Exhibit 10.4

 

NOTE: StarMed Group, Inc. has requested confidentiality treatment for the
portions of this Agreement marked with “****”. An unredacted agreement has been
filed with the Securities and Exchange Commission.

 

SERVICES AGREEMENT

 

THIS SERVICES AGREEMENT (the “Agreement”) is made and entered into effective as
of June 1, 2006, by and between StarMed Group, Inc., a Nevada corporation
(“Company”), and Mothers and Daughters Center, a California professional
corporation (“Clinic”).

 

RECITALS

 

A.         Company intends to own and operate a wellness center at 801 North
Tustin Avenue, Suite 405, Tustin, California 92705 (the “Wellness Center”).

 

B.           Clinic has special expertise and experience in providing various
services to centers such as the Wellness Center.

 

C.           Clinic desires to provide Company with the necessary support to
manage certain aspects of the Wellness Center.

 

D.           Company desires to obtain from Clinic, and Clinic desires to
provide to Company, certain services, as set forth herein, subject to the terms
and conditions of this Agreement.

 

NOW, THEREFORE, the parties to this Agreement do hereby agree as follows:

 

1.            Clinic’s Services.    Clinic shall provide the following services
(collectively, “Services”) with respect to the Wellness Center:

 

a.            Advertising and Marketing.    Clinic shall assist Company in
advertising and marketing the services and products offered at the Wellness
Center. In assisting Company, Clinic shall provide, at Company’s cost and
expense, general advertising and marketing services, which may include the
preparation of, or contracting with third parties for the preparation of, signs,
brochures, letterhead, ads, direct mailers, radio program content, press
releases, promotional contests, website content, and other marketing materials
for Company, subject to Company’s prior approval. At no time shall Clinic hold
itself out as providing, or actually provide, wellness services on behalf of
Company. Company shall be the owner and holder of all right, title, and interest
in and to all marketing, advertising and public relations materials created or
implemented on behalf of Company in connection with the Wellness Center services
and products.

 

b.            Additional Services.    If Company desires that Clinic provide
services in addition to those listed in this Section 1, and Clinic desires to
provide such additional services, the parties may negotiate for Clinic to
provide such additional services on such terms and for such additional
compensation as the parties may agree upon in writing.

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2.

Compensation for Services.

 

a.            Services Fee.    Company and Clinic acknowledge and agree that
Clinic shall incur substantial time, cost and expense in performing the Services
on behalf of Company, and that such costs and expenses will vary over the term
of this Agreement. Additionally, the parties acknowledge and agree that the
level and intensity of the Services will increase as the number of Wellness
Center customers increases. Company and Clinic acknowledge that the Services
Fee, as such term is defined below, has resulted from arm’s length negotiations
between the parties and does not take into account the volume or value of
referrals or business otherwise generated between the parties, and is consistent
with fair market value for the Services. Accordingly, as compensation in full
for the performance of the Services hereunder, Company shall pay Clinic a fee
(the “Services Fee”) equal to **** percent (****%) of Gross Revenues (as defined
below). As used herein, the term “Gross Revenues” shall be defined to mean all
amounts received by Company relating to any and all services performed and
products sold at the Wellness Center, whether such revenues are received in cash
from patients, private or prepaid insurance, other third party payors or from
any other source.

 

b.            Payment Date.    The Services Fee shall be due and payable on a
monthly basis throughout the term of this Agreement.

 

 

3.

Term and Termination.

 

a.            Term.    The initial term of this Agreement shall be for five (5)
years commencing as of the date first written above; thereafter, except as
provided in Section 3.b. of this Agreement, this Agreement shall renew
automatically for successive terms of one (1) year each, unless either party
notifies the other party in writing not less than ninety (90) days’ prior to the
end of the then current term, of its intention to not renew this Agreement.

 

 

b.

Termination.

 

i.             Either party may terminate this Agreement for cause upon the
material breach of this Agreement by the other party, if such breach is not
cured within thirty (30) days following written notice of such breach. If the
nature of the breach is such that it cannot reasonably be completed within
thirty (30) days, no termination shall occur if such cure is commenced within
such thirty (30) day period and diligently prosecuted to completion.

 

ii.            Either party may terminate this Agreement upon the filing, with
respect to the other party, of a voluntary or involuntary petition in bankruptcy
if such petition is not dismissed within thirty (30) days of such filing; or
upon the appointment of a receiver or trustee to take possession of all, or
substantially all, of the assets of a party, if such appointment is not
terminated within thirty (30) days.

 

iii.          The Company may terminate this Agreement immediately upon the sale
or transfer of substantially all of the Clinic’s assets, or the merger,
reorganization, liquidation or dissolution for any reason of the Clinic.

 

iv.           Clinic may terminate this Agreement upon the liquidation or
dissolution for any reason of the Clinic.

