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EXHIBIT 10(ccc)
ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT, effective the 1st day of
October, 1997, by and between ProDent, Inc., a Pennsylvania corporation
("ProDent"), and Xxxxxx X. Xxxxxxxx, D.D.S & Associates, Ltd., a Pennsylvania
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 Commonwealth of
Pennsylvania (the "Practice");
WHEREAS, the P.C. desires to obtain the benefit of ProDent's expertise
in the administration of practices similar to the Practice;
WHEREAS, the P.C. desires to obtain from ProDent, and ProDent desires
to provide to the P.C., certain premises and certain physical assets, furniture
and equipment needed to operate the Practice;
WHEREAS, ProDent and the P.C. are parties to that certain Management
Services Agreement dated November 29, 1983 pursuant to which the P.C. obtains
from ProDent and ProDent provides to the P.C., ProDent's expertise in operating,
directing, managing and supervising the non-professional aspects of the
operations of the Practice; and
WHEREAS, ProDent 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 ProDent will be responsible only for
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administrative services (as further described in this Agreement). Nothing
contained in this Agreement shall be construed as permitting or providing for
the provision by ProDent of the professional services of the Practice, which
services shall at all times be the sole responsibility of the P.C. or permitting
ProDent to exercise control over the Practice in violation of Pennsylvania
Statute 64 P.S.129; provided, however, that pursuant to its engagement
hereunder, ProDent shall 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 ProDent are not joint
venturers, partners, employees or agents of each other and, except as provided
herein, neither party shall have any authority to bind the other.
1.3 Practice. The P.C. agrees to conduct the Practice in compliance
with all applicable laws, rules and ordinances.
ARTICLE 2
SERVICES OF PRODENT
2.1 Covered Services. ProDent, unless otherwise prohibited by law,
shall control all aspects of, and provide to the P.C. the following services,
premises and assets (such services, premises and assets are hereinafter referred
to collectively as the "Covered Services"):
a. General Administrative Services. Overall day-to-day supervision,
conduct and management of the general administrative services required in
connection with the Practice, including supervision of the non-professional
services and personnel described below.
b. Personnel. Provision of all personnel (other than licensed or
certified professionals, technicians or hygienists, collectively, the
"Professional Personnel") needed to operate and support the Practice, such as
receptionists and secretarial, clerical, purchasing and marketing personnel
(collectively, the "Administrative Personnel"). ProDent shall have the sole and
exclusive
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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 ProDent's
personnel provided to the P.C. under this Agreement may from time to time
perform services for others, this Agreement shall not prevent ProDent from
performing such services for others or restrict ProDent from so using the
Administrative Personnel provided to the P.C. under this Agreement. ProDent will
make every effort consistent with sound business practices to honor the specific
requests of the P.C. with regard to the assignment of its employees to the P.C.;
however, ProDent reserves the sole right to determine the assignment of its
employees. Further, ProDent, in its sole discretion, may require each of its
employees assigned to the P.C. to perform several of the aforedescribed
functions and duties simultaneously.
c. Professional Personnel. Establish guidelines for the selection,
hiring and firing of the Professional Personnel by the P.C. and recruit and
evaluate prospective Professional Personnel; provided, however, that all of the
Professional Personnel shall be employees of or independent contractors to the
P.C.
d. Training. Training of all Administrative Personnel and 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 ProDent 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 ProDent retaining final
authority with respect to budget items including, without limitation, with
respect to compensation and payments to the Professional Personnel and the
Administrative Personnel.
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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 standards, sampling techniques for case review,
and preparation of appropriately documented studies.
i. Marketing, Development and Program Negotiation. Marketing of the
professional services provided by the P.C. to potential patients, facilities,
health maintenance organizations, self-insured employer health plans and various
third-party payors (the "Marketing Services"). The Marketing Services to be
provided by ProDent 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 ProDent to be
beneficial to the P.C., (iii) undertaking telemarketing campaigns and (iv) the
holding of seminars. ProDent 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 be in need of 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. Equipment and Supplies. Provision of all inventory, equipment,
furnishings and supplies reasonably necessary for the efficient operation of the
Practice. Title to such inventory, equipment, furnishings and supplies shall at
all times remain in ProDent. At the end of the term of this Agreement, ProDent
shall retain such inventory, equipment, furnishings and supplies as shall not
have been consumed in the day-to-day operations of the Practice.
k. Janitorial and Maintenance Service. 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., its employees and agents in an amount not
less than One Million
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Dollars ($1,000,000). ProDent shall also assist the P.C. in obtaining general
liability and property insurance in usual and customary amounts for the P.C.
ProDent shall, on behalf and in the name of the P.C., pay the premiums for all
such insurance and shall provide the P.C. with evidence of payment on a periodic
basis or as requested.
m. Contracts with Facilities/Programs. Contracts with facilities and
programs serviced by the Practice shall be in the name of the P.C. ProDent shall
serve as contracting agent for the P.C. in connection with such facilities or
programs contracts.
n. Protecting Goodwill. Take all necessary steps to preserve and
protect the reputation and goodwill associated with the P.C., including
assistance in the monitoring of utilization and quality of services provided by
the P.C., and shall assist the P.C. to take all steps necessary to remedy any
and all deficiencies in the efficiency or the quality of the services provided.
