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EXHIBIT 10.24
AGREEMENT FOR PROFESSIONAL PATHOLOGY SERVICES
THIS AGREEMENT is made this 1st day of November 1996, by and between
SmithKline Xxxxxxx Clinical Laboratories, Inc., a Delaware corporation, with a
principal office located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000
("SBCL") and AmeriPath Florida, Inc. Xxxxxxx and Associates Pathology, a
corporation organized under the laws of the state of Florida with a principal
facility located at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000
("AmeriPath").
WITNESSETH
WHEREAS, SBCL is a corporation organized under the laws of the state of
Delaware which owns and operates or manages clinical laboratories or provides
laboratory services, management support and reference testing to laboratories
which perform various tests for the purpose of providing information for the
diagnosis, prevention or treatment of disease or the assessment of medical
conditions; and
WHEREAS, AmeriPath is a professional corporation organized under the
laws for the state of Florida, which employs physicians who are duly licensed to
practice medicine in the State of Florida and specialists that are Board
Certified in the fields of anatomic and clinical pathology; and
WHEREAS, SBCL owns laboratory facilities located in Florida (the
"Laboratories") for which professional pathology services and other medical
services are needed from time to time to ensure its proper operation; and
WHEREAS, AmeriPath owns a licensed laboratory facility located at 0000
Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("Orlando Laboratory") in
which anatomic pathology services are provided;
WHEREAS, SBCL desires to contract with AmeriPath for the provision by
AmeriPath of anatomic pathology services to SBCL and to compensate AmeriPath;
and
WHEREAS, AmeriPath desires to provide anatomic pathology services to
SBCL; and
WHEREAS, AmeriPath and SBCL desire to provide a statement of their
respective rights, obligations and duties in connection with the performance of
services hereunder.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties agree as follows:
A. RESPONSIBILITIES OF AMERIPATH
1. Services: AmeriPath agrees to provide professional
anatomic pathology services (including histological and cytological services to
SBCL as SBCL shall from time-to-time request. Such medical services will
include, without limitation, the professional aspects of tissue pathology and
cytology and professional consultations and shall be performed only on site at
(site(s) licensed for anatomic pathology under federal regulations and by the
state of Florida. AmeriPath agrees that it will provide written [or
electronic] reports to SBCL with respect to its findings as to all tissue
specimens by AmeriPath. Such reports shall set forth the name and address of
the facility where the examination was performed and the Unique Physician
Identification Numbers ("UPINs") of the physicians rendering the professional
anatomic pathology services.
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AMERIPATH DBA XXXXXXX AND ASSOCIATES PATHOLOGY
SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER, 96
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AmeriPath shall at all times have members or engage physicians in numbers
sufficient for such purposes and in numbers sufficient to meet any and all
applicable federal, state or local regulations.
2. Specimen Handling: AmeriPath agrees to provide specimen
receiving and computer accessioning services for all cytology and history
specimens. The accessioning will be performed on the SBCL "Top Lab" system
following established SBCL procedures.
3. Licensure and Certification. All members and professional
employees of AmeriPath shall be licensed to practice medicine in the state of
Florida and shall be Board Certified pathologists, and shall maintain any other
licensing required by applicable laws or regulations to provide services under
this Agreement. At all times during the term of this Agreement and any renewal
thereof, all cytotechnologists employed by AmeriPath, if any, shall be Licensed
by the state of Florida, if such licensing exists, and any other applicable
Federal, state or local regulations, and also be registered or eligible for
registration by the American Society of Clinical Pathologists and shall meet
the standards set forth in 42 CFR 493.1433-1437 and any amendments or revisions
thereto. The medical services to be provided hereunder shall be rendered in
accordance with the professional standards adopted by the College of American
Pathologists. AmeriPath will maintain appropriate licenses and certifications
necessary to operate the pathology services and laboratories.
