Document:

Exhibit 10.43

 

LEASE AGREEMENT

 

BY
THIS LEASE dated February 1, 2001, TROC BUILDING PARTNERSHIP, a California
general partnership, herein called “Lessor,” leases to COASTAL RADIATION
ONCOLOGY MEDICAL GROUP, INC., a California corporation, herein called “Lessee,”
that certain real property, herein called “the Premises,” in the County of San
Luis Obispo, State of California, commonly known as 274 Heather Court,
Templeton, California, and more particularly described in Exhibit A,
attached hereto.

 

ARTICLE 1. TERM OF LEASE

 

Original Term

 

Section 1.01                             This Lease
shall be for a term of fifteen (15) years, commencing on February 1, 2001,
and ending on January 31, 2016.

 

Extended Term

 

Section 1.02                             Should Lessee
perform all the terms and conditions of this Lease and provided Lessee is not
then in default under the terms of this Lease, Lessee may extend this Lease for
two (2) additional, separate terms of ten (10) years each, commencing
on expiration of the preceding term, by giving Lessor written notice of Lessee’s
desire to extend the term hereof not less than one hundred eighty (180) days
prior to expiration of the preceding term. 
This option to extend the term of this Lease is personal to Lessee and
may not be transferred by Lessee without Lessor’s prior written consent.

 

Hold Over

 

Section 1.03                             Should Lessee
hold over and continue in possession of the Premises after expiration of the
term of this Lease or any extension thereof, Lessee’s continued occupancy of
the Premises shall be considered a month-to-month tenancy subject to all the
terms and conditions of this Lease, except that the base rent shall be in an
amount equal to 100% of the last monthly rent. 
If Lessee fails to surrender the Premises upon the expiration of this
Lease, Lessee shall indemnify and hold Lessor harmless from all loss or
liability, including without limitation, any claims made by any succeeding
tenant founded on or resulting from such failure to surrender.

 

ARTICLE 2. RENT

 

Base Rent

 

Section 2.01                             For the first
year of the term hereof, Lessee agrees to pay to Lessor a fixed rental for the
use and occupancy of the Premises of Thirteen Thousand Two Hundred Eleven
Dollars ($13,211.00) per month, payable on the first (1st) day of each and
every calendar month commencing on February 1, 2001, at 316 S.  Stratford Avenue, Santa Maria, CA 93454, or
at such other place or places as Lessor may from time to time designate by
written notice delivered to Lessee.

 

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Rent Adjustment

 

Section 2.02                             The Base Rent
provided for in Section 2.01 above shall be increased by three percent
(3%) one year after the commencement of the term hereof and annually thereafter
on the same date each calendar year until June 1, 2007.  Commencing on June 1, 2007 the Base Rent
shall be reduced to Nine Thousand Three Hundred Fifty Two Dollars ($9,352.00)
per month.  On June 1 of each
calendar year thereafter, including any exercised options to extend (“the
adjustment date”) the Base Rent shall be adjusted by three percent (3%) per year.

 

Base Rent for Extension Terms

 

(a)                                 In the event
Lessee timely exercises its option to extend the lease term under Section 1.02
above, then within fifteen (15) days of Lessee’s written notice to Lessor of
Lessee’s exercise of such option, Lessor and Lessee shall meet to establish the
Base Rent for the first year of the Extension Term (“Rent Meeting”).  The Base Rent per square foot of leaseable
area in the Premises for the first year of each extension term shall be the
fair market rental value of the Premises, determined in accordance with the
following formula:

 

Vault Sq. Ft. X (Market
Rent x 2.67) + Medical Sq. Ft X (Market Rent)

(divided by) total leaseable square footage

 

= Base Rent per square foot

 

As
used in the above formula, “Vault Sq. Ft.” means the total square footage of
the treatment vaults, other than any treatment vaults added at the Lessee’s
cost and expense.  “Market Rent” is the
current fair market rent per square foot for medical office space in the County
of San Luis Obispo, California on a triple net basis.  This space will be leased (not subleased) and
will be comparable in size, location and quality to the Premises.  “Medical Sq. Ft” refers to all leaseable
space in the Premises other than Vault Sq. Ft. “Total leaseable square footage”
shall be the total leaseable square footage in the Premises determined by
survey.

 

In
the event that the parties cannot agree on the Market Rent for the first year
of an extension term, then within ten (10) days after the Rent Meeting,
Lessor and Lessee shall each specify in writing to the other party its
determination of such Market Rent Rate. 
If either party fails to submit its written determination in accordance
with this Section, the Base Rent for the extension term shall be the
determination submitted by the other party.

 

(b)                                 Within ten (10) days
after the parties have exchanged written determinations, Lessor and Lessee
shall mutually select three commercial realtors within the County of San Luis
Obispo to determine the Market Rent. 
Each such realtor shall (i) be disinterested; (ii) be
qualified to determine the fair market rental rates for real estate similar to
the Premises; and (iii) have been actively engaged in the leasing of
comparable medical space in the County of San Luis Obispo for a period of not
less than five (5) continuous years immediately preceding his or her
appointment.  If Lessor and Lessee are
unable to mutually select three such commercial realtors, then either party, on
behalf of both, may request such appointment by the President of the local
chapter of the California Realtors Association. 
If such Association is not then in existence, either party, on behalf of
both, may request such appointment by the presiding judge of the Superior Court
of the Judicial District in which the property is located.  Each such realtor 

 

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shall submit their respective determinations of
Market Rent for the area in writing to both parties and shall provide the basis
for such determination.

 

(c)                                  The average of
the three written determinations of Market Rent prepared by the realtors so
selected shall be utilized to determine the Base Rent of the Premises for the
initial year of the extension term.  The
costs of the three realtors’ services shall be shared equally by the
parties.  The decision of the realtors
shall be binding upon the Lessor and Lessee.

 

(d)                                 In the event
that the parties have not agreed on the Market Rent or the realtors have not
been selected and the Market Rent determined before the commencement of the
extension term, Lessee shall continue to pay the same lease rate in effect at
the end of the lease year immediately preceding the commencement of the
extension term.  Lessee shall pay such
sum as Base Rent until the initial Base Rent for the extension term is
determined, at which time Lessee shall promptly pay Lessor any additional rent
due by reason of any increase in the Base Rent during the extension term over
the Base Rent previously paid by Lessee. 
If the Base Rent actually paid by Lessee during this period is
ultimately determined to be more than the revised Base Rent as finally
determined as above provided, any such over payment shall constitute a credit
against the revised Base Rent, and that credit shall be applied to the following
month or months until such credit is exhausted.

 

(e)                                  The Base Rent
as above determined shall be subject to increase at the end of the first lease
year of the extension term in the same manner as provided in Section 2.02
above.

 

Taxes, Utilities and Operating Expenses as Additional Rent

 

Section 2.03                             In addition to
the rent specified in Sections 2.01 and 2.02 above, Lessee shall pay, as
additional rent, all Utilities, Insurance, Personal and Real Property
Taxes and Operating Expenses directly to the vendor or creditor for such items,
or otherwise as set forth in this Section 2.03.  If Lessee fails to pay any such amount,
Lessor may in its sole discretion, advance monies to pay such items, and demand
reimbursement in full from Lessee (referred to as “additional rent” herein),
including without limitation any cost, expense, assessment or charge, as well
as interest as provided in this Lease.

 

Utilities

 

(a)                                 Lessee shall
pay, and hold Lessor and the property of Lessor including the Premises, free
and harmless from, all charges for the furnishing of gas, water, sewer,
electricity, telephone service, garbage and trash removal and other public
utilities during the entire term of this Lease or any extension thereof.  All such charges shall be paid by Lessee
directly to the provider of the service and shall be paid as they become due
and payable but in any event before delinquency.

 

Lessee
agrees that Lessor shall not be liable for damages, by abatement of Rent or
otherwise, for failure to furnish or delay in furnishing any service (including
telephone and telecommunication services) or for diminution in the quality or
quantity of any service when the failure, delay, or diminution is entirely or
partially caused by:

 

(i)                                     Breakage
repairs, replacements, or improvements;

 

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(ii)                                  Strike,
lockout, or other labor trouble;

 

(iii)                               Inability to
secure electricity, gas, water, or other fuel at the Building after reasonable
effort to do so;

 

(iv)                              Accident or
casualty;

 

(v)                                 Act or default
of Lessee or other parties; or

 

(vi)                              Any other cause
beyond Lessor’s reasonable control.

 

Such
failure, delay, or diminution shall not be considered to constitute an eviction
or a disturbance of Lessee’s use and possession of the Premises or relieve
Lessee from paying rent or performing any of its obligations under this
Lease.  Lessor shall not be liable under
any circumstances for a loss of or injury to property or for injury to or
interference with Lessee’s business, including loss of profits through, in
connection with, or incidental to a failure to furnish any of the utilities or
services under this Section 2.03. 
Lessor may comply with mandatory or voluntary controls or guidelines
promulgated by any government entity relating to the use or conservation of
energy, water, gas, light, or electricity or the reduction of automobile or
other emissions without creating any liability of Lessor to Lessee under this
Lease as long as compliance with voluntary controls or guidelines does not
materially and unreasonably interfere with Lessee’s use of the Premises.

 

Personal Property Taxes

 

(b)                                 Lessee shall
pay before they become delinquent all taxes, assessments and other charges
levied or imposed by any governmental entity on the furniture, trade fixtures,
equipment and other personal property placed by Lessee in, on or about the
Premises.

 

Real Property Taxes

 

(c)                                  Lessee shall
pay all real property taxes and general and special assessments on the
Premises, including any increases in such taxes and assessments, before they
become delinquent.

 

The
real property taxes and assessments levied against the Premises for the first
and last years of the term hereof shall be prorated between Lessor and Lessee
for purposes of this section as of 12:01 A.M.  on the date of commencement and termination
respectively of this Lease.

 

Lessee
shall have the right, at Lessee’s sole cost and expense, to protest or contest
in good faith the amount of any tax or assessment.  As a condition precedent to Lessee’s right to
protest such taxes or assessments, Lessee shall either pay the disputed amount
and file for refund or deposit with Lessor the disputed amount plus one (1) years
interest at the rate then charged by said county plus any estimated penalty
which Lessor may incur by non-payment. 
Upon such payment or deposit, Lessor shall cooperate with Lessee in
prosecuting such dispute.

 

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Operating Expenses

 

(d)                                 Lessee shall
pay all Operating Expenses attributable to the occupation and use of the
Premises.

 

The
term “Operating Expenses” as used in this Lease shall mean all expenses, costs
and fees attributable to Lessee’s use and occupancy of the Premises under this
Lease, including but not limited to:

 

(i)                                     Miscellaneous
operating costs, maintenance, security services, replacement for normal wear
and tear, repair, re-striping and resurfacing of paving, insurance (including
public liability and property damage, rent continuation, boiler and machinery
and extended coverage insurance), and cleaning of the Premises and all parts
thereof and all furnishings, fixtures and equipment therein.  The term “Operating Expenses” shall include
the annual amortization of costs (including financing at the then prevailing
rate, if any) of any improvements, equipment, or devices required by any
governmental authority or incurred as a labor saving measure or to reduce
operation or maintenance expenses with respect to the Premises where such costs
are amortized over the useful life thereof.

 

(ii)                                  Operating
Expenses shall also include licenses, permits, charges and assessments which
are levied, assessed, imposed or collected by any governmental authority or
improvement or assessment district during any calendar year with respect to the
Premises and Lessee’s use and occupancy of the Premises and the land on which
the premises are located, and any improvements, fixtures, equipment and other
property of Lessor, real or personal, used in connection with the operation or
maintenance of the Premises (computed on a cash basis or as if paid in
permitted installments regardless of whether actually so paid), as well as any
tax which shall be levied or assessed in addition to or in lieu of any tax
described in Sections 2.03 (b) or (c) above (it being acknowledged
that because of the passage of laws which limit increases in property taxes,
government agencies may impose fees, charges, assessments or other levies in
connection with services previously furnished without charge or at a lesser
charge and which were previously paid for in whole or in part, directly or
indirectly by real property taxes), any gross excise tax or other similar tax,
and any costs or expenses of contesting any such taxes, licenses, charges or
assessments, but excluding any federal or state income or gift tax or any
franchise, capital stock, estate or Inheritance taxes.

 

Late Charges

 

Section 2.04                             If any
installment of rent or other payment required to be paid by Lessee to Lessor is
not paid within ten (10) days of the date on which it is due, a late
charge equal to five percent (5%) of the late payment shall be due from Lessee
to Lessor to compensate Lessor for the additional administrative work caused by
such default and to compensate Lessor for the loss of use of such defaulted
payment.  The late charge herein shall be
in addition to any other remedy which Lessor may have hereunder for such
default.

 

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Interest on Late Payments

 

Section 2.05                             If any payment
required to be paid by Lessee to Lessor is not paid within ten (10) days
of the date on which it is due, such payment shall bear interest at the maximum
rate permitted by law from the date it became due until it is paid by Lessee to
Lessor.

 

ARTICLE 3. USE OF PREMISES

 

Permitted Use

 

Section 3.01                             The Premises shall,
during the term of this Lease and any extensions thereof, be used for
conducting a medical and radiation oncology business, for related activities
and for no other purpose without the prior written consent of Lessor.

 

Insurance Hazards

 

Section 3.02                             Lessee shall
not commit or permit the commission of any acts on the Premises nor use or
permit the use of the Premises in any manner that will increase the existing
rates for or cause the cancellation of any fire, liability, or other insurance
policy insuring the Premises or the improvements on the Premises.

 

Waste or Nuisance

 

Section 3.03                             Lessee shall
not commit or permit the commission by others of any waste on the Premises;
Lessee shall not maintain, commit, or permit the maintenance or commission of
any nuisance as defined in Section 3479 of the California Civil Code on
the Premises; and Lessee shall not use or permit the use of the Premises for
any unlawful purpose.

 

Hazardous Materials

 

Section 3.04                             Lessee warrants
and represents that during the term hereof, and any extensions thereof, Lessee
shall not use the Premises in any manner that would be in violation of any
federal, state or local law, ordinance or regulation relating to environmental
conditions on, under or about the Premises, including but not limited to soil
and groundwater conditions.  Lessee shall
not use, generate, manufacture, produce, store or dispose of on, under or about
the Premises any hazardous materials, including without limitation, flammable
materials, explosives, asbestos, radioactive materials, hazardous wastes, toxic
substances or related injurious materials, whether injurious by themselves or
in combination with other materials, other than such materials as may be
necessary for Lessee’s normal operations on the Premises.  Lessee shall not dispose of or permit the
disposal of any hazardous materials into the sewer system serving the Premises.

 

As
used in this Section 3.04, the term “Hazardous Material” shall mean any
hazardous or toxic substance, material, or waste at any concentration that is
or becomes regulated by the United States, the State of California, or any
local government authority having jurisdiction over the Building.  Hazardous Material includes:

 

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(a)                                 Any “hazardous
substance,” as that term is defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (CERCLA) (42 United States
Code sections 9601-9675);

 

(b)                                 “Hazardous
waste,” as that term is defined in the Resource Conservation and Recovery Act
of 1976 (RCRA) (42 United States Code sections 6901-6992k);

 

(c)                                  Any pollutant,
contaminant, or hazardous, dangerous, or toxic chemical, material, or
substance, within the meaning of any other applicable federal, state or local
law, regulation, ordinance, or requirement (including consent decrees and
administrative orders imposing liability or standards of conduct concerning any
hazardous, dangerous, or toxic waste, substance, or material, now or hereafter
in effect);

 

(d)                                 Petroleum
products;

 

(e)                                  Radioactive
material, including any source, special nuclear, or byproduct material as
defined in 42 United States Code sections 2011-2297g-4;

 

(f)                                   Asbestos in any
form or condition; and

 

(g)                                  Polychlorinated
biphenyls (PCBs) and substances or compounds containing PCBs.

 

If,
during the Lease Term (including any extensions), Lessee becomes aware of (i) any
actual or threatened release of any Hazardous Material on, under, or about the
Premises or the Building or (ii) any inquiry, investigation, proceeding,
or claim by any government agency or other person regarding the presence of
Hazardous Material on, under, or about the Premises or the Building, Lessee
shall give Lessor written notice of the release or investigation within five (5) days
after learning of it and shall simultaneously furnish to Lessor copies of any
claims, notices of violation, reports, or other writings received by Lessee
that concern the release or investigation.

 

Lessee
shall, at Lessee’s sole expense and with counsel reasonably acceptable to
Lessor, indemnify, defend, and hold harmless Lessor and Lessor’s shareholders;
directors, officers, employees, partners, affiliates, agents, successors, and
assigns with respect to all losses arising out of or resulting from the release
of any Hazardous Material in or about the Premises or the Building, or the
violation of any Environmental Law, by Lessee or Lessee’s agents, assignees,
sublessees, contractors, or invitees. 
This indemnification applies whether or not the concentrations of any
such Hazardous Material is material, the concentrations exceed state or federal
maximum contaminant or action levels, or any governmental agency has issued a
cleanup order.  This indemnification
includes:

 

(1)                                 Losses
attributable to diminution in the value of the Premises or the Building;

 

(2)                                 Loss or
restriction of use of rentable space in the Building;

 

(3)                                 Adverse effect
on the marketing of any space in the Building; and

 

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(4)                                 All other
liabilities, obligations, penalties, fines, claims, actions (including remedial
or enforcement actions of any kind and administrative or judicial proceedings,
orders, or judgements), damages (including consequential and punitive damages),
and costs (including attorney, consultant, and expert fees and expenses)
resulting from the release or violation.

 

This indemnification shall survive the expiration or termination of
this Lease.

 

If
the presence of any Hazardous Material brought onto the Premises or the
Building by Lessee or Lessee’s employees, agents, contractors, or invitees
results in contamination of the Building, Lessee shall promptly take all
necessary actions to remove or remediate such Hazardous Materials, whether or
not they are present at concentrations exceeding state or federal maximum
concentration or action levels, or any governmental agency has issued a cleanup
order, at Lessee’s sole expense, to return the Premises or the Building to the
condition that existed before the introduction of such Hazardous Material.  Lessee shall first obtain Lessor’s approval
of the proposed removal or remedial action. 
This provision does not limit the indemnification obligation set forth
in Section 3.04.

 

Compliance With Law

 

Section 3.05                             Lessee shall at
Lessee’s own cost and expense comply with all statutes, ordinances,
regulations, existing use permits and requirements of all governmental
entities, both federal and state and county or municipal, relating to Lessee’s
use and occupancy of the Premises whether such statutes, ordinances, regulations,
and requirements be now in force or hereinafter enacted.  The judgment of any court of competent
jurisdiction, or the admission by Lessee in a proceeding brought against Lessee
by any government entity, that Lessee has violated any such statute, ordinance,
regulation, or requirement shall be conclusive as between Lessor and Lessee and
shall be grounds for termination of this Lease by Lessor.  Lessor agrees that any requirements of the
Municipal, State, or Federal authorities which require alteration of Lessor’s
building shall not be the responsibility of Lessee, unless required because of
an act of Lessee or a use of the Premises by Lessee.

 

ARTICLE 4. ALTERATIONS AND
REPAIRS

 

Maintenance

 

Section 4.01                             Lessee shall at
his own cost and expense keep and maintain all portions of the Premises as well
as all improvements on the Premises and all facilities appurtenant to the
Premises, including but not limited to electrical, plumbing, heating and air
conditioning, sewage systems, roof and outer walls in good order and repair and
in as safe and clean a condition as they were when received by Lessee from
Lessor, reasonable wear and tear excepted.

 

Should
Lessee fail to maintain the Premises as set forth above, Lessor may, at Lessor’s
option, perform or contract for the performance of such maintenance for and on
behalf of Lessee.  In such event, Lessee
shall promptly on written demand of Lessor reimburse Lessor for all cost and
expense incurred by Lessor in performing Lessee’s obligations hereunder plus
interest at the maximum rate permitted by law from the date expended by Lessor
to the date of repayment by Lessee.

 

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Alterations and Liens

 

Section 4.02          Lessor and Lessee agree that from time
to time during the term of this Lease, Lessee may desire alterations, changes
and additions in and to the interior of the Premises and to the Building that
are necessary or convenient to the operation of its business at the Premises.

 

Non-structural Changes

 

(a)           Lessee may, at its own expense, make nonstructural changes
to the interior of the Premises (eg. revisions to interior decor, carpeting,
painting, wall covering, etc.) provided that the value of the Premises
shall not be diminished thereby.  Further
provided, that any non-structural changes exceeding $5,000 in total cost must
first be approved by the Lessor prior to commencement of such changes.

 

Structural Changes

 

(b)           If Lessee desires either (i) interior changes to the
Premises of a structural nature (eg. 
relocating interior walls); or (ii) changes to the facade or
exterior walls or roof, or (iii) desires the addition of square footage to
the Premises (i.e.  addition of Medical
square footage or Vault square footage) then Lessee shall submit detailed plans
and specifications for any proposed alteration or improvement to the Premises
for Lessor’s review and approval.  The
Lessor shall have the option to approve or deny the request for structural
changes in writing within 30 (thirty) days of receipt of such request, in the
reasonable discretion of the Lessor.  The
failure of the Lessor to disapprove or object to such plans and specifications
or any substantial changes therein within said thirty (30) days, shall
constitute Lessor’s disapproval of the same. 
Subsequent to such approval, minor changes in work or materials not
affecting the general character of the improvements need not be approved by
Lessor but a copy of the altered plans and specifications reflecting such
changes must be promptly given to Lessor. 
If approved, the Lessor shall have the option to pay for the changes, or
not, in its sole discretion.  If the
Lessor chooses to pay for the changes, then the parties shall meet immediately
to negotiate an adjustment to the Base Rent to go into effect at the completion
of the alterations.  If the Lessor
chooses not to pay for the alterations, the Lessee has the option to proceed
with the alterations, in its sole discretion and at its expense, without paying
any amount of rent for the added square footage for the remaining Original
Term, only the expenses attributable to the additional space.

 

Supervision of Alterations

 

(c)           All structural changes to the Premises involving load
bearing walls which require Lessor’s approval shall be made under the
supervision of a licensed architect or licensed structural engineer in
accordance with the detailed plans and specifications submitted to Lessor as
above provided.

 

Notices of Non-Responsibility

 

(d)           Lessee shall provide Lessor with at least twenty (20) days
written notice prior to commencing any alteration, addition or change to the
Premises requiring Lessor’s approval and 

 

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Lessor shall have the right to enter the Premises to
post Notices of Non-Responsibility as provided by law.

 

Quality of Work; Ownership

 

(e)           All work with respect to any alteration, addition or
change must be performed in a good and workmanlike manner and diligently
prosecuted to completion to the end that the Premises shall at all times be a
complete unit, except during the period of work.  Furthermore, any and all alterations,
additions, improvements, and fixtures, except furniture and trade fixtures,
made or placed in or on the Premises by Lessee or any other person shall on
expiration or sooner termination of this Lease become the property of Lessor
and remain on the Premises; provided, however, that Lessor shall have the
option on expiration or sooner termination of this Lease of requiring Lessee,
at Lessee’s sole cost and expense, to remove any or all such alterations,
additions, improvements, or fixtures from the Premises (excluding vaults).  All such changes, alterations, and
improvements shall be performed and completed strictly in accordance with the
laws and ordinances relating thereto, and in such a manner as not to impede
access to the Premises.

 

Lessee
shall not be the cause or object of any liens or allow such liens to exist,
attach to, be placed on, or encumber Lessor’s or Lessee’s interest in the
Premises, Building, or Real Property by operation of law or otherwise.  Lessee shall not suffer or permit any lien of
mechanics, material suppliers, or others to be placed against the Premises,
with respect to work or services performed or claimed to have been furnished to
Lessee or the Premises.  If any such lien
attaches or Lessee receives notice of any such lien, Lessee shall cause the
lien to be immediately released and removed of record.  Despite any other provision of this Lease, if
the lien is not released and removed within 10 (ten) days after Lessor delivers
notice of the lien to Lessee, Lessor may immediately take all action necessary
to release and remove the lien, without any duty to investigate the validity of
it.  All expenses (including reasonable
attorney fees) incurred by Lessor in connection with the lien shall be
considered additional rent under this Lease and be immediately due and payable
by Lessee.

 

Additional Requirements

 

(f)            If Lessee pays for the changes, the following provisions
shall apply to such changes:

 

(i)            The exterior of the improvements shall be compatible with
the design and appearance of the Premises as it exists at the time of execution
of this Lease.

 

(ii)           All work required in the construction of the structural
changes, including any site preparation work, utility installations as well as
actual construction shall be performed only pursuant to a contract entered into
by Lessee with a competent general contractor and sub-contractors duly licensed
as such under the Laws of the State of California, with proof of adequate
liability and workers compensation insurance.

 

(iii)          The approval by Lessor of any plans and specifications
under this paragraph refers only to the conformity of such plans and
specifications to the general architectural plan for the Building.  By approving such plans and specifications,
Lessor assumes no liability or 

 

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responsibility therefor and for any defect in any
structure constructed from such plans or specifications.

