MANAGEMENT AGREEMENT
Between
INTEGRAMED AMERICA, INC.
And
BAY AREA FERTILITY AND GYNECOLOGY MEDICAL GROUP, INC.
THIS MANAGEMENT AGREEMENT, dated January 7, 1997, by and between
IntegraMed America, Inc., a Delaware corporation, with its principal place of
business at Xxx Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("INMD") and Bay
Area Fertility and Gynecology Medical Group, Inc., a California professional
medical corporation, with its principal place of business at 0000 Xxxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 ("P.C.").
RECITALS:
P.C. specializes in the provision of gynecological and infertility
services, including the treatment of human infertility encompassing the
provision of in vitro fertilization and other assisted reproductive services
("Infertility Services"). All P.C. interests in P.C. are owned by Xxxxxx
Xxxxxxxx, M.D., Inc., Xxxxxx X. Xxxxx, M.D., Inc. and Xxxxx X. Xxxxxxxxx, M.D.,
Inc. (referred to herein as "Physicians" or "Shareholders").
INMD is in the business of owning certain assets and providing
management and administrative services to medical practices specializing in the
provision of Infertility Services, and furnishing such medical practices with
the necessary facilities, equipment, personnel, supplies and support staff.
P.C. desires to obtain the services of INMD in performing such
management and administrative functions to permit P.C. to devote its efforts on
a concentrated and continuous basis to the rendering of Infertility Services to
its patients.
In addition, P.C. desires access to capital to fund its growth and
development and INMD desires to provide such capital or access to capital as
provided herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, P.C. hereby agrees
to purchase from INMD the management and administrative services herein
described and INMD agrees to provide such services on the terms and conditions
provided herein.
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ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, the following
definitions shall apply:
1.1.1 "Assets" shall mean those fixed assets utilized in
connection with the operation of P.C.'s medical practice.
1.1.2 "Adjustments" shall mean adjustments for refunds,
discounts, contractual adjustments, professional courtesies and other
activities that do not generate a collectible fee as reasonably
determined by INMD and P.C..
1.1.3 "Base Management Fee" shall mean an annual fee paid by P.C.
to INMD in an amount equal to a percentage of P.C.'s annual Physician
and Other Professional Revenues as more specifically described in
Section 2.3.
1.1.4 "Cost of Services" shall mean all ordinary and necessary
expenses of P.C. and all direct ordinary and necessary operating
expenses of INMD, without xxxx-up, incurred in connection with the
management of P.C.'s medical practice, as more specifically described
in Section 2.1.
1.1.5 "Facilities" shall mean the medical office and clinical
space of P.C., including any satellite locations, related businesses
and all medical group business operations of P.C., which are utilized
by P.C. in its medical practice.
1.1.6 "Fiscal Year" shall mean the 12-month period beginning
January 1 and ending December 31 of each year.
1.1.7 "Infertility Services" shall mean the provision of
gynecological services, treatment of human infertility encompassing
the provision of in vitro fertilization and other assisted
reproductive services, including but not limited to those which during
the term of this Agreement are provided by P.C. or any Physician
Employee and Other Professional Employee.
1.1.8 "Other Professional Employees" shall mean the provision of
gynecological services, including the nurse anesthetists, physician
assistants, nurse practitioners, psychologists, and other such
professional employees who generate professional charges, but shall
not include Technical Employees.
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1.1.9 "Physician Employees" shall mean those individuals who are
employees or shareholders of P.C. or are otherwise under contract with
P.C. to provide professional services to P.C. patients and are duly
licensed as physicians in the State of California.
1.1.10 "Physician and Other Professional Revenues" shall mean all
fees, whether received or accrued, and actually recorded each month
(net of Adjustments) by or on behalf of P.C. as a result of
professional medical services personally furnished to patients by
Physician Employees and Other Professional Employees and other fees or
income earned in their capacity as professionals, whether rendered in
an inpatient or outpatient setting, including but not limited to,
medical director fees or technical fees from medical ancillary
services, consulting fees; provided, however, "Physician and Other
Professional Revenues" shall not include income derived from testimony
for litigation-related proceedings, lectures, passive investments,
fundraising, or writing where Physician does not render professional
medical services.
1.1.11 "Predistribution Earnings" ("PDE") shall mean (i)
Physician and Other Professional Revenues, less (ii) Cost of Services
and the Base Management Fee.
1.1.12 "Revenues" shall mean the sum of all Physician and Other
Professional Revenues.
1.1.13 "Shareholders" shall mean Physicians and/or other
physicians who are owners/shareholders of P.C.
1.1.14 "Technical Employees" shall mean technicians such as
embryologists and other laboratory personnel, ultrasonographers and
phlebotomists who provide services to the P.C. All Technical Employees
shall be INMD Employees or independent contractors.
ARTICLE 2
COST OF SERVICES AND BASE MANAGEMENT FEE
2.1 "Cost of Services" (as defined in Section 1.1.4) includes without
limitation, the following costs and expenses, whether incurred by INMD or P.C.:
2.1.1 Salaries and fringe benefits of all employees of INMD
working directly in the management, operation or administration
(including, without limitation, Other Professional Employees and
Technical Employees) providing services at P.C., along with payroll
taxes or all other taxes and charges now or hereafter applicable to
such personnel, and services of independent contractors;
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2.1.2 Expenses incurred in the recruitment of additional
physicians for P.C., including, but not limited to employment agency
fees, relocation and interviewing expenses and any actual
out-of-pocket expenses of INMD personnel in connection with such
recruitment effort;
2.1.3 Direct marketing expenses of P.C., such as direct costs of
printing marketing materials prepared by INMD;
2.1.4 Any sales and use taxes assessed against P.C. related to
the operation of P.C.'s medical practice;
2.1.5 Lease payments, depreciation expense (determined according
to GAAP), taxes and interest directly relating to the Facilities and
equipment, and other expenses of the Facilities described in Section
3.2 below;
2.1.6 Legal fees paid by INMD or P.C. to outside counsel in
connection with matters specific to the operation of P.C. such as
regulatory approvals required as a result of the parties entering into
this Agreement; provided however, legal fees incurred by the parties
hereto as a result of a dispute between the parties shall not be
considered a Cost of Services;
2.1.7 Fringe benefits provided to Physician Employees;
2.1.8 All insurance necessary to operate P.C. including fire,
theft, general liability and malpractice insurance for Physician
Employees of the P.C.;
2.1.9 Professional licensure fees and board certification fees of
Physician Employees and Other Professional Employees rendering
Infertility Services on behalf of P.C.;
2.1.10 Membership in professional associations and continuing
professional education for Physician Employees and Other Professional
Employees;
2.1.11 Quality Assurance Program described in Section 3.8 herein;
2.1.12 Cost of filing fictitious name permits pursuant to this
Agreement;
2.1.13 Cost of supplies, medical and administrative, and all
direct general and administrative expenses relative to the P.C.
