care, responding to any patient
complaints concerning dental services and undertaking appropriate quality
improvement activities. Group shall arrange for continuing education for
licensed personnel in accordance with all legal requirements and good
professional practice.
d. Wages, etc.
Group shall be solely responsible for payment of all wages, salaries,
bonuses and benefits of its employed licensed personnel, including all
payroll taxes, vacation and sick pay, insurance and pension or profit
sharing contributions.
Group shall be solely responsible for payment of all amounts due to
contracted licensed personnel under service contracts with Group. GDSC
shall provide payroll processing and accounts payable services as provided
in this Agreement.
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e. Professional Expenses.
Group shall pay all professional dues and license fees, continuing
education costs and similar costs incurred by Group's employees. Group
shall pay the cost of all professional liability insurance maintained
pursuant to paragraph 5.f.
f. Professional Liability Insurance.
Group shall continuously maintain throughout the term of this Agreement
professional liability (malpractice) insurance for all licensed personnel
of Group in amounts not less than $1,000,000 per incident and $3,000,000
annual limit for each dentist and dental hygienist employed by Group. Group
shall purchase extended reporting endorsements ("tail coverage") for
personnel leaving employment with Group, or on change in insurance
policies, if such coverage is available at reasonable rates. Group shall
require all contracted dentists and dental hygienists to maintain similar
coverages. The minimum amounts of insurance required by this Agreement
shall be increased as necessary to reflect current standards for dental
malpractice coverage.
6. Relationship of Parties.
The President of Group, or another licensed dentist designated by Group, shall
act as Group's liaison to GDSC. Group shall delegate to such person all
authority to make decisions on behalf of Group concerning day-to-day operations.
The person so designated shall consult with GDSC on operational matters as
requested. If approval by directors or shareholders of Group is required or
requested for any action recommended or referred for approval by GDSC, Group
shall take all reasonable steps to promptly refer the matter for decision to
Group's directors or shareholders, as appropriate.
Group designates GDSC's President, or his representative, as Group's
Attorney-In-Fact, with full right and authority, but in each instance at Group's
express direction, to execute contracts on behalf of Group, including, but not
limited to health plan agreements and employment agreements. As
Attorney-In-Fact, GDSC's President shall have the right to authorize
expenditures on behalf of Group for all activities related to its business.
Notwithstanding the above, this Agreement is a business support services
agreement only. GDSC shall have no control over Group, and Group shall retain
the sole and exclusive authority over all aspects of its dental practice
including, but not limited to, the authority to approve the locations of
Clinics, the types of improvements, furnishings, equipment and supplies to be
utilized, the manner of practice of dentistry or related ancillary services,
marketing approaches or advertisements, choice of dental personnel, treatment
decisions, assignment of patients to professionals, the content of dental
evaluation reports, fees charged, programs and services engaged in, and any
aspects of dental practice not listed that are the sole prerogative of a duly
licensed dentist under applicable state law.
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In the performance of this Agreement, it is mutually understood and agreed that
all dentists, dental hygienists and dental assistants practicing at any of the
Clinics are at all times acting and performing as employees of Group or as
contractors with Group ("Group's Personnel") and not as employees or agents of
GDSC. GDSC shall neither have nor exercise any control or direction over the
methods by which Group or Group's Personnel shall practice dentistry.
Group and Group's Personnel shall have no claim under this Agreement or
otherwise against GDSC for workers' compensation, unemployment compensation,
sick leave, vacation pay, retirement benefits, Social Security benefits, or any
other employee benefits, all of which shall be the sole responsibility of Group.
Since the Group's Personnel are not employees of GDSC, GDSC shall not withhold
on behalf of Group's Personnel pursuant to this Agreement any sums for income
tax, unemployment insurance, Social Security, or otherwise pursuant to any law
or requirement of any governmental agency, and all such withholding, if any is
required, shall be the sole responsibility of Group. Group shall indemnify and
hold harmless GDSC from any and all loss or liability arising with respect to
any of the foregoing benefits or withholding requirements.
Group shall require all dentists in its employ to execute non-competition
agreements in a form satisfactory to GDSC that prohibit such dentists from
providing dental services within five miles of a location at which they provided
dental services for Group for a period of two years after termination of
employment with Group. Group shall take all reasonable steps to enforce such
agreements in the event of any breach thereof.
All patient records, reports and information obtained, generated or encountered
relating to Clinics shall at all times be the property of Group and so long as
in the possession, use or control of either party, shall be kept in the
strictest confidence by both parties. GDSC shall instruct all of its personnel
to keep confidential any such information, as well as any financial,
statistical, personnel, and patient information obtained or encountered relating
to Group or to Group's operations.
Group shall not solicit, employ or contract with any employee of GDSC or any
entity or person that employs or contracts with any employee of GDSC, for a
period of two years after any such employee ceases to be employed by GDSC.
