Exhibit 10.18


 


First Surgical
Woodlands, L.P.


 


Management Agreement Addendum


 


THEMANAGEMENT AGREEMENT
ADDENDUM (the “Agreement”) is executed and delivered this 1st day of February 2012 by First Surgical Partners, L.L.C
(the “General Partner”) and First Surgical Woodlands, L.P. (the “Company”).


 


WHEREAS, the Company
owns a multispecialty ambulatory surgical center in Shenandoah, TX. (the “Center”); and


 


WHEREAS, the General
Partner is the general partner of the Company; and


 


WHEREAS, the Company
desires to retain the services of the General Partner to assist the Company in managing, and conducting the day-to-day business
and services of the Center, and the General Partner desires to provide such services, upon the terms and conditions set forth herein;


 


NOW THEREFORE, in consideration
of the foregoing and mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:


 


		1.	DEFINITIONS



 








1.1           Certain Defined Terms
– As used in this Agreement, the following terms shall have the following meaning unless otherwise provided.


 





“Management
Period” – The Term of this Agreement which is the period commencing on the date this agreement is executed
and ending as set forth hereafter in Section 2.


 


“Company”
– First Surgical Woodlands, L.P.


 


“Center”
– The multi-specialty ambulatory surgery center located at 111 Vision Park Blvd., Shenandoah, TX 77384.


 


“Physician
Investors” – Those Physicians that are limited partners in the Company.


 



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Exhibit 10.18


 


		2.	GENERAL



 


		2.1	APPOINTMENT



 


The Company
hereby appoints the General Partner, and the General Partner hereby accepts such appointment, to act as the exclusive manager of
the Center during the Management Period pursuant to the provisions hereof and to carry out and implement the desires and directions
of the Company with respect to thereto. While it is the intent of this Agreement to vest in the managing partner the authority
for all ordinary “day-to-day” management decisions (the “Day-to-Day” Decisions), and not withstanding anything
to the contrary elsewhere in this Agreement, the Company reserves the right to make final policy decisions that the Company feels
will impact the overall performance of the Center or the financial value of the Center. The Company and General partner agree that
they will act in good faith regarding management of the Center and the Company will endeavor to assist the General Partner’s
management, as needed, with effective and efficient management of the Center.


 


During the
Management Period, the General Partner shall devote appropriate time, attention, efforts, abilities and energy to the business
of the Center for profit, benefit and advantage of the Company. The General Partner agrees to perform its duties hereunder faithfully
and loyally and to the best of his abilities, and shall use commercially reasonable efforts to promote the business of the Center,
preserve the business and organization of the Center, keep available to the Center the services of it’s employees, to preserve
the business relations of the Center with suppliers, distributors, patients and others and to otherwise perform the Day-to-Day
Decisions. The General Partner agrees that he will not knowingly commit any act that might be reasonable be expected to injure
the business of the Center or members of the Company.


 


		2.2	Appointment as Attorney-in-Fact



 


The Company
appoints the General Partner its attorney-in-fact with full power on its behalf and in its name, or in the name of the Center,
(a) to enter into contracts relating to the operation of the Center, (b) to procure licenses, permits, and other approvals relating
to the operation of the Center, and (c) to take any and all other actions necessary, appropriate or useful to the General Partner
in connection with the services provided pursuant to this Agreement.


 


		2.3	Authority and Control



 


The General
Partner acknowledges that ultimate control of the business and operations of the Center shall remain with Company, and that Company,
by entering into this Agreement, is not relinquishing any of the powers, duties and responsibilities vested in it by law.


 



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Exhibit 10.18


 


		2.4	Patient Referrals



 


It is not
a purpose expressed or implied of this Agreement to induce or encourage the referral of patients or the payment directly or indirectly
of any remuneration to Company in violation of applicable laws, rules or regulations. The parties agree that the Management Fee
set forth herein was arrived at through arms-length negotiations and reflects to their knowledge the fair market value of General
Partner’s services hereunder.


 


		2.5	No Sharing of Professional Fees



 


Payment of
the fees specified herein is not intended to be and shall not be interpreted or construed as permitting General Partner to share
in Company’s or Physician Investor’s fees for medical services or any other services, but is market value of the services
provided by General Manager pursuant to this Agreement.


