EXHIBIT 10.3
FIRST AMENDMENT TO
OPERATING AGREEMENT OF
HEART HOSPITAL OF MILWAUKEE, LLC (the "Company")
THIS AMENDMENT to the Operating Agreement of the Company is effective
as of the date the Operating Agreement is initially adopted by its Member(s)
(the "Amendment").
1. Section 5.10(b) of the Company's Operating Agreement is
hereby deleted and replaced in its entirety with the
following:
(a) Except as specifically provided in this
Section 5.10, as long as any Member owns a Membership
Interest in the Company, and for a period of three (3) years
after a Member ceases for any reason to own a Membership
Interest in the Company, neither a Member, Investor Entity,
Owner, Practice nor any of their respective Affiliates, shall
hold, directly or indirectly, an investment, ownership or
other beneficial interest in (x) any hospital, or (y) any
other Entity (including a sole proprietorship), in either
case, which provides any of the following services or
facilities: cardiac catheterization, angioplasty, peripheral
angioplasty, atherectomy, stenting and PTCA, any cardiac
surgical procedures or services, or any cardiovascular
services, in any case within Milwaukee, Ozaukee, Waukesha,
Racine, and Washington Counties, Wisconsin (collectively, the
"Territory"). Notwithstanding the terms of this Section 5.10
(b):
(i) No Member or Owner who is a
physician shall be prohibited from maintaining his
or her staff privileges and admitting and treating
patients at any other hospital;
(ii) Nothing herein shall prohibit a
Member, Owner, Practice or their Affiliates from
owning up to three percent (3%) of the outstanding
capital stock of a company which provides healthcare
services or supplies and whose stock is publicly
traded and listed on a nationally recognized
securities exchange or from investing in a publicly
traded mutual fund or making other investments with
the prior written approval of the Board of
Directors;
(iii) Nothing herein shall prevent an
Investor Member who is a physician, an Owner who is
a physician or a Practice that is an Owner or an
Investor Member, from providing, and billing and
receiving fees from any payor for the services
required for therapeutic and diagnostic
cardiovascular services including, but not limited
to, nuclear imaging, echocardiography, stress
testing and other similar ancillary services
directly for the patients of such Investor Member,
Owner, or Practice at the regular office established
by such Investor Member, Owner or Practice for the
practice of medicine or any other office or location
except a hospital so long as they do not provide
diagnostic or interventional cardiac catheterization
services in such office or location;
(iv) Nothing herein shall prevent an
Investor Member, and Owner or a Practice from
operating a cardiac catheterization laboratory in
the MOB located on the Hospital's campus in the
event that the Board of Directors first determines
in writing that the Hospital's cardiac
catheterization laboratories have reached maximum
capacity and the Board of Directors elects for the
Company not to add additional cardiac
catheterization laboratories in the Hospital or to
operate a cardiac catheterization laboratory in the
MOB; provided, however, that, subject to the
restrictions set forth above in this subsection
(iv), among the Investor Members, the Owners and the
Practices, there may only be a total of two (2)
cardiac catheterization laboratories in the MOB and
further provided that (x) only diagnostic (but not
interventional) cardiac catheterization services may
be provided in such laboratories and (y) MHMI or an
Affiliate is engaged to manage the laboratories;
(v) In addition, MHMI or its
Affiliates may separately operate a mobile
catheterization laboratory within the Territory, but
only if either MHMI or an Affiliate thereof is
providing such service pursuant to a lease of six
(6) months or less to a provider who is already
providing cath lab services and if the Board of
Directors has elected not to have such service
provided by the Company;
(vi) Nothing herein shall prevent any
Member or Owner who is a physician from personally
performing professional medical services directly
for his or her patients at any hospital or facility
and from billing and receiving professional fees as
a result of his or her professional medical services
from any payor.
2. A new Section 5.10 (h) shall be added as follows:
(h) In the event that any Member, directly or
indirectly, with or without the participation of any third
party, intends (i) to obtain an investment, ownership or
other beneficial interest in any hospital which provides any
of the following services or facilities: cardiac
catheterization, angioplasty, peripheral angioplasty,
atherectomy, stenting and PTCA, any cardiac surgical
procedures or services, or any cardiovascular services, or
(ii) to develop, own, operate, or manage a hospital that
provides any such services in any case within the counties of
Dodge, Fond du Lac, Jefferson, Kenosha, Rock, Sheboygan, and
Walworth Counties, Wisconsin, then prior to agreeing to any
such transaction, such Member (the "Noticing Party") shall
give all of the other Members (the "Notice Recipients")
written notice of such proposed transaction including all of
its material terms and conditions (the "Third Party Notice").
The Notice Recipients shall then have sixty (60) days
following receipt of the Third Party Notice to elect to agree
by written notice to the Noticing Party to negotiate with the
Noticing Party the terms and conditions of the Notice
Recipient(s)' participation in the transaction set forth in
the Third Party Notice (the "Option"). Any Notice Recipient
who elects within such sixty (60) day period to participate
in the transaction described in the Third Party Notice shall
have the right to enter into the transaction on terms that
are substantially comparable to the terms available to
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the Noticing Party and the other participants in such
transactions, and the Noticing Party shall have a duty to
negotiate in good faith to provide the Notice Recipients the
opportunity to so participate in the transaction. In the
event that any Notice Recipient does not elect to exercise
any such Option within such sixty (60) day period and execute
final written agreements governing the transaction set forth
in the Third Party Notice within a total of one hundred and
twenty (120) days from the date of the Third Party Notice,
the Noticing Party may enter into the transaction set forth
in the Third Party Notice together with any Notice Recipients
who elect to participate but without participation of any
Notice Recipient who does not so elect. If the Noticing Party
does not enter into the transaction set forth in the Third
Party Notice within one hundred and eighty (180) days from
the Third Party Notice, the terms of this subsection (h)
shall again apply to such transaction
3. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same Amendment. The
Members may execute this Amendment on separate signature
pages, and there is no requirement that the Members sign the
same signature pages.
4. Except as provided herein, the Operating Agreement shall
remain in full force and effect.
MEMBER(S):
MILWAUKEE HOSPITAL MANAGEMENT, INC.
By: /s/ Dennis I. Kelly
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Title: VP
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[***] These portions of this exhibit have been omitted and filed separately
with the Commission pursuant to a request for confidential treatment.
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