Exhibit
10.57


 


FACILITIES
AND MANAGEMENT SERVICES AGREEMENT


 


FACILITIES
AND MANAGEMENT SERVICES AGREEMENT (this “Agreement”) made as
of October 13, 2008 (the “Effective Date”), by and between 21st Century Oncology-CHW, LLC, a California
limited liability company (“Manager”) 21st Century Oncology of California, A
Medical Corporation, a California professional medical corporation (“Medical
Group”) and Redding Radiation Oncologists, P.C, a California professional
medical corporation (“Successor Medical Group”).


 


RECITALS:


 


A.                        Manager is a
California limited liability company whose members are California Radiation
Therapy Management Services, Inc., a California corporation, and Catholic
Healthcare West, a California nonprofit public benefit corporation (“CHW”).


 


B.                          CHW’s mission
is to provide high quality, cost efficient health care services to communities
it serves in Northern California and elsewhere, including the Counties of
Shasta, Siskiyou, Tehama and Trinity, and CHW is participating as a co-owner of
Manager in order to make radiation therapy services available to residents of
those Counties.


 


C.                          Medical Group
and Successor Medical Group are each providers of radiation oncology services.


 


D.                         Medical Group
wishes to engage Manager to provide it with certain office facilities,
equipment, supplies and administrative services at practices located at Medical
Group’s medical offices located in Redding and Mt. Shasta, California (the “Offices”).
As provided in Section 16(f) of this Agreement, Medical Group intends to
transfer complete ownership and operation of the Offices to Successor Medical
Group shortly after the Effective Date, at which time this Agreement shall be
assigned to and assumed by Successor Medical Group for the remainder of its
term.


 


NOW,
THEREFORE, for good and valuable consideration, the parties
agree as follows;


 


1.                            Facilities,
Equipment and Services to be Provided by Manager.


 


(a)                    Offices. Manager
hereby grants an exclusive license to Medical Group to utilize the Offices and
Medical Group agrees to license such Offices from Manager. Manager shall make
all arrangements for and pay all costs associated with the utilities necessary
for the operation of the Offices, including, without limitation, electricity,
water, gas, telephone, waste (office and medical, including radioactive medical
waste) collection and removal and janitorial services. Manager shall provide
the Offices to Medical Group from 8:00AM to 5:00PM, Monday through Friday, or
at such other times as mutually agreed by Manager and Medical Group. All other
times of operation will be as needed and as mutually agreed between Manager and
Medical Group. In no event shall Manager permit any other parties to utilize
the Offices during the term of this Agreement, Manager and its employees and
representatives shall have the right to enter the Offices at all reasonable
times for the purposes of inspection, making repairs and for any other
reasonable purpose. Medical Group acknowledges that it has been


 


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involved in the selection
and approval of the Offices and has determined that the Offices are currently
adequate and suitable for Medical Group’s intended use in Medical Group’s
practice and meets appropriate standards of medical practice.


 


(b)                   Equipment. Manager
hereby grants Medical Group an exclusive right to utilize such furniture,
fixtures and equipment at the Offices as are described on Exhibit A hereof (the “Equipment”) and
Medical Group agrees to license the use of such Equipment from Manager. The
Equipment provided hereunder shall, at all times, be and remain the property of
Manager. Medical Group shall not remove the Equipment from the Offices without
the prior written consent of Manager. Medical Group acknowledges that it has
been involved in the selection and approval of the Equipment and has determined
that the Equipment is currently adequate and suitable for Medical Group’s
intended use in Medical Group’s practice and meets appropriate standards of
medical practice.


 


(c)                    General
Management. Manager shall have authority and responsibility to
manage, conduct and administer the day-to-day administrative and
non-professional operations of the Offices and shall perform those functions
pursuant to the terms of this Agreement and consistent with applicable laws, rules
and regulations. Nothing in this Agreement shall be construed as permitting the
Manager to engage in the practice of medicine, and Medical Group shall have
sole and exclusive authority over the professional operations of the Offices.
The duties of Manager shall include, but not be limited to:


 


(i)                                     Supplies. Manager shall
provide Medical Group with such office and medical supplies as are necessary
for patient care and treatment and the operation of the Offices by Medical
Group as reasonably determined by Medical Group in consultation with Manager.


 


(ii)                                  Scheduling. Manager shall
maintain patient appointment scheduling services on behalf of Medical Group,
which services shall include obtaining all appropriate pre-certification,
demographic, insurance and related materials with respect to patients.


 


(iii)                               Required
Licenses and Regulatory Fees. Manager shall procure and
maintain all necessary licenses and permits for the installation, use and
operation of the Equipment and the Offices (other than the professional medical
licenses of the Medical Group and its Physicians), and shall pay all related
licensing, inspection and regulatory fees.


 


(iv)                              Personnel.


 


(A)                     Manager shall provide, on
behalf of Medical Group, all non-professional support personnel including, but
not limited to, technicians and radiation therapists (such technicians and
therapists are hereinafter referred to as “Leased Personnel”), physicists,
dosimetrists, receptionists, secretaries, clerks, management personnel and/or
other personnel as necessary, as reasonably determined by the Manager upon
consultation with Medical Group. Manager shall be responsible for recruiting,
training, managing, supervising, compensating and terminating such personnel; provided,
however, that Medical Group shall at all times have the ultimate
authority and responsibility to supervise all such personnel to the extent they
are engaged in the delivery of patient care services and shall participate in
decisions


 


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of Manager with respect to
the recruiting, training and terminating of all such personnel. Manager shall
be responsible for all salaries, fringe benefits, taxes and insurance necessary
with respect to all such personnel.


 


(B)                       Leased
Personnel shall remain employees of Manager, and not employees of Medical
Group. At such times as the Leased Personnel are providing services on Medical
Group’s behalf, Medical Group shall have authority and responsibility for (i) the
supervision and control of the Leased Personnel (while providing services on
Medical Group’s behalf); (ii) determining the means and methods by which each
Leased Personnel provide services hereunder; and (iii) determining charges for
the Leased Personnels’ services.


 


(v)                                 Contract
Negotiations. Manager shall advise the Medical Group with
respect to and negotiate, on Medical Group’s behalf, all contractual
arrangements with third parties as are reasonably necessary and appropriate,
including, without limitation, negotiated price agreements with managed care
plans and third party payors, employees, labor unions, alternative delivery
systems, or other purchasers of group health care services; provided, however,
that all such contractual arrangements shall be subject to final approval by
Medical Group.


 


(vi)                              Financial
Reports. Manager shall prepare and submit to the Medical Group periodic
financial reports reflecting the financial status and operations of the
Offices.


 


(d)                   Prohibited
Activities. Notwithstanding any other provision of this
Agreement, Manager and Medical Group expressly agree and acknowledge that
Manager is not being engaged by Medical Group to, nor at any time shall
Manager:


 


(i)                                     engage in the
practice of medicine (including but not limited to determining what diagnostic
tests are appropriate for a particular condition, determining the need for
referrals to or consultations with another physician/specialist (or the
identity of the physician for such referral or consultation) determining
patient treatment options, or determining what is included in a particular
patient’s medical records);


 


(ii)                                  provide
marketing services, directly or indirectly, to or on behalf of Medical Group;


 


(iii)                               select, hire
and/or fire (as it relates to clinical competency or proficiency) physicians,
allied health staff and medical assistants;


 


(iv)                              set the
parameters under which Medical Group will enter into contractual relationships
with third-party payers;


 


(v)                                 make decisions
regarding coding and billing procedures for patient care services;


 


(vi)                              make decisions
regarding the compensation of Medical Group’s physicians;


 


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(vii)                           determine how
many patients a Medical Group physician must see during any given period of
time or how many hours a physician must work,


 


2.                            Term. The term of
this Agreement shall commence as of the Effective Date and shall, unless
terminated sooner as provided herein, continue for an initial term of ten (10) years
after the Effective Date. Thereafter, this Agreement shall automatically renew
for up to two successive 5-year renewal terms, unless either party gives the
other party a written notice of non-renewal at least 90 days before the
beginning of any renewal term.


 


3.                            Responsibilities
of Medical Group.


 


(a)                    Provision of
Professional Services. Medical Group, as an independent contractor,
shall be and remain fully responsible for all professional medical services
provided at the Offices. In connection therewith, Medical Group shall provide
all related physician support through its physician-employees and/or other
physicians otherwise engaged by the Medical Group (including physician-owned
professional corporations) (“Physicians”).


 


(b)                   Licensed
Providers. Each Physician engaged by the Medical Group to
provide services at the Offices shall be duly licensed, without restriction, to
practice medicine in the State of California; shall be board certified or board
eligible in the specialty of radiology; shall maintain professional liability
insurance in minimum amounts of $1,000,000/$3,000,000 annual aggregate; and
shall have never been convicted of a criminal offense related to healthcare, or
been listed by any federal or state healthcare program as excluded or otherwise
ineligible to participate in such federal or state program.


 


(c)                    Licenses and
Permits. The Medical Group and each Physician providing services on behalf of
the Medical Group shall have all necessary licenses, certificates, permits,
approvals, franchises, notices and authorizations issued by governmental
entities or other regulatory authorities, federal, state or local, required for
the ownership and operation of the Medical Group and the operation of its
medical practice at the Offices.


 


(d)                   Only Radiation
Oncology Services. The Medical Group shall only provide radiation
oncology services (and other integrally related ancillary services) at the
Offices, and only physicians in the specialty of radiation oncology shall be
shareholders of or employed or engaged by the Medical Group unless otherwise
agreed to in writing by Manager.


 


(e)                    CHW Charitable
Purposes. For so long as CHW is an owner of Manager, the
Medical Group agrees to conduct and operate its medical practice and provide
medical services at the Offices in a manner that provides access to patient
care services on a non-discriminatory basis based on medical necessity, without
regard to a person’s race, religion, national origin, gender, sexual
orientation, physical or mental disability, payor source or ability to pay, and
otherwise consistent with the charitable and religious purposes and policies
set forth in Sections 3.2 through 3.7 of Manager’s Operating Agreement (a copy
of which sections is attached hereto as Exhibit
B.)  In addition,
Medical Group agrees to cease using the names of “Catholic Healthcare West,” “CHW”
and/or “Mercy” (the “CHW Tradenames”) in connection with its medical practice
if at any time CHW revokes the license it has granted to use such names or
ceases being a member of Manager. Notwithstanding the foregoing, Medical Group
may


 


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continue to use the CHW
Tradenames if necessary to avoid any interruption in billing until such time as
the appropriate filings and notifications as required by applicable law and/or
payors are satisfied so that Medical Group can successfully bill using an
alternative name.


 


(f)                      Payor
Requirements. The Medical Group shall cause all radiation
oncology services performed at the Office to be performed in accordance with
all requirements of applicable third party payors, including Medicare and Medi-Cal,
as necessary to obtain all available payments therefore, including providing
necessary Physician supervision of all services provided.


 


(g)                   Quality of Care. The Medical
Group shall regularly review the Office’s quality assurance policies and procedures
to verify that the Offices are continually providing services that are medical
necessary and of appropriate quality. The Medical Group shall promptly inform
Manager of any deficiency in Office facilities, Equipment, supplies or
provision of services by Manager’s personnel which, directly or indirectly,
could adversely affect rendition of services of high quality on a consistent
basis.


 


(h)                   Physician
Compensation. Subject to Manager’s obligations under Section 5(c),
the Medical Group shall be solely responsible for the satisfaction of any and
all obligations with respect to any Physician it retains, employs or contracts
to provide professional services at the Offices. Such obligations shall
include, but not be limited to, payment of all federal and state withholding
and payroll taxes applicable to Physicians, compliance with federal and state
wage-hour obligations (including overtime), workers’ compensation obligations,
unemployment insurance obligations and other applicable taxes and contributions
to government mandated employment related insurance and similar programs. At
the request of Manager, the Medical Group shall provide Manager with
certificates or other evidence reasonably satisfactory to Manager that Medical
Group has complied with such requirements.