 

Inspection by Lessor

 

Section 4.03          Lessee shall permit Lessor or his
agents to enter into and upon the Premises during business hours for the
purpose of inspecting the same, or for the purpose of posting notices of
non-responsibility for alterations, additions or repairs or for the purpose of
placing upon the property in which the Premises are located any usual or
ordinary “for sale” signs, without any rebate of rent and without any liability
to Lessee for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned.  Lessee shall permit Lessor,
at any time within one hundred eighty (180) days prior to the expiration of
this Lease, to place upon the Premises any usual or ordinary “to let” or “to
lease” signs, provided that such entries made by Lessor hereunder shall not
unreasonably interfere with the conduct of Lessee’s business.

 

Surrender of Premises

 

Section 4.04          On expiration or sooner termination of
this Lease, or any extensions or renewals of this Lease, Lessee shall promptly
surrender and deliver the Premises to Lessor in as good condition as they are
on at the date of possession, reasonable wear and tear excepted.

 

ARTICLE 5. INDEMNITY AND
INSURANCE

 

Hold-Harmless Clause

 

Section 5.01          To the fullest extent permitted by
law, Lessee, on its behalf and on behalf of its successors and assignees,
waives all claims (in law, equity, or otherwise) against Lessor, its officers,
directors, principals, agents, successors, assignees and agent arising out of,
knowingly and voluntarily assumes the risk of, and agrees that Lessor shall not
be liable to Lessee for any of the following acts or failure to act set forth
in paragraphs (a) to (c) below. 
Lessor shall not be liable under this clause regardless of whether the
liability results from any active or passive act, error, omission, or
negligence of any of the Lessor; or is based on claims in which liability
without fault or strict liability is imposed or sought to be imposed on any of
the Lessor.  This exculpation clause
shall not apply to claims against Lessor to the extent that a final judgment of
a court of competent jurisdiction establishes that the injury, loss, damage, or
destruction was proximately caused by Lessor’s fraud, willful injury to person
or property, or violation of law.

 

(a)           The death or injury of any person or persons, including
Lessee or any person who is an employee or agent of Lessee, or by reason of the
damage to or destruction of any property, including property owned by Lessee or
any person who is an employee or agent of Lessee, and caused or allegedly
caused by either the condition of the Premises, or some act or omission of
Lessee or of some agent, contractor, employee, servant, sublessee, or
concessionaire of Lessee on the Premises;

 

(b)           Any work performed on the Premises or materials furnished
to the Premises at the instance or request of Lessee or any agent or employee
of Lessee;

 

11

 

(c)           Lessee’s failure to perform any provision of this Lease or
to comply with any requirement imposed on Lessee or the leased Premises by any
duly authorized governmental agency or political subdivision.

 

Liability Insurance

 

Section 5.02          Lessee shall, at its own cost and
expense, obtain and maintain during the entire term of this Lease and any
renewals or extensions thereof, a broad form comprehensive coverage policy of
public liability insurance issued by an insurance company or companies rated by
Best as A+ or better and authorized to conduct insurance business in the State
of California and insuring Lessee and Lessor against loss or liability caused
by or connected with Lessee’s occupation and use of the Premises under this
Lease in amounts not less than:

 

(a)           $1,000,000.00 combined single limit for injury to or death
as a result of any accident or incident.

 

(b)           $2,000,000.00 for damage to or destruction of any property
of others.

 

Such
public liability insurance, and property damage insurance shall insure
performance by Lessee of the indemnity provisions of Section 5.01
above.  Both parties shall be named as
co-insured, and the policy shall contain cross liability endorsements, if
available.  The policy shall be primary
insurance for all claims under it and provide that any insurance carried by
Lessor is strictly excess, secondary, and noncontributing with any insurance
carried by Lessee.  Lessee may provide
such insurance under a single policy or under one or more separate policies.

 

Every
three (3) years, Lessor may increase the amount of public liability and
property damage insurance coverage required hereunder, if at that time the
existing coverage is not adequate in the opinion of Lessor’s insurance broker
or lender(s).

 

Fire and Casualty Insurance

 

Section 5.03          Lessee shall, at Lessee’s sole cost
and expense, at all times during the term hereof, and any extensions thereof,
keep all buildings, improvements and other structures on the Premises insured
for their full replacement cost against loss or destruction by fire and the
perils, including vandalism and malicious mischief, commonly covered under
standard extended coverage endorsements in San Luis Obispo County,
California.  Lessor shall be named as an
additional insured on all such policies and the policies shall contain a cross-liability
endorsement.

 

“Full
replacement cost” as used herein shall mean the actual cost of replacement for
the buildings and other improvements on the Premises, as determined from time
to time by Lessor.  Upon notification to
Lessee in writing of Lessor’s determination of full replacement cost, Lessee
shall, within thirty (30) days of such written notice, increase the amount of
the insurance carried to the amount stated in the notice.

 

12

 

Business Interruption Insurance

 

Section 5.04          Lessee shall, at all times during the
term of this Lease and any extensions thereof, maintain at Lessee’s sole cost
and expense a policy of business interruption insurance, ensuring the rent
provided for in this Lease will be paid to Lessor for a period not less than
one (1) year in the event the Premises are destroyed or damaged so as to
render operation of Lessee’s business impossible or impractical by any casualty
insured against by standard fire and extended coverage insurance.

 

Lessee’s Personal Property

 

Section 5.05          Lessee shall, at all times during the
term of this Lease and any extensions thereof, maintain at Lessee’s sole cost
and expense an insurance policy issued by a company acceptable to Lessor
insuring for their full insurable value all furniture, fixtures, equipment and
alterations or improvements made to the Premises by Lessee against loss or
destruction by fire and the perils commonly covered under the standard extended
coverage endorsement to fire insurance policies in San Luis Obispo County.  Any loss payable under such insurance shall
be payable to Lessee and shall be used to repair or replace such furniture,
fixtures, equipment and alterations and improvements.

 

Cancellation Clause

 

Section 5.06          Any policy of insurance required to be
obtained and maintained by Lessee under this Article shall be written by
insurance companies authorized to do business in the State of California.  Each such policy of insurance shall expressly
provide that it cannot be cancelled for any reason or altered in any manner
unless at least thirty (30) days prior written notice has been given to Lessor
by the insurance company.

 

Deposit of Insurance with Lessor

 

Section 5.07          Lessee shall, prior to taking
possession of the Premises and promptly thereafter when any such policy is
replaced, rewritten, or renewed, deliver to Lessor a true and correct copy of
each insurance policy required by this Article of this Lease or a
certificate executed by the insurance company or companies or their authorized
agent evidencing such policy or policies.

 

Lessor’s Right to Procure Insurance

 

Section 5.08          If at any time Lessee fails to procure
or maintain the insurance required by this Article, Lessor may obtain that
insurance and pay the premiums on it for the benefit of Lessee.  Any amounts paid by Lessor to procure or
maintain insurance pursuant to this section shall be immediately due and
repayable to Lessor by Lessee with the next then due installment of rent under
this Lease.  Failure to repay at that time
any amount expended by Lessor shall be considered the same as a failure to pay
rent and a default by Lessee under this Lease.

 

13

 

Lessor’s Indemnity

 

5.09.       Lessor expressly agrees to indemnify,
protect, defend and hold Lessee harmless from all claims arising from any
breach or default in the performance of any obligation to be performed by
Lessor under the terms of this Lease and from and against all costs, loss,
damage, legal expenses and liabilities incurred in connection with such claim
or any action or proceeding brought thereon. 
Notwithstanding anything to the contrary herein, any claim for indemnity
brought by the Lessee under this provision shall be limited to Lessor’s
interest in the Premises, and Lessee shall not have recourse to any other
assets of Lessor or to the assets of any partner of Lessor for such claim.

 

ARTICLE 6. SIGNS AND TRADE
FIXTURES

 

Installation and Removal of Trade Fixtures

 

Section 6.01          Lessee shall have the right at any
time and from time to time during the term of this Lease and any renewal or
extension of such term, at Lessee’s sole cost and expense, to install and affix
in, to, or on the Premises such items, herein called “trade fixtures”, for use
in Lessee’s trade or business as Lessee may, in its sole discretion, deem
advisable.  Any and all such trade
fixtures that can be removed without structural damage to the Premises or any
building or improvement on the Premises shall remain the property of the Lessee
and may be removed by Lessee at any time or times prior to the expiration or
sooner termination of this Lease.

 

Unremoved Trade Fixtures

 

Section 6.02          Any trade fixtures described in this Article that
are not removed from the Premises by Lessee within ten (10) days after the
expiration or sooner termination, regardless of cause, of this Lease shall be
deemed abandoned by Lessee and shall automatically become the property of
Lessor as owner of the real property to which they are affixed, unless Lessor
notifies Lessee, in writing, of Lessor’s election to have Lessee remove such
trade fixtures and to repair any damage caused thereby.  Upon such election by Lessor to require
Lessee to remove such trade fixtures, Lessee shall have fifteen (15) days from
the date of such notice in which to remove such trade fixtures and repair any
damage caused by such removal.  If Lessee
fails to remove such trade fixtures and repair any such damage, Lessor may do
so at Lessee’s sole cost and expense, including any costs of storing such
property.  Such costs and expenses, if
incurred by Lessor for Lessee’s benefit, shall be promptly, upon written demand
therefor, reimbursed to Lessor by Lessee, together with interest at the maximum
rate permitted by law from the date expended by Lessor to the date of
reimbursement by Lessee.

 

Signs

 

Section 6.03          Lessee may place and maintain, or
permit any other person to place and maintain any sign on the Premises
providing such sign is in compliance with then existing governmental
regulations.  Lessee may not place any
decoration, lettering, or advertising matter on the glass of any exterior show
window of the Premises.  Lessee shall
maintain such sign at all times during this Lease in good appearance and
repair.  On expiration or sooner
termination of 

 

14

 

this Lease, all such signs not removed from the
Premises by Lessee on such expiration or termination of this Lease may, without
liability, be destroyed by Lessor.

 

ARTICLE 7.
DAMAGE, DESTRUCTION OR CONDEMNATION

 

Duty to Repair or Restore

 

Section 7.01          If any improvements, including the
buildings and other structures, located on the Premises are damaged or
destroyed during the term of this Lease or any extension thereof, the damage
shall be repaired as follows:

 

(a)           If the damage or destruction is caused by a peril against
which fire and extended coverage insurance is required to be carried under this
Lease, Lessee shall repair that damage as soon as reasonably possible and
restore the Premises and improvements to substantially the same condition as
existed before the damage or destruction, regardless of whether the insurance
proceeds are sufficient to cover the actual cost of repair or restoration.  If insurance required to be carried by Lessee
under this Lease has lapsed or not been carried, Lessee shall be solely
responsible for the full cost and expense of necessary repairs and restoration.

 

(b)           If the damage or destruction is caused by a peril against
which insurance is not required to be carried by this Lease, Lessor, subject to
Lessor’s right to terminate this Lease described in Section 7.02, shall
repair that damage as soon as reasonably possible and restore the Premises to
substantially the same condition as existed before the damage or destruction.

 

(c)           Whether the damage of destruction is caused either by a
peril against which fire and extended coverage insurance is required by this
Lease to be carried or by a peril against which insurance is not required to be
carried by this Lease, Lessee expressly waives any right under Civil Code
Sections 1931-1933 to terminate this Lease for damage or destruction to the
Premises.

 

Termination of Lease for Certain Losses

 

Section 7.02          (a)  Notwithstanding any other
provision of this Lease, if any improvements located on the Premises are
damaged or destroyed to such extent it will cost more than $100,000.00 to
repair or replace them, and the damage or destruction is caused by a peril
against which insurance is not required to be carried by this Lease, Lessor may
terminate this Lease by giving Lessee written notice of the termination.  The notice must be given within sixty (60)
days after the occurrence of the damage or destruction.

 

(b)           Lessee or Lessor shall have the right to terminate this
Lease under either of the following circumstances:

 

(i)            If the Premises are damaged or destroyed from any cause
whatsoever, insured or uninsured, and the laws then in effect do not permit the
repair or restoration of the Premises provided for in this Article; or

 

(ii)           If the Premises are damaged or destroyed from any cause
whatsoever, insured or uninsured, during the last year of the term of this
Lease or any extension thereof (provided 

 

15

 

Lessee has not elected before the date of damage or
destruction to extend the term of this Lease in accordance with Section 1.02).

 

(c)           Either party may terminate this Lease by giving written
notice of termination to the other party not later than fourteen (14) days
after the right to terminate accrues, and such termination shall be effective
as of the date of the notice of termination. 
In the event of a termination under subsection (b), Lessee shall not be
entitled to collect any insurance proceeds attributable to insurance policies
covering the Premises or improvements except those proceeds attributable to
Lessee’s personal property and trade fixtures.

 

(d)           If this Lease is terminated pursuant to either subsection (a) or
(b) above, the rent and other sums payable by Lessee to Lessor under this
Lease shall be prorated as of the termination date.  If any such sums have been paid in advance by
Lessee, Lessor shall refund them to Lessee for the unexpired period for which
the payment has been made.

 

Time for Construction of Repairs

 

Section 7.03          Any and all repairs and restorations
of improvements required by this Article shall be commenced by Lessor or
Lessee, as the case may be, within a reasonable time after the occurrence of
the damage or destruction requiring the repairs or restoration; shall be
diligently pursued after being commenced; and shall be completed within a
reasonable time after the loss.  If
Lessor is required under this Lease to perform the repairs and restoration,
Lessor shall cause the repairs and restoration to be completed within 180 days
after the occurrence of the event causing destruction or Lessee shall have the
right to terminate this Lease, unless the delays are caused by events outside
the control of Lessor.

 

Insurance Proceeds

 

Section 7.04          If the damage or destruction is caused
by a peril against which fire and extended coverage insurance is required to be
carried and maintained under this Lease by Lessee, the proceeds of insurance
shall be paid directly to the parties for the purpose of making the necessary
repairs to the Premises as required under this Lease.

 

Abatement of Rent

 

Section 7.05          In the event of repair, replacement or
restoration as herein provided, the Base Rent payable under this Lease shall be
abated proportionately with the degree to which Lessee’s use of the Premises is
impaired, from the date of the damage until completion of repairs plus one (1) calendar
month.  Lessee shall not be entitled to
any compensation of damages for loss in the use of all or part of the Premises
and/or for any inconvenience or annoyance occasioned by such damage, repair,
replacement or reconstruction.

 

Total Condemnation

 

Section 7.06          Should, during the term of this Lease
or any renewal or extension thereof, title and possession of all of the
Premises be taken under the power of eminent domain by any public or
quasi-public agency or entity, this Lease shall terminate as of 12:01 A.M.  on the date actual physical possession of the
Premises is taken by the agency or entity exercising the power 

 

16

 

of eminent domain and both Lessor and Lessee shall
thereafter be released from all obligations, except those specified in Section 7.10
of this Lease, under this Lease.

 

Termination Option for Partial Condemnation

 

Section 7.07          Should, during the term of this Lease
or any extension thereof, title and possession of only a portion of the
Premises be taken under the power of eminent domain by any public or
quasi-public agency or entity, Lessee may, at Lessee’s option, terminate this
Lease if more than 35 percent of the floor space or more than 55 percent in
value of the Premises is taken under the power of eminent domain.  Lessee shall exercise its option by giving
written notice to Lessor within 30 days after actual physical possession of the
portion subject to the eminent domain power is taken by the agency or entity
exercising that power.  This Lease shall
terminate as of 12:01 A.M.  on the
date the notice is deemed given to Lessor but the rent specified in Article 2
of this Lease shall be reduced in the manner specified in Section 7.08
below from the date of taking to the date of termination of the lease.

 

Partial Condemnation Without Termination

 

Section 7.08          Should Lessee fail to exercise the
option described in Section 7.06 of this Lease or should the portion of
the Premises taken under the power of eminent domain be insufficient to give
rise to the option described in Section 7.07 of this Lease, then, in that
event:

 

(a)           This Lease shall terminate as to the portion of the
Premises taken by eminent domain as of 12:01 A.M.  on the day, herein called the “date of
taking,” actual physical possession of that portion of the Premises is taken by
the agency or entity exercising the power of eminent domain;

 

(b)           The rent specified in Article 2 of this Lease shall,
after the date of taking, be reduced by an amount that bears the same ratio to
the rent specified in Article 2 of this Lease as the square footage floor
space of the portion of said premise taken under the power of eminent domain
bears to the total square footage floor space of the Premises as of the date of
this Lease; and

 

(c)           Lessor, at Lessor’s own cost and expense, will remodel and
reconstruct the building remaining on the portion of the Premises not taken by
eminent domain into a single efficient architectural unit as soon after the
date of taking, or before, as can be reasonably done; provided, however, that
the rent specified in this Lease shall not be abated or reduced, except as
provided in subparagraph (b) of this section, during such remodeling and
reconstruction.

 

Condemnation Award

 

Section 7.09          Should, during the term of this Lease
or any renewal or extension thereof, title and possession of all or any portion
of the Premises be taken under the power of eminent domain by any public or
quasi-public agency or entity, the portion of the compensation or damages for
the taking awarded to each of the parties to this Lease, Lessor and Lessee,
shall belong to and be the sole property of the party Lessor or Lessee, to whom
it is awarded.  Lessee shall be entitled
to that portion of the compensation or damages awarded for the eminent domain
taking that represents (i) reasonable value of Lessee’s rights under this
Lease for the unexpired 

 

17

 

term of this Lease and (ii) the cost or loss
sustained by Lessee because of the removal of Lessee’s trade fixtures,
equipment and furnishings from the portion of the Premises taken by eminent
domain.

 

Arbitration of Condemnation Award

 

Section 7.10          Should separate awards not be made to
Lessor and Lessee for the taking by eminent domain of all or any portion of the
Premises, and should Lessor and Lessee be unable to agree on the manner the
total award is to be divided between them pursuant to Section 7.09 of this
Lease, the proper division of the award between Lessor and Lessee shall be
settled by arbitration as provided in Section 9.03.

 

Lessee’s Waiver

 

Section 7.11          Lessee agrees that its rights to
terminate this Lease due to partial condemnation are governed by this Section.  Lessee waives all rights it may have under
California Code of Civil Procedure section 1265.13, or otherwise, to terminate
this Lease based on a partial condemnation.

 

ARTICLE 8. DEFAULT,
ASSIGNMENT, AND TERMINATION

 

Subleasing or Assigning as Breach

 

Section 8.01          Lessee shall not encumber, assign, or
otherwise transfer this Lease, any right or interest in this Lease, or any
right or interest in the Premises or any of the improvements that may now or
hereafter be constructed or installed on the Premises without the express
written consent of Lessor first had and obtained.  Neither shall Lessee sublet the Premises or
any part thereof or allow any other person, other than Lessee’s patrons,
agents, servants, and employees, to occupy the Premises or any part thereof
without the prior written consent of Lessor. 
The consent of Lessor to any assignment of Lessee’s interest in this
Lease or the subletting by Lessee of the Premises or parts of the Premises
shall not be unreasonably withheld.  A
consent by Lessor to one assignment, one subletting, or one occupation of the
Premises by another person shall not be deemed to be a consent to any
subsequent assignment, subletting, or occupation of the Premises by another
person.  Any encumbrance, assignment,
transfer, or subletting without the prior written consent of Lessor, whether it
be voluntary or involuntary, by operation of law or otherwise, is void and
shall, at the option of Lessor, terminate this Lease.  Notwithstanding the above, Lessee may assign
or sublease the Premises, or portions thereof, to a subsidiary, affiliate or
parent of Lessee.  Such permitted
assignment shall not relieve Lessee or any person who has personally guaranteed
Lessee’s performance of this Lease from any liability under this Lease or any
such guarantee.

 

Lessee’s Default

 

Section 8.02          The occurrence of any one or more of
the following events shall constitute a default under this Lease by Lessee:

 

(a)           Non-curable Defaults: 
(i)  The vacation or abandonment of any substantial portion of the
Premises by Lessee for a period of five (5) business days or longer;

 

18

 

 

 

(ii)           Any involuntary transfer of Lessee’s interest in this
Lease or any voluntary transfer, attempted or actual, of Lessee’s interest in
this Lease, without Lessor’s prior written consent, in violation of Section 8.01;

 

(iii)          If the leasehold interest of Lessee is levied upon under
execution or is attached by process of law and said levy or attachment is not
promptly released;

 

(iv)          If:  (1) all or
substantially all of the Lessee’s assets are placed in the hands of a receiver
or trustee, and such receivership or trusteeship continues for a period of
sixty (60) days, or

 

(2)           if Lessee makes an
assignment for the benefit of creditors or is adjudicated a bankrupt, or

 

(3)           if Lessee institutes
any proceedings under any provision of the Bankruptcy Code or under any other
act relating to the subject of bankruptcy wherein Lessee seeks to be
adjudicated a bankrupt, be discharged of its debts, or effect a plan of
liquidation, composition, arrangement or reorganization, or

 

(4) if any involuntary proceeding is filed against Lessee under
any such bankruptcy laws and Lessee consents thereto or acquiesces therein by
pleading or default,

 

then
any such act shall be deemed a breach of this Lease, and neither this Lease nor
any interest in and to the Premises shall become an asset in any of such
proceedings and, in any such event, and in addition to any and all rights or
remedies of Lessor hereunder or provided by law, this Lease shall terminate
automatically as of the date on which any one or more of the above-described occurrences
takes place.  In such event, it shall be
lawful for Lessor to re-enter the Premises and take possession thereof and
remove all persons and all of Lessee’s personal property, fixtures, equipment,
alterations, improvements and utility installations therefrom, and Lessee shall
have no further claim to the Premises or under this Lease.  Nothing contained herein shall limit or
prejudice the right of Lessor to recover damages by reason of any such
termination equal to the maximum allowed by any statute or rule of law in
effect at the time when, and governing the proceedings in which, such damages
are to be proved, whether or not such amount is greater, equal to, or less than
the amount of damages recoverable under the provisions of this Article.  However, the foregoing provisions in this Article shall
be subject to the Bankruptcy Code, as heretofore and hereafter amended.

 

(b)           Curable Defaults:  (i) 
The failure by Lessee to make any payment of Basic Rent, Additional Rent or any
other payment required to be made by Lessee hereunder as and when due and which
shall continue for a period of ten (10) business days after written notice
thereof from Lessor to Lessee; provided however, any such notice shall be in
lieu of, and not in addition to, any notice required under the California Code
of Civil Procedure or any other law, regulation or ordinance; or

 

(ii)           The failure by Lessee to observe or perform any
non-monetary covenants, conditions or provisions of this lease to be observed
or performed by Lessee, other than the aforementioned non-curable defaults,
within thirty (30) days after Lessee has been given written notice of such
failure.  Notwithstanding the foregoing,
if Lessee cannot reasonably cure such 

 

19

 

default within thirty (30) days, Lessee shall not be
in default hereunder so long as Lessee commences to cure the default within
such thirty (30) day period and thereafter diligently and in good faith pursues
such cure to completion.

 

Lessors Default

 

Section 8.03          (a)  Lessor shall be in default
if it fails or refuses to perform any provision of this Lease that it is
obligated to perform and such failure continues for thirty (30) days after
written notice thereof from Lessee detailing such failure.  Notwithstanding the foregoing, if Lessor
cannot reasonably cure such default within thirty (30) days, Lessor shall not
be in default hereunder so long as Lessor commences to cure the default within
such thirty (30) day period and thereafter diligently and in good faith pursues
such cure to completion.

 

(b)           If Lessor is in default hereunder, and as a consequence
Lessee recovers a money judgment against Lessor, such judgment shall be
satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title, and interest of Lessor in the
Premises, and out of rent or other income from such real property receivable by
Lessor or out of the consideration received by Lessor from the sale or other
disposition of all or any part of Lessor’s right, title, and interest in the
Premises.  Neither Lessor, nor any
partner, agent, officer, director or employee of Lessor shall be personally
liable for any portion of such a judgment.

 

Abandonment

 

Section 8.04          If Lessee vacates or abandons the Premises,
this Lease shall continue in effect unless and until expressly terminated by
Lessor, and Lessor shall have all of the remedies provided by this Lease or by
law, including without limitation, the right to maintain Lessee’s right to
possession and to recover Rent as it becomes due hereunder.  Lessor shall not be deemed to have terminated
this Lease other than by written notice of termination from Lessor.  At any time subsequent to vacation or
abandonment of the Premises by Lessee, Lessor may give notice of termination
and shall thereafter have all of the rights hereinafter set forth.

 

Termination

 

Section 8.05          Following the occurrence of any
default, Lessor shall have the right, so long as the default continues, to
terminate this Lease by written notice to Lessee setting forth:  (a) the default; (b) the
requirements to cure it; and (c) a demand for possession, which shall be
effective in accordance with the notice provisions specified in Section 9.04.

 

Possession

 

Section 8.06          Following termination under Section 8.05,
without prejudice to any other remedies Lessor may have by reason of Lessee’s
default or of such termination, Lessor may then or at any time thereafter, (a) peaceably
re-enter the Premises, or any part thereof, upon voluntary surrender by Lessee,
or expel or remove Lessee therefrom and any other persons occupying them, using
such legal proceedings as are then available; (b) repossess and enjoy the
Premises, or relet the Premises or any part thereof for such term or terms,
which may be for a term extending beyond the Term, at such rental or rentals
and upon such other terms and conditions as Lessor in its sole discretion shall
determine, with the right to make reasonable alterations and repairs to the 

 

20

 

Premises; and (c) remove all personal property
therefrom.  Lessee hereby expressly
waives any and all rights of redemption granted by or under any present or
future law in the event of Lessee’s being evicted or dispossessed for any
cause, or in the event of Lessor’s obtaining possession of the Premises, or by
reason of the violation by Lessee of any of the items, covenants or conditions,
of this Lease, or otherwise.

