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EXHIBIT 10.8
MANAGEMENT, LICENSING
AND FACILITIES AGREEMENT
This Agreement is made effective as of March 14, 1988 by and between
MICA CAL IV, INC. a California corporation (hereinafter referred to as
"Corporation"), and Magnetic Imaging Medical Group (hereinafter referred to as
"Physician Group").
RECITALS
A. Corporation, after careful study, has concluded that there is a need
in Huntington Beach for a medical center specializing in performing a variety of
medical imaging and diagnostic services by experienced physicians at reasonable
cost.
B. Corporation has a comprehensive system for establishing and
providing financial and related management to such a medical center which makes
available to qualified physicians a fully staffed facility, equipment, supplies,
management, capital, marketing services, and systems necessary to provide a
large volume of medical imaging and diagnostic services to patients at
reasonable cost. These services will be obtained from Medical Imaging Centers of
America, Inc. ("MICA").
C. Corporation desires to make its system available to physicians who
are capable of offering high quality services to the public at a competitive
cost. To that end, Corporation has committed substantial resources, and has
incurred substantial expenses and future obligations to develop the medical
imaging center located at 7677 Center Avenue, Huntington Beach, California 92647
(hereinafter referred to as the "Center").
D. Physician Group desires to contract with Corporation for use of
Corporation's management services and system of delivering medical imaging and
diagnostic care, a sublease for the Center, and a license for use of any
appropriate trade names and marks which Corporation may own or own rights to
license.
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Duties of Parties
1.1 Management Services of Corporation. Corporation shall provide the
following services:
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a. General Administrative Services. Overall supervision and management
of the Center, including supervision over the services and personnel described
below.
b. Personnel. Provision to the Center of all non-physician personnel
needed to operate and support the Center, such as nurses, technicians,
receptionists, secretarial, clerical, purchasing and marketing personnel. No
chief technologist shall be employed or terminated by the Corporation without
the consent of Physician Group, which consent shall not be unreasonably
withheld.
c. Training. Training of all non-physician personnel at the Center.
d. Fiscal Services. Fiscal services including accounting, auditing,
bookkeeping, budgeting, patient billings and record keeping, accounts
receivable, accounts payable processing, and electronic data processing.
e. Patient Records. Ownership and maintenance of patient medical
records and archives, record retrieval and record monitoring to assist Physician
Group with utilization and quality assurance reviews.
f. Physician Recruiting. Assistance to Physician Group in recruiting
and screening prospective physician-contractors, and physician-employees.
Physician Group shall make the final selections.
g. Quality Control. Assistance to Physician Group in the development of
appropriate quality control programs and protocols, including development of
performance and utilization standards, sampling techniques for case review, and
preparation of appropriately documented studies.
h. Administrative Services for Physician Group. Provision of general
administrative services to Physician Group in connection with its business
affairs relating to the Center, which shall include maintenance of Physician
Group's books and records and accounting services, billing, and such other
administrative services as Physician Group may from time to time require with
respect to the operation of the Center.
i. Management Reports. Preparation of management reports to assist
Physician Group in evaluating the performance and productivity of the Center and
of other doctors employed by or contracted with Physician Group at the Center.
j. Marketing. Marketing of the medical imaging and diagnostic services
offered at the Center by Physician Group pursuant to a marketing plan to be
jointly developed and shall be subject to approval by Physician Group.
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k. Equipment and Supplies. Provision of all equipment, furnishings, and
supplies reasonably necessary for the efficient operation of the Center.
l. Janitorial and Maintenance Service. Janitorial, grounds and
maintenance services for the Center and its equipment and furnishings.
1.2 Administrative Services of Physician Group. Physician Group shall
cooperate with the Corporation and use its best efforts to assure the continuing
success of the Center. These efforts shall include, by way of example and not
limitation: (1) promotion of services provided by the Center with particular
emphasis on direct contact with referring physicians and other health care
providers including office visits, seminars and advisory boards to apprise such
individuals and groups of the nature and availability of services offered at the
Center, (2) provision of technical advice and assistance with respect to the
acquisition, installation and maintenance of equipment, (3) participation in
planning for the Center, (4) the development of policies and standards for
operation. Physician Group shall also provide such administrative services at
the Center as shall be necessary to assure that medical services are provided
efficiently and commensurate with a high standard of care for the medical
community in Huntington Beach. In doing so, Physician Group shall consult with
Corporation concerning non-physician staffing requirements, needed equipment and
supplies, preparation of a suitable budget, the need for ancillary support, such
as laboratory services, so as to optimize the smooth and efficient functioning
of the Center. Physician Group shall analyze the efficiency of the Center and
monitor and evaluate the Center personnel, both physician and non-physician
personnel. Physician Group shall provide its evaluations and recommendations to
Corporation. Any such recommendations and evaluations shall be rendered on a
confidential basis and may include specific designation of non-medical personnel
considered unacceptable by Physician Group.
