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EXHIBIT 10.40
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the 29 day
of January, 1997, to be effective on February 1, 1997 (the "Effective Date") by
and between TELEQUEST, INC. ("TeleQuest"), a Delaware corporation and ORANGE
PARK DIAGNOSTIC CENTER, a Florida corporation("Orange Park."), (with TeleQuest
and Orange Park Diagnostic Center being also referred to singularly as "Party"
and collectively as "Parties").
W I T N E S S E T H:
WHEREAS, Orange Park is in the business of providing medical imaging
services in Orange Park, Florida (the "Facility"), which require both on-site
and remote diagnostic radiology services,
WHEREAS, TeleQuest is in the business of arranging for the provision
of on-site and remote diagnostic radiology services through independent
contractor relationships with professional corporations and radiology
departments of academic medical institutions; and
WHEREAS, TeleQuest agrees to arrange for the provision of such
services to Orange Park upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the adequacy and receipt of which is hereby acknowledged, TeleQuest and Orange
Park agree as follows:
1. TELEQUEST'S RESPONSIBILITIES. TeleQuest hereby agrees to
provide services as hereinafter set forth (the "TeleQuest Services"):
(A) PROVISION OF RADIOLOGISTS. TeleQuest agrees to
arrange for the provision of on-site and remote diagnostic radiology
services ("Radiology Services") as follows:
(1) TeleQuest agrees to arrange for the provision
of on-site Radiology Services to Orange Park through two (2)
radiologists who will be licensed to practice medicine in the State of
Florida ("TeleQuest Radiologists"), and who will be employees of
TeleQuest Associates, P.C., a Pennsylvania professional corporation
qualified to do business in the State of Florida ("TeleQuest PC").
The TeleQuest Radiologist will be physically present at Orange Park
during the days and times mutually agreed upon by TeleQuest and Orange
Park in writing.
(2) TeleQuest further agrees to arrange for the
provision of remote Radiology Services to Orange Park, by Radiologists
who are either board certified or eligible for board certification as
radiologists and who are currently licensed to practice medicine
("Radiologist or Radiologists") at one or more academic medical
institutions ("TeleQuest Affiliates").
(B) COOPERATION WITH ORANGE PARK. TeleQuest agrees, and shall use
its best efforts to cause TeleQuest PC, the TeleQuest Radiologists,
and all Radiologists and TeleQuest Affiliates to agree, to reasonably
cooperate with Orange Park in its efforts to obtain accreditation for
the Facility by the Joint Commission on the Accreditation of
Healthcare Organizations ("JCAHO"), and to reasonably assist in the
quality management activities of the Facility.
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(C) TRAINING PROGRAMS. TeleQuest shall, if requested by
Orange Park and agreed to by TeleQuest, provide training to the
radiological staff by or contracting with the Facility. Such
training shall be provided either onsite or at a TeleQuest Affiliate,
at TeleQuest's sole discretion. Any cost incurred by TeleQuest in
providing such training shall be paid by Orange Park promptly upon
receipt of invoice therefore, unless agreed by the Parties.
(D) EQUIPMENT. During the term of this Agreement,
TeleQuest shall provide and maintain teleradiolgy equipment necessary
(in TeleQuest's sole judgement) for the provision of remote Radiology
Services pursuant to this Agreement, which is described on Exhibit "A"
attached hereto and made a part hereof, at TeleQuest's expense. Such
Equipment is and shall remain the sole property of TeleQuest, unless
such equipment is transferred to Orange Park pursuant to the
provisions of Section 10 of this Agreement.
(E) COSTS OF SERVIES. TeleQuest shall pay all
telecommunication costs for transmission of teleradiology studies.
(F) COMMUNITY OUTREACH. TeleQuest and Orange Park shall
work cooperatively to develop communtiy awareness of the radiology
services offered by Orange Park and TeleQuest in the Facility's
service areas. Additionally, TeleQuest will use its best efforts to
make members of TeleQuest Affiliates' medical staff available to
participate in programs in the Facility's service areas which will
inform physicians of the services provided by Orange Park and
TeleQuest. The cost of this community outreach shall be divided
among the Parties hereto as they mutually agree.
