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EXHIBIT 10.16
Contract Number: VBMEDQUEST - 00
HITACHI PURCHASER:
MEDQUEST Associates
HITACHI MEDICAL SYSTEMS AMERICA, INC. 3295 River Exchange Drive
1959 Summit Commerce Park Norcross, GA 30092
Twinsburg, Ohio 44087-2371
Tel: 330.425.1313 Fax: 330.425.1410
Attn: Tom Gentry, CFO
SERVICE MAINTENANCE AGREEMENT
Hitachi Medical Systems America, Inc. (HMSA) will inspect and maintain the
purchaser's medical equipment described below (Equipment) for a period of
four (4) years as described below, for the charges specified herein, subject
to and in accordance with all the terms and conditions set forth on the face
and reverse side of this Agreement. This proposal is valid for a period of 30
days from October 24, 2000 at the above location only.
Upon the occurrence of any Event of Default, HMSA may, at any time, declare the
unpaid balance for the remaining term of this SMA to be immediately due and
payable. Any one or more of the following events shall constitute an Event of
Default: (I) Customer fails to pay when any monies are due HMSA pursuant to this
SMA; (ii) Customer becomes insolvent, a receiver is appointed for any part of
Customer's property, Customer makes an assignment for the benefit of creditors,
or any proceeding is commenced either by or against Customer under any
bankruptcy or insolvency laws; or (iii) Customer defaults in any obligation
owing HMSA pursuant to this SMA or otherwise.
SERVICE AGREEMENT SHALL BEGIN JANUARY 1, 2001 AND WILL REMAIN IN
EFFECT THROUGH DECEMBER 31, 2004.
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ITEM MODEL NUMBER EQUIPMENT DESCRIPTION SERIAL NUMBER
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<Caption>
1 AIRIS HITACHI MAGNETIC RESONANCE IMAGING SYSTEM See Page #2
2 AIRISII HITACHI MAGNETIC RESONANCE IMAGING SYSTEM See Page #2
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COVERAGE OPTIONS
/X/ 8:00 AM to 9:00 PM Monday through Friday See Page #2
SERVICE AGREEMENT IS PAYABLE IN ADVANCE IN (Select Method)
/ / Quarterly / / Semi Annual /X/ Monthly / / Annually
CONTRACT COVERAGE
A. PREVENTATIVE MAINTENANCE: 12 times annually.
B. LABORS: Remedial Maintenance required to maintain the equipment at
manufacturer's specifications during coverage hours. Labor requested
outside of coverage will be billed at normal rates in effect.
C. PARTS: All parts required to maintain the equipment to manufacturer's
specifications, including coils. (Note: Excludes abuse and/or
negligence).
D. TRAVEL EXPENSES: All travel and living expenses incurred.
E. PRODUCT ENHANCEMENTS: All authorized operating software enhancements
not requiring hardware addition. All (HMSA) authorized software updates
and hardware modifications affecting product safety as originally
purchased.
F. GUARANTEED UPTIME: Should the equipment not provide 98% uptime
during the contract coverage hours, as measured over a 3 month
period, HMSA will extend term of Renewal Agreement by one month for
each quarter below 98% the guarantee. When 98% uptime is not
achieved, the additional month of service coverage is provided at
the end of the service agreement period prior to contract renewal.
G. DISCOUNT SCHEDULE: Purchaser will receive a 33% discount on parts not
covered by this contract. (Items that have been affected by acts of
God/Nature, abuse or malicious destruction).
H. OPTION DISCOUNT: Purchaser will receive a 20% discount off the list
price of options.
I. APPLICATIONS: Assistance is provided on an as needed basis.
ADDITIONAL COMMENTS
THIS CONTRACT WILL SUPERCEDE ALL PREVIOUS CONTRACTS FOR THE ATTACHED MEDQUEST
SITES.
ACCEPTANCES
PURCHASER HITACHI MEDICAL SYSTEMS AMERICA, INC.
6/01 /s/ Thomas C. Gentry CFO
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DATE BY TITLE DATE HMSA
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Page 2
Contract Number: VBMEDQUEST-00
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SERIAL # SITE NAME LOCATION ANNUAL SERVICE COST
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A051 Open MRI of Atlanta, GA $72,000.00
Atlanta
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A104 Mobile Open MRI Mobil, AL $72,000.00
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*A114 Macon Macon, GA $72,000.00
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C083 Bridgeton MRI Bridgeton, MO $72,000.00
Center
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C093 Kirkwood MRI Kirkwood, MO $72,000.00
Center
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**C287 MedQuest Assoc Concord, NC $72,000.00
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A023 Bioimagery Nashville $72,000.00
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* A114 - Includes 6.0 software upgrade. Also includes de-installation and
re-installation for $20,000.
** C287 - Service Maintenance Agreement to begin upon expiration of the
equipment warranty and remain in effect for four (4) years.
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HITACHI MEDICAL SYSTEMS AMERICA, INC.