 


(i)                       Personal
Expenses. Except as otherwise provided in this Agreement,
the Medical Group shall be solely responsible for all personal and professional
expenses incurred by the Medical Group or its Physicians in rendering radiation
oncology services at the Offices or otherwise, including but not limited to
licensing and registration fees, membership fees and dues in professional
organizations and societies, medical books and journals, and expenses incurred
in attending conventions, meetings and continuing education.


 


(j)                       Medical Records. During the
term of this Agreement, all medical records with respect to Medical Group’s
patients shall remain in the custody and control of Medical Group. Such records
shall be stored at such location or locations as Medical Group shall direct.
Upon any termination of this Agreement, Medical Group, at its own expense,
shall remove such records from such location or locations. Notwithstanding the
foregoing, at all times during the term of this Agreement and thereafter, Manager
shall be provided with access to such records, as requested, for billing and
all other reasonable purposes, subject to applicable law regarding
confidentiality. Manager’s rights set forth in this Section 30 shall expressly
survive any termination of this Agreement.


 


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4.                            Manager
Compensation.


 


(a)                    Manager shall be paid, and
Manager shall accept as payment for all facilities, Equipment, supplies,
personnel and services provided to Medical Group hereunder, an amount equal to
seventy-five percent (75%) of Net Collected Dollars (the “Management Fee”). For
purposes of this Agreement, “Net Collected Dollars” shall mean the gross
collections attributable to radiation therapy services provided by Medical
Group at the Offices during the term of this Agreement, net of refunds,
adjustments and overpayments.


 


(b)                   Payment of the Management
Fee shall be made in accordance. with Section 5(c) below.


 


(c)                    Following the expiration or
other termination of this Agreement for any reason, Manager shall continue to
be entitled to receive the Management Fee based on Net Collected Dollars
attributable to radiation therapy services provided by the Medical Group at the
Offices prior to the expiration or other termination of this Agreement but for
which collections are actually received following such expiration or other
termination of this Agreement.


 


(d)                   The parties hereto have
reviewed and evaluated the compensation to be paid by Medical Group to Manager
for the facilities, Equipment, supplies, personnel and services hereunder and
have determined it to be commercially reasonable, to be commensurate with fair
market value and to not in any way be based upon the volume or value of patient
referrals or any other business generated between the parties hereto or any of
their affiliates.


 


5.                            Billing and
Collections.


 


(a)                    Medical Group shall engage
Financial Services of Southwest Florida, a Florida limited liability company (“FSS”)
to provide billing and collection services on behalf of Medical Group pursuant
to that certain Billing Services Agreement attached hereto as Exhibit C (the “Billing Services
Agreement”).


 


(b)                   All Net Collected Dollars of
Medical Group shall be deposited in a lockbox bank account in the name of
Medical Group (the “Account”) with a bank (“Bank”) mutually agreed upon by the
parties until termination or expiration of this Agreement at which time Medical
Group will assign all rights to and interest in the Account to Manager. Until
such assignment, Manager shall remain a required signatory on the Account and
shall be authorized to make payments from such account on behalf of the Medical
Group, including without limitation, the Management Fee. Medical Group shall
cause FSS to instruct all third party payors to deposit their payments directly
into the Account, Medical Group shall provide the Bank standing instructions
that at the end of each day all of the funds in the Account shall be swept into
another account maintained by Manager at the Bank or by wire transfer to appropriate
accounts) of Manager. Such letter of instruction shall not be altered,
modified, changed or supplemented by the Medical Group absent Manager’s prior
written agreement. Any such alteration, modification or change may be deemed by
Manager as an event of default by the Medical Group under the terms of this
Agreement. To the extent that any Net Collected Dollars are not sent directly
to the Account as required by this Agreement, or are received by Medical Group,
such collection shall be immediately remitted, in the form received, to the
Account immediately upon receipt by


 


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Medical Group. This Section 5(b)
shall expressly survive any termination or expiration of this Agreement.


 


(c)                    The parties
acknowledge that all collections of Medical Group shall be used to pay, subject
to the terms hereof, any amounts due Manager hereunder or due FSS pursuant to
the Billing Services Agreement, until such amounts are paid in full. On or
before the 15th day after each month, Manager shall remit the remaining balance
in the Account to Medical Group.


 


(d)                   So long as any
Management Fee or Billing Services Fee or any other liabilities or obligations
of the Medical Group under this Agreement remain unpaid, Manager shall, to the
extent authorized by law, have a continuing first priority security interest in
all of the accounts receivable of the Medical Group, whether now existing or
hereinafter arising, and all replacements of, and substitutions to, proceeds
and products of any of the foregoing The Medical Group shall promptly execute
and deliver any and all further instruments and documents, arid take all
further action that Manager may request, in order to perfect any security
interest granted or purported to be granted by the Medical Group hereunder in
accordance. Without limiting the generality of the foregoing, the Medical Group
shall execute and file such financing or continuation statements, or amendments
thereto, and such other similar instruments or notices as may reasonably be
deemed necessary or desirable by Manager, or as Manager may otherwise
reasonably request, in order to perfect and preserve the security interests
granted to Manager hereunder. The Medical Group shall promptly provide Manager
with evidence of such filings upon receipt, In addition, Manager shall have the
right, in its sole and absolute discretion, to assign, pledge or subordinate
the security interests granted to Manager hereunder. The parties acknowledge
and agree that this Section 5(d) does not constitute an assignment by the
Medical Group of its Medicare/Medicaid receivables in violation of the Social
Security Act. and the Medical Group is not required to have its
Medicare/Medicaid funds be paid directly to Manager.


 


6.                            Representations
of the Medical Group. The Medical Group hereby makes the following
representations and warranties to Manager, each of which shall be true as of
the date hereof and shall continue to be true during the term of this
Agreement:


 


(a)                    Duly Authorized. This
Agreement has been duly authorized, executed and delivered by the Medical Group
and is binding upon the Medical Group.


 


(b)                   Duly Organized. The Medical
Group is duly organized under the laws of the State of California and
authorized and qualified to do all things required of it under this Agreement.


 


(c)                    Capacity to
Contract. The Medical Group has the capacity and authority
to fulfill the obligations required of it hereunder and nothing prohibits or
restricts the right or ability of the Medical Group to carry out the terms hereof.


 


(d)                   Violations of
Law. Neither the Medical Group nor any agreement, document or instrument
executed or to be executed by it in connection with this Agreement, or anything
provided in or contemplated by this Agreement, does or will violate any applicable
law, rule or regulation or breach, invalidate, cancel, make inoperative or
interfere with, or result in


 


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acceleration of maturity of,
any contract or agreement to which the Medical Group is bound which would
affect Manager’s rights hereundor.


 


7.                            Manager’s
Representations. Manager hereby makes the following representations
and warranties to the Medical Group, each of which shall be true as of the date
hereof and shall continue to be true during the term of this Agreement:


 


(a)                    Duly Authorized. This
Agreement has been duly authorized, executed and delivered by Manager and is
binding upon it.


 


(b)                   Duly Organized. Manager is
duly organized under the laws of the State of California and authorized and
qualified to do all things required of it under this Agreement.


 


(c)                    Capacity to
Contract. Manager has the capacity and authority to fulfill
the obligations required of it hereunder and, to the best of Manager’s
knowledge and belief, nothing prohibits or restricts the right or ability of
Manager to carry out the terms hereof.


 


(d)                   Violations of
Law. Neither Manager nor any agreement, document or instrument executed or
to be executed in connection with this Agreement, or anything provided in or
contemplated by this Agreement, does or will, to the best of Manager’s
knowledge and belief, violate any applicable law, rule or regulation or breach,
invalidate, cancel, make inoperative or interfere with, or result in
acceleration of maturity of, any contract or agreement to which Manager is
bound which would affect the rights of the Medical Group hereunder.


 


8.                            Independent
Contractors.


 


(a)                    This Agreement is by and
between Manager and Medical Group and is not intended,- and shall not be
construed, to create an employment relationship, partnership or other such
association as between the parties. Each party is an independent contractor of
the other.


 


(b)                   Neither Manager nor its
employees or agents shall look to Medical Group for vacation pay, sick leave,
retirement benefits, Social Security, worker’s compensation, disability or
unemployment insurance benefits, or other employee benefits; nor shall Medical
Group or its employees or agents look to Manager for the same.


 


(c)                    In performing the services
required hereunder, Medical Group and its physician-employees and contractors
shall exercise independent professional judgment. Manager shall not exercise
any control over matters of Medical Group involving the exercise of
professional medical judgment, it being the sole intention of the parties that
the services provided under this Agreement by Manager are to be provided to
Medical Group so as to enable Medical Group to devote the full time and
energies of Medical Group’s physicians to the conduct of Medical Group’s
medical practice at the Offices.


 


(d)                   In the event the Internal
Revenue Service or any other governmental agency shall, at any time, question
or challenge the independent contractor status of either party, the party who
received notice of same shall promptly notify the other party and afford the
other party the opportunity to participate in any discussion or negotiation
with the Internal Revenue Service or other governmental agency, irrespective of
by whom such discussions or negotiations


 


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are initiated, The other
party shall participate in any such discussions or negotiations to the extent
permitted by the Internal Revenue Service or other governmental agency.


 


9.                            No Assignment,
Encumbrance or Unapproved Use. Medical Group shall not;


 


(a)                    assign, mortgage or encumber
this Agreement, or sublease or sublicense the Offices or any part of the
Offices, or permit their use by others for any purpose unless Manager gives its
prior written consent, which consent may be withheld in Manager’s sole
discretion;


 


(b)                   pledge, loan, create a
security interest in, or abandon possession of, the Equipment or the Offices;


 


(c)                    attempt to dispose of the
Equipment or the Offices or any part thereof; or


 


(d)                   cause or permit any liens,
attachments, encumbrances, charges or legal process arising by, through or
under Medical Group, to be incurred or levied on the Equipment or the Offices
or any part thereof; or


 


(e)                    take any action that would
adversely affect Manager’s title or interest in the Offices or the Equipment.


 


Any action taken by Medical
Group in contravention of the provisions of this Section shall be void ab
initio.


 


10.                      Default by
Medical Group.


 


(a)                    The occurrence of any one of
the following shall constitute a default by Medical Group hereunder:


 


(i)                                     if Medical
Group fails to pay the Management Fee when due;


 


(ii)                                  If Medical
Group attempts to or actually does remove, sell, transfer, encumber, sublease,
sublicense or part with possession of the Equipment, or vacates or abandons the
Offices;


 


(iii)                               if Medical
Group materially breaches any of its representations, warranties or covenants
under this Agreement and such breach remains uncured for a period of thirty
(30) days after delivery of written notice thereof to Medical Group from
Manager, or, if such breach cannot be cured within thirty (30) days, Medical
Group has failed to commence to cure such breach within such thirty (30) day
period and diligently proceeded to effect such cure;


 


(iv)                              if Medical
Group or any of its Physicians (A) ceases to practice medicine, in the
specialty of radiation therapy; (B) makes an assignment for the benefit of
creditors; (C) admits in writing its inability to pay its debts as they become
due; (D) files a petition seeking reorganization, an arrangement, readjustment,
or similar arrangement under any present or future statute, law or regulation; (E)
files an answer admitting the material allegations of a petition filed against
it in any such proceeding; or (F) consents to or acquiesces in the


 


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appointment of a trustee,
receiver or liquidator of all or any substantial part of its assets or
properties;


 


(v)                                 if within sixty
(60) days after the commencement of any proceedings against Medical Group
seeking reorganization or similar relief under any present or future statute,
law or regulation, such proceedings shall have not been dismissed, or if within
sixty (60) days after the appointment (without Medical Group’s consent or
acquiescence) of any trustee, receiver or liquidator of all or any substantial
part of its assets or properties, such appointment shall not have been vacated;
or


 


(vi)                              if Medical
Group is determined, by an appropriate governing body or court, to have
violated any applicable law, rule, regulation or ethical standard related to
the conduct of the practice of medicine which results in Medical Group being
unable to provide professional medical services.


 


(b)                   Upon a default by Medical
Group which has not been cured within the applicable cure period, Manager shall
have the right to immediately terminate this Agreement.