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c.            Effect of Termination.              Upon termination or expiration
of this Agreement, each party’s respective obligations hereunder shall terminate
in full, except for those obligations which either explicitly, as set forth in
this Agreement, or by their nature survive the termination or expiration of this
Agreement including but not limited to Clinic’s continued right to receive the
Services Fee after the termination or expiration of this Agreement, to the
extent such Services Fee arose out of services performed or products sold at the
Wellness Center prior to the termination or expiration of this Agreement. In
addition, Clinic shall return all documents, data and other materials or
information that constitute “Confidential Information” as defined in Section
7.a. below.

 

 

4.

Records.

 

a.            Medical Records.    Each of the parties hereto shall maintain and
safeguard the confidentiality of all patient records, charts and other
information generated in connection with the services provided hereunder in
accordance with federal and state confidentiality laws and regulations,
including without limitation, the California Confidentiality of Medical
Information Act, Civil Code Section 56 et seq. and the Health Insurance
Portability and Accountability Act of 1996 (“HIPAA”) and the regulations
thereunder.

 

b.            Business Records.    All business and administrative records
maintained by Clinic in connection with the Services shall be Clinic’s property.
All business and administrative records maintained by Company in connection with
the Services shall be Company’s property. Notwithstanding the foregoing, each of
Clinic and Company shall have a continuing right to inspect (at such party’s
expense) the other party’s business records specifically pertaining to the
Services for the purpose of determining the other party’s compliance with its
obligations under this Agreement, provided the party requesting inspection gives
the other party at least five (5) days’ prior written notice.

 

c.            Right to Inspect Records.    The right to inspect records set
forth above in Sections 4.a. and 4.b. above shall survive the expiration or
termination of this Agreement.

 

 

5.

Indemnification.

 

a.            Company agrees to defend, indemnify and hold harmless Clinic, its
officers, directors, shareholders, managers, representatives, employees and
agents, from and against any and all losses, liabilities, damages, claims,
judgments, costs or expenses, including attorneys’ fees, that Clinic may suffer,
incur or become liable for, as a result of any act or omission by Company, or
Company’s breach of this Agreement.

 

b.            Clinic agrees to defend, indemnify and hold harmless Company, its
officers, directors, shareholders, representatives, employees and agents, from
and against any and all losses, liabilities, damages, claims, judgments, costs
or expenses, including attorneys’ fees, that Company may suffer, incur or become
liable for, as a result of any act or omission by Clinic or Clinic’s breach of
this Agreement.

 

6.            Compliance with Laws.    The obligations of Clinic and Company
pursuant to this Agreement shall be subject to any limitations or restrictions
which may be imposed by law or regulation, and Company and Clinic, as the case
may be, may suspend any or all obligations

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hereunder, or, at its option, terminate this Agreement, if it determines, upon
advice of counsel, that the performance of any obligation pursuant to this
Agreement may contravene applicable law or regulation.

 

7.            Non-Disclosure of Professional and Business Practices, Trade
Secrets, or Privileged Information; Non-Solicitation and Non-Interference.

 

a.            Each of Clinic and Company agrees to keep confidential and to not
use or disclose the professional and business practices, trade secrets or
privileged information of the other party and to keep such knowledge
confidential in its dealings with any medical group, clinic or practice,
hospital, health care facility, health care company, independent practice
association (IPA) or other person or entity. Further, each of Clinic and Company
agrees that it shall not disclose to any person or use information obtained by
it during the period of their relationship as to customer lists, names of
customers or customer addresses or telephone numbers, fee schedules or rates,
business plans, business methods, marketing or strategic plans, financial
statements, financial information, any and all computer programs (whether or not
completed or in use), any and all operating manuals or similar materials that
constitute the systems, policies and procedures of the other party, or any other
trade secrets, confidential or proprietary information respecting the other
party (collectively, “Confidential Information”). Except to the extent necessary
to carry out their duties and obligations under this Agreement, each of Clinic
and Company acknowledges and agrees that it is expressly prohibited from
creating, making, duplicating, copying, retaining, taking, maintaining or
possessing, by any means or method, any of the other party’s Confidential
Information either during or after the term of this Agreement. In furtherance of
this Section 7, each of Clinic and Company agrees to execute an additional
nondisclosure agreement at any time, if requested by the other party.

 

b.            During the term of this Agreement and for a period of two (2)
years thereafter, Clinic agrees not to disrupt, damage, impair or interfere with
the business of Company, and Company agrees not to disrupt, damage, impair or
interfere with the business of Clinic, nor shall Clinic or Company undertake
planning for or organization of any competitive organization or other business
activity materially competitive with the other party’s business, or combine with
others for the purpose of organizing any such competitive organization.

 

c.            The obligations of this Section 7 shall be in full force and
effect during the term of this Agreement and shall survive and continue
indefinitely after the termination or expiration of this Agreement, except as
otherwise limited by this Agreement. If the scope of any restriction contained
above is too broad to permit enforcement of any such restriction to its full
extent, then such restriction shall be enforced to the maximum extent permitted
by law, and each of Clinic and Company hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce any such restriction.

