Management Agreement
Between
IVF AMERICA, INC.
AND
MPD Medical Associates (MA), P.C.
THIS MANAGEMENT AGREEMENT dated as of January 1, 1996 by and between IVF
AMERICA, INC., a Delaware corporation, with its principal place of business at
Xxx Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("IVFA") and MPD Medical
Associates (MA), P.C., with its principal place of business at Deaconess-Waltham
Hospital, Hope Ave. Waltham, Massachusetts 02254 ("P.C.").
Recitals
P.C. is a medical practice specializing in the provision of gynecological
services, including treatment of human infertility, encompassing the provision
of in vitro fertilization and other assisted reproductive services ("Infertility
Services").
IVFA 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 IVFA 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 .
P.C. desires access to capital to fund its growth and development and IVFA
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 the P.C. hereby
agrees to purchase from IVFA the management and administrative services herein
described and IVFA 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 IVFA's independent certified public accountant.
1.2 "Base Management Fee" shall mean an annual fee paid by P.C. to
IVFA in an amount equal to 6% percentage of P.C.'s annual Physician and
Other Professional Revenues. The Base Management Fee shall cover the cost
of management services provided by IVFA corporate staff to the P.C., as
more specifically described in Section 2.3.
1.3 "Cost of Services" shall mean all ordinary and necessary expenses
of P.C. and all direct ordinary and necessary operating expenses of IVFA
without xxxx-up, incurred in connection with the management of P.C.'s
medical practice , as more specifically described in Section 2.1.
1.4 "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 IVFA, which are utilized by P.C. in its
medical practice.
1.5 "Fiscal Year" shall mean the 12- month period beginning January 1
and ending December 31 of each year.
1.6 "Infertility Services" shall mean gynecological services,
including treatment of human infertility encompassing the provision of in
vitro fertilization and other assisted reproductive services provided by
P.C. or any Physician Employee and Other Professional Employee..
1.7 "Other Professional Employees" shall mean professional employees
who can not be employeed by IVFA due to any Massachusetts law or
regulation.
1.8 "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 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 P.C. as a result of professional medical
services personally furnished to patients by
-2-
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.
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, Base Management Fee, and any
advance made to P.C. by IVFA pursuant to Section 6.3 hereof.
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 IVFA Employees.
ARTICLE 2
COST OF SERVICES AND BASE MANAGEMENT FEE
2.1 "Cost of Services" (as defined in Section 1.3 above) includes without
limitation, the following costs and expenses, whether incurred by IVFA or P.C.:
2.1.1 Salaries and fringe benefits of all employees of IVFA working
directly in the management, operation or administration
(including, without limitation, Technical Employees) providing
services at P.C., 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 P.C., including, but not limited to employment agency
fees, relocation and interviewing expenses and any actual
out-of-pocket expenses of IVFA 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 IVFA;
2.1.4 Any sales and use taxes assessed against P.C. related to the
operation of P.C.'s medical practice;
-3-
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 IVFA or P.C. to outside counsel in
connection with matters specific to the operation of the P.C.
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 P.C., including fire,
theft, general liability and malpractice insurance for
Physician Employees and 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 of fictitious name permits pursuant to this
Agreement; and
2.1.13 Such other costs and expenses directly incurred by IVFA or
P.C. that are necessary for the management or operation of the
P.C.
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 Physician Stockholders;
2.2.2 Costs or expenses not included in the annual budget prepared
by IVFA pursuant to Section 3.4 herein, unless approved by the
parties;
2.2.3 the Base Management Fee;
2.2.4 Any IVFA overhead charges; and
2.2.5 Any federal or state income taxes of IVFA other than as
provided above.
-4-
2.3 "Base Management Fee" shall include all indirect costs of IVFA and
shall cover and include all legal, accounting, financial, marketing, management
and administrative assistance provided by IVFA corporate staff.
ARTICLE 3
DUTIES AND RESPONSIBILITIES OF IVFA
3.1 MANAGEMENT SERVICES AND ADMINISTRATION.
3.1.1 The P.C. hereby appoints IVFA as its sole and exclusive manager
and administrator of all of its day-to-day business functions and grants
IVFA 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. IVFA will have no
authority, directly or indirectly, to perform, and will not perform, any
medical function. IVFA 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
IVFA shall be subject to the professional supervision of the P.C.
3.1.2 IVFA shall, on behalf of P.C., xxxx patients and collect
professional fees for Infertility Services rendered by P.C. at the
Facility, outside the Facility 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 IVFA 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 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 IVFA 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. IVFA's management of all files and
records shall comply with all applicable state and federal laws and
regulations, including without limitation, those
-5-
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. IVFA 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 IVFA 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, IVFA 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 IVFA 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 IVFA and accepted by P.C. shall be employees of or
independent contractors to P.C.
3.1.7 IVFA shall negotiate, 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 IVFA shall arrange for legal and accounting services as may be
reasonably required in the ordinary course of P.C.'s operation, including
the cost of enforcing any physician contract containing restrictive
covenants. Nothing contained herein is intended to authorize IVFA to settle
any claim made by or against P.C.
3.1.9 IVFA shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Article 9.
3.1.10 IVFA 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.
-6-
3.2 FACILITIES. IVFA shall provide the office space, facilities and
services necessary for the operation of P.C.'s medical practice, as set forth in
Exhibit "A" 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. IVFA shall provide for the cleanliness of the Facilities, and timely
maintenance and cleanliness of the equipment, furniture and furnishings located
therein. IVFA shall consult with P.C. regarding the condition, use and needs for
the Facilities, equipment, services and improvements thereto.
