DME SUPPLY AND RELATED SERVICES AGREEMENT

Exhibit 10.27

DME SUPPLY AND RELATED SERVICES AGREEMENT

THIS DME SUPPLY AND RELATED SERVICES AGREEMENT (the “Agreement”) is made and entered into effective as of the 5th day of July 2005 by and between Nassau Orthopedic Surgeons, P.C. (“Provider”) and OrthoSupply Management, LLC, a Massachusetts Limited Liability Company or its designee (“OSMI”).

RECITALS

A. WHEREAS, Provider desires to offer Provider patients requiring durable medical equipment and orthotics (together referenced as “DME”) the option of having such DME fitted and dispensed within its office suite (the “Office”) in order to enhance the continuity, convenience and quality of care provided to Provider patients.

B. WHEREAS, OSMI supplies DME and related services to physician groups and other health care providers.

C. WHEREAS, Provider desires to purchase DME and related services from OSMI to facilitate its provision of DME to Provider patients.

D. WHEREAS, the parties desire to enter into this Agreement in order to provide a full statement of their respective responsibilities hereunder during the term of this Agreement.

FOR AND IN CONSIDERATION of the mutual covenants and agreements hereinafter contained, the parties hereto hereby agree as follows:

OSMI shall have only the responsibilities and authority delegated to it under this Agreement or as delegated by Provider and accepted by OSMI from time to time. Subject to the ultimate authority and control of the Provider, OSMI shall have the following authorities and responsibilities:

(a) Personal and Management Services . OSMI shall provide the personal and management services identified below in order to facilitate Provider’s on-site provision of DME and related services to Provider patients.

(1) Trained Consultant . OSMI shall employ and provide to Provider on a leased employee basis one (1) OSMI consultant, as follows:

A RehabPlus Manager trained in insurance verification process and who shall each provide services at the Office on a part-time basis, not less than twenty (20) hours per week. The RehabPlus Manager shall assist Provider in processing DME orders placed by Provider physicians, providing insurance verifications, assuring proper inventorying and storage of DME in the Office, proper fitting of DME, dispensing DME to Provider patients who elect to order DME from Provider, performing patient follow up to promote proper use and efficacy of DME and record keeping related to the above duties, as reasonably requested by Provider.

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Descriptions of the RehabPlus Manager’s essential functions and qualifications are attached as Exhibit A hereto. The RehabPlus Manager’s services hereunder shall be subject to the control, supervision and evaluation of Provider. Such employee also shall participate in such periodic staff meetings and meetings with treating physicians as the parties mutually agree are reasonably required for the effective provision of DME and related services to Provider patients.

Provider shall have the right to approve the person designated by OSMI to serve as the RehabPlus Manager, which approval shall not be unreasonably withheld or delayed. Upon written request of Provider, OSMI shall remove the person serving as the RehabPlus Manager from service under this Agreement and, within a reasonable period of time thereafter, replace such person with an individual approved by Provider in accordance with this provision.

(2) Policy and Procedure Manual . OSMI shall advise Provider regarding the compilation of a policy and procedure manual (hereinafter referred to as the “Manual”) for Provider’s review and approval, which Manual shall include protocols, operating policies and procedures and similar materials that are reasonably necessary for the proper ordering, storage, fitting and dispensing of DME, as well as proper documentation and patient follow up. OSMI may recommend revisions to the Manual, as necessary, from time to time and shall make such revisions as are necessary to tailor the Manual to Provider needs.

(3) Educational Programs . OSMI shall provide in-service training and educational programs for Provider physicians and staff related to the proper fitting, use and clinical benefits of DME.

(4) Quality Review Activities . OSMI shall assist Provider in establishing a quality oversight program and program evaluation standards to promote the efficacy of DME and related services provided by the Provider.

(5) RehabPlus Solution . OSMI shall provide RehabPlus Solution services as specified in Exhibit B hereto. OSMI will provide over-sight and leadership management of the Nassau Orthopedic Surgeons, P.C.’s RehabPlus Solution (see exhibit A).

(b) Billing and Collection Services . OSMI and Provider acknowledge that billing and collection shall be the sole responsibility of OSMI. The RehabPlus Manager, with assistance from and supervision by Provider, will handle all patient and encounter information of Provider on services rendered and enter said information into OSMI’s billing & collection system. The following information will be required by Provider to process customer charges:

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Based upon the above information received from Provider, OSMI shall provide the following billing and account management services:

(1) Patient Services Billing : Create claims or invoices, create patient bills, post payments, perform collection follow-up.

(2) Reporting : A set of monthly reports will be forwarded to Provider to detail the activity of the month. Specific reports will be determined through mutual consent of Provider and OSMI at the time of start-up.

(3) Billing for Agreement Services : For service described herein and in the RehabPlus Service Agreement, OSMI will create a monthly bill for the cost of goods purchased by Provider based on order information created from OSMI’s billing software program, management fee and employee lease(s) on a monthly basis no later than the 15th of the following month.