Should Group breach this specific provision, Group acknowledges that the damages
to GDSC would be difficult to ascertain, and shall as reasonable compensation
and liquidated damages promptly pay GDSC the sum of $40,000.
7. Confidential Information and Trade Secrets.
Group recognizes that due to the nature of this Agreement, Group will have
access to information of a proprietary nature owned by GDSC including, but not
limited to, any and all computer programs, and any and all operating manuals or
similar materials which constitute the non-dental systems, policies, procedures,
and methods of doing business developed for the operation of facilities managed
by GDSC. Consequently, Group acknowledges and agrees that GDSC has a proprietary
interest in all such information and that all such information constitutes
confidential
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and proprietary information and trade secrets of GDSC. Group hereby waives any
and all right, title and interest in and to such trade secrets and confidential
information and agrees to return all copies of such trade secrets and
confidential information related thereto to GDSC, at Group's expense, upon the
termination of this Agreement.
Group further acknowledges and agrees that GDSC is entitled to prevent its
competitors from obtaining and utilizing its trade secrets and confidential
information. Therefore, Group agrees to hold GDSC's trade secrets and
confidential information in strictest confidence and not to disclose them or
allow them to be disclosed, directly or indirectly, to any person or entity
other than those persons or entities who are employed by or affiliated with GDSC
or Group, without the prior written consent of GDSC. Group 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 persons or entities
who are employed by or affiliated with GDSC or Group any confidential or
proprietary information or trade secret information obtained by Group from GDSC,
except as otherwise required by law. Group agrees to require each independent
contractor and employee of the Group, and any such persons or entities to whom
such information is disclosed for the purpose of performance of GDSC's or
Group's obligations under this Agreement, to execute a "Confidentiality
Agreement" regarding such information in such form as from time-to-time may be
approved by Group and GDSC.
Group acknowledges and agrees that a breach of this Paragraph 7 will result in
irreparable harm to GDSC which cannot be reasonably or adequately compensated in
damages, and therefore GDSC shall be entitled to injunctive and/or equitable
relief to prevent a breach and to secure enforcement thereof, in addition to any
other relief or award to which GDSC may be entitled.
8. Working Capital.
a. Assignment of Accounts Receivable to GDSC.
Group hereby assigns, without recourse, to GDSC all of Group's accounts
receivable and other rights and interests in all sums which Group receives
or becomes entitled to receive for the performance of dental services by
Group's Dentists, for other services performed by employees of Group, and
for charges by Group for supplies and other items for which Group is
entitled to charge as reflected in invoices issued by Group with respect to
the Clinics; provided, however, that no assignment shall be made of any
sums or rights to payment the assignment of which is prohibited by law.
b. Remittance to Group.
Periodically, as required to meet Group's financial obligations, and after
deduction of amounts which are retained by GDSC as compensation, cash equal
to all remaining Net Revenues shall be remitted to Group. Group shall be
responsible for paying the expenses described in section 5 above from funds
of Group.
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9. GDSC's Compensation.
For its services hereunder, including lease of all facilities, furniture,
fixtures and equipment at the Clinics, provision of all employees of GDSC who
perform services at or for the Clinics, and provision of insurance, supplies and
management services contemplated hereunder, Group shall pay GDSC the following
service fee:
during the remainder of 1997, 53% of Net Revenues
during 1998, 54% of Net Revenues
during 1999, 55% of Net Revenues
during 2000 and for the remainder of the term of this Agreement and any
renewal term, 56% of Net Revenues.
The service fee can be adjusted by mutual agreement from time to time. Payment
shall be made by deduction of the amount due from amounts remitted to Group as
provided in paragraph 8.b. above. Monthly payments shall be made based on
unaudited Net Revenues year-to-date; final adjustment of the fee shall be made
based on audited Net Revenue for the calendar year.
For 1997, the service fee payable to GDSC under this Agreement is allocated to
the following services:
10.5% of Net Revenues Rents and utilities
32% of Net Revenues Support staff and administrative services
10.5% of Net Revenues Supplies
Increases in GDSC's service fee in 1998 and following shall be allocated
proportionately to each of the three service categories. In 2000 and following,
the allocations will be:
11% of Net Revenues Rents and utilities
34% of Net Revenues Support staff and administrative services
11% of Net Revenues Supplies
10. Definitions.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
generally accepted accounting principles ("GAAP"), and all financial
computations hereunder shall be computed unless otherwise specifically provided
herein, in accordance with GAAP as consistently applied and using the same
method of valuation as used in the preparation of GDSC's financial statements.
"Gross Revenues" means all xxxxxxxx by Group for services rendered during the
term of this Agreement, billed at Group's standard rates. For purposes of
capitated service contracts, "Gross Revenues" means the amount of revenue
received under the service contract for services rendered during the term of
this Agreement.
