Document:

Exhibit 10.56

 

THIRD
ADDENDUM TO MANAGEMENT SERVICES AGREEMENT

 

This Third Addendum (the “Addendum”)
is entered into as of August 1, 2007, by and between CALIFORNIA RADIATION
THERAPY MANAGEMENT SERVICES, INC., a California corporation (“Manager”)
and 21ST CENTURY ONCOLOGY OF CALIFORNIA A MEDICAL
CORPORATION, a California medical corporation (“Medical Group”). This Addendum
amends Sections l.(a) of the Management Services Agreement dated May 1,
2006, as set forth below.

 

From and after the date here
of,

 

(i)   Section 1.(a) shall be
amended to read as follows:

 

“(a)     Management. The Manager
will be responsible for general management and administration operations of the
Office locations, excluding the provision of medical services, set forth on Exhibit B
hereto. The Manager shall not engage in the practice of medicine.”

 

 

	
   

  	
  Accepted:

  	
  CALIFORNIA RADIATION
  THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David N. T. Watson

  
	
   

  	
   

  	
   

  	
  David N. T. Watson

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Accepted:

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel
  E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

EXHIBIT B

 

THIRD
ADDENDUM TO MANAGEMENT SERVICES AGREEMENT

 

Office
Locations and Manager Compensation

 

	
  Office Location

  	
   

  	
  Manager

  Compensation

  as a % of Net

  Collected Dollars

  
	
  Palm Desert

  	
   

  	
  77%

  
	
  77840 Flora Road

  	
   

  	
   

  
	
  Palm Desert, CA 92211

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Santa Monica

  	
   

  	
  77%

  
	
  2428 Santa Monica
  Boulevard

  	
   

  	
   

  
	
  Suite 103

  	
   

  	
   

  
	
  Santa Monica, CA 90404

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Beverly Hills Radiation
  Oncology

  	
   

  	
  77%

  
	
  150 N. Robertson Blvd.

  	
   

  	
   

  
	
  Suite 160

  	
   

  	
   

  
	
  Beverly Hills, CA 90221

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vidya S. Bobba,
  M.D., Inc.

  	
   

  	
  77%

  
	
  963 Butte Street

  	
   

  	
   

  
	
  Redding, CA 96001

  	
   

  	
   

  

 

 

SECOND
ADDENDUM TO MANAGEMENT SERVICES AGREEMENT

 

This Second Addendum (the “Addendum”)
is entered into as of November 1, 2006, by and between CALIFORNIA
RADIATION THERAPY MANAGEMENT SERVICES, INC., a California corporation (“Manager”)
and 21ST CENTURY ONCOLOGY OF CALIFORNIA A MEDICAL
CORPORATION, a California medical corporation (“Medical Group”). This Addendum
amends Sections l.(a) of the Management Services Agreement dated May 1,
2006, as set forth below.

 

From and after the date here
of,

 

(i)   Section 1.(a) shall be
amended to read as follows:

 

“(a)     Management. The Manager
will be responsible for general management and administration operations of the
Office locations, excluding the provision of medical services, set forth on Exhibit B
hereto. The Manager shall not engage in the practice of medicine.”

 

 

	
   

  	
  Accepted:

  	
  CALIFORNIA RADIATION
  THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
   

  	
  David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Accepted:

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel
  E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

EXHIBIT B

 

ADDENDUM
TO MANAGEMENT SERVICES AGREEMENT

 

Office
Locations and Manager Compensation

 

	
  Office Location

  	
   

  	
  Manager

  Compensation

  as a % of Net

  Collected Dollars

  
	
  Palm Desert

  	
   

  	
  77%

  
	
  77840 Flora Road

  	
   

  	
   

  
	
  Palm Desert, CA 92211

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Santa Monica

  	
   

  	
  77%

  
	
  2428 Santa Monica Boulevard

  	
   

  	
   

  
	
  Suite 103

  	
   

  	
   

  
	
  Santa Monica, CA 90404

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Beverly Hills Radiation
  Oncology

  	
   

  	
  77%

  
	
  150 N. Robertson Blvd.

  	
   

  	
   

  
	
  Suite 160

  	
   

  	
   

  
	
  Beverly Hills, CA 90221

  	
   

  	
   

  

 

 

ADDENDUM
TO MANAGEMENT SERVICES AGREEMENT

 

This Addendum (the “Addendum”)
is entered into as of August 1, 2006, by and between CALIFORNIA RADIATION
THERAPY MANAGEMENT SERVICES, INC., a California corporation (“Manager”)
and 21ST CENTURY ONCOLOGY OF CALIFORNIA A MEDICAL
CORPORATION, a California medical corporation (“Medical Group”). This Addendum
amends certain sections of the Management Services Agreement dated May 1,
2006, which was assumed by Manager in conjunction with Manager’s acquisition of
certain assets from LHA, Inc. also on May 1, 2006, as set forth
below.

 

From and after the date here
of,

 

(i)   Section 1.(a) shall be
amended to read as follows:

 

“(a)     Management. The Manager
will be responsible for general management and administration operations of the
Office locations, excluding the provision of medical services, set forth on Exhibit B
hereto. The Manager shall not engage in the practice of medicine.”

 

(ii)  Section 1.(g) shall
be added to read as follows:

 

“(g)     Patient-Related Matters.

 

(a)       Patient Relations,
Scheduling, Etc. Manager shall assist Medical Group in maintaining
positive patient relations by, among other things, in conjunction with and at
the direction of Medical Group: scheduling patient appointments; responding to
patient grievances and complaints in matters other than medical evaluation,
diagnosis, and treatment; and establishing and maintaining in Medical Group’s
name and on its behalf patient transfer arrangements to expedite referrals
where medically necessary, as determined and requested by the attending
physician.

 

(b)      Recordkeeping. Manager shall
assist Medical Group in maintaining patient medical records in accordance with
applicable laws concerning their confidentiality and retention, and promptly
making such records available to Medical Group’s employed providers,
contracting providers and other appropriate recipients. Notwithstanding the
foregoing sentence, patient medical records shall be and shall remain the
property of Medical Group, and the content thereof shall be solely the
responsibility of Medical Group.

 

 

(c)   Quality Assurance.

 

a.        In General. Manager shall
assist Medical Group, in accordance with criteria established by Medical Group,
in the development and implementation of appropriate quality assurance
programs, including development of performance and utilization standards,
sampling techniques for case review, and preparation of appropriately
documented studies. Notwithstanding the foregoing, Manager shall not perform
any duties that constitute the corporate practice of medicine in California and
all other states in which an Office at which the Medical Group provides patient
medical services is located.

 

b.        Periodic Independent Review. On behalf of
Medical Group, Manager may periodically perform quality assurance and
utilization reviews through nurses employed by it; provided however, that
Manager shall not engage in activities which constitute the practice of
medicine under applicable law. Alternatively, Manager may periodically arrange
for an independent quality assurance and utilization review to be performed by
persons who are unrelated to Medical Group or Manager, or to any Affiliate of
Medical Group or Manager, which has expertise in such areas, and which has been
approved in advance by Medical Group. Such review shall include a random
sampling of medical records (consistent with laws regarding the confidentiality
of medical records), an analysis of Medical Group’s quality assurance
utilization review procedures, and an analysis of the appropriateness of costs
associated with operating Medical Group’s medical practice at the practice.”

 

(iii)             Section 1.(h) shall
be added to read as follows:

 

“(h)     Offices. Manager shall
provide, manage and maintain the real property comprising the Offices and
reasonable improvements during the term of this Agreement. In consultation with
Medical Group, Manager shall oversee all management, maintenance and other
decisions pertaining to the Offices consistent with the terms of this
Agreement. Manager shall maintain the Offices in good condition and repair,
reasonable wear and tear excepted. Manager shall provide such additional and/or
replacement facilities as Medical Group and Manager agree, from time to time.
Manager shall provide Medical Group with all utilities (including water, gas
and electricity), heat, air conditioning, telephone, janitorial services and
disposal services (including the disposal of medical wastes) required in
connection with the operation of the Offices.”

 

 

(iv) The first
sentence of Section 4.(a) shall be amended to read as follows:

 

“(a)     The Manager shall be paid,
and Manager shall accept as payment for the full performance of its duties
hereunder, an amount equal to the respective percentage of Net Collected
Dollars for each Office as contained in Exhibit B hereto.”

 

(v)  Section 2. shall be amended
to read as follows:

 

“2.       Term. The initial
term of this Agreement shall commence as of May 1, 2006 (the “Commencement
Date”) and, shall, unless sooner terminated as herein, continue until April 30,
2031, and shall be automatically renewed for successive five (5) year
periods thereafter (collectively, the “Term”), provided that neither Manager
nor the Medical Group shall have given notice of termination of this Agreement
at least one hundred twenty (120) days before the end of the initial term or
any renewal term.”

 

(vi) Sections
13.(a) and (b) shall be amended to read as follows:

 

“13.     Restrictive Covenants.

 

(a)       During the Term of this
Agreement and for three (3) years following the termination of this
Agreement, Medical Group agrees that it shall not, directly or indirectly:

 

(i)        engage in the ownership,
operation or management of any radiation oncology practice or otherwise engage
in the provision of radiation oncology services (whether as a separate business
or in conjunction with any other business (a “Competing Business”) within an
eight (8) mile radius of the Office (the “Service Area”)); or

 

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

 

(b)      During the Term of this
Agreement and for three (3) years following the termination of this
Agreement, Medical Group agrees that it shall not, directly or indirectly, (i) solicit,
encourage or advise patients serviced during the Term of this Agreement to
obtain or seek professional services from any professional who is not an
employee, independent contractor or partner of Medical Group, or (ii) solicit,
encourage or advise any employees of Manager to terminate employment with
Manager for any reason whatsoever. Notwithstanding the foregoing, nothing in
this Agreement is intended to prevent Medical Group from referring a patient in
need of specialty services not otherwise provided by Medical Group, or

 

 

for other reasons in the
best interests of the patient, to another duly licensed professional or facility.”

 

(vii)   Section 16(k) shall
be added to read as follows:

 

“(k)     Indemnification. Medical Group
shall indemnify, hold harmless and defend Manager, its officers, directors,
shareholders, employees, agents and independent contractors (the “Manager Parties”)
from and against any and all liabilities, losses, damages, claims, causes of
action, and expenses (including reasonable attorneys’ fees and disbursements (a
“Manager Loss”)), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of medical services or any
other acts or omissions by Manager and/or its partners, agents, employees
and/or subcontractors (other than Manager) during the Term hereof except with
respect to any Manager Loss which is the result of any gross or willful
misconduct by a member of Manager Parties. Manager shall indemnify, hold
harmless and defend Medical Group, its officers, directors, shareholders,
employees, agents and independent contractors (the “Medical Group Parties”)
from and against any and all liabilities, losses, damages, claims, causes of
action, and expenses (including reasonable attorneys’ fees and disbursements)
(a “Medical Group Loss”), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of medical services or any
other acts or omissions by Manager and/or its partners, agents, employees
and/or subcontractors (other than Manager) during the Term hereof except with
respect to any Medical Group Loss which is the result of any gross or willful
misconduct by a member of Medical Group Parties.”

 

 

	
   

  	
  Accepted:

  	
  CALIFORNIA RADIATION
  THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
   

  	
  David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Accepted:

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel
  E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

EXHIBIT B

 

ADDENDUM
TO MANAGEMENT SERVICES AGREEMENT

 

Office
Locations and Manager Compensation

 

	
  Office Location

  	
   

  	
  Manager

  Compensation

  as a % of Net

  Collected Dollars

  
	
  Palm Desert

  	
   

  	
  77%

  
	
  77840 Flora Road

  	
   

  	
   

  
	
  Palm Desert, CA 92211

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Santa Monica

  	
   

  	
  77%

  
	
  2428 Santa Monica
  Boulevard

  	
   

  	
   

  
	
  Suite 103

  	
   

  	
   

  
	
  Santa Monica, CA 90404

  	
   

  	
   

  

 

 

 

EXECUTION
COPY

 

ASSIGNMENT
AND ASSUMPTION OF

MANAGEMENT SERVICES AGREEMENT

 

THIS
ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) made this
8th day of September, 2006 between and among Beverly Hills Radiation Oncology,
a California general partnership (“Assignor”), California Radiation Therapy
Management Services, Inc., a California corporation (“Assignee”); and 21st Century Oncology of California, a Medical
Corporation (“21st Century”).

 

RECITAL:

 

1.        Assignor and 21st Century are parties to that certain Management
Services Agreement, attached hereto as Exhibit A (the “Management
Services Agreement”).

 

2.        Assignee and Assignor have
entered into an Asset Purchase Agreement dated as of the date hereof, providing
for the acquisition by Assignee of substantially all of the assets of Assignor
(the “Transaction”).

 

3.        In connection with and only
upon the consummation of the Transaction, Assignor desires to assign all of its
right, title and interest in and to the Management Services Agreement to
Assignee as of the date hereof.

 

4.        Assignee desires to accept
the assignment of the Management Services Agreement and to assume all rights
and obligations of Assignor under the Management Services Agreement as of the
date hereof.

 

5.        Assignee and Assignor desire
to secure the consent of 21st Century to the assignment and assumption of the
Management Services Agreement.

 

6.        Assignee agrees to accept
such assignment in accordance with the terms, conditions, covenants and
agreements hereinafter set forth.

 

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

 

1.        Assignment. Assignor
hereby assigns, transfers, grants, bargains, delivers, conveys and sets over
(collectively, the “Assignment”) to Assignee all of Assignor’s legal,
beneficial and other rights, title, benefit, privileges, and interest in and to
the Management Services Agreement.

 

2.        Assumption. Assignee
hereby accepts the Assignment and hereby assumes, covenants and agrees to
perform and observe all of the undertakings and obligations to be performed or
observed by Assignor as a party to the Management Services Agreement.

 

3.        Consent of 21st Century. 21st Century hereby consents to the Assignment.

 

1

 

4.        Indemnification. Assignee
hereby agrees to indemnify and hold harmless Assignor and its officers,
directors, shareholders, employees, employees, agents, representatives and
affiliates from and against all claims, suits, obligations, liabilities,
damages and expenses, including, without limitation, reasonable attorneys’
fees, based upon, arising out of or resulting from any obligation, contract or
liability relating to the Management Services Agreement, but only to the extent
such obligation, contract or liability accrues, or is otherwise attributable to
the period on and after the date hereof.

 

5.        Licenses, Permits. Assignee
represents and warrants that Assignee shall have all necessary licenses,
certificates, permits, approvals, franchises, notices and authorizations issued
by governmental entities or other regulatory authorities, federal, state or
local, required for a the ownership and operation of a facility that provides
radiation therapy services.

 

6.        Linear Accelerator. Prior to the
date hereof, Assignor commenced the installation of a new vault at the Office
(as defined in the Management Services Agreement) to be used to house a new
linear accelerator. Assignee shall use commercially reasonable efforts to
complete as soon as commercially practicable the installation of the new vault
and linear accelerator for use by Assignor.

 

7.        Acknowledgement. Assignee
acknowledges that Assignor is entering into this Assignment in reliance upon
execution of that certain Professional Services Agreement by and between
Assignor and 21st Century dated the date hereof..

 

8.        Binding Effect. This
instrument shall inure to the benefit of Assignee and Assignor and their successors
and assigns and shall be binding upon the Assignor and Assignee and their
respective successors and assigns.

 

9.        Further Assurances. Assignor
further covenants and agrees that, from time to time after the delivery of this
instrument, at Assignee’s request and without farther consideration, Assignor
will do, furnish, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, conveyances,
transfers, assignments, documents and assurances as reasonably may be requested
by Assignee (or Assignee’s counsel) more effectively to convey to, transfer to
and vest in Assignee all rights, title and interest in and to the Management
Services Agreement assigned hereunder provided such is without cost or liability
to the Assignor.

 

10.      Waivers and Amendments. This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the Assignor and Assignee or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor
any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or remedies which any party
may otherwise have at law or in equity.

 

2

 

 

11.      Governing Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of California, without regard to its conflict of law principles.

 

12.      Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which when taken together shall constitute a single
instrument.

 

13.      Release of Assignor by 21st Century. Effective with the
execution and delivery of this Assignment, 21st Century
hereby releases Assignor and its directors, officers, shareholders, employees,
attorneys, accountants, agents and representative with respect to any and all
claims, demands, liens, agreements, contracts, covenants, actions, suits,
causes of action, obligations, controversies, debts, costs, expenses, damages,
judgments, administrative or criminal complaints or proceedings, orders and
liabilities of whatever kind and nature in law, equity or otherwise, whether
now known or unknown, suspected or unsuspected, which have existed or may have
existed, or which do exist, as of the date of this Assignment, including, but
without in any respect limiting the generality of the foregoing, any and all
claims which were, or might, or could have been alleged, and any and all claims
arising from or out of the acts, transactions, and occurrences relating to the
execution and delivery of the Management Services Agreement.

 

[SIGNATURE
PAGE TO FOLLOW]

 

3

 

IN WITNESS
WHEREOF, the parties have executed this Agreement on the
dated first written above.

 

	
   

  	
   

  	
  BEVERLY HILLS RADIATION
  ONCOLOGY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Authorized Signatory

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CALIFORNIA RADIATION
  THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Name:

  	
  David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
						

 

SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION OF

MANAGEMENT SERVICES AGREEMENT

 

 

Exhibit A

 

Management
Services Agreement

 

 

MANAGEMENT
SERVICES AGREEMENT

 

MANAGEMENT
SERVICES AGREEMENT (the “Agreement”) made as of the 8th day of
September, 2006, by and between Beverly Hills Radiation Oncology, a California
general partnership (“Manager”) and 21st Century Oncology of California, a
Medical Corporation, a California corporation (“Medical Group”).

 

RECITALS:

 

1.        Medical Group is a provider
of radiation oncology services.

 

2.        Medical Group wishes to
engage the Manager as an independent contractor, to provide it with certain
office facilities, equipment, supplies and administrative services at a
practice located at 150 North Robertson Boulevard, Suite 160, Beverly
Hills, California 90221 (the “Office”).

 

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

 

1.        Manager’s Undertakings.

 

(a)    Management. The Manager
will be responsible for general management and administration operations of the
Office, excluding the provision of medical services. The Manager shall not
engage in the practice of medicine.