(a) Organization and Operation . Provider shall retain ultimate legal responsibility for the proper operation of the Provider. Provider, as a continuing condition of OSMI’ s obligations under this Agreement, shall at all times during the Term be and remain legally organized and operated to provide physician services. Provider also will ensure that it is organized as a “group practice” as that term is defined in the Stark Act (42 U.S.C. § 1395nn(b)(2)) and regulations promulgated pursuant thereto (42 C.F.R. § 411.355(b)), both as amended from time to time, including but not limited to the “Special Rules for Profit Shares and Productivity Bonuses” attached as Attachment A. Provider also will be operated in a manner that qualifies Provider’s provision of DME to Provider patients for the “in-office ancillary services exception,” as defined by such regulations.

(b) Provision of Physician Services . The parties acknowledge and agree that Provider, through its physicians, shall be responsible for and shall have complete authority, responsibility, supervision and control over the provision of all physician services rendered by the Provider, and that all medical treatments and procedures related to the use of DME shall be provided and performed exclusively by or under the supervision of Provider physicians in such manner as Provider physicians, in their sole discretion, deem appropriate. OSMI shall have and exercise absolutely no control or supervision over the provision of physician services.

(c) Engagement of Clinicians . Provider shall be solely responsible for engaging all physician and all non-physician personnel necessary to the proper operation of Provider, other than the RehabPlus Manager provided by OSMI pursuant to Section 1 above.

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(d) Quality Oversight Program . Provider shall adopt a quality oversight program to monitor and evaluate the quality and cost-effectiveness of DME and related services provided at the Provider. Upon request of Provider, OSMI shall provide administrative assistance to Provider in performing its quality assurance/utilization review activities.

(e) Liaison . Provider and OSMI shall agree upon one or more Provider representatives to serve as liaison(s) for OSMI regarding RehabPlus billing and operational matters.

(f) Direction and Supervision of DME-Related Services . Provider shall be solely responsible for identifying appropriate patients for DME and related services, certifying the medical necessity of such DME and related services, scheduling all Provider services (including DME fittings and follow up appointments) and supervising the services of the RehabPlus Manager. The degree of supervision required should be that which is required to bill applicable payors for DME and related services and to qualify for the “in-office ancillary services exception” to the Stark Act identified above. Provider also shall be responsible for reviewing and evaluating the performance of the RehabPlus Manager, with a formal review to be conducted not less than annually.

(g) Documentation . Provider shall be solely responsible for providing appropriate medical documentation, as necessary to satisfy all applicable legal requirements, professional standards and billing requirements, including but not limited to letters of medical necessity and signed orders. Provider shall place all orders for DME from OSMI using order forms provided by OSMI and shall be responsible for selecting principal diagnosis and procedure codes based on Medicare and other applicable payor standards and guidelines. Provider agrees to comply with all DME order entry procedures specified by OSMI. Provider shall maintain a separate accounting of all collections it receives from DME and related services provided pursuant to this Agreement. Provider shall deposit any such collections into the Bank Account within three (3) calendar days of receipt by Provider. Provider shall weekly forward copies of Explanations of Benefits forms and/or receipts of payment in order to enable proper updating of patient accounts receivable ledgers and accounting for total collections.

(h) Licenses, Permits and Certifications . Provider shall be responsible for obtaining and maintaining any licenses, permits, certifications and provider numbers necessary for the Provider to dispense DME within the Office and bill payors for DME and related services.

(i) Financial Responsibilities . Provider shall, at its sole expense:

(1) Provide all necessary Office space (by lease or otherwise), receptionist services, security services and utilities as may be required for operation of the Provider, including the storage, fitting and dispensing of DME.

(2) Equip and furnish the Office space within which DME may be stored, fitted and dispensed.

(3) Arrange any modifications, maintenance and repairs to the Provider premises, furnishings or equipment necessary to maintain the Provider in good condition and in compliance with all applicable legal requirements.

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(4) Pay all physician and other Provider employee salaries and benefits, as well as compensation to independent contractors engaged directly by Provider.

(j) Charges . Provider shall determine the charges for all DME and related services provided to Provider patients.

(k) Compliance with Law and Professional Standards . All of Provider’s duties and responsibilities shall be conducted in accordance with all applicable federal, state and municipal laws, rules, regulations, ordinances and orders, professional standards and the ethical standards and standard of care of the medical community wherein the Office is located.

(l) Collection Responsibility and Payment to OSMI . Provider shall be responsible for:

(1) Collecting, receiving and administering, in Provider’s name and Provider’s account, for deposit into a bank account held in the name of Provider (the “Bank Account”), all accounts receivable attributable to DME and related services provided to Provider patients in the Office in accordance with collections procedures approved by Provider. Such accounts receivable shall be owned by Provider and shall constitute revenue to the Provider.

(2) Maintaining files containing documentation to support claims filed by Provider.

(3) Forward all RehabPlus related Explanation of Benefits (EOB) to OSMI weekly from date of receipt.

(m) Compliance with Law . All of OSMI ’s duties and responsibilities shall be conducted in accordance with all applicable federal, state and local statutes, rules and regulations.