1.3 Notification of Payer Disputes. Physician Group agrees to notify
Corporation of any complaints arising under any agreement between Physician
Group and a third-party payer for services provided at the Center, and Physician
Group shall immediately notify Corporation of any notice of termination of any
agreement with a third-party payer. Physician Group shall consult with the
Corporation and cooperate to resolve such problems as may arise under
third-party payer agreements. Physician Group shall also consult with
Corporation prior to terminating any third-party payer agreement.
ARTICLE II
Licensing Agreement
2.1 License of Trade Names and Marks. In consideration of the payment
provided for herein and the agreement of Physician Group to perform all of the
terms, covenants and conditions contained in this Agreement and the sublease for
the Center pursuant hereto, Corporation agrees to license to Physician Group the
nonexclusive right to use, subject to all legal restrictions upon
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physician advertising, such trade names and marks as MICA may license to the
Corporation, or as Corporation may from time to time adopt for use in connection
with its business, or the business of the Center but only in respect to business
of Physician Group conducted (1) at the Center while Physician Group's sublease
is in effect, (2) while this Agreement is in effect, and (3) if the Corporation
has not declared a default and Physician Group is in compliance with all of the
terms, covenants and conditions contained in this Agreement, and the sublease
for the Center.
2.2 Use of Trade Names and Marks. The exact manner of use of trade
names and marks licensed to Physician Group shall be subject to the prior
written consent of Corporation. Physician Group shall not use said names or
marks in publicly disseminated materials without such consent.
2.3 Nonexclusive Right. The license granted to Physician Group in
Section 2.1 hereof is nonexclusive.
2.4 Tern of License. The license granted herein shall terminate when
Physician Group's sublease expires or terminates, and shall terminate when this
Agreement expires or terminates.
2.5 Use of Trade Names and Marks After Term. Upon termination of this
license, Physician Group shall immediately discontinue the use of any trade
names and marks licensed to Physician Group hereunder in every respect, shall
execute all documents necessary to satisfy third- parties, including government
agencies regulating corporations and the practice of medicine that Physician
Group has no continuing interest in the trade names or marks of Corporation or
of MICA, and Physician Group shall not make any reference on their letterhead or
in other materials to their former affiliation with Corporation, or any
affiliation with MICA.
2.6 Protecting Goodwill. As further consideration for the opportunity
to sublease the Center and conduct the practice of medicine from the Center and
for the use of such trade names and marks, Physician Group agrees it will take
all necessary steps to preserve and protect the reputation and goodwill
associated with the Center and said names and marks including, without
limitation, the following:
a. Assigned Physicians. Physician Group shall contract only
with well-qualified licensed medical doctors who are experienced and Board
certified in medical imaging and diagnostic care provided at the Center, and the
assignment and continued service of an employed or contract medical doctor to
work at the Center shall be subject to the approval of Corporation, which shall
not be unreasonably withheld.
b. Compliance With Law. Physician Group and its
physician-contractors and physician-employees shall comply with all laws,
regulations, ethical and professional standards applicable to the practice of
medicine.
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c. Monitoring of Services. Physician Group shall rigorously
monitor utilization and quality of services provided at the Center and shall
take all steps necessary to remedy any and all deficiencies in the efficiency or
the quality of medical care provided.
d. Time Commitment. Corporation shall, after consultation with
Physician Group, establish reasonable business hours for the operation of the
Center. Physician Group shall engage a sufficient number of physician-employees
or physician-contractors to meet the demand and potential demand for medical
imaging and diagnostic services at the Center, and to assure the efficient
operation of the Center during its established business hours. It is understood
that a physician shall be present when procedures are performed for patients.