 

(b)    Personnel. Manager shall
provide, on behalf of Medical Group, all support personnel including, but not
limited to, technicians, physicists, dosimetrists, nurses, receptionists,
secretaries, clerks, management personnel and/or other personnel as necessary,
as determined by the Manager in consultation with Medical Group (“Manager
Personnel”). Manager shall be responsible for recruiting, managing, supervising
compensating and terminating the Manager Personnel. Manager shall be
responsible for all salaries, fringe benefits, taxes and insurance necessary
with respect to such individuals. At such times as the Manager Personnel are
providing services on Medical Group’s behalf, Medical Group shall have
authority and responsibility for (i) the supervision and control of the
Manager Personnel (while providing services on behalf of the Medical Group) and
(ii) determining the means and methods by which the Manager Personnel
provides services hereunder.

 

(c)    Equipment. Manager
hereby leases to the Medical Group the furniture, fixtures and equipment at the
Office described on Exhibit A hereof (the “Equipment”) and Medical
Group hereby leases such Equipment from Manager. Manager shall maintain all
Equipment in good repair, condition and working order, and shall furnish all
parts and services for the Equipment reasonably required therefor including,
without limitation, preventive and routine maintenance as necessary and
appropriate, as determined by Manager in its sole discretion. The parties agree
and acknowledge that Medical Group shall be free to exercise its professional
judgment with respect to the use of the Equipment. The Equipment provided
hereunder shall, at all times, be and remain the property of Manager. Medical
Group shall not cause or permit the Equipment to be subject to any lien, levy,
attachment, encumbrance or charge, or to any judicial process of any kind
whatsoever, and shall not remove the Equipment from the Office without the
prior written consent of Manager.

 

1

 

(d)    Licensing, Inspection
and Regulatory Fees. Manager shall be responsible for all licensing,
inspection and regulatory fees incurred in connection with the services
provided by Manager hereunder.

 

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

 

(f)     No Marketing. Manager and
Medical Group expressly agree and acknowledge that Manager is not being engaged
to, nor at any time shall Manager, provide marketing services, directly or
indirectly, to or on behalf of Medical Group.

 

2.        Term. The term of
this Agreement shall commence as of September 8, 2006 and shall continue
until September 7, 2031 (the “Initial Term”) and shall automatically be
renewed for successive five (5) year periods thereafter (each, a “Renewal
Term”) provided that neither Manager nor Medical Group shall have given notice
of termination of this Agreement at least one hundred twenty (120) days before
the end of the Initial Term or any Renewal Term. The Initial Term and the
Renewal Term shall be referred to collectively herein as the “Term.”.

 

3.        Provision of Professional Services. Medical
Group, as an independent contractor, shall be and remain fully responsible for
all professional medical services provided at the Office. In no event shall
Manager be deemed to be engaged in the practice of medicine. In connection
therewith, Medical Group shall provide all related physician support through
its physician-employees and/or other physicians otherwise engaged by the
Medical Group (the “Physicians”).

 

4.        Compensation.

 

(a)    The Manager shall be paid,
and Manager shall accept as payment for the full performance of its duties
hereunder, an amount equal to seventy seven percent (77%) percent of Net
Collected Dollars. For purposes of this Agreement, “Net Collected Dollars”
shall mean the gross collections, net of refunds, overpayments and the two and
one-half percent (2.5%) billing fee (the “Billing Fee”) due Financial Services
of Southwest Florida, LLC by Medical Group pursuant to the Billing Services
Agreement (as described in Section 5(a)), attributable to radiation
therapy services generated by the Medical Group at the Office (the “Management
Fee”). The amount of gross collections, net of refunds and overpayments and the
Billing Fee, to radiation therapy services performed by the Medical Group at
the Office shall be referred to herein as “Office Revenues.”

 

(b)    Payment of the Management
Fee shall be due no later than the fifteenth (15th) day of the month following the last day of the
month in which services were rendered by Manager hereunder.

 

(c)    Following the expiration or
other termination of this Agreement for any reason, Manager shall continue to
be entitled to receive the Management Fee for services provided prior to the
expiration or other termination of this Agreement but for which collections are
actually received following such expiration or other termination of this
Agreement.

 

2

 

5.        Billing and Collections. Medical Group
shall engage Financial Services of Southwest Florida, a Florida limited
liability company to provide billing and collection services on behalf of
Medical Group pursuant to that a Billing Services Agreement (the “Billing
Services Agreement”).

 

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

 

(a)    Licensed Providers. Each
physician engaged by the Medical Group to provide services at the Office shall
be duly licensed to practice medicine in the State of California and shall be
board certified or board eligible in the specialty of radiology and shall
maintain professional liability insurance in minimum amounts of
$1,000,000/$3,000,000 per annum.

 

(b)    Permits. Each of the
Medical Group and each physician providing services on behalf of the Medical
Group shall have all necessary licenses, certificates, permits, approvals,
franchises, notices and authorizations issued by governmental entities or other
regulatory authorities, federal, state or local, required for the ownership and
operation of the Medical Group and the operation of the Practice.

 

(c)    No Encumbrances. Title to the
Equipment and other property provided by Manager hereunder shall remain with
Manager. The Medical Group shall not take any action which would adversely
affect or encumber Manager’s title or interest in the Equipment.

 

(d)    Responsibility for Medical
Services. The Medical Group shall be and remain fully  responsible for all medical services
provided at the Office. In no event shall Manager be deemed to be engaged in
the practice of medicine.

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

(e)    Patient Care. Manager shall
cooperate with Medical Group to assure the continuation of any treatment plan
for a Medical Group patient that is in process as of the date hereof.

 

(f)     Linear Accelerator. Prior to the
date hereof, Medical Group commenced the installation of a new vault at the
Facility to be used to house a new linear accelerator. Manager shall use
commercially reasonable efforts to complete as soon as commercially practicable
the installation of the new vault and linear accelerator for use by Medical
Group.

 

(g)    Insurance. Manager shall
maintain, at Manager’s expense, (i) comprehensive general liability
coverage, including coverage for property damage, with limits of not less than
One Million Dollars ($1,000,000) per occurrence and Three Million Dollars
($3,000,000) annual aggregate, with respect to the Facility, and (ii) professional
liability coverage (medical malpractice insurance) for Medical Group for
occurrences during the term and any renewals thereof, with limits of not less
than One Million Dollars ($1,000,000) per occurrence and Three Million Dollars
($3,000,000) annual aggregate.

 

(h)    Permits, etc. Manager shall
have all necessary licenses, certificates, permits, approvals, franchises,
notices and authorizations issued by governmental entities or other regulatory
authorities, federal, state or local, required for the ownership and operation
of the Facility.

 

8.        Operation of Office. In the
performance of their respective obligations hereunder, Medical Group and
Manager shall comply with all applicable regulations and laws (including,
without limitation, applicable zoning regulations and rules and
regulations governing the practice of medicine) and shall use commercially
reasonable efforts to ensure that the Office complies

 

4

 

 

with the rules and
regulations of all regulatory bodies, agencies or authorities having
jurisdiction over them.

 

9.        Independent Contractors.

 

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

 

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

 

(c)    In performing the services
required hereunder, Medical Group and its physician-employees and contractors
shall exercise independent professional judgment. Manager shall not exercise
any control over matters of Medical Group involving the exercise of
professional medical judgment.

 

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

 

(e)    During the Term of this
Agreement, all medical records with respect to Medical Group’s patients shall
remain in the custody and control of Medical Group. Such records shall be
stored at such location or locations as Medical Group shall direct Upon any
termination of this Agreement, Medical Group, at its own expense, shall remove
such records from such location or locations. Notwithstanding the foregoing, at
all times during the term of this Agreement and thereafter, the Manager shall
be provided with access to such records, as requested, for billing and all
other reasonable purposes, subject to applicable law regarding confidentiality.
Manager’s rights set forth in this Section 9(e) shall expressly survive any
termination of this Agreement.

 

10.      Default by Medical Group.

 

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

 

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

 

(ii)     if Medical Group is in
breach of the Sublease and such breach is not cured within the applicable
period provided therein;

 

5

 

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

 

(iv)    if Medical Group fails to
observe or perform any of its other obligations hereunder in any material
respect and such failure continues uncured for a period of thirty (30) days
after delivery of written notice thereof to Medical Group from Manager or, if
such failure cannot be cured within such thirty (30) day period, Medical Group
has failed to commence to cure such failure within such thirty (30) day period
and diligently proceeded to effect such cure;

 

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

 

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

 

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

 

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

 

11.      Default by Manager.

 

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

 

(i)      If Manager fails to observe
or perform any of its obligations hereunder in any material respect and such
failure continues uncured for a period of thirty (30) days after written notice
thereof to Manager from Medical Group or, if such failure cannot be cured
within such thirty (30) day period, the Manager has failed to commence to cure
such failure within such thirty (30) day period and diligently proceed to
effect such cure;

 

6

 

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

 

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

 

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

 

12.      Termination.

 

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

 

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

 

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

 

13.      Restrictive Covenants.

 

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

 

(i)      engage in the ownership,
operation or management of any radiation oncology practice or facilities or
otherwise engage in the provision of radiation oncology services (whether as a
separate business or in conjunction with any other business (a “Competing
Business”) within a five (5) mile radius of the Office (the “Service Area”); or

 

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

 

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

 

7

 

Medical Group, or for other
reasons in the best interests of the patient, to another duly licensed
professional or facility.

 

(c)    Medical Group acknowledges
that the restrictive covenants contained in this Section 13 have unique value
to Manager, the breach of which cannot be adequately compensated in an action
of law. Medical Group further agrees that, in the event of the breach of the
restrictive covenants contained herein, Manager shall be entitled to obtain
appropriate equitable relief, including, without limitation, a permanent
injunction or similar court order enjoining either or both of them from
violating any of such provisions, and that pending the hearing and the decision
on the application for permanent equitable relief, Manager shall be entitled to
a temporary restraining order and a preliminary injunction. The prevailing
party shall be entitled to reimbursement from the other party of its reasonable
costs and expenses (including attorneys’ fees and disbursements) of, or related
to, such action or proceeding. No such remedy shall be construed to be the
exclusive remedy of Manager and any and all such remedies shall be held and
construed to be cumulative and not exclusive of any rights or remedies, whether
at law or in equity, otherwise available under the terms of this Agreement, at
common law, or under federal, state or local statutes, rules and regulations.

 

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

 

14.      Trade Name.

 

(a)    Manager herby grants to Medical
Group a non-exclusive, terminable license to continue to use the trade name “Beverly
Hills Radiation Oncology” (the “Trade Name”) for the purpose of doing business
and identifying the Practice at the Facility.

 

(b)    Medical Group undertakes and
agrees not to use the Trade Name in any manner whatsoever which, directly or
indirectly, would dilute, demean or otherwise tarnish the image of the Trade
Name, the Manager or its affiliates. Medical Group acknowledges that the Trade
Name and all rights therein and the goodwill pertaining thereto belong
exclusively to Manager. During the Term of this Agreement and thereafter,
Medical Group will not contest the validity or enforceability of the Trade Name
or perform any act or omission adverse to said rights.

 

(c)    Upon the expiration or
earlier termination of this Agreement, Medical Group shall immediately cease
using the Trade Name and the license granted in connection therewith to Medical
Group shall automatically revert to Manager.

 

15.      Confidentiality. The terms and
conditions of this Agreement are and shall be treated as confidential, and
shall not hereafter be disclosed by any party hereto or any of their

 

8

 

respective attorneys to any
person or entity, except to financial and legal advisors and others who need to
know them to effectuate the purposes of this Agreement, or as may be required
by law, Any individual to whom the terms and conditions of this Agreement have
been disclosed will be advised of and shall abide by the confidentiality
instructions of this Section 15.

 

16.      Regulatory Matters.

 

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

 

(b)    For purposes of this Section
16, ‘protected health information”, or PHI, has the meaning defined by the
Standards for Privacy of Individually Identifiable Health Information, 45
C.F.R. Part 160 and Subparts A and E of Part 164 (the “Privacy Standards”), as
promulgated by the Department of Health and Human Services (“HHS”) pursuant to
the Administrative Simplification provisions of the Health Insurance
Portability and Accountability Act of 1996 (“HIPAA”). Medical Group agrees to
implement appropriate administrative, technical and physical safeguards to
limit incidental disclosures of PHI.

 

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

 

9

 

17.      Miscellaneous.

 

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

 

	
  If to Manager:

  	
   

  
	
   

  	
   

  
	
   

  	
  California Radiation
  Therapy Management

  
	
   

  	
  Services, Inc.

  
	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
  Fort Myers, Florida 33907

  
	
   

  	
  Attention: Daniel E.
  Dosoretz, M.D.

  
	
   

  	
   

  
	
  If to Medical Group:

  	
   

  
	
   

  	
   

  
	
   

  	
  Beverly Hills Radiation
  Oncology

  
	
   

  	
  150 North Robertson
  Boulevard, Suite 160

  
	
   

  	
  Beverly Hills, California
  90211

  
	
   

  	
  Attention: Patricia
  Gordon, M.D.

  
	
   

  	
  Clifford J. Merlo, M.D.

  
	
   

  	
  David J. Rickles, M.D.

  

 

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

 

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

 

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

 

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

 

(e)    Severability. In the event
that any term or provision of this Agreement is held to be illegal, invalid or
unenforceable under any applicable law, rule or regulation, such term or
provision shall be deemed severed from this Agreement and the remaining terms
and

 

10

 

provisions shall remain
unaffected thereby provided the invalid term does not materially alter the
basic purpose or intent of this Agreement.

 

(f)     Assignment. Neither party
shall assign any of its rights or obligations under this Agreement without the
express, prior written consent of the other party.

 

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

 

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

 

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

 

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

 

[SIGNATURE
PAGE TO FOLLOW]

 

11

 

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

 

	
   

  	
   

  	
   

  	
  21ST CENTURY ONCOLOGY OF
  CALIFORNIA, A MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  David M. Koeninger

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BEVERLY HILLS RADIATION
  ONCOLOGY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ Authorized Signatory

  
	
   

  	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
   

  	
  Title: 

  	
   

  

 

SIGNATURE PAGE TO MANAGEMENT SERVICES AGREEMENT

 

 

Exhibit
A

 

Equipment

 

1.             All tangible assets used in
the provision of radiation oncology services (the “Business”) located at the
Office, whether owned or leased, including, without limitation, all
instruments, tools, medical equipment, supplies and office equipment and all
fixtures and improvements.

 

2.             All inventories of clinical
supplies and instruments, Pharmaceuticals, inventory, paper goods, raw
materials, finished goods, demonstration equipment, parts, packaging materials
and other products, materials, or accessories related thereto that are held at,
or are in transit from or to, the Office.

 

3.             All software programs
(including source and object codes and related documentation for software owned
by the Manager and used in connection with or developed for support of the
operations of the Business, as well as the internet web sites used by Manager
with respect to the Business and the related universal record locators (“URLs”)
used in connection therewith.

 

4.             All files, documents,
instruments, papers, books and records relating to the Business, operations, condition
of (financial or other) results of operations and assets and properties of
Manager, including without limitation, patient lists, medical documentation,
payor verification, mailing lists and related documentation, financial
statements, tax returns and related work papers and letters from accountants,
personnel records and files, budgets, ledgers, journals, computer files and
programs; retrieval programs, operating data and plans and environmental
studies and plans.

 

5.             All telephone numbers,
facsimile numbers, electronic addresses and passwords used in connection with
the Business.

 

6.             All intangible personal
property of the Manager relating to or in connection with the Business or
Assets, including, without limitation, Manager’s rights to and use of the name “Beverly
Hills Radiation Oncology” and all of Manager’s rights, title to and interest
therein and thereunder.

 

 

MANAGEMENT
SERVICES AGREEMENT

 

MANAGEMENT
SERVICES AGREEMENT (the “Agreement”) made as of the 1st day of May, 2006, by and between LHA, Inc.,
a California corporation (“Manager”) and 21st Century Oncology
of California, a Medical Corporation (“Medical Group”).

 

RECITALS:

 

1.             Medical Group is a provider of radiation
oncology services.

 

2.             Medical Group wishes to engage the Manager
as an independent contractor, to provide it with certain office facilities,
equipment, supplies and administrative services at a practice located at 2428
Santa Monica Boulevard, Suite 103, Santa Monica, California (the “Office”).

 

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

 

1.             Manager’s Undertakings.

 

(a)           Management. The Manager will be responsible
for general management and administration operations of the Office, excluding
the provision of medical services. The Manager shall not engage in the practice
of medicine.

 

(b)           Personnel. Manager shall provide, on
behalf of Medical Group, all support personnel including, but not limited to,
technicians, physicists, dosimetrists, nurses, receptionists, secretaries,
clerks, management personnel and/or other personnel as necessary, as determined
by the Manager in consultation with Medical Group (“Manager Personnel”).
Manager shall be responsible for recruiting, managing, supervising compensating
and terminating the Manager Personnel. Manager shall be responsible for all
salaries, fringe benefits, taxes and insurance necessary with respect to such
individuals. At such times as the Manager Personnel are providing services on
Medical Group’s behalf, Medical Group shall have authority and responsibility
for (i) the supervision and control of the Manager Personnel (while
providing services on behalf of the Medical Group) and (ii) determining
the means and methods by which the Manager Personnel provides services
hereunder.

 

(c)           Equipment. Manager hereby leases to
the Medical Group the furniture, fixtures and equipment at the Office described
on Exhibit A hereof (the “Equipment”) and Medical Group hereby
leases such Equipment from Manager. Manager shall maintain all Equipment in
good repair, condition and working order, and shall furnish all parts and
services for the Equipment reasonably required therefor including, without
limitation, preventive and routine maintenance as necessary and appropriate, as
determined by Manager in its sole discretion. The parties agree and acknowledge
that Medical Group shall be free to exercise its professional judgment with
respect to the use of the Equipment. The Equipment provided hereunder shall, at
all times, be and remain the property of Manager. Medical Group shall not cause
or permit the Equipment to be subject to any lien, levy, attachment,
encumbrance or charge, or to any judicial process of any kind whatsoever, and
shall not remove the Equipment from the Office without the prior written
consent of Manager.

 

1

 

(d)           Licensing, Inspection and Regulatory Fees.
Manager shall be responsible for all licensing, inspection and regulatory fees
incurred in connection with the services provided by Manager hereunder.

 

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

 

(f)            No Marketing. Manager and Medical
Group expressly agree and acknowledge that Manager is not being engaged to, nor
at any time shall Manager, provide marketing services, directly or indirectly,
to or on behalf of Medical Group.

 

2.             Term. The term of this Agreement
shall commence as of May          ,
2006 (the “Commencement Date”) and, shall, unless sooner terminated as herein,
continue until             ,
2031 (the “Term”).