2.1.14 Such other costs and expenses directly incurred by INMD or
P.C. necessary for the management or operation of P.C.; and
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2.2 Notwithstanding anything to the contrary contained herein, Cost of
Services shall not include costs of the following:
2.2.1 PDE of the P.C. paid to Shareholders;
2.2.2 Costs or expenses not included in the annual budget
prepared by INMD pursuant to Section 3.4 herein, unless approved by
the parties prior to costs or expenses being incurred unless
subsequently ratified by P.C.;
2.2.3 Any INMD overhead charges;
2.2.4 Any federal or state income taxes of INMD other than as
provided above; and
2.2.5 The Base Management Fee and the Fixed Management Fee.
2.3 The "Base Management Fee" and the "Fixed Management Fee" described
in Article 6 of this Agreement shall constitute INMD's sole compensation for all
indirect costs including all legal, accounting, financial, marketing, management
and administrative assistance provided by INMD corporate and regional staff
which are not provided for in Section 2.1.
ARTICLE 3
DUTIES AND RESPONSIBILITIES OF INMD
3.1 MANAGEMENT SERVICES AND ADMINISTRATION.
3.1.1 P.C. hereby appoints INMD as P.C.'s sole and exclusive
manager and administrator of all of its day-to-day business functions
and grants INMD all the necessary authority to carry out its duties
and responsibilities pursuant to the terms of this Agreement. P.C. and
only P.C. will perform the medical functions of its practice. INMD
will have no authority, directly or indirectly, to perform, and will
not perform, any medical function. INMD may, however, advise P.C. as
to the relationship between its performance of medical functions and
the overall administrative and business functioning of its practice.
To the extent that they assist P.C. in performing medical functions,
all Technical Employees provided by INMD shall be subject to the
professional supervision of P.C. The parties agree that the
"Decision-Making Authority for Integrated Entities Criteria" developed
by the California Medical Association which provides a framework for
compliance with the California corporate practice proscriptions shall
be utilized by the parties as a guide with respect to the management
and administration services to be provided under this Agreement.
3.1.2 INMD shall, on behalf of P.C., xxxx patients and collect
professional fees for Infertility Services rendered by P.C. at the
Facilities, outside the Facilities for P.C.'s hospitalized patients,
and for all other Infertility Services rendered by any Physician
Employee or Other Professional Employee. P.C. hereby appoints INMD for
the term hereof to be its true and lawful attorney-in-fact, for the
following purposes: (i) to xxxx patients in P.C.'s name and on its
behalf; (ii) to collect accounts receivable resulting from such
billing in P.C.'s name
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and on its behalf; (iii) to receive payments from insurance companies,
prepayments received from health care plans, and all other third-party
payors; (iv) to take possession of and endorse in the name of P.C.
(and/or in the name of any Physician Employee or Other Professional
Employee rendering Infertility Services to patients of P.C.) any
notes, checks, money orders, and other instruments received in payment
of accounts receivable; and (v) to initiate the institution of legal
proceedings in the name of P.C. to collect any accounts and monies
owed to P.C., to enforce the rights of P.C. as creditor under any
contract or in connection with the rendering of any service, and to
contest adjustments and denials by governmental agencies (or its
fiscal intermediaries) as third-party payors.
3.1.3 INMD shall supervise and maintain (on behalf of P.C.) all
files and records relating to the operations of the Facilities,
including but not limited to accounting and billing records, patient
medical records, and collection records. Patient medical records shall
at all times be and remain the property of P.C. and shall be located
at the Facilities and be readily accessible for patient care. INMD's
management of all files and records shall comply with all applicable
state and federal laws and regulations, including without limitation,
those pertaining to confidentiality of patient records. The medical
records of each patient shall be expressly deemed confidential and
shall not be made available to any third party except in compliance
with all applicable laws, rules and regulations. INMD shall have
access to such records in order to provide the services hereunder, to
perform billing functions, and to prepare for the defense of any
lawsuit in which those records may be relevant. The obligation to
maintain the confidentiality of such records shall survive termination
of this Agreement. P.C. shall have unrestricted access to all of its
records at all times.
3.1.4 INMD shall supply to P.C. all reasonably necessary
clerical, accounting, bookkeeping and computer services, printing,
postage and duplication services, medical transcribing services, and
any other necessary or appropriate administrative services reasonably
necessary for the efficient operation of P.C.'s medical practice at
the Facilities.
3.1.5 Subject to P.C.'s prior approval, INMD shall design and
implement an appropriate marketing and public relations program on
behalf of P.C., with appropriate emphasis on public awareness of the
availability of Infertility Services from P.C. The public relations
program shall be conducted in compliance with applicable laws and
regulations governing advertising by the medical profession. P.C.
shall approve all advertising and marketing materials prior to use.
3.1.6 INMD shall assist P.C. in recruiting additional physicians,
including such administrative functions as advertising for and
identifying potential candidates, checking credentials, and arranging
interviews; provided, however, P.C. shall interview and make the
ultimate decision as to the suitability of any physician to become
associated with P.C. All physicians recruited by INMD and accepted by
P.C. shall be employees of or independent contractors to P.C.
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3.1.7 INMD shall assist in negotiating, but shall not enter into,
and shall administer all managed care contracts on behalf of P.C. and
shall consult with P.C. on all administrative matters relating
thereto.
3.1.8 INMD shall arrange for legal and accounting services as may
be reasonably required in the ordinary course of the P.C.'s operation,
including the cost of enforcing any physician contract containing
restrictive covenants. Nothing contained herein is intended to
authorize INMD to settle any claim made by or against P.C..
3.1.9 INMD shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Article 10.
3.1.10 INMD shall take such other reasonable actions to collect
fees and pay expenses of the Facilities in a timely manner as are
deemed reasonably necessary to facilitate the operation of P.C.'s
medical practice at the Facilities.
3.2 FACILITIES.
(a) INMD shall provide the office space and facilities necessary
for the operation of P.C.'s medical practice, as set forth in Exhibit 3.2 hereto
(the "Facilities"), including but not limited to, the use of the Facilities, and
shall be responsible for all repairs, maintenance and improvements thereto,
utility (telephone, electric, gas, water) services, customary janitorial
services, refuse disposal and all other services reasonably necessary in
conducting the Facilities' physical operations. INMD shall provide for the
cleanliness of the Facilities, and timely maintenance and cleanliness of the
equipment, furniture and furnishings located therein. INMD shall consult with
P.C. regarding the condition, use and needs for the Facilities, equipment,
services and improvements thereto. P.C. shall have the right to review all
proposed leases for office space and INMD shall consult with P.C. with respect
to the terms of such leases and use its best efforts to ensure that the leases
provide for reasonable assignment.
