EXHIBIT 10.50
Support Services Agreement
between
Gentle Dental Service Corporation
and
Arena Dental Corporation
Date: Xxxxx 00, 0000
X-0
TABLE OF CONTENTS
Section Page
------- ----
1. Facilities 4
2. Furniture, Fixtures and Equipment 4
3. Administrative Services 5
4. Duties of Group 9
5. Relationship of Parties 10
6. Confidential Information and Trade Secrets 12
7. GDSC's Compensation 13
8. Definitions 13
9. Miscellaneous Authority and Duties of the Parties 14
10. Term and Termination 14
11. Indemnification 15
12. Assignment 16
13. Governing Law 16
14. Waiver 16
15. Amendment 16
16. Entire Agreement 16
17. Notice 16
18. Arbitration 17
19. Miscellaneous Provisions 18
ANNEX I - SECURITY AGREEMENT
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SUPPORT SERVICES AGREEMENT
--------------------------
This Agreement is effective as of March 31, 1997 (the "Effective Date") by and
between Gentle Dental Service Corporation, a Washington corporation ("GDSC"),
and Arena Dental Corporation, a California professional corporation, d/b/a Blue
Oak Dental Group, a Dental Office of Dr. Xxxx Arena ("Group"), and is made with
reference to the following facts:
1. Group is a California professional corporation able to practice
dentistry in and pursuant to the laws of the State of California.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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:
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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 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:
1. 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.
2. 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. Administrative Services.
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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:
1. 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.
2. 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.
3. 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:
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1. 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;
2. 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
3. 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.
4. 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.
5. 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,
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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.
6. 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.
7. 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 (with Group as a named insured) 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.
8. 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 hereby appoints GDSC as its true and
lawful agent for the term of this Agreement in Group's name and on its
behalf (i) to xxxx for services rendered by Group; (ii) to collect accounts
receivable generated by such xxxxxxxx; (iii) to receive payments for
services rendered by Group; and (iv) to deposit in the Accounts described in
subparagraph i. below any amounts received in payment of services rendered
by Group. 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 may, on its own, continue collection efforts with
respect to any accounts which GDSC has determined to be uncollectible.
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.
9. Bank Accounts and Disbursements.
During the term of this Agreement, GDSC shall establish and maintain bank
accounts in the name of Group (the "Accounts") for the deposit of all sums
received by Group from the provision of dental services or otherwise. Group
hereby authorizes GDSC to deposit checks and other funds received by Group
into the Accounts. GDSC and its authorized officers shall at all times
during the term of this Agreement have authority to sign checks and stop
payment on checks drawn on the Accounts. GDSC is hereby expressly authorized
to, and shall, disburse from the Accounts sums for the payment of Group's
expenses as described in Section 4, GDSC's compensation as described in
Section 7, and all other costs, expenses and disbursements which are
required or authorized by this Agreement.
10. Market Research and Activities.
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. Subject to prior approval of Group, GDSC shall develop
and distribute marketing materials (such as yellow page advertisements) that
communicate a philosophy of high quality customer-oriented dental care, as
GDSC determines to be appropriate. GDSC shall assist Group in improving
patient satisfaction in order to maintain existing patients, expand services
to existing patients and generate new referrals from existing patients. In
providing such marketing services, GDSC will act solely in its capacity as
administrator for Group. At no time shall GDSC hold itself out as providing
dental services on behalf of 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.
11. 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
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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.
12. 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 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.
4. Duties of Group
1. 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.
2. 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.
3. 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
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for licensed personnel in accordance with all legal requirements and good
professional practice.
4. 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.
5. 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
subsection 4.f.
6. 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.
5. 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
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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.
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 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.
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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.
6. 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 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 Section 6 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.
7. 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
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provision of insurance, supplies and management support services contemplated
hereunder, Group shall pay GDSC the following service fee:
during the remainder of 1997, *% of Net Revenues,
during 1998, *% of Net Revenues,
during 1999 and for the remainder of the term of this Agreement and
any renewal term, *% of Net Revenues.
The service fee can be adjusted by mutual agreement from time to time. Monthly
accruals of service fees shall be made based on estimated Net Revenues year-to-
date; final adjustment of the fee shall be made based on the final Net Revenue
for the calendar year determined after the closing of Group's books for the
year. GDSC shall be entitled to collect the accrued service fees from Group by
deducting from Group's cash collections on a daily basis that percentage of such
collections equal to the current service fee percentage according to the
schedule set forth above. Such deductions shall be made from funds collected in
the Accounts as provided in subsection 4.i. above.
To secure payment of all amounts due to GDSC hereunder, Group hereby grants GDSC
a security interest in all of Group's accounts receivable and proceeds
therefrom. Group will execute a Security Agreement in the form attached hereto
as Annex I and such financing statements and other documents as GDSC may
reasonably request from time to time to evidence and perfect such security
interest.
8. 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.
"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.
9. Miscellaneous Authority and Duties of the Parties.
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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.
10. Term and Termination.
1. 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.
2. This Agreement may be terminated by any of the following:
1. 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 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
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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.
2. GDSC may terminate this Agreement upon one (1) day's notice in
the event of the dissolution or liquidation of the Group.
3. 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.
3. 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. After termination of
this Agreement for any reason, GDSC shall be entitled to recover from Group
(out of the Accounts or otherwise) all fees and other amounts owed to GDSC
that had accrued but were unpaid as of the date of termination, and GDSC's
signing authority over the Accounts shall continue until all such amounts are
paid.
11. 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.
12. 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.
13. Governing Law.
This Agreement shall be governed by and construed under the laws of the State of
California.
14. 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.
15. 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.
16. 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.
17. 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
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:
Arena Dental Corporation
00 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
18. 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 for 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 California law to the extent not inconsistent with the Federal
Arbitration Act.
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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 18, the parties shall keep all matters relating to
any arbitration confidential, including the existence and subject of the
arbitration.
19. Miscellaneous Provisions.
1. 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 18.
2. 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.
3. 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.
4. 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.
5. 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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6. 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.
7. Attorneys' Fees; Prejudgment Interest.
If the services of an attorney are required by any party to secure the
performance of this Agreement or otherwise upon the breach or default of
another party to this Agreement, or if any judicial remedy or arbitration is
necessary to enforce or interpret any provision of this Agreement or the
rights and duties of any person in relation thereto, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and other expenses, in
addition to any other relief to which such party may be entitled. Any award
of damages following judicial remedy or arbitration as a result of the breach
of this Agreement or any of its provisions shall include an award of
prejudgment interest from the date of the breach at the maximum amount of
interest allowed by law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.
GENTLE DENTAL SERVICE CORPORATION ARENA DENTAL CORPORATION
Xxxx X. Xxx Xxxx X. Arena
President President
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