Exhibit 10.13
ADMINISTRATIVE SERVICES AGREEMENT
BY AND AMONG
NCRIC, INC.,
NCRIC, A MUTUAL HOLDING COMPANY,
NCRIC HOLDINGS, INC.,
NCRIC GROUP, INC.,
NCRIC MSO, INC.,
COMMONWEALTH MEDICAL LIABILITY INSURANCE COMPANY,
NATIONAL CAPITAL INSURANCE BROKERAGE, LTD.,
NCRIC INSURANCE AGENCY, INC.,
NCRIC PHYSICIANS ORGANIZATION, INC.
AND
HCI VENTURES, LLC
TABLE OF CONTENTS
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1. Engagement of Service Providers.............................. 1
2. Term......................................................... 1
3. Services..................................................... 2
4. Personnel and Hours.......................................... 2
5. Remuneration for Services.................................... 3
6. Financial Records............................................ 3
7. Independent Contractors...................................... 3
8. Limitation of Liability...................................... 3
9. Successors and Assigns....................................... 4
10. No Waiver.................................................... 4
11. Modification................................................. 4
12. Inclusion of a New Affiliate................................. 4
13. Applicable Law............................................... 4
14. Entire Agreement............................................. 4
15. Notice....................................................... 4
16. Not for the Benefit of Third Parties......................... 5
17. Captions..................................................... 5
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement") is made and entered as
of the 1st day of January, 1999, by and among NCRIC, Inc., a stock insurance
company organized under the laws of the District of Columbia ("NCRIC"), NCRIC, A
Mutual Holding Company, a mutual insurance holding company organized under the
laws of the District of Columbia; NCRIC Holdings, Inc., a stock holding company
organized under the laws of the District of Columbia; NCRIC Group, Inc., a stock
holding company organized under the laws of the District of Columbia; NCRIC MSO,
Inc., a corporation organized under the laws of the State of Delaware;
Commonwealth Medical Liability Insurance Company, a stock insurance company
organized under the laws of the Commonwealth of Virginia; National Capital
Insurance Brokerage, Ltd., an insurance brokerage organized under the laws of
the District of Columbia; NCRIC Insurance Agency, Inc., an insurance agency
organized under the laws of the District of Columbia; NCRIC Physicians
Organization, Inc., a physicians organization organized under the laws of the
District of Columbia; and HCI Ventures, LLC, a limited liability company
organized under the laws of Virginia (collectively, the "Affiliates").
RECITALS
Each of the Affiliates, in order to efficiently and effectively carry out
its operations, desires to engage one or more of its Affiliates (a "Service
Provider") to provide certain administrative and other services for and on
behalf of such Affiliate on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
undertakings and agreements set forth herein, the parties mutually agree as
follows:
1. Engagement of Service Providers. Each Affiliate hereby engages each
Service Provider to act as an independent contractor to provide the services set
forth, and to the extent contemplated, in Section 3 below (the "Services") to
such Affiliate. Each Affiliate hereby authorizes each Service Provider to
perform all acts necessary or appropriate to fulfill such engagement, and each
Service Provider hereby accepts such engagement and agrees to perform all acts
necessary or appropriate to fulfill such engagement, all in accordance with the
terms and conditions and subject to the limitations set forth in this Agreement.
2. Term. This Agreement shall commence as of the date set forth above
and shall remain in effect until terminated by all of the Affiliates pursuant to
a written agreement. Any Affiliate also may terminate this Agreement as it
applies to such Affiliate by giving written notice of such termination to each
other Affiliate at least sixty (60) days prior to the effective date of
termination. Upon termination of this Agreement by an Affiliate with respect to
itself, each Service Provider shall deliver to the terminating Affiliate all
records and information of every kind which relate to the provision of the
Service Provider's services under this Agreement and which are in the
possession, custody or control of the Service Provider. If the terminating
Affiliate is a Service Provider, such Service Provider shall also return to each
Affiliate all records and information of
every kind which relate to the provision of the Service Provider's Services
under this Agreement to such Affiliate.
