ADDENDUM
TO
USCMC-USCC
PARTNERSHIP AGREEMENT
THIS ADDENDUM is made by and between US CANCER CARE, INC., a Delaware
corporation ("USCC"), and US CANCER MANAGEMENT CORPORATION, a Delaware
corporation ("USCMC"), and is intended to be an addendum and a modification of
that certain PARTNERSHIP AGREEMENT dated April 5, 2000, between the parties.
A. Section 1.03 of the PARTNERSHIP AGREEMENT is hereby amended to
read as follows:
"1.03. Purpose of Partnership.
The purpose of this partnership is to manage the development,
building, and operations of cancer care centers in Rhonert Park,
California, and Fresno, California, only, pursuant to the agreement
between the Partnership and the Permanente Medical Group, Inc.
("TPMG"), dated September 7th, 2000, and any and all activities that
are reasonably and directly related to, and to, or in furtherance of
those activities. However, in the event that TPMG desires to use an
outside contractor (that is, an entity that is not owned by TPMG) to
provide PET imaging services to patients at the Partnership's cancer
centers, then the Partnership shall seek to manage this PET imaging
business by mutual agreement with TPMG. In no event shall USCC or USCMC
act to manage such business independent of the Partnership with respect
to all centers owned by the Partnership. The Partnership may also
manage, develop, build, and operate additional cancer care centers or
engage in any other lawful business, but only with the unanimous
written agreement of all of the Partners. It is understood that neither
USCMC nor W. Xxxxx Xxxxx are obligated to bring to the attention of the
Partnership any business opportunities, whether or not identical or
similar to the purposes of this Partnership outside of Rhonert Park,
Fresno, Modesto, Stockton, Turlock, Sonora and Hayward, California.
In the event USCMC suggests that the Partnership develop
additional cancer care centers, USCMC shall present to the Partnership
a complete proposal with reasonably detailed budget and projections and
full disclosure of all other information reasonably necessary to make
an informed decision. USCC shall have thirty (30) days from receipt of
the completed proposal to accept or reject the proposal as a
partnership project. Lack of a response within said time period shall
be a rejection. If the proposal is rejected by USCC, then USCMC is free
to proceed with the project on its own on the same basis as presented
to the Partnership without any further responsibility to the
Partnership or to USCC with respect to the said project."
B. Section 5.05 of the PARTNERSHIP AGREEMENT is herby amended to
read as follows:
Each Partner, including a Managing General Partner, either
individually or collectively, may participate in other business
ventures of every kind, but only to the extent that those other
business ventures 1) do not compete with or materially interfere with
the Partnership or USCC business in the geographic locations of
Modesto, Stockton, Turlock, Sonora, Hayward above or other centers
first developed by the Partnership including Fresno and Rhonert Park,
2) and do not obtain patients from any of these existing geographic
areas described as Modesto, Stockton, Turlock, Sonora, Hayward, Fresno
and Rhonert Park in which the Partnership or USCC treats patients, 3)
and do not conflict with the obligations of that Partner under this
Agreement. Neither the Partnership nor any other Partner shall have any
right to any income or profit derived from any such other business
venture of any Partner or Partners permitted under this Section.
Notwithstanding the forgoing, neither W. Xxxxx Xxxxx nor USCMC are
precluded from competing in areas other than Modesto, Stockton,
Turlock, Sonora and Hayward, California as set forth in Section 1.03
above or other centers first developed by the Partnership including
Fresno and Rhonert Park.
C. Section 5.07 of the PARTNERSHIP AGREEMENT is hereby amended to
read as follows:
The specific duties and responsibilities of USCC shall
be as follows:
D. Section 5.07(e) of the PARTNERSHIP AGREEMENT is hereby amended
to read as follows:
"(e) To provide for or obtain capital financing of all
costs of real estate acquisition, development, building and
construction and to provide for or obtain capital funding
for medical equipment necessary for the cancer centers
contemplated for Rhonert Park and Fresno within 20 days of a
written demand from either partner. It is understood the
working capital needs of the center will be the
responsibility of the partnership in accordance with the
terms of the Partnership Agreement. . Further, it is agreed
that if USCC loans any monies to the partnership to be
utilized as deposits towards or in connection with the
development of the real estate, that such deposits will be
returned to USCC in full upon the completion and receipt of
USCC's arranged financing of such real estate development.
E. Section 5.08(e) of the PARTNERSHIP AGREEMENT is hereby amended
to read as follows:
"(e) To acquire or otherwise procure the use of both the facility and
equipment for each cancer center under the agreement between the Partnership and
TPMG. USCMC is discussing with TPMG the financing for or other funding of such
acquisitions through TPMG."
A new Section 5.08(f) is added to the PARTNERSHIP AGREEMENT which will
read as follows:
"(f) To render monthly financial and operations reports to the
Partners within 30_days, or a reasonbable time, after the end of each
calendar month.
