NURSING HOME
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is made and entered into
this 1st day of July 1995, by and between Gordon Jensen Health Care
Association, Inc., (hereinafter called "Owner"), and Capitol Care Management
Company, Inc. (hereinafter called "CCMC").
Owner and CCMC agree that CCMC shall manage Twin View Health Care, Twin
City, Georgia (the "Facility"), owned by Owner, containing 110 licensed
nursing home beds, on the following tens and conditions:
SECTION ONE: MANAGEMENT DUTIES AND OBLIGATIONS
1.01 Management of Facility. During the term of this Agreement, CCMC
shall supervise the management of the Facility including but not limited to
staffing, accounting, billing, collections, setting of rates and charges and
general administration. In connection therewith CCMC (either directly or
through supervision of employees of the Facility) shall:
(a) Hire on behalf of Owner and maintain (to the extent such
personnel are reasonably available in the community in which the Facility is
located) an adequate staff of nurses, technicians, office and other employees,
including an administrator, at wage and salary rates for various job
classifications approved Dom time to time by Owner; and release employees at
CCMC's discretion.
(b) Recommend and institute, subject to approval of Owner,
appropriate employee benefits. Employee benefits may include pension and
profit-sharing plans, insurance benefits, incentive plans for key employees
and vacation policies.
(c) Design and maintain accounting, billing, patient and
collection records; prepare and file insurance, Medicaid and any and all other
necessary or desirable reports and claims related to revenue production.
(d) Order, supervise and conduct a program of regular
maintenance and repair of the Facility except that physical improvements
costing more than $500.00 shall be subject to prior approval of Owner which
shall not be unreasonably withheld.
(e) Purchase supplies, drugs, solutions, equipment, Furniture
and furnishings on behalf of Owner' except that purchases of items of
equipment which cost more than $500.00 shall be subject to prior approval of
Owner which shall not be unreasonably withheld.
(f) Administer and schedule all services of the Facility.
(g) Supervise and provide the operation of food service
facilities.
(h) Provide for the orderly payment (to the extent funds of
Owner are available therefore) of accounts payable, employee payroll, taxes
and insurance premiums.
(i) Institute standards and procedures for admitting patients,
for charging patients for services, and for collecting the charges from the
patients or third parties.
(j) Advise and assist Owner in obtaining and maintaining
adequate insurance coverage with Owner, Manager and such other persons as
requested by Owner named as insured for the Facility. CCMC shall advise Owner
with regard to the availability, nature and desirable policy limits of
insurance coverage for the Facility, and shall request and receive bids for
such coverage.
(k) Negotiate on behalf of Owner (and in conjunction with
Owner's counsel) with any labor union lawfully entitled to represent employees
of the Owner who work at the Facility, but any collective bargaining agreement
of labor contact must be submitted to Owner for approval and execution.
(1) Make periodic evaluation of the performance of all
departments of the facility paying particular attention to those departments
where there is an inconsistency between expenditures and budget.
(m) Establish and maintain books of account using accounts and
classifications consistent with those used by CCMC at other facilities owned
or leased by it or its affiliates.
(n) Advise and assist Owner in designing an adequate and
appropriate public and personnel relations program.
1.02 Reports to Owner. CCMC shall prepare and deliver to Owner monthly
financial statements (unaudited) containing a balance sheet and statement of
income in reasonable detail, and such monthly financial statements will be
delivered to Owner within 30 days after the close of each calendar month. CCMC
shall submit to Owner each 12 months a proposed budget for the operation of
the Facility during the succeeding 12-month period, and shall use its best
efforts to operate the Facility in accordance with the provisions of the
budget submitted to and approved by Owner. CCMC shall submit to Owner each
week a vacancy report for the Facility.
1.03 Bank Accounts and Working Capital. CCMC shall deposit all funds
received from the operation of the Facility in an Operating Account in a bank
or banks presently being used by the Facility or such other banks as are
designated from time to time by CCMC. Owner shall provide sufficient working
capital for the operation of the Facility and shall make deposits in the
Operating Accounts of such working capital from time to time upon the request
of CCMC. All costs and expenses incurred in the operation of the Facility
shall be paid out of the Operating Accounts. All checks or other documents
withdrawal must be signed by the Comptroller of CCMC or his designate.
Deposits may be made by the Comptroller of CCMC or his designate.