 


11.                      Default by
Manager.


 


(a)                    The occurrence of any one of
the following shall constitute a default by Manager hereunder.


 


(i)                                     If Manager
materially breaches any of its representations, warranties or covenants under
this Agreement and such breach continues uncured for a period of thirty (30)
days after written notice thereof to Manager from Medical Group or, if such
failure cannot be cured within such thirty (30) day period, Manager has failed
to commence to cure such failure within such thirty (30) day period and
diligently proceed to effect such cure;


 


(ii)                                  If Manager: (A)
makes an assignment for the benefit of creditors; (B) admits in writing its
inability to pay its debt as they become due; (C) files a petition seeking
reorganization and arrangement, readjustment or similar arrangement under the
present or future statute, law or regulation, if any present or future; (D) files
an answer admitting the material allegations of a petition filed against it and
any such-proceeding; or (E) consents to or acquiesces in the appointment of a
trustee, receiver, or liquidator of all or any part of its assets or
properties; or


 


(iii)                               If, within
sixty (60) days after the commencement of any proceedings against Manager
seeking reorganization or similar relief under any present or future statute,
law or regulation, such proceedings shall have not been dismissed, or if within
sixty (60) days after the appointment (without Manager’s consent or
acquiescence) of any trustee, receiver or liquidator of all or any substantial
part of its assets or properties, such appointment shall not have been vacated.


 


(b)                   Upon a default by Manager,
which has not been cured within the applicable cure period, Medical Group shall
have the right to immediately terminate this Agreement.


 


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12.                      Termination.


 


(a)                    Termination. This
Agreement shall terminate upon the following events:


 


(i)                                     the mutual
written agreement of the parties; or


 


(ii)                                  as provided in
Sections 2,10, and/or 11.


 


(b)                      Surrender of
Offices. Upon the termination or expiration of this Agreement, Medical Group,
at its own expense, shall immediately (i) relinquish control of and vacate the
Offices, (ii) return to Manager all Equipment and supplies, (iii) remove all of
its personal property, together with all liens, encumbrances and rights of
others created by or suffered to exist by the actions or inactions of Medical
Group, and (iv) pay all amounts due and owing by Medical Group to Manager in
accordance with the terms of this Agreement.


 


13.                      Restrictive
Covenants.


 


(a)                       At all times
while this Agreement remains in effect Medical Group agrees that it shall not,
directly or indirectly:


 


(i)                                     engage in the
ownership, operation or management of any radiation oncology practice or
facilities or otherwise engage in the provision of radiation oncology services
(whether as a separate business or in conjunction with any other business (a “Competing
Business”) within a 50 mile radius of the Offices (the “Service Area”); or


 


(ii)                                  have any
interest, whether as owner, stockholder, partner, member, director, officer,
employee or consultant in any Competing Business in the Service Area.


 


(b)                      At all times
while this Agreement remains in effect the Medical Group agrees that it shall
not, directly or indirectly, (i) solicit, encourage or advise patients serviced
during the term of this Agreement to obtain or seek professional services from
any professional who is not an employee, independent contractor or shareholder
of Medical Group, or (ii) solicit, encourage or advise any employees of Manager
to terminate employment with Manager for any reason whatsoever. Notwithstanding
the foregoing, nothing in this Agreement is intended, to prevent Medical Group
from referring a patient in need of specialty services not otherwise provided
by Medical Group, or for other reasons in the best interests of the patient, to
another duly licensed professional or facility.


 


(c)                       Medical Group
acknowledges that the restrictive covenants contained in this Section 13 have
unique value to Manager, the breach of which cannot be adequately compensated
in an action of law. Medical Group further agrees that, in the event of the
breach of the restrictive covenants contained herein, Manager shall be entitled
to obtain appropriate equitable relief, including, without limitation, a permanent
injunction or similar court order enjoining either or both of them from
violating any of such provisions, and that pending the hearing and the decision
on the application for permanent equitable relief, Manager shall be entitled to
a temporary restraining order and a preliminary injunction. The prevailing
party shall be entitled to reimbursement from the other party of its reasonable
costs and expenses (including attorneys’ fees and disbursements) of, or related
to, such action or proceeding. No such remedy


 


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shall be construed to be the
exclusive remedy of Manager and any and all such remedies shall be held and
construed to be cumulative and not exclusive of any rights or remedies, whether
at law or in equity, otherwise available under the terms of this Agreement, at
common law, or under federal, state or local statutes, rules and regulations.


 


(d)                      If any court of
competent jurisdiction shall deem any of the restrictive covenants contained in
this Section 13, or portion of any such covenants, too extensive or
unenforceable, the other provisions of this Section 13 shall nevertheless stand
and remain enforceable according to their terms. In such circumstance, the
parties hereto expressly authorize the come to modify such covenants or
offending portion thereof, so that the restrictions, limitations and scope of
the restrictive covenants extend for the longest period, comprise the largest
territory and are enforceable to the maximum permissible extent by law under
the circumstances.


 


14.                      Confidentiality. The terms and
conditions of this Agreement are and shall be treated as confidential, and
shall not hereafter be disclosed by any party hereto or any of their respective
attorneys to any person or entity, except to financial and legal advisors and
others who need to know them to effectuate the purposes of this Agreement, or
as may be required by law. Any individual to whom the terms and conditions of
this Agreement have been disclosed will be advised of and shall abide by the
confidentiality instructions of this Section 14.


 


15.                      Regulatory
Matters.


 


(a)                       In the
performance of their respective obligations hereunder, Medical Group and
Manager shall comply with all applicable regulations and laws (including,
without limitation, applicable zoning regulations and rules and regulations
governing the practice of medicine) and do everything in their power to see to
it that the Offices and the business conducted therein are in compliance with
the rules and regulations of all regulatory bodies, agencies or authorities
having jurisdiction over the Offices and such business.


 


(b)                      The parties
hereto acknowledge and agree that the amounts due to Manager from Medical Group
pursuant to this Agreement have been determined by the parties through good
faith and arm’s length bargaining to be commercially reasonable, to reflect
fair market value and to not in any way be based upon the volume or value of
patient referrals’ or any other business generated between the parties. Manager
and Medical Group enter into this Agreement with the intent of conducting their
relationship and implementing the agreements contained in this Agreement in
full compliance with applicable federal, state and local law, including without
limitation, the Medicare/Medicaid Anti-Kickback statute (the “Anti-Kickback Law”)
and Section 1877 of the Social Security Act (the “Stark Law”), as amended.
Notwithstanding any unanticipated effect of any of the provisions of this
Agreement, neither party will intentionally conduct itself under the terms of
this Agreement in a manner that would constitute a violation of the
Anti-Kickback Law or the Stark Law or any similar California law, rule or
regulation. Without limiting the generality of the foregoing, Manager and
Medical Group expressly agree that nothing contained in this Agreement shall
require either party to refer any patients to the other, or to any affiliate or
subsidiary of the other.


 


12

















 


(c)                       For purposes of
this Section 15, “protected health information”, or PHI, has the meaning
defined by the Standards for Privacy of Individually Identifiable, Health
Information, 45 C.F.R. Part 160 and Subparts A and E of Part 164 (the “Privacy
Standards”), as promulgated by the Department of Health and Human Services (“HHS”)
pursuant to the Administrative Simplification provisions of the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”). Medical Group
agrees to implement appropriate administrative, technical and physical
safeguards to limit incidental disclosures of PHI, and Manager agrees to meet
all requirements and obligations contained in the Business Associate Exhibit attached
hereto as Exhibit D and
incorporated herein by reference.


 


(d)                      In the event
that any law, rule, or regulation applicable to this Agreement or any rule or
policy of any third-party payor, or any policy, or any interpretation thereof
at any time during the term of this Agreement is modified, implemented,
threatened to be implemented, or determined to prohibit, restrict or in any way
materially change the terms of this Agreement, or by virtue of the existence of
this Agreement has or will have a material adverse affect on either party or
their respective affiliates or on the ability of either party to this Agreement
to engage in any commercial activity on terms at least as favorable to that
party as those reasonably attributable as of the date hereof (each of the
foregoing being referred to herein as a “Change”), then the parties to this
Agreement shall negotiate in good faith to amend this Agreement to the minimum
degree necessary in a manner consistent with such change and the intent of the
parties. If the parties are unable to reach agreement as to any such amendment
reasonably necessary to remove the jeopardy contemplated herein, within sixty
(60) days, this Agreement shall thereafter automatically terminate.


 


(e)                       Federal
Reporting. Upon written request, the parties shall make
available for a period of four (4) years after the furnishing of services under
this Agreement to the Secretary of the U.S. Department of Health and Human
Services, or any of its duly authorized representatives, this Agreement and any
of the parties’ books, documents, and records that are necessary to certify the
nature and extent of costs incurred pursuant to this Agreement and which are
required to be made available under the Omnibus Reconciliation Act of 1980,
Pubic Law 96-499, Section 952, or any regulation promulgated thereunder.
Further, if Manager carries out any of its duties under this Agreement through
a subcontract or assignment with a value or, cost of $10,000 or more over a
twelve (12) month period, such contract shall contain a clause to the effect
that the contracting organization shall furnish its books, documents, and
records upon request as described to verify the nature and extent of costs.


 


16.                      Miscellaneous.


 


(a)                       Notices. Any notice or
other communication required or which may be given hereunder shall be in
writing and shall be delivered personally, sent by certified mail, postage
prepaid, return receipt requested or by a nationally recognized overnight
courier, and shall be deemed given when so delivered personally or by
facsimile, or if mailed, five (5) days after the date of mailing as follows:


 


	
  If to Manager:

  	
  21st Century Oncology-CHW, LLC

  
	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
  Fort Myers, Florida 33907

  



 


13

















 


	
   

  	
  Attention: David N.T.
  Watson, Vice President

  
	
   

  	
   

  
	
  With a copy to:

  	
  Radiation Therapy
  Services, Inc.

  
	
   

  	
  111 Great Neck Road

  
	
   

  	
  Great Neck, New York 11021

  
	
   

  	
  Attention: Norton Travis, Esq.,
  Executive Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Garfunkel, Wild &
  Travis, P.C.

  
	
   

  	
  111 Great Neck Road

  
	
   

  	
  Great Neck, New York 11021

  
	
   

  	
  Attention: Greg E. Bloom, Esq.

  
	
   

  	
   

  
	
  If to Medical Group:

  	
  Redding Radiation
  Oncologists, P.C.

  
	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
  Fort Myers, Florida 33907

  



 


or to such other address and
to the attention of such other person(s) or officer(s) as either party may
designate by written notice.


 


(b)                      Governing Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of California without regard to principles of conflicts of law.


 


(c)                       Further
Instruments. At any time and from time to time, each party
shall, without further consideration and at its own expense, take such further
actions and execute and deliver such further instruments as may be reasonably
necessary to effectuate the purposes of this Agreement.


 


(d)                      Entire
Agreement. This Agreement (including the exhibits hereto)
contains the entire understanding between the parties hereto with respect to
the transactions contemplated hereby and supersedes all prior agreements
between them, written or oral.


 


(e)                       Severability. In the event
that any term or provision of this Agreement is held to be illegal, invalid or
unenforceable under any applicable law, rule or regulation, such term or
provision shall be deemed severed from this Agreement and the remaining terms
and provisions shall remain unaffected thereby provided the invalid term does
not materially alter the basic purpose or intent of this Agreement.


 


(f)                         Assignment. Successor
Medical Group agrees to use its best efforts to obtain its own Medicare and
Medi-Cal provider numbers and participation agreements as soon as practicable
and in no event later than January 1, 2009, at which time Medical Group agrees
to transfer all of its right, title and interest in the Offices to Successor
Medical Group and to assign


 


14

















 


this Agreement to Successor
Medical Group, and Successor Medical Group agrees to accept such transfer and
assignment and to assume all of Medical Group’s duties and obligations under
this Agreement for the period on and after the date of such assignment. After
such assignment and assumption, all references herein to “Medical Group” shall
be deemed to refer to Successor Medical Group, and the parties shall promptly
prepare and execute a restated agreement deleting 21st Century Oncology of
California, a Medical Corporation as a party to this Agreement. Except as
provided in the preceding sentences of this Section 16(f), no party shall
assign any of its rights or obligations under this Agreement without the
express, prior written consent of the other parties.