 

3.             Provision of Professional Services.
Medical Group, as an independent contractor, shall be and remain fully
responsible for all professional medical services provided at the Office. In no
event shall Manager be deemed to be engaged in the practice of medicine. In
connection therewith, Medical Group shall provide all related physician support
through its physician-employees and/or other physicians otherwise engaged by
the Medical Group (the “Physicians”).

 

4.             Compensation.

 

(a)           The Manager shall be paid, and Manager shall
accept as payment for the full performance of its duties hereunder, an amount
equal to seventy-seven (77%) percent of Net Collected Dollars. For purposes of
this Agreement, “Net Collected Dollars” shall mean the gross collections, net
of refunds, overpayments and the five percent (5%) billing fee (the “Billing
Fee”) due Financial Services of Southwest Florida, LLC by Medical Group
pursuant to the Billing Services Agreement (as described in Section 5(a)),
attributable to radiation therapy services generated by the Medical Group at
the Office (the “Management Fee”). The amount of gross collections, net of
refunds and overpayments and the Billing Fee, to radiation therapy services
performed by the Medical Group at the Office shall be referred to herein as “Office
Revenues.”

 

(b)           Payment of the Management Fee shall be due
no later than the fifteenth (15th)
day of the month following the last day of the month in which services were
rendered by Manager hereunder.

 

(c)           Following the expiration or other
termination of this Agreement for any reason, Manager shall continue to be
entitled to receive the Management Fee for services provided prior to the
expiration or other termination of this Agreement but for which collections are
actually received following such expiration or other termination of this
Agreement.

 

5.             Billing and Collections. Medical
Group shall engage Financial Services of Southwest Florida, a Florida limited
liability company to provide billing and collection services on behalf of
Medical Group pursuant to that a Billing Services Agreement (the “Billing
Services Agreement”).

 

2

 

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

 

(a)           Licensed Providers. Each physician
engaged by the Medical Group to provide services at the Office shall be duly
licensed to practice medicine in the State of California and shall be board
certified or board eligible in the specialty of radiology and shall maintain
professional liability insurance in minimum amounts of $1,000,000/$3,000,000
per annum.

 

(b)           Permits. Each of the Medical Group
and each physician providing services on behalf of the Medical Group shall have
all necessary licenses, certificates, permits, approvals, franchises, notices
and authorizations issued by governmental entities or other regulatory
authorities, federal, state or local, required for the ownership and operation
of the Medical Group and the operation of the Practice.

 

(c)           No Encumbrances. Title to the
Equipment and other property provided by Manager hereunder shall remain with
Manager. The Medical Group shall not take any action which would adversely
affect or encumber Manager’s title or interest in the Equipment.

 

(i)            Responsibility for Medical Services.
The Medical Group shall be and remain fully responsible for all medical
services provided at the Office. In no event shall Manager be deemed to be
engaged in the practice of medicine.

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

8.             Operation of Office. In the
performance of their respective obligations hereunder, Medical Group and
Manager shall comply with all applicable regulations and laws (including,
without limitation, applicable zoning regulations and rules and
regulations governing the practice of medicine) and shall use commercially
reasonable efforts to ensure that the Office complies with the rules and
regulations of all regulatory bodies, agencies or authorities having
jurisdiction over them.

 

9.             Independent Contractors.

 

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

 

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

 

(c)           In performing the services required
hereunder, Medical Group and its physician-employees and contractors shall
exercise independent professional judgment. Manager shall not exercise any
control over matters of Medical Group involving the exercise of professional
medical judgment.

 

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

 

(e)           During the Term of this Agreement, all
medical records with respect to Medical Group’s patients shall remain in the
custody and control of Medical Group. Such records shall be stored at such
location or locations as Medical Group shall direct Upon any

 

4

 

termination of this Agreement, Medical Group,
at its own expense, shall remove such records from such location or locations.
Notwithstanding the foregoing, at all times during the term of this Agreement
and thereafter, the Manager shall be provided with access to such records, as
requested, for billing and all other reasonable purposes, subject to applicable
law regarding confidentiality. Manager’s rights set forth in this Section 9(e) shall
expressly survive any termination of this Agreement.

 

10.           Default by Medical Group.

 

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

 

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

 

(ii)           if Medical Group is in breach of the
Sublease and such breach is not cured within the applicable period provided
therein;

 

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

 

(iv)          if Medical Group fails to observe or perform
any of its other obligations hereunder in any material respect and such failure
continues uncured for a period of thirty (30) days after delivery of written
notice thereof to Medical Group from Manager or, if such failure cannot be
cured within such thirty (30) day period, Medical Group has failed to commence
to cure such failure within such thirty (30) day period and diligently proceeded
to effect such cure;

 

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

 

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

 

(vii)         if Medical Group is determined, by an
appropriate governing body or court, to have violated any applicable law, rule,
regulation or ethical standard related to the

 

5

 

conduct of the practice of medicine which
results in Medical Group being unable to provide professional medical services.

 

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

 

11.           Default by Manager.

 

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

 

(i)            If Manager fails to observe or perform any
of its obligations hereunder in any material respect and such failure continues
uncured for a period of thirty (30) days after written notice thereof to
Manager from Medical Group or, if such failure cannot be cured within such
thirty (30) day period, the Manager has failed to commence to cure such failure
within such thirty (30) day period and diligently proceed to effect such cure;

 

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

 

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

 

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

 

12.           Termination.

 

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

 

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

 

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

 

13.           Restrictive Covenants.

 

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

 

6

 

(i)            engage in the ownership, operation or
management of any radiation oncology practice or facilities or otherwise engage
in the provision of radiation oncology services (whether as a separate business
or in conjunction with any other business (a “Competing Business”) within an
eight (8) mile radius of the Office (the “Service Area”); or

 

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

 

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

 

(c)           Medical Group acknowledges that the restrictive
covenants contained in this Section 13 have unique value to Manager, the
breach of which cannot be adequately compensated in an action of law. Medical
Group further agrees that, in the event of the breach of the restrictive covenants
contained herein, Manager shall be entitled to obtain appropriate equitable
relief, including, without limitation, a permanent injunction or similar court
order enjoining either or both of them from violating any of such provisions,
and that pending the hearing and the decision on the application for permanent
equitable relief, Manager shall be entitled to a temporary restraining order
and a preliminary injunction. The prevailing party shall be entitled to
reimbursement from the other party of its reasonable costs and expenses
(including attorneys’ fees and disbursements) of, or related to, such action or
proceeding. No such remedy shall be construed to be the exclusive remedy of
Manager and any and all such remedies shall be held and construed to be cumulative
and not exclusive of any rights or remedies, whether at law or in equity,
otherwise available under the terms of this Agreement, at common law, or under
federal, state or local statutes, rules and regulations.

 

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

 

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

 

7

 

Any individual to whom the terms and
conditions of this Agreement have been disclosed will be advised of and shall
abide by the confidentiality instructions of this Section 14.

 

15.           Regulatory Matters.

 

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

 

(b)           For purposes of this Section 15, “protected
health information”, or PHI, has the meaning defined by the Standards for
Privacy of Individually Identifiable Health Information, 45 C.F.R. Part 160
and Subparts A and E of Part 164 (the “Privacy Standards”), as promulgated
by the Department of Health and Human Services (“HHS”) pursuant to the
Administrative Simplification provisions of the Health Insurance Portability
and Accountability Act of 1996 (“HIPAA”). Medical Group agrees to implement
appropriate administrative, technical and physical safeguards to limit
incidental disclosures of PHI.

 

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

 

16.           Miscellaneous.

 

(a)           Notices. Any notice or other
communication required or which may be given hereunder shall be in writing and
shall be delivered personally, sent by certified mail, postage prepaid, return
receipt requested or by a nationally recognized overnight courier, and

 

8

 

shall be deemed given when so delivered
personally or by facsimile, or if mailed, five (5) days after the date of
mailing as follows:

 

	
  If to Manager:

  	
   

  	
  LHA Inc.

  2428 Santa Monica
  Boulevard, Suite 103

  Santa Monica, California 90404

  Attention: Michael L. Steinberg, M.D. and

  Leopold T. Avallone, M.D.

  
	
   

  	
   

  	
   

  
	
  If to Medical Group:

  	
   

  	
  21st Century Oncology of California

  2234 Colonial Boulevard

  Fort Myers, Florida 33907

  Attention: Daniel Dosoretz, M.D.

  President and Chief Executive Officer

  

 

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

 

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

 

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

 

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

 

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

 

(f)            Assignment. Neither party shall
assign any of its rights or obligations under this Agreement without the
express, prior written consent of the other party.

 

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

 

(h)           Amendments. This Agreement shall not
be changed or modified except by an instrument in writing executed by both
parties hereto. Without limiting any other provision herein, in the event that
rules, policies, directives and/or orders of the United States

 

9

 

Department of Health and Human Services or
any other applicable federal, state, or local agency or third-party payor
necessitate modifications or amendments to this Agreement, the parties hereto
agree to so modify or amend this Agreement to conform with such rules,
policies, directive and/or orders, provided they do not materially affect the
duties and obligations of the parties hereunder.

 

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

 

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

 

[SIGNATURE
PAGE TO FOLLOW]

 

10

 

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

 

	
   

  	
  LHA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Steinberg

  
	
   

  	
   

  	
  Name:

  	
  Michael L.
  Steinberg, M.D.

  
	
   

  	
   

  	
  Title: 

  	
  Chairman and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leepold T. Avallone

  
	
   

  	
   

  	
  Name:

  	
  Leepold T.
  Avallone, M.D.

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA,

  
	
   

  	
  a Medical Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
  Name:

  	
  David M. Koeninger

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
					

 

11

 

 

EXHIBIT A

Assets

 

1.             All tangible assets used in the provision
of radiation oncology services (the “Business”) located at the Office, whether
owned or leased, including, without limitation, all instruments, tools, medical
equipment, supplies and office equipment and all fixtures and improvements.

 

2.             All inventories of clinical supplies and
instruments, pharmaceuticals, inventory, paper goods, raw materials, finished
goods, demonstration equipment, parts, packaging materials and other products,
materials, or accessories related thereto that are held at, or are in transit
from or to, the Office.

 

3.             All software programs (including source
and object codes and related documentation for software owned by the Manager
and used in connection with or developed for support of the operations of the
Business, as well as the internet web sites used by Manager with respect to the
Business and the related universal record locators (“URLs”) used in connection
therewith.

 

4.             All files, documents, instruments, papers,
books and records relating to the Business, operations, condition of (financial
or other) results of operations and assets and properties of Manager, including
without limitation, patient lists, medical documentation, payor verification,
mailing lists and related documentation, financial statements, tax returns and
related work papers and letters from accountants, personnel records and files,
budgets, ledgers, journals, computer files and programs; retrieval programs,
operating data and plans and environmental studies and plans.

 

5.             All telephone numbers, facsimile numbers,
electronic addresses and passwords used in connection with the Business.

 

6.             All intangible personal property of the
Manager relating to or in connection with the Business or Assets, including,
without limitation, Manager’s rights to and use of the name “Santa Monica
Cancer Treatment Center” and all of Manager’s rights, title to and interest
therein and thereunder.

 

 

ASSIGNMENT
AND ASSUMPTION OF

MANAGEMENT SERVICES AGREEMENT

 

THIS
ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”)
made this 1st day of
May, 2006 between and among LHA, Inc., a California corporation
(“Assignor”), California Radiation Therapy Management Services, Inc., a
California corporation (“Assignee”); and 21st Century Oncology
of California, a Medical Corporation (“21st Century”).

 

RECITAL:

 

1.             Assignor and 21st Century are parties to that certain Management
Services Agreement, attached hereto as Exhibit A (the “Management
Services Agreement”).

 

2.             Assignee and Assignor have entered into an
Asset Purchase Agreement dated as of April 26, 2006, providing for the
acquisition by Assignee of substantially all of the assets of Assignor (the
“Transaction”).

 

3.             In connection with and only upon the
consummation of the Transaction, Assignor desires to assign all of its right,
title and interest in and to the Management Services Agreement to Assignee as
of the date hereof.

 

4.             Assignee desires to accept the assignment
of the Management Services Agreement and to assume all rights and obligations
of Assignor under the Management Services Agreement as of the date hereof.

 

5.             Assignee and Assignor desire to secure the
consent of 21st Century to the assignment and assumption of the Management
Services Agreement.

 

6.             Assignee agrees to accept such assignment
in accordance with the terms, conditions, covenants and agreements hereinafter
set forth.

 

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

 

1.             Assignment.         Assignor hereby assigns, transfers, grants,
bargains, delivers,

conveys and sets over (collectively, the “Assignment’) to Assignee all of
Assignor’s legal, beneficial and other rights, title, benefit, privileges, and
interest in and to the Management Services Agreement.

 

2.             Assumption. Assignee hereby accepts
the Assignment and hereby assumes, covenants and agrees to perform and observe
all of the undertakings and obligations to be performed or observed by Assignor
as a party to the Management Services Agreement.

 

3.             Consent of 21st Century. 21st Century hereby consents to the Assignment.

 

4.             Indemnification. Assignee hereby
agrees to indemnify and hold harmless Assignor and its officers, directors,
shareholders, employees, employees, agents, representatives

 

1

 

and affiliates from and against all claims,
suits, obligations, liabilities, damages and expenses, including, without
limitation, reasonable attorneys’ fees, based upon, arising out of or resulting
from any obligation, contract or liability relating to the Management Services
Agreement, but only to the extent such obligation, contract or liability
accrues, or is otherwise attributable to the period on and after the date
hereof.

 

5.             Binding Effect. This instrument
shall inure to the benefit of Assignee and Assignor and their successors and
assigns and shall be binding upon the Assignor and Assignee and their
respective successors and assigns.

 

6.             Further Assurances. Assignor
further covenants and agrees that, from time to time after the delivery of this
instrument, at Assignee’s request and without further consideration, Assignor
will do, furnish, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, conveyances,
transfers, assignments, documents and assurances as reasonably may be requested
by Assignee (or Assignee’s counsel) more effectively to convey to, transfer to
and vest in Assignee all rights, title and interest in and to the Management
Services Agreement assigned hereunder provided such is without cost or
liability to the Assignor.

 

7.             Waivers and Amendments. This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the Assignor and Assignee or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor
any single or partial exercise of any right, power or privilege hereunder, preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which any party may otherwise
have at law or in equity.

 

8.             Governing Law. This Agreement shall
be governed and construed in accordance with the laws of the State of
California, without regard to its conflict of law principles.

 

9.             Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
and all of which when taken together shall constitute a single instrument.

 

10.           Release of Assignor by 21st Century. Effective with the execution and
delivery of this Assignment, 21st Century hereby releases Assignor and its
directors, officers, shareholders, employees, attorneys, accountants, agents
and representative with respect to any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action,
obligations, controversies, debts, costs, expenses, damages, judgments,
administrative or criminal complaints or proceedings, orders and liabilities of
whatever kind and nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, which have existed or may have existed, or
which do exist, as of the date of this Assignment, including, but without in
any respect limiting the generality of the foregoing, any and all claims which
were, or might, or

 

2

 

could have been alleged, and any and all
claims arising from or out of the acts, transactions, and occurrences relating
to the execution and delivery of the Management Services Agreement.

 

[SIGNATURE
PAGE TO FOLLOW]

 

3

 

IN WITNESS
WHEREOF, the parties have executed this Agreement on
the dated first written above.

 

	
   

  	
  LHA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Steinberg

  
	
   

  	
   

  	
  Name : Michael L. Steinberg, M.D.

  
	
   

  	
   

  	
  Title : Chairman and Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leopold T. Avallone

  
	
   

  	
   

  	
  Name : Leopold T. Avallone, M.D.

  
	
   

  	
   

  	
  Title : President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
  Name : David M. Koeninger

  
	
   

  	
   

  	
  Title : Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  21ST CENTURY ONCOLOGY of CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
  Name : David M. Koeninger

  
	
   

  	
   

  	
  Title : Chief Financial Officer

  

 

Assignment and Assumption of Management
Services Agreement 

Signature Page

 

4

 

EXHIBIT A

 

Management
Services Agreement

 

 

MANAGEMENT
SERVICES AGREEMENT

 

MANAGEMENT
SERVICES AGREEMENT (the “Agreement”) made as of the 1st day of May, 2006; by and between
LHA, Inc., a California corporation (“Manager”) and 21st Century Oncology of California, a Medical
Corporation (“Medical Group”).

 

RECITALS:

 

1.             Medical Group is a provider of radiation
oncology services.

 

2.             Medical Group wishes to engage the Manager
as an independent contractor, to provide it with certain office facilities,
equipment, supplies and administrative services at a practice located at 2428
Santa Monica Boulevard, Suite 103, Santa Monica, California (the
“Office”).

 

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

 

1.             Manager’s Undertakings.

 

(a)           Management. The Manager will be
responsible for general management and administration operations of the Office,
excluding the provision of medical services. The Manager shall not engage in
the practice of medicine.

 

(b)           Personnel. Manager shall provide, on
behalf of Medical Group, all support personnel including, but not limited to,
technicians, physicists, dosimetrists, nurses, receptionists, secretaries,
clerks, management personnel and/or other personnel as necessary, as determined
by the Manager in consultation with Medical Group (“Manager Personnel”).
Manager shall be responsible for recruiting, managing, supervising compensating
and terminating the Manager Personnel. Manager shall be responsible for all
salaries, fringe benefits, taxes and insurance necessary with respect to such
individuals. At such times as the Manager Personnel are providing services on
Medical Group’s behalf, Medical Group shall have authority and responsibility
for (i) the supervision and control of the Manager Personnel (while
providing services on behalf of the Medical Group) and (ii) determining
the means and methods by which the Manager Personnel provides services
hereunder.

 

(c)           Equipment. Manager hereby leases to
the Medical Group the furniture, fixtures and equipment at the Office described
on Exhibit A hereof (the “Equipment”) and Medical Group hereby
leases such Equipment from Manager. Manager shall maintain all Equipment in
good repair, condition and working order, and shall furnish all parts and
services for the Equipment reasonably required therefor including, without
limitation, preventive and routine maintenance as necessary and appropriate, as
determined by Manager in its sole discretion. The parties agree and acknowledge
that Medical Group shall be free to exercise its professional judgment with
respect to the use of the Equipment. The Equipment provided hereunder shall, at
all times, be and remain the property of Manager. Medical Group shall not cause
or permit the Equipment to be subject to any lien, levy, attachment,
encumbrance or charge, or to any judicial process of any kind whatsoever, and
shall not remove the Equipment from the Office without the prior written
consent of Manager.

