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Teeth Power, Inc.
This Participation Agreement (the “Agreement”) is entered into by and between Teeth Power, Inc., a Delaware Corporation (“Teeth Power”) and the undersigned (“Member”) as of the date set forth below (the “Effective Date”). Teeth Power and Member are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, Teeth Power is a group purchasing organization (“GPO”), which negotiates vendor agreements on behalf of its participating dentists and dentist office members (the “Members”) for the purpose of obtaining discounted pricing on products and services (“Products”) for these Members.
WHEREAS, Member operates a health care or other facility that purchases a variety of Products needed for Member’s business from various suppliers and distributors of such Products.
WHEREAS, Member desires to retain Teeth Power to provide GPO services to Member as of the Effective Date in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for other good and valuable consideration, the Parties hereby agree as follows:
1.1 Subject to the terms and conditions of this Agreement, Member hereby engages Teeth Power to provide GPO services to Member, and authorizes Teeth Power, as the authorized agent for Member and in Member’s name, to: (a) negotiate the terms of and enter into contracts for the provision of Products (the “Vendor Contracts”) by vendors, including manufacturers, distributors, or other third parties (the “Vendors”) on behalf of Member, in order to make Products available to Member at Member’s election, and to cancel, amend, or modify any Vendor Contracts as Teeth Power deems necessary, advisable, or appropriate; (b) share with Vendors the data Member provides to Teeth Power about Member during the Member sign-up process on Teeth Power’s website, in order for Vendors to activate Member discounts; (c) receive from and share with Vendors data relating to purchases of Products under Vendor Contracts by Member; and (d) in Teeth Power’s sole discretion, share in any administrative and other fees arising from any purchases made by Member pursuant to any Vendor Contract. Teeth Power shall enter into Vendor Contracts with such Vendors as it determines, in its sole discretion, based on its assessment of the needs of its Members and their patients, its identification of quality Products, and its analysis of responsive bids, among other things.
1.2 Pursuant to the Vendor Contracts, Member, on a non-exclusive basis, may (a) purchase Products available under such Vendor Contracts for use by Member, and/or (b) participate in other GPOs or arrangements under which Member may be able to gain access to services or purchase products and services from Vendors with which Teeth Power does not have Vendor Contracts. Member is not obligated to make any purchase under this Agreement.
1.3 Active Vendor Contracts available through Teeth Power Membership will be listed on the Teeth Power website, which will be updated by Teeth Power from time to time. Teeth Power shall provide Member with a copy of all Vendor Contracts available for Member’s participation upon written request by Member. Each Vendor will determine Member’s eligibility to purchase under a Vendor Contract. Member may view product prices through the Teeth Power website (Members’ only section). Member may purchase Products directly from the applicable Vendor or the designated distributor under each Vendor Contract in which Member elects to participate.
2.1 Compliance with Law. Each Party acknowledges and agrees that this Agreement is subject to, and intended to comply with, all federal, state, and local constitutional provisions, laws, rules, regulations, ordinances, orders, judgments, and decrees issued or promulgated by judicial, governmental, or regulatory authority (collectively, “Law”) applicable to this Agreement. Specifically, but not exclusively, the Parties acknowledge and agree that they enter into this Agreement with the intent of conducting their relationship in full compliance with 42 U.S.C. § 1320a-7b (the “Anti-Kickback Statute”) and its applicable state law counterparts, as each may be amended from time to time, and each Party acknowledges and agrees that it will fully comply with: (a) the reimbursement requirements under any federal or state governmental payment program, including but not limited to Medicare or Medicaid programs; (b) the applicable requirements and conduct prohibitions of the federal Medicare and Medicaid statutes, including 42 U.S.C. §§ 1320a-7, 1320a-7(a), and 1320a-7b, the regulations promulgated thereunder, and their applicable state law counterparts, as each may be amended from time to time; and (c) the provisions of section 340B of the Public Health Service Act (42 U.S.C. § 256b). Each Party represents and warrants to the other Party that it shall not knowingly violate any such Laws by entering into this Agreement or performing its obligations hereunder. Any breach of this Section by a Party shall give the other Party the immediate right to terminate this Agreement.
2.2 Records/Audit. Each Party to this Agreement agrees to maintain all information related to its performance under this Agreement in a current, detailed, organized, and comprehensive manner and in accordance with customary industry practice and applicable Law. Each Party will maintain such records in readily accessible form, for a period of at least six (6) years from the applicable service date, or to the extent required by applicable Law, whichever is longer. Upon Teeth Power giving Member reasonable notice, Member shall provide Teeth Power reasonable access to such records to audit Member’s compliance under this Agreement or to assist Teeth Power’s efforts to audit Vendors.