MRI SERVICE AGREEMENT TERMS AND CONDITIONS
1. SERVICE
Hitachi Medical Systems America ("HMSA") agrees to provide service to
the standard System quoted hereunder as indicated on the front of this
Agreement.
a. PLANNED PREVENTIVE MAINTENANCE
Including Inspection, adjusting, tuning, lubrication, and replacement of
non-consumable parts as determined to be necessary by HMSA. Such inspections
to be provided as outlined by the Manufacturer's specifications.
b. ON CALL REMEDIAL MAINTENANCE
Provided as required due to system malfunction. Replacement pads will
be furnished in exchange for the part or pads being replaced. Components
pads, assemblies will be replaced with new or refurbished items at HMSA's.
There will be no charge for routine operational software upgrades as long as
Purchaser maintains an HMSA service contract.
Service furnished by HMSA at Purchaser's request in addition to those
specified hereunder will be invoiced at HMSA's applicable time and material
rates and terms then in effect, HMSA has the right to charge extra for
service outside the established hours (over-time). Purchaser shall provide
at no charge to HMSA full and free access to the Equipment covered hereunder,
working space in accordance with HMSA site specifications, adequate
facilities near the Equipment, and use of any machines attachments, features,
user ports or other materials necessary for the specified maintenance
services.
2. DOCUMENTATION AND MAINTENANCE MATERIALS
Purchaser agrees that at all times all right, title and interest in and
to all diagnostic maintenance media, including, software, shall remain HMSA's
and HMSA may remove same from the premises of Purchaser, temporarily or
permanently, or discontinue usage thereof at any time for any reason. All
HMSA's test, diagnostic and verification information and routines (on HMSA or
Purchaser-owned media), maintenance equipment and maintenance materials,
information and documentation are proprietary and confidential; such item,
whether on Purchaser's site or accessible by remote inquiry, are and shall
remain the sole property of HMSA in any case, and may be removed, or the
usage thereof discontinued at any time. Purchaser will destroy same upon
written request from HMSA. Purchaser shall not disclose to any person such
confidential items and shall take appropriate action by instruction or
agreement with its employees who are permitted access thereto to satisfy its
obligation of confidentiality thereunder.
3. SOFTWARE
3.1 Definitions
"Software" means computer instruction or data files, supplied by HMSA
and any improvements or modifications to said computer instructions or data
files, whether compiled in machine, assembly or higher level languages and
such instructions or data in all forms of interpretation, compilation, media
of expression, fixation and storage. "Operating Software" means software
which is essential for operation of Equipment in the end-use applications of
Purchaser which are known to HMSA as of date of HMSA's written acceptance
hereof. "Maintenance Software" means Software used in or with the Equipment
to aid their installation, maintenance or repair and includes the Software
other than Operating Software.
3.2 OWNERSHIP
All Software shall remain the sole property of HMSA. Without limiting
the preceding sentence, Purchaser expressly agrees that any Maintenance
Software (including without limitation any copy of all or any thereof)
shipped to, located on the premises of, or otherwise in the possession of
Purchaser remains the sole and exclusive property of HMSA; the accessing,
running, performance, display or any other use of such Maintenance Software
shall be limited to HMSA, its employees and authorized agents.
3.3 LICENSE
HMSA grants to Purchaser, as of date of installation of Equipment, a
nonexclusive and royalty-free license to use the Operating Software. NO LICENSE
IS GRANTED TO PURCHASER WITH RESPECT TO ANY OPERATING SOFTWARE, OR ANY COPIES
OF ALL OR ANY PORTION OF THE OPERATING SOFTWARE. PURCHASER ASSUMES FULL
RESPONSIBILITY FOR DAMAGES TO HMSA RESULTING FROM ANY UNAUTHORIZED TRANSFER OF
OPERATING SOFTWARE TO A THIRD PARTY.
3.4 CONFIDENTIALITY
Purchaser acknowledges that the Software is valuable to HMSA and agrees
to use reasonable care to prevent disclosure to others of Software in
Purchaser's possession or on Purchaser's premises. Purchaser agrees to
limit access to Software to those of its employees having a need to use the
Operating Software in connection with the Equipment. Purchaser agrees not to
copy Maintenance Software and to make only the number of copies of Operating
Software required for actual use of the Equipment in their intended
applications. Purchaser further agrees to ensure that all copies include
applicable HMSA trademark and patent identification notices.
3.5 MODIFICATIONS
Because of the highly technical nature of the Software and the high
probability that any modifications of it, however, minor, could significantly
affect the performence of the Equipment to which it applies, Purchaser agrees
that it shall not modify, or allow the modification of, the Software in any
manner whatsoever other than by, or with the express written consent at HMSA
or its employees. ANY SUCH MODIFICATIONS OF SOFTWARE IN VIOLATION OF THE
FOREGOING COVENANT SHALL CONSTITUTE ABUSE OR NEGLECT AND VOID THIS SERVICE
AGREEMENT IMMEDIATELY. Purchaser agrees to indemnify and hold HMSA, its
employees, agents, subsidiaries and affiliates harmless from any claim or
loss, including costs thereof attributable to any such modification of
Operating Software violation of the foregoing provision.
