MANAGEMENT AGREEMENT
Between
INTEGRAMED AMERICA, INC.
AND
MPD MEDICAL ASSOCIATES (MA), P.C.
MANAGEMENT AGREEMENT dated as of October 1, 1997, by and between
IntegraMed America, a Delaware corporation, with its principal place of business
at Xxx Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("INMD") and MPD Medical
Associates (MA), P.C., a professional corporation with its principal place of
business at Deaconess-Waltham Hospital, Hope Ave., Waltham, Massachusetts 02254
("PC"), and Xxxxxxxx XxXxxxx, MD ("Physician /Officer")
Recitals
PC is a medical practice specializing in the practice of gynecology and
the treatment of infertility, the utilization of in vitro fertilization and
assisted reproductive technology services (including but not limited to the
treatment of human infertility, gamete intra-fallopian tube transfer and zygote
intra-fallopian transfers) and related andrology services [all of the foregoing
are referred to collectively herein as "Infertility Services"].
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 in
order to assist such medical practices in the business aspects of the practice
of their discipline.
PC entered into a management agreement with IVF America now known as
IntegraMed America, Inc. ("INMD") dated January 1, 1996 (the "Management
Agreement") pursuant to which IVFA, (now known as INMD), agreed to provide,
among other things, certain management and administrative services to PC, an
office site and a license to use certain Trade Names as defined in the
Management Agreement.
PC wishes to continue to engage INMD to provide such management,
administrative and business services as are necessary and appropriate for the
day-to-day administration of the nonmedical aspects of PC's medical practice,
and INMD desires to provide such services upon all terms and conditions herein
set forth. PC and INMD have determined the fair market value for the full
complement of services rendered by INMD and have determined and agreed to a
management fee that will allow PC and INMD to establish a relationship
permitting each party to this agreement to devote its skills and expertise to
the appropriate responsibilities and functions.
PC and INMD desire to amend and restate the terms and conditions of the
Management Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration the PC 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.
ARTICLE 1
DEFINITIONS
1.0 DEFINITIONS. For the purposes of this Agreement, the following
definitions shall apply:
1.1 "Adjustments" shall mean adjustments for uncollectible accounts,
discounts, contractual adjustments, professional courtesies and other activities
that do not generate a collectible fee as reasonably determined by INMD's
independent certified public accountant.
1.2 "Base Management Fee" shall mean an annual fee paid by PC to INMD
in an amount equal to 6% (six percent) of PC's annual Physician and Other
Professional Revenues. The Base Management Fee shall include the cost of
management services provided by INMD corporate staff to the PC, as more
specifically described in Section 2.3.
1.3 "Costs of Services" shall mean all ordinary and necessary expenses
of PC and all direct ordinary and necessary operating expenses of INMD without
xxxx-up, incurred in connection with the management of PC's medical practice, as
more specifically described in Section 2.1.
1.4 "Facilities" shall mean the medical office and clinical space of
PC, including any satellite locations, related businesses and all medical group
business operations of INMD, which are utilized by PC in its medical practice.
1.5 "Fiscal Year" and "Calendar Year" shall mean the 12-month period
beginning January 1 and ending December 31 of each year, and the term "bi-weekly
draws" shall mean 26 annual pay periods.
1.6 "Infertility Services" shall mean medical care in gynecology and
the treatment of infertility, the utilization of in vitro fertilization and
assisted reproductive technology services (including but not limited to the
treatment of human infertility, gamete intra-fallopian tube transfer and zygote
intra-fallopian transfers) and related andrology services provided by PC or any
Physician Employee and Other Professional Employee.
1.7 "Other Professional Employees" shall mean professional employees of
PC who can not be employed by INMD due to any Massachusetts law or regulation.
1.8 "Physician Employees" shall mean those individuals who are
employees or shareholders of PC or are otherwise under contract with PC to
provide professional services to PC patients and are duly licensed as physicians
in the Commonwealth of Massachusetts.
1.9 "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 PC 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 and speaking fees.
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1.10 "Physician Stockholders" shall mean the physician or physicians
who are stockholders of P.C.
1.11 "Predistribution Earnings" ("PDE") shall mean Physician and Other
Professional Revenue, less Cost of Services and Base Management Fee. "Base Year
PDE" shall be the PDE earned during the Fiscal Year 1997. "Excess PDE" shall
mean such portion of PDE allocated to the PC, which exceeds the Aggregate
Physician Draws as delineated in Section 7.3 (C).
1.12 "Revenues" shall mean the sum of all Physician and Other
Professional Revenues.
1.13 "Technical Employees" shall mean technicians who provide services
to the P. C. All Technical Employees shall be INMD Employees.
ARTICLE 2
COSTS OF SERVICES AND BASE MANAGEMENT FEE
2.1 "Costs of Services" (as defined in Section 1.3 above) includes
without limitation, the following costs and expenses, whether incurred by INMD
or PC:
2.1.1 Salaries and fringe benefits of all employees of INMD
working directly in the management, operation or administration
(including, without limitation, Technical Employees) providing services
at PC, along with payroll taxes or all other taxes and charges now or
hereafter applicable to such personnel;
2.1.2 Expenses incurred in the recruitment of additional
Physicians for PC, 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 PC, such as direct costs of
printing marketing materials prepared by INMD;
2.1.4 Any sales and use taxes assessed against PC related to
the operation of PC'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 PC to outside counsel in
connection with matters specific to the operation of the PC such as
regulatory approvals required as a result of the parties entering into
this Agreement;
2.1.7 Fringe benefits provided to Physician Employees;
2.1.8 All insurance necessary to operate PC, including fire,
theft, general liability and malpractice insurance for Physician
Employees and the PC;
2.1.9 Professional licensure fees and board certification fees
of Physician Employees and Other Professional Employees rendering
Infertility Services on behalf of PC;
2.1.10 Membership in professional associations and continuing
professional education for Physician Employees and Other Professional
Employees;
2.1.11 The direct costs in maintaining a Quality Assurance
Program described in Section 3.7 herein;
2.1.12 Cost of filing of fictitious name permits pursuant to
this Agreement; and
2.1.13 The cost of medical supplies, including but not limited
to drugs, pharmaceuticals, products, substances, items, laboratory
supplies, office supplies, inventory and utilities; 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 PC paid to Physician Employees or
Stockholders or draws against PDE paid to such persons;
2.2.2 Costs or expenses not included in the annual budget
prepared by INMD and approved by the Joint Practice Management Board
pursuant to Section 3.4 herein, unless approved by such entities;
2.2.3 the Base Management Fee;
2.2.4 Any proportion of INMD's costs attributable to its
operation of its corporate offices or payment of its officers or
employees who work out of its corporate offices;
2.2.5 Any federal or state income taxes of INMD other than as
provided above.