 

Recovery

 

Section 8.07          Following termination under Section 8.05,
Lessor shall have all the rights and remedies of a Lessor provided by Section 1951.2
of the California Civil Code.  The amount
of damages which Lessor may recover following termination shall include:  (a) the worth at the time of the award
of the unpaid Rent which had been earned at the time of termination; (b) the
worth at the time of the award of the amount by which the unpaid Rent which
would have been earned after termination until the time of the award exceeds
the amount of such rental loss that the Lessee proves could have been
reasonably avoided; (c) the worth at the time of the award of the amount
by which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of rental loss Lessee proves could be reasonably avoided;
and (d) any other amount necessary to compensate Lessor for all detriment
proximately caused by Lessee’s failure to perform its obligations under this
Lease.  The “worth at the time of the
award” of the amounts referred to in (a) and (b) above shall be
computed by allowing interest at the maximum rate permitted by law.  The “worth at the time of the award” of the
amount referred to in (c) above shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one (1 %) percent.

 

Additional Remedies

 

Section 8.08          In addition to the foregoing remedies,
Lessor shall, so long as this Lease is not terminated, have the right to remedy
any default of Lessee, to maintain or improve the Premises without terminating
this Lease, to incur expenses on behalf of Lessee in seeking a new sublessee,
or to cause a receiver to be appointed to administer the Premises and new or
existing subleases, and to add to the Rent payable hereunder all of Lessor’s
reasonable costs in so doing, with interest at the maximum rate permitted by
law.

 

Other

 

Section 8.09          If Lessee causes or threatens to cause
a breach of any of the covenants, agreements, terms or conditions contained in
this Lease, Lessor shall be entitled to retain all sums held by Lessor, by any
trustee or in any account provided for herein, to enjoin such breach or
threatened breach, and to invoke any right and remedy allowed at law or in
equity or by statute or otherwise as though re-entry, summary proceedings and
other remedies were not provided for in this Lease.

 

Cumulative

 

Section 8.10          Each right and remedy of Lessor
provided for in this Lease shall be cumulative and shall be in addition to
every other right or remedy provided for in this Lease, or now or hereafter existing
at law or in equity or by statute or otherwise, and shall not preclude the 

 

21

 

simultaneous or later exercise by Lessor of any or
all other rights or remedies provided for in this Lease or now or hereafter
existing in law or in equity or by statute or otherwise.

 

No Waiver

 

Section 8.11          No failure by Lessor or Lessee to
insist upon the strict performance of any term hereof or to exercise any right
or remedy consequent upon a breach thereof, and no acceptance of full or
partial payment of Rent during the continuance of any such breach shall
constitute a waiver of any such breach or of any such term.  Efforts by Lessor to mitigate the damages
caused by Lessee’s breach of this Lease shall not be construed to be a waiver
of Lessor’s right to recover damages under this Article.  Nothing in this Article affects the
right of Lessor to indemnification by Lessee for liability arising prior to the
termination of this Lease for personal injuries or property damage.

 

Written Action

 

Section 8.12          No act or thing done by Lessor or its
agents during the Term hereof shall be deemed an acceptance of a surrender of
the Premises, and no agreement to accept a surrender of the premises shall be
valid unless made in writing and signed by Lessor.  Neither the reference in this Lease to any
particular remedy nor the pursuit of any particular remedy shall preclude
Lessor from any other remedy Lessor might have, either at law or in equity.

 

Replacement of Statutory Notice Requirements

 

Section 8.13          When this Lease requires service of a
notice, that notice shall replace rather than supplement any equivalent or
similar statutory notice, including any notices required by Code of Civil
Procedure section 1161 or any similar or successor statute.  When a statute requires service of a notice
in a particular manner, service of that notice (or a similar notice required by
this Lease) in the manner required by Section 9.04 shall replace and
satisfy the statutory service-of-notice procedures, including those required by
Code of Civil Procedure section 1162 or any similar or successor statute.

 

Continuation of Lease in Effect

 

Section 8.14          Lessor shall have the remedy described
in Civil Code section 1951.4, which provides that, when a Lessee has the right
to sublet or assign (subject only to reasonable limitations), the Lessor may
continue the lease in effect after the Lessee’s breach and abandonment and
recover Rent as it becomes due. 
Accordingly, if Lessor does not elect to terminate this Lease on account
of any default by Lessee, Lessor may enforce all of Lessor’s rights and
remedies under this Lease, including the night to recover all Rent as it
becomes due.

 

Efforts To Relet

 

Section 8.15          For purposes of this Article 8,
Lessee’s right to possession shall not be considered to have been terminated by
Lessor’s efforts to relet the Premises, by Lessor’s acts of maintenance or
preservation with respect to the Premises, or by appointment of a receiver to
protect Lessor’s interests under this Lease. 
This list is merely illustrative of acts that may be performed by Lessor
without terminating Lessee’s right to possession.

 

22

 

ARTICLE 9.
MISCELLANEOUS

 

Force Majeure - Unavoidable Delays

 

Section 9.01          Should the performance of any act
required by this Lease to be performed by either Lessor or Lessee be prevented
or delayed by reason of an act of God, strike, lockout, labor troubles,
inability to secure materials, restrictive governmental laws or regulations, or
any other cause except financial inability, not the fault of the party required
to perform the act, the time for performance of the act will be extended for a
period equivalent to the period of delay and performance of the act during the
period of delay will be excused; provided, however, that nothing contained in
this section shall excuse the prompt payment of rent or other sums by Lessee as
required by this Lease or the performance of any act rendered difficult solely
because of the financial condition of the party, Lessor or Lessee, required to
perform the act.

 

Attorney’s Fees

 

Section 9.02          (a)  Should any litigation be
commenced between the parties to this Lease concerning the Premises, this
Lease, or the rights and duties of either in relation thereto, the party,
Lessor or Lessee, prevailing in such litigation shall be entitled, in addition
to such other relief as may be granted in the litigation, to a reasonable sum
as and for his attorney’s fees in such litigation which shall be determined by the
court in such litigation or in a separate action brought for that purpose.

 

(b)           If Lessor is made a party defendant to any litigation
concerning this Lease or the leased Premises or the occupancy thereof by
Lessee, then Lessee shall hold Lessor harmless from all liability by reason of
said litigation, including reasonable attorney’s fees and expenses incurred by
Lessor in any such litigation, whether or not any such litigation is prosecuted
to judgment, provided however, it is agreed between Lessor and Lessee that if
the litigation referred to in this Section arises out of no act, fault, or
negligence of the Lessee, there shall be no obligation on the part of Lessee to
hold harmless the Lessor from said litigation.

 

(c)           If Lessee breaches any term of this Lease, Lessor may
employ an attorney or attorneys to protect Lessor’s rights hereunder, and in
the event of such employment following any breach by Lessee, Lessee shall pay
Lessor reasonable attorney’s fees and expenses incurred by Lessor, whether or
not an action is actually commenced against Lessee by reason of said breach.

 

Arbitration of Disputes

 

Section 9.03          IF ANY DISPUTE ARISES
BETWEEN LESSOR AND LESSEE CONCERNING THE PREMISES, ANY PROVISION OF THIS LEASE
OR THE RIGHTS AND DUTIES OF EITHER IN REGARD THERETO, THE DISPUTE SHALL BE
SETTLED BY ARBITRATION AS PROVIDED IN THIS SECTION.  EACH PARTY SHALL APPOINT AN ARBITRATOR AND
GIVE THE OTHER PARTY WRITTEN NOTICE OF THE NAME AND ADDRESS OF ARBITRATOR
WITHIN FIVE (5) DAYS AFTER WRITTEN DEMAND TO DO SO HAS BEEN SERVED ON THE
PARTY MAKING THE APPOINTMENT BY THE OTHER PARTY TO THIS LEASE.  THE TWO APPOINTED ARBITRATORS SHALL WITHIN
TEN (10) DAYS AFTER THEIR 

 

23

 

APPOINTMENT, APPOINT A THIRD
ARBITRATOR.  THE WRITTEN DECISION OF ANY
TWO OF THE THREE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE ON BOTH PARTIES TO
THIS LEASE.  THE ARBITRATORS MAY APPORTION
THE COSTS AND EXPENSES OF THE ARBITRATION PROCEEDING, INCLUDING ATTORNEY’S
FEES AND ARBITRATION FEES, BETWEEN THE PARTIES TO THIS AGREEMENT IN ANY MANNER
DEEMED REASONABLE BY TWO OF THE THREE ARBITRATORS.  THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.

 

NOTICE:  BY INITIALING IN THE SPACE BELOW YOU ARE
AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION
OF DISPUTES” PROVISION ABOVE DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MAY HAVE TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. 
BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION
OF DISPUTES” PROVISION.  IF YOU REFUSE TO
SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE.  YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.

 

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION
TO NEUTRAL ARBITRATION.

 

	
  LESSOR’S
  INITIALS:

  	
  /s/
  RIF

  	
   

  	
  LESSEE’S
  INITIALS:

  	
  /s/
  T.D. Fogel

  

 

Notices

 

Section 9.04          All notices to be given to Lessee
shall be given in writing personally or by depositing the same in the United
States mail, postage prepaid, and addressed to Lessee at the Premises, whether
or not Lessee has departed from, abandoned or vacated the Premises.  All notices to be given to Lessor shall be given
in writing personally or by depositing the same in the United States mail,
postage prepaid, and addressed to the Lessor at 316 South Stratford Avenue,
Santa Maria, CA, 93454, or such other place or places as may be designated from
time to time by Lessor.

 

No Merger

 

Section 9.05          The voluntary or other surrender of
this Lease by Lessee, or a mutual cancellation thereof, shall not work a
merger, and shall, at the option of Lessor, terminate any existing subleases or
subtenancies or may, at the option of Lessor, operate as an assignment to it of
any of such subleases or subtenancies.

 

24

 

Binding on Heirs and Successors

 

Section 9.06          This Lease shall be binding on and
shall inure to the benefit of the heirs, executors, administrators, successors,
and assigns of the parties hereto, Lessor and Lessee, but nothing in this
section contained shall be construed as a consent by Lessor to any assignment
of this Lease or any interest therein by Lessee except as provided in Article 8
of this Lease.

 

Partial Invalidity

 

Section 9.07          Should any provision of this Lease be
held by a court of competent jurisdiction to be either invalid, void, or
unenforceable, the remaining provisions of this Lease shall remain in full
force and effect unimpaired by the holding.

 

Sole and Only Agreement

 

Section 9.08          This instrument constitutes the sole
and only agreement between Lessor and Lessee respecting the Premises, the
leasing of the Premises to Lessee, or the lease term herein specified, and
correctly sets for the obligations of Lessor and Lessee to each other as of its
date.  Any agreements or representations
respecting the Premises or their leasing by Lessor to Lessee not expressly set
forth in this instrument are null and void.

 

Waiver

 

Section 9.09          The waiver by Lessor of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition on any subsequent breach of the same or any
other term, covenant or condition herein contained.  The subsequent acceptance of rent hereunder by
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of
any term, covenant or condition of this Lease other than the failure of the
Lessee to pay the particular rental so accepted, regardless of Lessor’s
knowledge of such preceding breach at the time of the acceptance of such rent.

 

Subordination and Non-Disturbance

 

Section 9.10          (a)  This Lease is subject and
subordinate to all mortgages and deeds of trust which may hereafter be placed and
recorded on the property of which the Premises are a part and to all renewals,
modifications, replacements, and extensions thereof.

 

(b)           The subordination provided for above is conditioned on and
subject to the following:

 

(i)            For each mortgage or deed of trust, Lessor shall obtain
from the mortgagee or beneficiary a non-disturbance agreement in writing that,
in the event of foreclosure, or any sale thereunder, this Lease shall not be
terminated and Lessee’s right to possession under this Lease shall not be
disturbed, provided Lessee is not then in default under this Lease;

 

(ii)           In consideration of the mortgagee’s or beneficiary’s
agreement not to disturb Lessee’s possession as above provided, Lessee hereby
agrees to attorn to the purchaser at any foreclosure, sale or other action or
proceeding.

 

25

 

(iii)          The subordination described in this section shall be
effective without the necessity of having any further instruments executed by
Lessee, but Lessee agrees to execute on demand any such further instruments
evidencing subordination that Lessor or any mortgagee or beneficiary may
reasonably request.

 

Time of Essence

 

Section 9.11          Time is expressly declared to be the
essence of this Lease.

 

Accord and Satisfaction

 

Section 9.12          No payment by Lessee or receipt by
Lessor of a lesser amount than the monthly rent stipulated herein or any other
sum due hereunder from Lessee to Lessor shall be deemed to be anything other
than a payment on account of the earliest sum then due and owing to
Lessor.  No endorsement or statement on
any check of any letter accompanying any check or payment or payment of any sum(s) due
from Lessee to Lessor hereunder shall be deemed to be an accord and
satisfaction, and Lessor may accept and negotiate any such payment without
prejudice to Lessor’s right to recover the balance of such rent or other sum or
to pursue any other remedy provided for in this Lease or by law.

 

Right of First Refusal to Purchase Leased Premises

 

Section 9.13          (a)  If at any time during the
term of this Lease Lessor receives from any third party a bona fide offer to
purchase the Premises at a price and on terms acceptable to Lessor, Lessor
shall give written notice of the offer to Lessee.  Within thirty (30) days after Lessor gives
Lessee written notice of the third-party offer, Lessee shall have the right to
purchase the Premises at the same price and on the same terms and conditions
set forth in the third-party offer.  To
exercise its right, Lessee must, within the same thirty (30) day period,
deposit in escrow with any title company in San Luis Obispo County, California,
all moneys and instruments required by the terms of the offer to be paid or
delivered to Lessor on close of escrow and shall also give Lessor written
notice of the deposit.  In the event
Lessee fails to exercise the option to purchase in accordance with the
provisions of this Section, Lessor may sell the Premises to the third party
making the offer on the same terms and conditions set forth in that offer.  If for any reason the Premises are not sold
to the party making the offer, Lessor shall give Lessee the same right to
purchase the Premises on receiving any subsequent offer from any third party
that is acceptable to Lessor.

 

(b)           Lessee may not assign the rights granted under this
section either separately or together with a transfer of Lessee’s leasehold
interest, and any purported assignment shall be null and void.

 

(c)           If this property is sold to any third party during the
term of this Lease, then the provisions of this section shall thereafter be of
no further force or effect.

 

Bankruptcy

 

Section 9.14          Should a petition in bankruptcy be
filed by the Lessee, or should Lessee, during the term hereof, become insolvent
or make any assignment for the benefit of creditors, or 

 

26

 

be adjudicated bankrupt or insolvent by any Court,
or should a receiver or trustee in bankruptcy be appointed over the business,
property and assets of the Lessee, and the Premises herein lease, or take
charge of the Premises herein demised, or should this lease, by operation of
law, devolve upon or pass to any person or persons other than the Lessee, then
upon any of such events, the Lessor may, at its option, re-enter and take possession
of these Premises herein leased and remove all persons therefrom and terminate
the Lease.

 

Estoppel Certificate

 

Section 9.15          Within ten (10) days following
any written request which Lessor may make from time to time, Lessee shall
execute, acknowledge and deliver to Lessor a statement certifying:  (a) the date of commencement of this
Lease; (b) the fact that this Lease is unmodified and in full force and
effect, or, if there have been modifications hereto, that this Lease is in full
force and effect, and stating the date and nature of such modifications; (c) the
date to which the Rent and other sums payable under this Lease have been paid; (d) that
there are no current defaults under this Lease by either Lessor or Lessee
except as specified in Lessee’s statement; and (e) any other information
Lessor may reasonably require.  Lessor
and Lessee intend that any statement delivered pursuant to this Section may
be relied upon by any encumbrancer, ground Lessee, beneficiary, purchaser or
prospective purchaser of the Property or any interest therein, as well as any
of their assigns.

 

Transfer Of Lessor’s Interest

 

Section 9.16          Lessor has the right to transfer all
or part of its interest in the Building and Real Property and in this
Lease.  On such a transfer, Lessor shall
automatically be released from all liability accruing under this Lease, and
Lessee shall look solely to that transferee for the performance of Lessor’s
obligations under this Lease after the date of transfer.  Lessor may assign its interest in this Lease
to a mortgage lender as additional security. 
This assignment shall not release Lessor from its obligations under this
Lease, and Lessee shall continue to look to Lessor for the performance of its
obligations under this Lease.

 

Liability Of The Lessor

 

Section 9.17          Except as otherwise provided in this
Lease or applicable law, for any breach of this Lease the liability of Lessor
(including all persons and entities that comprise Lessor, and any successor
Lessor) and any recourse by Lessee against Lessor shall be limited to the
interest of Lessor and Lessor’s successors in interest in and to the Building
and Real Property.  On behalf of itself
and all persons claiming by, through, or under Lessee, Lessee expressly waives
and releases Lessor from any personal liability for breach of this Lease.

 

27

 

Executed
on the day and date first above written at Templeton, California.

 

LESSEE:

 

	
  COASTAL
  RADIATION ONCOLOGY MEDICAL GROUP, INC.

  
	
  a
  California Corporation

  
	
   

  
	
  by:

  	
  /s/
  Thomas D. Fogel, M.D.

  	
   

  
	
   

  	
  THOMAS
  D. FOGEL, M.D., President

  	
   

  
	
   

  
	
  by:

  	
  /s/
  Jonathan R. Stella, M.D.

  	
   

  
	
   

  	
  JONATHAN
  R. STELLA, M.D., Secretary

  	
   

  
	
   

  
	
  LESSOR:

  
	
   

  
	
  TROC
  BUILDING PARTNERSHIP

  
	
  a
  California general partnership

  
	
   

  
	
  by:

  	
  /s/
  Robert I. Fishburn, M.D.

  	
   

  
	
   

  	
  ROBERT
  I. FISHBURN, M.D., Managing Partner

  	
   

  

 

28

 

EXHIBIT A

 

PARCEL
1:

 

AN UNDIVIDED INTEREST IN AND TO LOT 3 OF TRACT 1212 IN THE COUNTY OF
SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP RECORDED MARCH 21,
1986 IN BOOK 13, PAGE 15 OF MAPS.

 

29

 

FIRST AMENDMENT TO LEASE AGREEMENT

 

This
Amendment to Lease Agreement is dated October 1, 2003.  TROC Building Partnership (now known as TROC,
LLC) “Lessor” and Coastal Radiation Oncology Medical Group, Inc.  “Lessee” entered into a Lease Agreement dated
February 1, 2001, for the real property commonly known as 274 Heather
Court, Templeton, California (“the Premises.”)

 

Whereas Lessee desires to add an additional vault to the
Premises for the purposes of adding a second linear accelerator and enhancing
its business.

 

Whereas Lessor approves of this addition to the Premises
and as provided for in Section 4.02(b) has indicated the desire to
pay for these changes.

 

Whereas Lessor and Lessee have met and have agreed to the
following changes to the Lease Agreement dated February 1, 2001:

 

1.                                      Effective
October 1, 2003, the Base Rent provided for in Section 2.01 will be
adjusted to Twenty-two Thousand Two Hundred Four Dollars and Twenty-two Cents
($22,204.22) per month.  All other terms
of Section 2.01 will remain the same.

 

2.                                      The anniversary
of the Lease Agreement shall be revised to October 1st for the purpose of
the three percent (3%) rent adjustment provided for in Section 2.02.

 

3.                                      The reduction
of Base Rent provided for in Section 2.02 will be changed to Fourteen
Thousand Eight Hundred Fifteen Dollars and Eighty-nine Cents ($14,815.89) per
month effective June 1, 2007.

 

All
other terms and conditions of the Lease Agreement will remain unchanged.

 

In
Agreement to the above, this Amendment is executed by the Parties upon the date
first written above.

 

	
  Lessor:

  	
   

  	
  Lessee:

  
	
  TROC,
  LLC

  	
   

  	
  COASTAL
  RADIATION ONCOLOGY

  
	
  A
  California Limited Liability Company

  	
   

  	
  MEDICAL
  GROUP, INC.

  
	
   

  	
   

  	
  A
  California Corporation

  
	
   

  	
   

  	
   

  
	
  by:

  	
  /s/ Robert I. Fishburn, M.D.

  	
   

  	
  by:

  	
  /s/ Jonathan R. Stella, M.D.

  
	
   

  	
  Robert
  I. Fishburn, M.D.

  	
   

  	
   

  	
  Jonathan
  R. Stella, M.D., President

  
	
   

  	
  Managing
  Member 10/28/03Exhibit 10.44

 

MANAGEMENT
SERVICES AGREEMENT

BY AND
AMONG

 

USCC
FLORIDA ACQUISITION CORP,

FROG ONCURE
SOUTHSIDE, LLC

AND ONCURE
MEDICAL CORP.

 

AND

 

INTEGRATED
COMMUNITY ONCOLOGY NETWORK, LLC

 

 

DATED AS OF
MARCH 1, 2005

 

 

Table of
Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND
  RULES OF CONSTRUCTION

  	
   

  	
  i

  
	
  SECTION 1.1

  	
  Definitions

  	
   

  	
  i

  
	
  SECTION 1.2

  	
  Rules of Construction 

  	
   

  	
  ix

  
	
  ARTICLE II OBLIGATIONS OF
  THE COMPANY

  	
   

  	
  x

  
	
  SECTION 2.1

  	
  Management Services

  	
   

  	
  x

  
	
  SECTION 2.2

  	
  Furniture, Fixtures, Equipment and Supplies

  	
   

  	
  x

  
	
  SECTION 2.3

  	
  Financial Planning and Goals

  	
   

  	
  xi

  
	
  SECTION 2.4

  	
  Business Office Services

  	
   

  	
  xi

  
	
  SECTION 2.5

  	
  Financial Statements

  	
   

  	
  xiii

  
	
  SECTION 2.6

  	
  Personnel

  	
   

  	
  xiv

  
	
  SECTION 2.7

  	
  Cancer Centers

  	
   

  	
  xv

  
	
  SECTION 2.8

  	
  Files and Records

  	
   

  	
  xv

  
	
  SECTION 2.9

  	
  Recruitment of New Physicians

  	
   

  	
  xvi

  
	
  SECTION 2.10

  	
  Expansion of the Practice

  	
   

  	
  xvi

  
	
  SECTION 2.11

  	
  Practice Assessment and Consulting Services

  	
   

  	
  xvi

  
	
  SECTION 2.12

  	
  Managed Care Contracting

  	
   

  	
  xvi

  
	
  SECTION 2.13

  	
  Restrictive Covenants of the Company

  	
   

  	
  xvii

  
	
  SECTION 2.14

  	
  Payment of Operational Expenses

  	
   

  	
  xvii

  
	
  SECTION 2.15

  	
  Company Expenses

  	
   

  	
  xvii

  
	
  ARTICLE III OBLIGATIONS OF
  THE PRACTICE

  	
   

  	
  xviii

  
	
  SECTION 3.1

  	
  Required Services and Service Hours

  	
   

  	
  xviii

  
	
  SECTION 3.2

  	
  Professional Standards

  	
   

  	
  xviii

  
	
  SECTION 3.3

  	
  Physician Powers of Attorney

  	
   

  	
  xviii

  
	
  SECTION 3.4

  	
  Restrictive Covenants of the Practice

  	
   

  	
  xviii

  
	
  SECTION 3.5

  	
  Continuing Professional Education

  	
   

  	
  xx

  
	
  SECTION 3.6

  	
  Initial Physicians

  	
   

  	
  xx

  
	
  SECTION 3.7

  	
  Additional Physicians

  	
   

  	
  xx

  
	
  SECTION 3.8

  	
  Termination of Physicians

  	
   

  	
  xx

  
	
  SECTION 3.9

  	
  Cooperation

  	
   

  	
  xxi

  
	
  SECTION 3.10

  	
  Billing Information and Collection Policy

  	
   

  	
  xxi

  
	
  SECTION 3.11

  	
  Quality and Utilization Management

  	
   

  	
  xxi

  
	
  SECTION 3.12

  	
  Peer Review

  	
   

  	
  xxii

  
	
  SECTION 3.13

  	
  Practice Operational Authority

  	
   

  	
  xxii

  
	
  SECTION 3.14

  	
  Other Obligations of the Practice

  	
   

  	
  xxii

  
	
  SECTION 3.15

  	
  Practice Expenses

  	
   

  	
  xxiii

  
	
  ARTICLE IV FINANCIAL
  ARRANGEMENT

  	
   

  	
  xxiii

  
	
  SECTION 4.1

  	
  Management Fees

  	
   

  	
  xxiii

  
	
  SECTION 4.2

  	
  Retained Amount

  	
   

  	
  xxiv

  
	
  SECTION 4.3

  	
  Payments

  	
   

  	
  xxiv

  
	
  SECTION 4.4

  	
  Reconciliation

  	
   

  	
  xxiv

  
	