(n) Software . OSMI may provide Provider with the right to use OSMI’s intranet-based data collection system under the terms of OSMI’s standard license agreement. Provider shall license to OSMI all software systems that may be required to facilitate the functionalities of OSMI’s software system,

In consideration for the items and services provided by OSMI pursuant to this Agreement, OSMI shall be compensated as follows:

(a) Personnel Services . See Exhibit A.

(b) Billing & Collection Services – Flat Fee . OSMI will provide the billing & collection for the Provider’s Rehab Plus Solution. The fee for such services will be $3,500 per month and payable on the fifteenth (15) of every month; except that OSMI shall accrue the billing fee for the first two (2) months (for a total accrual of $7,000), and then such fee will be

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billed over the remaining ten (10) months of the Agreement (at $4,200 per month). By way of example, in months three (3) through twelve (12) of this Agreement the amount due from Provider for billing and collecting shall be $4,200 per month.

(c) DME . As compensation for the DME supplied to Provider by OSMI pursuant to Section 1(c), OSMI shall be paid in accordance with the fee schedule attached as Exhibit C.

(d) Invoicing . During the first one hundred twenty (120) days that this Agreement is in effect, Provider shall be invoiced on the basis of the cost of goods dispensed (or utilized) by Provider. Thereafter, Provider shall be invoiced on the basis of the costs of goods ordered by Provider. OSMI shall not issue its initial invoice to Provider (for goods and services delivered during the first month that this Agreement is in effect) until at least thirty (30) days after the commencement date of this Agreement and such invoice shall not be due and payable until thirty (30) days after such issuance. Thereafter, OSMI shall invoice Provider for all fees due under Section 3(a & b) hereunder on a monthly basis. Provider shall be invoiced for fees due under Section 3(c) the following month after initially dispensed to the patient. If any amount so invoiced or automatically payable is not paid on or within forty-five (45) calendar days after the invoice is received or fees are automatically payable, the outstanding balance shall bear simple interest from the date of said invoice or payment date at a rate of one percent (1%) per month until such amount is paid in full. Any payments made thereafter received by OSMI shall be applied first to interest accrued but unpaid and then to the oldest unpaid payable/invoice. In addition, the parties agree that a failure by Provider to pay any such invoice or amount automatically payable within forty-five (45) calendar days of the date the invoice is received or the payment date (as the case may be) shall be a material breach of this Agreement, subject to cure provisions of Section 6(b). Any such termination of this Agreement by OSMI shall not affect Provider’s obligation to pay amounts due to OSMI under this Agreement, but no such payment after the cure period shall affect the effectiveness of such termination.

Payment of the compensation due to OSMI is not intended to be and shall not be interpreted or applied as permitting OSMI to share in Provider’s fees for physician services or any other services, but is acknowledged as the parties’ negotiated agreement as to the reasonable fair market value of the items and services furnished by OSMI pursuant to this Agreement.

The term of this Agreement shall commence on August 1, 2005 (“Commencement Date”) and shall remain in full force and effect for a period of one (1) year (the “Initial Term”) and SHALL BE AUTOMATICALLY RENEWED FOR AN ADDITIONAL ONE (1) YEAR PERIOD (THE “RENEWAL TERMS”) THEREAFTER UNLESS EITHER PARTY GIVES THE OTHER PARTY NOTICE OF ITS INTENT NOT TO RENEW AT LEAST THIRTY (30) CALENDAR DAYS PRIOR TO THE EXPIRATION OF THE INITIAL TERM OR ANY RENEWAL TERM .

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The provisions of Section 5 of this Agreement notwithstanding, this Agreement may be terminated prior to the expiration of its Initial Term or any Renewal Term as follows:

(a) Termination for Insolvency . If either party shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or of all or a substantial part of its assets, file a voluntary petition in bankruptcy, or admit in writing its inability to pay its debts as they become due, make a general assignment for the benefit of creditors, file a petition or an answer seeking reorganization or arrangement with creditors or take advantage of any insolvency law, or if an order, judgment or decree shall be entered by a court of competent jurisdiction, on the application of a creditor, adjudicating such party a bankrupt or insolvent or approving a petition seeking reorganization of. such party or appointing a receiver, trustee or liquidator of such party or of all or a substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive calendar days, the other party may terminate this Agreement by giving such party notice of termination which shall be effective on the date set forth therein.

(b) Cancellation for Breach . In the event of a material breach of this Agreement by either party, the other party may cancel this Agreement by giving written notice of cancellation to the breaching party, setting forth the reasons therefor, which cancellation shall be effective and final upon the expiration of twenty ( 20 ) calendar days after delivery in accordance with Section 14(f) hereof or at such later date and time as may otherwise be specified in such notice. Not withstanding the above, if the nature of the breach is such that it can reasonably be cured and if the breaching party commences such cure in good faith and, within ten ( 10 ) calendar days after delivery of the aforesaid notice of cancellation, gives written notice to the canceling party of the action being taken to effect such cure, then this Agreement shall not be canceled because of such breach, unless the breaching party thereafter fails to pursue such cure diligently and in good faith to completion within a reasonable period of time, but in no event more than twenty ( 20 ) calendar days after giving notice of such cure to the canceling party. However, if the breaching party fails to so cure