2.3 "Base Management Fee" shall include all indirect costs of INMD and
shall cover and include 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 PC hereby appoints INMD as its 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. PC and only
PC 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 PC 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 PC in performing medical functions, all
Technical Employees provided by INMD shall be subject to the
professional supervision of the PC.
3.1.2 INMD shall, on behalf of PC, xxxx patients and collect
professional fees for Infertility Services rendered by PC at the
Facility, outside the Facility for PC's hospitalized patients, and for
all other Infertility Services rendered by any Physician Employee or
Other Professional Employee. PC hereby appoints INMD for the term
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hereof to be its true and lawful attorney-in-fact, for the following
purposes: (i) to xxxx patients in PC's name and on its behalf; (ii) to
collect accounts receivable resulting from such billing in PC's name
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 PC
(and/or in the name of any Physician Employee or Other Professional
Employee rendering Infertility Services to patients of PC) 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 PC to collect any accounts and monies owed
to PC to enforce the rights of PC 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 PC) 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 PC 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. PC shall have unrestricted access to all of its records at
all times.
3.1.4 INMD shall supply to PC 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 PC's medical practice at the
Facilities.
3.1.5 Subject to PC's prior approval, INMD shall design and
implement an appropriate marketing and public relations program on
behalf of PC, with appropriate emphasis on public awareness of the
availability of Infertility Services from PC. The public relations
program shall be conducted in compliance with applicable laws and
regulations governing advertising by the medical profession. PC shall
approve all advertising and marketing materials prior to use.
3.1.6 INMD shall assist PC in recruiting additional
physicians, including such administrative functions as advertising for
and identifying potential candidates, checking credentials, and
arranging interviews; provided, however, PC shall interview and make
the ultimate decision as to the suitability of any physician to become
associated with PC All physicians recruited by INMD and accepted by PC
shall be employees of or independent contractors to PC
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3.1.7 INMD shall negotiate, but shall not enter into, and
shall administer all managed care contracts on behalf of PC and shall
consult with PC 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 PC'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 PC.
3.1.9 INMD shall negotiate for and cause premiums to be paid
with respect to the insurance provided for in Article 11.
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 PC's
medical practice at the Facilities.
3.2 FACILITIES. INMD shall provide the office space, facilities and
services necessary for the operation of PC's medical practice, as set forth in
Exhibit 3.2 hereto, including but not limited to, the use of the Facilities, 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 PC regarding the condition, use and needs for
the Facilities, equipment, services and improvements thereto.
3.3 INMD REPRESENTATIVE AND OTHER PERSONNEL.
3.3.1 INMD REPRESENTATIVE. Subject to the approval of PC (not
to be unreasonably withheld), INMD shall (1) hire and appoint a
representative ["INMD Representative"], to be resident at the offices
of the PC and subject to the direction of the INMD Corporate staff, to
manage and administer all of the day-to-day business functions of the
Facilities; and (2) determine the salary and fringe benefits paid to
the INMD Representative. Under the direction, supervision and control
of INMD, the INMD Representative, subject to the terms of this
Agreement, shall implement the policies agreed upon by INMD and PC and
shall generally perform the administrative duties assigned to the INMD
Representative by INMD.
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 PC at the Facilities. Such personnel shall be
under the direction, supervision and control of INMD, with Technical
Employees subject to the professional supervision of PC If PC is
dissatisfied with the services of any person delivering
non-professional services, PC shall consult with INMD. INMD shall in
good faith determine whether the performance of that employee warrants
termination. INMD's obligations to utilize non-professional personnel
shall be governed by the overriding principle and goal of facilitating
PC's provision of high quality medical care and laboratory services.
INMD shall make every effort consistent with sound business practices
to honor the specific requests of PC with regard to the assignment of
INMD's employees.
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3.4 FINANCIAL PLANNING AND GOALS. INMD shall prepare for the approval
of PC annual capital and operating budgets reflecting the anticipated revenues
and expenses, sources and uses of capital for growth of PC's practice and for
the provision of Infertility Services at the Facilities. INMD shall present the
budgets to PC for its approval at least thirty (30) days prior to the
commencement of each Fiscal Year. INMD shall specify the targeted profit margin
for PC's practice at the Facilities which shall be reflected in the overall
budget.
3.5 FINANCIAL STATEMENTS. INMD shall prepare annual financial
statements for operations of PC at the Facilities within ninety (90) 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 the PC within thirty (30) days after the close of each calendar month.
3.6 INVENTORY AND SUPPLIES. INMD shall order and purchase inventory and
supplies, and such other materials which are requested by PC to enable the
providers to deliver Infertility Services in a cost-effective manner.
3.7 QUALITY ASSURANCE. INMD shall assist PC in fulfilling its
obligations to maintain a Quality Assurance Program and in meeting the goals and
standards of such program.
3.8 RISK MANAGEMENT. INMD shall assist PC in the development of a Risk
Management Program and in meeting the standards of such program.
3.9 PERSONNEL POLICIES AND PROCEDURES INMD shall develop personnel
policies, procedures and guidelines, to govern office behavior, protocol and
procedure, designed to insure that the work site(s) of the PC observe all laws
and guidelines related to employment and human resources.
3.10 LICENSES AND PERMITS INMD shall, on behalf of and in the name of
the PC, coordinate and assist the PC in its application for and efforts to
obtain and maintain all federal state and local licenses, certifications and
regulatory permits required for or in connection with the operation of the PC
and equipment located at the Facilities, other than those relating to the
practice of medicine or the administration of drugs by Physician Employees. INMD
has previously and shall grant PC a license to use the name "Reproductive
Science Center" on any licenses.