4. Quality Assurance and Document/Slide Retention. All services
provided by AmeriPath hereunder will be conducted in accordance with the
applicable laws and regulations pertaining to the services provided under this
Agreement. All services provided by AmeriPath hereunder will be conducted in
such a way as to fulfill all SBCL quality assurance requirements (including,
without limitation, the requirement that results or cytological findings be
reported using the then current Bethesda System), and AmeriPath agrees to
participate in all SBCL quality assurance efforts. Further, AmeriPath agrees
to abide by SBCL's document and slide retention policies/protocols, and with
the requirements of all applicable laws and regulations pertaining to document
/slide retention. Upon receipt of a request for documents and/or slides,
AmeriPath shall immediately notify SBCL of the request and shall coordinate the
release of such documents, slides and/or any information pertaining thereto
with the SBCL well in advance of such release.
5. Nondisclosure of Proprietary Information.
a. Proprietary Information. Ameripath acknowledges
that this Agreement creates a relationship of confidence and trust between the
parties with respect to any information disclosed by SBCL to AmeriPath during
the course of this Agreement including, but not limited to, secret processes,
formulas, trade secrets, techniques, inventions (whether or not patentable) and
know-how (hereinafter collectively called "proprietary information").
AmeriPath agrees to hold such proprietary information communicated to it by
SBCL and documents containing it such as customer lists, specifications, sales
and service manuals, samples and correspondence, in trust and confidence at all
times during the term of this Agreement and after its termination and will
refrain from using or disclosing any such proprietary information except when
acting pursuant to this Agreement.
b. Nondisclosure. All proprietary information received
from SBCL either prior to this Agreement or during its existence shall remain
the property of SBCL, shall be treated as proprietary by AmeriPath, shall be
treated with the same degree of care with which AmeriPath treats its own
proprietary information, and shall not be divulged or disclosed to others
except with the prior written consent of SBCL. AmeriPath agrees that it will
not, without prior written consent of SBCL, communicate proprietary information
to any person or organization other than to those of AmeriPath's partners,
associates, employees, agents or representatives to whom it shall be necessary
to disclose it in order to carry out the purposes of this Agreement. AmeriPath
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AMERIPATH DBA XXXXXXX AND ASSOCIATES PATHOLOGY
SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER 96
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agrees to use its best efforts to prevent its partners, associates, employees,
agents or representatives from disclosing any proprietary information to any
other person or organization. AmeriPath will promptly return all such
proprietary information provided in written form upon the written demand by
SBCL.
e. Exceptions. The provisions of this paragraph 4 shall not apply to
the extent (i) the information is in the public domain or is publicly known,
(ii) AmeriPath obtains said information from a third party who is not under any
duty of confidentiality, (iii) any disclosure is made with the consent of SBCL
or is otherwise required in order for AmeriPath to fulfill its duties and
obligations under this Agreement, or (iv) AmeriPath is compelled to do so by
legal process or the disclosure is otherwise required by applicable law.
However, in such cases AmeriPath will give SBCL prior written notification of
its disclosure.
B. RESPONSIBILITIES OF SBCL
1. Fees and Billing. The schedule of fees set forth in Exhibit A
attached hereto shall represent AmeriPath's full compensation for all services
provided by AmeriPath under this Agreement. Such fee schedule may be
renegotiated annually, on the anniversary date of the contract, to take effect
within 60 days of Agreement each year and to remain in effect for the
succeeding twelve (12) month period. Any change in the fee schedule must be
approved in writing by both parties. Such fee schedule must at all times,
comply with all applicable laws, rules, regulations and contractual
arrangements with third-party payors. SBCL and AmeriPath agree to renegotiate
the fee schedule in good faith.
AmeriPath shall invoice SBCL on a monthly basis. Within twenty (20) days after
SBCL's receipt of each invoice, SBCL will pay AmeriPath an amount equal to the
total professional and technical fees for services performed during the
preceding month in accordance with the fee schedule set forth in Exhibit A.
AmeriPath shall use electronic interface for transmitting invoices to SBCL
including the CPT codes of services provided.
2. Billing Penalty: AmeriPath has agreed to provide a PAP smear final
report to SBCL within 21 calendar days of receiving the slide in the AmeriPath
facility. If the turnaround time exceeds 21 calendar days, SBCL will notify
AmeriPath in writing of this Problem. AmeriPath has one week to correct the
problem without penalty. After one week, a penalty of 5% of the PAP smear fee
will be imposed until the turnaround time is corrected to less than 21
calendar days.