 


		2.6	Term



 


This Agreement
shall continue in force and effect for an initial period from February 1, 2005 for five (5) years, and shall automatically renew
for one additional (2) year period on the 5th anniversary, and annually thereafter, automatically renew for a (1) year
period each anniversary date, unless otherwise terminated in writing by either party pursuant to the terms hereof, or until termination
by mutual consent of both the General Partner and the Company as hereinafter set forth.


 


		2.7	Termination



 


Notwithstanding
anything to the contrary in the provisions of the foregoing Section 2.6, early termination of this agreement may occur only pursuant
to the following provisions.


 


		2.7.1	Automatic Termination



 


This Agreement
shall automatically terminate if either party shall file or have filed against it a petition in bankruptcy or any petition seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution or relief under the present or any future federal
bankruptcy act or any similar present or future applicable federal, state or other statue or law, or seeking or consenting to acquiescing
in the appointment of any trustee, receiver, or liquidation of all or any substantial part of its properties and such filing remains
unresolved or is not dismissed within ninety (90) days.


 



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Exhibit 10.18


 


		2.7.2	Termination by Regulatory Change



 


If there
shall be a change in laws, regulations or general instructions, the adoption of new legislation, or a change in any third party
reimbursement system, any of which materially affects the manner in which either party may perform or be compensated for its services
under this Agreement, the parties shall immediately propose a new service arrangement or basis for compensation for the services
furnished pursuant to this Agreement. If such notice of new service arrangement or basis for compensation is given, and if the
Company and the General Partner are unable within thirty (30) days thereafter to agree upon a new service arrangement or basis
for compensation, either party may terminate this Agreement by providing the other party with written notice at least thirty (30)
days prior to the specified termination date.


 


		2.7.3	Termination for Cause



 


This Agreement
may be terminated immediately by either party if either the General Partner, the Company or the Physician Investors do any of the
following: (a) commit a material breach of fiduciary duty, fraud, misappropriation or embezzlement involving the Company’s
property or assets; (b) commit an intentional wrongful act which materially impairs the goodwill or business of the Company or
causes material damage to the Company’s property, goodwill or business; (c) commits a criminal act; or (d) acts with gross
negligence. With respect to the Physician Investors, any criminal acts or gross negligence referenced in (c) and (d) above, must
materially impair the goodwill or business of the Company or cause damage to the Company or cause damage to the Company’s
property assets.


 


		2.7.4	Effects of Termination



 


Upon termination
of this Agreement, as hereinabove provided, neither party shall have any further obligations under this Agreement except for (i)
obligations accruing prior to the date of termination, including, without limitation, payment of the Management Fee and all reasonable
direct expenses relating to services provided prior to the termination of this Agreement, and (ii) obligations, promises, or covenants
set forth in this Agreement that are expressly made to extend beyond the Term, including, without limitation, indemnity and confidentiality
provision, which provisions shall survive the expiration or termination of this Agreement. In addition, upon termination or expiration
of this Agreement, each party shall immediately deliver, or cause its employees or agents to deliver, in good condition, all property
in its possession which belongs to the other party, ordinary wear and tear and damage by any cause beyond the reasonable control
of either party excepted.


 



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Exhibit 10.18


 


		3.	ORGANIZATIONAL AND DEVELOPMENTAL SERVICES



 


		3.1	General Services



 


The General
Partner shall render all services, direction advice, supervision and assistance necessary to assure the Center adequately performs
its ordinary and usual Day-to-Day Services (“Day-to-Day Services”). These Day-to-Day Services include, but are not
limited to, acting as general agent on behalf of the Company during the Center’s development and organization, and those
services specifically enumerated in this Section 3.


 


It
is specifically agreed that purposes of this Agreement and the General Partner duties and activities hereunder, to the extent that
the General Partner, in the performance of his duties hereunder, needs to provide to the Company or the Center any goods, property,
equipment or services of third parties then the same shall be provided on an arm’s length basis at fair market value thereof.


 


		3.2	Bankers, Vendors and Third Party Financing



 


The General
Partner shall deal directly with bankers, vendors, and other third parties on behalf of the Company as necessary, to arrange any
financing or refinancing for the Center, but may not commit to any financing in excess of $10,000.00 without the Physician Investors’
consent. Furthermore, the General Partner shall act as the procurement agent in obtaining any and all appropriate non-leased equipment
and supplies for the Center.