Throughout the term of this Agreement, Physician Group shall exercise its
highest skills and best efforts to cause the practice at the Center to grow in
volume and profitability. To the latter end, except for undertaking bona fide
charity cases on a basis customary for physicians in the Huntington Beach area,
without written consent of the Corporation, Physician Group shall only use the
Center for performance of medical services which are compensable by the payment
of professional fees established under Section 6.3, or as approved by the
Corporation.
ARTICLE III
Sublease of Center
Concurrently with executing this Agreement, the parties are entering
into a sublease for the Center of even date, which is incorporated by this
reference as if fully set forth herein.
ARTICLE IV
Relationship of Parties
4.1 Practice of Medicine. A fundamental understanding between the
parties is that Corporation shall not participate in any manner in the medical
services rendered by Physician Group in the conduct of its medical practice at
the Center. Corporation may make recommendations, but shall have no control,
over matters affecting Physician Group's medical practice, including without
limitation the following: furnishing physicians, supervising medical services,
or any and all other matters affecting the practice of medicine. All patients
treated by Physician Group shall be deemed to be the patients of Physician
Group. Physician Group shall not represent in any direct or indirect manner to
the public or any third-party that Corporation has participated, is
participating, or will participate in the practice of medicine in any manner.
4.2 Relationship of Parties. This Agreement does not constitute either
party the agent, legal representative or employee for any purpose whatsoever of
the other party, and neither party is granted any right or authority to assume
or create any obligation for or on behalf of, or in the
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name of, or in any way to bind the other party. Each party agrees not to incur
or contract for any debt or obligation on behalf of the other party, or commit
any act, make any representation or advertise in any manner which may adversely
affect any right of the other party, or be detrimental to its good name and
reputation.
ARTICLE V
Proprietary Interest and Rights of Corporation and MICA
5.1 Proprietary Interest of Corporation and MICA. Physician Group
recognizes the proprietary interest of Corporation and MICA in the Corporation
and MICA business system for operating a medical imaging and diagnostic center,
including all policies, procedures, operating manuals, forms, customer lists,
contracts, and other information regarding such system. Physician Group
acknowledges and agrees that such information constitutes trade secrets of
corporation and MICA. Physician Group hereby waives any and all right, title and
interest in and to such trade secrets and agrees to return all copies of such
trade secrets and information related thereto, at its expense, upon termination
of the Agreement.
5.2 Confidentiality. Physician Group acknowledges and agrees that
Corporation and MICA are entitled to prevent its competitors from obtaining and
utilizing its trade secrets. Physician Group agrees to hold the trade secrets of
Corporation and MICA in strictest confidence and not to disclose them or allow
them to be disclosed directly or indirectly to any person or entity other than
persons engaged by Physician Group for use in the course of their employment at
the Center, without the prior written consent of Corporation and MICA. Physician
Group acknowledges its confidential relationship to Corporation and the
confidentiality of its relationship with Corporation and of any information
relating to the services and business methods of Corporation or MICA which it
may obtain during the term of this Agreement. Physician Group shall not, either
during the term of this Agreement, or at any time after the expiration or sooner
termination of this Agreement, disclose to anyone other than persons employed at
the Center who use the information in the course of their employment any
confidential or proprietary information or trade secret of Corporation obtained
by it. Physician Group also agrees to place under legal obligation to treat such
information as strictly confidential any persons to whom said information is
disclosed for the purpose of performance.
5.3 Successor Medical Group. Upon termination of this Agreement, or the
sublease of the Center for any reason, whichever first occurs, Corporation shall
have the immediate right, in its sole discretion, to designate a professional
corporation, partnership or sole proprietor as successor to Physician Group at
the Center. If such professional corporation, partnership or sole proprietor is
composed solely of duly licensed physicians, they shall be entitled to retain
and utilize all existing customer lists and patient records at the Center.
Corporation agrees that all records transferred to Physician Group's successor
shall be maintained as long as required by law regulating retention of medical
records, and copies of said records shall be made available to
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Physician Group at its expense, if required for the purpose of defending any
malpractice claim against Physician Group, or for the purpose of providing
medical care. The rights of the parties under this section shall survive
termination of this Agreement.