 


(g)                      Waiver of Breach. No waiver of
a breach of any provision of this Agreement shall be construed to be a waiver
of any breach of any other provision of this Agreement or of any succeeding
breach.


 


(h)                      Amendments. This
Agreement shall not be changed or modified except by an instrument in writing
executed by both parties hereto. Without limiting any other provision herein,
in the event that rules, policies, directives and/or orders of the United
States Department of Health and Human Services or any other applicable federal,
state, or local agency or third-party payor necessitate modifications or
amendments to this Agreement, the parties hereto agree to so modify or amend
this Agreement to conform with such rules, policies, directive and/or orders,
provided they do not materially affect the duties and obligations of the
parties hereunder.


 


(i)                          Dispute
Resolution. In the event that a dispute shall occur between
the parties under this Agreement, either party may give a written notice
thereof to the other party (a “Dispute Notice”). Upon the giving of a Dispute
Notice, the parties shall use reasonable efforts to resolve the dispute. “Reasonable
efforts” shall include discussions over not less than a 30-day period,
including at least two in-person meetings between representatives of each party
who have authority to commit the party to an agreed resolution of the dispute.
If after reasonable efforts the dispute has not been resolved, either party may
elect to arbitrate the dispute by giving written notice to the other party (an “Arbitration
Notice”). Within 20 days after the date an Arbitration Notice is given, the
parties shall jointly select an independent third party to arbitrate the
dispute, or, if the parties are unable to agree on an arbitrator within such 20
day period, each party, shall, within 10 days after the end of such 20-day
period, submit such dispute to binding arbitration in accordance with the
alternative dispute resolution process established by the American Health
Lawyers Association (“AHLA”). The arbitrator or arbitrators so chosen shall
resolve the dispute in a manner that is consistent with the charitable purposes
and policies set forth in Sections 3.2 through 3.7 of the Manager’s Operating
Agreement. The arbitrators) shall have the authority to order specific performance
by either party under this Agreement, but in no event shall any arbitrator have
the power to require any action that would be inconsistent with the provisions
of Sections 3.2 through 3.7 of the Manager’s Operating Agreement. Such
arbitration decision will be final and binding on the parties, and may be
enforced through any court having jurisdiction. Unless otherwise required by
the arbitration rules or process, all arbitration sessions shall be conducted
in the State of California. Each party will bear its own costs and expenses
associated with the arbitration proceedings, including costs of witnesses,
travel, attorneys, and other representatives. The general costs and expenses of
the proceedings,


 


15

















 


such as the fees of the
arbitrators and the charges of the AHLA, will be divided equally among the
parties to the dispute.


 


(j)                          Counterparts. This
Agreement may be executed in counterparts including facsimile signature, each
of which shall be considered an original and all of which together shall
constitute one and the same instrument.


 


[Signature
page follows]


 


16

















 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first set forth above.


 


	
   

  	
  21st Century Oncology-CHW, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey A. Pakrosnis

  
	
   

  	
  Name:

  	
  Jeffrey A. Pakrosnis

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  21st Century Oncology of California,
  a Medical

  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David N.T. Watson

  
	
   

  	
  Name:

  	
  David N.T. Watson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Redding
  Radiation Oncologists, P.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David N.T. Watson

  
	
   

  	
  Name:

  	
  David N.T. Watson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  



 


 


FACILITIES AND MANAGEMENT SERVICES AGREEMENT

SIGNATURE PAGE


 

















 


EXHIBIT
A


 


Equipment
List


 


[To
come]


 

















 


EXHIBIT
B


 


Excerpt
from Manager’s Operating Agreement Regarding Operation of Offices


 


3.2                      Charitable
Purposes. The Company and the Centers shall at all times be
operated and managed in a manner that furthers the charitable, religious and
community-based healthcare purposes, mission, vision and values of CHW by
promoting health and providing or expanding access to healthcare services for a
broad cross section of the community. Specifically, and without limiting the
generality of the foregoing, the Company and the Centers shall be operated and
managed in a manner that:


 


(a)                    provides access to patient
care services based on medical necessity, without regard to characteristics
such as a person’s race, religion, creed, national origin, gender, age, sexual
orientation, physician or mental disability, payor source or ability to pay;


 


(b)                   provides access to patient
care services to individuals covered by Medicare, Medicaid/Medi-Cal and other
federal and state governmental payment programs; and


 


(c)                    will not, in the reasonable
opinion of CHW, on advice of CHW’s legal and/or tax counsel, cause CHW to act
other than exclusively in furtherance of its tax exempt purposes or adversely
affect its exempt status under Section 501(c)(3) of the Code.


 


3.3                      Charity Care. Consistent
with CHW’s charitable healthcare mission, the Company shall cause each Center
to:


 


(a)                    Establish and maintain
reasonable financial assistance policies and procedures for the Center, which
are consistent with CHW policies and procedures;


 


(b)                   Effectively communicate its
financial assistance policies and procedures; and


 


(c)                    Provide reasonable levels of
charity care consistent with its financial assistance policies and procedures
based on both historical and actual need and the levels of charity care in the
community.


 


3.4                      Ethical and
Religious Directives. The Company and each Center shall be operated in
compliance with (i) CHW’s Statement of Common Values and (ii) the Ethical and
Religious Directives for Catholic Health Care Services, as adopted and as the
same may be amended from time to time by the United States Conference of
Catholic Bishops.


 


3.5                      Precedence of
Charitable and Religious Purposes; Modification of Fiduciary Duties.
Notwithstanding any provision to the contrary in this Agreement or the Act, any
management agreement, or any other agreement related to the Company or the
Centers, the duty of the Company and its Members, the Board of Managers, and
all officers and managers of the Company to operate and manage the Company and
the Centers in a manner consistent with Sections 3.2,3.3 and 3.4 shall override
any fiduciary or other duty they may have to operate and manage the Company or
the Centers for the financial benefit of the Company or its Members or the
Medical Groups. The Members expressly acknowledge and consent to this
modification of


 


1

















 


the fiduciary duties of the
Members and managers to the Company pursuant to Section 17005 of the Act.


 


3.6                      Operating
Policies and Procedures.


 


(a)                    Conflicts and
Compliance Policies. The Company shall cause each Center to:


 


(i)                                     Be developed,
formed, managed and operated in compliance with all applicable legal and
regulatory requirements;


 


(ii)                                  Establish,
continually maintain and comply with a conflicts of interest policy, which will
apply to the owners, managers and key employees of the Center and be approved
by management of CHW (“CHW Management”);


 


(iii)                               Establish and
continually maintain a compliance program designed to detect and correct
non-compliance, which program will be consistent with recognized standards for
the industry and/or clinical services operated by the and with guidance
provided by the Office of the Inspector General, United States Department of
Health and Human Services; follow guidelines established by the RTSI Chief
Compliance Officer and the CHW Chief Compliance Officer (collectively, the “CCO’s”
for the joint venture compliance programs; and be in place prior to the
commencement of operations;


 


(iv)                              Submit the Center’s
compliance program to review by CHW Management or to self-assessment by the
Company at least annually to ensure its continuous and effective operation and
administration. The CCO’s must approve the method and content of the Center’s
self-assessment process; and


 


(v)                                 Allow for audit
of the Center’s compliance program by the CCO’s, or an appropriate audit firm
mutually agreed to by the CCO’s, upon written request of the CHW Member or RTSI
Member.


 


(vi)                              Notwithstanding
the above, the Center’s compliance program must also be consistent with the
compliance programs and policies of the RTSI Member.


 


(b)                   Quality of Care. The Company
shall cause each Center to adopt, maintain and apply protocols, guidelines,
policies and procedures approved in advance by RTSI Management and CHW
Management that will:


 


(i)                                     Provide for the
delivery of patient care at or above the community standard for the industry
and/or clinical service(s) operated by the Center;


 


(ii)                                  Assure the
operation and maintenance of a safe clinical environment for the delivery of
patient care, including appropriate medical staff credentialing and peer review
processes;


 


(iii)                               Promote
positive outcomes in connection with the delivery of patient care; and


 


2

















 


(iv)                              Allow for the
quantitative measurement and provide for ongoing monitoring by CHW Management
of clinical quality based upon recognized standards for the industry and/or
clinical service(s) operated by the Center.


 


3.7                      Binding on
Managers and Physicians. The Company shall cause each manager under
a management agreement or billing services agreement, as well as each Medical
Group providing professional services at the Centers, to agree to comply with
the covenants set forth in this Section 3, and each such agreement shall
include provisions to that effect.


 


3














 


EXHIBIT
C


 


Billing
Services Agreement


 


[Attached]


 

















 


BILLING
SERVICES AGREEMENT


 


THIS
BILLING AND SERVICES AGREEMENT (this “Agreement”) is made
and entered into effective as of                   
(the “Effective Date”), by and between 21st
Century Oncology of California, a Medical Corporation, a California
professional medical corporation, and Redding
Radiation Oncologists, P.C.,  a
California professional medical corporation (“Client”) and Financial Services of Southwest Florida, LLC, a
Florida limited liability company (“FSS”).


 


RECITALS


 


A.                         FSS is a wholly owned
subsidiary of Radiation Therapy Services, Inc. and is in the business of
providing billing services for radiation oncology medical practices and
facilities.


 


B.                         Client is in the business of
providing radiation oncology services at its medical practice offices located
in Redding, California and Mount Shasta, California (the “Offices”).


 


C.                         Client desires to engage the
services of FSS in order that FSS may provide its experience, skills,
supervision and personnel in connection with the provision of the billing
services described in this Agreement (the “Billing Services”) at the Offices on
behalf of Client, and FSS desires to provide the Billing Services set forth in
and pursuant to this Agreement.


 


D.                         Client and FSS desire to
enter into this Agreement in order to provide a full statement of their
respective rights and responsibilities as set forth herein.


 


E.                           “Client” shall initially be
deemed to refer solely to 21st Century of California, a  Medical Corporation, but after the events
described in Section 16 of this Agreement, “Client” shall be deemed to refer
solely to Redding Radiation Oncologists, P.C.


 


NOW,
THEREFORE, in consideration of the foregoing recitals and the
mutual promises and covenants of the parties hereinafter set forth, and for
their mutual reliance, the parties hereto, intending to be legally bound,
hereby agree as follows:


 


1.                            Billing and
Collection Services. For and in consideration of the payments described
in Section 5 below, FSS shall, except as otherwise expressly provided herein
from and after the Effective Date, be responsible for and shall, as the
exclusive billing and collection agent of the Client, bill and collect all
patient accounts (the “Accounts”) generated by Client at the Offices. In this
regard, FSS shall be and hereby is appointed as Client’s billing and collection
agent consistent with 42 C.F.R. Section 424.80(b)(6). Client shall fully
cooperate with FSS so that FSS may satisfactorily complete its responsibilities
regarding its billing and collection services. FSS shall use its best efforts
to bill and collect on behalf of Client, which duties and responsibilities
shall include, without limitation, the following:


 


(a)                       Patient file
maintenance, including without limitation, data entry and transaction posting
for adjustments and payments, provided, however, that Client shall be
responsible for posting patient demographic data and charges and payments made
in cash by patients, for services performed by Client at the Offices.


 


1

















 


(b)                      Follow-up
activity regarding the billing for patients’ services.


 


(c)                       Referral to
attorneys or other agents of FSS’s choice, after consultation with Client, to
initiate collection of unpaid patient charges when said charges remain unpaid
at least one hundred twenty (120) days from the date of billing.


 


(d)                      Preparation of
reports on a monthly basis (the “Billing and Collections Statements”). The
Billing and Collections Statements shall include, without limitation, (i) a
statement of the amounts billed and collected from patients and Medicare,
private insurance or other third-party payors, (ii) a statement of all deposits
made to the “Client’s Bank Account” (as defined in Section l(e) below), (iii) an
accounts receivable aging schedule, (iv) a list of uncollectible and doubtful
accounts that should be written-off, (v) a daily posting summary, of charges,
payments, and adjustments, and (vi) billing class activity within financial
classes, (vii) aged trial balances by financial class. FSS shall deliver all
reports to Client by not later than the fifteenth (15th) day of each month
during the term of this Agreement. In addition to the Billing and Collections
Statements, Client shall also be responsible for providing to FSS all
information regarding patient co-payments and deductibles received by Client
including, without limitation, the date and amount of such deductibles and
co-payments.