1.04 Access to Records and Facility. The books and records kept by
CCMC for the Facility shall be maintained at the Facility, although CCMC shall
have the right to maintain copies of such records at its home office for the
purpose of providing services under this Agreement. CCMC shall make available
to Owner, its agents, accountants and attorneys, during normal business hours,
all books and records pertaining to the Facility and CCMC shall promptly
respond to any questions of Owner with respect to such books and records and
shall confer with Owner at all reasonable times, upon request, concerning
operation of the Facility. In addition, Owner shall have
access to the Facility at all reasonable hours for the purpose of examining or
inspecting the Facility.
1.05 Licenses.
(a) CCMC shall use its best efforts to manage the Facility in a
manner necessary to maintain all necessary licenses, permits, consents, and
approvals from all governmental agencies which have jurisdiction over the
operation of the Facility. CCMC shall not assume the liability for any
employee action, failure to act or negligence prohibiting the intent of this
provision to be met.
(b) Neither Owner nor CCMC shall knowingly take any action which
may (1) cause any governmental authority having jurisdiction over the
operation of the Facility to institute any proceeding for the rescission
or revocation of any necessary license, permit, consent or approval, or (2)
adversely affect Owner's right to accept and obtain payments under Medicare,
Medicaid, or any other public or private medical payment program; however,
this Agreement in no way guarantees or warrants that any or all of the above
will not or could not occur.
(c) CCMC shall, with the written approval of Owner, have the
right to contest by appropriate legal proceedings, diligently conducted in
good faith, in the name of the Owner, the validity or application of any law,
ordinance, rule, ruling, regulation, order or requirement of any governmental
agency having jurisdiction over the operation of similar facilities. Owner,
after having given its written approval, shall cooperate with CCMC with regard
to the contest, and Owner shall pay the reasonable attorney's fees incurred
win regard to the contest. Counsel for any such contest shall be mutually
selected by CCMC and Owner. CCMC shall have the right, without the written
consent of the Owner, to process all third-party payment claims for the
services of the Facility, including the full right to contest adjustments and
denials by governmental agencies (or their fiscal intermediaries) as
third-party
payer.
1.06 Taxes. Any taxes or other governmental obligations properly
imposed on the Facility are the obligations of the Owner, not of CCMC, and
shall be paid out of the operating Accounts of the Facility. With the Owner's
written consent, CCMC may contest the validity or amount of any such tax or
imposition on the Facility in the same manner as described in Section 1.05(c).
1.07 Use of CCMC's Personnel. CCMC shall actively utilize CCMC staff
specialists in such areas as accounting, auditing, budgeting, computer
services, dietary services, housekeeping, industrial engineering, interior
design, legal, nursing, personnel, pharmaceutical, purchasing, systems and
procedures, and third-party payments for services of facilities in the
management of the Facility when considered desirable by CCMC or upon the
reasonable request of Owner.
SECTION TWO: TERM AND TERMINATION
2.01 Term. The term of this Agreement shall commence on July 1, 1995
and shall terminate at Midnight on December 31, 2000, unless an earlier date
is mutually agreed upon during the provision of section 2.02.
This Agreement shall automatically renew for an additional three year
term unless either party shall terminate this Agreement in accordance with
Section 2.02.
2.02 Termination. Owner may terminate this Agreement upon giving CCMC
sixty (60) days written notice after the end of the third year of this
Agreement. CCMC may terminate this Agreement at any time by giving the Owner
sixty (60) days written notice.
SECTION THREE: MANAGEMENT FEE
3.01 Fee to CCMC. During each term of this Agreement the Facility
shall pay CCMC a fee equal to Twelve Thousand dollars ($12,000.00) per month
for the term of this Agreement. During the term of this Agreement, the
management fee shall comply with Revenue Procedure 93-19.
3.02 Timing of Payments to CCMC. Within twenty (20) days after the end
of each month of the term, CCMC shall be paid the fee computed in accordance
with the provisions of Section 3.01. The amount of such fee shall be
calculated on the basis of monthly financial statements regularly prepared by
CCMC in accordance with Section 1.02 hereof.
SECTION FOUR: COVENANTS OF OWNER
4.1 Insurance. Owner shall provide and maintain throughout the Term,
the following insurance with responsible companies naming Owner and CCMC (as
its interest may appear) as insured thereunder in amounts approved by CCMC and
Owner.