3. Services. During the term of this Agreement, each Service Provider
shall undertake its best efforts to provide Services to an Affiliate at and upon
the request of such Affiliate, subject to each Service Provider's reasonable
discretion to decline to provide specific Services that may be requested by such
Affiliate. All Services performed under this Agreement shall be performed in
accordance with good business practices and industry customs. The Services
which may be provided include:
(a) Administrative and clerical services, and such personnel as may be
required by an Affiliate for administrative and clerical tasks, to ensure the
smooth and orderly operation of such Affiliate's business;
(b) Financial and accounting services, which may include (i) recording
and payment on behalf of an Affiliate of all employment-related expenses of such
Affiliate, including, but not limited to, payroll, payroll taxes, employee
fringe benefits, income tax withholdings (federal, state and local), FICA,
insurance and other expenses; provided, however, that any employees of an
Affiliate shall remain employees of such Affiliate and shall not, by reason of
the Service Provider's rendering of services in an agency capacity, become
employees of such Service Provider; (ii) the establishment and maintenance of
accounting journals, including cash receipts journals, cash disbursements
journals, general journals, and general ledgers; (iii) accounting and managerial
services which shall include, but not be limited to, maintenance of purchase
records, personnel and employment records and tax records; (iv) performing all
revenue accounting functions including invoicing of all sales, collection of
revenues, credit determinations, accounts receivable accounting and reporting to
an Affiliate; (v) maintaining adequate records and books of account reflecting
all financial transactions; and (vi) performing such other services incidental
to the foregoing as may from time to time be reasonably requested by an
Affiliate;
(c) Support services including access to the Service Provider's word
processing facilities and personnel and the Service Provider's receptionist and
telephone answering service;
(d) Utilization of the Service Provider's computer hardware and
software, including any necessary technical support;
(e) Marketing, claims processing, underwriting and executive
management services; and
(f) Assistance in the acquisition of furniture and equipment
reasonably necessary to an Affiliate's operations.
4. Personnel and Hours. The number and hours of service of each Service
Provider's personnel assigned to perform the Services shall be determined by
such Service Provider in its
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discretion, and such Service Provider shall have the right reasonably to reduce
or increase the number of its personnel providing the Services from time to time
without notice to or consent of an Affiliate. Such personnel shall be and at all
times remain the employees of the Service Provider. In consultation with an
Affiliate, the Service Provider shall define the duties and responsibilities of
personnel provided under this provision. The Service Provider shall be solely
responsible for hiring, training and firing such personnel and for setting
compensation and benefits and all other terms, conditions and requirements of
employment. The Service Provider shall be solely responsible for all
compensation and benefits owed to its personnel who perform Services hereunder.
The Service Provider shall be solely responsible for meeting any and all legal
obligations to such personnel which are imposed upon the Service Provider as
their employer or contractor, as the case may be.
5. Remuneration for Services. During the term of this Agreement, each
Affiliate will pay to the Service Provider a quarterly service fee (the "Service
Fee"), in arrears, equal to the Service Provider's costs and expenses to provide
Services to such Affiliate in the preceding quarter; such payment shall include,
but not be limited to, reimbursement to the Service Provider of payroll-related
expenses, telephone expenses, postage, office equipment and supplies, overhead,
rent for equipment and office space, expenses associated with computer hardware
and software, and expenses of receptionist and telephone answering services.
The Service Fee will be billed by invoice to each Affiliate stating in
reasonable detail the Services rendered to such Affiliate, fees charged therefor
and costs and expenses incurred. The Service Fee will be due and payable within
thirty (30) days of invoice date.
6. Financial Records. Each Service Provider shall maintain on a current
basis true, correct and complete books and records of moneys disbursed in
connection with the Service Provider's performance of the Services, and all
matters relating thereto.
7. Independent Contractors. Each Affiliate hereby engages each Service
Provider as an independent contractor and the Service Provider and each
Affiliate is responsible only for its own actions. Neither a Service Provider
nor its employees, subcontractors or agents shall be deemed to be the servants
or employees of any Affiliate. Nothing in this Agreement shall be construed to
create a joint venture, partnership or any other relationship of any nature
which would create any liability or responsibility on the part of any party for
the debts, obligations or liabilities of any other party; provided, however,
that should a Service Provider become liable to any third party by reason of
providing services hereunder, the Affiliate on whose behalf the Services were
provided will (subject to paragraph 8) hold the Service Provider harmless from
and against all damages (including settlements) and expenses (including
attorneys' fees and expenses) incurred by the Service Provider in connection
with the defense of all such debts, obligations or liabilities, including, but
not limited to, defense of all actions, suits and proceedings and prosecution or
defense of any related appeal. Nonetheless, a Service Provider is not authorized
to enter into any contract on behalf of any Affiliate by reason of any term of
this Agreement without the prior written consent of such Affiliate.