(b) Inclusive in the Facilities to be provided shall be a
state-of-the-art clinical and IVF laboratory (the "Lab") which shall meet
minimum national standards and be consistent with other laboratories provided by
INMD to other medical practices it manages. The Lab build-out, which shall
consist of all required construction necessary for P.C. to seek licensure (the
"Lab Build- Out"), shall be accomplished within seven (7) months of execution of
the lease for the new Facilities. INMD shall bear the risk of all construction
aspects being completed within the seven (7)- month period in order for the Lab
to be in operational and capable of generating Revenues, but shall have no
liability or responsibility for the failure of the appropriate license issuing
agencies to timely issue licenses; all other risks, including the failure of the
Lab to be timely licensed, shall be borne by P.C. INMD and P.C. agree to use
their best efforts to accomplish the Lab build-out and licensure thereof and
will cooperate with each other as to all reasonable requests of the other.
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(c) INMD agrees that in the event the Lab Build-Out isn't completed
as provided for in Section 3.2 (b), P.C. shall, effective with the commencement
of the 8th month of this Agreement, suspend payment of any further Management
Fee provided for in Section 6.1.3, unless and until such time as the Lab
Build-Out is completed.
(d) INMD agrees that during the first 5 years of this Agreement, it
will ensure that Shareholders, as lessors of the Facility located at 0000 Xxxxxx
Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, shall realize rental income
of $6,000.00 per month in the event P.C. relocates its medical practice from the
Facility. In such event, Shareholders shall cooperate with INMD in obtaining a
subtenant for the Facility. Such cooperation shall include, but not be limited
to, active participation in seeking a subtenant, execution of such documents of
assignment as may be required to effect an assignment and using best efforts to
accomplish a timely assignment.
3.3 EXECUTIVE DIRECTOR AND OTHER PERSONNEL.
3.3.1 EXECUTIVE DIRECTOR. Subject to the approval of P.C., which
shall not be unreasonably withheld, INMD shall hire and appoint an
Executive Director to manage and administer all the day-to-day
business functions of the Facilities and determine the salary and
fringe benefits paid to the Executive Director. At the direction,
supervision and control of INMD, the Executive Director, subject to
the terms of this Agreement, shall implement the policies agreed upon
by INMD and P.C. and shall generally perform the administrative duties
assigned to the Executive Director by INMD. P.C. acknowledges that the
removal of an Executive Director is likely to involve financial and
other commitments on the part of INMD that were undertaken after that
individual's approval by P.C. Therefore, the decision to remove an
Executive Director shall rest with INMD. However, upon request by
P.C., INMD shall review any disputes between P.C. and an Executive
Director, or disapproval of Executive by P.C. and endeavor to resolve
the problem with consideration to be given to the removal of the
Executive Director, among other outcomes.
3.3.2 PERSONNEL. INMD shall provide non-professional support
personnel and administrative personnel, clerical, secretarial,
bookkeeping and collection personnel reasonably necessary for the
efficient operation of P.C. at the Facilities. Such personnel shall be
under the direction, supervision and control of INMD, with Technical
Employees and Other Professional Employees subject to the professional
supervision of P.C.. If P.C. is dissatisfied with the services of any
person delivering non-professional services, P.C. shall consult with
INMD. INMD shall in good faith determine whether the employment of
that employee warrants termination. INMD's obligations to utilize
non-professional personnel shall be governed by the overriding
principle and goal of facilitating P.C.'s provision of high quality
medical care and laboratory services. INMD shall make every effort to
honor the specific requests of P.C. with regard to the assignment of
INMD's employees, including the Executive Director.
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3.4 FINANCIAL PLANNING AND GOALS. INMD shall prepare, for the approval
of P.C., annual capital and operating budgets reflecting the anticipated
revenues and expenses, sources and uses of capital for growth of P.C.'s practice
and for the provision of Infertility Services at the Facilities. INMD shall
present the budgets to P.C. for its approval at least thirty (30) days prior to
the commencement of the Fiscal Year. INMD shall specify the targeted profit
margin for P.C.'s practice at the Facilities which shall be reflected in the
overall budget. If the parties cannot agree on the budget for any Fiscal Year,
the budget for the preceding Fiscal Year shall serve as the budget until such
time as the dispute can be resolved.
3.5 AUDITS AND STATEMENTS. INMD shall prepare annual financial
statements for operations of P.C. at the Facilities within sixty (60) days of
the close of the Fiscal Year. INMD shall prepare monthly financial statements
containing a balance sheet and statement of operations, which shall be delivered
to P.C. within thirty (30) days after the close of each calendar month.
3.6 TAX PLANNING AND TAX RETURNS. INMD will not be responsible for any
tax planning or tax return preparation for P.C., but will provide support
documentation in connection with the same. Such support documentation shall not
be destroyed without P.C.'s consent.
3.7 INVENTORY AND SUPPLIES. INMD shall order and purchase inventory and
supplies, and such other materials which are requested by P.C. to enable P.C. to
deliver Infertility Services in a cost-effective manner.
3.8 QUALITY IMPROVEMENT. INMD shall assist P.C. in fulfilling its
obligations to maintain a Quality Improvement Program and in meeting the goals
and standards of such program.
ARTICLE 4
DUTIES AND RESPONSIBILITIES OF P.C.
4.1 PROFESSIONAL SERVICES. P.C. shall provide Infertility Services to
patients in compliance at all times with ethical standards, laws and regulations
applying to the practice of medicine in the State of California. P.C. shall
ensure that each Physician Employee, Other Professional Employee and any other
professional provider associated with P.C. is duly licensed to provide the
services being rendered within the scope of such provider's practice. In
addition, P.C. shall require each new shareholder and Physician-Employee to
maintain a DEA number and appropriate medical staff privileges as determined by
P.C. during the term of this Agreement and to obtain board certification in
Reproductive Endocrinology within five (5) years of a shareholder's or
Physician-Employee's completion of an accredited training program. It is
acknowledged that Physician-Shareholders are not board certified in Reproductive
Endocrinology and shall have no obligation to meet this requirement. In the
event that any disciplinary actions or medical malpractice actions are initiated
against any Physician-Shareholder, Physician-Employee or other professional
provider, P.C. shall immediately inform the Executive Director and provide a
written indication of the underlying facts and circumstances of such action.