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ARTICLE 4
DUTIES AND RESPONSIBILITIES OF PC
4.1 PROFESSIONAL SERVICES. PC shall provide Infertility Services to
patients in compliance at all times with applicable ethical standards, laws and
regulations applying to the practice of medicine in the Commonwealth of
Massachusetts. PC shall ensure that each Physician Employee, Other Professional
Employee and any other professional provider associated with PC is duly licensed
to provide the services being rendered within the scope of such provider's
practice. In addition, PC shall require each Physician Employee to maintain a
DEA number and appropriate medical staff privileges as determined by PC during
the term of this Agreement and to obtain board certification in Reproductive
Endocrinology within five (5) years of a Physician Employee's completion of an
accredited training program. In the event that any disciplinary actions or
medical malpractice actions are initiated against any such physician or other
professional provider, PC shall promptly inform the INMD Representative of the
underlying facts and circumstances of such action.
4.2 MEDICAL PRACTICE. PC 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. The medical practice conducted at the Facilities shall be conducted solely
by physicians employed by or serving as independent contractors to PC. PC shall
require that Physician Employees work the number of professional days referenced
in each Physician's Employment Agreements (upon which INMD has relied) and shall
assign equitable shares of weekend "on call" hours to each Physician Employee so
as to provide weekend coverage to patients of the PC. 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 DIRECTION OF PRACTICE
4.3.1 PC, as a continuing condition of INMD's obligations
under this Management Agreement, shall at all time during the Term be
and remain legally organized and operated to provide Infertility
Services in a manner consistent with state and federal laws.
4.3.2 PC shall operate and maintain at the Facilities a full
time practice of medicine specializing in the provision of Infertility
Services and shall maintain and use diligent efforts to enforce
Physician Employment Agreements substantially in the form attached
hereto as Exhibit 4.3 ["Employment Agreement"] or in such other form as
is mutually agreed to by the PC and INMD in writing. PC covenants that
it shall not employ any physician, or have any physician as a
shareholder, unless said physician shall sign such Employment Agreement
prior to assuming the status as employee and/or shareholder. PC
covenants that should a physician become a shareholder of the PC, that
a condition precedent to the issuance of the shares shall be the
ratification of this Management Agreement.
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4.3.3 PC shall not (except for cause) terminate the Employment
Agreement(s) of any Physician or Shareholder, without two months
written notice to INMD. PC shall not amend or modify the Employment
Agreements in any material manner, nor waive any material rights of the
PC thereunder without the prior written approval of INMD. PC covenants
to use diligent efforts to enforce the terms of each Physician
Employment Agreement, including but not limited to any covenants not to
compete and other terms confirming a Physician-Employee's commitment to
practice medicine solely through the PC for a specified number of
years. In addition, in the exercise of INMD's sole discretion, if the
PC fails to diligently pursue the enforcement of its rights against a
Physician-Employee, INMD shall have the right, but not the obligation,
to direct, initiate or join in a lawsuit to enforce the provisions of
any Employment Agreement and PC shall assign its rights and remedies
against such Physician-Employee upon the request of INMD.
4.3.4 Recognizing that INMD would not have entered into this
Management Agreement but for the PC's covenant to maintain and enforce
Employment Agreements with Physicians now employed or Physicians who
may hereafter become employees of the PC, and in reliance upon such
physicians' observance and performance of all of the obligations under
the Employment Agreements, any damages, liquidated damages,
compensation, payment or settlement ["Damages"] received by the PC from
a Physician whose employment is terminated, shall be paid to INMD.
4.3.5 PC shall retain that number of Physician Employees as
are reasonably necessary and appropriate for the provision of
Infertility Services. However, PC shall hire Physicians ["Incoming
Physician"] only (1) with the consent, not to be unreasonably withheld,
of INMD, and (2) after the PC and INMD have mutually determined the
compensation of such Incoming Physician. Each Incoming Physician shall
be licensed to practice medicine in Massachusetts, and shall be
competent in the practice of obstetrics and gynecology, including the
subspecialty of infertility and assisted reproductive medicine. PC
shall be responsible for paying the compensation and benefits, as
applicable, for all Physician Employees, and for withholding, as
required by law, any sums for income tax, unemployment insurance,
social security, or any other withholding required by applicable law.
INMD may, on behalf of the PC, establish and administer the
compensation with respect to such Physician Employees in accordance
with the written agreement between the PC and each Physician Employee.
INMD shall neither control nor direct any Physician in the performance
of Infertility Services for patients.
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4.3.6 PC shall insure that Physician Employees and
Professional Employees provide patient care and clinical backup as
required to insure the proper provision of services to patients of the
PC at the Facilities, and/or such other locations as shall be mutually
agreed to by PC and INMD. PC shall insure that its Physician Employees
and Professional Employees devote appropriate professional time, effort
and ability to PC's practice, including the provision of Infertility
Services and the development of such practice.
4.3.7 PC covenants to use diligent efforts to cooperate with
INMD in order to obtain necessary licenses. INMD shall be primarily
responsible for pursuing, in behalf of, and in the name of, the PC, any
and all necessary licenses to operate the laboratory and tissue bank
services existing on the date hereof at the Facilities.
4.3.8 PC acknowledges that it bears all medical obligations to
patients treated at the facilities and covenants that it is responsible
for all tissue, specimens, embryos or biological material ["Biological
Materials"] kept at the Facilities on behalf of the patients (or former
patients) of the PC. In the event of a termination or dissolution of
the PC, or the termination of this Management Agreement for any reason,
the PC and its members shall have the obligation to account to patients
and to arrange for the storage or disposal of such Biological Materials
in accordance with patient consent and the ethical guidelines of the
American Society of Reproductive Medicine ["Relocation Program"]. INMD,
in such event, shall, at the request of the PC, assist in the
administrative details of such a Relocation Program for so long as the
PC shall request and the Management Fee shall be paid during that time.
These obligations shall survive the termination of this Agreement.
4.3.9 PC covenants not to liquidate or dissolve as a
Professional Corporation except on six months prior written notice to
INMD. In the event that any liquidation or dissolution of the PC
occurs, for a reason other than the death or disability of all of the
shareholders, the PC, and its individual shareholders, shall indemnify
INMD for: (a) the actual costs of maintaining the facilities and any
reasonably necessary Professional Employees during a Relocation Program
(Section 4.3.8); (b) legal costs for relicensing; (c) recruitment of
other physicians to assume the Practice; and (d) any damages, costs,
liabilities, including reasonable attorneys fees, arising out of the
result of claims, suits, causes of action or proceedings, brought by a
patient of the PC having an interest in any Biological Materials kept
at the Facilities. These obligations shall survive the termination of
this Management Agreement.