 


(e)                       Deposit of all
patient revenues collected by FSS on behalf of Client into the Client’s Bank
Account. Client shall open (or identify as already existing) a bank account
(the “Client’s Bank Account”) at a bank or other suitable financial institution
to be used solely for depositing the Client’s collected revenues, FSS will not
have access to the Client’s Bank Account for withdrawal or any financial
negotiating purposes. FSS will be provided with an endorsement stamp and
deposit slips at Client’s expense for purposes of making deposits. FSS will
deposit all collected revenues upon the Accounts under this Agreement to the
Client’s Bank Account a minimum of twice weekly.


 


(f)                         Subject to
Client’s responsibilities pursuant to Section 2(a) below, FSS shall be
responsible for providing training to, and continuing education for, all
billing clerks and coders to the proper industry standards and consistent with
industry guidelines.


 


(g)                      FSS shall
provide all software, including all changes to programs of same, relative to
the billing and collection services to be rendered by FSS for and on behalf of
Client.


 


(h)                      Set up and
provide electronic billing to Medicare and Medicaid, as well as private
insurance or other third-party payors which may have such electronic billing
capabilities.


 


(i)                          Client shall
perform those services associated with obtaining insurance information,
consents from patients, charge capture, the entering of patient demographics
and other such services performed at the Offices.


 


(j)                          For purposes of
the duties of FSS as Client’s billing agent, FSS agrees to bill all claims on
behalf of Client within seven (7) business days of FSS’s receipt of the “Patient
Information” (as defined below), FSS shall provide Client with written notice
(the “Billing Notice”) of all rejected claims within seven (7) business days of
FSS’s receipt of an applicable Explanation of Benefits (“EOB”). The Billing
Notice shall, in the event that Client has already provided FSS with the
Patient Information, confirm that the claim has been rejected and FSS


 


2

















 


shall rebill the rejected
claim within seven (7) business days of the date of the Billing Notice. In the
event that the EOB identifies information that has not previously been provided
by Client to FSS, then the Billing Notice shall expressly identify the
additional information needed by FSS from Client to rebill the claim, and FSS
shall rebill the rejected claim within seven (7) business days of FSS’s receipt
of such additional information from Client. For the purposes of this Agreement,
“Patient Information” shall, unless subsequently modified by state or federal
law, be defined to mean:


 


(i)                           Patient
demographic information such as patient name, address, age and telephone
number, and, if possible, a photocopy of the patient’s driver’s license, passport
or other identification card;


 


(ii)                        When
applicable, patient insurance information, including, when applicable, the
patient’s plan or group number and a photocopy of the patient’s insurance card;
and


 


(iii)                     Patient and encounter
form/charge tickets including the following information:


 


(1)                                  ICD 9 Code and
diagnosis;


 


(2)                                  Evidence of any
referral required by a third party payor;


 


(3)                                  Third party
payor pre-authorization number, as applicable;


 


(4)                                  Date and place
of service;


 


(5)                                  Name of
physician providing service; and


 


(6)                                  Such other “protocols”
described by third party payors from time to time.


 


2.                            Client
Responsibilities.


 


(a)                       At all times
during the term of this Agreement, Client shall be responsible for the codes
assigned to patient charts, including, but not limited to, the accuracy,
legality and appropriateness of such codes; the accuracy of fee schedules; and
the accuracy of all other data provided to Client (collectively, “Coding Data”).


 


(b)                      At all times
during the term of this Agreement, Client shall be responsible for providing to
FSS all information regarding the receipt of any patient co-payments or
deductibles, including the date and amount of such co-payments and deductibles.


 


3.                            Designation of
Account Manager and Other Personnel. FSS shall designate an
individual as Client’s account manager (the “Account Manager”) who shall be
primarily responsible for the Accounts and the performance by FSS of the terms
of this Agreement. The Account Manager shall further serve as the liaison of
FSS to the Client, At Client’s request from time to time, the Account Manager,
as well as any FSS personnel assigned to be on the Client’s


 


3

















 


site, may be removed and
another individual, who is mutually acceptable to Client and FSS, shall be
designated as Account Manager.


 


4.                            Term. The term of
this Agreement shall commence as of the Effective Date and shall, unless
terminated sooner as provided herein, continue for an initial term often (10) years
after the Effective Date. Thereafter, this Agreement shall automatically renew
for up to two successive 5-year renewal terms, unless either party gives the
other party a written notice of non- renewal at least 90 days before the
beginning of any renewal term.


 


5.                            Compensation. As full and
complete compensation for the Billing Services performed by FSS, Client shall
pay FSS an amount equal to five percent (5%) of the “net patient revenues”
collected by FSS for and on behalf of Client in the ordinary course of its
business (the “Billing Fees”)- For purposes of this Section 5, the term “net
patient revenues” shall mean gross collected revenues, less any offsets,
recoupments, refunds, co-payments, deductibles, or reapplication of revenues in
order to address adjustments by third party payors including, without
limitation, Medicare or Medicaid. The Billing Fees shall be paid by Client to
FSS on a monthly basis, based upon the patient revenue collected by FSS for the
particular month and shall be payable by Client to FSS on or before the fifteenth
(15th) day of the month following the month for which payment is due.


 


6.                            Confidentiality. FSS
acknowledges and agrees that, in the course of the performance of its duties
under the terms of this Agreement, FSS may or will gain access to Confidential
Information of Client, For the purposes of this Agreement, “Confidential
Information” shall mean any and all information, written or oral and regardless
of the medium in which produced, communicated or stored, regarding Client or
Client’s business, business plans, trade secrets, and operations, and
including, without limitation, the pricing utilized by Client, Client’s
contracts, Client’s patient lists, fee schedules and Client’s patients
(including patient identity, diagnosis and medical history). FSS agrees that,
without Client’s prior written consent which consent may be granted, withheld,
revoked or rescinded in Client’s sole discretion, FSS shall not release,
disclose, disseminate or publish any Confidential Information except to the
extent necessary for FSS to perform its services under the terms of this
Agreement and, in the context of information regarding patient information,
then and in that event FSS shall publish only such information as may be
minimally necessary and, in all events, consistent with the respective patient
consents. Except as otherwise expressly provided above, FSS shall, and shall
cause all of its employees and agents to, treat and maintain all Confidential
Information as confidential. FSS acknowledges and agrees that any violation of
this Section 6 by FSS, its employees or agents, shall result in immediate and
irreparable harm to Client, the dollar value of which will be difficult, if not
impossible, to identify. Therefore, Client shall, in addition to all other
remedies available at law or in equity to Client, for a violation of this Section
6, FSS further acknowledges and agrees that Client shall be entitled to all
equitable remedies including, without limitation, injunctive relief and
specific performance, necessary to prevent a breach or threatened breach of
this Section 6 by FSS, its employees or agents.


 


7.                            No Assignment
of Benefits. The parties acknowledge and agree that this
Agreement is not intended to constitute, and shall not be construed or deemed
to constitute, an assignment of benefits within the meaning of Section 1842(b)(6)(a)
of the Social Security Act, 42 U.S.C. § 1395(n)(b)(6)(a), and the Rules and
Regulations promulgated thereunder.


 


4

















 


8.                            Access to Books
and Records by Third Parties. In addition to the other
obligations of FSS described herein, FSS agrees that, to the extent requited by
Section 1861(v)(l)(i) of the Social Security Act or similar state or federal
law, if the cost or value of this Agreement is Ten Thousand Dollars ($10,000)
or more over any twelve (12) month period, then, until the expiration of four (4)
years after the furnishing of services provided for under this Agreement, FSS
will make available to the secretary, U.S. Department of Health and Human
Services, the U.S. Comptroller General, and their representatives, this
Agreement and all books, documents and records necessary to certify the nature
and extent of the costs of those services.


 


9.                            Compliance With
Laws.


 


(a)                       General
Compliance. In connection with the performance of this
Agreement, Client and FSS agree to comply in all material respects with all
applicable laws. Any party receiving any notice of any pending inspection or
violation of such law with respect to the Offices or the Accounts and the
operation thereof shall immediately notify the other party. Further, FSS shall
and shall cause each of its employees and agents to perform his or her duties
and responsibilities hereunder, to (a) conduct all activities in compliance
with applicable laws and regulations, (b) promote the highest standards of
business ethics and integrity, (c) maintain the confidentiality of patient
information and protect confidential and proprietary information about
employees and the organization, (d) conduct activities and relationships with
others so as to avoid conflicts of interest, in appearance or fact, (e) conduct
business transactions with suppliers, contractors, vendors and other third
parties at arms-length and free from offers or solicitation of gifts and favors,
or other improper inducements, and (f) exercise responsible stewardship to
preserve and protect Client’s assets by making productive and effective use of
Client’s resources.


 


(b)                      Fraud and Abuse. Client and
FSS agree not to engage, and agree to prohibit all persons and entities
providing services pursuant to this Agreement from engaging in, any activities
which are prohibited under Section l320a-7b of Title 42 of the United States
Code or the regulations promulgated thereunder, or related state or local
statutes or regulations, or which are prohibited by rules of professional
conduct, including, but not limited to, the following: (i) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (iii) any
failure by a claimant to disclose knowledge of the occurrence of any event
affecting the initial or continued right to any benefit or payment on its own
behalf or on behalf of another, with the intent to fraudulently jiecure such
benefit or payment; and (iv) knowingly and willfully soliciting or receiving
any remuneration (including any kickback, bribe or rebate) directly or
indirectly, overtly or covertly, in cash or in kind, or offering to pay or
receive such remuneration (x) in return for referring an individual to a person
for the furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare or Medicaid, or (y) in
return for purchasing, leasing or ordering or arranging for, or recommending,
purchasing, leasing or ordering any good, facility, service or item for which
payment may be made in whole or in part by Medicare or Medicaid or any other
Federal health insurance reimbursement program.


 


5

















 


(c)                       HIPAA. FSS
acknowledges that it meets the definition of a “business associate” set forth
in the regulations adopted pursuant to the Health Insurance Portability and
Accountability Act (hereinafter, the Health Insurance Portability and
Accountability Act and its implementing regulations (including, without
limitation, the privacy and security regulations adopted at 45 C.F.R. Parts 160
and 164) as they may be amended from time to time are collectively referred to
as “HIPAA”), and that this Agreement is subject to the requirements for business
associate contracts with health care providers which involve the use of
individually identifiable health information (“Protected Health Information”),
including the provisions of the Business Associate Exhibit attached hereto as Exhibit
A and incorporated herein by reference, with which FSS agrees to comply.
FSS acknowledges that Client will be providing Protected Health Information to
FSS in order for FSS to carry out its obligations under this Agreement. FSS may
use and disclose the Protected Health Information only for the purposes of
performing its obligations under this Agreement, the proper management and
administration of FSS, and the provision of aggregation services relating to
the health care operation of Client. It may not utilize or disclose such
Protected Health Information for any other purpose. FSS shall not use Protected
Health Information in any manner that would constitute a violation of HIPAA if
such use were by Client.


 


10.                      Termination.


 


(a)                       Client may
terminate this Agreement if, subject to the provisions of Section 10(c) below,
FSS defaults in the performance of any material covenant, agreement, term or
provision of this Agreement.


 


(b)                      FSS may
terminate this Agreement if, subject to the provisions of Section 10(c) below,
Client defaults in the performance of any material covenant, agreement term or
provision of this Agreement.


 


(c)                       Upon the
occurrence of any of the foregoing, the non-defaulting party shall be required
to provide written notice to the defaulting party of the particular event of
default and the defaulting party shall thereafter have thirty (30) days in.
which to cure said default, or if the defaulting party is unable to cure said
default within said thirty (30) day period, the defaulting party shall have an
additional ten (10) business days in which to take substantial steps toward
curing said default. If the defaulting party shall not have cured said default
or taken substantial steps in curing said default within the additional ten (10)
business day period, then at the option of the non-defaulting party, and upon
providing further written notice to the defaulting party, this Agreement shall
terminate as of the date of said notice.