2.3 Exclusions. Each Party hereby represents and warrants to the other that: (a) it is not currently excluded, debarred, or otherwise ineligible to participate in any federal health care program as defined in 42 U.S.C. § 1320a-7b(f) (the “Federal Healthcare Programs”); (b) it has not been convicted of a criminal offense related to the provision of health care items or services and not yet been excluded, debarred, or otherwise declared ineligible to participate in the Federal Healthcare Programs; and (c) it is not under investigation or otherwise aware of any circumstances which may result in the Party being excluded from participation in the Federal Healthcare Programs. This shall be an ongoing representation and warranty during the term of this Agreement, and each Party shall immediately notify the other of any change in the status of the representations and warranties set forth in this Section. Any breach of this Section by a Party shall give the other Party the immediate right to terminate this Agreement.
3.1 Member Representations. Throughout the term of this Agreement Member agrees: (a) to comply with all terms and conditions of this Agreement; (b) to comply with all Teeth Power’s standard operating procedures and policies established and in effect from time to time and either provided to Member or posted on the Teeth Power’s website; (c) to comply with all terms and conditions of the Vendor Contracts (and any local supplements or other contracts between Member and Vendor or third parties relating to the Vendor Contracts) that are consistent with Member’s obligations under applicable Law; (d) to remain duly licensed under applicable state law to engage in Member’s business, and certified to participate in the Medicare and Medicaid programs; (e) to comply with all Laws applicable to its performance under this Agreement; and (f) to execute separate agreements or acknowledgements as requested by Teeth Power or any particular Vendor evidencing Member’s agreement to comply with the terms of the relevant Vendor Contracts.
3.2 Anti-Kickback Compliance. With respect to its purchases under Vendor Contracts and/or Vendor rebates it receives from Teeth Power or directly from Vendors, Member agrees to comply with the terms of 42 C.F.R. § 1001.952(h)(1) and any applicable state law counterparts, as may be amended form time to time. A copy of 42 C.F.R. § 1001.952(h)(1) is available here: https://ecfr.federalregister.gov/current/title-42/chapter-V/subchapter-B/part-1001/subpart-C/section-1001.952. By signing this Agreement, Member specifically acknowledges notice of this regulation’s reporting and information provision obligations.
3.3 Non-Diversion/Own Use. Member hereby represents that every purchase of a Product subject to the requirements of Section 340B of the Public Health Services Act (a “340B Product”) made by Member through any Vendor Contract shall be for Member’s ultimate consumption or “Own Use,” and not for resale, as defined in Abbott Labs v. Portland Retail Discount Druggist Association, Inc., 425 U.S. 1 (1976), and its successor line of cases. Member shall report any known breach of this Section 3.3 immediately to Teeth Power. In the event Member fails to comply with the provisions of this Section, Member shall be liable for all losses or costs incurred by Teeth Power, the applicable Vendor, and any other applicable manufacturers and distributors as a result of such failure.
3.4 Confidentiality. Member agrees not to disclose the terms of this Agreement, the proposed and actual Vendor Contract prices and terms and conditions, and, if applicable, customer lists and customer identifying data of Teeth Power and/or any Vendor, without the prior written consent of Teeth Power or the applicable Vendor, except: (a) where required by law, regulation, or legal process; or (b) where the information is generally available to the public, was already known at the time of the disclosure, or becomes available on a non-confidential basis from another source not itself bound by a confidentiality agreement, as evidenced by Member’s written records. This Section shall survive expiration or termination of this Agreement.
4.1 Administrative Fees. Teeth Power is a “group purchasing organization” that is structured to comply with the requirements of the “safe harbor” regulations regarding payments to group purchasing organizations set forth in 42 C.F.R. § 1001.952(j). Teeth Power shall have the right to receive an administrative fee formulated in the manner set forth in Section 4.2 below.
4.2 Administrative Fees Paid by Vendors. At its option, Teeth Power may charge a Vendor an administrative fee that equals a percentage of the purchase price of the products or services sold to Member under the applicable Vendor Contract, but only in accordance with the following:
a. Teeth Power may receive from a Vendor a fee equal to three percent (3%) or less of the purchase price of the products or services sold to Member under the applicable Vendor Contract, or, if the fee is greater than three percent (3%) of the purchase price of the products or services sold to Member under the applicable Vendor Contract, Teeth Power will specify the exact percentage to Member; and
b. Teeth Power will disclose to Member in writing at least annually, and to the Secretary of the United States Department of Health and Human Services upon his or her request, the amount it received from each Vendor with respect to purchases made by or on behalf of Member.