This section shall not be construed as permitting ProDent to influence or
control Professional Personnel.
o. Facilities. Facilities occupied by the P.C. for the Practice shall
be made available to the P.C. by ProDent.
p. Operations and Regulatory Reports. Deliver to the P.C. operations
reports containing such information as the P.C. may reasonably request. ProDent
shall prepare all written reports and information that shall be lawfully
required by any government body or agency having jurisdiction over the P.C. or
the Practice. The P.C. shall review and approve all such required reports and/or
information before any dissemination of the same.
q. Processing Disputes. Administer and process of all disputes,
grievances and complaints between the P.C. and all third parties, subject at all
times to the review and final approval of the P.C.
r. Government Regulations; Licenses. To the extent known and material
to the operation of the P.C. and the Practice, ProDent shall promptly notify the
P.C. of any changes which may occur in relevant laws or regulations of any
government, governmental body or agency having jurisdiction over the P.C. or the
Practice. The foregoing shall not in any way limit the P.C.'s continuing
professional and legal responsibility to comply with, and be aware of, all
licensing, regulatory, professional or other
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requirements applicable to individuals licensed to provide
dental services.
s. Advances to ProDent. ProDent shall make advances to the P.C. as
required by Section 5.6 herein. Such advances shall bear a reasonable rate of
interest, as mutually agreed to by ProDent and the P.C.
The Covered Services shall include assumption of all obligations of the
P.C. to provide administrative services to professional personnel who are not
employed by the P.C. ProDent may perform the Covered Services directly or by
reimbursing the P.C. for the cost of any Covered Services.
2.2 Performance of Services. ProDent is hereby expressly authorized to
perform the Covered Services hereunder in whatever reasonable manner it deems
appropriate to meet the day-to-day administrative needs of the Practice. It is
understood and agreed that ProDent will perform some of the Covered Services for
the P.C. at a centralized location.
2.3 Events Excusing Performance. ProDent 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 ProDent 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 ProDent, and the P.C. shall be
solely and exclusively responsible for all professional dental services rendered
to patients of the Practice. Without limiting the generality of the foregoing,
the parties acknowledge that the P.C. shall be 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. ProDent hereby grants to the P.C. a nontransferable,
nonexclusive license to use the proprietary name "ProDent" and any other
proprietary names owned by ProDent 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 name
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"ProDent" and any other proprietary names owned by ProDent and used by the
Practice and their accompanying symbols, including, but not limited to, rights
relating to trademark, service xxxx, patent and copyright shall be and remain
the sole property of ProDent. The P.C. shall have no right, title or interest in
any such proprietary rights.
ARTICLE 3
PROPRIETARY INTEREST AND RIGHTS OF PRODENT
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 ProDent.
3.2 Confidentiality. The P.C. acknowledges and agrees that ProDent is
entitled to prevent its competitors from obtaining and utilizing its trade
secrets. The P.C. agrees to hold ProDent'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 ProDent. The P.C.
acknowledges its fiduciary obligations to ProDent and the confidentiality of its
relationship with ProDent and of any information relating to the services and
business methods of ProDent 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 ProDent
any confidential or proprietary information or trade secret obtained by the P.C.
from ProDent. 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
ProDent, establish a schedule of fees
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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.
4.3 Billing and Collection Agent. ProDent shall serve as billing and
collection agent for the P.C. in connection with the Practice. ProDent 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, ProDent may withdraw all monies daily from said bank account
for processing at a central location to be used for payment of the P.C.'s
expenses, including the administrative services fee set forth in Section 5.4
hereof and any amounts advanced to the P.C. pursuant to Section 5.6 hereof. Said
processing will consist of establishing and maintaining a book account for the
P.C. showing all fee collections and expense disbursements made by ProDent at
the P.C.'s request. ProDent will provide the P.C. with periodic financial
statements for the Practice reflecting such processing.
4.4 Reports. ProDent shall provide the P.C. with financial statements
for the Practice, stating Gross Xxxxxxxx (as hereafter defined) and ProDent's
Administrative Fees (as hereafter defined).
4.5 Security for ProDent's Compensation. To secure the prompt and
orderly payment of any amounts owing by the P.C. to ProDent pursuant to this
Agreement, the P.C. hereby agrees to grant, at the request of ProDent, a
security interest to ProDent or to a third party designated by ProDent, 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.
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ARTICLE 5
COMPENSATION
5.1 Gross Xxxxxxxx. The term "Gross Xxxxxxxx" as used in this Agreement
shall mean all xxxxxxxx by the P.C. in connection with the Practice for dental
services, including any other income or receivables relating thereto, less
contractual allowances, if any, and an allowance for bad debts, to be determined
from time to time by ProDent, in its discretion, based upon the actual
experience of the P.C., plus all other cash payments and miscellaneous revenues
received by the P.C. in connection with the Practice.