ARTICLE VI
Compensation
6.1 Inducement to Enter Agreement. As partial consideration, and as an
inducement to Physician Group for entering this Agreement, Corporation shall be
responsible for any losses related to the operation of the Center which do not
arise from wrongful or negligent acts or omissions of Physician Group.
6.2 Corporation's Risk. Corporation has incurred substantial expenses
and future obligations to establish the Center, the system for the delivery of
medical imaging and diagnostic services, including fees for consultants and
other professionals, salaries for responsible staff, interest expenses, lease
obligations, and costs of equipping the Center. Corporation has also assumed
substantial obligations associated with the continuing operation of the Center.
Although there is uncertainty about the profitability of the Center during the
initial years of operation, Corporation is assuming responsibility for losses as
provided in Section 6.1. The parties therefore recognize and agree that in order
for Corporation to receive a fair and reasonable return for its expenses and
risks, a fair return for lease of premises, services, and the use of its trade
names and marks hereunder, as well as to permit the necessary accumulation of
capital to establish and maintain a first rate and fully equipped Center, a goal
the parties hereto agree to be desirable, the total payments to Corporation
should increase in future years.
6.3 Professional Fees. Physician Group, shall in consultation with
Corporation, establish a schedule of fees and charges for medical services at
the Center.
6.4 Billing and Collections. Billings to patients for all services
rendered at the Center shall be in the name of Physician Group. Corporation, or
its delegate, shall serve as billing and collection agent for Physician Group,
and shall be diligent and timely in the performance of billing and collection
services. However, Corporation does not guarantee collection and shall not be
responsible for any loss to Physician Group as a result of inability to collect
fees and charges.
6.5 Intention of the Parties. It is the intention of the parties hereto
that from the revenues of the Center Physician Group shall be fairly and
reasonably compensated for its professional services and those of the physicians
engaged by it, and Corporation shall be fairly and reasonably compensated for
the sublease of the Center, the licensing of trade names and marks, the
provision of services by it pursuant to this Agreement, and for the expenses,
obligations, and risks assumed by it in connection with the establishment and
operation of the Center and the operation of the Corporation system.
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6.6 Fair and Reasonable Compensation of Physician Group. The parties
hereto agree Physician Group will be fairly and reasonably compensated for its
services and those of the physicians it engages by retaining in the aggregate
twenty percent (20%) of the revenues actually collected for each medical imaging
diagnostic or other medical procedure ("medical services") performed by
Physician Group at the Center. For purposes of this Agreement, aggregate
revenues collected shall mean all collected receipts for medical imaging,
diagnostic and other medical procedures performed at the Center, including
charges for use of equipment, supplies, facilities and Center personnel in
connection with performance of medical services.
6.7 Fair and Reasonable Compensation to Corporation. Any revenues or
receipts in excess of those retained by Physician Group as provided in Section
6.6 hereof shall be paid to Corporation as compensation for the sublease of the
Center, provision of services under this Agreement, the licensing of trade names
and marks to Physician Group, and for its expenses, obligations, and risks in
connection with the establishment of the Center, and the operation of the
Corporation system. Said compensation includes the total rent to Corporation for
the Center subleased by Physician Group.
6.8 Remittance. All monies which Physician Group is entitled to retain
pursuant to Section 6.1 and all monies which Corporation is entitled to receive
pursuant to Section 6.7 shall be accounted for and disbursed weekly.
ARTICLE VII
Term and Termination
7.1 Term. Subject to paragraphs 7.2 and 7.3 below, this Agreement shall
become effective on the date first above written and shall continue for a period
of five years unless sooner terminated in accordance with this Agreement.
7.2 Termination by the Corporation. This Agreement may be terminated by
Corporation upon thirty (30) days' prior written notice to Physician Group upon
occurrence of the following:
7.2.1 The Prime Lease pursuant to which Corporation is leasing
the Center is terminated as a result of the acts or omissions of Physician Group
or any other reason.
7.2.2 Physician Group, or any shareholder, director or
physician-employee of Physician Group or any professional corporation to which
this Agreement may be assigned, engages in any criminal act in the nature of
conversion, embezzlement or theft relative to the business conducted pursuant to
this Agreement; Physician Group will maintain adequate physician- employee
dishonesty insurance.