4.3.10 PC shall undertake and use its best efforts to locate
physicians who, in PC's judgment, possess the credentials and expertise
necessary to enable such physician candidates to become affiliated with
PC for the purpose of providing Infertility Services.
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4.4 CONTINUING MEDICAL EDUCATION . PC shall require its Physician
Employees and Other Professional Employees to participate in such continuing
medical education as PC deems to be reasonably necessary for such Physicians or
Other Professional Employees to remain current in the provision of Infertility
Services.
4.5 PROFESSIONAL INSURANCE ELIGIBILITY. PC shall require its Physician
Employees and Professional Employees to participate in such risk management
program as PC deems to be reasonably necessary in order to cooperate with its
insurers and minimize risk.
4.6 PRACTICE DEVELOPMENT, COLLECTION EFFORTS AND NETWORK INVOLVEMENT.
PC agrees that during the term of this Agreement PC covenants for itself and
will use its diligent efforts to cause its Physician Employees and Professional
Employees to:
4.6.1 Execute such documents and take such steps reasonably
necessary to assist billing and collecting for patient services
rendered by PC and its Physician Employees and Professional Employees;
4.6.2 Promote PC's medical practice and participate in
marketing efforts developed by INMD; and
4.6.3 Participate in reasonable INMD network activities and
programs.
4.7 PERSONNEL POLICIES. PC covenants for itself and will use diligent
efforts to cause its Physician Employees and other Professional Employees to
comply with reasonable personnel policies and guidelines developed for the
practice of the PC by INMD, which shall include administrative protocols and
policies designed to insure that the work sites complies with all applicable
laws and regulations, federal and state.
ARTICLE 5
LICENSE OF INMD NAME
5.1 GRANT OF LICENSE. INMD hereby grants to PC a revocable and
non-assignable license for the term of this Agreement to use the name
REPRODUCTIVE SCIENCE CENTER and any other service names, trademark names and
logos of INMD (the "Trade Names") in conjunction with the provision of
Infertility Services by PC at the Facilities. PC agrees to practice medicine, at
all locations, under the name Reproductive Science Associates, or Reproductive
Science Center. Notwithstanding the License granted to PC hereunder, INMD
retains the absolute right to use and license the Trade Names to others.
5.2 FICTITIOUS NAME PERMIT. If necessary, PC 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 PC 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 PC in obtaining any such original, amended or
renewal fictitious name permit.
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5.3 RIGHTS OF INMD. PC 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, PC shall not in any manner represent that it has any
ownership interest in the Trade Names, and PC's use shall not create in PC'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 PC shall inure to the
benefit of INMD. PC 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. PC 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 PC or join PC as a party thereto. PC 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 IN TRADE NAME UPON TERMINATION.
5.4.1 Upon termination or expiration of this Agreement, PC
shall: (i) within 30 days of the termination or expiration, 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 PC'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. The remedies hereunder shall be at the expense of PC
and shall be a Cost of Services.
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ARTICLE 6
FINANCIAL ARRANGEMENTS
6.1 COMPENSATION. 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 the
following amounts:
6.1.1 an amount reflecting all Costs of Services (whether
incurred by INMD or PC) paid or recorded by INMD pursuant to the terms
of this Agreement;
6.1.2 during each year of this Agreement, a Base Management
Fee of an amount equal to six percent (6%) of the Revenues;
6.1.3 an additional service fee ["Service Fee"] which shall be
calculated in accordance with the PDE allocation formula set forth in
Article 7 hereof (items 6.1.1, 6.1.2 and 6.1.3 are hereafter referred
to as "Compensation").
6.2 ACCOUNTS RECEIVABLE.
6.2.1 On or before the 15th business day of each month, INMD
shall reconcile the accounts receivable of PC arising during the
previous month. Subject to the terms and conditions of this Agreement,
PC hereby sells and assigns to INMD as absolute owner, and INMD hereby
purchases from PC all accounts receivables hereafter owned by or
arising in favor of PC. All accounts receivables are sold on a full
recourse basis. Accounts receivable are defined as all rights to
payment for services rendered or goods sold, accounts, receivables,
contract rights, chattel paper, documents, instruments and other
evidence of patient indebtedness to PC, policies and certificates of
insurance relating to any of the foregoing, and all rights to payment,
reimbursement or settlement or insurance or other medical benefit
payments assigned to PC by patients or pursuant to any preferred
provider, HMO, capitated payment agreements or other agreements between
PC and a payer, recorded each month (net of adjustments) on the books
of PC (collectively "Receivables"). INMD shall transfer or pay such
amount of funds to PC equal to the Receivables less the Compensation
due to INMD pursuant to Section 6.1 and its subparts. In addition, INMD
shall transfer any amounts for Costs of Services paid or to be paid
directly by PC. PC shall cooperate with INMD in connection with the
sale of such Receivables, not take any action or do anything to impair
INMD's rights to the Receivables and execute all necessary documents in
connection with the purchase and assignment of such Receivables to INMD
or, at INMD's option, its lenders.
6.2.2 All collections with respect to the Receivables shall be
deposited in a bank account at a bank designated by INMD. To the extent
that PC or any of its physicians comes into possession of any payments
relative to the Receivables, PC shall direct and cause its physicians
to direct such payments to INMD.
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6.3 ADVANCES. Subject to the provisions of Article 7 hereof, INMD
shall, in its sole discretion, advance funds to PC, with the consent of PC, to
provide new services, utilize new technologies, provide working capital or fund
mergers with other physicians or physician groups into PC (collectively referred
to as an "Advance"). The acceptance of any Advances shall constitute consent by
the PC.
6.3.1 Subject to the provisions of Article 7, any Advance
shall be a debt owed to INMD by PC and shall have payment priority over
PDE distribution to PC. Allocations of PDE shall be made pursuant to
Article 7, and any Advance repayable to INMD shall within 60 days after
the advance, be repaid, and accordingly deducted, from the PC's share
of PDE either as a lump sum payment, or installments as agreed to by
INMD.