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4.2 MEDICAL PRACTICE. P.C. shall use and occupy the Facilities
exclusively for the purpose of providing Infertility Services and shall comply
with all applicable laws and regulations and all applicable standards of medical
care, including, but not limited to, those established by the American Society
of Reproductive Medicine and the American College of Obstetricians and
Gynecologists. The medical practice conducted at the Facilities shall be
conducted solely by physicians employed by or serving as independent contractors
to P.C., and other Professional Employees as defined herein. No other physician
or medical practitioner shall be permitted to use or occupy the Facilities
without the prior written consent of INMD, except in the case of a medical
emergency, in which event, notification shall be provided to INMD as soon after
such use or occupancy as possible.
4.3 EMPLOYMENT OF PHYSICIAN AND OTHER PROFESSIONAL EMPLOYEES. In the
event P.C. shall determine that additional physicians are necessary, P.C. shall
undertake and use its best efforts to locate physicians who, in P.C.'s judgment,
possess the credentials and expertise necessary to enable such physician
candidates to become affiliated with P.C. for the purpose of providing
Infertility Services. P.C. shall cause each Physician-Employee to enter into an
employment agreement with P.C. in the form attached hereto as Exhibit 4.3(A) if
the Physician- Employee is a shareholder or in the form of Exhibit 4.3(B) if the
Physician-Employee is not a shareholder, or such other form as is mutually
acceptable to P.C. and INMD. Physicians shall also sign, and shall require each
shareholder to sign an Acknowledgement of Personal Financial Responsibility in
the form attached hereto as Exhibit 4.3(C). P.C. covenants that it will not
employ any physician or make any physician a shareholder of P.C. unless the
physician shall sign the appropriate employment agreement before employment or
ownership interest in P.C. P.C. shall have complete control of and
responsibility for the hiring, compensation, supervision, evaluation and
termination of its Physician- Employees and Other Professional Employees,
although at the request of P.C., INMD shall consult with P.C. respecting such
matters.
4.4 CONTINUING MEDICAL EDUCATION . P.C. shall require its
Physician-Employees and Other Professional Employees to participate in such
continuing medical education as P.C. deems to be reasonably necessary for such
physicians or Other Professional Employees to remain current in the provision of
Infertility Services.
4.5 PROFESSIONAL AND OTHER INSURANCE ELIGIBILITY.
(a) P.C. shall cooperate in the obtaining and retaining of
professional liability insurance by assuring that its Physician-Employees and
Other Professional Employees are insurable and participating in an ongoing risk
management program, under INMD's direction.
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(b) P.C. and INMD shall cooperate in the obtaining and retaining
Key Man Insurance and/or Business Interruption coverage with respect to
Physicians and P.C.
ARTICLE 5
LICENSE OF INMD NAME
5.1 GRANT OF LICENSE. INMD hereby grants to P.C. a revocable and
non-assignable license for the term of this Agreement to use the name
Reproductive Science Center(R), Bay Area Fertility and any other service names,
trademark names and logos of INMD (the "Trade Names") in conjunction with the
provision of Infertility Services by P.C. at the Facilities. Notwithstanding the
License granted to P.C. hereunder, INMD retains the absolute right to use and
license the Trade Names to others, except that INMD agrees that:
5.1.1 During the term of this Agreement, it will not enter into
any management agreement with any other physician or medical practice
providing Infertility Services within 25 miles of P.C.'s office(s) (
the "Radius") county without P.C.'s consent.
5.1.2 During the first eighteen months following the signing of
this Agreement, it shall not enter into a management agreement with
any other physician or medical practice providing Infertility Services
which physician or medical practice is located outside the Radius in
Alameda county or, San Francisco, Marin, San Mateo or Santa Xxxxx
Counties, California (the "Territory"), without first offering the
opportunity for P.C. to establish an office in such counties to be
managed by INMD on essentially the same terms as in the proposed
management arrangement. P.C. shall within 20 days of receipt of
written notice, including all terms and copies of contracts, from INMD
of INMD's intent to manage a practice in the Territory indicate to
INMD in writing, its willingness to establish, at its costs and
expense, an office in the Territory to be managed by P.C. Failure to
provide the written notice within the 20-day period shall be a waiver
of P.C.'s right of first refusal provided for in this Section 5.1.2.
5.2 FICTITIOUS NAME PERMIT. If necessary, P.C. shall file or cause to
be filed an original, amended or renewal application with an appropriate
regulatory agency to obtain a fictitious name permit which allows P.C. to
practice at the Facilities under the Trade Names and shall take any other
actions reasonably necessary to procure protection of or protect INMD's rights
to the Trade Names. INMD shall cooperate and assist P.C. in obtaining any such
original, amended or renewal fictitious name permit.
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5.3 RIGHTS OF INMD. P.C. acknowledges INMD's exclusive right,
ownership, title and interest in and to the Trade Names and will not at any time
do or cause to be done any act or thing contesting or in any way impairing or
tending to impair any part of such right, title and interest. In connection with
the use of the Trade Names, P.C. shall not in any manner represent that it has
any ownership interest in the Trade Names, and P.C.'s use shall not create in
P.C.'s favor any right, title, or interest in or to the Trade Names other than
the right of use granted hereunder, and all such uses by P.C. shall inure to the
benefit of INMD. P.C. shall notify INMD immediately upon becoming aware of any
claim, suit or other action brought against it for use of the Trade Names or the
unauthorized use of the Trade Names by a third party. P.C. shall not take any
other action to protect the Trade Names without the prior written consent of
INMD. INMD, if it so desires, may commence or prosecute any claim or suit in its
own name or in the name of P.C. or join P.C. as a party thereto. P.C. shall not
have any rights against INMD for damages or other remedy by reason of any
determination of INMD not to act or by reason of any settlement to which INMD
may agree with respect to any alleged infringements, imitations or unauthorized
use by others of the Trade Names, nor shall any such determination of INMD or
such settlement by INMD affect the validity or enforceability of this Agreement.
5.4 RIGHTS UPON TERMINATION.
5.4.1 Upon termination of this Agreement, P.C. shall: (i) within
45 days of the termination, cease using the Trade Names in all
respects and refrain from making any reference on its letterhead or
other publicly-disseminated information or material to its former
relationship with INMD; and (ii) take any and all actions required to
make the Trade Names available for use by any other person or entity
designated by INMD.
5.4.2 P.C.'s failure (except as otherwise provided herein) to
cease using the Trade Names at the termination or expiration of this
Agreement will result in immediate and irreparable damage to INMD and
to the rights of any licensee of INMD. There is no adequate remedy at
law for such failure. In the event of such failure, INMD shall be
entitled to equitable relief by way of injunctive relief and such
other relief as any court with jurisdiction may deem just and proper.
Additionally, pending such a hearing and the decision on the
application for such permanent injunction, INMD shall be entitled to a
temporary restraining order, without prejudice to any other remedy
available to INMD. All such remedies hereunder shall be at the expense
of P.C. and shall not be a Cost of Services.