2. ORANGE PARK'S RESPONSIBILITIES. Orange Park hereby agrees to
the following:
(A) FACILITIES. Orange Park shall furnish such equipment
and apparatus for the Facility as is necessary, in the sole and
absolute discretion of Orange Park, for the operation of the Facility
and shall keep same in good repair. All costs for the operation of
the Facility(except those specifically assumed by TeleQuest herein)
shall be the responsibility of Orange Park. Orange Park shall obtain
and maintain all necessary licenses and permits to operate the
Facility, and shall at all times operate the Facility in compliance
with all applicable laws and regulation.
(B) STAFFING. Orange Park shall employ, engage and
compensate all personnel (except for the TeleQuest Radiologist) which
may be required for the operation of the Facility, the number of which
shall be determined by Orange Park.
(C) COST OF SERVICES. Orange Park shall be responsible
for all overnight mail costs incurred in transmitting data, films,
and related information between the parties pursuant to this
Agreement. Orange Park will be responsible for all costs of
transcription services.
3. INDEPENDENT CONTRACTOR RELATIONSHIP. Notwithstanding any
provision herein to the contrary, the Parties agree that TeleQuest, TeleQuest
PC, the TeleQuest Radiologists, the Radiologists and the TeleQuest Affilitate,
are and shall be retained as independent contractors with respect to the
services, including the Radiology Services, performed in connection with this
Agreement. Except as otherwise expresssly provided in this Agreement. Except
as otherwise provided in this Agreement, including Section 1 above, Orange Park
shall not have the right to control the professional judgement of the TeleQuest
Radiologists or the Radiologists or the manner or method by which the TeleQuest
Radiologist or the Radiologists shall provide Radiology Services under this
Agreement.
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4. EXPENSES. Except as specified in Section 1 or 2, Orange Park
shall not be responsible for any expenses incurred by TeleQuest, TeleQuest PC,
or any Radiological or TeleQuest Affiliates in the performance of Radiology
Services under this Agreement.
5. COMPENSATION. Orange Park shall pay to TeleQuest, on a
monthly basis, fourteen percent (14%) of gross collected revenues received by
the center for services performed, minus refunds, and minus fees for
echocardiograms and nuclear medicine cardiology studies for which Radiologists
does not proved reading and interpretation, or any other diagnostic studies or
procedures added to the array of radiological services offered by the Center
which Radiologist does not provide reading and interpretation. Commencing
ninety days after the effective date, in any give month thereafter during the
term of this agreement if fourteen percent (14%) of gross collected revenues
are not at least $3,000 Orange Park will pay the difference to the extent that
a minimum payment of $3,000 is made to TeleQuest. TeleQuest and Orange Park
shall review collected revenues on a quarterly basis.
6. CHARGES AND BILLING. The Parties shall acknowledge and agree
that Orange Park is the owner of, and is responsible for the billing and
collection for all fees due to the Center for services performed at the Center,
including but not limited to the services performed by TeleQuest, TeleQuest PC,
TeleQuest Radiologists, the Radiologist and TeleQuest Affiliates. All patients
who receive medical services at the Center shall be billed on a "global" basis
fee which includes the fee for both Radiologist's medical services and for the
services rendered by the Center.
7. TERM; EXCLUSIVITY.
(A) TERM. This Agreement shall commence on the Effective
Date and shall continue in force through the third anniversary of the
Effective Date unless terminated in accordance with Section 10 hereof.
In the event that Orange Park is sold to another party ("Successor")
during the term of this agreement, this Agreement shall continue in
full force and effect. During the term of the Agreement, TeleQuest
shall not enter into any other agreements to provide Radiology
Services within a fifteen mile radius of the Facility.
(B) EXCLUSIVITY. During the term of this Agreement, the
Facility shall not enter into any other contractual agreements for
the provision of Radiology Services, and TeleQuest shall have the
exclusive right to provide TeleQuest Services, and to arrange for the
provision of Radiology Services, to the Facility.