6.3.2 Except as provided by the provisions of Article 7,
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.
6.3.3 Commencing with the Effective Date of this Agreement,
the Advances made to the PC by INMD under the prior INMD-PC Management
Agreement dated January 11, 1996 ["Prior Agreement"] in the amount of
$106,372.00 (one hundred and six thousand, three hundred and seventy
two dollars) shall first be repaid to INMD from eighty percent (80%) of
the PC's share(s) of Excess PDE, as that term is used in Article 7,
during the term of this Agreement, until the Advance is completely
repaid. The remaining twenty percent (20%) of the PC's share(s) of
Excess PDE shall be utilized for payment to Xxxxxx Xxxx, M.D., unless
he shall not be employed by the PC, in which case it shall be used in
the precise same manner as the eighty percent.
ARTICLE 7
PDE ALLOCATION FORMULA
7.1 PDE, as defined in Article 1, section 1.11, shall be allocated
pursuant to the provisions (and subdivisions) of this Article 7.
7.2 PDE shall be allocated, between INMD and PC, as follows:
1. PDE between $0.00 (zero dollars) and $2,000,000 (two
million dollars), shall be allocated forty percent
(40%) to the PC and sixty percent (60%) to INMD.
2. Thereafter, the incremental PDE between $2,000,000
(two million dollars) and $2,500,000 (two million
five hundred thousand dollars), shall be allocated
fifty percent (50%) to the PC and fifty percent (50%)
to INMD.
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3. Thereafter, the incremental PDE between $2,500,000
(two million five hundred thousand dollars) and
$3,000,000 (three million dollars), shall be
allocated sixty percent (60%) to the PC and forty
percent (40%) to INMD.
4. Thereafter, the incremental PDE between $3,000,000
(three million dollars) and $3,500,000 (three million
five hundred thousand dollars), shall be allocated
seventy percent (70%) to the PC and thirty percent
(30%) to INMD.
5. Thereafter, the incremental PDE greater than
$3,500,000 (three million five hundred thousand
dollars), shall be allocated seventy-five percent
(75%) to the PC and twenty-five percent (25%) to
INMD.
7.3 INMD shall provide certain funding to the PC, for the purpose of
physician draws as against PDE, under the following terms and conditions:
A. During the term of this Management Agreement, INMD shall make
Advances, as necessary, pursuant to Section 6.3 of this
Agreement, to enable PC to fund bi-weekly draws against PDE,
for Dr. Xxxxxx Xxxx ["Xxxx"] and Xx. Xxxxxxxx XxXxxxx
[XxXxxxx"] so long as Xxxx and/or XxXxxxx shall be employed by
the PC as follows:
1. Xx. Xxxx shall receive bi-weekly draws based on an
aggregate annualized salary of $250,000 (two hundred
and fifty thousand dollars) for the period between
the Effective Date of the Employment Agreement
between the PC and Xxxx and December 31, 1999;
thereafter, from January 1, 2000 and in subsequent
years, bi-weekly draws shall be based on an aggregate
annualized salary of $200,000 (two hundred thousand
dollars) ["Xxxx Draw(s)"]. The Xxxx Draws represent
compensation based upon a five (5) day work week and
an equitable portion of "weekend call" hours.
2. Xx. Xxxxxxxx XxXxxxx shall receive bi-weekly draws
based on an aggregate annualized salary of $205,000
(two hundred and five thousand dollars) for the
period between the Effective Date of this Agreement
and December 31, 1998; thereafter, commencing January
1, 1999, in subsequent years bi-weekly draws shall be
based on an aggregate annualized salary of $175,000
(one hundred and seventy five thousand dollars)
["XxXxxxx Draw(s)"]. The XxXxxxx Draws represent
compensation based upon a four (4) day work week and
an equitable portion of "weekend call" hours.
3. In the event that, at the end of any Fiscal Year, the
PC's portion of PDE is insufficient to repay INMD the
Advances made for the Xxxx Draw(s) and/or the XxXxxxx
Draw(s), such Advances shall be forgiven and neither
the PC, Xxxx nor XxXxxxx shall owe INMD any monies
thereon.
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B. During the term of this Management Agreement (subject to
section D below), INMD shall make Advances, as necessary,
pursuant to Section 6.3 of this Agreement, to fund bi-weekly
draws against PDE, for the following Physician Employee(s) as
are actually employed by the PC as follows:
1. A part time (two days a week) physician, to be paid
an aggregate annualized salary (or any portion
thereof) of $100,000 (one hundred thousand dollars)
for the period between the Effective Date of this
Agreement and December 31, 1998. Thereafter,
commencing January 1, 1999, in subsequent years
bi-weekly draws shall be based upon an aggregate
annualized salary of $70,000 (seventy thousand
dollars). It is understood that, as of the Effective
Date of this Agreement, such physician will be Xxxxx
X. Xxxxxx, M.D.
2. A full time (5 day a week) physician, to be paid an
aggregate annualized salary (or any portion thereof)
of $180,000 (one hundred and eighty thousand dollars)
for the period between the Effective Date of this
Agreement and December 31, 1998. Thereafter,
commencing January 1, 1999, in subsequent years
bi-weekly draws shall be based upon an aggregate
annualized salary of $175,000 (one hundred and
seventy-five thousand dollars). It is understood
that, as of the Effective Date of this Agreement,
such physician will be Xxxxx X. Xxxxxxxxx, M.D.
3. A full time (5 day a week) physician, to be paid an
aggregate annualized salary (or any portion thereof)
of $210,000 (two hundred and ten thousand dollars)
for the period between the Effective Date of this
Agreement and December 31, 1998. Thereafter,
commencing January 1, 1999, in subsequent years
bi-weekly draws shall be based upon an aggregate
annualized salary of $175,000 (one hundred and
seventy-five thousand dollars). It is understood
that, as of the Effective Date of this Agreement,
such physician will be Xxxxxx Xxxx, M.D.
4. An aggregate annualized salary (or any portion
thereof) of $150,000 (one hundred and fifty thousand
dollars) only for the period between the Effective
Date of this Agreement and February 28, 1998 the
expiration of the current Employment Agreement
between Xxxxxx Xxxxxxxxxx, M.D., Xx. Xxxxxxxxxx to
perform Infertility Services on behalf of the PC
pursuant to the terms of such Employment Agreement.