3. Renewal: If this Agreement is not renewed or SBCL terminates
this Agreement to obtain another provider for cytology and histology testing,
other than for reasons of non-performance or quality assurance, SBCL shall
provide AmeriPath a right of first refusal to provide those services at the same
rate.
4. Services: SBCL shall provide the following services or perform
the following obligations on an ongoing basis during the term of this Agreement
and any renewals thereof;
a. all supplies, including but not limited to, glass slides,
slide holders, collection supplies, regulations slips, reporting forms and
other supplies as needed by SBCL clients, at no cost to AmeriPath;
b. distribution services which include courier and report
delivery, at no cost to AmeriPath (such courier services shall apply to all
clients of AmeriPath and shall be of such obligations under this Agreement);
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SMITKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER, 96
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c. installation of the necessary telephone lines into
AmeriPath to be used solely for the purpose of carrying out the terms of this
Agreement (SBCL shall permit AmeriPath to utilize its Florida Xxxxx line for
the purpose of carrying out this Agreement), at no cost to AmeriPath;
d. data processing capabilities necessary for handling the
patient demographic, billing and clinical information.
e. access to computer programmers and analysts as required
to set up and maintain the information interfaces described in this agreement.
5. Nonsolicitation. During the term of this Agreement and any
renewals thereof and continuing for a period of one (1) year following
expiration, nonrenewable or termination of this Agreement, SBCL agrees not to
solicit directly or indirectly the services, including employment or
consulting agreements, or any person employed by or under contract with
AmeriPath without the consent of AmeriPath. AmeriPath agrees not to solicit
directly or indirectly the SBCL clients to which it gains access as a result
of this Agreement unless agreed to in writing by SBCL.
6. Exclusive Vendor. In the areas which are subject to this
Agreement (which would include such additional areas as may from time to time
be subject to this Agreement (which would include such additional areas as may
from time to time be subject to this Agreement), AmeriPath shall be the
exclusive vendor of pathology services to SBCL and SBCL clients. As such, SBCL
shall refer to AmeriPath all specimens for anatomic pathology services in said
areas for AmeriPath to provide said services hereunder. Listing of exclusive
areas are noted on Exhibit B. AmeriPath shall be given the right of first
refusal to bid on certain managed care contracts for the "carve out" of
anatomic pathology services.
C. PROFESSIONAL LIABILITY INSURANCE AND NOTICE
1. Professional Liability Insurance Coverage. Each party shall
obtain and maintain at its own expense respectively, professional liability
insurance, or in the case of SBCL only self-insurance, in the minimum amount of
One Million Dollars ($1,000,000) per claim/occurrence and Five Million Dollars
($5,000,000) per in the aggregate to cover said party for any and all liability
it may have with respect to the provision of services pursuant to this
Agreement or with respect to its responsibilities hereunder or any services
performed by AmeriPath for or on behalf of SBCL. AmeriPath agrees to furnish
SBCL upon request with a current and valid certificate of endurance relating to
the extent of professional liability coverage called for under this Agreement.
In the event of termination or nonrenewal of this Agreement, if AmeriPath did
not maintain insurance on a claims-made basis for the full term of this
Agreement (as is required under this Agreement), AmeriPath shall provide a
reporting endorsement of "tail" coverage relating to AmeriPath's duties under
this Agreement.
2. Notice. Each party hereto shall promptly notify the other in
writing of any claim asserted against the other party, or any of either party's
employees, agents, servants or representatives, relating to the services
provided under this Agreement of the responsibilities hereunder, and further
shall promptly deliver to the other party a true copy of any such claim
including, but not limited to, a true copy of any summons or other process,
pleading or notice issued in any lawsuit or other proceeding to assert or
enforce any such claim.