8. INDEMNIFICAITON. TeleQuest agrees to indemnify, defend and
hold Orange Park and its officers, trustees, employees and agents harmless from
any and all claims, actions, liabilities, loss, damages for personal injury or
property damages, and expenses (including reasonable attorney's fees), which
are or may be brought against Orange Park: (i) which arise or may arise as a
result of any conduct, acts or omissions of TeleQuest PC, the TeleQuest
Radiologists, or any Radiologist, any TeleQuest Affiliate, of any other person
providing services on behalf of TeleQuest pursuant to or in breach of this
Agreement; and (ii) for any criminal conduct or intentional wrongdoing by
TeleQuest, TeleQuest PC, the TeleQuest Radiologists, any Radiologist, any
TeleQuest Affiliate, or any other person providing services or any TeleQuest
Affiliate pursuant to this Agreement. Orange Park agrees to indemnify, defend
and hold TeleQuest, TeleQuest PC, the TeleQuest Radiologists, the Radiologists,
the TeleQuest Affiliates, and their respective officers, trustees, directors,
employees, agents ( the "Indemnified Parties") harmless from and against any
and all claims, actions, liabilities, losses, or damages for personal injury or
property damaged and expenses (including reasonable attorney's fees), which are
or may be brought against the Indemnified Parties: (i) which arise or may
arise as a direct result of any conduct, acts, or ommisions of Orange Park or
any of its employees,
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agents, director, or contractors, or any other person providing services
pursuant to or in breach of the Agreement; and (ii) for any criminal conduct or
intentional wrongdoing by Orange Park or any of its employees, agents,
directors, or contractors, or any other person providing services pursuant to
this agreement.
9. LIABILITY INSURANCE. TeleQuest shall require in its
Participation Agreements that TeleQuest PC and each TeleQuest Affiliate and
Radiologist shall obtain, and keep in force without cost to Orange Park, a
policy of professional liability (malpractice) insurance with a minimum
coverage of $1,000,000 for each claim and $3,000,000 annually for the aggregate
of all claims. Such insurance shall include coverage for "nose" and "tail"
insurance (if a claims-made policy) and shall be kept in full force and effect
notwithstanding a termination of this Agreement for any and all applicable
periods of limitation, so as to therafter provide coverage for claims and
lawsuits arising out of services performed during the term hereof.
10. TERMINATION OF AGREEMENT. This Agreement may be terminated by
either Party in accordance with the following provisions:
(A) TERMINATION BY MUTUAL AGREEMENT. At any time by the
mutual written agreement of Orange Park (or the Successor) and
TeleQuest.
(B) TERMINATION FOR BREACH . In the event of a material
breach by a Party or the Successor, the non-breaching Party may, at
any time after having given thirty (30) days written notice breach to
the other Party and the breaching party having failed to cure such
alleged breach within such ▇▇▇▇▇ (30) day period, terminate this
Agreement without any further written notice of termination.
(C) TERMINATION WITHOUT CAUSE. This Agreement may be
terminated by either Party (or the Successor) without cause
following the first anniversary of the Effective Date, provided that
the terminating party has first given written notice at least sixty
(60) days in advance of the proposed termination date. If the
Agreement is terminated by Orange Park or the Successor, Orange Park
or the Successor will pay TeleQuest (i) $23,335 if terminated prior to
the second anniversary of the agreement, and (ii) $11,665 if
terminated prior to the third anniversary of the agreement, in
reimbursement of expenses incurred by TeleQuest to buy-out the
professional services contract of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Should Orange Park or the Successor terminate this Agreement
prior to the third Anniversary of the Effective Date for any reason
other than due to a material breach by TeleQuest, Orange Park or the
Successor shall reimburse TeleQuest for its costs to deinstall the
equipment listed on "Exhibit A", which may include (i) the costs of
terminating any rental and service contracts existing on the equipment
and (ii) the fair market value of any equipment owned by TeleQuest,
where upon TeleQuest shall transfer to Orange Park or the Successor
the associated equipment.