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"Net Revenues" means all Gross Revenues net of allowances for contractual
discounts and bad debt. Bad debt allowances shall be determined in accordance
with GAAP. Contractual discount allowances shall be based on reasonable
estimates as determined by GDSC.
11. Miscellaneous Authority and Duties of the Parties.
GDSC is hereby exclusively authorized by Group to perform all services required
of GDSC pursuant to the terms of this Agreement as GDSC deems reasonable and
appropriate in order to meet the day-to-day requirements of Group. GDSC may
subcontract with other persons or entities to perform any part or all of the
services required of GDSC hereunder.
Each of the parties agrees to cooperate fully with the other in connection with
the performance of their respective obligations under this Agreement, and both
parties agree to employ their best efforts to resolve any dispute that may arise
under or in connection with this Agreement. Subject to GDSC maintaining the
confidentiality of patient records and Group's confidential information, Group
shall provide to GDSC full and complete access to Group's premises, and to
Group's charts, Books and Records, in order that GDSC can perform its functions
hereunder.
During the term of this Agreement, at Group's direction GDSC shall add
facilities or clinics for the practice of dentistry by Group, and Group shall
staff those facilities with dental personnel and shall deliver dental services
therein. GDSC shall exclusively provide the services contemplated by this
Agreement in those facilities. Group shall not open or otherwise participate in
the operation of any dental clinics or otherwise expand its operations other
than through the exclusive relationship with GDSC as described in this
Agreement.
Notwithstanding any other provisions contained herein, GDSC shall not be liable
to Group, and shall not be deemed to be in default hereunder, for the failure to
perform or provide any of the supplies, services, personnel, or other obligation
to be performed or provided by GDSC pursuant to this Agreement if such failure
is a result of a labor dispute, act of God, or any other event which is beyond
the reasonable control of GDSC.
12. Term and Termination.
a. Unless sooner terminated in accordance with the provisions of
this Agreement, this Agreement shall remain in effect for an
initial term of forty (40) years after the Effective Date.
Following the initial term, this agreement shall be automatically
renewed for successive ten (10) year renewal terms unless more
than 180 days prior to the end of the initial term or any renewal
term either party gives notice of termination.
b. This Agreement may be terminated by any of the following:
i. In the event of a material breach of this Agreement by
either party, the other party shall have the right to cancel
this Agreement by
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service of written notice upon the defaulting party (the
"Default Notice"). In the event such breach is not cured
within thirty (30) days after service of the Default Notice,
this Agreement shall immediately terminate at the election
of the non-defaulting party upon the giving of a written
notice of termination to the defaulting party no later than
sixty (60) days after the giving of the Default Notice,
unless such breach cannot be cured within thirty (30) days
and the defaulting party gives timely notice to the other
party to such effect and promptly undertakes appropriate
steps to effect such cure and pursues such action to
conclusion.
ii. GDSC may terminate this Agreement upon one (1) day's notice
in the event of the dissolution or liquidation of the Group.
iii. Upon institution of any voluntary or involuntary bankruptcy,
reorganization, insolvency or receivership proceedings, or
any assignment for the benefit of creditors, the other party
may immediately terminate this Agreement on written notice
to the party involved in such proceedings.
c. Upon any termination of this Agreement, it is understood and
agreed that the right of Group to occupy the Clinics and to the
use and possession of the furniture, fixtures, furnishings,
equipment and leasehold improvements shall terminate, and Group
shall immediately vacate and surrender possession to GDSC of the
Clinics, furniture, fixtures, furnishings, equipment and
leasehold improvements as well as all other materials and
supplies then located in or upon the premises of such Clinics.
The various rights and remedies herein provided shall be cumulative and in
addition to any other rights and remedies the parties may be entitled to pursue
under the law. The exercise of one or more of such rights or remedies shall not
impair the rights of either party to exercise any other right or remedy at law
or in equity.
Termination of the 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.
13. Indemnification.
Each party shall indemnify, hold harmless, and defend the other party from any
and all liability, loss, claims, lawsuits, damages, injury, costs or expenses
(including reasonable attorneys' fees incurred at trial, on appeal or on review)
arising out of or incident to acts or omissions by such indemnifying party, its
employees, contractors and subcontractors provided, however, neither
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party shall be liable to the other party hereunder for any claim covered by
insurance, except to the extent the liability of such party exceeds the amount
of such insurance coverage.
14. Assignment.
This Agreement, and the rights and obligations created hereunder, shall not be
assignable by Group, either voluntarily or by operation of the law, without the
express prior written consent of GDSC. Any assignment without such consent shall
be null and void. Group shall not sublet any Clinic or any part thereof, and
Group shall not sublease any of the furniture, furnishings, leasehold
improvements or equipment referred to in this Agreement without the express
prior written agreement of GDSC. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties, their heirs, executors
and assigns.