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7.2.3 Physician Group or any professional corporation to which
this agreement may be assigned is liquidated or dissolved, or files a petition
seeking protection under any state or federal insolvency or similar law
affecting the rights of creditors generally, or a similar filing is made against
the Physician Group, or a receiver is appointed for all or substantially all of
the Physician Group's assets, unless said filing is dismissed within thirty (30)
days.
7.2.4 Breach by Physician Group of any of its obligations
under this Agreement, which breach continues for a period of thirty (30) days
following written notice of the breach, or otherwise by mutual agreement.
7.2.5 Conduct by Physician Group, its employees or agents
which is disruptive of operations of the Center, which interferes with the
performance of the Corporation's duties under this Agreement, provided such
conduct continues or reoccurs more than thirty (30) days following written
notice to Physician Group of such breach.
7.2.6 Conduct by Physician Group, its employees or agents
imposing, or which may impose, civil or criminal liabilities (other than
liability for medical malpractice) on Corporation.
7.2.7 Failure of Physician Group during any four (4) month
period commencing more than eighteen (18) months after the commencement of
operations at the Center to perform a sufficient number of diagnostic procedures
to enable it to generate a profit based on generally accepted principles of
accounting used by the Center. In accordance with the Agreement, Corporation
expenses incurred with respect to the Center, for said four month period as they
become due include, without limitation, the expense of equipment leases,
facility leases, salaries, maintenance contracts, supplies, management fees
(excluding bonuses or other incentive management fees), and other expenses and
overheads, unless such failure results from equipment or mechanical failures
beyond the control of Physician Group.
7.3 Termination By Physician Group. This Agreement may be terminated by
Physician Group upon thirty (30) days' written notice to the Corporation upon
the occurrence of the following:
7.3.1 The Prime Lease pursuant to which Corporation is leasing
the Center is terminated as the result of acts or omissions of Corporation or
for any other reason other than acts or omissions of Physician Group, its
employees or agents.
7.3.2 Corporation or any of the officers of the Corporation
engage in any criminal act in the nature of conversion, embezzlement or theft
relative to the payments due to the Physician Group under this Agreement.
Corporation will maintain adequate Employee dishonesty insurance.
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7.3.3 The Corporation is liquidated or dissolved, or files a
petition seeking protection under any state or federal insolvency or similar law
affecting the rights of creditors generally, or a similar filing is made against
the Corporation, or a receiver is appointed for all or substantially all of the
Corporation's assets, unless such filing is dismissed within thirty (30) days.
7.3.4 Corporation fails to perform its material duties as set
forth herein for more than thirty (30) days following the giving of written
notice of the breach, or otherwise by mutual agreement.
7.4 Rights Upon Termination. The termination of this Agreement shall
not release or discharge either party from any obligation, debt or liability
which shall have previously accrued and remains to be performed upon the date of
termination, or which by its terms is to be performed after the date of
termination. Upon termination, the parties shall each be entitled to
compensation in accordance with the terms of this Agreement, for services
rendered through the date of termination, but such compensation shall be limited
to monies with respect to the period prior to termination which are collected
within one hundred and twenty (120) days after the date of termination. Any
monies collected thereafter shall be the property of the Corporation.
ARTICLE VIII
General Provisions
8.1 Insurance. Physician Group shall obtain and maintain professional
liability insurance and coverages on all medical doctors providing medical
services to patients at the Center, with reasonable limits to be agreed upon.
Corporation shall obtain and maintain professional liability insurance on all
nonprofessional staff, with reasonable limits to be agreed upon.
8.2 Assignment. The rights conferred upon Physician Group hereunder may
not be transferred or assigned without the prior written consent of Corporation
and any assignment in violation of this section shall be void. However,
Physician Group may form a professional medical corporation of which it is the
principal shareholder and transfer this Agreement to said professional
corporation, provided performance of this Agreement is guaranteed by all
shareholders of such corporation. It is understood and agreed that Corporation
and its successors shall have the right to assign this Agreement.
8.3 Third-Party Beneficiary. MICA shall be a third-party beneficiary of
the provisions of this Agreement pertaining to it.
8.4 Governing Law. This Agreement shall be governed by the laws of the
State of California.
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8.5 Article and Section Headings. The article and section headings in
this Agreement are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit, or aid in the construction of any
term or provision hereof.