ARTICLE 6
FINANCIAL ARRANGEMENTS
6.1 SERVICE FEES. The compensation set forth in this Article 6 is being
paid to INMD in consideration of the substantial commitment made and services to
be rendered by INMD hereunder and is fair and reasonable. INMD shall be paid
monthly the following amounts (collectively "Service Fees") prior to any P.C.
distributions (defined herein as PDE):
6.1.1 an amount reflecting all Cost of Services (whether incurred
by INMD or P.C.) paid or recorded by INMD pursuant to the terms of
this Agreement;
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6.1.2. during each year of this Agreement, a Base Management Fee
in an amount equal to six percent (6%) of the Revenues;
6.1.3 during years 1 through 5 of this Agreement, an additional
management fee ("Additional Management Fee") in an amount equal to
twelve (12%) of the Revenues, but not to exceed 20% of PDE; provided,
however, for years 1 through 5 of this Agreement, if the PDE is $2.0
million or less, the Additional Management Fee shall not exceed
$320,000 per year. For all PDE over $2.0 million, INMD shall be
entitled to the applicable Additional Management Fee, but not
exceeding 20% of PDE over $2.0 million..
6.1.4 during years 6 through 20 of this Agreement, an Additional
Management Fee in an amount equal to fifteen (15%) of the Revenues,
but not to exceed 25% of PDE.
6.2 ACCOUNTS RECEIVABLE. On or before the 15th business day of each
month, INMD shall reconcile the accounts receivable of P.C. arising during the
previous calendar month. Accounts receivable shall be defined as all receivables
recorded each month (net of Adjustments) on the books of the P.C.
("Receivables"). INMD shall transfer or pay such amount of funds to P.C. equal
to the Receivable less Service Fees. INMD shall, in addition, transfer such
portion of the Services Fees necessary to pay such portion of the Cost of
Services which are costs and expenses of P.C., as described in Section 2.1
above. P.C. shall cooperate with INMD and execute all necessary documents in
connection with the assignment of such Receivable to INMD or at INMD's option,
to its lenders. All collections in respect of such Receivables shall be
deposited in a bank account at a bank designated by INMD. To the extent P.C.
comes into possession of any payments in respect of such Receivables, P.C. shall
direct such payments to INMD for deposit in bank accounts designated by INMD.
6.3 ADVANCES. In addition to the purchase of the Receivables set forth
in 6.2 above, INMD agrees to advance funds to P.C., to provide new services,
utilize new technologies, meet Cost of Services, provide working capital or fund
mergers with other physicians or physician groups into P.C. ("Advance"). Such
Advances shall be made only with the consent of P.C..
6.3.1 Any amounts advanced hereunder shall be a debt owed to INMD
by P.C. and shall have payment priority over PDE distribution to
Partners. Any Advance shall be repaid, and accordingly deducted, from
Partners' PDE either as a lump sum payment, within 60 days after the
advance or installments as agreed to by INMD.
6.3.2 Interest expense will be charged for funds advanced and
will be computed at the Prime Rate used by INMD's primary bank in
effect at the time of the Advance. Advances shall be evidenced by a
security agreement in the form of Exhibit 6.3.2, giving INMD a
collateral interest in all Receivables of P.C. and PDE to Partners.
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ARTICLE 7
EXCLUSIVE MANAGEMENT RIGHT AND TERM
7.1 INMD Agrees to pay P.C. on the Closing Date, as hereinafter
defined, the sum of $1.5 million ("Right to Manage Fee") for the exclusive right
to manage P.C. during the term of this Agreement (the "Exclusive Management
Right"), as follows:
7.1.1 $0.5 million in the form of INMD Common Stock based on the
closing price on the 3rd business day prior to the Closing Date (the
"Shares"); and
7.1.2 $0.955 million in the form of a check payable in U.S.
funds.
7.1.3 The Shares will be unregistered and issued in relation to
the provisions of Rule 144 under the Securities Act of 1933. If at any
time within two years after the date of this Agreement, INMD shall
determine to file a registration statement under the Securities Act of
1933 (the "Act") on Form S-l or its equivalent covering an
underwritten public offering of INMD's common stock by INMD (other
than an exchange offer by INMD to stockholders of another corporation
or an offer to INMD's employees) or by any of its stockholders, INMD
shall so notify P.C. at least 30 days prior to the filing. Upon
written request made by P.C. within 15 days after the notice is given,
INMD shall include in the registration statement such number of the
shares of P.C.s common stock acquired by P.C. pursuant to this
Agreement as P.C. shall designate in its request, except that INMD
shall not be obligated to include any of P.C.'s shares in the
registration statement if:
(i) in the case of a proposed registration statement covering
shares to be offered by INMD, INMD or any proposed underwriter of the
shares covered by the registration statement advises P.C. that it
reasonably believes that inclusion of P.C.'s shares would interfere
with the offering of the other shares being registered;
(ii) P.C. shall have failed to agree in writing within 10 days
after INMD's request to do so: (A) not to sell any of P.C.'s shares
for such a period of time as INMD may designate (not to exceed 120
days after the effective date of the registration statement), or (B)
to distribute the shares for which registration was requested (or such
lesser number of shares, in proportion to the total number of shares
to be offered pursuant to the registration statement as the
underwriter may specify) pursuant to a firm (as distinguished from a
best efforts) underwriting through an underwriter designated by INMD;
(iii) INMD withdraws the registration statement with respect to
all the shares for which registration was contemplated before the
registration statement becomes effective; or
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(iv) P.C. shall have failed to furnish to INMD such information
and other material as INMD or its counsel may have reasonably
requested with respect to the public offering of its shares or shall
have failed to take any other action or execute any documents which
INMD or its counsel considers necessary or desirable in connection
with the registration statement.
7.2 The term of this Agreement shall begin on the Closing Date, as
hereinafter defined, and shall expire twenty (20) years after such date unless
earlier terminated pursuant to Article 8, below. This Agreement may be renewed
by either party, if within the period of 180 days prior to the expiration date
one party gives notice to the other of its intention to continue this Agreement
under the same terms and conditions as set forth herein or under such different
terms and conditions as particularly set forth in the written notice and further
providing that the other party has 30 days from the date of notice to accept,
reject or modify the offer. If within 30 days, the other party does not respond
or by written notice accepts, this Agreement shall continue for an additional 10
years under the terms and conditions as provided in the notice.