 

1

 

(d)           Licensing, Inspection and Regulatory Fees.
Manager shall be responsible for all licensing, inspection and regulatory fees
incurred in connection with the services provided by Manager hereunder.

 

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

 

(f)            No Marketing. Manager and Medical Group
expressly agree and acknowledge that Manager is not being engaged to, nor at
any time shall Manager, provide marketing services, directly or indirectly, to
or on behalf of Medical Group.

 

2.             Term. The term of this Agreement
shall commence as of May       , 2006 (the “Commencement
Date”) and, shall, unless sooner terminated as herein, continue until
                         ,
2031 (the “Term”).

 

3.             Provision of Professional Services.
Medical Group, as an independent contractor, shall be and remain fully
responsible for all professional medical services provided at the Office. In no
event shall Manager be deemed to be engaged in the practice of medicine. In
connection therewith, Medical Group shall provide all related physician support
through its physician-employees and/or other physicians otherwise engaged by
the Medical Group (the “Physicians”).

 

4.             Compensation.

 

(a)           The Manager shall be paid, and Manager shall
accept as payment for the full performance of its duties hereunder, an amount
equal to seventy-seven (77%) percent of Net Collected Dollars. For purposes of
this Agreement, “Net Collected Dollars” shall mean the gross collections, net
of refunds, overpayments and the five percent (5%) billing fee (the “Billing
Fee”) due Financial Services of Southwest Florida, LLC by Medical Group
pursuant to the Billing Services Agreement (as described in Section 5(a)),
attributable to radiation therapy services generated by the Medical Group at
the Office (the “Management Fee”). The amount of gross collections, net of
refunds and overpayments and the Billing Fee, to radiation therapy services
performed by the Medical Group at the Office shall be referred to herein as
“Office Revenues.”

 

(b)           Payment of the Management Fee shall be due
no later than the fifteenth (15th)
day of the month following the last day of the month in which services were
rendered by Manager hereunder.

 

(e)           Following the expiration or other
termination of this Agreement for any reason, Manager shall continue to be
entitled to receive the Management Fee for services provided prior to the
expiration or other termination of this Agreement but for which collections are
actually received following such expiration or other termination of this
Agreement.

 

5.             Billing and Collections. Medical
Group shall engage Financial Services of Southwest Florida, a Florida limited
liability company to provide billing and collection services on behalf of
Medical Group pursuant to that a Billing Services Agreement (the “Billing
Services Agreement”).

 

2

 

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

 

(a)           Licensed Providers. Each physician
engaged by the Medical Group to provide services at the Office shall be duly
licensed to practice medicine in the State of California and shall be board
certified or board eligible in the specialty of radiology and shall maintain
professional liability insurance in minimum amounts of $1,000,000/$3,000,000
per annum.

 

(b)           Permits. Each of the Medical Group
and each physician providing services on behalf of the Medical Group shall have
all necessary licenses, certificates, permits, approvals, franchises, notices
and authorizations issued by governmental entities or other regulatory
authorities, federal, state or local, required for the ownership and operation
of the Medical Group and the operation of the Practice.

 

(c)           No Encumbrances. Title to the
Equipment and other property provided by Manager hereunder shall remain with
Manager. The Medical Group shall not take any action which would adversely
affect or encumber Manager’s title or interest in the Equipment.

 

(i)            Responsibility for Medical Services.
The Medical Group shall be and remain fully responsible for all medical
services provided at the Office. In no event shall Manager be deemed to be
engaged in the practice of medicine.

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

 

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

 

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

 

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

 

8.             Operation of Office. In the
performance of their respective obligations hereunder, Medical Group and
Manager shall comply with all applicable regulations and laws (including,
without limitation, applicable zoning regulations and rules and
regulations governing the practice of medicine) and shall use commercially
reasonable efforts to ensure that the Office complies with the rules and
regulations of all regulatory bodies, agencies or authorities having
jurisdiction over them.

 

9.             Independent Contractors.

 

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

 

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

 

(c)           In performing the services required
hereunder, Medical Group and its physician-employees and contractors shall
exercise independent professional judgment. Manager shall not exercise any
control over matters of Medical Group involving the exercise of professional
medical judgment.

 

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

 

(e)           During the Term of this Agreement, all
medical records with respect to Medical Group’s patients shall remain in the
custody and control of Medical Group. Such records shall be stored at such
location or locations as Medical Group shall direct Upon any

 

4

 

termination of this Agreement, Medical Group,
at its own expense, shall remove such records from such location or locations.
Notwithstanding the foregoing, at all times during the term of this Agreement
and thereafter, the Manager shall be provided with access to such records, as
requested, for billing and all other reasonable purposes, subject to applicable
law regarding confidentiality. Manager’s rights set forth in this
Section 9(e) shall expressly survive any termination of this
Agreement.

 

10.           Default by Medical Group.

 

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

 

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

 

(ii)           if Medical Group is in breach of the
Sublease and such breach is not cured within the applicable period provided
therein;

 

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

 

(iv)          if Medical Group fails to observe or perform
any of its other obligations hereunder in any material respect and such failure
continues uncured for a period of thirty (30) days after delivery of written
notice thereof to Medical Group from Manager or, if such failure cannot be
cured within such thirty (30) day period, Medical Group has failed to commence
to cure such failure within such thirty (30) day period and diligently
proceeded to effect such cure;

 

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

 

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

 

(vii)         if Medical Group is determined, by an
appropriate governing body or court, to have violated any applicable law, rule,
regulation or ethical standard related to the

 

5

 

conduct of the practice of medicine which
results in Medical Group being unable to provide professional medical services.

 

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

 

11.           Default by Manager.

 

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

 

(i)            If Manager fails to observe or perform any
of its obligations hereunder in any material respect and such failure continues
uncured for a period of thirty (30) days after written notice thereof to
Manager from Medical Group or, if such failure cannot be cured within such
thirty (30) day period, the Manager has failed to commence to cure such failure
within such thirty (30) day period and diligently proceed to effect such cure;

 

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

 

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

 

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

 

12.           Termination.

 

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

 

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

 

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

 

13.           Restrictive Covenants.

 

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

 

6

 

(i)            engage in the ownership, operation or
management of any radiation oncology practice or facilities or otherwise engage
in the provision of radiation oncology services (whether as a separate business
or in conjunction with any other business (a “Competing Business”) within an
eight (8) mile radius of the Office (the “Service Area”); or

 

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

 

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

 

(c)           Medical Group acknowledges that the
restrictive covenants contained in this Section 13 have unique value to
Manager, the breach of which cannot be adequately compensated in an action of
law. Medical Group further agrees that, in the event of the breach of the
restrictive covenants contained herein, Manager shall be entitled to obtain
appropriate equitable relief, including, without limitation, a permanent
injunction or similar court order enjoining either or both of them from
violating any of such provisions, and that pending the hearing and the decision
on the application for permanent equitable relief, Manager shall be entitled to
a temporary restraining order and a preliminary injunction. The prevailing
party shall be entitled to reimbursement from the other party of its reasonable
costs and expenses (including attorneys’ fees and disbursements) of, or related
to, such action or proceeding. No such remedy shall be construed to be the
exclusive remedy of Manager and any and all such remedies shall be held and
construed to be cumulative and not exclusive of any rights or remedies, whether
at law or in equity, otherwise available under the terms of this Agreement, at
common law, or under federal, state or local statutes, rules and
regulations.

 

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

 

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

 

7

 

Any individual to whom the terms and
conditions of this Agreement have been disclosed will be advised of and shall
abide by the confidentiality instructions of this Section 14.

 

15.           Regulatory Matters.

 

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

 

(b)           For purposes of this Section 15,
“protected health information”, or PHI, has the meaning defined by the
Standards for Privacy of Individually Identifiable Health Information, 45
C.F.R. Part 160 and Subparts A and E of Part 164 (the “Privacy
Standards”), as promulgated by the Department of Health and Human Services
(“HHS”) pursuant to the Administrative Simplification provisions of the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”). Medical Group
agrees to implement appropriate administrative, technical and physical
safeguards to limit incidental disclosures of PHI.

 

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

 

16.           Miscellaneous.

 

(a)           Notices. Any notice or other
communication required or which may be given hereunder shall be in writing and
shall be delivered personally, sent by certified mail, postage prepaid, return
receipt requested or by a nationally recognized overnight courier, and

 

8

 

shall be deemed given when so delivered
personally or by facsimile, or if mailed, five (5) days after the date of
mailing as follows:

 

	
  If to Manager:

  	
   

  	
  LHA Inc.

  
	
   

  	
   

  	
  2428 Santa
  Monica Boulevard, Suite 103 

  Santa Monica, California 90404

  
	
   

  	
   

  	
  Attention: Michael L. Steinberg, M.D. and 

  Leopold T. Avallone, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Medical Group:

  	
   

  	
  21st Century Oncology of California

  
	
   

  	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
   

  	
  Fort Myers, Florida 33907

  
	
   

  	
   

  	
  Attention: Daniel Dosoretz, M.D. 

  President and Chief Executive Officer

  

 

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

 

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

 

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

 

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

 

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

 

(f)            Assignment. Neither party shall
assign any of its rights or obligations under this Agreement without the
express, prior written consent of the other party.

 

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

 

(h)           Amendments. This Agreement shall not
be changed or modified except by an instrument in writing executed by both
parties hereto. Without limiting any other provision herein, in the event that
rules, policies, directives and/or orders of the United States

 

9

 

Department of Health and Human Services or
any other applicable federal, state, or local agency or third-party payor
necessitate modifications or amendments to this Agreement, the parties hereto
agree to so modify or amend this Agreement to conform with such rules,
policies, directive and/or orders, provided they do not materially affect the
duties and obligations of the parties hereunder.

 

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

 

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

 

[SIGNATURE
PAGE TO FOLLOW]

 

10

 

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

 

	
   

  	
  LHA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Steinberg

  
	
   

  	
   

  	
  Name: Michael L. Steinberg, M.D.

  
	
   

  	
   

  	
  Title: Chairman and Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leopold T. Avallone

  
	
   

  	
   

  	
  Name: Leopold T. Avallone, M.D.

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, 

  a Medical Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Koeninger

  
	
   

  	
   

  	
  Name: David M. Koeninger

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

11

 

EXHIBIT A

Assets

 

1.             All tangible assets used in the provision of
radiation oncology services (the “Business”) located at the Office, whether
owned or leased, including, without limitation, all instruments, tools, medical
equipment, supplies and office equipment and all fixtures and improvements.

 

2.             All inventories of clinical supplies and
instruments, pharmaceuticals, inventory, paper goods, raw materials, finished
goods, demonstration equipment, parts, packaging materials and other products,
materials, or accessories related thereto that are held at, or are in transit
from or to, the Office.

 

3.             All software programs (including source and
object codes and related documentation for software owned by the Manager and
used in connection with or developed for support of the operations of the
Business, as well as the internet web sites used by Manager with respect to the
Business and the related universal record locators (“URLs”) used in connection
therewith.

 

4.             All files, documents, instruments, papers,
books and records relating to the Business, operations, condition of (financial
or other) results of operations and assets and properties of Manager, including
without limitation, patient lists, medical documentation, payor verification,
mailing lists and related documentation, financial statements, tax returns and
related work papers and letters from accountants, personnel records and files,
budgets, ledgers, journals, computer files and programs; retrieval programs,
operating data and plans and environmental studies and plans.

 

5.             All telephone numbers, facsimile numbers,
electronic addresses and passwords used in connection with the Business.

 

6.             All intangible personal property of the
Manager relating to or in connection with the Business or Assets, including,
without limitation, Manager’s rights to and use of the name “Santa Monica
Cancer Treatment Center” and all of Manager’s rights, title to and interest
therein and thereunder.

 

 

 

SECOND
ADDENDUM TO MANAGEMENT SERVICES AGREEMENT

 

This Second Addendum (the “Addendum”) is entered
into as of November 1, 2006, by and between CALIFORNIA RADIATION THERAPY
MANAGEMENT SERVICES, INC., a California corporation (“Manager”) and 21ST CENTURY ONCOLOGY OF CALIFORNIA A MEDICAL
CORPORATION, a California medical corporation (“Medical Group”). This Addendum
amends Sections 1.(a) of the Management Services Agreement dated
May 1, 2006, as set forth below.

 

From and after the date here of,

 

(i) Section 1.(a) shall
be amended to read as follows:

 

“(a) Management. The Manager will be responsible for
general management and administration operations of the Office locations,
excluding the provision of medical services, set forth on Exhibit B
hereto. The Manager shall not engage in the practice of medicine.”

 

	
  Accepted:

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David M. Koeninger 

  
	
   

  	
   

  	
   

  	
  David M. Koeninger 

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

EXHIBIT B

 

ADDENDUM TO MANAGEMENT SERVICES AGREEMENT

Office Locations and Manager Compensation

	
  Office Location

  	
   

  	
  Manager

  Compensation

  as a % of Net

  Collected Dollars

  
	
   

  	
   

  	
   

  
	
  Palm Desert

  	
   

  	
  77%

  
	
  77840 Flora Road

  	
   

  	
   

  
	
  Palm Desert, CA 92211

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Santa Monica

  	
   

  	
  77%

  
	
  2428 Santa Monica Boulevard

  	
   

  	
   

  
	
  Suite 103

  	
   

  	
   

  
	
  Santa Monica, CA 90404

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Beverly Hills Radiation Oncology

  	
   

  	
  77%

  
	
  150 N. Robertson Blvd.

  	
   

  	
   

  
	
  Suite 160

  	
   

  	
   

  
	
  Beverly Hills, CA 90221

  	
   

  	
   

  

 

 

ADDENDUM TO
MANAGEMENT SERVICES AGREEMENT

 

This Addendum (the “Addendum”) is entered into as of
August 1, 2006, by and between CALIFORNIA RADIATION THERAPY MANAGEMENT
SERVICES, INC., a California corporation (“Manager”) and 21ST CENTURY ONCOLOGY OF CALIFORNIA A MEDICAL
CORPORATION, a California medical corporation (“Medical Group”). This Addendum
amends certain sections of the Management Services Agreement dated May 1, 2006, which was assumed by Manager
in conjunction with Manager’s acquisition of certain assets from LHA, Inc.
also on May 1, 2006, as set
forth below.

 

From and after the date here of,

 

(i) Section 1.(a) shall
be amended to read as follows:

 

“(a) Management. The Manager will be
responsible for general management and administration operations of the Office
locations, excluding the provision of medical services, set forth on
Exhibit B hereto. The Manager shall not engage in the practice of
medicine.”

 

(ii) Section 1.(g) shall be added to read as
follows:

 

“(g) Patient-Related Matters.

 

(a)                                  Patient
Relations, Scheduling, Etc. Manager shall assist
Medical Group in maintaining positive patient relations by, among other things,
in conjunction with and at the direction of Medical Group: scheduling patient
appointments; responding to patient grievances and complaints in matters other
than medical evaluation, diagnosis, and treatment; and establishing and
maintaining in Medical Group’s name and on its behalf patient transfer
arrangements to expedite referrals where medically necessary, as determined and
requested by the attending physician.

 

(b)                                 Recordkeeping. Manager shall
assist Medical Group in maintaining patient medical records in accordance with
applicable laws concerning their confidentiality and retention, and promptly
making such records available to Medical Group’s employed providers,
contracting providers and other appropriate recipients. Notwithstanding the
foregoing sentence, patient medical records shall be and shall remain the
property of Medical Group, and the content thereof shall be solely the
responsibility of Medical Group.

 

 

(c)              Quality Assurance.

 

a.               In General. Manager
shall assist Medical Group, in accordance with criteria established by Medical
Group, in the development and implementation of appropriate quality assurance
programs, including development of performance and utilization standards,
sampling techniques for case review, and preparation of appropriately
documented studies. Notwithstanding the foregoing, Manager shall not perform
any duties that constitute the corporate practice of medicine in California and
all other states in which an Office at which the Medical Group provides patient
medical services is located.

 

b.              Periodic Independent Review. On behalf
of Medical Group, Manager may periodically perform quality assurance and
utilization reviews through nurses employed by it; provided however, that
Manager shall not engage in activities which constitute the practice of
medicine under applicable law. Alternatively, Manager may periodically arrange
for an independent quality assurance and utilization review to be performed by
persons who are unrelated to Medical Group or Manager, or to any Affiliate of
Medical Group or Manager, which has expertise in such areas, and which has been
approved in advance by Medical Group. Such review shall include a random
sampling of medical records (consistent with laws regarding the confidentiality
of medical records), an analysis of Medical Group’s quality assurance
utilization review procedures, and an analysis of the appropriateness of costs
associated with operating Medical Group’s medical practice at the practice.”

 

(iii) Section 1.
(h) shall be added to read as follows:

 

“(h)         Offices. Manager shall provide,
manage and maintain the real property comprising the Offices and reasonable
improvements during the term of this Agreement. In  consultation with
Medical Group, Manager shall oversee all management, maintenance and other
decisions pertaining to the Offices consistent with the terms of this
Agreement. Manager shall maintain the Offices in good condition and repair,
reasonable wear and tear excepted. Manager shall provide such additional and/or
replacement facilities as Medical Group and Manager agree, from time to time.
Manager shall provide Medical Group with all utilities (including water, gas
and electricity), heat, air conditioning, telephone, janitorial services and
disposal services (including the disposal of medical wastes) required in
connection with the operation of the Offices.”

 

 

(iv)   The first
sentence of Section 4.(a) shall be amended to read as follows:

 

“(a) The Manager shall be paid, and Manager shall accept as
payment for the full performance of its duties hereunder, an amount equal to
the respective percentage of Net Collected Dollars for each Office as contained
in Exhibit B hereto.”

 

(v)   Section 2.
shall be amended to read as follows:

 

“2. Term. The initial term of this Agreement shall commence as
of May 1, 2006 (the “Commencement Date”) and, shall, unless sooner
terminated as herein, continue until April 30, 2031, and shall be
automatically renewed for successive five (5) year periods thereafter
(collectively, the “Term”), provided that neither Manager nor the Medical Group
shall have given notice of termination of this Agreement at least one hundred
twenty (120) days before the end of the initial term or any renewal term.”

 

(vi) Sections
13.(a) and (b) shall be amended to read as follows:

 

“13.  Restrictive Covenants.