F. Section 5.09 of the PARTNERSHIP AGREEMENT is hereby amended to
read as follows:
5.09. Loan to Partnership by USCC.
For the first twelve (12) months of the Partnership's
operations, commencing on November 7, 2000, USCC shall loan to the Partnership
the sum of Sixteen Thousand Six Hundred Sixty-Six and 67/100 Dollars
($16,666.67) per month, payable on the first business day of each month. For the
second twelve (12) months of the Partnership's operations, USCC shall loan to
the Partnership the sum of Eight Thousand Three Hundred Thirty-Three and 33/100
Dollars ($8,333.33) per month, payable on the first business day of each month.
Accordingly, by the end of the second year of the Partnership's operations, USCC
shall have loaned to the Partnership the total sum of Three Hundred Thousand
Dollars ($300,000.00).
In order to assure the funding of this loan commitment, USCC
shall, within fifteen (15) days after the signing of this Addendum to the
PARTNERSHIP AGREEMENT, deposit the sum of $ 200,000 into an interest-bearing
account with Xxxxxxx Xxxxx, an Escrow Holder agreed upon between the partners,
with written Escrow Instructions providing that Escrow Holder shall make a
payment by the fifth (5th) day of each month commencing May 1, 2001, to US
Cancer Management Corporation ("USCMC") c/o W. XXXXX XXXXX in a sum equal to the
payment due ($16, 666.67 per month through October 31, 2001 and $8,333.33 per
month until paid in full, estimated to be October 31, 2001 ). It is understood
and agreed that the funds in said account will be devoted solely to the payment
of the loan to the Partnership as provided in this section and that the Escrow
Holder may withdraw from said account only for the purpose of meeting said
payments. USCC shall have no rights to withdraw from said fund until the total
amount is paid to USCMC and approved by it. It is further agreed that after all
payments have been made in satisfaction of said loan, all accrued interest and
any remaining balance in said account shall belong to and shall be returned to
USCC and said account may be closed by USCC.
USCC shall be in default under this Agreement if any payment
due under this loan is not paid within ten (10) days after its due date, or if
USCC fails to perform any of its other obligations hereunder within ten (10)
days of the date the obligation is to be performed. USCC shall have twenty (20)
days to cure such a default after Notice. If USCC is in default under paragraph
5.07(a) (pertaining to this loan) or under paragraph 5.07(e) (pertaining to
capital financing) only and such default has not been fully cured within twenty
(20) days after such Notice, then, at such time, with notice, USCC's percentage
interest in either Rhonert Park or Fresno shall automatically and irrevocably be
reduced to five percent (5%), and USCMC's percentage interest shall be increased
to ninety-five percent (95%) in that SPECIFIC CENTER PROJECT ONLY. A reduction
in percentage interest under this Section shall in no way relieve or release
USCC of its obligations hereunder, including any obligations then in default;
regardless of any such reduction in percentage interest of USCC, USCC shall
continue to be obligated in the same manner and in the same amounts as before
the reduction, and USCC shall have no right to the restoration of any such
percentage interest reduced under this Section. Upon full satisfaction of
the requirements under Sections 5.07(a) and (e) herein with respect to Rhonert
Park and Fresno only , this obligation for any further percentage reduction in
ownership shall be void.
If USCC is in default under paragraph 5.07(b), (c), or (d),
then the cost to the Partnership of obtaining the services set forth in any of
those paragraphs shall be a charge against the distributive profit share of USCC
and shall be treated as if said amount had been distributed to USCC.
Provided that USCC is not in default under this Agreement, the
Partnership agrees to repay this loan to USCC in sixty (60) equal monthly
installments in the amount of Five Thousand Dollars ($5,000.00) each, without
interest, commencing on the later of i) the end of the second full year of the
Partnership's operations, or ii) ninety (90) days after the date that the cancer
care centers as contemplated in this Partnership's agreement with TPMG are
completed and have become operational and profitable on a GAAP and cash flow
basis. The loan repayment shall be due and payable on the first of each month
once the commencement conditions are met. If such payment is not received by the
10th of each month, then interest shall accrue and be paid at a rate of 9 %. If
USCC is in default or becomes in default under either paragraph 5.07(a) or
5.07(e) of this Agreement, then each monthly payment under this paragraph shall
be reduced from $5,000.00 to One Hundred Dollars ($100.00), and the payments
shall continue on a monthly basis for as long as necessary until the principal
of the loan has been repaid in full.
IN WITNESS WHEREOF this ADDENDUM TO USCMC-USCC PARTNERSHIP
AGREEMENT is executed by the parties, which execution may be in counterparts,
and is agreed to be effective as of April 5, 2001.
GENERAL PARTNERS:
US Cancer Care, Inc., US Cancer Management Corporation,
a Delaware corporation a Delaware corporation
000 Xxxxxxx Xxxxxx Xxxx 700 Ygnacio Valley Road
Xxxxx 000 Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000 Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ W. Xxxxx Xxxxx
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XXXXXXX XXXXXXXXX W. XXXXX XXXXX
President and Chief Operating Officer President and Secretary
By: /s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
Chief Executive Officer and Secretary