  SECTION 4.5

  	
  Review of Financial Arrangements by the Practice

  	
   

  	
  xxiv

  
	
  SECTION 4.6

  	
  Collateral Security

  	
   

  	
  xxv

  
	
  SECTION 4.7

  	
  Deposit of Receivables

  	
   

  	
  xxix

  

 

i

 

 

	
  SECTION 4.8

  	
  Automatic Termination

  	
   

  	
  xxix

  
	
  ARTICLE V TERM AND
  TERMINATION

  	
   

  	
  xxx

  
	
  SECTION 5.1

  	
  Term; Renewal Terms

  	
   

  	
  xxx

  
	
  SECTION 5.2 

  	
  Termination by the Company

  	
   

  	
  xxx

  
	
  SECTION 5.3

  	
  Termination by the Practice

  	
   

  	
  xxxi

  
	
  SECTION 5.4

  	
  Limitation On Termination Rights

  	
   

  	
  xxxi

  
	
  SECTION 5.5

  	
  Duties And Remedies Upon Expiration Or Termination

  	
   

  	
  xxxii

  
	
  ARTICLE VI REPRESENTATIONS
  AND WARRANTIES OF THE PRACTICE

  	
   

  	
  xxxii

  
	
  SECTION 6.1

  	
  Representations and Warranties of the Practice

  	
   

  	
  xxxii

  
	
  SECTION 6.2

  	
  Representations and Warranties of the Company

  	
   

  	
  xxxvi

  
	
  ARTICLE VII OTHER
  OBLIGATIONS OF THE PARTIES

  	
   

  	
  xxxviii

  
	
  SECTION 7.1

  	
  Covenants of the Practice

  	
   

  	
  xxxviii

  
	
  SECTION 7.2

  	
  Taxes

  	
   

  	
  xxxix

  
	
  SECTION 7.3

  	
  Covenants of the Company

  	
   

  	
  xxxix

  
	
  ARTICLE VIII INSURANCE AND
  INDEMNIFICATION

  	
   

  	
  xl

  
	
  SECTION 8.1

  	
  Insurance Maintained by the Practice

  	
   

  	
  xl

  
	
  SECTION 8.2

  	
  Insurance Maintained by the Company

  	
   

  	
  xl

  
	
  SECTION 8.3

  	
  Requirements as to Insurance

  	
   

  	
  xli

  
	
  SECTION 8.4

  	
  Indemnification

  	
   

  	
  xli

  
	
  SECTION 8.5

  	
  Indemnification Procedure

  	
   

  	
  xlii

  
	
  ARTICLE IX CONFIDENTIAL
  INFORMATION; ACCESS TO RECORDS

  	
   

  	
  xliii

  
	
  SECTION 9.1

  	
  Confidential Information and Trade Secrets

  	
   

  	
  xliii

  
	
  SECTION 9.2

  	
  Books and Records

  	
   

  	
  xliii

  
	
  ARTICLE X ARBITRATION

  	
   

  	
  xliii

  
	
  SECTION 10.1

  	
  Arbitration

  	
   

  	
  xliii

  
	
  ARTICLE XI GENERAL
  PROVISIONS

  	
   

  	
  xlv

  
	
  SECTION 11.1

  	
  Changes in the Law

  	
   

  	
  xlv

  
	
  SECTION 11.2

  	
  Independent Contractors

  	
   

  	
  xlv

  
	
  SECTION 11.3

  	
  Force Majeure

  	
   

  	
  xlv

  
	
  SECTION 11.4

  	
  Notices and Addresses

  	
   

  	
  xlvi

  
	
  SECTION 11.5

  	
  Entire Agreement

  	
   

  	
  xlvi

  
	
  SECTION 11.6

  	
  Physician Rights

  	
   

  	
  xlvi

  
	
  SECTION 11.7

  	
  Governing Law

  	
   

  	
  xlvi

  
	
  SECTION 11.8

  	
  Captions

  	
   

  	
  xlvii

  
	
  SECTION 11.9

  	
  Severability

  	
   

  	
  xlvii

  
	
  SECTION 11.10 

  	
  Waiver

  	
   

  	
  xlvii

  
	
  SECTION 11.11

  	
  Counterparts

  	
   

  	
  xlvii

  
	
  SECTION 11.12

  	
  Medical Advisory Board

  	
   

  	
  xlvii

  
	
  SECTION 11.13

  	
  Amendment and Modification

  	
   

  	
  xlvii

  
	
  SECTION 11.14

  	
  Assignment and Delegation

  	
   

  	
  xlvii

  
	
  SECTION 11.15

  	
  Open Records

  	
   

  	
  xlvii

  
	
  SECTION 11.16

  	
  Binding Effect

  	
   

  	
  xlviii

  
	
  SECTION 11.17

  	
  Further Actions

  	
   

  	
  xlviii

  
	
  SECTION 11.18

  	
  No Prejudice

  	
   

  	
  xlviii

  

 

ii

 

MANAGEMENT
SERVICES AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”),
dated as of March 1, 2005 (the “Effective Date”), is by and among USCC
Florida Acquisition Corp., a Delaware corporation, FROG OnCure Southside, LLC,
a Florida limited liability company, OnCURE Medical Corp., a Delaware
corporation, (“OnCURE” and collectively, the “Company”), and Integrated
Community Oncology Network, LLC, a Florida limited liability company (the “Practice
or “ICON”).

 

RECITALS

 

A.                                    The Practice is
a medical practice that provides Radiation Oncology Services (as defined
herein) and medical oncology services in the States of Florida and Georgia.

 

B.                                    The Company is
in the business of providing certain administrative and support services to
medical practices, and in providing space, equipment, furnishings, supplies and
inventory to medical practices in connection therewith.

 

C.                                    The Company and
Florida Radiation Oncology Group, a Florida general partnership (“FROG”) were
parties to several Medical Services Agreements, specifically: (i) The Medical
Services Agreement dated October 1, 1998 by and among USCC Florida Acquisition
Corp., and St. John’s Oncology Center, Florida Cancer Center — Palatka, Florida
Cancer Center — Wells Complex, Florida Cancer Center — Orange Park and FROG;
and the Amendments dated January 1, 2003 and June 30, 2003, (ii) The Medical
Services Agreement dated December 1, 2000 by and between U.S. Cancer Center, Inc.
and FROG, and the Amendment dated June 30, 2003, and (iii) The Medical Services
Agreement dated February 1, 2003 by and among OnCURE, FROG OnCURE Southside,
LLC and FROG (the “Original Agreements”), pursuant to which FROG
provided radiation oncology medical services to the Company’s Cancer Centers.

 

D.                                    In March 2005,
the physicians who had been (and continue to be) affiliated with FROG developed
ICON with a number of additional physicians as a new medical practice and it
was decided that FROG and the Company would terminate the Original Agreements
and enter into this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing
and of the respective covenants and undertakings hereunder and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, intending to be legally bound, the parties hereto do hereby agree
as follows:

 

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

 

SECTION
1.1                                   Definitions. As used in
this Agreement, the following terms have the meanings set forth below.

 

“ACCC” shall mean the Association of
Community Cancer Centers.

 

“Accountants” shall have the meaning set
forth in Section 4.5.

 

i

 

“ACR” shall mean the American College of
Radiology.

 

“Administrative Employees” shall have the
meaning in Section 2.6(a).

 

“Affiliate” shall mean a Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, a specified Person. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through
ownership of capital stock, by contract or otherwise. For purposes of this
Agreement, neither the Practice nor any of the Physicians shall be deemed
Affiliates of the Company.

 

“Agreement” shall mean this Agreement, as
amended, modified or supplemented from time to time in accordance with the
terms hereof, together with any exhibits, schedules or other attachments
thereto.

 

“Ancillary Services” shall have the meaning
set forth in Section 6.1(d). 

 

“Annual Budget” shall have the meaning set
forth in Section 2.3.

 

“Billing and Collection Fee” shall have the
meaning set forth in Section 4.1(a)(i). 

 

“BHS” shall mean Baptist Health System, Inc. and
its affiliates.

 

“Business Day” shall mean a day (other than a
Saturday or Sunday), on which commercial banks are open for business in New
York, New York.

 

“Cancer Centers” shall mean the: (i) Florida
Cancer Center — Orange Park, located at 2161 Kingsley Ave., Orange Park, FL,
32073, (ii) Florida Cancer Center — Wells Complex Clinic, located at 3599
University Blvd. South, Suite 1500, Jacksonville, FL, 32245, (iii) Florida
Cancer Center — Palatka, located at 600 Zeagler Drive, Palatka, FL 32178, (iv) Florida
Cancer Center — St. John’s, located at 300 Healthpark Blvd., Suite 1008, St.
Augustine, FL 32086, (v) Florida Cancer Center — Beaches, located at 1375
Roberts Drive, Jacksonville Beach, FL 32207, (vi) Southside Cancer Center,
located at 5742 Booth Road, Jacksonville, FL, 32207, and any future center
owned or operated by the Company that the Parties mutually agree.

 

“Change of Control” means and includes each
of the following: (i) the acquisition, in one or more transactions, of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
by any person or entity or any group of persons or entities who constitute a
group (within the meaning of Section 13(d)(3) of the Exchange Act), other than (x)
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a Subsidiary, or (y) a person who acquires such securities
directly from the Company in a privately-negotiated transaction approved by all
of the members of the Company’s Board of Directors, of any securities of the
Company such that, as a result of such acquisition, such person, entity or
group either (A) beneficially owns (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 50% of the Company’s
outstanding voting securities entitled to vote on a regular basis for a
majority of the members of the Board of Directors of the Company or (B) otherwise
has the ability to elect, directly or indirectly, a majority of the members of
the Board; (ii) the stockholders of the Company approve a merger or

 

ii

 

consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iii) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of (in one or more
transactions) all or substantially all of the Company’s assets; provided,
however, that notwithstanding the foregoing, the term “Change of Control” shall
not include any Change of Control that has occurred in connection with, or as a
result of, an underwritten public offering by the Company of all or part of the
capital stock or other equity securities of the Company pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act of 1933, as amended.

 

“Clinical Employees” shall have the meaning
set forth in Section 2.6(a).

 

“CMS” shall mean the Centers for Medicare and
Medicaid Services, an agency of the United States Department of Health and
Human Services, and any successor thereto.

 

“Collateral” shall have the meaning set forth
in Section 4.6(a).

 

“Communities” shall mean the city of
Jacksonville, and the counties of Nassau, Duval, Baker, Union, Bradford, Clay,
Alachua, Putnam, St. John’s, and Flagler, each located in the State of Florida,
and the counties of Ware, Charlton, and Camden in the State of Georgia.

 

“Company” shall have the meaning set forth in
the preamble.

 

“Company Account” shall have the meaning set
forth in Section 4.7.

 

“Company Expense” shall mean any expense of
the Company which is not an Operational Expense or a Practice Expense. Company
Expense shall include, without limitation, the following:

 

(a)                                 all costs and
expenses relating to the acquisition of medical equipment required to be purchased
pursuant to the terms of this Agreement;

 

(b)                                 any expenditure
relating to the medical equipment used (or to be used) at the Cancer Centers;
provided that such expenditure is contemplated by the Annual Budget and
required to be capitalized under GAAP;

 

(c)                                  all costs and
expenses of the Company associated with the Company assisting that the Practice
is in compliance with all appropriate rules and regulations imposed by managed
care programs, Third-Party Payors, governmental agencies and accreditation bodies,
including without limitation, JCAHO, ACR and ACCC;

 

(d)                                 salaries,
benefits (including any deferred compensation) and other costs relating to the
employment or engagement by the Company of (i) any director or executive
officer of the Company (or Person serving in a similar capacity), (ii) any
Person who provides

 

iii

 

Billing and Collection Services; and (iii) any Person who provides
accounting, finance, payroll, human resources, informational technology, and
compliance services; and

 

(e)                                  such other
costs and expenses expressly set forth in the Annual Budget as Company
Expenses.

 

For purposes of this definition, the term “Company”
shall mean, collectively, the Company and its Affiliates.

 

“Company Lender” shall mean each of Merrill
Lynch Capital Inc., Siemens Medical Credit Corp., and/or any other entity which
is in the business of lending money and which makes funds available to the
Company or any Affiliate of the Company to borrow.

 

“Company Lender Loan” shall mean any loan
agreement between the Company or any of its Affiliates and a Company Lender.

 

“Company Taxes” shall have the meaning set
forth in Section 7.2(a).

 

“Confidential Information and Trade Secrets”
shall mean (a) the material terms of this Agreement or any other written
agreement between the Parties, and (b) any confidential or secret information
concerning (i) any trade secrets, new product developments, special or unique
processes or methods of the Company or any of its Affiliates or of the Practice,
as the case may be, (ii) any sales, advertising or other concepts or plans of
the Company or any of its Affiliates or of the Practice, as the case may be, (c)
records (other than patient medical records), patient lists, reports and other
documents pertaining to the Management Services, (d) the systems, protocols,
policies, procedures, manuals, reports, data bases, documents, instruments and
other materials used by the Company or any of its Affiliates or by the
Practice, as the case may be, (e) all other professional or business
information developed by or on behalf of the Company or any of its Affiliates
or by the Practice, as the case may be, including items produced by the
Physicians, and (f) all financial statements and reports produced by the Company
or any of its Affiliates or by the Practice in connection with this Agreement.

 

“Depository Bank” shall mean Wells Fargo
Bank. 

 

“DHS” shall have the meaning set forth in Section
6.1(d).

 

“DME” shall have the meaning set forth in Section
6.1(d).

 

“EBITDA” shall mean Net Income before
interest expense, taxes, depreciation and amortization.

 

“Effective Date” shall have the meaning set
forth in the preamble.

 

“Event of Company Default” shall have the meaning
set forth in Section 5.3.

 

“Event of Practice Default” shall have the
meaning set forth in Section 5.2.

 

“FF&E” shall have the meaning set forth
in Section 2.2(a).

 

iv

 

“FROG” shall mean Florida Radiology Oncology
Group, a Florida general partnership.

 

“GAAP” shall mean U.S. generally accepted
accounting principles and practices set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession that are
applicable to the circumstances as of the date of determination.

 

“General Management Services Fee” shall have
the meaning set forth in Section 4.1(a)(ii).

 

“Government Receivables” shall mean all
accounts receivable generated from services rendered to beneficiaries under the
Medicare, Medicaid and other state and federal programs, which services are
reimbursable under any of such programs.

 

“Governmental Authority” shall mean any
governmental or quasi-governmental authority including, without limitation, any
federal, state, territorial, county, municipal or other governmental or
quasi-governmental agency, board, branch, bureau, commission, court,
arbitration panel, department, authority, body or other instrumentality or
political unit or subdivision or official thereof, whether domestic or foreign.

 

“HIPAA” shall mean the Health Insurance Portability
and Accountability Act of 1996, as amended.

 

“ICON Physicians” shall have the meaning set
forth in Section 6.1(d).

 

“Indemnified Party” shall have the meaning
set forth in Section 8.5. 

 

“Indemnifying Party” shall have the meaning
set forth in Section 8.5.

 

“JCAHO” shall mean the Joint Commission on
the Accreditation of Healthcare Organizations.

 

“Law” shall mean any statute, ordinance,
code, rule, regulation or court order enacted, adopted or promulgated by any
Governmental Authority.

 

“Lease” shall have the meaning set forth in Section
2.7.

 

“Lien” shall mean any security agreement,
financing statement (whether or not filed), mortgage, lien (statutory or
otherwise), charge, pledge, hypothecation, conditional sales agreement, adverse
claim, title retention agreement or other security interest, encumbrance, lien,
charge, restrictive agreement, mortgage, deed of trust, indenture, pledge,
option, limitation, exception to or other title defect in or on any interest or
title of any vendor, lessor, lender or other secured party to or of such Person
under any conditional sale, lease, consignment, or bailment given for security
purposes, trust receipt or other title retention agreement with respect to any
property or asset of such Person, whether direct, indirect, accrued or
contingent.

 

v

 

“Lockbox Account Agreement” shall have the
meaning set forth in Section 4.7.

 

“Loss” shall have the meaning set forth in Section
8.4(a).

 

“Management Services” shall have the meaning
set forth in Section 2.1.

 

“Medicaid” shall mean, collectively, the
healthcare assistance program established by Title XIX of the Social Security
Act and any statutes succeeding thereto, and all Laws pertaining to such
program including (a) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting such program; (b) all state
statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and requirements of all Government Authorities promulgated in connection
with such program (whether or not having the force of Law), in each case as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Medical Advisory Board” shall mean that
certain Medical Advisory Board of the Company.

 

“Medicare” shall mean, collectively, the
health insurance program for the aged and disabled established by Title XVIII
of the Social Security Act and any statutes succeeding thereto, and all Laws
pertaining to such program including (a) all federal statutes (whether set
forth in Title XVIII of the Social Security Act or elsewhere) affecting such
program; and (b) all applicable provisions of all rules, regulations, manuals,
orders and requirements of all Governmental Authorities promulgated in
connection with such program (whether or not having the force of Law), in each
case as the same may be amended, supplemented or otherwise modified from time
to time.

 

“Net Income” shall mean, for any period, the
excess of Practice Revenues over Operational Expenses.

 

“New Physician” shall have the meaning set
forth in Section 3.7.

 

“Operational Expenses” shall mean, for any
fiscal period, all of the expenses and costs (other than the Company Expenses
and the Practice Expenses) incurred by the Company (or any of its Affiliates)
in connection with the provision of Management Services to the Practice
pursuant to this Agreement, determined on an accrual basis of accounting in
accordance with GAAP, including, but not limited to, the following:

 

(a)         salaries, benefits
(including, without limitation, any deferred compensation) and other costs
(including, without limitation, costs pertaining to training and education)
relating to the employment or engagement by the Company (or any of its
Affiliates) of all Administrative Employees and Clinical Employees;

 

(b)         obligations of the Company
(or its Affiliates) under the leases or subleases for the Cancer Centers
(including, without limitation, the Lease);

 

(c)          medical and office supply
expenses;

 

vi

 

(d)         utility expenses and all
other costs relating to the Cancer Centers, including, without limitation,
costs of repairs, maintenance, telephone, janitorial services and refuse
disposal;

 

(e)          the cost and expense of
FF&E, Required Improvements and all costs and expenses associated
therewith; provided, however, to the extent that any such cost and expense is
required to capitalized under GAAP, such cost and expense shall be deemed a
Company Expense;

 

(f)           insurance premiums and
deductibles for the insurance described in Sections 8.1 and 8.2;

 

(g)          all liability expense, other
than medical malpractice liability expense;

 

(h)         the Billing and Collection
Fee;

 

(i)             any new capital expenditures
made after the Effective Date of the Agreement, which such capital expenditure
shall be added as a depreciation cost allocated to the Cancer Centers, based
upon the life of the asset in accordance with GAAP ; and

 

(j)            such other costs and
expenses expressly set forth in the Annual Budget as Operational Expenses.

 

“Original Agreements” shall have the meaning
set forth in the recitals.

 

“Patients” shall mean all individuals seeking
Radiation Oncology Services from the Practice or any Physician in the
Communities.

 

“Parties” shall mean the Company and the
Practice collectively. 

 

“Party” shall mean any party to this
Agreement.

 

“Payor Instruction Letter” shall have the
meaning set forth in Section 4.7. 

 

“Permits” shall have the meaning set forth in
Section 6.1(d)(ii).

 

“Person” shall mean any individual, entity or
group, including, without limitation, any corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency
or political subdivision thereof.

 

“Physician” shall mean each individual who (a)
is duly licensed to practice medicine in the State of Florida and/or Georgia
and (b) provides Radiation Oncology Services under the direction of the
Practice.

 

“Practice” shall have the meaning set forth
in the preamble.

 

vii

 

“Practice Area” shall mean that area within
the same Communities and/or a twenty (20) mile radius of each Cancer Center.

 

“Practice Expense” shall mean any cost or
expense of the Practice which is not an Operational Expense or a Company
Expense including, without limitation, the following:

 

(a)         all salaries, benefits
(including deferred compensation and health insurance) and other costs relating
to the employment or engagement of a Physician (including physician independent
contractors);

 

(b)         all federal, state or local
income and employment taxes of the Practice and the costs of preparing its
federal, state or local income and employment tax returns;

 

(c)          all costs of membership in
professional associations and continuing professional education expenses, including
subscriptions, for the Physicians;

 

(d)         all medical malpractice
liability judgments assessed against the Practice (to the extent not covered by
insurance);

 

(e)          all direct personnel
expenses of Physicians, including travel and entertainment expenses;

 

(f)           licensure fees and board
certification fees;

 

(g)          all dues and fees for
hospital and medical staff memberships of the Physicians;

 

(h)         the cost and expense to
retain qualified locum tenums to provide comprehensive Radiation Oncology
Services to all Patients seeking such treatment at the Cancer Centers;

 

(i)             the Practice Review Expense;
and

 

(j)            such other
costs and expenses expressly set forth in the Annual Budget as Practice
Expenses.     

 

“Practice Lockbox Account” shall have the
meaning set forth in Section 4.7.

 

“Practice Revenues” shall mean, for any
fiscal period, (a) all cash received (net of adjustments, refunds,
recoupment claims, repayments, fines, penalties, assessments, levies,
disgorgements, restitutions or otherwise to any federal, state or local
governmental agency or other payor) by or on behalf of the Practice or the
Professional Staff as a result of the provision of Radiation Oncology Services
and - (b) all cash received (net of adjustments, refunds, recoupment
claims, repayments, fines, penalties, assessments, levies, disgorgements,
restitutions or otherwise to any federal, state or local governmental agency or
other payor) by the Practice or the Professional Staff in their capacity as
employees of the Practice and rendered incident to this Agreement, whether
received in an inpatient or outpatient setting and whether rendered to health

 

viii

 

maintenance organizations, preferred provider organizations, Medicare,
Medicaid or Patients, including, but not limited to, payments received under
any capitation arrangement.

 

“Practice Review Expense” shall have the
meaning set forth in Section 4.5.

 

“Practice Taxes” shall have the meaning set
forth in Section 7.2(b).

 

“Professional Staff’ shall mean the
Physicians together with the Clinical Employees.

 

“Radiation Oncology Services” shall mean all
radiation oncology services, of a routine and emergency nature, presently or
hereafter provided by the Practice or the Professional Staff and the performance
of all services ancillary thereto.

 

“Receivable” shall mean, as of any date of
determination thereof, with respect to the Practice, all accounts and any and
all rights to payment of money or other forms of consideration of any kind now
owned or hereafter acquired (whether classified under the Uniform Commercial
Code as accounts, chattel paper, general intangibles or otherwise) arising out
of the sale or lease of goods or the provision of Radiation Oncology Services
including, but not limited to, accounts receivable, proceeds of any letters of
credit naming the Practice or the Physicians as beneficiary, chattel paper,
insurance proceeds, contract rights, notes, drafts, instruments, documents,
acceptances and all other debts, obligations and liabilities in whatever form
from any other Person.

 

“Required Improvement” shall mean all
maintenance and repairs to the FF&E.

 

“Retained Amount” shall have the meaning set
forth in Section 4.2.

 

“Secured Obligations” shall have the meaning
set forth in Section 4.6(a). 

 

“SEGHS” shall mean Southeast Georgia Health
System.

 

“Stark Laws” shall have the meaning set forth
in Section 6.1(d).

 

“Third-Party Payors” shall mean any
governmental entity, insurance company, health maintenance organization,
preferred provider organization employer or other Person or similar entity that
is obligated to make payments with respect to a Receivable.

 

“Uniform Commercial Code” shall mean the
Uniform Commercial Code as the same may be in effect from time to time in the
State of Florida; provided that if, by reason of applicable Law, the validity
or perfection of any security interest in any Collateral granted under this
Agreement is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Florida, then as to the validity or perfection, as the
case may be, of such security interest, “Uniform Commercial Code” shall mean
the Uniform Commercial Code as in effect from time to time in such other
jurisdiction.

 

SECTION 1.2                     Rules of
Construction. Unless the context otherwise requires:

 

ix

 

(a)                   an accounting term defined
by GAAP that is not otherwise defined herein shall have the meaning assigned to
it in accordance with GAAP;

 

(b)                   “or” is not exclusive;

 

(c)                    words in the singular include
the plural, and words in the plural include the singular;

 

(d)                   the words “include” and “including”
shall be deemed to mean “include, without limitation,” and “including, without
limitation”;

 

(e)                    “herein,” “hereof,” “hereto,”
“hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular article, section, paragraph or clause where
such terms may appear;

 

(f)                     references to sections mean
references to such section in this Agreement, unless stated otherwise; and

 

(g)                    the use of any gender shall
be applicable to all genders.

 

ARTICLE II

OBLIGATIONS OF THE COMPANY

 

SECTION 2.1                     Management
Services. The Company shall (itself or through any of its Affiliates)
provide to the Practice the management services, personnel, office space,
equipment and supplies as set out in this Article II (referred to
collectively as the “Management Services”).

 

SECTION 2.2                     Furniture,
Fixtures, Equipment and Supplies.