5. Warranties and Limitation of Liabilities.
5.1 WARRANTY. TEETH POWER MAKES NO GUARANTEES AS TO MEMBER’S EXPERIENCE OR SATISFACTION WITH ANY VENDOR AND MAKES NO REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THE PRODUCTS TO BE PROVIDED BY A VENDOR HEREUNDER, WHETHER EXPRESS OR IMPLIED, AND INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INFRINGEMENT AGAINST ANY THIRD-PARTY PATENT OR OTHER PROPRIETARY RIGHTS OF A THIRD PARTY, AND ANY WARRANTY ARISING OUT OF PRIOR COURSE OF DEALING OR USAGE OF TRADE. WHILE TEETH POWER USES REASONABLE EFFORTS TO ENSURE THAT THE PRICING, PRODUCT INFORMATION, AND OTHER INFORMATION AVAILABLE TO MEMBER THROUGH ITS TECHNOLOGY APPLICATIONS IS CURRENT AND ACCURATE, TEETH POWER CANNOT GUARANTEE THE ACCURACY OR COMPLETENESS OF IT.
5.2 LIMITATION OF LIABILITY.
a. Member acknowledges and agrees that Member will be solely responsible for Product payments and compliance with all other obligations in Member’s capacity as the purchaser under each Vendor Contract, AND THAT TEETH POWER IS NOT RESPONSIBLE FOR AND CAN HAVE NO LIABILITY FOR SUCH PAYMENT AND/OR COMPLIANCE.
b. Member further acknowledges and agrees that Teeth Power is not responsible for and CAN HAVE no liability for the fulfillment of any Member orders made pursuant to any Vendor Contract, including, without limitation, the provision of Products in accordance with the specifications of Member orders, and Product shipment and/or delivery. Member further acknowledges and agrees that Teeth Power is not responsible and CAN HAVE no liability for any failure of Vendors to apply the correct price and/or discount to any Product under the applicable Vendor Contract. Member further acknowledges and agrees that Teeth Power, not being the manufacturer, wholesaler, or distributor of the Products, is not responsible and CAN HAVE no liability for damaged Products, defective Products, harm caused by any Products, and/or the failure of Vendors to abide by return policies, warranties, and/or any other policies and procedures applicable to customers.
c. MEMBER FURTHER ACKNOWLEDGES AND AGREES THAT TEETH POWER IS NOT RESPONSIBLE FOR AND CAN HAVE NO LIABILITY FOR VENDORS’ USE OF THE DATA Member provides to Teeth Power about Member during the Member sign-up process on Teeth Power’s website, WHICH MEMBER AGREES TEETH POWER MAY SHARE WITH VENDORS IN ORDER TO ACTIVATE MEMBER DISCOUNTS PURSUANT TO SECTION 1.1;
d. IN NO EVENT SHALL TEETH POWER BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, AND/OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REGARDLESS OF THE FORM OF ACTION, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER DUE TO BREACH OF CONTRACT, BREACH OF WARRANTY, TORT, NEGLIGENCE, AND/OR OTHERWISE. THE ENTIRE LIABILITY OF TEETH POWER FOR ANY ACTION, CLAIM, OR CAUSE OF ACTION WHATSOEVER, INCLUDING WITHOUT LIMITATION, BREACH OF CONTRACT, WARRANTY, TORT, NEGLIGENCE, AND/OR ANY OTHER LEGAL THEORY, SHALL NOT EXCEED THE ADMININSTRATIVE FEES RECEIVED BY TEETH POWER FROM VENDORS THAT RESULTED FROM MEMBER’S PURCHASES UNDER VENDOR CONTRACTS DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEEDING THE DEFAULT.
6. Dispute Resolution.
6.1 Governing Law. All disputes arising under this Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of laws.
6.2 Informal Dispute Resolution. Except for matters subject to emergent or injunctive relief, in the event that any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement (each, a “Dispute”) arises between the Parties, either Party may by written notice (a “Dispute Notice”), pursuant to Section 8.1 below, call an in-person or telephonic meeting regarding such Dispute, to be attended by at least one (1) senior executive of each Party with authority to bind the Party to a resolution who shall attempt in good faith to resolve the Dispute. Such negotiation shall take place no later than thirty (30) days after delivery of a Dispute Notice, and the Parties shall negotiate in good faith to resolve the Dispute.