 


		3.3	Permits and Licenses



 


The General
Partner shall apply and maintain in full force and affect all necessary licenses and permits required in connection with the operation
of the Center. All such licenses and permits shall be issued in the name of the Company. The Company shall pay for the actual fees
or expenses of any permits and licenses.


 


		3.4	Other Services



 


The General
Partner may retain legal counsel and other professional services on behalf of the Company as reasonably necessary for the proper
organization and management of the Company. Any expenses of such third parties related to such services shall be paid by the Company.


 



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Exhibit 10.18


 


		4.	MANAGEMENT SERVICES



 


		4.1	General



 


Throughout
the Management period, the General Partner shall, in accordance with Section 3.1 hereof, render all services associated with the
day-to-day operation of the Center, including, but not limited to, the services described in this Section 4.


 


		4.2	Management Fee



 


The Company
shall pay General Partner for the services rendered under Sections 3 and 4 hereof, a monthly fee equal to a five (5%) percent of
the “net monthly collected revenues”, from the Centers’ cash collections, with said monthly fee to be paid on
the 15th day of each month following the month earned. For purposes of this Section 4.2, “net monthly collected
revenues” shall be defined as gross revenue minus all patient allowances, discounts, fixed fee write downs and bad debts,
actually collected and deposited. Such fee shall not be payable until the Center is actually in operation.


 


		4.3	Proration



 


In the event
this Agreement is executed on a day other than the first day of the calendar month or the center begins operations other than on
the first day of a calendar month, the monthly management fee payable hereunder shall be prorated for such month.


 


		4.4	Reimbursement of Expenses



 


The Company
shall reimburse the General Partner on a monthly basis for all reasonable, direct, out-of-pocket expenses incurred in connection
with the services provided pursuant to this Agreement. The General Partner shall prepare an itemization of such expenses on a monthly
basis to be submitted to the Company by the fifteenth (15th) day of the subsequent month. The Company shall reimburse
the General Partner for such properly documented expenses within ten (10) days after receipt of such itemization.


 


		4.5	Staff



 


The General
Partner, within the parameters of an guidelines established by the Company, shall hire, train, promote, discharge, set the salary
and benefit levels, and supervise the work of the staff and all other employees of the Center, all in the name of and on behalf
of the Company. All of such employees, including the Director of Nursing (“DON”) shall be employees of the Company
and shall be on the Company’s payroll, and the General Partner shall not be liable to such employees for their wages, compensation
or fringe benefits, as these employees are direct employees of the Company, and as employees of the Company, the Company is to
be responsible for all Company employee salaries, benefits, insurance, payroll taxes, ect.


 



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Exhibit 10.18 


 


		4.6	Compliance with Laws and Representation



 


The General
Partner shall strive to ensure compliance in all material respect with applicable statutes, ordinances, laws, rules, regulations,
orders, and determinations affecting or issued in connection with the operation of the Center and make arrangements for any compliance
required thereby. Any fees or expenses owed to third parties as a result of such compliance activities shall be paid by the Company.
In addition, the General Partner shall, solely in connection with the management of the Center, employ attorneys and other professional
consultants to the extent reasonably necessary in the General Partner’s judgment to protect the interest of the Company,
the partners, and the employees of the Company in matters relating to and including, without limitation, EEOC claims, unemployment
compensation claims, collection of past due accounts, determination of property taxes and procurement of insurance. The reasonable
expense of said legal and other professional service shall be paid for by the Company. Furthermore, unless otherwise directed by
the managers, the General Partner, at the Company’s expense shall protest or litigate to final decision in any appropriate
court or forum any violations, order, rule or regulation adversely affecting the Center.


 


		4.7	Marketing



 


Commencing
with the execution of this Agreement and continuing through the Management Period, the General Partner shall supervise the design
of and implement a marketing program including preparation of marketing materials such as brochures, media advertising materials,
direct mail and press releases. The Company will be consulted during the development of this program. The marketing efforts of
the General Partner shall include active solicitation of third party managed care contracts, such as PPO’s and HMO’s.


 


		4.8	Accounting



 


The General
Partner shall coordinate all accounting functions through a licensed CPA. The CPA will engage to review the financial records on
a quarterly basis. The CPA’s reports shall be provided to the Physician Investors when completed.