(a) public liability insurance and insurance against theft of or
damage to patient's property in the Facility or its Premises;
(d) workman's compensation, employers' liability or similar
insurance as may be required by law;
(c) insurance against loss or damage to the Facility Down fire
and such other risks and casualties now or hereafter embraced by "Extended
Coverage," as well as such other risks and casualties with respect to which
insurance is customarily carried for similar facilities;
(d) business interruption insurance against loss of income due to
the risks insured against under this Section 4.01;
(e) personal injury liability insurance against claims of bodily
injury or death or otherwise arising out of the operations of the Facility
such insurance to afford minimum protection of not less than $1,000,000 in
respect to bodily injury or death to any one person;
(f) such other insurance or additional insurance as CCMC and
Owner together shall reasonably deem necessary for protection against claims,
liabilities and losses arising from the operation or ownership of the
Facility.
If Owner fails to effect or maintain any such insurance, Owner will
indemnify CCMC against damage, loss or liability resulting from all risks for
which such insurance should have been maintained, and CCMC may, but shall not
be liable for its failure so to do, effect the same as the agent of Owner by
taking our policies in such insurance companies as may be selected by CCMC,
running for a period not to exceed one year.
4.02 Convalescent Services. Owner covenants and agrees that Facility
is and will continue to be a fully licensed nursing home containing the number
of licensed beds set forth on the first page of this Agreement. CCMC and Owner
agree that the services rendered by the Facility will not, during the term
thereof, be changed in any material respect, unless there shall first have
been mutual agreement between CCMC and Owner to such change.
SECTION FIVE: MISCELLANEOUS
5.01 Assignment by CCMC. CCMC shall not assign its rights or
obligations under this Agreement without the consent of Owner.
5.02 Assignment by Owner. Owner shall not assign its rights or
obligations under this Agreement without the notice to CCMC.
5.03 Binding on Successors and Assigns. The terms, covenants,
conditions, provisions and agreements herein contained shall be binding upon
and inure to the benefit of the parties hereto, their heirs, administrators,
executors, successors and assigns, subject to provisions of Section 5.01 and
5.02 above.
5.04 Negation of Partnership. Joint Venture and Agency. Nothing in this
Agreement contained shall constitute or be construed to be or to create a
partnership, joint venture or lease between Owner and CCMC with respect to the
Facility. The parties intent for the relationship of CCMC to Owner under this
Agreement to be that of an independent contractor, nor that of an agent. Owner
shall not have the power to control the time method or manner of CCMC's
performance hereunder, Owner shall look solely to the results to be achieved
by CCMC, and nothing contained herein shall be construed to create a
relationship of agency between CCMC and Owner.
5.05 Notices. All notices hereunder by either party to the other shall
be in writing. All notices, demands and request shall be deemed given when
mailed, postage prepaid, registered, or certified mail, return receipt
requested,
(a) to Owner: Edward E. Lane
Gordon Jensen Health Care Association, Inc.
6000 Lake Forrest Drive, Suite 200
Atlanta, GA 30328
(b) to CCMC: Capitol Care Management Company, Inc.
6000 Lake Forrest Drive, Suite 225
Atlanta, GA 30398
or to such other address or to such other person as may be designated by
notice given from time to time during the term by one party to the other.
5.06 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto, and no representations or agreements, oral or
otherwise, between the parties not embodied herein or attached hereto shall be
of any force and effect. Any additions or amendments to this Agreement
subsequent hereto shall be of no force and effect unless in writing and signed
by the party to be bound.
5.07 Governing Law. This Agreement has been executed and delivered in
the State of Georgia, all the teas and provisions hereof and the rights and
obligations of the parties hereto shall be construed and enforced in
accordance with the laws hereof.
5.08 Captions and Headings. The captions and headings throughout this
Agreement are for convenience and reference only, and the words contained
therein shall in no way be held or deemed to define, limit, describe, explain,
modify, amplify or add to the interpretation, construction or meaning of any
provision of or the scope or intent of this Agreement nor in any way affect
this Agreement.
5.09 Disclaimer of Employment of Facility Employees. No person employed
by Owner in operation of the Facility will be an employee of CCMC, and CCMC
will have no liability for payment of wages, payroll taxes and other expenses
of employment, except that CCMC shall have the obligation to exercise
reasonable care in its management of the Facility to properly apply available
Facility funds to the payment of such wages and payroll taxes.