ARTICLE 8
TERMINATION OF THE AGREEMENT
8.1 TERMINATION This Agreement may be terminated by either party in the
event of the following:
8.1.1 INSOLVENCY. If a receiver, liquidator or trustee of any
party shall be appointed by court order, or a petition to reorganize
shall be filed against any party under any bankruptcy, reorganization
or insolvency law, and shall not be dismissed within 90 days, or any
party shall file a voluntary petition in bankruptcy or make assignment
for the benefit of creditors, then either of the other parties may
terminate this Agreement upon 10 days prior written notice to the
other parties.
8.1.2 MATERIAL BREACH. If either party shall materially breach
its obligations hereunder, then either of the other parties may
terminate this Agreement by providing 30 days prior written notice to
the breaching party detailing the nature of the breach, provided that
the breaching party shall not have cured the breach within such 30 day
period, or, with respect to breaches that are not curable within such
30 day period, shall not have commenced to cure such breach within
such 30 day period and thereafter shall not have cured the breach with
the exercise of due diligence.
8.1.3 ILLEGALITY.
(a) Any party may terminate this Agreement immediately upon
receipt of notification by any local, state or federal agency or court
of competent jurisdiction that the conduct contemplated by this
Agreement is forbidden by law; except that this Agreement shall not
terminate during such period of time as to any party which contests
such notification in good faith and the conduct contemplated by this
Agreement is allowed to continue during such contest. If any governing
regulatory agency asserts that the services provided by INMD under
this Agreement are unlawful or that the practice of medicine by P.C.
as contemplated by this Agreement requires a certificate of need, and
any such assertion is not contested (or if contested, the agency's
assertion is found to be correct by a court of competent jurisdiction
and no appeal is taken, or if any appeals are taken and the same are
unsuccessful), this Agreement shall thereupon terminate with the same
force as if such termination date was the date originally specified in
this Agreement as the date of final expiration of the terms of this
Agreement.
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(b) Any illegality may also be cured and the termination of this
Agreement avoided by implementing Section 11.9 entitled
"Separability."
8.2 TERMINATION BY INMD FOR PROFESSIONAL DISCIPLINARY ACTIONS. INMD may
terminate this Agreement upon 10 days prior written notice to P.C. if a
physician's authorization to practice medicine is suspended, revoked or not
renewed, or if any other formal disciplinary action is taken against a physician
which could reasonably lead to a suspension, revocation or non-renewal of a
physician's license; provided, however, such action may not be taken until
physician has been given 30 days to resolve such physician's authorization to
practice medicine. P.C. shall notify INMD within five (5) days of a notice that
a physician's authorization to practice medicine is suspended, revoked or not
renewed or that formal disciplinary action has been taken against a physician
which could reasonably lead to s suspension, revocation or non-renewal of a
physician's license.
ARTICLE 9
PURCHASE OF ASSETS - OBLIGATIONS AND OPTIONS
9.1 TERMINATION BY INMD If INMD terminates this Agreement due to the
insolvency of P.C. (Section 8.1.1) for reasons other than circumstances directly
attributable to INMD, for a material breach by P.C. (Section 8.1.2), or for
disciplinary action against a Physician Employee (Section 8.2), P.C. agrees,
within 90 days of the date of termination, at INMD's option;
9.1.1 To purchase from INMD the P.C. Assets and leasehold
improvements at their net book value determined in accordance with
GAAP, consistently applied, as of the date of termination.
9.1.2 To pay INMD 100% of the preceding 12 months' Revenues over
$3.0 million.
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9.1.3 In addition, during the first five years of this Agreement
P.C. shall repay INMD such portion of the $2.0 million received by
P.C. from INMD for the Exclusive Management Right and the purchase of
the name "Bay Area Fertility" (the "Name") under the Asset Purchase
Agreement of even date between INMD and Bay Area Fertility &
Gynecology Medical Group, a California partnership, predecessor to
P.C., determined by multiplying the number of years the Management
Agreement has been in effect rounded off to the nearest quarter of the
year by $400,000.00 ("Earned Amount"). The Earned Amount is then
deducted from the amount P.C. actually received from INMD for the
Exclusive Management Right and the Name; the excess, if any, equals
the amount to be repaid by P.C. to INMD. Further, P.C. shall pay all
Base Management Fees due as of the termination together with any other
Service Fees, including unpaid Advances.
9.1.4 If a purchase is completed under this Section 9.1, P.C.
shall assume all leases for offices and equipment used directly for
the management and operation of P.C.'s business and may hire such
employees as it determines are necessary to operate the medical
practice and business.
9.2 TERMINATION BY P.C. In the event this Agreement is terminated by
P.C. as a result of the insolvency of INMD (8.1.1) or material breach by INMD
(8.1.2), INMD agrees, within 90 days of the date of termination, at P.C. option,
to sell to P.C. the P.C. Assets and leasehold improvements as set forth in
Sections 9.1.1.
9.2.1 If a termination occurs under this Section 9.2, P.C. shall
assume all leases for offices and equipment used directly for the
management and operation of P.C.'s business and may hire such
employees as it determines are necessary to operate the medical
practice and business.
9.2.2 In the event P.C. exercises the option set forth in this
Section 9.2, closing shall occur within 90 days of the date the option
is exercised. In the event P.C. does not exercise the option within 90
days of termination, P.C. shall have relinquished its right and
interest to the P.C. Assets and INMD shall be free to use or dispose
of the P.C. Assets as it determines with neither party having any
further obligations to the other.
9.3 TRANSFER OF OWNERSHIP
Upon receipt of payment of the purchase price and other payments due,
INMD shall transfer ownership and possession of the P.C. Assets, and assign all
right, title and interest in and to and obligations under the Lease(s) to P.C.
and return to P.C. all security deposits. P.C. shall have the option of
receiving full credit on the purchase price for all liens, encumbrances or
security interest, or of having INMD transfer ownership of the P.C. Assets free
and clear of all liens, encumbrances or security interests thereon.
- 17 -
ARTICLE 10
INSURANCE
10.1 INMD shall carry professional liability insurance, covering itself
and its employees providing services under this Agreement in the minimum amount
of $1 million per incident, $3 million in the aggregate, at its own expense.
INMD shall also carry a policy of public liability and property damage insurance
with respect to the Facilities under which the insurer agrees to indemnify INMD
against all cost, expense and/or liability arising out of or based upon any and
all claims, accidents, injuries and damages customarily included within the
coverage of such policies of insurance available for INMD. The minimum limits of
liability of such insurance shall be $1 million combined single limit covering
bodily injury and property damage. If possible under the terms of the insurance
coverage, P.C. shall be named as additional insureds on the INMD's public
liability and property damage insurance policies; provided however, conditions
for being made an additional insured should be (i) P.C. utilizing patient
informed consent forms supplied by INMD and (ii) P.C. complying with
requirements of INMD's insurance company. A certificate of insurance evidencing
such policies shall be presented to P.C. within thirty (30) days after the
execution of this Agreement. Failure to provide such certificate(s) with such
period shall constitute a material breach by INMD hereunder.