 

(a)                   The Company agrees to
provide to the Practice those supplies and items of furniture, fixtures and
equipment as are reasonably determined by the Company, after consultation with
the Practice, to be necessary and/or appropriate for the Practice’s operations
at the Cancer Centers during the term of this Agreement, or as are reasonably
requested by the Practice, and in each case as are contemplated by the Annual
Budget (all such items of furniture, fixtures, equipment and supplies are
collectively referred to hereinafter as the “FF&E”). Title to the
existing, additional and replacement FF&E shall be in the name of the
Company, any Affiliate of the Company, or any of their respective nominees or a
leasing company. The Company shall be responsible for ensuring that all (x) Required
Improvements and (y) capital improvements to the FF&E that are
contemplated by the Annual Budget, are made. For the avoidance of doubt, the
cost and expense of such Required Improvements shall be deemed an Operational
Expense.

 

(b)                   The Practice acknowledges
that neither the Company nor any of its Affiliates makes any representation or
warranty, express or implied, as to the fitness, suitability or adequacy of any
furniture, fixtures, equipment, inventory or supplies, which are leased or
provided pursuant to this Agreement, for the conduct of a medical practice or
for any other particular purpose. The Practice shall not, and shall cause each
Physician not to, make any

 

x

 

changes, alterations or additions to the FF&E without the prior
written consent of the Company, which consent shall not be unreasonably
withheld.

 

SECTION 2.3                     Financial
Planning and Goals. The Company will prepare, in consultation with the
Practice, an annual budget (the “Annual Budget”) for the Cancer Centers,
reflecting in reasonable detail anticipated revenues and expenses, sources and
uses of capital for the Cancer Centers, anticipated personnel staffing and
support services arrangements and anticipated ancillary services. The Annual
Budget shall be subject to review and approval of the Practice. In the event
that the Company and the Practice are unable to approve any Annual Budget
within 30 days of the beginning of the fiscal year to which such Annual Budget
relates, such dispute shall be settled by the Medical Advisory Board and the
Annual Budget in respect of the preceding fiscal year shall be deemed the
Annual Budget for such new fiscal year pending the determination of the Medical
Advisory Board. Neither Party shall be permitted to make any expenditure that
is: (a) not included in the Annual Budget if such expenditure is greater
than $25,000 individually or in the aggregate with all other expenditures that
were not included in the Annual Budget and all other expenditures that exceed
their identified amount in the Annual Budget (but only to the extent of such
excess); or (b) set forth in the Annual Budget if such expenditure is
greater than $25,000 of the amount approved for such expenditure in the Annual
Budget individually or in the aggregate with all other expenditures that exceed
their identified amount in the Annual Budget (but only to the extent of such
excess) and all other expenditures that where not included in the Annual
Budget. The Annual Budget for any fiscal year may be amended or modified by a
written agreement executed by each of the Parties.

 

SECTION 2.4                     Business Office
Services. The Practice appoints the Company as its sole and
exclusive manager and administrator of all business functions and services
related to the Cancer Centers services during the term of this Agreement, including,
but not limited to, all computer, bookkeeping, billing and collection services,
accounts receivable and accounts payable management services, janitorial and
cleaning services and management services. The Company hereby is expressly
authorized to perform its business office services, in whatever manner it
reasonably deems appropriate, to meet the day-to-day requirements of the
non-medical business functions of the Cancer Centers; provided, that the costs
associated with providing such services are consistent with the Annual Budget.
Without limiting the generality of the foregoing, the Company shall perform the
following functions:

 

(a)                   Accounting, bookkeeping and
accounts payable processing.

 

(b)                   Materials management,
including purchase and stocking of office and medical supplies at levels
reasonably necessary for the provision of Radiation Oncology Services.

 

(c)                    Human resources management,
including recruitment of any necessary additional Clinical Employees and
Administrative Employees that are contemplated by the Annual Budget.

 

(d)                   Provide qualified support
sufficient to assure the proper and efficient functioning of all hardware and
software components of the information systems utilized in connection with the
Cancer Centers.

 

xi

 

(e)                    Provide financial auditing
services reasonably necessary for billing purposes and for compliance with
Medicare and Medicaid, managed care contracts, and other federal, state, or
private payor reimbursement programs or plans.

 

(f)                     Evaluate, negotiate and
administer all managed care contracts and other third-party payor contracts on
behalf of the Practice, all such contracts being subject to approval by the
Practice.

 

(g)                    Provide ongoing assessment
of business activity including outcomes monitoring and patient satisfaction.

 

(h)                   Order and purchase all
medical and office supplies required in the day-to-day operation of the
Practice at the Cancer Centers and contemplated by the Annual Budget.

 

(i)                       Provide a
computer management information system for the provision of Billing and
Collection Services.

 

(j)                      Provide such
other services as are deemed reasonably necessary by the Company to assure the
efficient delivery of Radiation Oncology Services.

 

(k)                   Bill and collect all
professional fees for services furnished to Patients. The Practice hereby
irrevocably appoints the Company its lawful attorney-in-fact, with full
authority in the place and stead of the Practice and in the name of the
Practice, the Company or otherwise, and with full power of substitution in the
premises (which power of attorney, being coupled with an interest, is
irrevocable for so long as this Agreement shall be in effect), for the
following purposes:

 

(i)                                  to bill
Patients in the Cancer Centers and Practice’s name and on the Practice’s
behalf, and in the name and on behalf of all Physicians;

 

(ii)                               to bill in the
Cancer Centers and Practice’s name and on the Practice’s behalf, and in the
name and behalf of all Physicians, all claims for reimbursement or
indemnification from insurance companies, Medicare and Medicaid, and all other
Third-Party Payors or fiscal intermediaries for all goods and services provided
by the Practice or the Professional Staff;

 

(iii)                            to collect
Receivables in the Cancer Centers and Practice’s name and on the Practice’s
behalf, and in the name and on behalf of all Physicians;

 

(iv)                              to settle,
compromise or release in whole or in part any amounts owing on the Receivables;

 

(v)                                 to receive, on
behalf of the Cancer Centers and Practice and all Physicians, payments from
Patients,

 

xii

 

insurance companies and all other payors with
respect to services rendered by the Practice and Professional Staff, and the
Practice shall forward any such payments received by it or any Physician to the
Company for deposit;

 

(vi)                            other than with
respect to Government Receivables where applicable, to take possession of and
endorse, in the name of the Cancer Centers and Practice or in the name of any
Physician, any notes, checks, money orders, insurance payments and any other
instruments received as payment of such Receivable;

 

(vii)                         to direct all
Third-Party Payors, other than Medicare or Medicaid, to deposit all payments
with respect to Receivables in the Company Lockbox Account by wire transfer;
and

 

(viii)                     to initiate
(subject to the approval of the Medical Advisory Board) and pursue legal
proceedings in the name of the Cancer Centers and Practice, to collect any
accounts and moneys owed to the Cancer Centers and Practice or any Physician,
to enforce the rights of the Cancer Centers and Practice as creditor under any
contract or in connection with the rendering of any service, and to contest
adjustments and denials by Governmental Agencies (or their fiscal
intermediaries) as third-party payors.

 

The Practice, and only the Practice, will perform
all of the medical functions associated with the provision of the Radiation
Oncology Services. The Company will have no authority, directly or indirectly,
to perform, and will not perform, any medical function. The Company may,
however, advise the Practice as to the relationship (if any) between its
performance of medical functions and the overall administrative and business
functioning of its practice. To the extent that any Clinical Employees assist
the Practice in performing medical functions, such Clinical Employees shall be
subject to the professional direction and supervision of the Practice and, in
the performance of such medical functions, shall not be subject to any
direction or control by, or create any liability on behalf of the Company,
except as may be specifically authorized in writing by the Company.

 

SECTION 2.5                     Financial
Statements. The Company shall prepare and deliver to the Practice
monthly financial statements within 45 days after the end of each month and a
year-end financial statement within 120 days after the end of each fiscal year
reflecting Net Income, Patient Revenues and Operational Expenses for such
period. The Company shall also prepare and deliver with such financial
statements, a report setting forth: (i) billing and collections by
patient, (ii) Receivables, aging reports broken down by payor and patient,
(iii) billings and collection reports broken down by payor and patient, (iv) billings
and census reports broken

 

xiii

 

down by referring physician, and (v) such other financial
information as shall be mutually agreed to by the Practice and the Company.

 

SECTION 2.6                     Personnel.

 

(a)                   The Company shall employ and
provide to the Cancer Centers and Practice all personnel (other than the
Physicians) (i) that the Company determines, after consultation with the
Practice, to be reasonably necessary for the effective operation of the
Practice and (ii) whose salaries, benefits (including deferred
compensation) and other costs of employment are contemplated by the Annual
Budget, including, without limitation: (1) all nurses, therapists,
physicists, medical records personnel and other medical support personnel
(referred to collectively as the “Clinical Employees”); (2) all
business office personnel (i.e.,  clerical,
secretarial, bookkeeping and revenue collection personnel) as are necessary for
the maintenance of patient records, scheduling of Radiation Oncology Services,
collection of Receivables and maintenance of the financial records of the
Cancer Centers to the extent directly related to the provision of Radiation
Oncology Services at the Cancer Centers (referred to collectively as the “Administrative
Employees”); and (3) an office administrator to manage and administer,
subject to the terms and conditions hereof, all of the day-to-day routine
business functions and services of the Cancer Centers. The Company shall not
unreasonably withhold its consent to requests by the Practice for additional
personnel. The Company shall determine the salaries and fringe benefits of all
such personnel provided under this Section consistent with the Annual
Budget. Schedule 2.6(a) sets forth as of the Effective Date a
complete and correct list of each of the initial Clinical Employees, the
Administrative Employees and the office administrator.

 

(i)                                     The Clinical
Employees shall constitute and be treated as leased employees of the Practice
under Section 2050.1C of the Medicare Carriers Manual (CMS Pub. 14-3), as
amended from time to time, and the Practice shall have, and agrees to exercise,
such supervision and control over the Clinical Employees as may be required by
CMS (including without limitation by the provisions of Section 2050.1C of
the Medicare Carriers Manual, as amended from time to time) so that the
Practice may bill Medicare for the services of the Clinical Employees under the
Physicians’ or the Practice’s, as the case may be, Medicare provider number(s).

 

(ii)                                  Each Clinical
Employee shall be (1) appropriately licensed, certified or registered, as
the case may be, by the State of Florida or Georgia, as appropriate, to assist
the Physicians in the provision of Radiation Oncology Services; and (2) qualified
by virtue of his training and/or experience to assist the Physicians in the
provision of Radiation Oncology Services.

 

xiv

 

(b)                   The Company shall be
responsible for the assignment of all such personnel to perform services at the
Cancer Centers; provided, however, that the Company shall, at the Practice’s
reasonable request, reassign or replace any non-physician medical support
personnel who are not, in the Practice’s judgment, adequately performing the
required services. Neither the Practice nor the Company shall discriminate
against such personnel on the basis of race, religion, age, sex, disability or
national origin in violation of any applicable Law.

 

(c)                    Notwithstanding anything to
the contrary contained herein, at all times during the term of this Agreement,
the Clinical Employees and the Administrative Employees shall be deemed
employees or independent contractors of the Company and not the Practice.

 

SECTION 2.7                     Cancer Centers. The Company
hereby grants the Practice the exclusive right in conjunction with the Company,
during the term of this Agreement, to use, subject to the terms and conditions
of the Cancer Center leases (the “Lease”), for the provision of
Radiation Oncology Services. The Company covenants that (i) the Practice
will have quiet possession of and the undisturbed right to use each of the
Cancer Centers during the term of this Agreement, (ii) the Company will
not default under any Lease, and (iii) the Company will not amend any
Lease without the Practice’s consent. The Practice shall not, and shall cause
each of the Physicians not to, make any changes, alterations or additions to
the Cancer Centers without the prior written consent of the Company, which
shall not be unreasonably withheld. The Practice shall use and occupy the Cancer
Centers (a) in accordance with the terms and conditions of the Lease, (b) exclusively
for the provision of Radiation Oncology Services and ancillary services, such
as imaging, laboratory, cyclotron, and support services, and (c) in
compliance with all applicable Laws and standards of medical care. It is
expressly acknowledged by the Parties that the medical practice or practices
conducted at the Cancer Centers shall be conducted solely by Physicians
associated with the Practice, and no other physician or medical practitioner
shall be permitted to use or occupy the Cancer Centers without the prior
written consent of the Company.

 

SECTION 2.8                     Files and
Records.

 

(a)                   Subject to the succeeding
paragraph, the Company shall maintain all files and records relating to the
operation of the Cancer Centers and Practice, including, but not limited to,
customary financial records and patient files. The Company shall use its best
efforts to manage all files and records in compliance with all applicable Laws,
and all files and records shall be located so that they are readily accessible
for patient care, consistent with ordinary records management practices. The
Practice shall have reasonable access to such records during the term of this
Agreement and for a period of five years after the termination or expiration of
the term of this Agreement.

 

(b)                   The Practice shall supervise
the preparation of, and direct the contents of, patient medical records, all of
which shall be and remain confidential and the property of the Practice. The
Practice shall establish and enforce procedures to ensure that the Professional
Staff properly prepare and complete medical records for all Patients as
required by applicable Law, the medical staff bylaws, rules and
regulations of the Company and its Affiliates, and the rules and
regulations of any Third-Party Payors with which the Company (or any Affiliate
of the Company) may contract or affiliate from time to time. All such patient
records shall be

 

xv

 

maintained for the periods required by, and subject to the other
requirements of, applicable Law. The Company shall have reasonable access to
such records and, subject to applicable Laws and accreditation policies, the
Company shall be permitted to retain true and complete copies of such records.

 

SECTION 2.9                     Recruitment of
New Physicians. At the request of the Practice, the Company shall
perform administrative services relating to the recruitment of physicians for
the Practice. The Company’s role in recruitment is not to be construed as
direct employment by the Company, but an acknowledgement that any financial
commitment made to a Physician during recruitment will affect the performance
of both the Company and the Practice under this Agreement.

 

SECTION 2.10              Expansion of the Practice. The Company
shall assist the Practice in evaluating and adding additional office space, new
Cancer Centers, new office-based procedures and services, and new or additional
ancillary or other professional services, as provided for in the Annual Budget
or otherwise approved by the Company and the Practice. The Company and the
Practice hereby pledge their mutual intention and support for such reasonable
expansion of the Practice.

 

SECTION 2.11              Practice Assessment and
Consulting Services. The Company shall assess the Practice’s
performance including product line analysis, outcomes monitoring and patient
satisfaction. The Company shall develop systems to track revenues, expenses,
utilization, quality improvement, Practice and Physician productivity and
patient satisfaction. The Company shall arrange for or provide business and
financial management consultation and advice reasonably requested by the
Practice and directly related to the operations of the Practice pursuant to this
Agreement.

 

SECTION 2.12              Managed Care Contracting.

 

(a)                   The Company shall review all
proposed managed care contracts and provide recommendations to the Practice
regarding whether the participation in such managed care contract is consistent
with the Annual Budget. The Practice shall execute only such managed care
contracts as may be consistent with the Annual Budget (unless otherwise
approved by the Company) and shall (and shall cause the Professional Staff to)
abide by the terms of any such contract. Notwithstanding the foregoing, no
Party shall execute a managed care contract pertaining to Radiation Oncology
Services to be provided at the Cancer Centers without the other Party’s prior
written consent (which consent shall not be unreasonably withheld).

 

(b)                   The Practice shall ensure
that: (i) each Physician participates (without interruption or suspension)
in Medicare, Medicaid, TRICARE, workers’ compensation, other federal and state
reimbursement programs, and the payment plan of any commercial insurer, health
maintenance organization, preferred provider organization, or other health
benefit plan or program with which the Practice may contract or affiliate from
time to time and (ii) the Professional Staff complies with appropriate
utilization control and review mechanisms and quality improvement policies
implemented by the Company or by appropriate managed care programs, Third-Party
Payors, governmental agencies and accreditation bodies, including without
limitation, JCAHO, ACR and ACCC.

 

xvi

 

SECTION 2.13              Restrictive Covenants of the
Company.

 

(a)                   The Company shall not
provide space, furnishings, facilities, equipment, supplies, services or
personnel similar to those provided to the Practice under this Agreement, directly
or indirectly, to any Person or entity (other than the Practice) in connection
with the provision of Radiation Oncology Services to patients in the Practice
Area, without providing the Practice with appropriate prior written notice and
the opportunity to provide such Radiation Oncology Services on terms no less
favorable than those proposed to be offered to such Person.

 

(b)                   The Company shall not take
any action to disparage or criticize the Practice or any of its employees,
officers, directors, owners or customers.

 

(c)                    Each Party hereby agrees
that the provisions of this Section 2.13 are independent of all other
covenants or agreements between the Parties and shall remain enforceable
regardless of any claim or determination with respect to, or breach of, any
other agreement between the Parties.

 

(d)                   Each Party hereby
acknowledges that in the event of any breach or threatened breach by the
Company of any of the provisions of this Section 2.13, the Practice would
not have an adequate remedy at Law and could suffer substantial and irreparable
damage. Accordingly, the Company hereby agrees that, in such event, the
Practice shall be entitled, and notwithstanding any election by the Practice to
claim damages, to obtain a temporary and/or permanent injunction (without
proving a breach therefor) to restrain any such breach or threatened breach or
to obtain specific performance of any such provisions, all without prejudice to
any and all other remedies that the Practice may have at Law or in equity.

 

(e)                    Any term or provision of
this Section 2.13 that is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Section 2.13 or affecting the validity or
enforceability of any of the terms and provisions of this Section 2.13 in
any other jurisdiction. Each of the Parties hereby agrees that the provisions
set forth in this Section 2.13 are reasonable under the circumstances, and
further agrees that, if in the opinion of any court of competent jurisdiction
any provision herein is determined to be excessively broad as to duration,
activity, subject or otherwise incompatible with applicable Law, said court is
authorized and requested to modify such provision so as to cause it to be not
excessively broad or incompatible with applicable Law, and to enforce such
provision as modified.

 

(f)                     For purposes of this Section 2.13,
the term “Practice” shall mean, collectively, the Practice and its Affiliates.

 

SECTION 2.14              Payment of Operational
Expenses. As more fully set forth in Article IV, each
Operational Expense shall be paid out of Practice Revenues and the Company
shall have the authority to pay each such Operational Expense from the Company
Lockbox Account.

 

SECTION 2.15              Company Expenses. The Company
shall be solely responsible for the payment of all Company Expenses.

 

xvii

 

ARTICLE III

OBLIGATIONS OF THE PRACTICE

 

SECTION 3.1                                   Required
Services and Service Hours. Unless otherwise agreed to
by each of the Parties, at all times during the term of this Agreement, the
Practice shall ensure that: (a) a Physician is available to provide
comprehensive Radiation Oncology Services at the Cancer Centers on a fulltime
basis (the Practice may retain, at its sole cost and expense, qualified locum
tenens to provide such services); (b) each Patient seeking Radiation
Oncology Services at the Cancer Centers is treated within a reasonable time of
such Patient’s request for treatment; and (c) a Physician shall be
available at the Cancer Centers, at all times, when a Patient is being treated.

 

SECTION 3.2                                   Professional
Standards.  

 

(a)                                 The professional
services provided by the Practice and the Professional Staff shall be performed
solely by or under the supervision of a Physician licensed to practice medicine
in the State of Florida or Georgia, as appropriate, and shall at all times be
provided in accordance with applicable ethical standards and Laws applying to
the medical profession (or with any standards to which by contract it has
agreed to abide). The Practice shall, with the assistance of the Company if so
requested, resolve any utilization management or quality improvement issues (as
described more fully in Section 3.11) which may arise in connection with
the Practice.

 

(b)                                 If any
disciplinary actions or professional liability actions are initiated against
the Practice or any Professional Employee, the Practice shall immediately
inform the Company of such action and the underlying facts and circumstances
and provide the Company, promptly upon receipt thereof but in any event within
five Business Days, with copies of all documents received by the Company with
respect to any such action. The Company shall similarly inform the Practice of
any such disciplinary actions or professional liability actions initiated
against the Practice or any Professional Staff of which it first becomes aware
and provide the Practice, promptly upon receipt thereof but in any event within
five Business Days, with copies of all documents received by the Company with
respect to any such action.

 

(c)                                  The Practice
shall establish and maintain procedures to assure the consistency and quality
of all professional medical services provided by the Practice, and the Company
shall render administrative assistance to the Practice as requested in
furtherance thereof. The Practice shall in good faith cooperate with
inspections and on-site surveys of the Practice as may be conducted by any
Governmental Authority, accrediting organization or other Third-Party Payor.

 

SECTION 3.3                                   Physician
Powers of Attorney. The Practice shall require all Physicians to
execute and deliver to the Practice powers of attorney, satisfactory in form
and substance to the Company, appointing the Practice as attorney-in-fact for
each such Physician for the purposes set forth in Section 2.4(k).

 

SECTION 3.4                                   Restrictive
Covenants of the Practice.

 

(a)                                 The Practice acknowledges
and agrees that the services to be provided by the Company hereunder are
feasible only if the Practice operates a vigorous medical practice to

 

xviii

 

which the Physicians devote their full time, attention and best
efforts. Accordingly, the Practice agrees that it shall not, without the prior
written consent of the Company, during the term of this Agreement and for a
period of three years following the termination of this Agreement, other than pursuant
to this Agreement, on its behalf or on behalf of any other Person, directly or
indirectly,

 

(i)                                    solicit,
recruit or employ any Person who has been employed or otherwise retained by the
Company at any time during the 12 months immediately preceding such
solicitation or recruitment or cause or seek to cause such Person to leave the
employ of the Company, excluding however individuals who at the time are
employed by BHS, SEGHS or any of their Affiliates; or

 

(ii)                                 solicit any
supplier, lender, lessor or any other Person which has a business relationship
with the Company with a view to cause, or seek to cause, such Person to take
action which is intended to or could reasonably likely adversely affect the
Company’s relationship with such Person.

 

(b)                                 The Practice
shall not take any action to disparage or criticize the Company or, as
applicable, any of its employees, officers, directors, owners or customers.

 

(c)                                  The Practice
shall cause each Physician (other than any locum tenens engaged by the
Practice) to enter into an agreement concerning the restrictions set forth in
this Section 3.4. Such agreements shall expressly name the Company as a
third-party beneficiary.

 

(d)                                 Each Party
hereby agrees that the provisions of this Section 3.4 are independent of
any and all other covenants or agreements by and among such Parties and shall
remain enforceable regardless of any claim or determination with respect to, or
breach of, any other agreement between such Parties.

 

(e)                                  Each Party
hereby acknowledges that in the event of any breach or threatened breach by the
Practice of any of the provisions of this Section 3.4, the Company would
have no adequate remedy at Law and could suffer substantial and irreparable
damage. Accordingly, the Practice hereby agrees that, in such event, the
Company shall be entitled, and notwithstanding any election by the Company to
claim damages, to obtain a temporary and/or permanent injunction (without
proving a breach therefor) to restrain any such breach or threatened breach or
to obtain specific performance of any such provisions, all without prejudice to
any and all other remedies which the Company may have at Law or in equity.

 

(f)                                   Any term or
provision of this Section 3.4 which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Section 3.4 or affecting the
validity or enforceability of any of the terms

 

xix

 

and provisions of this Section 3.4 in any other jurisdiction. Each
of the Parties hereby agrees that the provisions set forth in this Section 3.4
are reasonable under the circumstances, and further agrees that if in the
opinion of any court of competent jurisdiction any provision herein is
determined to be excessively broad as to duration, activity, subject or
otherwise incompatible with applicable Law, said court is authorized and
requested to modify such provision so as to cause it to be not excessively
broad or incompatible with applicable Law, and to enforce such provision as
modified.

 

(g)                                  For purposes of
this Section 3.4, the term “Company” shall mean, collectively, the Company
and its Affiliates (including, but not limited to, entities with which the
Company and its Affiliates have management arrangements or to which any of them
provides management services).

 

(h)                                 The Practice
shall cause each Physician to agree to provide radiation oncology medical
services exclusively for the Company at the Cancer Centers, and will NOT
provide any such services to any non-owned outpatient Company Cancer Centers,
nor compete with any Cancer Centers, within the Practice Area, unless with the
written consent of the Company. The Parties hereby agree that the Cancer
Centers owned, operated, leased or managed by BHS, SEGHS or any of their
Affiliates are excluded from such non-compete, and, accordingly, the Company
hereby grants consent for the Practice to provide such professional services at
those Centers.

 

SECTION 3.5                                   Continuing
Professional Education. The Practice shall ensure that each
Physician maintains competence in, and remains currently well-informed as to
recent developments about, radiation oncology clinical protocols. Accordingly,
subject to the Practice at all times providing sufficient Physicians to care
for the needs of Patients, the Physicians shall attend seminars, keep current
with journals and take other reasonable steps to remain proficient in the
practice of radiation oncology. All seminars necessary to maintain licensure or
competence shall be the responsibility of the Practice and the individual
Physicians. At a minimum, the Practice shall ensure that each Physician
participates in such continuing medical education as is necessary for the
Physician to remain licensed.

 

SECTION 3.6                                   Initial
Physicians. The initial Physicians of the Practice shall be
Drs. Paryani, Wells, Johnson, Scott, Kuruvilla, Terk, Jamieson, Schoeppel,
Tripp, Simmons, Deshmukh, Augspurger, Mendoza, Sinopoli, and Collieand who
shall provide Radiation Oncology Services at the Cancer Centers and BHS and
SEGHS Centers on a fulltime basis.