8.6 Attorneys' Fee. Should any party employ an attorney for the purpose
of enforcing this Agreement, or any judgment based thereon, in any court,
including bankruptcy courts and courts of appeal, or arbitration proceedings,
the prevailing party shall be entitled to receive its attorneys' fees and costs,
whether taxable or not.
8.7 Waiver. The waiver of any covenant, condition or duty hereunder by
either party shall not prevent that party from later insisting upon full future
performance of the same.
8.8 Amendment. No amendment in the terms of this Agreement shall be
binding on either party unless in writing and executed by the duly authorized
representatives of each party.
8.9 Notice. Any communication under this Agreement shall be given in
writing and shall be delivered in person or by prepaid certified or registered
mail to each party at such address as either party shall furnish to the other in
writing. Notice shall be deemed given when personally delivered, or if given by
mail, then two days after deposit in the United States mail, postage prepaid.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
8.11 Entire Agreement. This Agreement and the sublease referenced
herein constitute the entire agreement between the parties in connection with
the subject matter hereof and shall supersede all prior agreements, whether oral
or in writing, whether explicit or implicit, which have been entered into prior
to the execution hereof.
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8.12 Notwithstanding any term in this Agreement and the sublease
agreement, the Corporation, in an effort to utilize all available capacity of
the Center's imaging equipment on a time available basis may sublet the use of
the Center's equipment to other physicians, paying the PHYSICIANS a 5% medical
supervisory fee. The Corporation will consult with the PHYSICIANS regarding
sublease of renter equipment and the PHYSICIANS will cooperate in this effort.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
MICA CAL IV, INC.
By: /s/ Nathan Kaufman
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PHYSICIAN GROUP
By: /s/ Joel Levine, M.D.
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EXTENSION OF AND FIRST AMENDMENT TO
MANAGEMENT, LICENSING AND FACILITIES AGREEMENT
This Extension of and First Amendment to Management, Licensing and
Facilities Agreement is made and entered into this 29th day of May, 1992, by and
between MICA CAL IV, INC., a California corporation (the "Corporation") and
Magnetic Imaging Medical Group (herein after referred to as "Physician Group").
RECITALS
WHEREAS, Corporation and Physician Group entered into a Management,
Licensing and Facilities Agreement ("Agreement") on and effective March 14,
1988, as well as a Sublease entered into and effective the same date; and,
WHEREAS, under its terms, the Agreement expires March 14, 1993 and the
Sublease terminates when the Agreement terminates; and,
WHEREAS, the parties' relationship under the Agreement and Sublease has
been mutually beneficial, such that each party desires to extend the Agreement,
and, as a result of such extension, the Sublease as well; and,
WHEREAS, the parties also desire to amend the Agreement in connection
with such extension;
NOW THEREFORE, in consideration of their mutual covenants and promises
and other good and valuable consideration, receipt of which each party hereby
acknowledges, Corporation and Physician Group agree:
1. The term of the Agreement shall be extended for an additional term
of five (5) years, commencing March 14, 1993 and ending March 14, 1998, the
Agreement to remain in effect during such additional term unless sooner
terminated in accordance with the Agreement.
2. The Agreement is hereby amended by deleting Section 7.2.7 of the
Agreement in its entirety.
3. This Extension of and First Amendment to Management, Licensing and
Facilities Agreement shall be effective March 14, 1993.
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IN WITNESS WHEREOF, Corporation and Physician Group have executed this
Extension of and First Amendment to Management, Licensing and Facilities
Agreement as of the date first above written.
MICA CAL IV, INC.
By: /s/ Robert S. Muehlberg
----------------------------------------
Magnetic Imaging Medical Group (MIMG)
By: /s/ Joel Levine, M.D.
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AMENDMENT
AMENDMENT TO the Management, Licensing and Facilities Agreements
entered into by and between predecessors to MAGNETIC IMAGING MEDICAL GROUP,
INC., a California professional corporation (hereinafter referred to as
"Physician Group" and MEDICAL IMAGING CENTERS OF AMERICA, INC., a California
corporation ("MICA") which wholly-owned subsidiaries are MICA CAL I, Inc., a
California corporation ("M-I") and the managing general partner of Long Beach
Medical Imaging Center, Ltd., a California limited partnership ("Long Beach"),
MICA CAL II, INC., a California corporation ("M-III") and MICA CAL IV, INC., a
California corporation ("M-IV").