8. Limitation of Liability. Except as provided in this Agreement or
otherwise provided by law, Service Providers will incur no liability to any
Affiliate, or to others, in respect of any act
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or failure to act taken or done in good faith by the Service Provider in
performing its obligations under this Agreement, and the Affiliate(s) on whose
behalf such obligations were performed will indemnify and hold such Service
Provider harmless from and against all damages (including settlements) and
expenses (including attorneys' fees and expenses) incurred by the Service
Provider in connection with the defense of all such acts or failures to act,
including, but not limited to, defense of all actions, suits and proceedings and
prosecution or defense of any related appeal, and all claims or actions relating
to the payroll services rendered by the Service Provider on behalf of such
Affiliate(s). Notwithstanding the foregoing, no Affiliate shall be liable for,
nor shall indemnify the Service Provider for, any act or failure to act by the
Service Provider which is due to the gross negligence or willful misconduct of
the Service Provider.
9. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon each Affiliate and the Service Providers, and their
respective predecessors, successors and assigns.
10. No Waiver. No delay or failure by any party in exercising any right
under this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right.
11. Modification. No term or provision of this Agreement may be changed,
modified, terminated or discharged, in whole or in part, except by a writing
which is dated and signed by all parties hereto. No waiver of any of the
provisions or conditions of this Agreement or of any of the rights, powers or
privileges of a party hereto shall be effective or binding unless in writing and
signed by the party claimed to have given or consented to such waiver.
12. Inclusion of a New Affiliate. If a Service Provider or any Affiliate
acquires or organizes another corporation, then such corporation may join in and
become a party to this Agreement by executing the master copy of this Agreement
which shall be maintained at NCRIC's headquarters. It will not be necessary for
each Affiliate to re-execute the Agreement; a new Affiliate may simply execute
the existing Agreement, and such Agreement shall be binding on such new
Affiliate and the Service Providers.
13. Applicable Law. This Agreement shall be construed in all respects in
accordance with the laws of the District of Columbia (without giving effect to
the principles of conflict of laws thereof).
14. Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties concerning the subject matter hereof and supersedes
all prior and contemporaneous agreements, arrangements and understandings
between the parties concerning such subject matter.
15. Notice. Any notice, instrument or communication required or permitted
under this Agreement shall be deemed to have been effectively given and made if
in writing and served either by personal delivery to the party for whom it is
intended, or by being deposited, postage prepaid,
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registered or certified mail, return receipt requested, in the United States
mail, addressed to the party for whom it is intended to the following addresses:
If to an Affiliate: 0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
If to a Service Provider: 0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Either party may change such address by notice given to the other party in
the manner set forth above.
16. Not for the Benefit of Third Parties. This Agreement and each and
every provision hereof is for the exclusive benefit of the parties to this
Agreement and not for the benefit of any third party, and under no circumstances
shall the terms hereof be deemed to make a Service Provider or any Affiliate
responsible to any third party for any damages or other liabilities to such
third party.
17. Captions. The captions in this Agreement are for convenience only and
shall not be considered a part of, or effect the construction or interpretation
of any provision of, this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers,
have executed this Agreement as of the date first set forth above.
NCRIC, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
NCRIC, A MUTUAL HOLDING COMPANY
/s/ Xxxxxx X. Xxxxxxxx, M.D.
_________________________________________
Chairman, Board of Directors
NCRIC HOLDINGS, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
[Signatures continued on following page.]
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NCRIC GROUP, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
NCRIC MSO, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
COMMONWEALTH MEDICAL LIABILITY
INSURANCE COMPANY
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
NATIONAL CAPITAL INSURANCE
BROKERAGE, LTD.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
NCRIC INSURANCE AGENCY, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
NCRIC PHYSICIANS ORGANIZATION, INC.
/s/ R. Xxx Xxxx, Xx.
_________________________________________
President
HCI VENTURES, LLC
By: NCRIC MSO, Inc., its Managing Member
/s/ R. Xxx Xxxx, Xx.
___________________________________
President
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