 






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Exhibit 10.18


 


		4.9	Insurance



 


The General
Partner shall acquire and maintain for the Company, at the Company’s expense and in the Company’s name, insurance of
such kinds, including general, liability, property and other necessary insurance coverage, as the Company will require and are
usually maintained by entities with businesses similar to the Center in such amounts as reasonably deemed sufficient by the Company;
provided, however, that all physicians on the Center’s medical staff shall be required by the Center’s Medical Staff
Bylaws to obtain and maintain at all times their own malpractice insurance. The Company and the General Partner agree that such
insurance shall be maintained with companies and through brokers offering the necessary coverage at the lowest cost.


 


		4.10	Bank Accounts and Flow of Funding



 


This Agreement
contemplates that the flow of funds received and disbursed in connection with the operation of the Center shall be conducted through
and controlled by a system of accounts established by agreement of the Company and the General Partner. The Company shall, if necessary,
establish such bank or other deposit accounts as the Company and the General Partner shall mutually agree are necessary for the
efficient operation of the Center and control of the flow of funds received and disbursed in connection with such operation, in
the Company’s name at a bank or other financial institution mutually agreed upon by the Company and the General Partner.
Any disbursement over $20,000 shall require two (2) signatures, one signature from an authorized Company designee and one from
the General Partner.


 


		4.11	Vendor’s Contracts



 


The General
Partner shall enter into contracts covering the ordinary day-to-day business of the Center, as reasonably necessary, and maintain
existing contracts assuring that these contracts are in the name of, and at the expense of the Company. These contracts shall include
but not be limited to all electricity, gas, water, telephone, cleaning services, air-conditioning maintainace, and other necessary
utilities or services, and purchase of materials and supplies in the name of, for the account of, the Company which are appropriate
for the operation of the Center.


 


		4.12	Repairs and Maintenance



 


The General
Partner shall arrange for the making or installing at the Company’s expense and in the name of the Company, at competitive
costs, such alterations, repairs, decorations and/or replacements of any non-leased equipment, deemed reasonable and necessary
by the General Partner and the Company.


 



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		4.13	Billing and Collecting



 


General partner
shall be responsible, on behalf of the Company and as its agent, for billing and collecting payments for all Center related services,
services rendered by the Center to its patients (including collections from Medicare, Medicaid, insurance companies, HMOs, PPOs,
and other third-party payors), with all such billing and collecting to be done in the name of the Center. General Partner shall
maintain complete and accurate records of all fees, chages and billings of all services contemplated hereby. A schedule of fees
for all of the Center’s charges shall be proposed by the General Partner with the approval of the Company. The General Partner
shall comply with all applicable laws and regulations; and all applicable rules and regulations of insurance companies and other
third-party payors in discharging its duties to bill and collect payments hereunder.


 


		4.14	Information Systems



 


The General
Partner shall supervise and manage the use of all software and/or hardware for the management information system utilized in the
operations of the Center, provide modifications, enhancements and upgrades and provide new hardware and/or software to the extent
reasonably necessary or appropriate and as approved by the Company.


 


		4.15	License of the Center’s and the Company’s Name and Logo



 


The Company
hereby grants to the General Partner the nonexclusive right, license, and privilege to use the Center’s and Company’s
name and logo alone or with the corporate name of the General Partner during the Term and subject to the terms and conditions of
this Agreement. The General Partner may include its name and the name of the Company and/or the Center on any letterhead, professional
announcements, private placements, public offerings, and the like relating to the Center.


 


		4.16	No Practice of Medicine by Manager



 


The General
Partner shall have and exercise absolutely no control or supervision over the provision of medical services or the practice of
medicine for patients at the Center.


 


		5.	OWNERSHIP AND INSPECTION OF RECORDS



 


		5.1	Patient Records



 


At all times
during and after the Term of this Agreement, all patient medical records shall be and remain the sole property of the Company.
To the extent permitted by law, the General Partner shall be permitted to retain copies of such records, at its expense upon termination
of this Agreement. The parties acknowledge that the Center is a “covered entity” as that term is defined by the Privacy
and Security regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).
As such, the General Partner agrees to comply with the terms of the Business Associate Addendum attached hereto as Addendum A and
incorporated herein by reference.


 



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Exhibit 10.18


 


		5.2	Manager Business Records



 


At all times
during and after the Term of this Agreement, all business records and information, including all books of account and general administrative
records and all information generated under or contained in the management information system relating to the business activities
of the General Partner shall be and remain the sole property of the General Partner.