(D) TERMINATION COMPENSAITON. Upon contract termination
for whatever reason and in addition to any payments as described in
paragraphs (10a)(10b) and (10c) the Center agrees to pay TeleQuest for
any readings which TeleQuest performed under the contract in
accordance with the terms set forth in paragaph 5 of this agreement.
Payments will be paid monthly on fourteen (14%) of collections for
those readings performed by TeleQuest only. These payments will
continue based on collections for a period of one year from date of
contract termination. Telequest will not be entitled to any payment
therafter for future collections. Upon contract termination the
Center will not be obligated to pay any minimum fee per month.
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11. ACCESS TO RECORDS. Upon reasonable notice and during normal
business hours, each Party may inspect the books and records of the other which
are necessary to document compliance with the terms of this Agreement, subject
to the provisions of Section 12 below. The Parties agree that any data,
slides, films, radiological materials, or other patient information received by
the TeleQuest Affiliate (whether in tangible of electronic form) shall be and
remain the property of Orange Park unless otherwise agreed by the Parties. The
Parties agree to provide each other reasonable access to their records to the
extent any claim or cause of action is brought against a Party arising out of
or related to Radiology Services or TeleQuest Services furnished or alleged
to have been furnished pursuant to this Agreement, subject to any applicable
laws regarding confidentiality of medical records. Orange Park agrees to
maintain its patient medical records in accordance with all state and federal
statutes and regulations and any accrediting body standards applicable to
Orange Park and the Facility, but in no event for less than the the statute of
limitations applicable in the state of Florida for medical malpractice as
applicable to each patient.
12. CONFIDENTIALITY. For purposes of this Agreement, and subject
to subparagraph 12(b) below, the term "Confidential Information" means any
confidential or propriety information of TeleQuest or Orange Park, including,
without limitation, this Agreement, including any term, condition or exhibit
thereof, patient records, symbols, trademarks, service marks, designs,
management information systems, utilization procedures, and protocols, forms
and claims processing techniques, utilization review and quality assurance
mechanisms and data, agreements with managed care organizations and purchases
of services, education programs related to the activities of either Party, any
information related to either Party's financial affairs, business and marketing
plans and strategies, contract negotiations with managed care organizations,
fee schedules, and any other information that either Party considers to be a
trade secret or confidential information.
(A) PROTECTION OF CONFIDENTIAL INFORMATION. All
Confidential Information received by either Party (the "Receiving
Party") pursuant to this Agreement shall be restricted in accordance
herewith, and Receiving Party agrees to use such Confidential
Information solely for the limited purpose described in this
Agreement. Receiving Party agrees that any Confidential Information
received from the other Party (the "Disclosing Party") is the
exclusive property of the Disclosing Party, and Receiving Party shall
not have any ownership interest therein. Receiving Party agrees not
to use, employ, or in any manner or form disclose, publish, or
otherwise make available in any manner in whole or in part, any
Confidential Information of the Disclosing Party. Receiving Party
shall not have the right to print or copy, in whole or in part, any
Confidential Information of the Disclosing Party, or any documentation
pertaining thereto. Receiving Party agrees to take appropriate
action, whether by instruction, agreement, or otherwise to ensure the
protection, confidentiality, and security of the Confidential
Information of the Disclosing Party. Receiving Party agrees to use
the same care with the Disclosing Party's Confidential Information
which it uses for its own proprietary and trade secret information.
All notes, data, reference materials, sketches, drawings, memoranda,
documentation, and records relating to any of its Confidential
Information shall belong exclusively to Disclosing Party, and
Receiving Party agrees to turn over to Disclosing Party all such
Confidential Information and copies thereof in its possession at the
request of Disclosing Party.
(B) EXCEPTION TO CONFIDENTIALITY. The confidentiality
restrictions of this Agreement shall not apply to any document or
information if such document or information (i) was known to Receiving
Party, as evidence by receiving Party's written records, prior to the
receipt of such document or information from Disclosing Party, (ii)
was publicly available at the time of the disclosure of such document
to Receiving Party or subsequently became publicly available through
no fault of receiving Party, (iii) was approved for public disclosure
by the written authorization of
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Disclosing Party, (iv) was or became available to receiving Party or
its agent from a nonconfidential source, or (v) is required to be
disclosed by law, any state agency third party reimbursement agencies
or professional organizations, or pursuant to subpoena or proper court
order.