 


(d)                      In the event of
termination of this Agreement by Client pursuant to Section 10(a) above, FSS
shall deliver to Client, after and conditioned upon full payment to FSS of all
undisputed fees owed to FSS by Client under this Agreement, a complete list of
existing accounts receivable (all debit and credit balances) in an industry
standard electronic format, including data layout and/or translation tables.


 


6

















 


11.                      Indemnification.


 


(a)                       Client shall
indemnify and hold harmless FSS from and against all claims, suits,
obligations, liabilities, damages and expenses, including without limitation
reasonable attorneys fees (“Losses”), based upon, arising out of or resulting
from (i) any and all claims of any third party for alleged liabilities related
to Client’s submission to FSS of inaccurate Coding Data, (ii) any negligent
acts or omissions of any Client employee or shareholder, (iii) any claims of
professional liability resulting from the acts or omissions of any Client
employee or independent contractor, and (iv) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and expenses,
including without limitation, reasonable legal fees and expenses, incident to
any of the foregoing or incurred in attempting to oppose the imposition
thereof, or in enforcing this indemnity.


 


(b)                      FSS agrees to
indemnify, hold harmless and defend Client, its officers, directors,
shareholders, employees and agents (the “Client Group”) from and against any
and all claims, demands or actions, including reasonable attorneys’ fees and
litigation expenses, based upon or arising out of gross negligence or willful
misconduct by FSS or its employees or agents. FSS shall have no obligation to
indemnify or hold the Client Group harmless in the event of any error in or
omission of information submitted by the Client Group or liability otherwise
attributable to the Client Group.


 


12.                      Power of Attorney. Client hereby
designates, makes, constitutes and appoints FSS (and all persons designated by
FSS from time to time, as approved by Client) for the term of this Agreement
and for purposes accomplishing the duties set forth in therein above, as Client’s
true and lawful attorney and agent-in-fact, and FSS, and any agent of FSS, may
without notice to Client execute, endorse, accept and deliver in the name of
Client, any and all checks, orders, drafts or any other instrument evidencing
the right to payment and receive cash or any other form of payment in the name
of, and on behalf of, Client and shall be, and hereby is, authorized to deposit
any and all funds collected in a deposit account for the benefit of Client.


 


13.                      Notices. Any notice or
other communication required or which may be given hereunder shall be in
writing and shall be delivered personally, sent by certified mail, postage
prepaid, return receipt requested or by a nationally recognized overnight
courier, and shall be deemed given when so delivered personally or by
facsimile, or if mailed, three (3) days after the date of mailing as follows:


 


	
  If to FSS:

  	
  Financial Services of
  Southwest Florida, Inc.

  2234 Colonial Boulevard

  Fort Myers, Florida 33907

  Attention: David N.T. Watson, Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Client:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
  Radiation Therapy
  Services, Inc.

  111 Great Neck Road

  	
   

  



 


7

















 


	
   

  	
  Great Neck, New York 11021

  Attention: Norton Travis, Esq.

  	
   

  



 


or to such other address and
to the attention of such other person(s) or officer(s) as either party may
designate by written notice.


 


14.                      Governing Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of California without regard to principles of conflicts of law.


 


15.                      Independent
Contractor. FSS is retained by Client only for the purposes
and to the extent set forth in this Agreement, and this relationship with
Client during the term of this Agreement shall be that of an independent
contractor. FSS shall not be deemed an employee, agent, partner, joint
venturer, officer, principal, associate, or other representative of Client.
Each party hereto shall pay for all Social Security, withholding tax,
unemployment insurance, workers’ compensation insurance, and all other similar
expenses with respect to its own employees and will indemnify the other against
all loss, damage, expense, claims and liabilities resulting from the failure to
pay same. Additionally, as an independent contractor, FSS shall be free to
dispose of such portions of its entire time, energy and skill as it is not
obligated to devote hereunder to Client in such a manner and to such persons,
corporations or other entities as it deems advisable.


 


16.                      Assignment. Redding
Radiation Oncologists, P.C. (“Redding PC”) agrees to use its best efforts to
obtain its own Medicare and Medi-Cal provider numbers and participation
agreements as soon as practicable and in no event later than January 1, 2009,
at which time 21st Century Oncology of California, a Medical Corporation (“21st
Century PC”) agrees to assign this Agreement to Redding PC, and Redding PC
agrees to accept such transfer and assignment and to assume all of 21st Century
PC’s duties and obligations under this Agreement for the period on and after
the date of such assignment. After such assignment and assumption, all
references herein to “Client” shall be deemed to refer to Redding PC, and the
parties shall promptly prepare and execute a restated agreement deleting 21st
Century PC as a party to this Agreement. Except as provided in the preceding
sentences of this Section 16, nothing in this Agreement shall permit assignment
by Client without the express prior written consent of FSS. FSS upon reasonable
notice shall have the right, without the consent of Client, to assign all or
any portion of its rights, duties and obligations under this Agreement to any
subsidiary or other affiliate of FSS.


 


17.                      Attorney’s Fees. In the event
of a dispute hereunder, the prevailing party shall be entitled to all of its
costs inclined in connection with the disposition of such dispute, including,
without limitation, reasonable attorneys’ fees and costs through all trial and
appellate levels and post judgment proceedings.


 


18.                      Further
Instruments. At any time and from time to time, each party
shall, without further consideration and at its own expense, take such further
actions and execute and deliver such further instruments as may be reasonably
necessary to effectuate the purposes of this Agreement.


 


8

















 


19.                      Entire
Agreement. This Agreement (including the exhibits hereto)
contains the entire understanding between the parties hereto with respect to
the transactions contemplated hereby and supersedes all prior agreements
between them, written or oral.


 


20.                      Severability. In the event
that any term or provision of this Agreement is held to be illegal, invalid or
unenforceable under any applicable law, rule or regulation, such term or
provision shall be deemed severed from this Agreement and the remaining terms
and provisions shall remain unaffected thereby provided the invalid term does
not materially alter the basic purpose or intent of this Agreement.


 


21.                      Waiver of
Breach. No waiver of a breach of any provision of this Agreement shall be
construed to be a waiver of any breach of any other provision of this Agreement
or of any succeeding breach.


 


22.                      Interpretation. No provision
of this Agreement shall be interpreted for or against either party because that
party’s legal representative drafted such provision, it being recognized that
the parties hereto have contributed substantially and materially to its
preparation and that this Agreement has been the subject of and is the product
of negotiations between the patties. This Agreement shall be construed
according to its fair meaning and as if prepared by all parties hereto.


 


23.                      Amendments. This
Agreement shall not be changed or modified except by an instrument in writing
executed by both parties hereto. Without limiting any other provision herein,
in the event that rules, policies, directives and/or orders of the United
States Department of Health and Human Services or any other applicable federal,
state, or local agency or third-party payor necessitate modifications or
amendments to this Agreement, the parties hereto agree to so modify or amend
this Agreement to conform with such rules, policies, directive and/or orders,
provided they do not materially affect the duties and obligations of the
parties hereunder.


 


24.                      Counterparts. This
Agreement may be executed in counterparts, each of which shall be considered an
original and all of which together shall constitute one and the same
instrument.


 


25.                      Dispute
Resolution. In the event that a dispute shall occur between
the parties under this Agreement, either party may give a written notice
thereof to the other party (a “Dispute Notice”). Upon the giving of a Dispute
Notice, the parties shall use reasonable efforts to resolve the dispute. “Reasonable
efforts” shall include discussions over not less than a 30-day period,
including at least two in-person meetings between representatives of each party
who have authority to commit the party to an agreed resolution of the dispute.
If after reasonable efforts the dispute has not been resolved, either party may
elect to arbitrate the dispute by giving written notice to the other party (an “Arbitration
Notice”). Within 20 days after the date an Arbitration Notice is given, the
parties shall jointly select an independent third party to arbitrate the
dispute, or, if the parties are unable to agree on an arbitrator within such 20
day period, each party, shall, within 10 days after the end of such 20-day
period, submit such dispute to binding arbitration in accordance with the
alternative dispute resolution process established by the American Health
Lawyers Association (“AHLA”). The arbitrator or arbitrators so chosen shall
resolve the dispute in a manner that is consistent with the charitable purposes
and policies referenced in Section 3(e)


 


9

















 


of Client’s Facilities and
Management Services Agreement with 21st Century
Oncology-CHW, LLC. The arbitrator(s) shall have the authority to order specific
performance by either party under this Agreement, but in no event shall any
arbitrator have the power to require any action that would be inconsistent with
the provisions referenced in Section 3(e) of Client’s Facilities and Management
Services Agreement with 21st Century Oncology-CHW, LLC. Such
arbitration decision will be final and binding on the parties, and may be
enforced through any court having jurisdiction. Unless otherwise required by
the arbitration rules or process, all arbitration sessions shall be conducted
in the State of California. Each party will bear its own costs and expenses
associated with the arbitration proceedings, including costs of witnesses,
travel, attorneys, and other representatives. The general costs and expenses of
the proceedings, such as the fees of the arbitrators and the charges of the
AHLA, will be divided equally among the parties to the dispute.


 


[SIGNATURE
PAGE TO FOLLOW]


 


10














 


IN WITNESS
WHEREOF, the parties have executed this Agreement through
their duly authorized representatives effective as of the Effective Date.


 


 


	
  21st
  Century Oncology of California,

  a Medical Corporation, a professional

  medical corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  



 


 


	
  Redding
  Radiation Oncologists, P.C.,

  a California professional medical

  corporation

  	
   

  	
  Financial
  Services of Southwest Florida,

  LLC, a Florida limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  



 


11

















 


EXHIBIT
A


 


Business
Associate Exhibit


 


This Business Associate Exhibit
(“Exhibit”) supplements and is made a part of the Billing Services
Agreement(the “Agreement”), by and between:


 


21st Century Oncology of
California, a Medical Corporation, and Redding Radiation Oncologists, P.C.,
each of which hereby acknowledges that it is a “Covered Entity” [defined in
paragraph l(b) below] and shall hereinafter be referred to as such, and


 


Financial Services of
Southwest Florida, LLC, which hereby acknowledges that it is a “Business
Associate” [defined in paragraph l(a)] and shall hereinafter be referred to as
such,


 


RECITALS


 


Under the Agreement,
Business Associate has access to certain Facility
Data [defined in paragraph l(i)], which includes both patients’
protected health information (“PHP”) [defined in paragraph l(e)] and non-PHI
disclosed or made available by or on behalf of Covered Entity to Business
Associate and derivatives thereof.


 


A.                                   Covered Entity
is required to comply with the Health Insurance Portability and Accountability
Act of 1996, Public Law 104-191 and regulations promulgated thereunder by the
U.S. Department of Health and Human Services (“HIPAA”)
and other laws which protect the privacy, security and confidentiality
of a patient’s PHI; and, in accordance with HIPAA, Covered Entity and Business
Associate are required to enter into a contract containing specific
requirements protecting and restricting the use and disclosure of PHI,


 


1.                                       Definitions


 


(a)                                  “Business Associate” shall have the meaning given
to such term under the Privacy Rule [defined in paragraph l(d) below] and which
includes a third party that performs functions for or on behalf of Covered
Entity and has access to Covered Entity’s PHI and uses such PHI in the
performance of its functions.


 


(b)                                 “Covered Entity” shall have the meaning given to such term
under the Privacy Rule [defined in paragraph l(d)], which includes a hospital,
since it provides health care and transmits health information in electronic
form in the course of its standard functions.


 


(c)                                  “Patient” shall have the same meaning as the term “individual”
under the Privacy Rule [defined in paragraph l(d)] and shall include a person
who qualifies as a personal representative.


 


(d)                                 “Privacy Rule” shall mean the Standards for Privacy of
Individually Identifiable Health Information at 45 CFR 160 and 164, subparts A
and E and amendments thereto.