5. In the event that a physician, as described in any of
the subsections (1-4) above is not employed by the
PC, INMD shall not have the obligation to make
advances for the draw described for such physician.
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6. In the event that any of the Physicians described in
Sections 7.3 (A) and (B)(1) - (4) shall work less
than the amount described (which shall include an
equitable share of "weekend call" hours), then the
stated draws shall be proportionately reduced, and
INMD's obligation to fund such draws shall be
similarly proportionately reduced.
C. The draws against PDE enumerated above in subsections A and B
shall hereinafter be known, in the collective, as "Aggregate
Physician Draw(s)".
D. In the event that the Aggregate Physician Draws actually paid
to Physician Shareholders and/or Physician Employees shall,
for two successive quarters, represent a sum of money in
excess of forty percent (40%) of the actual PDE earned by the
Practice in such quarters ["Successive Quarters"], then the
obligations of INMD, under paragraphs A and B shall be amended
upon the following terms and conditions:
1. INMD shall, at the conclusion of any such Successive
Quarters provide written notice to the PC, in the
form and by the method of delivery detailed in
Section 13.11, that commencing six months thereafter
["Amendment Date"], it shall no longer fund Aggregate
Physician Draws beyond forty percent (40%) of actual
PDE earned during any Quarter.
2. Commencing with the Amendment Date, INMD shall fund
Aggregate Physician Draws only to the extent that
such Aggregate Physician Draws represent forty
percent (40%) of actual PDE earned during any
Quarter. Advances for Aggregate Physician Draw(s)
made during the Successive Quarters and Prior to the
Amendment Date, shall be forgiven and neither the PC
nor the Individual Physician Employee shall owe INMD
any monies thereon. Notwithstanding anything
contained in subsection D, INMD's obligations with
respect to the Xxxx Draw and the XxXxxxx Draw, as
delineated in 7.3(A)(1)-(3) above, shall not be
altered in any manner.
ARTICLE 8
TERM AND RENEWAL
8.1 The term of this Agreement shall begin October 1, 1997 ["Effective
Date"] and shall expire ten (10) years after such date unless earlier terminated
pursuant to Article 9 below. This Agreement may be renewed by either party, if
within the period of 180 days prior to the date of expiration 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. In the event the offer
is not accepted, the parties agree to negotiate, in good faith, a renewal of
this Agreement under terms and conditions acceptable to each party.
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ARTICLE 9
TERMINATION OF THE AGREEMENT
9.1 TERMINATION .
This Agreement shall be terminated by either party in the event of the
following:
9.1.1 INSOLVENCY. If a receiver, liquidator or trustee of
either party shall be appointed by court order, or a petition to
reorganize shall be filed against either party under any bankruptcy,
reorganization or insolvency law, and shall not be dismissed within 90
days, or either party shall file a voluntary petition in bankruptcy or
make assignment for the benefit of creditors, then the other party may
terminate this Agreement upon 10 days prior written notice to the other
party.
9.1.2 MATERIAL BREACH. If either party shall materially breach
its obligations hereunder, then the other party 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.
9.1.3 ILLEGALITY. (a) Subject to the provisions of Section
9.1.3(b) hereof, either party may terminate this Agreement (as amended,
if necessary) immediately upon receipt of final 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
either party contests such notification in good faith and the conduct
contemplated by this Agreement is allowed to continue during such
contest.
(b) The PC and INMD agree to make such amendments to
this Agreement as necessary to conform with any regulatory ruling or
advisory opinion, provided that any such amendments are not materially
to the PC's financial detriment.
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(c) If any governing regulatory agency asserts that
the services provided by INMD under this Agreement (as amended pursuant
to subsection (b) hereof) are unlawful or that the practice of medicine
by PC 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.
9.1.4 ECONOMIC INFEASIBILITY. (a) Either party may terminate
this Agreement upon 90 days prior written notice to the other party in
the event that the provision of Infertility Services as contemplated by
this Agreement is no longer economically feasible for any reason,
including, without limitation, due to technological obsolescence of the
Infertility Services, adverse modification of the reimbursement system
materially affecting payment for such services, or adverse change in
the applicable laws or regulations materially affecting the delivery of
Infertility Services.
(b) INMD may terminate this Agreement, upon six
months written notice, should the INMD portion of PDE diminish, from
the Base Year PDE as defined in Section 1.11, by thirty-five percent
(35%) in any one (1) Fiscal Year.
9.2 TERMINATION BY INMD FOR PROFESSIONAL DISCIPLINARY ACTIONS. INMD may
terminate this Agreement upon 10 days prior written notice to PC if either of
the medical license(s) of Xxxxxxxx XxXxxxx (President of PC) or Xxxxxx X. Xxxx
(Medical Director) is suspended, revoked, materially limited, or not renewed.
ARTICLE 10
RIGHTS UPON TERMINATION
10.1 If this Agreement is terminated for any reason, then INMD and the
PC agree as follows:
(1) PC shall purchase, and INMD shall sell, any fixed
assets including, the equipment, furniture, supplies
and fixtures, at the net book value determined in
accordance with generally accepted accounting
principles consistently applied as to the date of
termination.
(2) PC shall assume all leases for offices and equipment
used directly for the management and operation of the
PC's business, or if assumption is not permitted,
make all payments called for by such leases, to INMD.
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(3) PC shall notify, within 30 days of the date of
termination, all patients with Biological Materials
in storage at the Facility, that INMD will no longer
provide management services and that the care and
custody of such Biological Materials rests solely
with the PC. The form of such notification shall be
with the consent of INMD (such consent not to be
unreasonably withheld).
(4) Repay any indebtedness, owned to INMD as the result
of Advances or Service Fees.
ARTICLE 11
INSURANCE
11.1 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, PC shall be named as an additional insured on INMD's public liability
and property damage insurance policies. A certificate of insurance evidencing
such policies shall be presented to PC within thirty (30) days after the
execution of this Agreement.
11.2 PC shall carry professional liability insurance covering PC and
PC's employees in the amount of , at least, $1 million per incident, $3 million
in the aggregate. Certificates of insurance evidencing such policies shall be
presented to INMD within thirty (30) days after the execution of this Agreement.