 

SECTION 3.7                                   Additional
Physicians. The decision to employ or engage an additional
Physician (“New Physician”) shall be made by the Practice (after
consultation with the Company) and the terms of any employment contract or
similar agreement between the Practice and such New Physician shall be
determined by the Practice. Each Physician (including each New Physician) shall
be deemed an employee, independent contractor or agent of the Practice.

 

SECTION 3.8                                   Termination of
Physicians. The Practice shall consult with the Medical
Advisory Board prior to terminating the employment or engagement of any
Physician; provided, however, that all decisions with respect to removing
Physicians shall be made by the Practice, in its sole and absolute discretion.
Each Physician’s right to treat Patients or otherwise

 

xx

 

provide services at the Cancer Centers shall automatically terminate
upon the termination of such Physician’s employment or engagement with the
Practice. Evidence of the disclosure by the Practice to all Physicians of the
foregoing limitation on their right to so use the Cancer Centers, and each
Physician’s acceptance of such limitations, shall be documented and made
available to the Company upon request.

 

SECTION 3.9                                   Cooperation. The Practice
shall, and shall request the Physicians to, cooperate with and assist the
Company to control all costs and expenses relating to the operation of the
Cancer Centers without sacrificing professional standards or patient care. The
Practice shall, and shall require Physicians to, exercise due care to ensure
that, when being used by the Physicians, medical equipment utilized by the
Practice is being used in a safe and efficient manner, and shall timely report
any unsafe or unsatisfactory equipment of which the Practice, or any of the
Physicians, is aware. The Parties acknowledge that the Practice retains full
authority and responsibility for patient care and that the Company’s policies
and procedures referenced herein are not to interfere with the Practice’s
authority with respect to patient care issues. The Practice also agrees to
cooperate with, and participate in, any patient satisfaction surveys and/or
outcomes management surveys or programs instituted or implemented by the
Company, subject to approval by the Practice (such approval not to be
unreasonably withheld or delayed). In the event that the Practice reasonably
objects to any policy or procedure implemented by the Company, such objection
shall be resolved by the Medical Advisory Board. In the event that the Medical
Advisory Board shall be unable to resolve any such dispute, such dispute shall
be submitted to arbitration in accordance with Article X.

 

SECTION 3.10                            Billing
Information and Collection Policy.

 

(a)                                 The Practice
shall promptly provide the Company with all billing information requested by
the Company (including, but not limited to, appropriate provider numbers, the
name of the Patient, the date of service, and the nature and extent of services
provided) and any supporting medical information necessary to enable the
Company to bill and collect the Cancer Centers and Practice’s charges pursuant
hereto. The Practice shall cause each Physician to provide the Company with
billing codes and complete descriptions supporting all procedures performed by
such Physician, and shall comply with all reasonable requests by the Company to
supplement such coding or descriptions for billing purposes.

 

(b)                                 All
professional fee schedules for services shall be mutually agreed to by the
Practice and the Company. No discount, fee reduction, writeoff, or other waiver
of the agreed fees shall be made by the Company without express authorization
of the Practice, which authorization shall not be unreasonably withheld. The
Company shall be liable to reimburse the Practice in full for any writeoff or
fee reduction not expressly authorized by the Practice.

 

SECTION 3.11                            Quality and
Utilization Management. The Practice acknowledges and agrees that a
quality and utilization management program for determining the medical
necessity and appropriateness of care rendered by the Practice provides
controls and protections that assist to prevent potential overutilization with
any fee-for-service arrangement including, but not limited to, those
reimbursable under federal health insurance programs and also provides
essential data to the Practice and the Company for the purposes of managing the
Cancer Centers and negotiating, administering and maintaining Third-Party Payor
contracts. The Practice and

 

xxi

 

the Company agree to develop and implement a quality and utilization
management program in accordance with recommendations made by the Company, the
Practice, or the Medical Advisory Board or as required under Third-Party Payor
contracts. The Practice shall cause the Physicians to participate in the
development of such programs and to comply with the standards, protocols or
practice guidelines established thereby, and the Practice will ensure that such
individuals are required by their employment agreements or other contracts to
do so. The Company is authorized by the Practice to prepare and distribute
reports of such program activities to employees of, and consultants to the
Practice and the Company, to Third-Party Payors, and to such other Persons as
the Company deems necessary in order for the Company to carry out its
obligations hereunder.

 

SECTION 3.12                            Peer Review. The Practice
and the Company shall cooperate to develop, from time-to-time, peer review
procedures for the Professional Staff providing services to the Patients. The
Practice shall provide the Company with prompt notice of any material quality
of care concerns relating to the Physicians providing services on behalf of the
Practice. The Practice shall implement such corrective actions that the
Practice, after consultation with the Medical Advisory Board, determines are necessary
or appropriate to comply with the then current peer review procedures,
community standards, and Laws. The Practice and the Physicians will also comply
with, and participate in, all peer review programs of the Company its
Affiliates, and any entity with whom the Company (or any Affiliate of the
Company) and the Practice contracts with respect to the provision of Radiation
Oncology Services at the Cancer Centers, including, but not limited to,
Third-Party Payors.

 

SECTION 3.13                            Practice
Operational Authority. The Practice shall have exclusive authority
and control over day-to-day operations and center staff decisions subject to
the requirement that the Practice shall, at all times, comply with and follow: (a) the
human resources policies of the Company and its Affiliates, (b) all
employment Laws, (c) the Annual Budget, (d) all reimbursement rules of
Medicare and all other Third-Party Payors and (e) all Laws as to which
non-compliance would be detrimental to the Company, its Affiliates and/or the
Practice.

 

SECTION 3.14                            Other
Obligations of the Practice. At all times during the
term of this Agreement, the Practice shall also be responsible for: (a) the
scheduling of Physician coverage to ensure that fulltime coverage is being
provided at the Cancer Centers during the business hours established by the
Company; (b) maintaining an adequate internal mechanism for selecting,
disciplining and removing Physicians; (c) assisting the Company (and its
Affiliates) in interviewing, screening, selecting, reviewing and disciplining
the Clinical Employees; (d) exerting its best efforts to effectively and
efficiently resolve (with the cooperation of the Company) Patient, Clinical
Employee and medical staff member complaints and problems concerning the
provision of Radiation Oncology Services; (e) communicating and
participating in regular meetings with the Medical Advisory Board to discuss
the delivery of Radiation Oncology Services and the operation of the Cancer
Centers; (f) cooperating with the efforts of the Company (and its Affiliates)
to obtain and/or maintain accreditations by ACR and JCAHO, as well as all
appropriate and necessary federal and state licenses and certifications; (g) assisting
the Company (and its Affiliates) in the development and implementation of all
marketing plans and efforts in connection with the Cancer Centers, and causing
the Physicians to be available on a reasonable basis to support these marketing
activities (which may include, for example, speaking engagements at cancer
conferences, public forums, support groups, participation on

 

xxii

 

tumor boards, and meetings with referring physicians); (h) maintaining
a number of Physicians sufficient for the Practice to be able to accept and
treat all new Patients equally, without regard to any factors other than
medical condition (including, without limitation, Patients of Medicare and
Medicaid, as well as insured and uninsured Patients); (i) providing a
reasonable amount of indigent care in the Community, and when and to the extent
reasonably requested by the Company, teaching in any teaching program at the
Cancer Centers; (j) causing the Physicians to maintain staff privileges at
major hospitals and health plans in the Community; and (k) ensuring that
the Professional Staff are familiar and comply with (i) all Laws governing
the practice of medicine or the provision of Radiation Oncology Services, (ii) all
policies, rules and regulations and bylaws of those hospitals where they
have staff privileges, (iii) all applicable professional standards,
including, without limitation, the standards of the American Medical
Association and (iv) all requirements of Medicare, Medicaid, the Health
Insurance Portability and Accountability Act, managed care contracts, and any
other federal, state or private payor reimbursement programs and plans
participated in by the Cancer Centers.

 

SECTION 3.15                            Practice
Expenses. The Practice shall be solely responsible for the
payment of all Practice Expenses.

 

ARTICLE IV

FINANCIAL ARRANGEMENT

 

SECTION 4.1                                   Management Fees.

 

(a)                                 As compensation
for the provision by the Company of the Management Services, the Practice shall
pay the Company:

 

(i)                                    an annual (on a
calendar year basis) fee equal to the lesser of 4% of the annual Practice
Revenues or the actual cost of the billing and collection services set forth in
Section 2.4(k) at the Cancer Centers (the “Billing and Collection Fee”);
plus

 

(ii)                                 an annual (on a
calendar year basis) fee (General Management Services Fee”) equal to:

 

(A)                                    60% of the
EBITDA of the Cancer Centers other than Beaches Cancer Center; and

 

(B)                                    an amount equal
to 50% of the EBITDA at the Beaches Cancer Center.

 

The amounts to be paid to
the Company pursuant to the Billing and Collection Fee and the General
Management Services Fee shall be prorated and payable monthly during the term
of this Agreement within 20 days after the end of each calendar month.

 

(b)                                 Payment of the
Billing and Collection Fee and the General Management Services Fee is not
intended to permit the Company to share in the Practice’s fees, but is

 

xxiii

 

acknowledged as the Parties’ negotiated agreement as to the reasonable
fair market value of the equipment, support services, personnel, office space,
management, administration and other items and services furnished by Company
pursuant to this Agreement, considering the nature and volume of the services
required and the respective risks assumed by the Company and the Practice.
Payment of the Billing and Collection Fee and the General Management Services
Fee is not intended to be, and shall not be interpreted to constitute, the
payment of remuneration for referrals.

 

SECTION 4.2                                   Retained Amount.
Notwithstanding the requirements of Section 4.1, the Practice shall be entitled
to retain, on a monthly basis, a draw of at least $ 107,500 (the “Retained
Amount”). The Company shall prepare for the Practice a quarterly
reconciliation of the exact Billing and Collection Fee and the General
Management Services Fee due against the Retained Amount and shall pay any
amount due either the Company or the Practice within 45 days. In addition, the
Company shall prepare an analysis to verify Practice Revenues on an accrual
basis versus cash basis.

 

SECTION 4.3                                   Payments.

 

(a)                                 When determining
the amount of any payments to be made pursuant to Section 4.1 and Section 4.2,
the Company shall be permitted to estimate monthly revenues and expenses in
accordance with the Annual Budget.

 

(b)                                 In the event
that Practice Revenues are insufficient to pay all of the Operational Expenses
for any period, all Operational Expenses other than the Billing and Collection
Fee shall be paid in full prior to the payment of the General Management
Services Fee.

 

SECTION 4.4                                   Reconciliation. Adjustments
to any payments made to the Company or the Practice pursuant to this Agreement
shall be made to reconcile actual amounts due under this Agreement within 90
days after the end of each calendar year during the term of this Agreement
(pro-rated for any year for which this Agreement has been in effect less than
the entire year). At such intervals, the Company shall determine the actual
amounts due to each Party pursuant to this Agreement for such period and shall
notify the Practice of the amount of payments, if any, owed by or due to each
Party as a result of the reconciliation. If payment is owed by any Party, such
amount shall be paid to such Party within 20 Business Days of such
notification.

 

SECTION 4.5                                   Review of
Financial Arrangements by the Practice. The Practice shall have
the right, at its own cost and expense, to review the Company’s calculations of
all payments, fees and expenses owed by or due to any Party or a third party
under this Agreement (such costs and expenses to review the Company’s
calculations are referred to herein as the “Practice Review Expense”).
Upon reasonable notice to the Company, the Practice shall have the right to
review the Company’s calculations or allocation of any such payments,-fees or
expenses and the Company shall provide the Practice, with all documents,
reports, records and supporting materials used in determining such amounts.
Such documents shall be delivered to the Practice within a reasonable period of
time after such request, but in any event within 15 Business Days. Not later than
20 Business Days following the delivery of such documents to the

 

xxiv

 

Practice, the Practice may furnish the Company with written
notification of any dispute concerning any items shown thereon or omitted
therefrom, together with a detailed explanation in support of the Practice’s
position in respect thereof. The Company and the Practice shall consult to
resolve any dispute for a period of 15 Business Days following such
notification to the Company. If such 15 Business Day consultation period
expires and the dispute has not been fully resolved, the matter shall be
referred to any accounting firm which has not provided accounting services to
any Party or its Affiliates within the prior three years and is chosen by the
Medical Advisory Board (the “Accountants”), which shall resolve the
dispute and render its decision (together with a brief explanation of the basis
therefor) to the Practice and the Company not later than 20 Business Days
following submission of the dispute to it. The decision of such Accountants
shall be a final determination of such amounts. In the event that the
Accountants resolve all disputes presented to it in the manner proposed by one
of the Parties, the fees and expenses of the Accountants relating to the
resolution of such dispute shall be paid by the other Party. In all other
events, the fees and expenses of the Accountants shall be shared in the same
proportion that the Company’s position, on the one hand, and the Practices’
position, on the other, initially presented to the Accountants bears to the
final resolution as determined by the Accountants.

 

SECTION 4.6                                   Collateral
Security.

 

(a)                                 Grant of
Security Interest. To the extent permitted by applicable Law, as
collateral security for the prompt and complete payment when due of all
Operating Expenses (referred to in this Section 4.6 as the “Secured
Obligations”), the Practice hereby sells, assigns, mortgages, hypothecates,
conveys and transfers to the Company, and hereby grants to the Company a
continuing security interest (subordinate only to any security interest of
Third Party Payors in Receivables owed by such payor) in all of the Practice’s
rights, title and interest in, to and under the Receivables (other than the
Governmental Receivables) which may be created or arise during the term of this
Agreement, together with any and all proceeds (as defined in the Uniform
Commercial Code) and products thereof, accessions thereto and substitutions and
additions therefor, regardless of the manner in which the entitlement to
payment for such Receivables shall exist, whether as accounts, accounts
receivable, notes receivable or other evidence of entitlement to the
Receivables, and all of the Practice’s rights, title and interest (including
its right to control the same), if any, in, to and under the Practice Lockbox
Account and the sums on deposit therein (referred to collectively as the “Collateral”).

 

(b)                                 Remedies. If an Event of
Practice Default shall have occurred and be continuing, the Company shall be
entitled to exercise in respect of the Collateral all of its rights, powers and
remedies provided for herein or otherwise available to it by Law, in equity or
otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code, and shall be entitled in particular, but without
limitation of the foregoing, to exercise the following rights, which the
Practice agrees to be commercially reasonable: to sell, resell, assign and
deliver, in its sole discretion, all or any of the Collateral, in one or more
parcels, at public or private sale, at the Company’s main office or elsewhere,
for cash, upon credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as the Company may deem satisfactory.
If any of the Collateral is sold by the Company upon credit or for future
delivery, the Company shall not be liable for the failure of the purchaser to
purchase or pay for the same and, in the event of any such failure, the Company
may resell such Collateral.

 

xxv

 

In no event shall the Practice be credited with any part of the
proceeds of sale of any Collateral until and to the extent cash payment in
respect thereof has actually been received by the Company. Each purchaser at
any such sale shall hold the property sold absolutely, free from any claim or
right of whatsoever kind, including any equity or right of redemption of the
Practice, and the Practice hereby expressly waives all rights of redemption,
stay or appraisal, and all rights to require the Company to marshal any assets
in favor of the Practice or any other party or against or in payment of any or
all of the Secured Obligations, that it has or may have under any rule of
Law now existing or hereafter adopted. No demand, presentment, protest,
advertisement or notice of any kind (except any notice required by Law, as
referred to below), all of which are hereby expressly waived by the Practice,
shall be required in connection with any sale or other disposition of any part
of the Collateral. If any notice of a proposed sale or other disposition of any
part of the Collateral shall be required under applicable Law, the Company
shall give the Practice at least 10 days’ prior notice of the time and place of
any public sale and of the time after which any private sale or other
disposition is to be made. The Company shall not be obligated to make any sale
of Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Company may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable Law, upon each private sale, the Company may purchase
all or any of the Collateral being sold, free from any equity, right of redemption
or other claim or demand, and may make payment therefor by endorsement and
application (without recourse) of the Secured Obligations in lieu of cash as a
credit on account of the purchase price for such Collateral.

 

(c)                                  Application
of Proceeds. All proceeds collected by the Company upon any sale,
other disposition of or realization upon any of the Collateral, together with
all other moneys received by the Company hereunder, shall be applied as
follows: (i) first, to the payment of all costs and expenses of such sale,
disposition or other realization, including the reasonable costs and expenses
of the Company and the reasonable fees and expenses of its agents and counsel
and all amounts advanced by the Company for the account of the Practice; (ii) second,
after payment in full of the amounts specified in clause (i) above, to the
ratable payment of all other Secured Obligations owing to the Company; and (iii) third,
after payment in full of the amounts specified in clauses (i) and (ii) above,
and following the termination of this Agreement, to the Practice or any other
Person lawfully entitled to receive such surplus. The Company shall remain
liable to the extent of any deficiency between the amount of all proceeds
realized upon sale or other disposition of the Collateral pursuant to this
Agreement and the aggregate amount of the sums referred to in clauses (i) and
(ii) above. Upon any sale of any Collateral hereunder by the Company (whether
by virtue of the power of sale herein granted, pursuant to judicial proceeding,
or otherwise), the receipt of the Company or the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Company or such
officer or be answerable in any way for the misapplication thereof.

 

(d)                                 Waivers. The Practice,
to the greatest extent not prohibited by applicable Law, hereby (i) agrees
that it will not invoke, claim or assert the benefit of any rule of Law
now or hereafter in effect (including, without limitation, any right to prior
notice or judicial hearing in

 

xxvi

 

connection with the Company’s possession, custody or disposition of any
Collateral or any appraisal, valuation, stay, extension, moratorium or
redemption Law), or take or omit to take any other action, that would or could
reasonably be expected to have the effect of delaying, impeding or preventing
the exercise of any rights and remedies in respect of the Collateral, the
absolute sale of any of the Collateral or the possession thereof by any
purchaser at any sale thereof, and waives the benefit of all such Laws and
further agrees that it will not hinder, delay or impede the execution of any
power granted hereunder to the Company, but that it will permit the execution
of every such power as though no such Laws were in effect, (ii) waives all
rights that it has or may have under any rule of Law now existing or
hereafter adopted to require the Company to marshal any Collateral or other
assets in favor of the Practice or any other party or against or in payment of
any or all of the Secured Obligations, and (iii) waives all rights that it
has or may have under any rule of Law now existing or hereafter adopted to
demand, presentment, protest, advertisement or notice of any kind (except
notices expressly provided for herein).

 

(e)                                  The
Company; Standard of Care. The Company will hold all
items of the Collateral at any time received under this Agreement in accordance
with the provisions hereof. The obligations of the Company as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The powers conferred on the Company hereunder are solely to protect
its interest in the Collateral, and shall not impose any duty upon it to
exercise any such powers. Except for treatment of the Collateral in its
possession in a manner substantially equivalent to that which the Company
accords its own property of a similar nature, and the accounting for moneys
actually received by it hereunder, the Company shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to the Collateral. The
Company shall not be liable to the Practice (i) for any loss or damage
sustained by the Practice, or (ii) for any loss, damage, depreciation or
other diminution in the value of any of the Collateral that may occur as a
result of or in connection with or that is in any way related to any exercise
by the Company of any right or remedy under this Agreement, any failure to
demand, collect or realize upon any of the Collateral or any delay in doing so,
or any other act or failure to act on the part of the Company, except to the
extent that the same is caused by its own gross negligence or willful
misconduct.

 

(f)                                   Further
Assurances; Attorney-in-Fact. The Practice agrees that it
will join with the Company to execute and, at the Company’s expense, file and
refile under the Uniform Commercial Code such financing statements,
continuation statements and other documents and instruments in such offices as
the Company may reasonably deem necessary or appropriate, and wherever required
or permitted by Law, in order to perfect and preserve the Company’s security
interest in the Collateral, and hereby authorizes the Company to file financing
statements and amendments thereto relating to all or any part of the Collateral
without the signature of the Practice where permitted by Law, and agrees to do
such further acts and things (including, without limitation, making any notice
filings with state tax or revenue authorities required to be made by account
creditors in order to enforce any Receivables) and to execute and deliver to
the Company such additional conveyances, assignments, agreements and
instruments as the Company may reasonably require or deem advisable to perfect,
establish, confirm and maintain the security interest and Lien provided for
herein, to carry out the purposes of this Agreement or to further assure and
confirm unto the Company its rights, powers and remedies hereunder.

 

xxvii

 

In addition to the powers set forth in Section
2.4(k), the Practice hereby irrevocably appoints the Company its lawful
attorney-in-fact, with full authority in the place and stead of the Practice
and in the name of the Practice, the Company or otherwise, and with full power
of substitution in the premises (which power of attorney, being coupled with an
interest, is irrevocable for so long as this Agreement shall be in effect),
from time to time in the Company’s discretion after the occurrence and during
the continuance of an Event of Practice Default (except for the actions
described in clause (i) below, which may be taken by the Company without regard
to whether any such a default has occurred) to take any action and to execute
any instruments that the Company may deem necessary or advisable to accomplish
the purpose of carrying out the provisions of the Company’s security interest
in the Receivables, including, without limitation: (i) to sign the name of the
Practice on any financing statement, continuation statement, notice or other
similar document that, in the Company’s opinion, should be made or filed in
order to perfect or continue perfected the security interest granted under this
Agreement; (ii) to ask, demand, collect, sue for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral; (iii) to receive, endorse and collect any
checks, drafts, instruments, chattel paper and other orders for the payment of
money made payable to the Practice representing any interest or other amount
payable in respect of any of the Collateral and to give full discharge for the
same; (iv) to pay or discharge taxes, Liens or other encumbrances levied or
placed on or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by the
Company in its sole discretion, any such payments made by the Company to become
Secured Obligations of the Practice to the Company, due and payable immediately
and without demand; (v) to file any claims or take any action or institute any
proceedings that the Company may deem necessary or advisable for the collection
of any of the Collateral or otherwise to enforce the rights of the Company with
respect to any of the Collateral; and (vi) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with any and all
of the Collateral as fully and completely as though the Company were the
absolute owner of the Collateral for all purposes, and to do from time to time,
at the Company’s option and the Practices’ expense, all other acts and things
deemed necessary by the Company to protect, preserve or realize upon the
Collateral and to more completely carry out the purposes of this Agreement.

 

If the Practice fails to perform any covenant or
agreement contained in this Agreement after written request to do so by the
Company (provided that no such request shall be necessary at any time after the
occurrence and during the continuance of an Event of Practice Default), the
Company may itself perform, or cause the performance of, such covenant or
agreement and may take any other action that it deems necessary and appropriate
for the maintenance and preservation of the Collateral or its security interest
therein, and the reasonable expenses so incurred in connection therewith shall
be payable by the Company.

 

(g)             Company
Lender Loans. Notwithstanding anything to the contrary contained
in this Section 4.6, to the extent that any Company Lender Loan may be
outstanding, then the Company’s security interest in the Collateral granted
hereby may be subordinate to, and only to, any security interest of such Company
Lender in such Collateral.

 

(h)             Assignment.
To the extent permitted by applicable Law, the Company. may assign all
of its rights and interests under this Agreement as security for loans and
other

 

xxviii

 

financing arrangements obtained by the Company from any other Person or
entity, whether now existing or hereafter arising. Any such assignee shall have
all of the Company’s rights and remedies, but none of the Company’s
obligations, under this Agreement. The Company shall provide the Practice with
prior written notice of any such assignment. The Practice shall cooperate with
the Company and execute all necessary documents in connection with the
assignment of the Collateral to the Company or, at the Company’s option, any
assignee.

 

SECTION 4.7            Deposit of
Receivables. Promptly upon the request of the Company, the
Practice shall provide the Company with an accurate and complete list of all
Third-Party Payors. The Company shall have the right (but not the obligation)
to deliver a letter, substantially in the form as attached hereto as Exhibit
A, to all Third-Party Payors (the “Payor Instruction Letter”) or
otherwise notify such Third-Party Payors of the contents thereof. The Payor
Instruction Letter shall direct payments on the Receivables to be deposited
into a bank account at the Depository Bank designated by the Company (the “Company
Account”). For Receivables for services rendered to patients who
participate in the Medicare program, the Medicaid program, other government
health care programs, and any other Third Party Payors that ‘will not allow the
Practice’s Receivables to be deposited into the Company Account, the Practice
shall establish a bank account at the Depository Bank (the “Practice Lockbox
Account”) and the Practice shall enter into an agreement with the
Depository Bank that sets forth a standing order from the Practice to transfer
or remit all cash proceeds on a daily basis to the Company Account (the “Lockbox
Account Agreement”). To the extent that the Practice receives any payments
contrary to the terms of the Payor Instruction Letter (including, without
limitation, any amounts received directly from Patients at the time medical
services are rendered or otherwise), the Practice agrees to deposit all such
payments received by the Practice into the Practice Lockbox Account. As set
forth in Section 2.14, the Company is hereby granted full power and authority
to pay, out of the funds in the Company Account, the Retained Amount, the
Company Fee, all Operational Expenses (including, without limitation, all
Billing and Collection Fees) and reimburse itself, out of the funds in the
Company Account, for all Operational Expenses advanced or paid by it. The
instructions set forth in the Payor Instruction Letter and the Lockbox Account
Agreement shall be revocable by the Practice during the term of this Agreement
if an Event of Company Default shall have occurred; provided, however, that if
the Practice revokes such instructions or agreement during the term of this
Agreement when no Event of Company Default shall have occurred, such revocation
shall constitute an Event of Practice Default and the Company shall be entitled
to seek an order from a court of competent jurisdiction for specific
performance to “sweep” the Practice Lockbox Account pursuant to this Agreement.
Following termination or expiration of the term of this Agreement, the Company
shall take all action and execute all instruments as the Practice may
reasonably request in order to notify the Third-Party Payors of such
termination.