13. RENEGOTIATION. If TeleQuest's counsel determines that the
ability of the Parties hereto to fulfill their respective obligations
hereunder, or payment by Orange Park, are (or are likely to be ) adversely
impacted by the requirement of any federal, state, or local law, rule, or
regulation, or published official interpretation of any of the foregoing, as
applied to this Agreement, then, at the option of TeleQuest, the Parties shall
negotiate to amend this Agreement in a manner which will, if possible, avoid
such adverse impact, while maintaining the essential benefits intended to be
afforded hereby. If this Agreement is not so amended prior to the effective
date of such requirement or within thirty (30) days after TeleQuest's notice
under this section, whichever shall first occur, then this Agreement shall
terminate, at the option of TeleQuest, as of such date.
14. MISCELLANEOUS
(A) GOVERNING LAW. This agreement shall be constructed,
enforced, and governed in accordance with the laws of the State of
Florida.
(B) COSTS AND ATTORNEY'S FEES. Except as otherwise
provided in this Agreement in the event that suit is brought in any
court to determine or enforce rights or obligations or damages under
this Agreement, or any arbitration proceeding occurs, the parties
agree that the court or arbitrator shall award reasonable costs and
attorney's fees to the prevailing party.
(C) SEVERABILITY CLAUSE. In the event any term or
provision of this Agreement is found to be unenforceable or void, in
whole or in part, as drafted, then the offending term or provision
shall be constructed as valid and enforceable to the maximum extent
permitted by law, and the balance of this Agreement shall remain in
full force and effect, unless such a construction would materially
affect the rights or obligations of either party hereto.
(D) AMENDMENTS; ASSIGNMENT. Amendments may be made to
this Agreement but only after the mutual approval in writing by
Orange Park and TeleQuest. This Agreement shall be assignable upon
mutual agreement of the Parties.
(E) PARAGRAPH HEADINGS. The Paragraph headings contained
in this Agreement are for convenience only and shall in no manner be
construed as a part of this Agreement.
(F) ENTIRE AGREEMENT. This Agreement supersedes all
prior discussions and agreements between Orange Park, or any of its
managers, directors, employees, or agents, and TeleQuest or any of its
officers, directors, employees, or agents, with respect to all matters
contained herein. Any representation, inducement, promise, or
agreement, whether oral or written, between Orange Park, or and of its
officers, directors, employees, or agents, and TeleQuest, or any of
its officers, directors, employees, or agents herein shall be of no
force or effect.
(G) NOTICES. All notices, payments, and other
communications required or permitted under the Agreement shall be
deemed given and received if delivered in person or by first-
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class United States Mail, postage prepaid and either registered or
certified, and addressed:
TeleQuest: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Orange Park: Orange Park Diagnostic Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
(H) PRACTICE OF MEDICINE. The Parties understand,
acknowledge, and agree that in furnishing the TeleQuest Services,
TeleQuest is not engaged in the practice of medicine and is not
undertaking to render any medical services in this Agreement, any
provision hereof to the contrary notwithstanding.
(I) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
TELEQUEST, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Its Authorized Officer
ORANGE PARK DIAGNOSTIC CENTER, LTD.
a Florida corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Its Authorized Officer
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EXHIBIT "A"
TO PROFESSIONAL SERVICES AGREEMENT
EQUIPMENT
EQUIPMENT FOR ORANGE PARK DIAGNOSTIC CENTER
1 Lumiscan 75/150 Film Digitizer and Film Digitizer Workstations
1 Frame Grabbers plus Workstation to connect 2 CTs and 1 MR
2 Computer terminal for radiological Information System Access
Cabling for Local Area Network
Wide Area Network Installation
1 Laser Printer and Network Connections