Failure to provide such certificates within such period shall constitute a
material breach by PC hereunder.
11.3 PC 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.
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ARTICLE 12
NON-SOLICITATION AND NON-COMPETITION
12.1 The PC recognizes and acknowledges that INMD will incur
substantial costs in providing the equipment, support services, personnel,
management, administration and other services that are the subject of this
Agreement. The parties also recognize that the services to be provided by INMD
will be feasible only if the PC operates an active practice to which the
Physician Employees devote their full professional time and attention. PC agrees
that the non-competition and non-solicitation covenants described hereunder are
necessary for the protection of INMD, and that INMD would not enter this
Agreement without the following covenants:
(a) During the term of this Agreement, PC and any
business entity of which Physician/Owner is a principal or employee
["Covenanting Parties"] shall not establish, operate or provide
Infertility Services at a medical office, clinic or other health care
facility other than as provided for in this Agreement.
(b) During the Term of this Agreement, and for a
period of two years from the date it is terminated, Covenanting Parties
shall not directly or indirectly own, manage, operate, control,
contract with, be associated with or lend its or its shareholders'
names to, the provision or marketing of Infertility Services, within a
20 mile radius of the Facilities ["Service Area"], if an entity using
the name "Reproductive Science Center", or any INMD Trade Name,
continues to operate in the Service Area.
(c) During the term of this Agreement, and for two
years from the date of termination, PC shall not hire, attempt to hire,
contract or solicit for hiring or consultancy, any employee of INMD, or
form a corporation, partnership or joint venture or other entity with
any such employee, who is currently employed by INMD or had been
employed by INMD within one (1) year prior to the termination of this
Agreement.
ARTICLE 13
JOINT DUTIES AND RESPONSIBILITIES
13.1 FORMATION AND OPERATION OF JOINT PRACTICE MANAGEMENT BOARD. INMD
and PC will establish a Joint Practice Management Board which will be
responsible for developing management and administrative policies for the
overall operation of PC. The Joint Practice Management Board will consist of (1)
designated management representative(s) from INMD, (2) the PC President and
Medical Director and (3) such other practice physicians as appointed by the PC
President and Medical Director [(2) and (3) collectively the PC Representative].
In the case of any matter requiring a formal vote, the PC Representatives shall
collectively have one (1) vote and the INMD Representatives shall likewise have,
collectively, one (1) vote, and action shall require unanimous consent.
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13.2 DUTIES AND RESPONSIBILITIES OF THE JOINT POLICY BOARD. The Joint
Practice Management Board shall have the following duties and responsibilities:
13.2.1 ANNUAL BUDGETS. All annual capital and operation
budgets prepared by INMD shall be subject to the review, amendment,
approval and/or disapproval of the Joint Practice Management Board.
13.2.2 CAPITAL IMPROVEMENTS AND EXPANSION. Except as otherwise
provided herein, any renovation and expansion plans, and capital
equipment expenditures with respect to PC shall be reviewed and
approved by the Joint Practice Management Board and shall be based upon
the best interests of PC, and shall take into account capital
priorities, economic feasibility, physician support, productivity and
then current market and regulatory conditions.
13.2.3 ADVERTISING BUDGET. All annual advertising and other
marketing budgets prepared by INMD shall be subject to the review,
amendment, approval and disapproval of the Joint Practice Management
Board.
13.2.4 PATIENT FEES. The Joint Practice Management Board shall
review and approve the fee schedule for all physician and ancillary
services rendered by PC.
13.2.5 ANCILLARY SERVICES. The Joint Practice Management
Board shall approve ancillary services rendered by PC.
13.2.6 PROVIDER AND PAYER RELATIONSHIPS. Decisions regarding
the establishment or maintenance of relationship with institutional
health care providers and payers shall be made by the Joint Practice
Management Board in consultation with PC; provided, however, that
unanimous consent of PC designated members of the Joint Practice
Management Board shall be necessary to discontinue any existing PC
institutional relationship.
13.2.7 STRATEGIC PLANNING. The Joint Practice Management Board
shall develop long-term strategic plans, from time to time.
13.2.8 PHYSICIAN HIRING. The Joint Practice Management Board
shall determine, except as otherwise provided for herein, the number
and type of physicians required for the efficient operation of PC. The
approval of the Joint Practice Management Board shall be required for
any modifications to the restrictive covenants contained in any
physician agreement.
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13.2.9 PROVIDER CONTRACTS. The Joint Practice Management Board
shall approve, disapprove, or amend all managed care, PPO, HMO,
Medicare risk and other provider contracts negotiated by INMD.
13.2.10 INMD REPRESENTATIVE. The selection and retention of
the INMD Representative pursuant to Section 3.3.1 by INMD shall be
subject to the reasonable approval of the Joint Practice Management
Board. If PC is dissatisfied with the services provided by the INMD
Representative, PC shall consult with INMD who shall, in good faith,
determine whether the performance of the INMD Representative could be
brought to acceptable levels through counsel and assistance, or whether
the INMD Representative should be terminated. PC acknowledges that the
removal of an INMD Representative is likely to involve financial and
other commitments on the part of INMD that were undertaken after that
individual's approval by PC. Therefore, the decision to remove an INMD
Representative shall rest with INMD.
ARTICLE 14
MISCELLANEOUS
14.1 INDEPENDENT CONTRACTOR. INMD and PC are independent contracting
parties. In this regard, the parties agree that the relationship between INMD
and PC 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 PC.
14.1.1 Notwithstanding the authority granted to INMD herein,
INMD and PC agree that PC shall retain the full authority to direct all
of the medical, professional, and ethical aspects of its medical
practice;
14.1.2 Any powers of PC not specifically vested in INMD by the
terms of this Agreement shall remain with PC;
14.1.3 PC shall, at all times, be the sole employer of the
Physician Employees, the Other Professional Employees and all other
professional personnel engaged by PC 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;
14.1.4 Neither party shall have the right to participate in
any benefits, employment programs or plans sponsored by the other party
on behalf of its employees, including, but not limited to, workers'
compensation, unemployment insurance, tax withholding, health
insurance, life insurance, pension plans or any profit sharing
arrangement;
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14.1.5 In no event shall either party be liable for the debts
or obligations of the other except as otherwise specifically provided
in this Agreement; and
14.1.6 Matters involving the internal agreements and finances
of PC, 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 PC, and other
employees of PC, disposition of PC property and stock, 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 PC and licensing, shall remain the
sole responsibility of PC and the individual Physician Stockholder(s).