10.2 INMD shall use its best efforts to cause P.C., Physicians and
physician-employees to be made named insureds under INMD's professional
liability coverage. If P.C. is not made an insured, P.C. shall carry
professional liability insurance covering P.C. and P.C.'s employees in the
amount of $2 million per incident, $5 million in the aggregate. INMD shall be
made an additional insured under such coverage and Certificates of Insurance
evidencing such policies and additional insured status shall be presented to
INMD within ninety (90) days after the execution of this Agreement.
10.3 P.C. and INMD shall provide written notice to the other at least
ten (10) days in advance of the effective date of any reduction, cancellation or
termination of the insurance required to be carried by each hereunder.
ARTICLE 11
MISCELLANEOUS
11.1 INDEPENDENT CONTRACTOR. INMD and P.C. are independent contracting
parties. In this regard, the parties agree that:
11.1.1 The relationship between INMD and P.C. is that of an
independent supplier of non-medical services and a medical practice,
respectively, and, unless otherwise provided herein, nothing in this
Agreement shall be construed to create a principal-agent,
employer-employee, or master-servant relationship between INMD and
P.C.;
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11.1.2 Notwithstanding the authority granted to INMD herein, INMD
and P.C. agree that P.C. shall retain the full authority to direct all
of the medical, professional, and ethical aspects of its medical
practices;
11.1.3 Any powers of P.C. not specifically vested in INMD by the
terms of this Agreement shall remain with P.C.;
11.1.4 P.C. shall, at all times, be the sole professional P.C. of
the Partners and, except with INMD's specific consent, the sole
employer of the Physician Employees, the Other Professional Employees
required by law to be employees of P.C. and all other professional
personnel engaged by P.C. in connection with the operation of its
medical practice at the Facilities, and shall be solely responsible
for the payment of all applicable federal, state or local withholding
or similar taxes and provision of workers' compensation and disability
insurance for such professional personnel that are employees of P.C.;
11.1.5 No party shall have the right to participate in any
benefits, employment programs or plans sponsored by the other parties
on behalf of the other parties' employees, including, but not limited
to, workers' compensation, unemployment insurance, tax withholding,
health insurance, life insurance, pension plans or any profit sharing
arrangement;
11.1.6 In no event shall any party be liable for the debts or
obligations of any other party except as otherwise specifically
provided in this Agreement; and
11.1.7 Matters involving the internal agreements and finances of
P.C., including but not limited to the distribution of professional
fee income among Physician Employees and Other Professional Employees
who are providing professional services to patients of P.C., and other
employees of P.C., disposition of P.C. property and P.C. interests
(except all Partners shall be required to accept and be bound by the
Agreement), accounting, tax preparation, tax planning, and pension and
investment planning (and expenses relating solely to these internal
business matters), hiring and firing of physicians, decisions and
contents of reports to regulatory authorities governing P.C. and
licensing, shall remain the sole responsibility of P.C. and the
individual Physician Stockholder(s).
11.2 FORCE MAJEURE. No party shall be liable to the other parties for
failure to perform any of the services required under this Agreement in the
event of a strike, lockout, calamity, act of God, unavailability of supplies, or
other event over which such party has no control, for so long as such event
continues and for a reasonable period of time thereafter, and in no event shall
such party be liable for consequential, indirect, incidental or like damages
caused thereby. This provision shall not apply to INMD's obligation to provide
for a backup generator for the Lab provided as part of the Facilities.
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11.3 USE OF NAME OF P.C.. The name or any statement that may implicitly
refer directly or indirectly to P.C. or impute any affiliation directly or
indirectly between INMD and P.C. shall not be used in any manner or on behalf of
INMD in any advertising or promotional materials or otherwise without P.C.'s
prior written consent. However, INMD may use P.C.'s name or address in
advertising to the public solely for the purpose of providing directions to the
office of P.C..
11.4 EQUITABLE RELIEF. Without limiting other possible remedies
available to a non-breaching party for the breach of the covenants contained
herein, injunctive or other equitable relief shall be available to enforce those
covenants, such relief to be without the necessity of posting bond, cash or
otherwise. If any restriction contained in said covenants is held by any court
to be unenforceable or unreasonable, a lesser restriction shall be enforced in
its place and remaining restrictions therein shall be enforced independently of
each other.
11.5 PRIOR AGREEMENTS; AMENDMENTS. This Agreement supersedes all prior
agreements and understandings between the parties as to the subject matter
covered hereunder, and this Agreement may not be amended, altered, changed or
terminated orally. No amendment, alteration, change or attempted waiver of any
of the provisions hereof shall be binding without the written consent of all
parties, and such amendment, alteration, change, termination or waiver shall in
no way affect the other terms and conditions of this Agreement, which in all
other respects shall remain in full force.
11.6 ASSIGNMENT; BINDING EFFECT. This Agreement and the rights and
obligations hereunder may not be assigned without the prior written consent of
all of the parties, and any attempted assignment without such consent shall be
void and of no force and effect, except that INMD may assign this Agreement to
any subsidiary or affiliate of INMD without the consent of the other parties.
The provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties' respective heirs, legal representatives, successors and
permitted assigns. In particular, the obligation to pay Service Fees shall be
owed by any of the Physicians or any other Shareholder who establishes, during
the term of this Agreement, whether alone or with one or more Physicians, or
joins a medical practice in the P.C. Service Area which offers, whether through
that Shareholder or with his assistance, Infertility Services.
11.7 WAIVER OF BREACH. The failure to insist upon strict compliance
with any of the terms, covenants or conditions herein shall not be deemed a
waiver of such terms, covenants or conditions, nor shall any waiver or
relinquishment of any right at any one or more times be deemed a waiver or
relinquishment of such right at any other time or times.
11.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California to the fullest extent
permitted by law, without regard to the application of conflict of law rules.
Any and all claims, disputes, or controversies arising under, out of, or in
connection with this Agreement or any breach thereof, shall be determined by
binding arbitration in the State of California, County of Contra Costa
(hereinafter "Arbitration"). The party seeking determination shall subject any
such dispute, claim or controversy
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to either (i) JAMS/Endispute or (ii) the American Arbitration Association, and
the rules of commercial arbitration of the selected entity shall govern. The
Arbitration shall be conducted and decided by three (3) arbitrators, unless the
parties mutually agree, in writing at the time of the Arbitration, to fewer
arbitrators. In reaching a decision, the arbitrators shall no authority to
change or modify any provision of this Agreement, including without limitation,
any liquidated damages provision. Each party shall bear its own expenses and
one-half the expenses and costs of the arbitrators. Any application to compel
arbitration, confirm or vacate an arbitral award or otherwise enforce this
Paragraph shall be brought either in the Courts of the State of California or
the United States District Court for the Northern District of California, to
whose jurisdiction for such purposes P.C., Partners and INMD hereby irrevocably
consent and submit.