 

(a)                                  During the Term
of this Agreement and for three (3) years following the termination of
this Agreement, Medical Group agrees that it shall not, directly or indirectly:

 

(i)             engage in the ownership,
operation or management of any radiation oncology practice or otherwise engage
in the provision of radiation oncology services (whether as a separate business
or in conjunction with any other business (a “Competing Business”) within an
eight (8) mile radius of the Office (the “Service Area”)); or

 

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

 

(b)                                 During the Term
of this Agreement and for three (3) years following the termination of
this Agreement, Medical Group agrees that it shall not, directly or indirectly,
(i) solicit, encourage or advise patients serviced during the Term of this
Agreement to obtain or seek professional services from any professional who is
not an employee, independent contractor or partner of Medical Group, or
(ii) solicit, encourage or advise any employees of Manager to terminate
employment with Manager for any reason whatsoever. Notwithstanding the
foregoing, nothing in this Agreement is intended to prevent Medical Group from
referring a patient in need of specialty services not otherwise provided by
Medical Group, or

 

 

for other reasons in the best interests of the
patient, to another duly licensed professional or facility.”

 

(vii)                        Section 16(k) shall
be added to read as follows:

 

“(k)         Indemnification. Medical Group
shall indemnify, hold harmless and defend Manager, its officers, directors,
shareholders, employees, agents and independent contractors (the “Manager
Parties”) from and against any and all liabilities, losses, damages, claims,
causes of action, and expenses (including reasonable attorneys’ fees and
disbursements (a “Manager Loss”)), caused or asserted to have been caused,
directly or indirectly, by or as a result of the performance of medical
services or any other acts or omissions by Manager and/or its partners, agents,
employees and/or subcontractors (other than Manager) during the Term hereof
except with respect to any Manager Loss which is the result of any gross or
willful misconduct by a member of Manager Parties. Manager shall indemnify,
hold harmless and defend Medical Group, its officers, directors, shareholders,
employees, agents and independent contractors (the “Medical Group Parties”)
from and against any and all liabilities, losses, damages, claims, causes of
action, and expenses (including reasonable attorneys’ fees and disbursements)
(a “Medical Group Loss”), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of medical services or any
other acts or omissions by Manager and/or its partners, agents, employees
and/or subcontractors (other than Manager) during the Term hereof except with
respect to any Medical Group Loss which is the result of any gross or willful
misconduct by a member of Medical Group Parties.”

 

 

	
  Accepted:

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David M. Koeninger 

  
	
   

  	
   

  	
   

  	
  David M. Koeninger 

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

EXHIBIT B

 

ADDENDUM TO
MANAGEMENT SERVICES AGREEMENT

Office Locations and Manager Compensation

 

	
  Office Location

  	
   

  	
  Manager

  Compensation

  as a % of Net

  Collected Dollars

  
	
   

  	
   

  	
   

  
	
  Palm Desert

  	
   

  	
  77%

  
	
  77840 Flora Road

  	
   

  	
   

  
	
  Palm Desert, CA 92211

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Santa Monica

  	
   

  	
  77%

  
	
  2428 Santa Monica Boulevard

  	
   

  	
   

  
	
  Suite 103

  	
   

  	
   

  
	
  Santa Monica, CA 90404

  	
   

  	
   

  

 

 

ADDENDUM
TO ADMINISTRATIVE SERVICES AGREEMENT

 

This Addendum (the “Addendum”) is entered into as of
January 1, 2006, by and between CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.,
a California corporation (“MANAGEMENT SERVICES”) and 21st CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
CORPORATION, a California medical corporation (the “PC”). This Addendum amends
Section 3.1 of the Administrative Services Agreement dated August 1,
2003 between the parties (the “Agreement”) to adjust the monthly Service Fee of
$39,583.33 paid in 2005 to a monthly Service Fee of $184,000.00 and replaces
the Addendum of that same Section dated January 1, 2005. From and
after the date hereof, Section 3.1 shall read as follows:

 

3.1. Service Fee. For
the services to be provided hereunder by MANAGEMENT SERVICES, the PC shall pay
to MANAGEMENT SERVICES a monthly Service Fee of $184,000.00. The parties agree
that the Service Fee represents the fair market value of the services provided
by MANAGEMENT SERVICES hereunder and that the parties shall meet annually to
reevaluate the value of services provided by MANAGEMENT SERVICES and shall
establish the fair market value thereof for purposes of this Section 3.1.

 

 

	
  Accepted:

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Koeninger 

  
	
   

  	
   

  	
   

  	
  David Koeninger 

  
	
   

  	
   

  	
   

  	
  Vice President and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
  21st CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

ADDENDUM TO ADMINISTRATIVE
SERVICES AGREEMENT

 

This Addendum (the “Addendum”) is entered into as of
January 1, 2005, by and between CALIFORNIA RADIATION THERAPY MANAGEMENT
SERVICES, INC., a California corporation (“MANAGEMENT SERVICES”) and 21st CENTURY ONCOLOGY OF
CALIFORNIA, A MEDICAL CORPORATION, a California medical corporation (the “PC”).
This Addendum amends Section 3.1 of the Administrative Services Agreement
dated August 1, 2003 between the parties (the “Agreement”) to adjust the
monthly Service Fee of $21,666.67 paid in 2004 to a monthly Service Fee of
$39,583.33 and replaces the Addendum of that same Section dated
January 1, 2004. From and after the date hereof, Section 3.1 shall
read as follows:

 

3.1. Service Fee. For
the services to be provided hereunder by MANAGEMENT SERVICES, the PC shall pay
to MANAGEMENT SERVICES a monthly Service Fee of $39,583.33. The parties agree
that the Service Fee represents the fair market value of the services provided
by MANAGEMENT SERVICES hereunder and that the parties shall meet annually to
reevaluate the value of services provided by MANAGEMENT SERVICES and shall
establish the fair market value thereof for purposes of this Section 3.1.

 

	
  Accepted:

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Koeninger 

  
	
   

  	
   

  	
   

  	
  David Koeninger 

  
	
   

  	
   

  	
   

  	
  Vice President and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

ADDENDUM TO ADMINISTRATIVE
SERVICES AGREEMENT

 

This Addendum (the “Addendum”) is entered into as of
January 1, 2004, by and between CALIFORNIA RADIATION THERAPY MANAGEMENT
SERVICES, INC., a California corporation (“MANAGEMENT SERVICES”) and 21st CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
CORPORATION, a California medical corporation (the “PC”). This Addendum amends Section 3.1
of the Administrative Services Agreement dated August 1, 2003 between the
parties (the “Agreement”).

 

From and after the date hereof, Section 3.1
shall read as follows:

 

3.1. Service Fee. For
the services to be provided hereunder by MANAGEMENT SERVICES, the PC shall pay
to MANAGEMENT SERVICES a monthly Service Fee of $21,667.00. The parties agree
that the Service Fee represents the fair market value of the services provided
by MANAGEMENT SERVICES hereunder and that the parties shall meet annually to
reevaluate the value of services provided by MANAGEMENT SERVICES and shall
establish the fair market value thereof for purposes of this Section 3.1.

 

	
  Accepted:

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Koeninger 

  
	
   

  	
   

  	
   

  	
  David Koeninger 

  
	
   

  	
   

  	
   

  	
  Vice President and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
  21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
   

  	
  Vice President

  

 

 

ADMINISTRATIVE
SERVICES AGREEMENT

“California”

 

This Administrative Services Agreement (“Agreement”)
is entered into as of August 1, 2003 (“Effective Date”) by and among
CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC., a California
corporation (“MANAGEMENT SERVICES”) and 21st CENTURY ONCOLOGY OF CALIFORNIA, A
MEDICAL CORPORATION, a California medical corporation (the “PC”).

 

RECITALS

 

A.          The PC is a
California medical corporation that engages in the business of providing or
arranging for the provision of health care services (the “Practice”). The PC
has entered into and throughout the term of this Agreement may (if MANAGEMENT
SERVICES does not do so itself as provided herein) continue to enter into
arrangements with insurers, HMOs and other third-party payers (“Payers”) to
provide or arrange for the provision of health care services to persons covered
by those Payers (“Enrollees”).

 

B.           The PC has
entered into written employment agreements with physicians and other health
care providers and health care professionals (“Employed Providers”) licensed to
practice in the State of California. The PC may also enter into independent
contractor agreements with various physicians and other health care providers
and health care professionals (“Contracting Providers”) to assist the PC in
providing or arranging for the provision of health care services to Enrollees
and other patients of the PC (collectively, “Patients”).

 

C.           MANAGEMENT
SERVICES engages in the business of providing certain administrative and
support services concerning the day-to-day affairs of radiation therapy offices
(the “Offices”), both in their startup and established phases, and in providing
space, equipment, furnishings, supplies, inventory, personnel and working
capital to Offices and facilities management in connection therewith.

 

D.          The PC desires
to secure certain administrative services from MANAGEMENT SERVICES in
connection with its operation of the Practice in the Offices, and to lease from
MANAGEMENT SERVICES certain space, equipment, furnishings, supplies and
inventory in connection therewith.

 

E.           The PC and
MANAGEMENT SERVICES desire to enter into a written agreement for the provision
by MANAGEMENT SERVICES, on an exclusive basis, of administrative services to
the PC with respect to the Practice, and for the provision of space,
furnishings, supplies, inventory, non-medical personnel and management services
to the Practice, so as to permit the PC to devote its efforts on a concentrated
and continuous basis to the rendering of medical services to its Patients.

 

NOW, THEREFORE, in consideration of the mutual
covenants and conditions contained herein, the parties agree as follows:

 

 

I.
RESPONSIBILITIES OF THE PC

 

1.1.          Sole Responsibility for All Medical and Professional
Matters. All medical and professional matters relating to the provision of
radiation therapy or oncology services at the Offices shall be the sole
responsibility of the PC. The PC shall use and occupy the facilities provided
by MANAGEMENT SERVICES hereunder exclusively for the practice of medicine. The
PC expressly acknowledges that the medical practice or practices conducted at
these facilities shall be conducted solely by Employed Providers and
Contracting Providers.

 

1.2.          Employed Providers and Contracting Providers. The PC shall
have complete control of and responsibility for the hiring, engagement,
compensation, supervision, evaluation, and termination of all Employed
Providers and Contracting Providers, including nurses, physician assistants and
other licensed healthcare professionals. With respect to physicians, the PC
shall only employ and contract with licensed physicians meeting applicable
credentialing guidelines established by the PC. The PC shall be responsible for
the payment of salaries and wages, compensation, payroll taxes, employee
benefits, and all other taxes and charges now or hereafter applicable to
Employed Providers and Contracting Providers. Prior to making any changes with
respect to any of the Employed Providers or Contracting Providers, the PC shall
consult with MANAGEMENT SERVICES, although MANAGEMENT SERVICES shall provide
input only and shall not conclude whether an Employed Provider should be hired
or terminated. The PC shall also consult with MANAGEMENT SERVICES with regard
to the terms of contracts entered into between the PC and Employed Providers
and Contracting Providers and the terms and conditions of their employment or
engagement as independent contractors, as applicable.

 

1.3.          Fees, Charges and Payer Agreements. The PC shall,
after consultation with MANAGEMENT SERVICES, determine the fees, charges,
premiums, or other amounts due in connection with its delivery of health care
services to Patients. Such fees, charges, premiums, or other amounts,
regardless of whether determined on a fee-for-service, capitated, prepaid, or
other basis, shall be reasonable and consistent with the fees, charges,
premiums and other amounts due to health care providers for similar services
within the community under the type of reimbursement program involved. MANAGEMENT
SERVICES shall provide input relating to the foregoing but shall not conclude
the level of fees, charges, premiums, or other amounts the PC should establish.

 

1.4.          Compliance with law. The PC shall
require all of its Employed Providers and Contracting Providers to comply with
all laws, regulations, and ethical and professional standards applicable to the
practice of medicine. Employed Providers and Contracting Providers who are
physicians shall at all times be licensed to practice medicine in the State of
California and all other states in which an Office at which such physician
provides patients medical services is located.

 

2

 

1.5.          Offices; Hours of Operation; Staffing. The PC shall
conduct the Practice from the current Office located in California at 78120
Wildcat Drive, Palm Desert, California, 92211 as well as such hospitals and
other facilities as may be agreed upon by MANAGEMENT SERVICES and the PC from
time to time. Any additional or substitute Office shall be deemed to be part of
the Practice for the purposes of this Agreement. The hours of operation and the
medical staffing of the Offices shall be established by the agreement of the PC
and MANAGEMENT SERVICES from time to time hereafter.

 

1.6.          Quality Assurance. The PC shall rigorously
monitor utilization and quality of services provided by Employed Providers and
Contracting Providers, shall develop, maintain and administer quality assurance
programs and performance standards and shall take all steps necessary to remedy
any and all deficiencies in the efficiency or the quality of medical care
provided.

 

1.7.          Patient Referrals. The parties agree that the
benefits to the PC hereunder do not require, are not payment for, and are not
in any way contingent upon the admission, referral or any other arrangements
for the provision of any item or service offered by MANAGEMENT SERVICES or any
Affiliate, as defined in Section 8.21 of this Agreement, of MANAGEMENT
SERVICES to any of the PC’s Patients in any facility or laboratory controlled,
managed or operated by MANAGEMENT SERVICES or any Affiliate of MANAGEMENT
SERVICES.

 

1.8.          Professional Dues and Education Expenses. The PC and
its Employed Providers and Contracting Providers shall be solely responsible
for the cost of membership in professional associations, and continuing
professional education. The PC shall ensure that each of its Employed Providers
and Contracting Providers participates in such continuing medical education as
is necessary for such provider to remain current with professional licensure
and community standards.

 

1.9.          Professional Insurance Eligibility. The PC shall
cooperate with MANAGEMENT SERVICES in the obtaining and retaining of
professional liability insurance by assuring that either its Employed Providers
and Contracting Providers are insurable or instituting proceedings to terminate
any Employed Provider of Contracting Provider who is not insurable or loses his
or her insurance eligibility. Termination shall be effective no more than thirty
(30) days from such determination. The PC shall require all Employed Providers
and Contracting Providers to participate in an on-going risk management
program.

 

1.10.        Fees for Professional Services. MANAGEMENT
SERVICES shall be solely responsible for legal, accounting and other
professional services incurred by the PC in operating the Practice absent a
violation by the PC of any provisions of this Agreement.

 

3

 

II.
RESPONSIBILITIES OF MANAGEMENT SERVICES

 

2.1.          General Responsibility. MANAGEMENT
SERVICES shall have general responsibility for providing fiscal services,
administrative services, and other strategic and tactical support services to
the PC with respect to the Practice, except as otherwise provided in this
Agreement. MANAGEMENT SERVICES shall perform all required functions in
accordance with sound management techniques. Notwithstanding MANAGEMENT
SERVICES’s general and specific rights and responsibilities set forth in this
Agreement, the PC shall have full authority and control with respect to all
medical, professional and ethical determinations over the PC’s Practice to the
extent required by federal, state and local laws, rules and regulations.
MANAGEMENT SERVICES shall not engage in activities which constitute the
practice of medicine under applicable laws. MANAGEMENT SERVICES shall neither
exercise control over nor interfere with the physician-patient relationship,
which shall be maintained strictly between the physicians employed by or contracting
with the PC and the PC’s Patients.

 

2.2.          Responsibilities with Regard to Selected Patient-
Related Matters.

 

(a)           Patient Relations, Scheduling, Etc. MANAGEMENT
SERVICES shall assist the PC in maintaining positive Patient relations by,
among other things, in conjunction with and at the direction of the PC:
scheduling Patient appointments; responding to Patient grievances and
complaints in matters other than medical evaluation, diagnosis, and treatment;
and establishing and maintaining in the PC’s name and on its behalf Patient
transfer arrangements to expedite referrals where medically necessary, as
determined and requested by the attending physician.

 

(b)           Recordkeeping. MANAGEMENT SERVICES shall
assist the PC in maintaining Patient medical records in accordance with
applicable laws concerning their confidentiality and retention, and promptly
making such records available to the PC’s Employed Providers, Contracting
Providers and other appropriate recipients. Notwithstanding the foregoing
sentence, Patient medical records shall be and shall remain the property of the
PC, and the content thereof shall be solely the responsibility of the PC.

 

(c)           Quality Assurance.

 

(i)            In General. MANAGEMENT SERVICES shall
assist the PC, in accordance with criteria established by the PC, in the
development and implementation of appropriate quality assurance programs,
including development of performance and utilization standards, sampling
techniques for case review, and preparation of appropriately documented
studies. Notwithstanding the foregoing, MANAGEMENT SERVICES shall not perform
any duties that constitute the corporate practice of medicine in California and
all other states in which an Office at which the PC provides patient medical
services is located.

 

(ii)           Periodic Independent Review. On behalf of
the PC,

 

4

 

MANAGEMENT SERVICES may periodically perform quality assurance and
utilization reviews through nurses employed by it; provided, however,
that MANAGEMENT SERVICES shall not engage in activities which constitute the
practice of medicine under applicable law. Alternatively, MANAGEMENT SERVICES
may periodically arrange for an independent quality assurance and utilization
review to be performed by persons who are unrelated to the PC or MANAGEMENT
SERVICES, or to any Affiliate of the PC or MANAGEMENT SERVICES, which has
expertise in such areas, and which has been approved in advance by the PC. Such
review shall include a random sampling of medical records (consistent with laws
regarding the confidentiality of medical records), an analysis of the PC’s
quality assurance utilization review procedures, and an analysis of the
appropriateness of costs associated with operating the PC’s medical practice at
the Practice.

 

2.3.          Responsibilities with Regard to Selected Financial
Matters.

 

(a)           Billing. MANAGEMENT SERVICES shall
submit on a timely basis all bills and necessary documentation required by
Patients and Payers in order to obtain payment in connection with the PC’s
delivery of health care services at the Practice or its arrangement for the
delivery of such services. In seeking such payment, MANAGEMENT SERVICES shall
act as the PC’s exclusive agent in billing and collecting professional fees,
charges and other amounts owed to the PC. In this connection, the PC hereby
appoints MANAGEMENT SERVICES, during the term of this Agreement, as the PC’s
true and lawful attorney-in-fact, with power of substitution, for the following
purposes relating to the Practice:

 

(i)            To bill the PC’s Patients on the PC’s behalf.

 

(ii)           To collect accounts receivable generated by such
billings on the PC’s behalf, including, where deemed appropriate by MANAGEMENT
SERVICES and approved in advance by the PC, settling and compromising claims,
assigning such accounts receivable to a collection agency or the bringing of
legal action against a Patient or Payer on the PC’s behalf.

 

(iii)          To receive payments on behalf of the PC from
Patients and Payers, to cause such payments to be deposited into appropriate
depository accounts (each such depository account, a “Collections Account”) and
to write checks against or otherwise withdraw such payments to pay the PC
Expenses (as hereinafter defined).