 

SECTION 4.8            Automatic
Termination. The assignment, security interest, and deposit of
Receivables provided for in Sections 4.6 and 4.7 shall terminate immediately,
without any action required by the Practice, upon the earliest to occur of (i)
an Event of Company Default or an event that, with the passage of time, the
giving of notice or both, would constitute an Event of Company Default or (ii)
the termination of this Agreement for any reason other than an Event of
Practice Default. Immediately upon any such termination, the Company shall take
all actions requested by the Practice to effect such termination and to notify
third parties thereof.

 

xxix

 

ARTICLE V

TERM AND TERMINATION

 

SECTION 5.1            Term; Renewal
Terms. This Agreement shall commence on the Effective Date and shall expire
on October 11, 2011, unless earlier terminated as provided for in Sections 5.2
and 5.3 hereof. The term of this Agreement automatically shall be extended for
an additional five year term unless (a) there has been a material change in
either (i) the management fees set forth in Section 4.1, (ii) the Management
Services set forth in Article II or (iii) the Practice’s clinical practice
(including any significant change with respect to staffing, equipment or
administrative oversight thereof) required by, or otherwise resulting from an
action taken by, the Company, and (b) either Party gives written notice to the
other not less than 180 days prior to the end of the then current term that it
does not desire to extend the term.

 

SECTION 5.2            Termination by
the Company. Upon written notice to the Practice, the Company
may terminate this Agreement and have no further liability or obligation
hereunder (except as expressly provided herein) upon the occurrence of any of
the following events (each an “Event of Practice Default”):

 

(a)           The Practice is
involuntarily suspended, excluded or terminated from participation in the
Medicare or Medicaid programs.

 

(b)           The Practice
withdraws from participation in the Medicare or Medicaid programs as a result of
regulatory investigation or the Practice is excluded from entering into
healthcare provider agreements with any material portion of the managed care or
healthcare insurance industry.

 

(c)           A majority of
the members of the Medical Advisory Board determines that (i) the Practice is
not providing care in a manner that meets the prevailing standard of care in
the community or (ii) the Practice or any Physician has materially breached
professional standards in a way that endangers the health or safety of any Patient
or employee of the Company (or any Affiliate of the Company) and the Practice
fails, after 60 days notice from the Medical Advisory Board, to take action
which the Medical Advisory Board deems reasonably acceptable.

 

(d)           The Practice
shall apply for or consent to the appointment of a receiver, trustee or
liquidator of it or all or a substantial part of its assets, file a voluntary
petition in bankruptcy, be unable to pay its debts as they come due, make a
general assignment for creditors or take advantage of any insolvency Law, have
liabilities that exceed its assets, or be “insolvent” as defined in the federal
Bankruptcy Code or under any insolvency Law of the State of Florida, or any
order, judgment or decree shall be entered by any court of competent
jurisdiction, on the application of a creditor, adjudicating it as bankrupt or
insolvent or approving a petition seeking its reorganization or appointment of
a receiver, trustee, or liquidator of it or all or a substantial part of its
assets.

 

(e)           The Practice
ceases to perform its duties and responsibilities hereunder or breaches any
material term or condition of this Agreement (including, without limitation,
Section 3.4) and, in the reasonable opinion of the Company, such cessation or
breach remains uncured for a period of 60 days after the Practice’s receipt of
a written notice specifying such breach.

 

xxx

 

(f)            The Practice
revokes any instructions to a Third Party Payor related to the Third Party
Payor Instruction Letter or revokes or modifies any instructions to the
Depository Bank in connection with the Practice Lockbox Agreement as set forth
in Section 4.7, except as specifically permitted by the provisions of Section
4.7 or 4.8.

 

(g)           The Practice
ceases to engage or employ at least one Physician to provide Radiation Oncology
Services at each of the Cancer Centers on a fulltime basis.

 

SECTION 5.3            Termination by
the Practice. Upon written notice to the Company, the Practice
may terminate this Agreement and have no further liability or obligation
hereunder (except as expressly provided herein) upon the occurrence of any of
the following events (each an “Event of Company Default”):

 

(a)           The Company
shall apply for or consent to the appointment of a receiver, trustee or
liquidator of it or all or a substantial part of its assets, file a voluntary
petition in bankruptcy, be unable to pay its debts as they come due, make a
general assignment for creditors or take advantage of any insolvency Law, have
liabilities that exceed its assets, or be “insolvent” as defined under the
federal Bankruptcy Code or under any insolvency law in any state in which the
Company does business, or any order, judgment or decree shall be entered by any
court of competent jurisdiction, on the application of a creditor, adjudicating
it as bankrupt or insolvent or approving a petition seeking its reorganization
or appointment of a receiver, trustee, or liquidator of it or all or a
substantial part of its assets.

 

(b)           The Company
fails to make any payment within ten (10) days of when such payment is due to
the Practice hereunder and such failure continues for more than ten (10) days
after the Company’s receipt of a written notice specifying such breach.

 

(c)           Except as
provided in Section 5.3(b), the Company ceases to perform its duties and
responsibilities hereunder or breaches any material term or condition of this
Agreement (including, without limitation, Section 2.13) and, in the reasonable
opinion of the Practice, such cessation or breach remains uncured for a period
of 60 days after the Company’s receipt of a written notice specifying such
breach.

 

(d)           The Company is
involuntarily suspended, excluded or terminated from participation in Medicare
or Medicaid.

 

(e)           The Company
withdraws from participation in Medicare or Medicaid as a result of regulatory
investigation or the Company is excluded from entering into healthcare provider
agreements with a material portion of the managed care or healthcare insurance
industry.

 

SECTION 5.4            Limitation On
Termination Rights. Notwithstanding anything to the contrary contained
herein, neither Party shall be permitted to terminate this Agreement pursuant
to Section 5.2(e) or Section 5.3(c) above if the other Party’s actions or
inactions are a result of any written directions or instructions of the Medical
Advisory Board and/or such non-defaulting Party.

 

xxxi

 

SECTION 5.5            Duties And
Remedies Upon Expiration Or Termination.

 

(a)           Except as
necessary to provide care to any Patient undergoing treatment at any Cancer
Centers at the time of the expiration or earlier termination of this Agreement,
upon the expiration or earlier termination of this Agreement, the Practice and
the Company hereby agree to perform, in addition to their obligations provided
for elsewhere in this Agreement and continuing after such expiration or
termination of this Agreement, such steps as are otherwise customarily required
to wind up their relationship under this Agreement in as orderly a manner as
possible. Except as specifically set forth herein, upon the expiration or
earlier termination of this Agreement, neither Party shall have any further
obligation hereunder with the exception of obligations accruing prior to the
date of such expiration or earlier termination and obligations, promises and
covenants contained herein which extend beyond the terms hereof including,
without limitation, any indemnities, restrictive covenants and access to books
and records. Upon the expiration or earlier termination of this Agreement, the
financial arrangements set forth in Article IV shall be pro-rated between the
Parties to reflect any partial fiscal year. From and after any expiration or
earlier termination, each Party shall provide the other with reasonable access
to books and records then owned by it to permit such requesting Party to
satisfy legal reporting and contractual obligations which may be required of
it.

 

(b)           In addition to
the foregoing, upon termination of this Agreement by the Company pursuant to
Section 5.2, the Practice shall immediately (i) quit and surrender the Cancer
Centers in as good condition as reasonable use and wear thereof will permit and
(ii) (and shall cause the Physicians to) remove from the Cancer Centers all
personal property of the Practice and of any Physician and shall, at its own
expense, repair any damage caused to the Cancer Centers by reason of such
removal. If the Practice shall fail to do so, the Company may, without notice
and without prejudice to any other remedy available, enter and take possession
of the Cancer Centers and remove such personal property without being liable to
prosecution or any claim for damage suffered by the Practice or the Physicians.

 

(c)           If the Practice
or a Physician remains in possession or control of any Cancer Centers beyond
the expiration or termination of this Agreement, without the written consent of
the Company, such possession or control shall not be deemed to create any
rights whatsoever in the Practice.

 

ARTICLE VI

REPRESENTATIONS AND
WARRANTIES OF THE PRACTICE

 

SECTION 6.1            Representations
and Warranties of the Practice. The Practice hereby represents
and warrants to the Company as follows:

 

(a)           Organization
and Qualification. The Practice
is a limited liability company duly organized, validly existing and in good
standing under the Laws of the State of Florida, and has all corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as currently being conducted and as proposed to be conducted.

 

(b)           Authority. The Practice
has the requisite corporate power and authority to execute and deliver this
Agreement and all other instruments or agreements to be executed in connection
herewith, and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement, and the consummation of
the transactions

 

xxxii

 

contemplated hereby, have been duly authorized by all necessary action
on the part of the Practice, and no other proceedings on the part of the
Practice are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Practice and, assuming this Agreement constitutes a valid and
binding obligation of the Company, constitutes a valid and binding obligation
of the Practice enforceable against it in accordance with its terms.

 

(c)           Consents
and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement by the Practice, nor the
consummation by the Practice of the transactions contemplated hereby nor
compliance by the Practice with any of the provisions hereof (including,
without limitation, the Practice’s grant of a security interest hereunder) will
(a) conflict with or result in any breach of any provision of the Operating
Agreement of the Practice, (b) require any filing with, or consent of a
Governmental Authority, agency or court or other Person or entity by the
Practice, (c) (with or without the giving or receipt of notice or passage of
time or both) result in a violation or breach of, or constitute a default or
give rise to any right of termination, amendment, cancellation or acceleration
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Practice is a party (or becomes a party) or by which
any of its properties or assets may be bound or subject or (d) violate any writ,
injunction or decree applicable to the Practice or any of its properties or
assets.

 

(d)           Compliance
With Laws; Licenses.

 

(i)            To the
knowledge of the Practice, the conduct of the operations of the Practice
(including the conduct of any Physician or any other practice employee) has not
violated, and as presently conducted does not violate, in any material respect
any Laws, including, but not limited to, the Clinical Laboratories Improvements
Act of 1988, or any other promulgations, interpretative advice or guidance of
any court or Governmental Authority or agency, including, but not limited to,
the Occupational Safety and Health Administration, the CMS or any medical
industry standards, nor has the Practice received any notice of any such
violation which remains outstanding.

 

(ii)           The Practice
has all licenses, certificates, permits, approvals, franchises, notices and
authorizations (“Permits”) required for the conduct of its operations as
currently conducted and as proposed to be conducted (including, without
limitation, accreditations and certifications as a provider of healthcare
services eligible to receive payment and compensation and to participate under
Medicare and Medicaid). To the Practice’s knowledge, all of such Permits are in
full force and effect, the Practice has not engaged in any activity which would
cause or permit revocation, modification, cancellation or suspension of any
such Permit, and no action or proceeding looking to or contemplating the
revocation, modification, cancellation or suspension of any such Permit is
pending or threatened. The Practice has no knowledge of any default or claimed
or purported or alleged default or state of facts which, with or without the
giving or receipt of notice or the passage of time or both, would constitute a
default by the Practice under, or give rise to a right of revocation,
modification, cancellation or suspension of, any such Permit.

 

xxxiii

 

(iii)          The Practice
qualifies as (and will continue to qualify during the term of this Agreement
as) a “group practice” as defined in the federal physician self referral law at
42 USC § 1395nn and applicable regulations (collectively, the “Stark Laws”)
and any similar state laws. Without limiting the generality of the foregoing:

 

(A)          Each Physician,
who is an employee and/or shareholder of the Practice (each, an “ICON
Physician”) furnishes (and will continue to furnish during the term of this
Agreement) substantially the full range of patient care services that such ICON
Physician routinely furnishes, including medical care, consultation, diagnosis,
and treatment, through the joint use of shared office space, facilities,
equipment, and personnel.

 

(B)          “Substantially
all” of the “patient care services” (as those terms are defined and explained
in 42 C.F.R. § 411.352(d)) of the ICON Physicians are furnished (and will
continue to be furnished during the term of this Agreement) through the
Practice and billed under a billing number assigned to the Practice, and the
amounts received are treated (and will continue to be treated during the term
of this Agreement) as receipts of the Practice.

 

(C)          The overhead
expenses of, and income from, the Practice is distributed (and will continue
during the term of this Agreement to be distributed) to the ICON Physicians
according to methods that are determined before the receipt of payment for the
services giving rise to the overhead expense or producing the income.

 

(D)          The Practice is
(and will continue during the term of this Agreement to be) a unified business
that has a centralized decision-making by a body representative of the Practice
that maintains effective control over the Practice’s assets and liabilities
(including, but not limited to, budgets, compensation, and salaries) and consolidated
billing, accounting, and financial reporting.

 

(E)           No ICON
Physician directly or indirectly receives (or will directly or indirectly
receive during the term of this Agreement) compensation based on the volume or
value of referrals by such ICON Physician, and no ICON Physician receives (or
will receive during the term of this Agreement) any profit or bonus
distributions that is determined in any manner that is directly related to the
volume or value of referrals of “designated health services” (as defined in 42
C.F.R. § 411.351) (“DHS”) by such ICON Physician.

 

(F)           The ICON
Physicians personally conduct (and will continue to conduct during the term of
this Agreement) no less than 75 percent of the physician-patient encounters of
the Practice.

 

(iv)          Any DHS
(including certain items of “durable medical equipment,” as defined in 42
C.F.R. § 411.355(b)(4) (“DME”), and infusion pumps that are DME
(including external ambulatory infusion pumps) but excluding all other DME and
parenteral and enteral nutrients, equipment, and supplies) furnished or
provided by the Practice as a result of referrals of patients for such DHS by
the ICON

 

xxxiv

 

Physicians to the Practice (collectively, the “Ancillary
Services”) meet (and will continue to meet during the term of this
Agreement) the requirements of 42 C.F.R. § 411.355(b). Without limiting the
generality of the foregoing, the Ancillary Services are (and will continue
during the term of this Agreement to be):

 

(A)          furnished
personally by an ICON Physician or by an individual, who is supervised by an
ICON Physician, and such supervision complies with all applicable Medicare
payment and coverage rules for such Ancillary Services;

 

(B)          furnished
either in the “same building” (as defined in 42 C.F.R. § 411.351) and pursuant
to the requirements set forth in 42 C.F.R. § 411.355(b)(2)(i); or a “centralized
building” (as defined in 42 C.F.R. § 411.351) that is used by the Practice for
the provision of some or all of the Practice’s clinical laboratory services or
some or all of the Practice’s DHS (other than clinical laboratory services);

 

(C)          billed only by
the Company under a billing number assigned to the ICON Physician or the
Practice, and the billing arrangement meets the requirements of 42 C.F.R. §
424.80(b)(6); and

 

(D)          furnished in
the location the service is actually performed upon a patient or where an item
is dispensed to a patient in a manner that is sufficient to meet the applicable
Medicare payment and coverage rules.

 

(v)           All financial
arrangements that are “financial relationships,” as defined at 42 C.F.R.
411.354, between the Practice and any physician(s) or other entity(ies) who
refer and or will refer patients to the Practice and/or who generate or will
generate other business for the Practice are (and will continue to be during
the term of this Agreement to be) commercially reasonable and consistent with
the fair market value for the services provided in such financial relationships
and satisfy (and will continue to satisfy during the term of this Agreement)
one or more applicable exceptions to the Stark Laws and any similar state laws.

 

(e)           Litigation;
Investigations. There are no
suits, claims, proceedings, investigations or reviews which are pending or, to
the knowledge of the Practice, threatened against or affecting the Practice,
any Physician, any director or officer (in their capacity as such) of the
Practice or any properties or assets used by the Practice in conducting its
businesses. To the knowledge of the Practice, no investigation or review by any
Governmental Authority, agency or court or other regulatory body (including
trade associations) with respect to either the Practice or any Physician or
other practice employee is pending or threatened or probable of initiation, nor
has any Governmental Authority, agency or court or other regulatory body
(including trade associations) indicated to the Practice an intention to
conduct the same, and there is no action, suit or proceeding pending or, to the
knowledge of the Practice, threatened against or affecting the Practice or any
Physician or other Practice employee, at Law or in equity, or before any
Governmental Authority or other regulatory body (including trade associations).

 

(f)            Professional
Liability. No Physician or other
employee of the Practice has ever (a) had his or her license to practice
medicine or other profession in any state or his or her

 

xxxv

 

Drug Enforcement Agency Number suspended, relinquished, terminated,
restricted or revoked; (b) been reprimanded, sanctioned or disciplined by any
licensing board, or any federal, state or local society or agency, Governmental
Authority or specialty board; (c) had entered against him or her final judgment
in, or settled without judgment, a malpractice or similar action for an
aggregate award or amount to the plaintiff in excess of $25,000; or (d) had his
or her medical staff privileges at any hospital or medical facility suspended,
involuntarily terminated, restricted or revoked.

 

(g)           Ownership
of Collateral. The Practice owns, or has
valid rights with respect to, all Collateral purported to be pledged by it
hereunder, free and clear of any Liens except for the Liens granted to the
Company pursuant to this Agreement. No security agreement, financing statement
or other public notice with respect to all or any part of the Collateral is on
file or of record in any government or public office, and the Practice has not
filed or consented to the fling of any such statement or notice, except Uniform
Commercial Code financing statements naming the Company as secured party.

 

(h)           Security
Interests; Filings. This
Agreement, together with the filing of duly completed and executed Uniform
Commercial Code financing statements naming the Practice as debtor, the Company
as secured party, and describing the Collateral, in the State of Florida, which
have been duly executed and delivered by the Practice and delivered to the
Company for filing, creates, and at all times shall constitute, a valid and
perfected security interest in and Lien upon the Collateral in favor of the
Company to the extent a security interest therein can be perfected by such
filings or possession, as applicable, superior and prior to the rights of all
other Persons therein, and no other or additional filings, registrations,
recordings or actions are or shall be necessary or appropriate in order to
maintain the perfection and priority of such Lien and security interest, other
than actions required with respect to Collateral of the types excluded from
Article 9 of the Uniform Commercial Code or from the filing requirements under
such Article 9 by reason of Section 9-104 or 9-302 of the Uniform Commercial
Code and other than continuation statements required under the Uniform
Commercial Code.

 

(i)            Receivables. Each
Receivable is, or at the time it arises will be, a bona fide, valid and legally
enforceable indebtedness of the account debtor according to its terms, arising
out of or in connection with the sale, lease or performance of goods or
services by the Practice.

 

(j)            Disclosure. No
representation, warranty or statement made by the Practice in this Agreement
contains any untrue statement of a material fact, or omits to state a material
fact required to be stated herein or necessary to make the statements contained
herein, in light of the circumstances under which they were made, not
misleading.

 

SECTION 6.2            Representations
and Warranties of the Company. The Company hereby
represents and warrants to the Practice as follows:

 

(a)           Organization
and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware, and has all corporate power and authority to
own, lease and operate its properties and assets and to carry on its business
as currently being conducted and as proposed to be conducted.

 

xxxvi

 

(b)           Authority. The Company
has the requisite corporate power and authority to execute and deliver this Agreement
and all other instruments or agreements to be executed in connection herewith,
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of the Company, and no other proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered on behalf of the Company and, assuming this Agreement constitutes a
valid and binding obligation of the Practice, constitutes a valid and binding
obligation of the Company enforceable against it in accordance with its terms.

 

(c)           Consents
and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof, will (a) conflict
with or result in any breach of any provision of the charter or bylaws of the
Company, (b) require any filing with, or consent of, a Governmental Authority,
agency or court or other Person or entity by the Company, (c) (with or without
the giving or receipt of notice or passage of time or both) result in a
violation or breach of, or constitute a default or give rise to any right of
termination, amendment, cancellation or acceleration under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Company is a party (or becomes a party) or by which any of its properties or
assets may be bound or subject or (d) violate any writ, injunction or decree
applicable to the Company or any of its properties or assets.

 

(d)           Compliance
With Laws; Licenses.

 

(i)              To the
knowledge of the Company, the conduct of the operations of the Company has not
violated, and as presently conducted does not violate, any Laws, including, but
not limited to, any promulgation, interpretative advice or guidance of any
court or Governmental Authority or agency, including, but not limited to the
Occupational Safety and Health Administration, the CMS or any medical industry
standards, nor has the Company received any notice of any such violation that
remains outstanding.

 

(ii)             The Company has
all licenses, certificates, permits, approvals, franchises, notices and
authorizations (“Company Permits”) required for the conduct of its operations
as currently conducted. To the Company’s knowledge, all Company Permits are in
full force and effect, the Company has not engaged in any activity that would
cause or permit revocation, modification, cancellation or suspension of any
such Company Permit, and no action or proceeding looking to or contemplating
the revocation, modification, cancellation or suspension of any such Permit is
pending or threatened. The Company has no knowledge of any default or claimed
or purported or alleged default or state of facts that, with or without the
giving or receipt of notice or the passage of time or both, would constitute a
default by the Company under, or give rise to a right of revocation,
modification, cancellation or suspension of, any Company Permit.

 

xxxvii

 

(e)                                  Litigation;
Investigations. Except as
provided in Schedule 6.2(e), there are no suits, claims, proceedings,
investigations or reviews pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its directors or officers
(in their capacity as such) of the Company or any properties or assets used by
the Company in conducting its businesses. To the knowledge of the Company, no
investigation or review by any Governmental Authority, agency or court or other
regulatory body (including trade associations) with respect to the Company or
any of its employees is pending or threatened or probable of initiation, nor
has any Governmental Authority, agency or court or other regulatory body
(including trade associations) indicated to the Company an intention to conduct
the same, and there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its employees, at Law or in equity, or before any Governmental Authority or
other regulatory body (including trade associations).

 

(f)                                   Disclosure. No
representation, warranty or statement made by the Company in this Agreement
contains any untrue statement of a material fact, or omits to state a material
fact required to be stated herein or necessary to make the statements contained
herein, in light of the circumstances under which they were made, not
misleading. All representations and warranties as to the Company shall be
deemed to include the Company and all of its Affiliates.

 

ARTICLE VII

OTHER OBLIGATIONS OF THE PARTIES

 

SECTION 7.1                                   Covenants of
the Practice. The Practice covenants and agrees that for so long
as this Agreement is in effect:

 

(a)                                 Certificates.
The Practice will provide, and will use its best efforts to cause each
Physician to provide, notice to the Company if any representation or warranty
contained herein becomes untrue as of a date after the date hereof because of
subsequent events and to provide from time-to-time, at the reasonable request
of the Company, a certificate stating that the representations and warranties
contained herein are true, or, if they are not true, specifying in reasonable
detail the extent to which they are not true.

 

(b)                                 Existence.
The Practice will preserve and keep in full force and effect its corporate
existence.

 

(c)                                  Change
of Name, Locations, etc. The Practice shall not (i) change
its name, identity or corporate structure, (ii) change its chief executive
office from 3599 University Blvd. South, Jacksonville, FL, or (iii) change
the jurisdiction of its organization from Florida (whether by merger or
otherwise), unless, in each case, the Practice has given 20 days prior written
notice to the Company of its intention to do so.

 

(d)                                 Collateral.
The Practice shall not grant any other Lien on or in, or otherwise
encumber, any of the Collateral.

 

(e)                                  Records;
Inspection. The Company shall have the right to make test verifications
of the Receivables in any reasonable manner and through any reasonable medium,
and the Practice agrees to furnish all such reasonable assistance and
information as the Company may require in connection therewith.

 

xxxviii

 

(f)                                   Compliance
with Law. The Practice will comply, in all material respects, with
all Laws which it reasonably believes are applicable with respect to the
conduct of its businesses and its operations.

 

(g)                                  Standard
of Care. The Practice will consistently provide Radiation
Oncology Services in a manner that meets or exceeds the prevailing community
standard

 

(h)                                 Physicians.
Each Physician will: (i) be duly licensed and otherwise authorized
to render Radiation Oncology Services, (ii) be duly licensed to practice
medicine in the State of Florida and shall maintain such licenses in good
standing, (iii) have, and will maintain in good standing, unrestricted federal
and state registrations authorizing them to prescribe controlled substances in
the State of Florida or Georgia, as appropriate, and (iv) be board
certified or board eligible in radiation oncology, and shall maintain such
certifications in good standing.

 

(i)                                     Other
Notice. In addition to the other notice obligations of the
Practice provided for elsewhere in this Agreement, the Practice will provide,
and will use its best efforts to cause each Physician to provide, notice to the
Company of any (i) physical or mental illness or condition that impairs or may
impair a Physician’s ability to provide the services required by this
Agreement, and (ii) Physician’s dependency on, habitual use or episodic
abuse of, alcohol or any controlled substances.