15. Governing Law.
This Agreement shall be governed by and construed under the laws of the State of
Washington.
16. 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.
17. Amendment.
No amendment to the terms of this Agreement shall be binding on either party
unless in writing and executed by the duly authorized representatives of each
party.
18. Entire Agreement.
This Agreement constitutes the entire agreement between the parties in
connection with the subject matter hereof and supersedes all prior agreements,
whether written or oral, and whether explicit or implicit, which have been
entered into before the execution hereof. Should any litigation or arbitration
arise between the parties, neither party shall (and each party hereby waives the
right to) introduce any parol evidence which would tend to contradict or impeach
any of the express written terms, conditions, and covenants of this Agreement.
19. Notice.
Any notice or other communication required or which may be given hereunder shall
be in writing and shall be delivered personally, telegraphed, telexed or sent by
facsimile, or sent by certified, registered or express mail, postage prepaid,
and shall be deemed given when so delivered personally, telegraphed or telexed
or sent by facsimile, or if mailed, two days after the day of mailing, as
follows:
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(i) If to GDSC to:
Gentle Dental Service Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: President
With a copy to:
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(ii) If to Group:
Xxxx Xxx, P.C.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: President
20. Arbitration.
Any disagreement which the parties are unable to resolve by mutual agreement
shall be submitted to private arbitration in accordance with the rules of the
American Arbitration Association ("AAA"), except as modified by this Agreement.
The arbitration shall be conducted by a single, neutral arbitrator appointed in
accordance with AAA procedures. Unless the parties agree otherwise, the
arbitration proceedings and venue for the filing of exceptions, if any, shall be
Xxxxx County, Washington. Discovery of documents shall be permitted to the full
extent permitted by the Federal Rules of Civil Procedure ("FRCP"). Other types
of discovery available under the FRCP shall be permitted as the arbitrator shall
find to be appropriate. The parties shall share equally the costs of the
arbitrator and all other costs of arbitration, except that each party shall be
solely responsible for its own attorneys' fees and expenses. Exceptions to the
decision of the arbitrator can be filed in accordance with RCW 7.04.160; in
addition to the grounds recognized in that statute, an exception may be filed
based on mistake of law. Judgment on the arbitration award can be filed in any
court with jurisdiction.
Arbitration under this Agreement shall be governed by the Federal Arbitration
Act, and by Washington law to the extent not inconsistent with the Federal
Arbitration Act.
To the greatest extent consistent with law and disclosure requirements
applicable to either party, and except as required in a judicial proceeding
contemplated by this section 20, the parties shall
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keep all matters relating to any arbitration confidential, including the
existence and subject of the arbitration.
21. Miscellaneous Provisions.
a. Changes In Law.
In the event that any state or federal laws or regulations now in effect or
enacted or promulgated after the execution of this Agreement are
interpreted by judicial decision, regulatory agency or legal counsel in
such a manner as to indicate that the structure of this Agreement may be in
violation of such laws or regulations, the parties shall negotiate in good
faith and shall seek agreement on modifications or amendments to this
Agreement that appropriately address the possible violation of law or
regulation while preserving the intent of this Agreement as nearly as
possible. If the parties are unable to reach agreement within a reasonable
time, the parties shall proceed as set forth in section 20.
b. Partial Invalidity.
If any one or more of the terms, provisions, promises, covenants, or
conditions of this Agreement or the application thereof to any person or
circumstance shall be adjudged to any extent invalid, unenforceable, void
or voidable for any reasons whatsoever by a court of competent
jurisdiction, each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other
persons or circumstances shall not be affected thereby and shall be valid
and enforceable to the fullest extent permitted by law.
c. Heading, Titles.
The headings appearing herein are for convenience and reference only and
shall not be deemed to govern, limit, modify or in any manner affect the
scope, meaning or intent of the provisions of this Agreement.
d. Binding Effect.
Subject to the provisions contained herein, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors.
e. Covenants and Conditions.
Each covenant hereof is a condition, and each condition hereof is as well a
covenant by the parties bound thereby unless waived in writing by the
parties hereto.
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f. Approval and Consent.
Whenever in this Agreement an approval or consent is required by one of the
parties, the same shall not be unreasonably withheld.
g. Attorneys' Fees.
In the event suit or action is brought to enforce any of the terms of this
Agreement, the prevailing party shall be entitled to recover fees and
expenses incurred in such action or proceeding, including reasonable
attorneys' fees, incurred at trial, on appeal or on review.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.
Gentle Dental Service Corporation Xxxx Xxx, P.C.
L. XXXXXXXX XXX XXXXXX XXXX X. XXX
---------------------------------- ----------------------------------
L. Xxxxxxxx Xxx Xxxxxx Xxxx X. Xxx
Chief Financial Officer President
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