R E C I T A L S
A. On March 28, 1984, Long Beach entered into a Management, Licensing
and Facilities Agreement with the predecessor to the Physician Group. A true and
correct copy of that Agreement is attached hereto as Exhibit A (the "A
Agreement").
B. On March 14, 1988, M-IV entered into a Management, Licensing and
Facilities Agreement with the predecessor to the Physician Group. This Agreement
was extended on May 29, 1992. A true and correct copy of that Agreement as
extended is attached hereto as Exhibit B (the "B Agreement").
C. On February 3, 1992, M-IV entered into a Management, Licensing and
Facilities Agreement with the predecessor to the Physician Group. A true and
correct copy of that Agreement is attached hereto and marked as Exhibit C (the
"C Agreement").
D. On July 1, 1994, M-III entered into a Management, Licensing and
Facilities Agreement with the predecessor to the Physician Group. A true and
correct copy of that Agreement is attached hereto and marked as Exhibit D (the
"D Agreement").
E. The A Agreement is an agreement which has a term which does not
terminate except on the occurrence of certain events while the B, C, and D
Agreements have terms which end on different dates in 1997 and 1998. MICA wished
to place limits on the term of the A Agreement and the Physician Group is
willing to permit such limits and both parties wish each of the Agreements to be
coterminous. All of the parties wish to provide for certainty and continuity of
service in their relationship as well as revise certain of the compensation
provisions and clarify certain other matters.
NOW THEREFORE, in consideration of their mutual covenants and promises
and for other good and valuable consideration, receipt of which each party
acknowledges, the parties agree as follows:
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1. Term.
The term as set forth in each of the Agreements (Section 7.1
of Exhibits A, B, C and D) is hereby revised to read as follows:
7.1 Term. The term hereunder shall commence January 1, 1996
and shall continue for five (5) years. Provided that Physician Group is not in
material default pursuant to this Agreement then and in that event Physician
Group shall have the right to extend the term of this Agreement for two (2)
consecutive five (5) year terms so long as it shall give written notice to the
other party no less than sixty (60) days prior to the end of a term hereunder.
If a party believes a material default has occurred it shall promptly give
written notice to the other party specifying the nature of the material default
and providing a recommended method of cure. The notified party shall have ninety
(90) days to correct the material default either in accordance with the
suggested methodology or by an alternate equally effective methodology. The
failure to provide notice within thirty (30) days of an event giving rise to a
material default shall be deemed a waiver of such default. Notwithstanding
anything to the contrary set forth in this Agreement, it is understood and
agreed that this Agreement is attached to the assets of the Center. To the
extent the Center or its assets are sold, assigned or otherwise transferred,
this Agreement must be transferred and accepted in full by the acquirer as a
condition of such acquisition, assignment or transfer.
2. Compensation.
(a) The Compensation as set forth at Section 6.6 in each of
those Agreement attached as Exhibits A and B is hereby revised to read as
follows:
6.6 Compensation of Physician Group. The parties
hereto agree Physician Group will be fairly and reasonably compensated for its
services by retaining in the aggregate Twenty percent (20%) of the first Two
Hundred Thousand Dollars ($200,000) of revenues each month actually collected
for each medical imaging diagnostic or other medical procedure ("medical
services") performed by Physician Group at the Center with Physician Group
receiving Eighteen percent (18%) of such revenues in excess of Two Hundred
Thousand Dollars ($200,000) actually collected each month. For purposes of this
Agreement aggregate revenues collected shall mean all collected receipts for
medical imaging, diagnostic and other medical procedures performed at the
Center, including charges for use of equipment, facilities and Center personnel
in connection with performance of medical services (the aggregate of the
"Professional" and "Technical" components). Notwithstanding the foregoing, in
those instances in which Technical only services are performed at the Center, or
in which injections are provided, Physician Group shall receive an amount equal
to Ten percent (10%) of the revenues actually collected for such services each
month.