 

d.            Each of Clinic and Company hereby acknowledges and confirms that
its violation of Section 7 would cause irreparable injury to the other party,
and that the other party’s remedies at law for breach of the obligations under
this Section 7 would be inadequate; therefore, each of Clinic and Company
consents to and agrees that temporary and permanent injunctive relief may be
granted in any proceeding which may be brought to enforce any provision hereof.
In addition to specific performance, Clinic and Company shall have the right and
remedy to require the other party to account for and pay over to the harmed
party all compensation, profits,

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monies, accruals or other benefits derived or received by the other party as a
result of any transactions constituting a breach of any of the provisions of
Section 7, and all expenses (including reasonable attorneys’ fees) of the harmed
party in any action, suit or proceeding for breach of such provisions. Each of
the rights and remedies enumerated herein shall be severally enforceable, and
all of such rights and remedies shall be in addition to, and not in lieu of, any
other rights and remedies available to Clinic and Company.

 

 

8.

Independent Contractor.

 

a.            In the performance of the duties and obligations under this
Agreement, it is mutually understood and agreed that Clinic is at all times
acting and performing as an independent contractor. None of the provisions of
this Agreement is intended to create nor shall be construed to create any
relationship between the parties other than that of independent entities
contracting with each other solely for the purpose of effecting the provisions
of this Agreement. Company shall neither have nor exercise any control or
direction over the methods by which Clinic performs the Services required of
Clinic hereunder, or over Clinic’s best business judgment. The sole interest and
responsibility of Clinic is to assure that the Services covered by this
Agreement shall be performed in a competent, efficient and satisfactory manner.

 

 

9.

General Provisions.

 

a.            No Assignment.    Clinic shall not assign any of its rights, nor
delegate any of its duties under this Agreement. Subject to the foregoing
restriction, this Agreement shall be binding on the parties hereto and their
successors and permitted assigns.

 

b.            Severability.    If any provision of this Agreement as applied to
any party or to any circumstance shall be found by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of any such provision in any other circumstance, or
the validity or enforceability of this Agreement, unless such invalidity or
unenforceability would defeat an essential business purpose hereof, or except as
otherwise provided herein.

 

c.            Notices.    All notices or demands shall be in writing and shall
be given personally, by electronic facsimile, or by certified mail. Notice shall
be deemed conclusively made at the time of notice if given personally or by
electronic facsimile or, if by certified mail, three (3) days after deposit
thereof in the United States mail, properly addressed and postage pre-paid to
the following addresses:

 

Clinic:

 

Mothers and Daughters Center

801 North Tustin Avenue, Suite 403

Santa Ana, California 92705

Attention: Dr. Kathy Anderson

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Company:

 

StarMed Group, Inc.

2029 Century Park East, Suite 1112

Los Angeles, California 90067

Attention: Herman H. Rappaport, President

 

d.            Waiver.    A waiver by either party of any of the terms and
conditions of this Agreement in any instance shall not be deemed or construed to
be a waiver of such term or condition for the future, or of any subsequent
breach thereof, nor shall it be deemed a waiver of performance of any other
obligation hereunder.

 

e.            Entire Understanding.    This Agreement and any exhibits attached
hereto contain the entire understanding of the parties hereto relating to the
subject matter contained herein, and supersede all prior and collateral
agreements, understanding, statements and negotiations of the parties. This
Agreement can only be changed, modified, amended, rescinded or supplemented by a
written agreement executed by both parties.

 

f.             California Law.    This Agreement shall be construed and enforced
in all respects according to the laws of the State of California.

 

g.            Attorney’s Fees.    Should either party institute any action or
proceeding, in connection with, relating to or arising out of this Agreement,
the prevailing party in any such action or proceeding shall be entitled to
receive from the other party all costs and expenses, including reasonable
attorney’s fees, incurred in connection with such action or proceeding.

 

h.            Interpretation of Agreement.    The parties acknowledge and agree
that because all parties and their attorneys participated in negotiating and
drafting this Agreement, no rule of construction shall apply to this Agreement
that construes any language, whether ambiguous, unclear or otherwise, in favor
of, or against any party by reason of that party’s role in drafting this
Agreement.

 

i.             Additional Acts.    The parties hereto agree to perform such
other acts, and to execute and file such additional documents, as may be
required from time to time to carry out the provisions of this Agreement or the
intentions of the parties.

 

IN WITNESS WHEREOF, this Agreement is executed effective as of the date and year
first set forth above.

 

“COMPANY”

“CLINIC”

 

STARMED GROUP, INC.,

MOTHERS AND DAUGHTERS CENTER,

a Nevada corporation

a California professional corporation

 

 

By:

/s/ Herman Rappaport

By:

/s/ Kathy Anderson, M.D.

 

Herman H. Rappaport, President

Its:

Secretary

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