 


1

















 


(e)                                  “Protected Health Information” (“PHI”) shall have the same
meaning given to such term under HIPAA and shall include any information,
whether oral or recorded in any form or medium, limited to the information
created or received by Business Associate from or on behalf of Covered Entity (i)
that relates to the past, present or future physical or mental condition of the
patient; the provision of health care to patient; or the past, present or
future payment of for the provision of health care to patient; and (ii) that
identifies the patient or with respect to which there is a reasonable basis to
believe the information can be used to identify the patient.


 


(f)                                    “Facility Data” shall mean PHI, disclosed or made available
by or on behalf of Covered Entity to Business Associate, and shall include derivatives
thereof created by Business Associate or his agents.


 


(g)                                 “Designated Record Set” shall have the same meaning
given to such term under HIPAA and shall include patients’ medical or billing
records or any group of records which contains PHI that are used, in whole or
in part, by or for Covered Entity to make decisions about patients.


 


(h)                                 “Data Aggregation” shall have the same meaning given to such
term under HIPAA and shall include the combining of PHI received or created by
Business Associate to permit data analyses relating to healthcare operations of
Covered Entity.


 


(i)                                     “Secretary” shall mean the Secretary of the Department of
Health and Human Services or her/his designee.


 


(j)                                     “Security Incident” means the attempted or
successful unauthorized access, use, disclosure, modification, or destruction
of information or interference with system operations in an information system.


 


2.                                       Permitted Uses and Disclosures by Business Associate


 


(a)                                  Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
or disclose Facility Data only for the benefit of Covered Entity and to perform
functions, activities, or services as specified in the Agreement or the minimum
necessary policies and procedures of Covered Entity. Business Associate
warrants and represents that each of the data elements of any PHI that it may
access or receive from or on behalf of Covered Entity is minimally necessary to
permit Business Associate to provide the services under the Agreement.


 


(b)                                 Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
or disclose Facility Data for the proper management and administration of the
Business Associate or to carry out the legal responsibilities of the Business
Associate, provided that (i) the disclosure is required by law, or (ii) the
Business Associate obtains reasonable assurances from the person to whom the
information is disclosed that such information will remain confidential and
used or further disclosed solely as required by law or for the purpose of
assisting Business Associate to meet Business Associate’s obligations under the
Agreement.


 


(c)                                  Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
PHI to provide data aggregation services only for Covered Entity.


 


2

















 


3.                                       Obligations of Business Associate


 


(a)                                  Business
Associate will not use or disclose Facility Data other than as permitted or
required by the Agreement, this Exhibit or as required by law.


 


(b)                                 Business
Associate will use appropriate safeguards to prevent further use or disclosure
of Facility Data other than as provided for by the Agreement and this Exhibit and
will implement administrative, physical and technical safeguards that reasonably
and appropriately protect the confidentiality, security, integrity and
availability of Facility Data that it receives, maintains, transmits or creates
on behalf of Covered Entity, which in any event shall be no less than the
HIPAA-related implementation recommendations of the NIST/URAC/WEDI Health Care Security Workgroup (see www.wedi.org;  keyword search “NTST” or “URAC”).


 


(c)                                  Business
Associate will promptly mitigate, to the extent practicable, any harmful effect
of a use or disclosure of Facility Data by Business Associate in violation of
the Agreement and this Exhibit.


 


(d)                                 Business
Associate will promptly report to Covered Entity any use or disclosure of
Facility Data not provided for by the Agreement and/or this Exhibit, including
any requests for inspection, copying or amendment of such information. Business
Associate will maintain a record of all such requests for inspection, copying
and amendment(s) of Facility Data not provided for by the Agreement, including
those initiated by Patient, Covered Entity, or third parties, and will promptly
provide such documentation to Covered Entity upon request. Business Associate
will use “best efforts” to promptly report to Covered Entity any Security
Incident of which the Business Associate becomes aware in a manner and time to
permit Covered Entity to timely determine if Covered Entity must report the
Security Incident to the individual as required by law, and to permit Covered
Entity to do so within the time required by law, Business Associate will follow
the incident reporting classification and manner prescribed in CHW’s Investigations and Notification of Privacy and Data
Security Incidents Policy (9.828), a copy of which shall be made
available to Business Associate upon its request. Business Associate shall cooperate
in good faith with Covered Entity in the investigation of any privacy or data
security incident.


 


(e)                                  Business
Associate will ensure in writing that any agent, including a subcontractor, to
whom it provides Facility Data agrees to the same restrictions and conditions
that apply to Business Associate with respect to such information and that such
agent or subcontractor will implement reasonable and appropriate safeguards,
which shall be no less than the HIPAA-related implementation recommendations of
the NIST/URAC/WEDI Health Care Security Workgroup (see www.wedi.org; keyword search “NIST” or “URAC”),
to protect it. Notwithstanding the foregoing or anything to the contrary in the
Agreement or this Exhibit, Business Associate will not use any agent or
subcontractor to perform any service under the Agreement without the express
written consent of an authorized representative of Covered Entity and in which
event, it will use agents, employees or subcontractors that reside only within
the United States of America and only after such agent or subcontractor has.
agreed in writing to comply with the same restrictions and conditions that
apply to Business Associate under the Agreement and this Exhibit with respect
to such information.


 


3

















 


(f)                                    Business
Associate will provide prompt access to Facility Data in designated record sets
to Covered Entity whenever so requested by Covered Entity, or, if directed by
Covered Entity, to a Patient in order to meet the requirements of HIPAA. If
Patient requests directly from Business Associate (i) to inspect or copy his or
her PHI, or (ii) requests its disclosure to a third party, the Business
Associate will promptly notify Covered Entity’s facility privacy official of
such request and await such official’s denial or approval of the request.


 


(g)                                 Business
Associate will promptly make amendment(s) to Facility Data requested by Covered
Entity and will do so in the time and manner requested by Covered Entity to
enable it to comply with HIPAA. If Patient requests an amendment to his or her
PHI, directly from Business Associate, the Business Associate will promptly
notify Covered Entity’s facility privacy official of such request and await
such official’s denial or approval of the request.


 


(h)                                 Business
Associate will promptly make its internal practices, books, records, relating
to the use or disclosure of Facility Data and the policies, procedures, and
documentation for Covered Entity to implement the security measures required
under 45 CFR 164.316 for the protection of PHI that the Business Associate
received from, maintained or created for or on behalf of Covered Entity,
available to Covered Entity or the Secretary, in a time and manner designated
by Covered Entity or the Secretary, to enable the Secretary to determine
compliance with HIPAA.


 


(i)                                     Business
Associate will document and provide to Covered Entity all disclosures of
Facility Data and information related to such disclosures, and will do so in
the time and manner designated by Covered Entity, to enable it to meet security
and privacy law requirements and for an accounting of such disclosures.


 


(j)                                     Business
Associate will cooperate with Covered Entity and its medical staff to preserve
and protect the confidentiality of Facility Data accessed or used pursuant to
the Agreement and will not disclose or testify about such information during or
after the termination of the Agreement, except as required by law.


 


4.                                       Obligations of Covered Entity


 


(a)                                  Covered Entity
will notify Business Associate of any limitation in its notice of privacy
practices in accordance with 45 CFR 164.520 to the extent that such limitation
may affect Business Associate’s permitted use or disclosure of PHI.


 


(b)                                 Covered Entity
will notify Business Associate of any changes in, or revocation of, permission
by Patient to the use or disclosure of PHI, to the extent such changes affect
Business Associate’s permitted or required uses and disclosures of PHI.


 


(c)                                  Covered Entity
will notify Business Associate of any restriction to the use or disclosure of
PHI that Covered Entity has agreed to with a patient to the extent that such
restriction may affect Business Associate’s permitted use or disclosure of PHI.


 


4

















 


5.                                       Effect of Breach of Obligations


 


(a)                                  Should Business
Associate breach any of its obligations herein, Covered Entity will have the
option to do any of the following:


 


(i)                                     Provide
Business Associate an opportunity to cure the breach, to the extent curable,
and end the violation within a reasonable time specified by Covered Entity. If
Business Associate does not cure the breach or end the violation as specified
by Covered Entity, or if the breach is not curable, Covered Entity may
terminate its obligations to Business Associate, including, but not limited to,
its future payment obligations and obligations to provide information,
materials, equipment or resources to Business Associate; or


 


(ii)                                  Immediately
terminate the Agreement, if Covered Entity reasonably determines that Business
Associate (i) has acted with gross negligence in performing its obligations
herein; (ii) is in violation of the law; (iii) willfully violates the privacy
and security provisions of this Exhibit; or (iv) is unable to provide, if
requested, written assurances to Covered Entity of its ability to protect the
confidentiality and security of the Facility Data. Such termination of the
Agreement shall be without prejudice to other legal remedies available to
Covered Entity.


 


(b)                                 Covered Entity
may also report the violation to the Secretary.


 


6.                                       Effect of Termination


 


(a)                                  Upon
termination of the Agreement, Business Associate will promptly return to
Covered Entity all Facility Data, including derivatives thereof or, upon
Covered Entity’s request, destroy such data. This provision shall apply to
Facility Data in the possession of subcontractors or agents of Business
Associate. Upon destruction of Facility Data, Business Associate will certify
in writing that such information has been destroyed. Notwithstanding the
foregoing, Business Associate will notify Covered Entity in writing about its
intent to destroy data within ten (10) days before such date of destruction. If
Covered Entity requests the return of any Facility Data, Business Associate
will comply as requested.


 


(b)                                 If the return
or destruction of Facility Data is infeasible, Business Associate will promptly
notify Covered Entity of the conditions that make such return or destruction
infeasible. Upon mutual determination by the parties that return or destruction
of Facility Data is infeasible, Business Associate will extend the protections
of this Exhibit to such data and will limit its further use or disclosure to
purposes that make its return or destruction infeasible.


 


7.                                       Indemnity


 


Business Associate will
promptly and fully defend, indemnify and hold harmless Covered Entity, its
affiliates and respective officers, directors, agents and employees against all
claims, demands and judgments made or recovered against them for damages
relating to a failure to comply with the terms of this exhibit and/or a breach
of confidentiality of the Facility Data in connection with this Agreement, to
the extent that such damage, injury or death was caused by an act or omission
of Business Associate, its subcontractor or its employees or agents.


 


5

















 


8.                                       [RESERVED]


 


9.                                       No Third Party Beneficiary


 


The provisions and covenants
set forth in this Exhibit are expressly entered into only by and between
Business Associate and Covered Entity, and are only for their benefit. Neither
Business Associate nor Covered Entity intends to create or establish any third
party beneficiary status or right (or the equivalent thereof) in any other
third party and no such third party shall have any right to enforce or enjoy
any benefit created or established by the provisions and covenants in this
Exhibit.


 


10.                                 Amendment


 


The parties agree to
promptly modify or amend this Business Associate Exhibit to permit Covered
Entity to comply with any new laws, rules or regulations that might modify the
terms and conditions herein.


 


6

















 


EXHIBIT
D


 


Business
Associate Exhibit


 


This Business Associate Exhibit
(“Exhibit”) supplements and is made a part of the Management Services Agreement
(the “Agreement”), by and between:


 


21st Century Oncology of
California, a Medical Corporation, and Redding Radiation Oncologists, P.C.,
each of which hereby acknowledges that it is a “Covered Entity” [defined in
paragraph l(b) below] and shall hereinafter be referred to as such, and


 


21st Century Oncology-CHW, LLC, which hereby
acknowledges that it is a “Business Associate” [defined in paragraph 1 (a)] and
shall hereinafter be referred to as such.


 


RECITALS


 


Under the Agreement, Business
Associate has access to certain Facility Data
[defined in paragraph l(f)], which includes both patients’ protected
health information (“PHI”) [defined
in paragraph l(e)] and non-PHI disclosed or made available by or on behalf of
Covered Entity to Business Associate and derivatives thereof.


 


A.                                   Covered Entity
is required to comply with the Health Insurance Portability and Accountability
Act of 1996, Public Law 104-191 and regulations promulgated thereunder by the
U.S. Department of Health and Human Services (“HIPAA”)
and other laws which protect the privacy, security and confidentiality of a
patient’s PHI; and, in accordance with HIPAA, Covered Entity and Business
Associate are required to enter into a contract containing specific
requirements protecting and restricting the use and disclosure of PHI.