6.3 Arbitration. If the Parties are unable to resolve any Dispute within ninety (90) days after the commencement of negotiations pursuant to Section 6.2 herein, the Dispute shall be finally and fully settled by binding arbitration in Los Angeles, California, before a single arbitrator of the American Arbitration Association (“AAA”). The arbitrator shall be selected by application of the rules of the AAA then in effect, or by mutual agreement of the Parties. The decision of the arbitrator will be final and binding. The prevailing Party will be entitled to apply to, and obtain from, a court or tribunal having jurisdiction, an order enforcing the arbitrator’s decision.
7.1 Term. The term of this Agreement will commence on the Effective Date and shall remain in effect for two (2) years thereafter (the “Initial Term”), unless terminated earlier under the terms of this Agreement. Thereafter, this Agreement will automatically renew for successive one (1) year terms (each, a “Renewal Term”), unless otherwise terminated pursuant to this Section 7.
7.2 Termination by Member. At its election, Member may terminate this Agreement at the end of the Initial Term or at the end of each Renewal Term upon no less than thirty (30) days prior written notice in accordance with Section 8.1 below.
7.3 Termination by Teeth Power. At its election, Teeth Power may terminate this Agreement at the end of the Initial Term or at the end of each Renewal Term upon no less than thirty (30) days prior written notice in accordance with Section 8.1 below. Teeth Power may also terminate this Agreement immediately with written notice to Member in the event that Teeth Power determines, in its sole discretion, that (a) Member does not meet the minimum requirements for membership in the GPO; (b) is in breach of Section 2 and/or Section 3 of this Agreement; or (c) if continuation of this Agreement may be detrimental to the operations of Teeth Power or the other Members.
7.4 Breach. If a Party to this Agreement commits a material breach of this Agreement or a Vendor Contract, the non-breaching Party will be entitled to terminate this Agreement in accordance with the following: (a) the non-breaching Party will give the breaching Party written notice of such breach in accordance with Section 8.1 below; (b) the breaching Party will have thirty (30) days from the receipt of such notice to cure such breach; and (c) in the event the breaching Party fails to cure such breach, the non-breaching Party will be entitled to terminate the Agreement as of the end of such thirty (30) day period; provided, however, that if the non-breaching Party determines in its reasonable discretion that the breach is not curable, then the non-breaching Party may terminate the Agreement any time after giving written notice in accordance with Section 8.1 below.
8.1 Notices. Any notice or other communication required or permitted to be given pursuant to the terms and provisions of this Agreement shall be deemed given to the Party to be notified if in writing and sent by electronic mail, and/or by registered or certified mail (receipt requested) or nationally recognized courier (signature required), to such other Party’s address as set forth pursuant to this Section 8.1 and will be deemed delivered upon receipt as indicated by the date on the signed receipt. Notices will be sent to the contact information of each Party as provided in this Section 8.1 or to such other address as last provided to the other Party by written notice. Any Party may change the address to which notices are to be sent by notice given in accordance with the provisions of this Section 8.1.
If to Teeth Power:
Teeth Power, Inc.
Office of General Counsel
1801 Century Park East, Suite 2500
Los Angeles, CA 90067
If to Member:
To the physical address, fax number, and/or email address provided by Member during
the Member sign-up process. It is the responsibility of Member to notify Teeth Power of
any change of address, fax number, email address, and other contact information.
8.2 Relationship of the Parties. This Agreement does not create any franchise, joint venture, partnership or other similar legal relationship between Teeth Power and Member. No Party has the authority to bind or act on behalf of the other Party except as otherwise specifically stated herein. There are no third-party beneficiaries of or to this Agreement.
8.3 Assignment. Neither Party hereto may assign this Agreement or assign, transfer, or delegate rights or obligations under this Agreement, without the other Party’s prior written consent; provided, however, that Teeth Power may freely assign this Agreement to any affiliate, subsidiary, parent, or commonly-controlled entity of Teeth Power without the consent of Member.
8.4 Entire Agreement. Upon the Effective Date of this Agreement as set forth below, any previous membership agreement with respect to the subject matter hereof entered into by the Parties is hereby deemed null and void. This Agreement embodies the entire agreement between the Parties relating to the subject matter hereof and supersedes any and all other discussions, understandings, and agreements, either oral or in writing, between the Parties relating to the subject matter of this Agreement.
8.5 Amendment. This Agreement may only be amended, supplemented, or otherwise modified by means of a written instrument signed by an authorized representative of each Party and expressly providing for such modification.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.
TEETH POWER, INC.
Chief Executive Officer