(b) The compensation as set forth in Section 6.6 in each of
Exhibits C and D is hereby revised to read as follows:
17
6.6 Compensation of Physician Group. The parties hereto agree
Physician Group will be fairly and reasonably compensated for its services by
retaining in the aggregate Twenty percent (20%) of the first One Hundred
Thousand Dollars ($100,000) of revenues each month actually collected for each
medical imaging diagnostic or other medical procedure ("medical services")
performed by Physician Group at the Center with Physician Group receiving
Eighteen percent (18%) of such revenues in excess of One Hundred Thousand
Dollars ($100,000) actually collected each month. For purposes of this Agreement
aggregate revenues collected shall mean all collected receipts for medical
imaging, diagnostic and other medical procedures performed at the Center,
including charges for use of equipment, facilities and Center personnel in
connection with performance of medical services (the aggregate of the
"Professional" and "Technical" components). Notwithstanding the foregoing, in
those instances in which Technical only services are performed at the Center, or
in which injections are provided, Physician Group shall receive an amount equal
to Ten percent (10%) of the revenues actually collected for such services each
month in recognition of their supervisorial responsibilities.
3. Statement of Revenues. A new Section 6.10 shall be added to Exhibit
A and a new Section 6.9 to Exhibits B, C and D which provides as follows:
6.9[10] Statement of Revenues. Partnership [Corporation] shall
furnish to Physician Group a statement of revenues generated by Physician Group
upon or as to which a fee to be paid to Physician Group hereunder is calculated
at the end of every month. This statement shall be submitted to Physician Group
on the tenth (10th) day of each month reflecting the previous month's revenue
from services rendered by Physician Group. Each statement shall be signed and
certified to be correct by Partnership [Corporation] or its authorized
representative. Partnership [Corporation] shall keep in the Center premises full
and accurate books of account, records, cash receipts, and other pertinent data
showing its revenues. Such books of account, records, cash receipts and other
pertinent data shall be kept for a period of two (2) years. Physician Group
shall be entitled during the term and within two (2) years after expiration or
termination of this Agreement to inspect and examine all of Partnership's
[Corporation's] books of account, records, cash receipts, and other pertinent
data relative only to the revenues involving the Center, so that Physician Group
can ascertain Center's revenues. Partnership [Corporation] shall cooperate fully
with Physician Group in making the inspection. Physician Group shall also be
entitled once during each year of the Agreement and once after expiration or
termination to an examination of Center's books of account, records, cash
receipts and other pertinent data to determine Center's revenues by a certified
public accountant to be designated by Physician Group, and who will be paid
solely by Physician Group, unless such review shall disclose an understatement
by Center of two percent (2%) or more in which case all expenses of such
examination will be paid by Partnership [Corporation].
4. Reference. It is hereby agreed between the parties hereto that
wherever the term "Physicians" or "Physician Group" appears in Exhibits A, B, C
and D it shall be deemed to mean "Magnetic Imaging Medical Group, Inc., a
California professional corporation.
18
5. Indemnification. MICA and Long Beach, jointly and severally, agree
to indemnify and hold Physician Group together with its predecessors, harmless
against any and all liabilities which it might incur in connection with its
service as a General Partner of Long Beach. Physician Group shall promptly
notify MICA of the existence of any claim, demand or other matter involving
liabilities to third parties to which MICA's indemnification obligations would
apply and shall give MICA a reasonable opportunity to defend the same at its own
expense and with counsel of its own selection. If MICA, within a reasonable time
after notice, fails to defend, Physician Group shall have the right, but not the
obligation, to undertake the defense of and to compromise or settle (exercising
reasonable business judgment) the claim or other matter on behalf of MICA.
[INTENTIONALLY LEFT BLANK]
19
6. Incorporation. Except as specifically revised herein, Exhibits A, B,
C and D are incorporated herein in full and restated as revised.
Executed this 31st day of January, 1996 at Long Beach, California.
MAGNETIC IMAGING MEDICAL
GROUP, INC.
By /s/ Joel Levine, M.D.
----------------------------
Its CFO
----------------------------
MEDICAL IMAGING CENTERS OF
AMERICA, INC.
By /s/ Robert S. Muehlberg
----------------------------
Its President and CEO
----------------------------
LONG BEACH MEDICAL IMAGING
CENTERS, LTD.
By MICA CAL I, INC.
Its Managing General Partner
By /s/ Robert S. Muehlberg
----------------------------
Its President
----------------------------
MICA CAL III, INC.
By /s/ Robert S. Muehlberg
----------------------------
Its President
----------------------------
MICA CAL IV, INC.
By /s/ Robert S. Muehlberg
----------------------------
Its President
----------------------------