D. TERM AND TERMINATION
1. Initial Term and Renewal. This Agreement shall commence
on the 1st day of November, 1996 and shall remain in effect for an initial term
of two (2) years. Thereafter, this Agreement shall automatically renew for
successive terms of three (3) years subject to all terms and
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SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER, 96
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conditions herein contained (except that the fees provided for in paragraph
B.1, above are subject to review and adjustment on an annual basis), unless and
until either AmeriPath or SBCL shall give the other party written notice not
less than ninety (90) days prior to expiration of the then current term of its
intention to terminate this Agreement as of the expiration of the initial term
or any subsequent term.
2. Termination. This Agreement will immediately and
automatically terminate on and as of the date of any of the following occur:
a. Default. Failure of either party to comply with
any of the material terms of this Agreement after thirty (30) days written
notice of such failure or violation by the other party giving notice of such
default or noncompliance and written notice of its intention to so terminate,
unless within such thirty (30) day period the defaulting party has cured such
default; or
b. Discontinuance of Operations. Discontinuance of its
operations by either party by law or otherwise for a period of fifteen (15) or
more days; or
c. Bankruptcy. The filing of a petition in bankruptcy
by either party or the making by either party of an assignment for the benefit
of creditors; or if any involuntary petition in bankruptcy or petition for an
arrangement pursuant to the Bankruptcy Act is filed against either party and is
not dismissed within thirty (30) days; or if a receiver is appointed for the
business of either party, or any party thereof.
d. SBCL may terminate this Agreement immediately without
written notice to AmeriPath as the date of any of the following occur:
1. any physician employee or physician contractor
of AmeriPath is charged with gross misconduct of either a professional or
personal nature, or engages in other conduct which is grounds for immediate
discharge without pay under SBCL's personnel policies; or
2. any physician employee or physician contractor
of AmeriPath is convicted of a crime other than a minor traffic violation; or
3. any physician employee or physician contractor
of AmeriPath providing services under this Agreement has his or her right to
practice medicine in the State either suspended, revoked, or placed under
probation, or is excluded from the Medicare or Medicaid programs, or fails to
maintain his or her standing as a Board-Certified clinical and anatomic
pathologist or licensed cytotechnologies; or
4. any physician employee or physician contractor
providing services under this Agrement has a guardian or conservator of the
person or estate appointed by a court of competent jurisdiction; or
5. any physician employee or physician contractor
of AmeriPath becomes permanently disabled to the extent her or she is unable to
perform the duties required by this Agreement.
This subparagraph d. shall not apply if, within ten (10) days after SBCL's
termination, AmeriPath cures the above circumstances in regard to said
particular physician employee or physician contractor either terminates said
person or confirms to SBCL in writing that said person will no longer be
involved in the rendering of services to SBCL under this Agreement and the
continued association or employment by AmeriPath shall not have a material
adverse effect on AmeriPath's ability to perform or on SBCL's reputation.
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SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER, 96
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e. In the event SBCL proposes to furnish to AmeriPath additional
cytology and histology tests resulting in a substantial increase in number over
that set forth herein or from that previously agreed to between SBCL and
AmeriPath, the parties will agree to cooperate and work together so that
AmeriPath shall have time within which to increase its capacity to handle said
increase.
E. MISCELLANEOUS
1. Nonbreach. Each party represents and warrants that execution of and
performance under this Agreement shall not constitute or cause a breach of any
other agreement between that party and any third party.
2. Entire Agreement: Amendments. This Agreement contains the entire
understanding between the parties hereto and supersedes any and all prior
agreements, understandings and arrangements between the parties relating to the
subject matter hereof. No amendment, change, modification or alteration of the
terms and conditions hereof shall be binding unless evidenced by a writing
signed by all the parties hereto.
3. Waiver. The failure of any party to this Agreement to exercise or
enforce any right conferred upon it hereunder shall not be deemed to be a
waiver of any such right nor operate to bar the exercise or performance thereof
at any time or times thereafter, nor shall a waiver of any right hereunder
at any given time, including rights to any payments, be deemed a waiver thereof
for any other time.
4. Force Majeure. No party to this Agreement shall be liable for failure to
perform any duty or obligation that said party may have under the Agreement
where such failure has been occasioned by any act of God, fire, strike,
inevitable accident, war or any cause outside the reasonable control of the
party who had the duty to perform.
5. Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable by a court of competent jurisdiction, the parties
shall, if possible, agree on a legal, valid and enforceable substitute provision
which is as similar in effect to the deleted provision as possible. The
remaining portion of the Agreement not declared illegal, invalid or
unenforceable shall, in any event, remain valid and effective for the term
remaining unless the provision found illegal, invalid or unenfoceable goes to
the essence of this Agreement.
6. Assignment. Without prior written consent of other party hereto, neither
party may assign any of its rights or delegate any of its obligations hereunder.
Notwithstanding anything to the contrary herein contained, SBCL may assign its
rights hereunder to SBCL or any of its affiliated companies without the consent
of AmeriPath. Subject to the foregoing, this Agreement inures to the benefit of,
and is binding upon, the successors and assigns of the parties hereto.
7. Legislative/Regulatory Modification. In the event Medicare, Medicaid or
any third-party payor, or any other federal, state or local law, rule,
regulation or interpretation thereof at any time during the term of this
Agreement prohibits, restricts or in any way substantially changes the method or
amount of reimbursement or payment for services under this Agreement, then this
Agreement shall, in good faith, be amended by the parties to provide for payment
of compensation in a manner consistent with any such prohibition, restriction or
limitation. If as a result of any such prohibition, restriction or change
AmeriPath incurs additional costs, SBCL shall compensate AmeriPath for such
additional costs. However, if as a result of any costs, SBCL shall compensate
AmeriPath for such additional costs. However, if as a result of any such
prohibition, restriction or change AmeriPath's costs are reduced, AmeriPath
shall pay SBCL an amount equal to such reduction. With respect to any such
prohibitions, restrictions or changes that require amendment of this Agreement,
if this Agreement is not so amended in writing prior to the effective date of
said change, this Agreement shall terminate, unless otherwise agreed upon.
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SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER 96
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8. Notice. All notices hereunder shall be in writing, personally
delivered or sent by certified mail, return receipt requested, addressed to the
other party as follows:
If to AmeriPath: AmeriPath dba Xxxxxxx and Associates Pathology
0000 Xxxxxxxxxx Xxxxx, Xxxxx #000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, COO
If to SBCL: General; Manager
SmithKline Xxxxxxx Clinical Laboratories, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
With a copy to: SmithKline Xxxxxxx
Law Department (FP2225)
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxx, Esq.
and
Xxxxx and Lardner
000 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx, Esq.
Either party may change its address to which notices shall be sent by a notice
similarly sent.
9. Execution in Counterpart. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
10. Section Headings. Section headings contained in this Agreement
for reference purposes only and shall not affect, in any way, the meaning and
interpretation of this Agreement.
11. Parties as Independent Contractors. The parties to this
Agreement understand and agree that no agency, employment, partnership or joint
venture is created by this Agreement, and the businesses operated by SBCL and
AmeriPath are separate. The parties further agree that neither party is the
general agent of the other and no representation shall be made by either party
that would create apparent agency, employment, partnership or joint venture.
Neither party will have the authority to act for the other in any manner, nor
to create obligations or debts that would be binding upon the other.
12. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall in all respects be governed by the substantive law
of the state of Florida, including all matters of construction, validity and
performance, but without giving effect to Florida choice-of-law or
conflict-of-law principles.
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SMITHKLINE XXXXXXX CLINICAL LABORATORIES
OCTOBER 96
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13. No Third Party Beneficiaries. This Agreement is solely between
SBCL and AmeriPath, and no other parties shall have any rights or privileges
hereunder either as third party beneficiaries or otherwise.
IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement in duplicate effective as of the date first above
written, each party to retain a duplicate original/.
SMITHKLINE XXXXXXX CLINICAL
LABORATORIES, INC. ("SBCL")
By: /s/ Xxxx X. Okkese, Jr.
-----------------------------------
Name: Xxxx X. Okkese, Jr.
---------------------------------
Title: Vice President
---------------------------------
AMERIPATH FLORIDA INC., DBA
XXXXXXX AND ASSOCIATES PATHOLOGY
("AMERIPATH")
By: /s/ XXXXXX XXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: CCO