5.2 Intention of the Parties. It is the intention of the parties hereto
that from the Gross Xxxxxxxx of the P.C. in connection with the Practice, the
P.C. shall be entitled to fairly and reasonably compensate its Professional
Personnel, and ProDent shall be entitled to receive from the P.C. fair and
reasonable compensation for (i) the provision of the Covered Services pursuant
to this Agreement, (ii) the License provided for in Section 2.5 hereof, and
(iii) the expenses, obligations, and risks assumed by ProDent in connection
therewith.
5.3 Fair and Reasonable Compensation of the P.C. for Services of
Professional Personnel. The parties hereto agree that the P.C. shall have the
right to fairly and reasonably compensate its Professional Personnel for their
professional services. Compensation for the Professional Personnel shall be
determined in accordance with employment agreements and other employment
arrangements entered into by the P.C., in consultation with ProDent, and the
Professional Personnel.
5.4 Fair and Reasonable Compensation to ProDent.
a. ProDent's Administrative Fees. The term "ProDent's
Administrative Fees" as used in this article shall mean Gross Xxxxxxxx less
compensation payable by the P.C. as set forth in Section 5.3.
b. For Services of ProDent. The parties hereto agree that ProDent
shall be fairly and reasonably compensated for its administrative services.
ProDent's Administrative Fees shall be paid to ProDent as compensation for (i)
the provision of the Covered Services under this Agreement, (ii) the License and
(iii) its expenses, obligations, and risks in connection therewith. ProDent
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shall pay all expenses of the Practice, except for compensation to the
Professional Personnel, (including interest expenses payable with respect to any
indebtedness of the P.C. to which ProDent shall have consented in writing) out
of ProDent's Administrative Fees or out of funds advanced to the P.C. by
ProDent.
5.5 Periodic Adjustment of Compensation. The parties hereto recognize
that the Practice may change in size and scope over the term of this Agreement
which may necessitate adjusting the fees provided for herein. Therefore, the
parties shall review the compensation to ProDent no less frequently than
annually and more frequently at the request of ProDent or the P.C., if changes
in the business of the P.C. or services by ProDent 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 ProDent and the P.C. in connection with
the Practice, changes in the purchasing power of money, the size and number of
facilities being supplied by ProDent, the scope of the Marketing Services, the
size of the Administrative Personnel workforce and the expenses and risks to the
respective parties of performing this Agreement.
5.6 Remittances. To the extent the P.C. shall not generate adequate
revenues to meet the P.C.'s ongoing operating expenses, including the
compensation for professional services pursuant to Section 5.3 of this
Agreement, ProDent shall advance to the P.C. or arrange for such amounts as may
be required. To the extent that ProDent advances any funds to the P.C. pursuant
to this Section 5.6, such advances shall be evidenced by interest-bearing demand
note(s) from the P.C. in favor of ProDent and shall be secured by the Collateral
as provided in Section 4.5 hereof.
ARTICLE 6
TERM AND TERMINATION
6.1 Term. The term of this Agreement shall be for a period of forty
(40) years and thereafter this Agreement shall continue indefinitely until
terminated in accordance with Section 6.2 hereof.
6.2 Termination. Notwithstanding any provision of this Agreement to the
contrary, this Agreement may be terminated as set forth below:
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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 (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 remain to be performed upon the date of
termination.
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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, and agents, including, without
limitation, all consequential damages and attorneys' fees, provided, however,
neither party shall be liable to the other under this Section 7.1 for any claim
covered by insurance, except to the extent liability of the party exceeds the
amount of the coverage.
7.2 Assignment. The rights conferred upon the P.C. hereunder may not be
transferred or assigned without the prior written consent of ProDent and any
assignment in violation of this Section 7.2 shall be void. This Agreement shall
be assignable by ProDent.
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.:
000 Xxxxx Xxxxxx Xxxx
Xxxxx, Xxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
(2) If to ProDent:
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
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, and two business days after the date of mailing, if mailed.
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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.
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 Commonwealth of Pennsylvania applicable to
agreements made and to be performed entirely within such State.
7.8 Article and Section Headings. The article and section headings in
this Agreement are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision hereof.
7.9 Waiver. The waiver of any covenant, condition or duty hereunder by
either party shall not prevent that party from later insisting upon full
performance of the same.
7.10 Amendment. No amendment in the terms of this Agreement shall be
binding on either party unless in writing and executed by the duly authorized
representatives of each party.
7.11 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and both of which taken together shall
constitute one and the same instrument.
7.12 Severability. In the event that any provision of this Agreement
shall be held to be void or unenforceable for any reason, the parties shall
negotiate in good faith for a period of up to one hundred eighty (180) days in
order to arrive at a mutually acceptable substitute provision.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
XXXXXX X. XXXXXXXX, D.D.S. &
ASSOCIATES, LTD.
By: /s/ Xxxxxx X. Xxxxxxxx, D.D.S.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, D.D.S.
Title: President
PRODENT, INC.
By: /s/ W. Xxxx Xxxxxxx
---------------------------------
Name: W. Xxxx Xxxxxxx
Title: Vice President