 

SECTION 7.2                                   Taxes.

 

(a)                                 The Company
shall pay (i) all taxes (if any) assessed and levied against the Company’s
property and assets located within or associated with the Cancer Centers and (ii) all
lawful claims that, if unpaid, might become a Lien upon any of its properties
located within or associated with the Cancer Centers; provided, however, that
the Company shall not be required to pay any such unsecured (or secured, only
if secured by operation of Law) tax, assessment, charge, levy or claim that is
being contested in good faith and by proper proceedings and as to which the
Company has maintained adequate reserves with respect thereto in accordance
with GAAP. The Company shall be solely responsible for the payment of all such
taxes and claims (referred to as “Company Taxes”) that may be imposed on
the Company with respect to this Agreement.

 

(b)                                 The Practice
shall pay (i) all taxes (if any) assessed and levied against the Practice’s
property and assets and (ii) all lawful claims that, if unpaid, might
become a Lien upon any of its properties; provided, however, that the Practice
shall not be required to pay any such unsecured (or secured, only if secured by
operation of Law) tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings and as to which the Practice
has maintained adequate reserves with respect thereto in accordance with GAAP.
The Practice shall be solely responsible for the payment of all such taxes and
claims (referred to as “Practice Taxes”) that may be imposed on the
Practice with respect to this Agreement.

 

SECTION 7.3                                   Covenants of
the Company. The Company covenants and agrees for so long as
this Agreement is in effect:

 

xxxix

 

(a)                                 Certificates. The Company
shall provide notice to the Practice if any representation or warranty
contained herein becomes untrue as of a date after the date hereof because of
subsequent events and to provide from time to time, at the reasonable request
of the Practice, a certificate stating that the representations and warranties
contained herein are true or, if they are not true, specifying in reasonable
detail the extent to which they are not true.

 

(b)                                 Corporate
Existence. The Company shall preserve
and keep in full force and effect its existence.

 

(c)                                  Leases. The Company
shall not permit any of the Leases to be amended, modified or terminated
without the Practice’s prior written consent. The Company shall provide the Practice,
within five Business Days of receipt of knowledge by the Company, of any notice
of default, termination or other material event or circumstance under any of
the Leases.

 

(d)                                 Compliance
with Law. The Company shall comply,
in all material respects, with all Laws that it reasonably believes are
applicable to the conduct of its businesses and its operations.

 

(e)                                  Standard
of Care. The Company shall
consistently provide the Management Services in a manner that meets or exceeds
the prevailing business standard.

 

(f)                                   Other
Notice. In addition to the other
notice obligations of the Company provided for elsewhere in this Agreement, the
Company shall provide notice to the Practice, within five Business Days of
receipt of knowledge thereof by the Company, of any notice from a Third-Party
Payor that alleges a default under or intention to terminate or not perform its
obligations under, or of any other material occurrence under, a managed care
agreement. The Company shall also provide notice to the Practice of any Change
of Control, within five Business Days after the occurrence of a Change of
Control.

 

ARTICLE VIII

INSURANCE AND INDEMNIFICATION

 

SECTION 8.1                                   Insurance
Maintained by the Practice. During the term of this Agreement,
the Practice shall provide, or shall arrange for the provision of, and maintain
comprehensive professional liability insurance on the Practice and each
Physician in such reasonable amounts (and with such insurance companies) as are
agreed upon by the Parties, however, not less than a minimum coverage of $ 1.0
million per occurrence and $ 3.0 million in the aggregate annually. Each such
insurance policy shall name the Company and each of its Affiliates as an
additional insured and by its terms provide that it shall not be amended or
modified without the prior written consent of the Company and shall not be
canceled or terminated unless 10 days’ prior notice thereof is given by the
insurer to the Company. All payments in respect of the insurance described in
this Section 8.1 shall be deemed Operational Expenses.

 

SECTION 8.2                                   Insurance
Maintained by the Company. During the term of this Agreement, the
Company shall provide, or shall arrange for the provision of, and maintain: (a)
comprehensive professional liability insurance for all Clinical Employees
providing services to the Practice pursuant to this Agreement in such
reasonable amounts (and with such insurance

 

xl

 

companies) as are agreed upon by the Parties, however, not less than a
minimum coverage of $ 1.0 million per occurrence and $ 3.0 million in the
aggregate annually. and (b) comprehensive general liability and property
insurance covering the Cancer Centers premises and operations in the minimum
amount of $1.0 million per occurrence and $3.0 million in the aggregate
annually. Each such insurance policy shall name the Practice as an additional
insured and by its terms provide that it shall not be amended or modified
without the prior written consent of the Practice and shall not be canceled or terminated
unless 90 days’ prior notice thereof is given by the insurer to the Practice.
All payments in respect of the insurance described in this Section 8.2
shall be deemed Operational Expenses.

 

SECTION 8.3                                   Requirements as
to Insurance. At all times during this Agreement, each Party
shall require its insurance carrier(s) to provide the other Party with a
current certificate of insurance evidencing the coverage required by Sections
8.1 and 8.2. The obligations of each Party to be insured for acts and occurrences
during the term of this Agreement shall be binding on the Parties and shall
survive the termination or expiration of this Agreement. In the event any such
insurance is written on a “claims-made” rather than an “occurrence” basis, any
necessary reporting endorsements (“tail insurance”) shall be procured by the
responsible Party.

 

SECTION 8.4                                   Indemnification. Except to the
extent that this Section 8.4 may have the effect of reducing or
eliminating any insurance coverage that would otherwise be available to pay
damages suffered by any Party, each of the Parties shall have the following
rights to indemnification.

 

(a)                                 Indemnification
of the Company. The Practice shall indemnify and hold the Company,
its Affiliates and their respective permitted successors and assigns and any of
their respective officers, directors, employees, representatives and agents
harmless from and against any and all losses, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages,
deficiencies, taxes and reasonable expenses and costs, including reasonable
attorneys’, accountants’ and auditors’ fees (and any reasonable experts’ fees)
and court costs (each referred to individually as a “Loss”), incurred by
the Company (or any of its Affiliates) in any action or proceeding between the
Practice and the Company (and/or any of its Affiliates) or between any third
party (including, without limitation, any Physician) and the Company (and/or
any of its Affiliates) or otherwise, arising out of or in any way related to: (i) any
material breach or default by the Practice of any term or condition of this
Agreement; (ii) the performance (or non-performance) of services required
to be performed by the Practice, the Physicians or any of the Practice’s agents
under this Agreement (including, without limitation, the Radiation Oncology
Services); (iii) any professional malpractice claim arising out of acts
committed or omitted by the Practice or the Physicians; (iv) any claim,
arising from any act prohibited under Medicare or Medicaid alleging that the
Practice or any Physician: (1) made a false statement or representation of
a material fact in any application for any benefit or payment; (2) made a
false statement or representation of a material fact for use in determining
rights to any benefit or payment; or (3) failed to disclose knowledge of the
occurrence of an event affecting the initial or continued right to any benefit
or payment on its behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (v) any Practice Taxes; (vi) any act
prohibited under any healthcare Law that was committed or omitted by the
Practice; or (vii) any defects or dangerous conditions at the Cancer
Centers or in any FF&E caused by or which are the

 

xli

 

responsibility of the Practice, the Physicians or any of the Practice’s
agents. Notwithstanding the foregoing, in each case above, to the extent such
Loss arises out of or relates to the negligent, reckless or wrongful acts or
omissions of the Company, its Affiliates or any of their respective employees
or agents, the Loss shall be shared by the Parties in proportion to their
relative contributions to its occurrence as determined by arbitration pursuant
to Article X.

 

(b)                                 Indemnification
of the Practice and the Physicians. The Company shall indemnify
and hold the Practice, its officers, directors, employees, independent
contractors, representatives and agents, and the Physicians harmless from and
against any Loss incurred by the Practice in any action or proceeding between
the Company and the Practice or between the Practice and any third party
(including, without limitation, any Physician) or otherwise, arising out of or
in any way related to: (i) any material breach or default by the Company
of any term or condition of this Agreement; (ii) the performance (or
non-performance) of services required to be performed by the Company under this
Agreement (including, without limitation, the Management Services); (iii) any
claim, arising from any act prohibited under Medicare or Medicaid alleging that
the Company: (1) made a false statement or representation of a material
fact in any application for any benefit or payment; (2) made a false
statement or representation of a material fact for use in determining rights to
any benefit or payment; or (3) failed to disclose knowledge of the
occurrence of an event affecting the initial or continued right to any benefit
or payment on its behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (iv) any Company Taxes; (v) any
defects or dangerous conditions at the Cancer Centers or in any FF&E caused
by or which are the responsibility of the Company; or (vi) any act
prohibited under any healthcare Law that was committed or omitted by the
Company; or (vii) any Wrongful Termination Claim. Notwithstanding the
foregoing, in each case above, to the extent such Loss arises out of or relate
to the negligent, reckless or wrongful acts or omissions of the Practice, the
Physicians or any of the Practice’s agents, the Loss shall be shared by the
Parties in proportion to their relative contributions to its occurrence as
determined by arbitration pursuant to Article X.

 

(c)                                  Survival.
The obligations of this Section 8.4 shall survive the expiration or
earlier termination of this Agreement indefinitely (or if indefinite survival
is not permitted by Law, then for the maximum period permitted by applicable
Law).

 

SECTION 8.5                                   Indemnification
Procedure. Whenever any claim shall arise for indemnification
hereunder, the Party entitled to indemnification (the “Indemnified Party”)
shall provide written notice to the other Party (the “Indemnifying Party”)
within a reasonable time after becoming aware of any such claim to
indemnification, and shall state the facts constituting the basis for such
claim. In connection with any claim for indemnification hereunder resulting
from or arising out of any claim or legal proceeding by a Person who is not a
party to this Agreement, the Indemnifying Party, at its sole cost and expense
and upon written notice to the Indemnified Party, may assume the defense of any
such claim or legal proceeding with counsel reasonably satisfactory to the
Indemnified Party, unless such assumption of defense by the Indemnifying Party
is not reasonable under the circumstances. The Indemnified Party shall be
entitled to participate in the defense of any such action, with its own counsel
and at its own expense. If the Indemnifying Party does not assume the defense
of any such claim or litigation resulting therefrom, the Indemnified Party may
defend against such claim or litigation in such manner as it may deem
appropriate, including, but not limited to, settling such claim or litigation,

 

xlii

 

after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate but after consultation with
the Indemnifying Party; and no action taken by the Indemnified Party in
accordance with such defense and settlement shall relieve the Indemnifying
Party of its indemnification obligations herein provided with respect to any
Loss resulting therefrom.

 

ARTICLE IX

CONFIDENTIAL INFORMATION; ACCESS TO RECORDS

 

SECTION 9.1                                   Confidential
Information and Trade Secrets. All Confidential Information
and Trade Secrets belong to and shall remain the property of the Company and
the Practice, as the case may be. Each Party recognizes and acknowledges that
the Confidential Information and Trade Secrets of the other Party are
proprietary to such Party and are a valuable, special and unique asset of the
such Party’s business. Each Party therefore covenants and agrees that it will
not (and it will ensure that each of its employees will not), during or after
the term of this Agreement, disclose any of the other Party’s Confidential
Information or Trade Secrets to any Person or entity for any reason or purpose
whatsoever, without the written consent of the other Party, except (a) as
necessary in the proper performance of its obligations hereunder, (b) for
any such Confidential Information or Trade Secrets that becomes public through
no fault of the disclosing Party, or (c) as may be required by Law. Each
Party hereby acknowledges that if it or any of its employees or agents engage
in activities within the limitations of this Section 9.1, money damages
shall be an inadequate remedy, and shall be entitled to obtain, in addition to
any other remedy provided by Law or equity, an injunction against the violation
of such Party’s obligation hereunder.

 

SECTION 9.2                                   Books and
Records. Each Party shall maintain and make available to the other Party
accurate books, records, and accounts relating to the services provided by such
Party pursuant to this Agreement. Such books and records shall be available at
their place of keeping for inspection by the other Party or its representative
for the purpose of determining whether the correct amounts have been retained
and/or paid in accordance with the terms of this Agreement and for any other
valid purpose. Each Party shall have the right to conduct an audit (at such
Party’s expense) upon fifteen (15) days advance written notice, but not more
frequently than twice each calendar year.

 

ARTICLE X

ARBITRATION

 

SECTION 10.1                            Arbitration.

 

(a)                                 In the event of
any controversy or claim, whether based on contract, tort, statute, or other
legal or equitable theory (including but not limited to any claim of fraud,
misrepresentation, or fraudulent inducement) arising out of or related to this
Agreement (“dispute”) arises and cannot be resolved by negotiation, the Parties
agree to submit the dispute to mediation by a mediator mutually selected by the
Parties. If the Parties are unable to agree upon a mediator, then the mediator
shall be appointed by the American Arbitration Association. In any event, the
mediation shall take place within thirty (30) days of the date that a Party
gives the other Party written notice of its desire to mediate the dispute.

 

xliii

 

(b)                                 If not thus
resolved by mediation, the dispute shall be resolved by arbitration pursuant to
this Section 10.1 and the then-current rules and supervision of the
American Arbitration Association, and shall be subject to binding arbitration
in accordance with applicable sections of the Florida Code of Civil Procedure.

 

(c)                                  The duties to
mediate and arbitrate shall extend to any director, officer, employee,
shareholder, principal, agent trustee in bankruptcy or otherwise, Affiliate,
subsidiary, third-party beneficiary, or guarantor of a Party making or
defending any claim which would otherwise be subject to this Section 10.1.

 

(d)                                 The arbitration
shall be held in Jacksonville, Florida, before a single arbitrator. The
arbitrator’s decision and award shall be final and binding and may be entered
in any court having jurisdiction thereof. The arbitrator shall not have the
power to award punitive, exemplary, or consequential damages, or any damages
excluded by or in excess of any damage limitations expressed in this Agreement
or any subsequent agreement between the Parties.

 

(e)                                  In order to
prevent irreparable harm, the arbitrator may grant temporary or permanent
injunctive or other equitable relief for the protection of property rights.

 

(f)                                   Issues or
arbitrability shall be determined in accordance with the federal substantive
and procedural Laws relating to arbitration; all other aspects of the Agreement
shall be interpreted in accordance with and the arbitrator shall apply and be
found to follow the substantive Laws of the State of Florida. The prevailing
party in such action, in addition to any other award made by the arbitrator,
shall be entitled to an award of reasonable attorney’s fees and costs incurred
in prosecuting such action and the enforcement of any judgment entered in such
action, all in the amount to be determined by the arbitrator in accordance with
the rules of the American Arbitration Association.

 

(g)                                  If court
proceedings to stay litigation or compel arbitration are necessary, the Party
who unsuccessfully opposes such proceedings shall pay all associated costs,
expenses, and attorney’s fees which are reasonably incurred by the other Party.

 

(h)                                 The arbitrator
may order the Parties to exchange copies of nonrebuttal exhibits and copies of
witness lists in advance of the arbitration hearing. However, the arbitrator
shall have no other power to order discovery or depositions unless and then
only to the extent that all Parties otherwise agree in writing.

 

(i)                                     Neither a
Party, a witness, nor the arbitrator may disclose the facts of the underlying
dispute or the contents or results of any negotiation, mediation, or
arbitration hereunder without prior written consent of all Parties, unless and
then only to the extent required to enforce or challenge the negotiated
agreement or the arbitration award, as required by Law, or as necessary for
financial and tax reports and audits.

 

(j)                                    Notwithstanding
anything to the contrary in this Section 10.1, in the event of alleged
violation of a Party’s property or equitable rights (including but not limited
to unauthorized disclosure of confidential information), that Party may seek
temporary injunctive relief from any court of competent jurisdiction pending
appointment of an arbitrator. The Party requesting such relief shall simultaneously
file a demand for mediation and arbitration of the

 

xliv

 

dispute, and shall request the American Arbitration Association to
proceed under its rules of expedited procedures. In no event shall any
such court-ordered temporary injunctive relief continue for more than thirty
(30) days.

 

(k)                                 If any part of
this Section 10.1 is held to be unenforceable, it shall be severed and
shall not affect either the duties to mediate and arbitrate hereunder or any
other part of this Section 10.1.

 

ARTICLE XI

GENERAL PROVISIONS

 

SECTION 11.1                            Changes in the
Law. This Agreement shall be subject to all applicable Laws and all
changes and amendments thereto. Any provision of Law that invalidates, or is
otherwise inconsistent with, the terms of this Agreement, or which would cause
one of the Parties to be in violation of Law, shall automatically supersede the
terms of this Agreement; provided, however, the Parties shall exercise their
best efforts to negotiate an appropriate modification to the terms and
conditions of this Agreement to accommodate such provisions of Law and to
effectuate the existing terms and intent of this Agreement to the greatest
possible extent consistent with the requirements of such Law. In the event that
there shall be a change in the Medicare or Medicaid (or the general
instructions relating thereto), or in other Laws (or the application thereof),
or the adoption of new legislation, or a change in any Third-Party Payor
reimbursement system applicable to the provision of Radiation Oncology
Services, any of which materially and adversely affects the compensation that
the Company may receive for the services furnished to the Practice or if there
is any other material change in the facts, circumstances or assumptions of the
Parties that substantially alters the allocation of risks and rewards intended
to be accomplished herein, the Party so affected may by notice propose to the
other Party a new basis for compensation hereunder or other modification of this
Agreement and the Parties shall negotiate in good faith an equitable amendment
to this Agreement. If such notice is given and if the Parties are unable within
60 days to agree upon such amendment, the Parties shall submit such matter to
binding arbitration in accordance with Article X.

 

SECTION 11.2                            Independent
Contractors. The relationship between the Company and the
Practice is that of independent contractors, and none of the provisions of this
Agreement is intended to create, nor shall be construed to create a
partnership, joint venture or employment relationship between the Parties.
Neither Party, nor any of its respective officers, members, employees or
independent contractors, shall, except as otherwise expressly provided in this
Agreement, be deemed to be the employee or representative of the other Party by
virtue of this Agreement.

 

SECTION 11.3                            Force Majeure. Neither Party
shall be liable to the other for failure to perform any of the services, duties
or obligations required of such Party herein in the event of strikes, lockouts,
calamities, acts of God, unavailability of supplies or other events over which
such Party has no control for so long as such event continues and for a
reasonable period of time thereafter; provided, however, that each Party agrees
to use reasonably diligent efforts to perform such services, duties and
obligations required of such Party herein notwithstanding such events and shall
be liable to the other for the failure to use such reasonable diligent efforts.

 

xlv

 

SECTION 11.4                            Notices and
Addresses. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service, if personally served or sent by
facsimile; on the Business Day after notice is delivered to a courier or mailed
by express mail, if sent by courier delivery service or express mail for next
day delivery; and on the third day after mailing, if mailed to the Party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:

 

To Company:                                           OnCURE Medical
Corp.

610 Newport Center Drive, Suite 350

Newport Beach, CA 92660

Attn:  Jeffrey
A. Goffman, President & CEO

Fax:    (949) 721-6541

 

With a copy to:                                    Scott M. Zimmerman, Esq.

Dechert, LLP

30 Rockefeller Plaza

New York, NY 10112

Fax:    (212) 891-9598

 

To Practice:                                                       Integrated
Community Oncology Network

Shyam B. Paryani, M.D., Manager

3599 University Blvd. South, Suite 1000

Jacksonville, FL 32216

 

With a copy to:                                    M. Richard Lewis, Jr., Esq.

Smith Hulsey &
Busey

1800 Wachovia Bank Tower

225 Water St.

Jacksonville, FL 32202

Fax:  (904)
359-7712

 

SECTION 11.5                            Entire
Agreement. This Agreement, including the exhibits and
schedules hereto, sets forth the entire understanding and agreement and
supersedes any and all other understandings, negotiations or agreements between
the Parties (including, without limitation, the Original Agreements).

 

SECTION 11.6                            Physician Rights. The Parties
acknowledge and agree that the Physicians are third-party beneficiaries of this
Agreement and have standing to enforce their rights hereunder. In addition, the
Practice shall require that each Physician acknowledges and agrees to be bound
by all representations, warranties and covenants expressly applicable to him in
this Agreement. 

 

SECTION 11.7                            Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the Laws of the State of Florida.

 

xlvi

 

SECTION 11.8                            Captions. The captions
or headings in this Agreement are made for convenience and general reference
only and shall not be construed to describe, define or limit the scope or
intent of the provisions of this Agreement.

 

SECTION 11.9                            Severability. The
provisions of this Agreement shall be deemed severable and if any portion shall
be held invalid, illegal or unenforceable for any reason, the remainder of this
Agreement shall be effective and binding upon the parties.

 

SECTION 11.10                     Waiver. Any term or
condition of this Agreement may be waived at any time by the Party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. No waiver by any Party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this Agreement
on any future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not alternative.

 

SECTION 11.11                     Counterparts. This
Agreement may be executed via facsimile and in any number of counterparts, each
of which shall be deemed to be an original instrument and all of which together
shall constitute one and the same instrument.

 

SECTION 11.12                     Medical
Advisory Board. Each Physician providing Radiation Oncology Services
at the Cancer Centers on a fulltime basis shall have the right to be a member
of the Medical Advisory Board. The Medical Advisory Board shall not have any
members other than physicians who are owners or employees of a practice managed
by the Company or an Affiliate of the Company.

 

SECTION 11.13                     Amendment and
Modification. This Agreement may be amended or modified only by
written agreement executed by all of the Parties hereto.

 

SECTION 11.14                     Assignment and
Delegation. The Company shall have the right to assign its
rights hereunder to any Affiliate of the Company and to any lending
institution, for security purposes or as collateral, from which the Company or
such Affiliate obtains financing. Except as set forth in this Section 11.14,
neither the Company nor the Practice shall have the right to assign their
respective rights and obligations hereunder without the written consent of the
other party. Neither the Company nor the Practice may delegate any of its
duties hereunder, except as expressly contemplated herein; however, the Company
may delegate some or all of its duties and obligations hereunder to an
Affiliate of Company and the Practice may delegate some or all of its rights
and obligations hereunder to FROG or to an Affiliate of either, provided that
any assignor shall remain responsible for its obligations hereunder.

 

SECTION 11.15                     Open Records. Upon the
written request of the Secretary of Health and Human Services or the
Comptroller General or any of their duly authorized representatives, the
Company shall make available to the Secretary of Health and Human Services the
contract, books, documents and records that are necessary to verify the nature
and extent of the cost of providing the Management Services. No applicable
attorney-client, accountant-client or other legal privilege shall be deemed
waived by virtue of this Agreement.

 

xlvii

 

SECTION 11.16                     Binding Effect. Subject to Section 11.14,
this Agreement shall be binding on and shall inure to the benefit of the
Parties, and their successors and permitted assigns.

 

SECTION 11.17                     Further Actions. Each of the
Parties agrees (and the Practice agrees to cause the Physicians) to execute and
deliver such further instruments, and do such further acts and things, as may
be reasonably required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof. In addition, the
Parties agree to cooperate with one another in the fulfillment of their
respective obligations under this Agreement. Furthermore, the Practice agrees
(and agrees to cause the Physicians) to cooperate with the Company and to
assist it in obtaining all necessary licenses, certificates of need, and other
approvals from regulatory agencies and accrediting bodies.

 

SECTION 11.18                     No Prejudice. This
Agreement has been jointly prepared by the Parties hereto and the terms hereof
shall not be construed in favor of or against any Party on account of its
participation in such preparation.

 

Signature Page Follows

 

xlviii

 

IN WITNESS WHEREOF, the
Parties hereby execute this Agreement as of the Effective Date.

 

	
   

  	
  USCC FLORIDA ACQUISITION CORP

  ONCURE MEDICAL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey A. Goffman

  
	
   

  	
   

  	
  Jeffrey A. Goffman

  
	
   

  	
   

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FROG ONCURE SOUTHSIDE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey A. Goffman

  
	
   

  	
  Name:

  	
  Jeffrey A. Goffman

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INTEGRATED COMMUNITY ONCOLOGY NETWORK

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shyam B. Paryani

  
	
   

  	
   

  	
  Shyam B. Paryani, M.D.

  
	
   

  	
   

  	
  Manager

  

 

[Signature
Page to ICON MSA]

 

 

EXHIBIT A—PAYOR
INSTRUCTION LETTER

 

[DATE]

 

[Name of Payor]

[Address of Payor]

 

Re:                                                          Federal Tax
Identification Number:

Medicare Provider Number:

Medicaid Provider Number:

Unique Provider
Identification Number:

 

To Whom It May Concern:

 

You are directed to make:

 

(1)                                                    All wire transfers
directly to the following account: 

 

[NAME OF DEPOSITORY BANK]

 

 

 

ABA #

Account #                                              (Sweeping
Account)

 

(2)                                                    All explanation
of benefits, remittance advises, and other forms of payment, including checks,
to the following address:

 

[DEPOSITORY BANK] as Company
Lockbox Bank

P.O. Box             (Practice
Lockbox)

 

 

 

Reference:

Account #                                            (Sweeping
Account)

 

Thank you for your cooperation in this matter.

 

	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  

 

48

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