11.9 SEPARABILITY. If any portion of the provisions hereof shall to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such portion or provisions in circumstances other than those in
which it is held invalid or unenforceable, shall not be affected thereby, and
each portion or provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law, but only to the extent the same continues to
reflect fairly the intent and understanding of the parties expressed by this
Agreement taken as a whole.
11.10 HEADINGS. Section and paragraph headings are not part of this
Agreement and are included solely for convenience and are not intended to be
full or accurate descriptions of the contents thereof.
11.11 NOTICES. Any notice hereunder shall have been deemed to have been
given only if in writing and either delivered in hand or sent by registered or
certified mail, return receipt requested, postage prepaid, or by United States
Express Mail or other commercial expedited delivery service, with all postage
and delivery charges prepaid, to the addresses set forth below:
11.11.1 If for INMD at:
IntegraMed America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx, President
With a copy to:
IntegraMed America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 000000-0000
Attention: Xxxxxx Xxxxx, General Counsel
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11.11.2 If for P.C. at:
Bay Area Fertility Group
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, M.D.
11.11.3 With a Copy to:
Xxxxx Gamma, Esq.
Xxxxxxx Xxxx & Associates
000 Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Any party hereto, by like notice to the other parties, may designate
such other address or addresses to which notice must be sent.
11.12 ENTIRE AGREEMENT. This Agreement and all attachments hereto and
the Asset Purchase Agreement represent the entire understanding of the parties
hereto with respect to the subject matter hereof and thereof, and cancel and
supersede all prior agreements and understandings among the parties hereto,
whether oral or written, with respect to such subject matter.
11.13 NO MEDICAL PRACTICE BY INMD. INMD will not engage in any activity
that constitutes the practice of medicine, and nothing contained in this
Agreement is intended to authorize INMD to engage in the practice of medicine or
any other licensed profession.
11.14 CONFIDENTIAL INFORMATION.
(a) During the initial term and any renewal term(s) of this Agreement,
the parties may have access to or become acquainted with each others' trade
secrets and other confidential or proprietary knowledge or information
concerning the conduct and details of each party's business ("Confidential
Information"). At all times during and after the termination of this Agreement,
no party shall directly or indirectly, communicate, disclose, divulge, publish
or otherwise express to any individual or governmental or non-governmental
entity or authority (individually and collectively referred to as "Person") or
use for its own benefit or the benefit of any Person any Confidential
Information, no matter how or when acquired, of another party. Each party shall
cause each of its employees to be advised of the Confidential nature of such
Confidential Information and to agree to abide by the confidentiality terms of
this Agreement. No party shall photocopy or otherwise duplicate any Confidential
Information of another party without the prior express written consent of the
such other party except as is required to perform services under this Agreement.
All such Confidential Information shall remain the exclusive property of the
proprietor and shall be returned to the proprietor immediately upon any
termination of this Agreement.
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(b) Confidential Information shall not include information which (i) is
or becomes known through no fault of a party hereto; (ii) is learned by a party
from a third-party legally entitled to disclose such information; or (iii) was
already known to a party at the time of disclosure by the disclosing party.
(c) In order to minimize any misunderstanding regarding what
information is considered to be Confidential Information, INMD or P.C. will
designate at each others request the specific information which INMD or P.C.
considers to be Confidential Information.
11.15 INDEMNIFICATION.
11.15.1 INMD agrees to indemnify and hold harmless P.C., its
directors, officers, employees and servants from any suits, claims,
actions, losses, liabilities or expenses (including reasonable
attorney's fees) arising out of or in connection with any act or
failure to act by INMD related to the performance of its duties and
responsibilities under this Agreement. The obligations contained in
this Section 11.15.1 shall survive termination of this Agreement.
11.15.2 P.C. agrees to indemnify and hold harmless INMD, its
shareholders, directors, officers, employees and servants from any
suits, claims, actions, losses, liabilities or expenses (including
reasonable attorney's fees) arising out of or in connection with any
act or failure to act by P.C. related to the performance of its duties
and responsibilities under this Agreement. The obligations contained
in this Section 11.15.2 shall survive termination of this Agreement.
11.16 HOSPITAL LABORATORY P.C. represents and warrants that (i) it has
advised San Xxxxx Regional Medical Center ("SRRMC") that P.C. and/or Bay Area
Fertility & Medical Group, a California partnership, intend to develop and
operate the Lab at the Facilities and that thereafter they intend to cease using
SRRMC's laboratory, (ii) to their knowledge, SRRMC has not claimed, formally or
informally, that P.C.'s development and use of the Lab in preference to SRRMC's
would be in breach of any contractual obligation P.C. has to SRRMC and (iii) to
P.C.'s knowledge, no agent or employee of SRRMC has stated nor has SRRMC taken
any action indicating that SRRMC intends to solicit or recruit other physicians
who specialize in Infertility Services to continue operation of SRRMC's lab.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above written.
INTEGRAMED AMERICA, INC.
By: /s/Xxxxxx Xxxxxxx
-------------------
XXXXXX XXXXXXX, VICE PRESIDENT
BAY AREA FERTILITY AND GYNECOLOGY MEDICAL GROUP, INC.
BY:/s/ Xxxxxx Xxxxxxxx, M.D.
-------------------------
XXXXXX XXXXXXXX, M.D., PRESIDENT
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EXHIBIT 3.2
DESCRIPTION OF OFFICE AND FACILITIES
TO BE PROVIDED BY INMD TO P.C.
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000
EXHIBIT NO. 10.61 (CONTINUED)
IntegraMed America, Inc. will provide upon request copies of the following
exhibits to the attached Management Agreement between IntegraMed America, Inc.
and Bay Area Fertility and Gynecology Medical Group, Inc.
Exhibit 4.3(a)(1) - Current Shareholder-Physician Employment Agreement
1. Xxxxxx Xxxxxxxx, M.D.
2. Xxxxxx Xxxxx, M.D.
3. Xxxxx Xxxxxxxxx, M.D.
Exhibit 4.3(a)(2) - Future Shareholder-Physician Employment Agreement
Exhibit 4.3(b) - Employee-Physician Employment Agreement(non-shareholder)
Exhibit 4.3(c) - Personal Responsibility Agreement
1. Xxxxxx Xxxxxxxx, M.D.
2. Xxxxxx Xxxxx, M.D.
3. Xxxxx Xxxxxxxxx, M.D.
Exhibit 6.3.2 - Security Agreement