14.2 FORCE MAJEURE. Neither party shall be liable to the other 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.
14.3 USE OF NAME OF PC The name or any statement that may implicitly
refer directly or indirectly to PC or impute any affiliation directly or
indirectly between INMD and PC shall not be used in any manner or on behalf of
INMD in any advertising or promotional materials or otherwise without PC'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 PC
14.4 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.
14.5 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 the
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.
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14.6 ASSIGNMENT; BINDING EFFECT. This Agreement and the rights and
obligations hereunder may not be assigned without the prior written consent of
both 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 PC 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.
14.7 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 of
relinquishment of such right at any other time or times.
14.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts 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, except for equitable
relief or enforcement sought pursuant to Articles 5, 12 and 14 shall be
determined by binding arbitration in the Commonwealth of Massachusetts, City of
Boston (hereinafter "Arbitration"). The party seeking determination shall
subject any such dispute, claim or controversy to the American Arbitration
Association or JAMS/Endispute, 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 have no authority to change or modify any provision of this
Agreement. 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, enforce any rights under Articles 5, 12 and 14 (where
modifications only pursuant to the specific terms of this Agreement shall be
permissible) or otherwise enforce this Paragraph shall be brought in the Courts
of the Commonwealth of Massachusetts.
14.9 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 take as a whole.
14.10 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.
14.11 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:
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14.11.1 If for INMD at:
IntegraMed America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx, Chief Executive Officer
With a copy to:
IVF America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 000000-0000
Attention: Xxxxxx Xxxxx, General Counsel
14.11.2 If for PC at:
MPD Medical Associates (MA), PC
x/x Xxxxxxxxx-Xxxxxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxxx XxXxxxx
Either party hereto, by like notice to the other party, may designate such other
address or addresses to which notice must be sent.
14.12 ENTIRE AGREEMENT. This Agreement and all attachments hereto
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.
14.13 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.
14.14 CONFIDENTIAL INFORMATION. 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, neither 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
the 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. Neither party shall photocopy or
otherwise duplicate any Confidential
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Information of the 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. Publicly available items shall not be considered
proprietary except as protected by applicable state or federal law independent
of this Agreement.
14.15 INDEMNIFICATION.
14.15.1 INMD agrees to indemnify and hold harmless PC, 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 shall survive termination of this Agreement.
14.15.2 PC 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 PC related to the performance of its duties
and responsibilities under this Agreement. The obligations contained in
this Section shall survive termination of this Agreement.
14.15.3 In the event of any claims or suits in which INMD
and/or PC and/or their directors, officers, employees and servants are
named, each of INMD and PC for their respective directors, officers,
employees agree to cooperate in the defense of such suit or claim; such
cooperation shall include, by way of example but not limitation,
meeting with defense counsel (to be selected by the respective party
hereto), the production of any documents in his/her possession for
review, response to subpoenas and the coordination of any individual
defense with counsel for the respective parties hereto. The respective
party shall, as soon as practicable, deliver to the other copies of any
summonses, complaints, suit letters, subpoenas or legal papers of any
kind, served upon such party, for which such party seeks
indemnification hereunder. This obligation to cooperate in the defense
of any such claims or suits shall survive the termination, for whatever
reason, of this Agreement.
14.15.4 Promptly after the receipt by the PC of notice of any
claim or commencement of any action or proceeding subject to
indemnification delineated in Section 14.15.1 ("asserted liability"),
the PC will demand such indemnification from INMD and proffer the
defense to INMD. INMD may thereafter, at its option, assume such
defense at its own expense and by its own counsel. INMD shall provide
written notice to the PC, within twenty days, of its assumption or
declination of such defense. If INMD shall undertake to compromise any
asserted liability, it shall promptly notify the PC of its intention to
do so and the PC agrees to cooperate fully and promptly with
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INMD and its counsel in the compromise and defense of any asserted
liability. INMD shall not enter into any non-monetary settlement
hereunder without the prior written consent of the PC. Notwithstanding
the foregoing, PC shall have the right to participate in the compromise
or defense of any asserted liability with its own counsel and at its
own expense.
14.15.5 Promptly after the receipt by INMD of notice of any claim or
commencement of any action or proceeding subject to indemnification
delineated in Section 14.15.2 ("asserted liability"), INMD will demand
such indemnification from the PC and proffer the defense to the PC. The
PC may thereafter, at its option, assume such defense at its own
expense and by its own counsel. The PC shall provide written notice to
INMD, within twenty days, of its assumption or declination of such
defense. If the PC shall undertake to compromise any asserted
liability, it shall promptly notify INMD of its intention to do so and
INMD agrees to cooperate fully and promptly with the PC and its counsel
in the compromise and defense of any asserted liability. The PC shall
not enter into any non-monetary settlement hereunder without the prior
written consent of INMD. Notwithstanding the foregoing, INMD shall have
the right to participate in the compromise or defense of any asserted
liability with its own counsel and at its own expense.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
October 1, 1997.
INTEGRAMED AMERICA, INC.
By: /S/Xxxxxx Xxxx
---------------------------
Xxxxxx Xxxx, Vice President
MPD MEDICAL ASSOCIATES (MA), PC
By:/s/Xxxxxxxx Xxxxxxx
----------------------------
Xxxxxxxx XxXxxxx, MD
By:/s/Xxxxxxxx Xxxxxxx
----------------------------
Xxxxxxxx XxXxxxx, MD
Individually
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EXHIBIT 3.2
DESCRIPTION OF OFFICE AND FACILITIES
TO BE PROVIDED BY INMD TO PC
Office space and amenities at Deaconess-Waltham Hospital, Hope Avenue, Waltham,
Massachusetts or an equivalent location.
EXHIBIT 6.2
SECURITY AGREEMENT (ACCOUNTS RECEIVABLE)
See attached
EXHIBIT 4.3
PHYSICIAN EMPLOYMENT AGREEMENT
See attached