 

(b)           Accounting. MANAGEMENT SERVICES shall
direct and maintain the operation of an appropriate accounting system with
respect to the PC’s operation of the Practice which shall perform all
bookkeeping and accounting services required for the operation of the Practice,
including the maintenance, custody and supervision of business records, ledgers
and reports; the establishment, administration and implementation of accounting
procedures, controls and systems. Such accounting system shall allow MANAGEMENT
SERVICES to prepare the reports specified in Section 2.3(c).

 

5

 

(c)           Reporting. MANAGEMENT SERVICES shall
present to the PC reports on the financial condition of the PC on the basis set
forth below in clauses (i) and (ii) and such other reports that the
PC may reasonably request, including daily activity reports, weekly analyses,
alternative delivery system reports, backlog reports and the like. MANAGEMENT
SERVICES also shall provide such reports as may be required by any regulatory
agency having jurisdiction over the operations of the PC.

 

The reports initially required to be delivered to
the PC under this Section 2.3(c) with respect to the Practice are as
follows:

 

(i)            As soon as possible after the close of each month, a
balance sheet and a related statement of revenues and expenses showing the
results of the PC’s operations for the preceding month of the fiscal year and
the year to date.

 

(ii)           As soon as possible after the close of each fiscal
year, a balance sheet and related statement of revenues and expenses showing
the results of the PC’s operations during that fiscal year.

 

2.4.          Responsibilities with Respect to Facilities
Management.

 

(a)           Office Management Service. MANAGEMENT
SERVICES shall provide, supervise and direct the development of appropriate and
efficient office management services with respect to the PC’s operation of the
Practice.

 

(b)           Offices. MANAGEMENT SERVICES shall
provide, manage and maintain the real property comprising the Offices and
reasonable improvements during the term of this Agreement. In consultation with
the PC, MANAGEMENT SERVICES shall oversee all management, maintenance and other
decisions pertaining to the Offices consistent with the terms of this
Agreement. MANAGEMENT SERVICES shall maintain the Offices in good condition and
repair, reasonable wear and tear excepted. MANAGEMENT SERVICES shall provide
such additional and/or replacement facilities as the PC and MANAGEMENT SERVICES
agree, from time to time. MANAGEMENT SERVICES shall provide the PC with all
utilities (including water, gas and electricity), heat, air conditioning,
telephone, janitorial services and disposal services (including the disposal of
medical wastes) required in connection with the operation of the Offices.

 

(c)           Use of Assets.

 

(i)            MANAGEMENT SERVICES shall lease or purchase and, when
necessary, replace equipment and furnishings needed for the delivery of health
care services by the PC at the Offices and for the delivery of services
provided by MANAGEMENT SERVICES pursuant to this Agreement. MANAGEMENT SERVICES
shall consult with the PC with respect to the suppliers, prices and
specifications of such equipment and furnishings. MANAGEMENT SERVICES shall use
its best efforts to keep and maintain the equipment and

 

6

 

furnishings used by the PC at the Offices in good working order and
condition.

 

(ii)           All assets provided or purchased under this
Agreement by MANAGEMENT SERVICES, including any management information systems,
shall remain the property of MANAGEMENT SERVICES and the PC shall have the
right to use such assets only during the term of this Agreement.

 

(iii)          Nothing in this Agreement shall be construed to
affect or limit in any way the professional discretion of the PC to select and
use equipment, furnishings, inventory and supplies purchased by MANAGEMENT
SERVICES in accordance with the terms of this Agreement insofar as such
selection or use constitutes or might constitute the practice of medicine.

 

(d)           Supplies and Inventory. MANAGEMENT
SERVICES shall provide and replenish, as necessary and as may be permitted by
applicable law, the inventory and supplies needed for the delivery of medical
services by the PC, and for the delivery of services by MANAGEMENT SERVICES
pursuant to this Agreement. MANAGEMENT SERVICES shall consult with the PC with
respect to the suppliers, prices and specifications of such inventory and
supplies.

 

(e)           No Warranties. THE PC ACKNOWLEDGES THAT
MANAGEMENT SERVICES MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED,
AS TO THE SUITABILITY OR ADEQUACY OF ANY FACILITIES, EQUIPMENT, FURNISHINGS, INVENTORY
OR SUPPLIES PROVIDED PURSUANT TO THIS AGREEMENT FOR THE CONDUCT OF A MEDICAL
PRACTICE OR FOR ANY OTHER PARTICULAR PURPOSE.

 

2.5.          Other Responsibilities.

 

(a)           Public Relations. MANAGEMENT SERVICES shall
provide services reasonably necessary for enhancing public relations for the PC’s
health care services and shall submit any public relations programs for prior
review and revision, if necessary, and approval by the PC. Such public
relations shall comply with applicable laws and regulations governing the use
of promotional activities by the medical profession and with applicable
standards of medical ethics.

 

(b)           Insurance.

 

(i)            Property and Liability Insurance. MANAGEMENT
SERVICES shall obtain and maintain during the term of this Agreement, if
available on commercially reasonable terms, (a) property damage insurance
protecting the Practice premises and the personal property located therein
against such hazards and in such amounts as MANAGEMENT SERVICES determines are
reasonably prudent; and (b) general liability insurance in such amounts as
MANAGEMENT SERVICES determines are reasonably prudent.

 

7

 

(ii)           General Liability Insurance. The PC shall
obtain and maintain during the term of this Agreement general liability
insurance in such amounts as the PC determines are reasonably prudent. The PC
shall name MANAGEMENT SERVICES as an additional insured on such policies.

 

(iii)          Malpractice Insurance. It is understood that
the PC and its Employed Providers shall, at the PC’s cost, at all times be
covered by malpractice insurance with coverage in usual and customary amounts
for practitioners of the same profession and specialties in California and, if
applicable, other states. The PC shall ensure that its written agreements with
Contracting Providers who are physicians require such Contracting Providers to
at all times be covered by malpractice insurance in amounts that are usual and
customary for practitioners of the same profession and specialty in California
and, if applicable, other states. Such malpractice policies shall name
MANAGEMENT SERVICES as an additional insured.

 

(iv)          Copies of Insurance Policies. MANAGEMENT
SERVICES or the PC shall, upon request by the PC or MANAGEMENT SERVICES, as the
case may be, promptly provide the PC or MANAGEMENT SERVICES, as the case may
be, with copies of all policies of insurance that it procures under this
Agreement. Each such policy shall provide that it cannot be modified or
terminated except after thirty (30) days written notice to MANAGEMENT SERVICES.

 

(c)           Personnel. MANAGEMENT SERVICES shall
furnish the services of all personnel other than physicians, nurses, physician
assistants or other licensed healthcare professionals required for the
operation of the Practice. Except as specifically provided in this Section 2.5(c),
MANAGEMENT SERVICES has the power to recruit, hire, train, promote, assign, set
the compensation level for, and discharge all personnel other than physicians,
nurses, physician assistants or other licensed healthcare professionals. Any
personnel employed by MANAGEMENT SERVICES who perform patient care services
shall perform such services under the exclusive direction, supervision and
control of the PC, while all other services of MANAGEMENT SERVICES personnel
shall be performed under the exclusive direction, supervision and control of
MANAGEMENT SERVICES. If the PC is dissatisfied with the services of any
personnel employed by MANAGEMENT SERVICES, the PC shall consult with MANAGEMENT
SERVICES. MANAGEMENT SERVICES shall in good faith determine whether the
performance of that employee could be brought to acceptable levels through
counsel and assistance, or whether, if requested by the PC (provided that such
employee is not an officer or senior manager of MANAGEMENT SERVICES), such
employee should be removed from providing services for the PC. Employee
assignments shall be made with the intention of assuring consistent and
continued rendering of quality services and to ensure prompt availability and
accessibility of personnel to physicians in order to develop constant, familiar
and routine working relationships between the Employed Providers, Contracting
Providers and MANAGEMENT SERVICES personnel.

 

(d)           Employed Providers. MANAGEMENT SERVICES shall
assist the PC

 

8

 

in the administration of any employee benefit plans established by the
PC in compliance with the provisions of Section 1.10 hereof.

 

(e)           Managed Care Agreements. MANAGEMENT
SERVICES shall negotiate and administer all managed care agreements on behalf
of the PC and shall consult with the PC on all professional and clinical
matters relating thereto.

 

III. FINANCIAL
ARRANGEMENTS

 

3.1.          Service Fee. For the services to be
provided hereunder by MANAGEMENT SERVICES, the PC shall pay to MANAGEMENT
SERVICES a Service Fee of Ten Thousand Dollars ($10,000.00) per month payable
by the 15th day of the month following the month for which
the Service Fee is being paid. The parties agree that the Service Fee
represents the fair market value of the services provided by MANAGEMENT
SERVICES hereunder and that the parties shall meet annually to reevaluate the
value of services provided by MANAGEMENT SERVICES and shall establish the fair
market value thereof for purposes of this Section 3.1.

 

3.2.          Security Agreement; the PC Expenses. To secure the
PC’s payment obligations hereunder, MANAGEMENT SERVICES may require the PC to
enter into a security agreement, in form acceptable to MANAGEMENT SERVICES, to
grant to MANAGEMENT SERVICES a security interest in the accounts receivable of
the PC and all of the PC’s rights to receive payments under managed care
contracts. The PC shall cooperate with MANAGEMENT SERVICES and execute all
reasonably necessary documents in connection with the granting of such security
interest.

 

All payments on behalf of the PC from Patients and
Payers shall be deposited into one or more Collection Accounts. To the extent
the PC receives any such payments, the PC shall direct such payments to
MANAGEMENT SERVICES for deposit in one or more Collection Accounts.

 

3.3.          Arbitration. Any controversy or claim
arising out of or relating to this Agreement or the transactions contemplated
hereby, including any controversy or claim arising out of or relating to the
parties’ decision to enter into this Agreement or the transactions contemplated
hereby, shall be settled by binding arbitration. Each party shall select an
arbitrator who has at least three (3) years experience in health care or
medical practice management or in health care or medical practice dispute
resolution. The arbitration proceedings shall be confidential and the
arbitrators may issue appropriate protective orders to safeguard each party’s
confidential information. Such protective orders shall be enforceable by any
court of competent jurisdiction. Except as specifically provided in this
section, the arbitration shall be conducted in accordance with the rules of
conciliation and arbitration of the American Arbitration Association. The two
arbitrators shall agree upon any issue no later than thirty (30) days after the
date the second arbitrator has been engaged, and shall take into account the
principles and objectives set forth in paragraph (b) below. If the two
arbitrators cannot agree on a determination, then within five (5) days
thereafter the two arbitrators shall select a third arbitrator, who shall have
the same qualifications required for the first two arbitrators. No later than
thirty (30) days after the date

 

9

 

the third arbitrator is engaged, he or she shall determine which of the
two positions best satisfies the provisions of the contract and the intent of
the parties, taking into account the principles and objectives set forth in
paragraph (b) below. The third arbitrator shall have no right to propose a
middle ground between the two or to make any modification of the proposals of
either party. The third arbitrator’s determination shall be final and binding
on all parties. The cost and expense of the third arbitrator shall be shared
equally between the parties. If either party fails to engage an arbitrator as
required hereunder, the arbitrator selected by the other party shall conduct
the arbitration and make the final decision in accordance with this Section 3.4.

 

IV.
REPRESENTATIONS AND WARRANTIES; COVENANTS

 

4.1           Representation and
Warranties and Covenants of the PC.

 

(a)           The PC hereby represents and warrants to MANAGEMENT SERVICES
as follows:

 

(i)            The PC is and shall remain during the term of this
Agreement a professional corporation duly organized, validly existing and in
good standing under the laws of the State of California, actively engaged in
the practice of medicine, and possessing full corporate power and authority to
own its properties and to conduct the business in which it engages.

 

(ii)           The PC has full corporate power and authority to
execute and deliver this Agreement and to engage in the transactions and
obligations contemplated by this Agreement. Upon its execution, this Agreement
shall constitute a valid and binding obligation of the PC, enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting generally the rights of
creditors and by principles of equity. The party executing this Agreement on
behalf of the PC is duly authorized to do so.

 

(iii)          The consummation of the transactions contemplated by
this Agreement will not: result in a breach of the terms, provisions, or
conditions of or constitute a default under the Articles of Incorporation,
By-Laws or other enabling or governing instruments of the PC or any agreement
to which the PC is a party or by which it is bound; or, to the best knowledge
of the PC, constitute a violation of any applicable law or regulation.

 

(b)           The PC hereby covenants to MANAGEMENT SERVICES that
it shall not, without the prior written consent of MANAGEMENT SERVICES, take
any action to terminate or nullify, or release any Employed Provider from, the
terms of any noncompetition covenant set forth in any employment agreement
between the PC and such Employed Provider.

 

4.2.          Covenants and Warranties of MANAGEMENT SERVICES. MANAGEMENT SERVICES
hereby represents and warrants to the PC as follows:

 

10

 

(a)           MANAGEMENT SERVICES is and
shall remain during the term of this Agreement a corporation which is duly
organized, validly existing and in good standing under the laws of the State of
California, possessing full corporate
power and authority to own its properties and to conduct the business in which
it engages.

 

(b)           MANAGEMENT SERVICES has full
corporate power and authority to execute and deliver this Agreement and to
engage in the transactions and obligations contemplated by this Agreement. Upon
its execution, this Agreement shall constitute a valid and binding obligation
of MANAGEMENT SERVICES, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, moratorium, or other similar laws
affecting generally the rights of creditors and by principles of equity. The
party executing this Agreement on behalf of MANAGEMENT SERVICES is duly
authorized to do so.

 

(c)           The consummation of the
transactions contemplated by this Agreement will not: result in any breach of
the terms, provisions or conditions of or constitute a default under the
Certificate of Incorporation, Bylaws or other enabling or governing instruments
of MANAGEMENT SERVICES or any agreement to which MANAGEMENT SERVICES is a party
or by which it is bound; or, to the best knowledge of MANAGEMENT SERVICES,
constitute a violation of any applicable law or regulation.

 

V. TERM AND
TERMINATION

 

5.1           Initial and Renewal Term. The term of
this Agreement will be for an initial period of twenty-five (25) years after
the Effective Date, and shall be automatically renewed for successive five (5) year
periods thereafter (collectively, the “Term”), provided that neither MANAGEMENT
SERVICES nor the PC shall have given notice of termination of this Agreement at
least one hundred twenty (120) days before the end of the initial term or any
renewal term, or unless otherwise terminated as provided in Section 5.2 of
this Agreement.

 

5.2          Termination.

 

(a)           Termination by the PC. The PC may
immediately terminate this Agreement at its discretion, upon written notice as
follows:

 

(i)            If MANAGEMENT SERVICES becomes insolvent by reason
of its inability to pay its debts as they mature; is adjudicated bankrupt or
insolvent; files a petition in bankruptcy, reorganization or similar proceeding
under the bankruptcy laws of the United States or shall have such a petition
filed against it which is not discharged within thirty (30) days; has a
receiver or other custodian, permanent or temporary, appointed for its
business, assets or property; makes a general assignment for the benefit of
creditors; has its bank accounts, property or accounts attached; has execution
levied against its business or property; or voluntarily dissolved or liquidates
or has a petition filed for corporate dissolution and such petition is not
dismissed with thirty (30) days;

 

11

 

(ii)           If the MANAGEMENT SERVICES fails to comply with any
material provision of this Agreement, or any other agreement with the PC, and
does not correct such failure within sixty (60) days after written notice of
such failure to comply is delivered by the PC specifying the nature of the
breach in reasonable detail.

 

(b)           Termination by MANAGEMENT
SERVICES. MANAGEMENT SERVICES may immediately terminate this
Agreement at its discretion, upon written notice as follows:

 

(i)            If the PC becomes insolvent by reason of its
inability to pay its debts as they mature; is adjudicated bankrupt or
insolvent; files a petition in bankruptcy, reorganization or similar proceeding
under the bankruptcy laws of the United States or shall have such a petition
filed against it which is not discharged within thirty (30) days; has a
receiver or other custodian, permanent or temporary, appointed for its
business, assets or property; makes a general assignment for the benefit of
creditors; has its bank accounts, property or accounts attached; has execution
levied against its business or property; or voluntarily dissolves or liquidates
or has a petition filed for corporate dissolution and such petition is not
dismissed with thirty (30) days; or

 

(ii)           If the PC fails to comply with any material
provision of this Agreement with MANAGEMENT SERVICES, and does not correct such
failure within sixty (60) days after written notice of such failure to comply
is delivered by MANAGEMENT SERVICES specifying the nature of the breach in
reasonable detail.

 

(c)           Termination by Agreement. In  the
event the PC and MANAGEMENT SERVICES shall mutually agree in writing, this
Agreement may be terminated on the date specified in such written agreement.

 

(d)           Legislative, Regulatory or
Administrative Change. In the event there shall be a change in the
Medicare or Medicaid statutes, federal statutes, state statutes, case laws,
administrative interpretations, regulations or general instructions, the
adoption of new federal or state legislation, or a change in any third-party
reimbursement system, any of which are reasonably likely to materially and
adversely affect the manner in which either party may perform or be compensated
for its services under this Agreement or which shall make this Agreement or any
related agreements unlawful or unenforceable, or which would be reasonably
likely to subject either party to this Agreement, or any member, shareholder,
officer, director, employee, agent or affiliated organization to any civil or
criminal penalties or administrative sanctions, the parties shall immediately
use their best efforts to enter into a new service arrangement or basis for
compensation for the services furnished pursuant to this Agreement that
complies with the law, regulation, or policy, or which minimizes the
possibility of such penalties, sanctions or unenforceability, and that
approximates as closely as possible the economic position of the parties prior
to the change. If the parties are unable to reach a new agreement within a
reasonable time, then either party may submit the issue to arbitration pursuant
to Section 3.3 for the purpose of reaching an alternative arrangement that
is equitable under the circumstances.