4. EXCLUSIONS
The service to Purchaser hereunder does not include electrical work
external to the equipment, maintenance of accessories, attachments, machines
or other devices not furnished by HMSA; repair or damage resulting from:
accident, transportation, neglect or misuse, failure of electrical power,
causes other than ordinary use, or damage caused by catastrophe beyond HMSA
control; maintenance or repair to the equipment other than by HMSA's
employees; an improper environment for the equipment such as lack of air
conditioning or electricity, furnishing photographs, materials, magnetic or
paper tape, chart paper, bacterial filters, making application changes or
performing services connected with relocation of equipment; adding or
removing accessories, attachments or other devices; service rendered
impractical as determined by HMSA by reason of electrical or mechanical
connection to other equipment not supplied by HMSA.
Purchaser agrees that equipment out of warranty prior to the start of
this Agreement may be inspected by HMSA's personnel. Any deficiencies found
will be corrected at HMSA's time and material rates then in effect, or
excluded from coverage under this Agreement.
5. CHARGES
Charges are payable in advance upon receipt of invoice. If Purchaser
requests unscheduled, on call maintenance service other than during HMSA's
normal working hours or the coverage selected on this Service Agreement, such
service will be furnished at HMSA's hourly rates in effect at the time
service is performed.
Purchaser shall pay HMSA, upon receipt of invoice, all travel and other
expenses incurred by HMSA for service performed at Purchaser's request
outside of the coverage selected in this Agreement.
Invoices not paid within ten (10) days of the invoice date will have a
1.5 percent per month interest charge, or the highest lawful rate, whichever
is less, assessed against the unpaid balance from the date of the invoice
until the date of payment. Purchaser shall pay all costs involved in HMSA's
collecting its overdue accounts from Purchaser including reasonable
attorney's fees.
All invoicing procedures are subject to change by HMSA at any time
following the expiration of the Initial Term upon a minimum of sixty (60)
days prior written notice.
6. TAXES
Prices do not include local, state, or federal taxes. Consequently,
the amount of any sales use or similar tax applicable to the sale of the
Agreement herein or to the use of such goods by the Purchaser shall be paid
by the Purchaser. If HMSA is required to collect or pay any such tax,
Purchaser shall reimburse HMSA promptly after demand for such tax payment and
for any associated expenses.
7. NOTICE
Any notice required or permitted to be given under this Agreement shall
be considered sufficient if delivered personally or mailed via certified
mail. Such notices directed to HMSA shall be delivered or sent to its office
address set forth on the face hereof to the attention of the President.
Notices to the Purchaser shall be sent to the address shown on the front of
this Agreement. Notices to either HMSA or the Purchaser may be sent to such
other address as either party may give to the other from time pursuant to
this provision.
8. TERMINATION
This Agreement shall remain in effect during the entire Service
Agreement Period provided for on the face hereof, and shall not be cancelable
by either party in the absence of a material breach by the other party.
9. ASSIGNMENT
Upon execution, this Agreement shall be binding upon HMSA and the
Purchaser and shall inure to their behalf and to their successors and
permitted assigns. This Agreement may not be assigned by Purchaser in whole
or in part to any third party without the express written consent of HMSA
which will not be unreasonably withheld.
HMSA may, however, require any proposed assignee to reimburse it for
any of its reasonable costs associated with such assignment, and to supply it
with such information and to make such representations as HMSA deems
appropriate for its protection.
10. CONSTRUCTION; JURISDICTION
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Ohio. Headings used herein are for the convenient
reference to the parties and are not intended to modify the express terms
hereof. Each party consents to the jurisdiction of the federal and state
courts located in Ohio, and hereby appoints each officer of HMSA as its agent
for accepting any process in Ohio.
11. MISCELLANEOUS
This Service Agreement replaces and supersedes any previous Agreement
between the parties respecting the subject matter hereof and constitutes the
entire agreement between the parties relative to the subject matter hereof.
HMSA's obligations hereunder are subject to delays incident to labor
difficulties; fires; casualties and accidents; acts of the elements; acts of
public enemies; transportation difficulties; inability to obtain equipment,
materials or qualified labor sufficient to fill its orders; governmental
interference or regulations; and other causes beyond HMSA's control.
HMSA's liability arising out of or relating to this Agreement shall not
exceed the amounts paid by Purchaser to HMSA for the Agreement.
HMSA shall not be liable for special incidental or consequential
damages. Consequential damages shall include, without limitation, loss of
use, income or profit or loss of or damages to persons or property.
DUE IN PART TO THE COMPLEXITY AND INTERCHANGEABLITY OF THE COMPONENTS
OF HMSA'S EQUIPMENT, SOME PARTS USED IN SERVICING PURCHASER'S EQUIPMENT MAY
BE RECONDITIONED. ALL PARTS MEET HMSA'S SPECIFICATIONS IN FORCE ON THE DATE
OF THEIR INSTALLATION IN THE PURCHASER'S EQUIPMENT.
This Service Agreement is subject to acceptance by HMSA at its home
office. After acceptance, HMSA shall mail to Purchaser a signed duplicate
copy hereof, and the same shall constitute the entire Service Agreement
between the parties, which shall be changed only by written agreement of the
parties.