5.10 Impossibility of Performance. Neither party to this Agreement
shall be deemed to be in violation of this Agreement if it is prevented from
performing any of its obligations hereunder for any reason beyond its control,
including without limitation, acts of God or of the public enemy, flood or
storm, strikes or statutory regulation or rule of any federal, state, or local
government, or any agency thereof.
5.11 Non-assumption of Liabilities. CCMC shall not, by entering into
and performing this Agreement, become liable for any of the existing or future
obligations, liabilities or debts of Owner, and CCMC shall not be managing the
Facility assume or become liable for any of the obligations, debts and
liabilities of Owner, and CCMC will in its role as manager of the Facility
have only the obligation to exercise reasonable care in its management and
handling of the funds generated from the operation of the Facility.
5.19 Responsibility for Misconduct of Employees and Other Personnel.
CCMC will have no liability whatever for damages suffered on account of the
dishonesty, willful misconduct or negligence of any employee of the Owner
regarding the Facility in connection with damage or loss directly sustained by
it by reason of the dishonesty, willful misconduct and gross negligence of
CCMC employees in the operation of the Facility during the teen of this
Agreement.
5.13 Rights Cumulative, No Waiver. No right or remedy herein conferred
upon or reserved to either of the parties hereto is intended to be exclusive
of any other right or remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given hereunder, or
now or hereafter legally existing upon the occurrence of any event of default
hereunder. The failure of either party hereto to insist at any time upon the
strict observance or performance of any of the provisions of this Agreement or
to exercise any right or remedy as provided in this Agreement shall not impair
any such right or remedy to be construed as a waiver or relinquishment
thereof. Every right and remedy given by this Agreement to the parties hereto
may be exercised from time to time and as often as may be deemed expedient by
the parties hereto, as the case may be.
5.14 Time of Essence. Time is of the essence of this Agreement.
5.15 Invalid or Unenforceable Provisions. If any terms, covenants or
conditions of this Agreement or the application thereof to any person or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and shall be enforced to the fullest extent permitted
by law.
5.16 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all such
counterparts together shall constitute one and the same instrument.
5.17 Authorization of Agreement. CCMC and Owner represent and warrant,
each to the other, that this Agreement has been duly authorized by its
respective Board of Directors and, if required by law, shareholders; and that
this Agreement consulates a valid and enforceable obligation of CCMC and Owner
in accordance with its terms.
5.18 Designation. Owner agrees that, during the term of this Agreement,
CCMC shall have the right to designate and make public reference to the
Facility as a Capitol Care Management Company, Inc., managed facility.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, the
day and year first above written.
CAPITOL CARE MANAGEMENT COMPANY, INC.
By:/s/ Darrell C. Tucker
GORDON JENSEN HEALTH CARE
ASSOCIATION, INC.
By: /s/ Edward E. Lane
ADDITIONAL NURSING HOME MANAGEMENT AGREEMENTS
The Registrant has additional Nursing Home Management Agreements with
affiliates substantially identical to the foregoing. The material details of
such agreements which differ are as follows:
Owner Date of Termination Monthly
Name of Facility Location <FN1> Agreement Date Fee
- ---------------- ------------- ----- --------- ----------- -------
Magnolia Manor Green Cove GJ 7/1/95 12/31/01 $14,000
Springs, FL
Marshall C. Harriman, TN NAB 1/1/95 6/30/96 $14,000
Voss H.C.C.
Midway H.C.C. Midway, GA GJ 7/1/95 12/31/00 $24,000
Riverside H.C.C. Covington, GA CHCS 7/1/95 12/31/00 $28,000
Sea Breeze H.C.C. Mobile, AL WHH 7/1/94 7/31/00 $12,000
<FN2>
Trenton H.C.C. Trenton, TN GJ 7/1/95 12/31/00 $10,000
- ---------------
<FN>
<FN1>
The names of the owners are abbreviated a follows: Gordon Jensen Health Care
Associates, Inc. - GJ; National Assistance Bureau, Inc. - NAB; Chamber Health
care Society, Inc. - CHCS; Winter Haven Homes, Inc. - WHH.
<FN2>
Owned by Sea Breeze Health Care Center, Inc., a subsidiary of Winter Haven
Homes, Inc.
</FN>