 


1.                                       Definitions


 


(a)                                  “Business Associate” shall have the meaning given
to such term under the Privacy Rule [defined in paragraph l(d) below] and which
includes a third party that performs functions for or on behalf of Covered
Entity and has access to Covered Entity’s PHI and uses such PHI in the
performance of its functions.


 


(b)                                 “Covered Entity” shall have the meaning given to such term
under the Privacy Rule [defined in paragraph l(d)], which includes a hospital,
since it provides health care and transmits health information in electronic
form in the course of its standard functions.


 


(c)                                  “Patient” shall have the same meaning as the term “individual”
under the Privacy Rule [defined in paragraph l(d)] and shall include a person
who qualifies as a personal representative.


 


(d)                                 “Privacy Rule” shall mean the Standards for Privacy of
Individually Identifiable Health Information at 45 CFR 160 and 164, subparts A
and E and amendments thereto.


 

















 


(e)                                  “Protected Health Information” (“PHI”) shall have the same
meaning given to such term under HIPAA and shall include any information,
whether oral or recorded in any form or medium, limited to the information
created or received by Business Associate from or on behalf of Covered Entity (i)
that relates to the past, present or future physical or mental condition of the
patient; the provision of health care to patient; or the past, present or
future payment of for the provision of health care to patient; and (ii) that
identifies the patient or with respect to which there is a reasonable basis to
believe the information can be used to identify the patient.


 


(f)                                    “Facility Data” shall mean PHI, disclosed or made available
by or on behalf of Covered Entity to Business Associate, and shall include
derivatives thereof created by Business Associate or his agents.


 


(g)                                 “Designated Record Set” shall have the same meaning
given to such term under HIPAA and shall include patients’ medical or billing
records or any group of records which contains PHI that are used, in whole or
in part, by or for Covered Entity to make decisions about patients,


 


(h)                                 “Data Aggregation” shall have the same meaning given to such
term under HIPAA and shall include the combining of PHI received or created by
Business Associate to permit data analyses relating to healthcare operations of
Covered Entity.


 


(i)                                     “Secretary” shall mean the Secretary of the Department of
Health and Human Services or her/his designee.


 


(j)                                     “Security Incident” means the attempted or successful
unauthorized access, use, disclosure, modification, or destruction of
information or interference with system operations in an information system.


 


2.                                       Permitted Uses and Disclosures by Business Associate


 


(a)                                  Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
or disclose Facility Data only for the benefit of Covered Entity and to perform
functions, activities, or services as specified in the Agreement or the minimum
necessary policies and procedures of Covered Entity. Business Associate
warrants and represents that each of the data elements of any PHI that it may
access or receive from or on behalf of Covered Entity is minimally necessary to
permit Business Associate to provide the services under the Agreement.


 


(b)                                 Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
or disclose Facility Data for the proper management and administration of the
Business Associate or to carry out the legal responsibilities of the Business
Associate, provided that (i) the disclosure is required by law, or (ii) the
Business Associate obtains reasonable assurances from the person to whom the
information is disclosed that such information will remain confidential and
used or further disclosed solely as required by law or for the purpose of
assisting Business Associate to meet Business Associate’s obligations under the
Agreement.


 


(c)                                  Except as
otherwise limited in the Agreement and this Exhibit, Business Associate may use
PHI to provide data aggregation services only for Covered Entity.


 


2

















 


3.                                       Obligations of Business Associate


 


(a)                                  Business
Associate will not use or disclose Facility Data other than as permitted or
required by the Agreement, this Exhibit or as required by law.


 


(b)                                 Business
Associate will use appropriate safeguards to prevent further use or disclosure
of Facility Data other than as provided for by the Agreement and this Exhibit and
will implement administrative, physical and technical safeguards that
reasonably and appropriately protect the confidentiality, security, integrity
and availability of Facility Data that it receives, maintains, transmits or
creates on behalf of Covered Entity, which in any event shall be no less than
the HIPAA-related implementation recommendations of the NIST/URAC/WEDI Health Care Security Workgroup (see
www.wedi.org; keyword search “NIST”
or “URAC”).


 


(c)                                  Business
Associate will promptly mitigate, to the extent practicable, any harmful effect
of a use or disclosure of Facility Data by Business Associate in violation of
the Agreement and this Exhibit.


 


(d)                                 Business
Associate will promptly report to Covered Entity any use or disclosure of
Facility Data not provided for by the Agreement and/or this Exhibit, including
any requests for inspection, copying or amendment of such information. Business
Associate will maintain a record of all such requests for inspection, copying
and amendment(s) of Facility Data not provided for by the Agreement, including
those initiated by Patient, Covered Entity, or third parties, and will promptly
provide such documentation to Covered Entity upon request. Business Associate
will use “best efforts” to promptly report to Covered Entity any Security
Incident of which the Business Associate becomes aware in a manner and time to
permit Covered Entity to timely determine if Covered Entity must report the
Security Incident to the individual as required by law, and to permit Covered
Entity to do so within the time required by law. Business Associate will follow
the incident reporting classification and manner prescribed in CHW’s Investigations and Notification of Privacy and Data
Security Incidents Policy (9.828), a copy of which shall be made
available to Business Associate upon its request. Business Associate shall
cooperate in good faith with Covered Entity in the investigation of any privacy
or data security incident.


 


(e)                                  Business
Associate will ensure in writing that any agent, including a subcontractor, to
whom it provides Facility Data agrees to the same restrictions and conditions
that apply to Business Associate with respect to such information and that such
agent or subcontractor will implement reasonable and appropriate safeguards,
which shall be no less than the HIPAA-related implementation recommendations of
the NIST/URAC/WEDI Health Care Security Workgroup (see www.wedl.org; keyword search “NIST” or “URAC”),
to protect it. Notwithstanding the foregoing or anything to the contrary in the
Agreement or this Exhibit, Business Associate will not use any agent or
subcontractor to perform any service under the Agreement without the express
written consent of an authorized representative of Covered Entity and in which
event, it will use agents, employees or subcontractors that reside only within
the United States of America and only after such agent or subcontractor has
agreed in writing to comply with the same restrictions and conditions that
apply to Business Associate under the Agreement and this Exhibit with respect
to such information.


 


3

















 


(f)                                    Business
Associate will provide prompt access to Facility Data in designated record sets
to Covered Entity whenever so requested by Covered Entity, or, if directed by
Covered Entity, to a Patient in order to meet the requirements of HIPAA. If
Patient requests directly from Business Associate (i) to inspect or copy his or
her PHI, or (ii) requests its disclosure to a third party, the Business
Associate will promptly notify Covered Entity’s facility privacy official of
such request and await such official’s denial or approval of the request.


 


(g)                                 Business
Associate will promptly make amendment(s) to Facility Data requested by Covered
Entity and will do so in the time and manner requested by Covered Entity to
enable it to comply with HIPAA. If Patient requests an amendment to his or her
PHI, directly from Business Associate, the Business Associate will promptly
notify Covered Entity’s facility privacy official of such request and await
such official’s denial or approval of the request.


 


(h)                                 Business
Associate will promptly make its internal practices, books, records, relating
to the use or disclosure of Facility Data and the policies, procedures, and
documentation for Covered Entity to implement the security measures required
under 45 CFR 164.316 for the protection of PHI that the Business Associate
received from, maintained or created for or on behalf of Covered Entity,
available to Covered Entity or the Secretary, in a time and manner designated
by Covered Entity or the Secretary, to enable the Secretary to determine
compliance with HIPAA.


 


(i)                                     Business
Associate will document and provide to Covered Entity all disclosures of
Facility Data and information related to such disclosures, and will do so in
the time and manner designated by Covered Entity, to enable it to meet security
and privacy law requirements and for an accounting of such disclosures.


 


(j)                                     Business
Associate will cooperate with Covered Entity and its medical staff to preserve
and protect the confidentiality of Facility Data accessed or used pursuant to
the Agreement and will not disclose or testify about such information during or
after the termination of the Agreement, except as required by law.


 


4.                                       Obligations of Covered Entity


 


(a)                                  Covered Entity,
will notify Business Associate of any limitation in its notice of privacy
practices in accordance with 45 CFR 164.520 to the extent that such limitation
may affect Business Associate’s permitted use or disclosure of PHI.


 


(b)                                 Covered Entity
will notify Business Associate of any changes in, or revocation of, permission
by Patient to the use or disclosure of PHI, to the extent such changes affect
Business Associate’s permitted or required uses and disclosures of PHI.


 


(c)                                  Covered Entity
will notify Business Associate of any restriction to the use or disclosure of
PHI that Covered Entity has agreed to with a patient to the extent that such
restriction may affect Business Associate’s permitted use or disclosure of PHI.


 


4

















 


5.                                       Effect of Breach of Obligations


 


(a)                                  Should Business
Associate breach any of its obligations herein, Covered Entity will have the
option to do any of the following:


 


(i)                                     Provide
Business Associate an opportunity to cure the breach, to the extent curable,
and end the violation within a reasonable time specified by Covered Entity. If
Business Associate does not cure the breach or end the violation as specified
by Covered Entity, or if the breach is not curable, Covered Entity may
terminate its obligations to Business Associate, including, but not limited to,
its future payment obligations and obligations to provide information,
materials, equipment or resources to Business Associate; or


 


(ii)                                  Immediately
terminate the Agreement, if Covered Entity reasonably determines that Business
Associate (i) has acted with gross negligence in performing its obligations
herein; (ii) is in violation of the law; (iii) willfully violates the privacy
and security provisions of this Exhibit; or (iv) is unable to provide, if
requested, written assurances to Covered Entity of its ability to protect the
confidentiality and security of the Facility Data, Such termination of the
Agreement shall be without prejudice to other legal remedies available to
Covered Entity.


 


(b)                                 Covered Entity
may also report the violation to the Secretary.


 


6.                                       Effect of Termination


 


(a)                                  Upon
termination of the Agreement, Business Associate will promptly return to
Covered Entity all Facility Data, including derivatives thereof or, upon
Covered Entity’s request, destroy such data. This provision shall apply to
Facility Data in the possession of subcontractors or agents of Business
Associate. Upon destruction of Facility Data, Business Associate will certify
in writing that such information has been destroyed. Notwithstanding the
foregoing, Business Associate will notify Covered Entity in writing about its
intent to destroy data within ten (10) days before such date of destruction. If
Covered Entity requests the return of any Facility Data, Business Associate
will comply as requested.


 


(b)                                 If the return
or destruction of Facility Data is infeasible, Business Associate will promptly
notify Covered Entity of the conditions that make such return or destruction
infeasible. Upon mutual determination by the parties that return or destruction
of Facility Data is infeasible, Business Associate will extend the protections
of this Exhibit to such data and will limit its further use or disclosure to
purposes that make its return or destruction infeasible.


 


7.                                       Indemnity


 


Business Associate will
promptly and fully defend, indemnify and hold harmless Covered Entity, its
affiliates and respective officers, directors, agents and employees against all
claims, demands and judgments made or recovered against them for damages
relating to a failure to comply with the terms of this exhibit and/or a breach
of confidentiality of the Facility Data in connection with this Agreement, to
the extent that such damage, injury or death was caused by an act or omission
of Business Associate, its subcontractor or its employees or agents.


 


5

















 


8.                                       [RESERVED]


 


9.                                       No Third Party Beneficiary


 


The provisions and covenants
set forth in this Exhibit are expressly entered into only by and between Business
Associate and Covered Entity, and are only for their benefit. Neither Business
Associate nor Covered Entity intends to create or establish any third party
beneficiary status or right (or the equivalent thereof) in any other third
party and no such third party shall have any right to enforce or enjoy any
benefit created or established by the provisions and covenants in this Exhibit.


 


10.                                 Amendment


 


The parties agree to
promptly modify or amend this Business Associate Exhibit to permit Covered
Entity to comply with any new laws, rules or regulations that might modify the
terms and conditions herein.


 


6