 

12

 

5.3           Effects of Termination. Upon
termination of this Agreement, as provided in this Article V, neither
party shall have any further obligations hereunder except for (i) obligations
accruing prior to the date of termination, including, without limitation,
payment of the Service Fee relating to services provided prior to the
termination of this Agreement, (ii) obligations, promises, or covenants
set forth herein that are expressly made to extend beyond the Term, including,
without limitation, insurance, indemnities and non-competition provisions,
which provisions shall survive the expiration or termination of this Agreement.
In effectuating the provisions of this Section 5.3, the PC specifically
acknowledges and agrees that if this Agreement terminates pursuant to Sections
5.2(b) or (d), MANAGEMENT SERVICES shall continue for a period not to
exceed ninety (90) days to collect and receive on behalf of the PC on an
exclusive basis all cash collections from accounts receivable in existence at
the time this Agreement is terminated, it being understood that (a) such
cash collections may be used to compensate MANAGEMENT SERVICES for services
rendered prior to the termination of this Agreement, (b) MANAGEMENT SERVICES
shall not be entitled to collect accounts receivable after the termination date
of this Agreement is terminated pursuant to Section 5.2(a), and (c) the
MANAGEMENT SERVICES shall deduct for such cash collections any other amounts
owed to MANAGEMENT SERVICES under this Agreement, including, without
limitation, any reasonable costs incurred by MANAGEMENT SERVICES in carrying
out the post-termination procedures and transactions contemplated herein.
MANAGEMENT SERVICES shall remit remaining amounts from such collection
activities, if any, to the PC. Upon the expiration or termination of this
Agreement for any reason or cause whatsoever, MANAGEMENT SERVICES shall
surrender to the PC all books and records pertaining to the PC’s Patient
medical records and PC Records (as defined in Section 7.2).

 

13

 

VI.
RESTRICTIVE COVENANTS

 

6.1.          Covenant Regarding
Proprietary Information. In the course of the relationship created
pursuant to this Agreement, the PC will have access to certain methods, trade
secrets, processes, ideas, systems, procedures, inventions, discoveries,
concepts, software in various stages of development, designs, drawings,
specifications, models, data, documents, diagrams, flow charts, research, economic
and financial analysis, developments, procedures, know-how, policy manuals,
financial data, form contracts, marketing ad other techniques, plans,
materials, forms, copyrightable materials and trade information regarding the
operations of MANAGEMENT SERVICES and/or of its Affiliates (collectively, the “Protected
Parties”). The foregoing, together with the existence and terms of this
Agreement, are referred to in this Agreement as “Proprietary Information”. The
PC shall maintain all such Proprietary Information in strict secrecy and shall
not divulge such information to any third parties, except as may be necessary
for the discharge of its obligations under this Agreement. The PC shall take
all necessary and proper precautions against disclosure of any Proprietary
Information to unauthorized persons by any of its officers, directors,
employees or agents. All officers, directors, employees and agents of the PC
who will have access to all or any part of the Proprietary Information may be
required to execute an agreement, at the reasonable request of MANAGEMENT
SERVICES, valid under the law of the jurisdiction in which such agreement is
executed, and in a form acceptable to MANAGEMENT SERVICES and its counsel,
committing themselves to maintain the Proprietary Information in strict
confidence and not to disclose it to any unauthorized person or entity. The
Protected Parties not party to this Agreement are hereby specifically made
third party beneficiaries of this Section 6.1, with the power to enforce
the provisions hereof. Upon termination of this Agreement for any reason, the
PC and each of its Employed Providers and Contracting Providers shall cease all
use of any of the Proprietary Information and, at the request of MANAGEMENT
SERVICES, shall execute such documents as may be necessary to evidence the PC’s
abandonment of any claim thereto. The parties recognize that a breach of this Section 6.1
cannot be adequately compensated in money damages and therefore agree that
injunctive relief shall be available to the Protected Parties as their
respective interests may appear.

 

The obligations of the PC under this Section 6.1 shall not apply to information: (i) which
is a matter of public knowledge on or becomes a matter of public knowledge
after the Effective Date of this Agreement, other than as a breach of the
confidentiality terms of this Agreement or as a breach of the confidentiality
terms of any other agreement between the PC and MANAGEMENT SERVICES or its
Affiliates; or (ii) was lawfully obtained by the PC on a nonconfidential
basis other than in the course of performance under this Agreement and from
some entity other than MANAGEMENT SERVICES or its Affiliates or from some
person other than one employed or engaged by MANAGEMENT SERVICES or its
Affiliates, which entity or person has no obligation of confidentiality to
MANAGEMENT SERVICES or its Affiliates.

 

6.2.          Covenants Not to Compete
During the Term. The parties recognize that the services to be
provided by MANAGEMENT SERVICES shall be feasible only if the PC operates an
active medical practice to which the PC and Employed Providers devote full time
and

 

14

 

attention. To that end:

 

(a)           Restrictive Covenants by the
PC. During the term of this Agreement, the PC shall not establish,
operate or provide physician or other health care services at any medical
office, clinic or other health care facility providing services substantially
similar to those provided by the PC pursuant to this Agreement anywhere other
than at the Offices and as may be approved in writing by MANAGEMENT SERVICES.
The PC shall also not enter into any management or administrative services
agreement or arrangement with any person or entity other than MANAGEMENT
SERVICES without MANAGEMENT SERVICES’s prior written approval.

 

(b)           Restrictive Covenants by Employed
Providers. All employment contracts between the PC and its
Employed Providers shall name MANAGEMENT SERVICES as a third-party beneficiary
to the contract and shall not be revised without the prior written consent of
MANAGEMENT SERVICES. The contracts shall include noncompetition agreements with
its Employed Providers who are physicians, the substance and form of which is
set forth as Exhibit A hereto, and which the PC will enforce.

 

6.3.          Covenant Not to Compete
Following Termination. For three (3) years following the
termination of this Agreement by MANAGEMENT SERVICES pursuant to Section 5.2,
the PC shall not enter into any management or administrative services agreement
or any similar arrangement with any person or entity for the provision of the
same or similar services as MANAGEMENT SERVICES provides to the PC under this
Agreement.

 

6.4.          Covenant Not to Solicit. During the
term of this Agreement and for three (3) years following the termination of
this Agreement, the PC shall not:

 

(a)         Directly
or indirectly solicit, recruit or hire, or induce any party to solicit, recruit
or hire any person who is an employee of, or who has entered into an
independent contractor arrangement with, MANAGEMENT SERVICES or any Affiliate
of MANAGEMENT SERVICES (excluding any person who performs patient services);

 

(b)   Directly or
indirectly, whether for itself or for any other person or entity, call upon,
solicit, divert or take away, or attempt to solicit, call upon, divert or take
away any of MANAGEMENT SERVICES’s customers, business, or clients; or

 

(c)         Disrupt,
damage, impair or interfere with the business of MANAGEMENT SERVICES.

 

6.5.          Enforcement. MANAGEMENT
SERVICES and the PC acknowledge and agree that since a remedy at law for any
breach or attempted breach of the provisions of this Article VI or of Article VII
shall be inadequate, either party shall be entitled to specific performance and
injunctive or other equitable relief in case of any such breach or attempted
breach, in addition to whatever other remedies may exist by law. All parties
hereto also waive

 

15

 

any requirement for the securing or posting of any bond in connection
with the obtaining of any such injunctive or other equitable relief. If any
provision of Article VI or Article VII relating to the restrictive
period, scope of activity restricted and/or other provisions described therein
shall be declared by a court of competent jurisdiction to exceed the maximum
time period, scope of activity restricted or geographical area such court deems
reasonable and enforceable under applicable law, the time period, scope of
activity restricted and/or area of restriction held reasonable and enforceable
by the court shall thereafter be the restrictive period, scope of activity
restricted and/or the territory applicable to the restrictive covenant
provisions in this Article VI or Article VII. The invalidity or
non-enforceability of this Article VI or Article VII in any respect
shall not affect the validity or enforceability of the remainder of this
Article VI or Article VII or of any other provisions of this
Agreement.

 

VII.
INFORMATION AND RECORDS

 

7.1.          Ownership of Records. At all times
during and after the term of this Agreement, including any extensions or
renewals hereof, all business records, including but not limited to, business
agreements, books of account, general administrative records and all
information generated under or contained in the management information system
pertaining to MANAGEMENT SERVICES’s obligations hereunder, and other business
information of any kind or nature, except for Patient medical records and the
PC’s Records (as defined in Section 7.2), shall be and remain the sole
property of MANAGEMENT SERVICES; provided that after termination of this
Agreement the PC shall be entitled to reasonable access to such records and
information, including the right to obtain copies thereof, for any purpose
related to patient care or the defense of any claim relating to patient care or
the business of MANAGEMENT SERVICES or the PC.

 

7.2.          The PC’s Business and
Financial Records. At all times during and after the term of this
Agreement, the financial, corporate and personnel records and information
relating exclusively to the business and activities of the PC, as distinguished
from the business and activity of MANAGEMENT SERVICES, hereinafter referred to
as “the PC’s Records,” shall be and remain the sole property of the PC.

 

7.3.          Access to Records. Each party
shall be entitled, upon request and with reasonable advance notice, to obtain
access to all records of the other party directly related to the performance of
such party’s obligations pursuant to this Agreement; provided, however, that such
right shall not allow for access to records that must necessarily be kept
confidential. Either party, at its expense, shall have the right to make copies
of any records to which it has access pursuant to this Section.

 

7.4.          Confidentiality of Records. MANAGEMENT
SERVICES and the PC shall adopt procedures for maintaining the confidentiality
of the records relating to the operations of MANAGEMENT SERVICES and the PC
which do not constitute Proprietary Information, which information is not
otherwise available to third parties publicly or by law, and shall comply with
all applicable federal and state statutes and regulations relating to such
records. Patient

 

16

 

medical records and other privileged Patient information shall not be
disclosed or utilized by the PC or MANAGEMENT SERVICES or their agents or
employees except as required or permitted by applicable laws and regulations.

 

VIII.
MISCELLANEOUS

 

8.1.          Independent Contractor Status
of Parties. In the performance of the work, duties and
obligations under this Agreement, it is mutually understood and agreed that
each party is at all times acting and performing as an independent contractor
with respect to the other and that no relationship of partnership joint venture
or employment is created by this Agreement. Neither party, nor any other person
performing services on behalf of such party pursuant to this Agreement, shall
have any right or claim against the other party for Social Security benefits,
workers’ compensation benefits, disability benefits, unemployment insurance
benefits, health benefits, vacation pay, sick leave or any other employee
benefits of any kind.

 

8.2.          No Waiver. The waiver by
any party to this Agreement of any breach of any term or condition of this
Agreement shall not constitute a waiver of subsequent breaches. No waiver by
any party of any provision of this Agreement shall be deemed to constitute a
waiver of any other provision.

 

8.3.          Notices. If, at any
time after the execution of this Agreement, it shall become necessary or
convenient for one of the parties to serve any notice, demand or communication
upon the other party, such notice, demand, or communication shall be in writing
and shall be served personally, by nationally recognized overnight courier
which provides confirmation of delivery, or by depositing the same in the
United States mail, registered or certified, return receipt requested, postage
prepaid and to such address as either party may have furnished to the other
party in writing as the place for the service of notice. Any notice so mailed
shall be deemed to have been given three (3) days after the same has been
deposited in the United States mall; when delivered if the same has been given
personally; or the next business day if the same has been delivered to a
nationally recognized overnight courier service.

 

8.4.          Assignment. Neither party
may sell, transfer, assign, or otherwise convey its rights or obligations under
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, MANAGEMENT
SERVICES shall have the right to (a) assign its rights and/or delegate all
or any of its obligations to any of its Affiliates; and/or (b) subcontract
some portion of its obligations hereunder to a third party which is not an
Affiliate of MANAGEMENT SERVICES, in each case without the consent of the PC.

 

8.5.          Successors and Assigns. Subject to
the provisions of this Agreement respecting assignment, the terms, covenants
and conditions contained herein shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties hereto.

 

8.6.          Severability. Nothing
contained in this Agreement shall be construed to require

 

17

 

the commission of an act contrary to law, and whenever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance or regulation, the latter shall prevail. In such event, and in any
case in which any provision of this Agreement is determined to be in violation
of a statute, law, ordinance or regulation, the affected provision(s) shall
be limited only to the extent necessary to bring it within the requirements of
the law and, insofar as possible under the circumstances, to carry out the
purposes of this Agreement. The other provisions of this Agreement shall remain
in full force and effect, and the invalidity or unenforceability of any
provision hereof shall not affect the validity and enforceability of the other
provisions of this Agreement, nor the availability of all remedies in law or
equity to the parties with respect to such other provisions.

 

8.7.          Third Parties. Except as
provided in Article VII, nothing in this Agreement shall be construed to
create any duty to, any standard of care with reference to or any liability to
anyone not a party to this Agreement.

 

8.8.          Headings. The headings
used in this Agreement are for convenience of reference only and shall have no
force or effect in the construction or interpretation of the provisions of this
Agreement.

 

8.9.          Time of the Essence. Time is of
the very essence of each and all of the agreements, covenants and conditions of
this Agreement.

 

8.10.        Governing Law. This
Agreement shall be deemed made, executed and entered into and shall be governed
by and construed in accordance with the internal laws of the State of
California.

 

8.11.        Language Construction. The language
in all parts of this Agreement shall be construed, in all cases, according to
its fair meaning, and not for or against either party hereto. The parties
acknowledge that each party and its counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.

 

8.12.        Indemnification. The PC shall
indemnify, hold harmless and defend MANAGEMENT SERVICES, its officers,
directors, shareholders, employees, agents and independent contractors (the
“MANAGEMENT SERVICES Group”) from and against any and all liabilities, losses,
damages, claims, causes of action, and expenses (including reasonable
attorneys’ fees and disbursements (a “MANAGEMENT SERVICES Loss”)), caused or
asserted to have been caused, directly or indirectly, by or as a result of the
performance of medical services or any other acts or omissions by MANAGEMENT
SERVICES and/or its partners, agents, employees and/or subcontractors (other
than MANAGEMENT SERVICES) during the term hereof except with respect to any
MANAGEMENT SERVICES Loss which is the result of any gross negligence or willful
misconduct by a member of the MANAGEMENT SERVICES Group. MANAGEMENT SERVICES
shall indemnify, hold harmless and defend the PC, its officers, directors,
partners employees, agents and independent contractors (the “the PC Group”)

 

18

 

from and against any and all liabilities, losses, damages, claims,
causes of action, and expenses (including reasonable judgment attorneys’ fees
and disbursements) (a “the PC Loss”), caused or asserted to have been caused,
directly or indirectly, by or as a result of the performance of any acts of
omissions by MANAGEMENT SERVICES and/or its shareholders, agents, employees
and/or subcontractors during the term hereof except with respect to any the PC
Loss which is the result of any gross negligence or willful misconduct by a
member of the PC Group.

 

8.13.        Entire Agreement. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether written or
oral, between or among parties regarding the subject matter of this Agreement.

 

8.14.        Incorporation by Reference. All exhibits
and other attachments to this Agreement are incorporated by reference into this
Agreement by such reference.

 

8.15.        Amendments_Only  in Writing. This Agreement may not be
amended or modified in any respect whatsoever, except by an instrument in
writing signed by the parties hereto.

 

8.16.        Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
considered an original and all of which shall constitute one and the same
agreement. This Agreement shall not become effective until it has been executed
by all of the parties hereto.

 

8.17.        Commercial Impracticability. No party to
this Agreement shall be liable for any failure to perform its obligations
hereunder where such failure results from any cause beyond that party’s
reasonable control, including, for example, an act of God, labor disturbance
such as a strike or walkout, war, riot, fire, storm, accident, government
regulation or interference, or mechanical, electronic or communications
failure.

 

8.18.        Election of Remedies. The
respective rights of the parties to this Agreement shall be cumulative. Each
party shall have all other rights and remedies consistent with this Agreement
as law and equity may provide. No exercise by any party of one right or remedy
shall be deemed to be an exclusive election of rights or remedies.

 

8.19.        Survival. The
provisions of Articles III, IV, V, VI, VII and VIII shall survive any
termination of this Agreement.

 

8.20.        Third Party Beneficiaries. Except with
respect to Affiliates of MANAGEMENT SERVICES, nothing in this Agreement shall
be construed to create any duty to, any standard of care with reference to, or
any liability to any Person not a party to this Agreement. The Affiliates of MANAGEMENT
SERVICES are intended third party beneficiaries of this Agreement.

 

19

 

8.21         Affiliate. An
“Affiliate” of an entity means (i) any person or entity directly or indirectly
controlled by such entity; (ii) any person or entity directly or
indirectly controlling such entity; (iii) any subsidiary of such entity if
the entity has a fifty percent (50%) or greater ownership interest in the
subsidiary; or (iv) such entity’s parent entity if the parent has a fifty
percent (50%) or greater ownership interest in the entity. For purposes of this
Agreement, the PC is not an Affiliate of MANAGEMENT SERVICES.

 

IN WITNESS WHEREOF, MANAGEMENT SERVICES and the PC
have caused this Agreement to be executed by their duly authorized respective
officers as of the Effective Date.

 

 

	
   

  	
   

  	
  CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel E. Dosoretz

  
	
   

  	
   

  	
  Daniel E. Dosoretz, M.D.

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  21st CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael J. Katin

  
	
   

  	
   

  	
  Michael
  J. Katin

  
	
   

  	
   

  	
  President

  

 

20

 

 

EXHIBIT A

NONCOMPETITION
AGREEMENT

NON-COMPETITIVE AND
RESTRICTIVE AGREEMENTS.

 

A.            During the term of this
Agreement and any renewal period, Physician shall not undertake any
professional service except as directed and authorized by [Employer] and shall
not engage in any profession other than the rendition of the professional
services as directed by [Employer].

 

B.            In the event of the
termination of this Agreement for any reason, Physician agrees not to directly
or indirectly engage in the practice of radiation therapy or oncology, or
otherwise compete with [Employer], or any of its physician providers, by
practicing as a radiation therapist or oncologist (i) at any hospital in
which physician providers of [Employer] regularly admit patients, or (ii) within
any county in which [Employer] or any of its Affiliates operate an Office for a
period of two (2) years after the date of such actual termination of this
Agreement. The purpose of this covenant is to protect [Employer] from the
irreparable harm it will suffer if Physician competes with [Employer] after
having been introduced to [Employer]’s personnel and patients and after
learning special medical procedures used by [Employer]’s physician providers,
[Employer]’s business procedures, office and practice policies, and the special
and confidential professional procedures developed by [Employer].

 

C.            The parties agree that in
the event of any breach or attempted breach of any of the covenants set out in
section B (the “Covenant Not to Compete”), [Employer] will be entitled to
equitable relief by way of injunction or otherwise, in addition to any remedy
at law which may be available. The parties agree that any violation or
threatened violation by Physician of the Covenant Not to Compete will cause
[Employer] to suffer irreparable harm. The parties agree that [Employer]’s
remedy of an injunction is not the exclusive remedy for breach of the Covenant
Not to Compete and that a court may grant such additional relief as is
reasonable.