 


		5.3	Inspections



 


The Company
shall, during and after the term of this agreement, make available to the General Partner for inspection by its authorized representatives,
during regular business hours, at the principal place of business of the Company, any Center records determined by the General
Partner to be necessary to perform its services and carry out its responsibilities hereunder or necessary for the defense of any
legal or administrative claim or action relating to said records.


 


		6.	MISCELLANEOUS



 


		6.1	Notices



 


All notices,
requests, demands or other communications pursuant to this Agreement or contemplated hereby shall be in writing and shall be deemed
to have been given when personally delivered or if mailed, by registered or certified US Mail, postage prepaid, return receipt
requested three (3) days after such mailing to the parties at the addresses set forth below. Any party may change the address to
which such notices are giving by giving notice in the manner provided herein.


 


Notice to the Company shall
be addressed as follows:


 


Dr. David Tomaszek


111 Vision Park Blvd.


Shenandoah, TX 77384


 


Notice to the General Partner
shall be addressed as follows:


 


Tony Rotondo


411 First Street


Bellaire, TX 77401


 



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Exhibit 10.18 


 


		6.2	Entire Agreement



 


This agreement
represents the entire agreement between the parties hereto and all prior understandings and agreements are hereby merged into this
Agreement. This Agreement may not be modified except by an instrument in witting signed by the parties hereto.


 


		6.3	Binding Effect



 


This Agreement
shall insure to the benefit of and are binding upon the parties hereto and their respected heirs, representatives, successors and
permitted assigns.


 


		6.4	Severability



 


If any of
the provisions of this Agreement shall be constructed to be illegal or invalid, such construction shall nor affect the legality
or validity of any of the other provisions hereof and the illegal or invalid provisions hereof shall be deemed stricken and deleted
herefrom to the same extent as if never herein but all other provisions hereof shall remain in full force and effect.


 


		6.5	Captions



 


The captions
of various provisions of this Agreement are inserted for conveniece only, and are in no way to be construed as part of this Agreement
or as limitation of the scope of the particular provisions to which they refer.


 


		6.6	Assignability



 


This Agreement
may not be assigned by either party hereto without the prior written consent of the other party.


 


		6.7	Attorney’s Fees



 


The prevailing
party in any action arising under this Agreement may recover reasonable attorney’s fees and costs from the non-prevailing
party.


 


		6.8	Compliance with Laws



 


The intent
of the parties is to conduct their relationship in full compliance with all applicable laws including, but not limited to, the
Anti-Kickback Statute, the Stark Laws and any applicable fraud and abuse provisions. Not withstanding any unanticipated effect
of any of the provisions herein, neither party will intentionally conduct itself under the terms of this Agreement in a manner
which violates any laws.


 



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Exhibit 10.18 


 


		6.9	Access to Books and Records of Subcontractor



 


Upon the
written request of the Secretary of Health and Human Services or the Comptroller General or any of their duly authorized representatives,
the General Partner will make available those contracts, books, documents, and records necessary to verify the nature and extent
of the costs of providing services under this Agreement. Such inspection shall be available up to four (4) years after the rendering
of such services. If the General Partner carries out any of the duties of this Agreement through a subcontract with a value of
$10,000 or more over a 12-month period with a related individual or organization, the General Partner agrees to include this requirement
in any such subcontract. This section is included pursuant to and is governed by the requirements of Public Law 96-499, Sec. 952
(Sec. 1861(v)(1)(i) of the Social Security Act) and the regulations promulgated thereunder. No attorney-client, accountant-client
or other legal privilege will be deemed to have been waived by the General Partner or the Company by virtue of this Agreement.


 


(Remainder of Page Intentionally
Left Blank – Signature Page Follows)


 



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Exhibit 10.18


 


In WITNESS
WHEREOF, the parties have caused this instrument to be executed on the day and year first written above.


 


	 	First Surgical Partners, L.L.C.
	 	 
	 	By:	 /s/Tony Rotondo
	 	Name:  Tony Rotondo
	 	Title:    General Partner
	 	 
	 	First Surgical Woodlands, L.P.
	 	 
	 	By:	  /s/David Tomaszek, MD
	 	Name: David Tomaszek M.D.
	 	Title:  Medical Director


 








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