 

D.            In the event Physician
breaches the Covenant Not to Compete, in addition to the injunctive relief to
which [Employer] shall be entitled under the law, Physician shall immediately
repay to [Employer] any amounts paid by [Employer] pursuant to section 3.B
hereof after the termination of this Agreement, and all severance or
termination pay, if any, paid pursuant to this Agreement. [Employer] may offset
against any amounts owed Physician pursuant to this Agreement any amounts
Physician owes [Employer] pursuant to paragraph E below for breach of the
Covenant Not to Compete.

 

E.             In addition to the
injunctive relief to which [Employer] is entitled under the law and in addition
to the payments provided for in paragraph D above and in order to compensate
[Employer] for the damages it will incur in recruiting and compensating a
replacement radiation oncologist and for the lost business it will suffer, in
the event of a breach

 

21

 

by Physician of the Covenant Not to Compete, Physician shall also pay
to [Employer], as liquidated damages, a sum equal to a percentage of the gross
billings of [Employer] for the twelve month period immediately preceding the
termination of this Agreement. The percentage shall be that formed by dividing
the number one by the number equal to the total number of physician providers
of [Employer], including Physician, on the date of termination of this
Agreement. The parties agree that, in the event of the breach by Physician of
the Covenant Not to Compete, the actual amount of damages which would be
incurred by [Employer] would be difficult to ascertain and prove, and that
therefore the liquidated damages sum set forth herein would be reasonable and
appropriate.

 

F.             In the event the Covenant
Not to Compete shall be determined by a court of competent jurisdiction to be
unenforceable by reason of its geographic or temporal restrictions being too
great, or by reason that the range of activities covered is too great, or for
any other reason, section B shall be interpreted to extend over the maximum
geographic area, period of time, range of activities or other restrictions as
to which it may be enforceable.

 

22

 

HIPAA
BUSINESS ASSOCIATE ADDENDUM

 

This Addendum, dated as of August 1, 2003
(“Addendum”), supplements and is made a part of the Administrative Services
Agreement (as defined below) by and between 21st Century
Oncology of California, A Medical Corporation (“Covered Entity”) and California
Radiation Therapy Management Services, Inc. (“Business Associate”).

 

WHEREAS, Covered Entity and Business Associate are
parties to the Administrative Service Agreement pursuant to which Business
Associate provides certain services to Covered Entity. In connection with
Business Associate’s services, Business Associate creates or receives Protected
Health Information from or on behalf of Covered Entity, which information is
subject to protection under the Federal Health Insurance Portability and
Accountability Act of 1996, Pub. L. No. 104-191 (“HIPAA”) and related
regulations promulgated by the Secretary (“HIPAA Regulations”).

 

WHEREAS, in light of the foregoing and the
requirements of the HIPAA Regulations, Business Associate and Covered Entity
agree to be bound by the following terms and conditions:

 

1.             Definitions.

 

(a)           General. Terms used,
but not otherwise defined, in this Addendum shall have the same meaning as
those terms in the Privacy Rule.

 

(b)         Specific.

 

(i)              Individual. “Individual”
shall have the same meaning as the term “individual” in 45 CFR 164.501 and
shall include a person who qualifies as a personal representative in accordance
with 45 CFR 164.502(g).

 

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

 

(iii)            Protected Health Information. “Protected
Health Information” shall have the same meaning as the term “protected health
information” in 45 CFR 164.501, limited to the information created or received
by Business Associate from or on behalf of Covered Entity.

 

(iv)            Required By Law. “Required by
Law” shall have the same meaning as the term “required by law” in 45 CFR
164.501.

 

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

 

(vi)            Services Agreement. “Services
Agreement” shall mean any present or future written agreements between Covered
Entity and Business Associate under which Business

 

 

Associate provides services to Covered Entity which involve the use or
disclosure of Protected Health Information.

 

2.             Obligations and Activities of Business Associate.

 

(a)           Use and Disclosure. Business
Associate agrees to not use or disclose Protected Health Information other than
as permitted or required by the Services Agreement or as Required By Law.

 

(b)           Appropriate Safeguards. Business
Associate agrees to use appropriate safeguards to prevent use or disclosure of
the Protected Health Information other than as provided for by the Services
Agreement. Without limiting the generality of the foregoing, Business Associate
agrees to protect the integrity and confidentiality of any Protected Health
Information it electronically exchanges with Covered Entity.

 

(c)           Reporting. Business
Associate agrees to report to Covered Entity any use or disclosure of the
Protected Health Information not provided for by the Services Agreement of
which it becomes aware.

 

(d)           Agents. Business
Associate agrees to ensure that any agent, including a subcontractor, to whom
it provides Protected Health Information received from, or created or received
by Business Associate on behalf of Covered Entity agrees to the same
restrictions and conditions that apply through this Addendum to Business
Associate with respect to such information.

 

(e)           Access to Designated Record
Sets. To the extent that Business Associate possesses or maintains
Protected Health Information in a Designated Record Set, Business Associate
agrees to provide access, at the request of Covered Entity, and in the time and
manner reasonably requested by the Covered Entity, to Protected Health
Information in a Designated Record Set, to Covered Entity or, as directed by
Covered Entity, to an Individual in order to meet the requirements under 45 CFR
164.524.

 

(f)            Amendments to Designated Record
Sets. To the extent that Business Associate possesses or maintains
Protected Health Information in a Designated Record Set, Business Associate
agrees to make any amendment(s) to Protected Health Information in a
Designated Record Set that the Covered Entity directs or agrees to pursuant to
45 CFR 164.526 at the request of Covered Entity or an Individual, and in the
time and manner reasonably requested by the Covered Entity.

 

(g)           Access to Books and Records. Business
Associate agrees to make internal practices, books, and records, including
policies and procedures and Protected Health Information, relating to the use
and disclosure of Protected Health Information received from, or created or
received by Business Associate on behalf of, Covered Entity available to the
Secretary, in a time and manner designated by the Secretary, for purposes of
the Secretary determining Covered Entity’s compliance with the Privacy Rule.

 

 

(h)           Accountings. Business
Associate agrees to document such disclosures of Protected Health Information
and information related to such disclosures as would be required for Covered
Entity to respond to a request by an Individual for an accounting of
disclosures of Protected Health Information in accordance with 45 CFR 164.528.

 

(i)            Requests for Accountings. Business
Associate agrees to provide to Covered Entity or an Individual, in the time and
manner reasonably requested by the Covered Entity, information collected in
accordance with Section 2.h. of this Addendum, to permit Covered Entity to
respond to a request by an Individual for an accounting of disclosures of
Protected Health Information in accordance with 45 CFR 164.528.

 

3.             Permitted Uses and Disclosures by Business Associate.

 

(a)           Services Agreement. Except as
otherwise limited in this Addendum, Business Associate may use or disclose
Protected Health Information to perform functions, activities, or services for,
or on behalf of, Covered Entity as specified in the Services Agreement,
provided that such use or disclosure would not violate the Privacy Rule if
done by Covered Entity or the minimum necessary policies and procedures of the
Covered Entity.

 

(b)           Use for Administration of
Business Associate. Except as otherwise limited in this Addendum,
Business Associate may use Protected Health Information for the proper
management and administration of the Business Associate or to carry out the
legal responsibilities of the Business Associate.

 

(c)           Disclosure for
Administration of Business Associate. Except as otherwise
limited in this Addendum, Business Associate may disclose Protected Health
Information for the proper management and administration of the Business
Associate, provided that disclosures are Required by Law, or Business Associate
obtains reasonable assurances from the person to whom the information is
disclosed that it will remain confidential and used or further disclosed only
as Required by Law or for the purpose for which it was disclosed to the person,
and the person notifies the Business Associate of any instances of which it is
aware in which the confidentiality of the information has been breached.

 

4.             Obligations of Covered Entity.

 

(a)           Privacy Notice. Covered
Entity shall notify Business Associate of any limitation(s) in its notice
of privacy practices of Covered Entity in accordance with 45 CFR 164.520, to
the extent that such limitation may affect Business Associate’s use or
disclosure of Protected Health Information.

 

(b)           Changes of Permission of
Individual. Covered Entity shall notify Business Associate of
any changes in, or revocation of, permission by an Individual to use or
disclose Protected Health Information, to the extent that such changes may
affect Business Associate’s use or disclosure of Protected Health Information.

 

 

(c)           Restrictions on Use or
Disclosure. Covered Entity shall notify Business Associate of
any restriction to the use or disclosure of Protected Health Information that
Covered Entity has agreed to in accordance with 45 CFR 164.522, to the extent
that such restriction may affect Business Associate’s use or disclosure of
Protected Health Information.

 

5.             Permissible Requests by Covered Entity. Except as set forth in Section 3 of this Addendum, Covered Entity
shall not request Business Associate to use or disclose Protected Health
Information in any manner that would not be permissible under the Privacy Rule if
done by Covered Entity.

 

6.             Term and Termination.

 

(a)           Term. This Addendum
shall be effective as of the date of this Addendum, and shall terminate when
all of the Protected Health Information provided by Covered Entity to Business
Associate, or created or received by Business Associate on behalf of Covered
Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to
return or destroy Protected Health Information, protections are extended to
such information, in accordance with the termination provisions in this
Section.

 

(b)           Termination for Cause. Upon Covered
Entity’s knowledge of a material breach by Business Associate, Covered Entity
shall either:

 

i.                Provide an opportunity for
Business Associate to cure the breach or end the violation. If Business
Associate does not cure the breach or end the violation within the time
specified by Covered Entity, Covered Entity shall terminate: (A) this
Addendum; and (B) all of the provisions of the Services Agreement that
involve the use or disclosure of Protected Health Information;

 

ii.               Immediately terminate: (A) this
Addendum; and (B) all of the provisions of the Services Agreement that
involve the use or disclosure of Protected Health Information if Business
Associate has breached a material term of this Addendum and cure is not
possible; or

 

iii.              If neither termination nor
cure are feasible, Covered Entity shall report the violation to the Secretary.

 

(c)           Effect of Termination.

 

i.              Except as provided in
paragraph ii. of this Section 6.c., upon termination of this Addendum, for
any reason, Business Associate shall return or destroy all Protected Health
Information received from Covered Entity, or created or received by Business
Associate on behalf of Covered Entity. This provision shall apply to Protected
Health Information that is in the possession of subcontractors or agents of
Business Associate. Business Associate shall retain no copies of the Protected
Health Information.

 

 

ii.             In the event that Business
Associate determines that returning or destroying the Protected Health
Information is infeasible, Business Associate shall provide to Covered Entity
notification of the conditions that make return or destruction infeasible. Upon
mutual agreement of the parties that return or destruction of Protected Health
Information is infeasible, Business Associate shall extend the protections of
this Addendum to such Protected Health Information and limit further uses and
disclosures of such Protected Health Information to those purposes that make
the return or destruction infeasible, for so long as Business Associate
maintains such Protected Health Information.

 

7.             Electronic Transaction Standards.

 

(a)               Compliance with HIPAA
Standards. When providing its services and/or products,
Business Associate shall comply with all applicable HIPAA standards and
requirements (including, without limitation, those specified in 45 CFR Part 162)
with respect to the transmission of health information in electronic form in
connection with any transaction for which the Secretary has adopted a standard
under HIPAA (“Covered Transactions”).

 

(b)              Agents and Subcontractors. Business
Associate shall require all of its agents and subcontractors (if any) who
assist Business Associate in providing its services and/or products to comply
with all applicable requirements of HIPAA, including without limitation,
compliance with 45 CFR Part 162.

 

8.             Miscellaneous.

 

(a)             Regulatory References. A reference in
this Addendum to a section in the Privacy Rule means the section as in
effect or as amended.

 

(b)             Amendment. The Parties
agree to take such action as is necessary to amend the Services Agreement from
time to time  as is necessary for Covered Entity to comply with the
requirements of the Privacy Rule and HIPAA.

 

(c)             Survival. The respective
rights and obligations of Business Associate under Section 6.c. of this
Addendum shall survive the termination of the Services Agreement.

 

(d)             Interpretation. Any ambiguity
in this Addendum shall be resolved to permit Covered Entity to comply with the
Privacy Rule.

 

 

(e)             Miscellaneous. The terms of
this Addendum are hereby incorporated into the Services Agreement. Except as
otherwise set forth in Section 8.d. of this Addendum, in the event of a conflict
between the terms of this Addendum and the terms of the Services Agreement, the
terms of this Addendum shall prevail. The terms of the Agreement which are not
modified by this Addendum shall remain in full force and effect in accordance
with the terms thereof. The Services Agreement together with this Addendum
constitutes the entire agreement between the parties with respect to the
subject matter contained herein. This Addendum may be executed in counterparts,
each of which when taken together shall constitute one original.

 

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

 

CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.

 

 

	
  By:

  	
  /s/ Daniel E. Dosoretz

  	
   

  
	
   

  	
  Name: Daniel E. Dosoretz, M.D.

  	
   

  
	
   

  	
  Title: President

  	
   

  

 

21ST CENTURY ONCOLOGY OF CALIFORNIA, A MEDICAL
CORPORATION

 

 

	
  By:

  	
  /s/ Michael J. Katin

  	
   

  
	
   

  	
  Name: Michael J. Katin

  	
   

  
	
   

  	
  Title: PresidentExhibit
10.57

 

FACILITIES
AND MANAGEMENT SERVICES AGREEMENT

 

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

 

RECITALS:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)                              Personnel.

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

3.                            Responsibilities
of Medical Group.

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

4.                            Manager
Compensation.

 

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

 

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

 

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

 

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

 

5.                            Billing and
Collections.

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

8.                            Independent
Contractors.

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10.                      Default by
Medical Group.

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

11.                      Default by
Manager.

 

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

 

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

 

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

 

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

 

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

 

10

 

12.                      Termination.

 

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

 

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

 

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

 

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

 

13.                      Restrictive
Covenants.

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

15.                      Regulatory
Matters.

 

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

 

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

 

12

 

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

 

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

 

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

 

16.                      Miscellaneous.

 

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

 

	
  If to Manager:

  	
  21st Century Oncology-CHW, LLC

  
	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
  Fort Myers, Florida 33907

  

 

13

 

	
   

  	
  Attention: David N.T.
  Watson, Vice President

  
	
   

  	
   

  
	
  With a copy to:

  	
  Radiation Therapy
  Services, Inc.

  
	
   

  	
  111 Great Neck Road

  
	
   

  	
  Great Neck, New York 11021

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Garfunkel, Wild &
  Travis, P.C.

  
	
   

  	
  111 Great Neck Road

  
	
   

  	
  Great Neck, New York 11021

  
	
   

  	
  Attention: Greg E. Bloom, Esq.

  
	
   

  	
   

  
	
  If to Medical Group:

  	
  Redding Radiation
  Oncologists, P.C.

  
	
   

  	
  2234 Colonial Boulevard

  
	
   

  	
  Fort Myers, Florida 33907

  

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

[Signature
page follows]

 

16

 

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

 

	
   

  	
  21st Century Oncology-CHW, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey A. Pakrosnis

  
	
   

  	
  Name:

  	
  Jeffrey A. Pakrosnis

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  21st Century Oncology of California,
  a Medical

  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David N.T. Watson

  
	
   

  	
  Name:

  	
  David N.T. Watson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Redding
  Radiation Oncologists, P.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David N.T. Watson

  
	
   

  	
  Name:

  	
  David N.T. Watson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

 

FACILITIES AND MANAGEMENT SERVICES AGREEMENT

SIGNATURE PAGE

 

 

EXHIBIT
A

 

Equipment
List

 

[To
come]

 

 

EXHIBIT
B

 

Excerpt
from Manager’s Operating Agreement Regarding Operation of Offices

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

3.6                      Operating
Policies and Procedures.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

3

 

EXHIBIT
C

 

Billing
Services Agreement

 

[Attached]

 

 

BILLING
SERVICES AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

(1)                                  ICD 9 Code and
diagnosis;

 

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

 

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

 

(4)                                  Date and place
of service;

 

(5)                                  Name of
physician providing service; and

 

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

 

2.                            Client
Responsibilities.

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

9.                            Compliance With
Laws.

 

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

 

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

 

5

 

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

 

10.                      Termination.

 

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

 

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

 

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

 

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

 

6

 

11.                      Indemnification.

 

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

 

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

 

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

 

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

 

	
  If to FSS:

  	
  Financial Services of
  Southwest Florida, Inc.

  2234 Colonial Boulevard

  Fort Myers, Florida 33907

  Attention: David N.T. Watson, Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Client:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
  Radiation Therapy
  Services, Inc.

  111 Great Neck Road

  	
   

  

 

7

 

	
   

  	
  Great Neck, New York 11021

  Attention: Norton Travis, Esq.

  	
   

  

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

[SIGNATURE
PAGE TO FOLLOW]

 

10

 

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

 

 

	
  21st
  Century Oncology of California,

  a Medical Corporation, a professional

  medical corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

 

	
  Redding
  Radiation Oncologists, P.C.,

  a California professional medical

  corporation

  	
   

  	
  Financial
  Services of Southwest Florida,

  LLC, a Florida limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

11

 

EXHIBIT
A

 

Business
Associate Exhibit

 

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

 

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

 

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

 

RECITALS

 

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

 

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

 

1.                                       Definitions

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

2.                                       Permitted Uses and Disclosures by Business Associate

 

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

 

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

 

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

 

2

 

3.                                       Obligations of Business Associate

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

4.                                       Obligations of Covered Entity

 

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

 

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

 

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

 

4

 

5.                                       Effect of Breach of Obligations

 

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

 

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

 

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

 

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

 

6.                                       Effect of Termination

 

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

 

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

 

7.                                       Indemnity

 

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

 

5

 

8.                                       [RESERVED]

 

9.                                       No Third Party Beneficiary

 

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

 

10.                                 Amendment

 

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

 

6

 

EXHIBIT
D

 

Business
Associate Exhibit

 

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

 

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

 

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

 

RECITALS

 

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

 

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

 

1.                                       Definitions

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

2.                                       Permitted Uses and Disclosures by Business Associate

 

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

 

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

 

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

 

2

 

3.                                       Obligations of Business Associate

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

4.                                       Obligations of Covered Entity

 

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

 

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

 

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

 

4

 

5.                                       Effect of Breach of Obligations

 

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

 

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

 

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

 

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

 

6.                                       Effect of Termination

 

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

 

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

 

7.                                       Indemnity

 

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

 

5

 

8.                                       [RESERVED]

 

9.                                       No Third Party Beneficiary

 

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

 

10.                                 Amendment

 

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

 

6

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