3.3 EXECUTIVE DIRECTOR AND OTHER PERSONNEL.
3.3.1 EXECUTIVE DIRECTOR. Subject to the approval of P.C., IVFA shall
hire and appoint an Executive Director to manage and administer all of 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 IVFA, the Executive Director, subject to the
terms of this Agreement, shall implement the policies agreed upon by IVFA
and P.C. and shall generally perform the administrative duties assigned to
the Executive Director by IVFA.
3.3.2 PERSONNEL. IVFA 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 IVFA, with Technical Employees subject to the
professional supervision of P.C. If P.C. is dissatisfied with the services
of any person delivering nonprofessional services, P.C. shall consult with
IVFA. IVFA shall in good faith determine whether the performance of that
employee warrants termination. IVFA's obligations to utilize
nonprofessional personnel shall be governed by the overriding principle and
goal of facilitating P.C.'s provision of high quality medical care and
laboratory services. IVFA shall make every effort consistent with sound
business practices to honor the specific requests of P.C. with regard to
the assignment of IVFA's employees.
3.4 FINANCIAL PLANNING AND GOALS. IVFA 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. IVFA shall present the
budgets to P.C. for its approval at least thirty (30) days prior to the
commencement of each Fiscal Year. IVFA shall specify the targeted profit margin
for P.C.'s practice at the Facilities which shall be reflected in the overall
budget.
3.5 AUDITS AND STATEMENTS. IVFA shall prepare annual financial statements
for operations of P.C. at the Facilities within ninety (90) days of the close of
the Fiscal Year. IVFA shall prepare monthly financial statements containing a
balance sheet and statement of operations, which shall be delivered to the P.C.
within thirty (30) days after the close of each calendar month.
-7-
3.6 INVENTORY AND SUPPLIES. IVFA shall order and purchase inventory and
supplies, and such other materials which are requested by P.C. to enable the
providers to deliver Infertility Services in a cost-effective manner.
3.7 QUALITY ASSURANCE. IVFA shall assist P.C. in fulfilling its obligations
to maintain a Quality Assurance 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 applicable ethical standards, laws and
regulations applying to the practice of medicine in the Commonwealth of
Massachusetts. 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 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 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, P.C. shall promptly inform the Executive
Director and the underlying facts and circumstances of such action.
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.
The medical practice conducted at the Facilities shall be conducted solely by
physicians employed by or serving as independent contractors to P.C. No other
physician or medical practitioner shall be permitted to use or occupy the
Facilities without the prior written consent of IVFA, except in the case of a
medical emergency, in which event, notification shall be provided to IVFA as
soon after such use or occupancy as possible.
4.3 EMPLOYMENT OF PHYSICIANS AND OTHER PROFESSIONAL EMPLOYEES. 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 B. P.C.
covenants that it will not employ any physician unless the physician shall sign
such employment agreement before employment. 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., IVFA shall consult with P.C. respecting such
matters.
-8-
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 INSURANCE ELIGIBILITY. 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 on-going risk management program.
ARTICLE 5
LICENSE OF IVFA NAME
5.1 GRANT OF LICENSE. IVFA hereby grants to P.C. a non-assignable license
for the term of this Agreement to use the name IVFA America(R) and any other
service names, trademark names and logos (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, IVFA retains the absolute right to use
and license the Trade Names to others.
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 IVFA's rights to the Trade Names.
IVFA shall cooperate and assist P.C. in obtaining any such original, amended or
renewal fictitious name permit.
5.3 RIGHTS OF IVFA. P.C. acknowledges IVFA'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 IVFA. P.C. shall notify IVFA 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
IVFA. IVFA, 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 IVFA for damages or other remedy by reason of any
determination of IVFA not to act or by reason of any settlement to which IVFA
may agree with respect to any alleged infringements, imitations or unauthorized
use by others of the Trade Names, nor shall any such determination of IVFA or
such settlement by IVFA affect the validity or enforceability of this Agreement.
-9-
5.4 RIGHTS UPON TERMINATION.
5.4.1 Upon termination of this Agreement, P.C's license to use the
Trade Names shall be automatically revoked and P.C. shall: (i) 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 IVFA; and (ii) take any and all actions
required to make the Trade Names available for use by any other person or
entity designated by IVFA.
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 harm to IVFA and to the rights of
any licensee of IVFA for which there is no adequate remedy at law. In such
event, IVFA 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 a decision on an
application for a permanent injunction, IVFA shall be entitled to a
temporary restraining order, without prejudice to any other remedy
available to IVFA. The costs of all such remedies hereunder shall be at the
expense of P.C. but shall not be a Cost of Services, as defined herein..
ARTICLE 6
FINANCIAL ARRANGEMENTS
6.1 SERVICE FEES. The compensation set forth in this Article 6 is being
paid to IVFA in consideration of the substantial commitment made and services to
be rendered by IVFA hereunder and is fair and reasonable. IVFA shall be paid the
following amounts (collectively "Service Fees"):
6.1.1 an amount reflecting all Costs of Services (whether incurred by
IVFA or P.C.) paid or recorded by IVFA pursuant to the terms of this
Agreement;
6.1.2. any amounts advanced by IVFA to P.C. to fund obligations of
P.C. pursuant to Section 6.3, below;
6.1.3. during each year of this Agreement, a Base Management Fee of an
amount equal to six percent (6%) of the Revenues;
6.1.4 an additional service fee which shall be calculated in
accordance with the profit allocation formula set forth in Exhibit C
hereof.
6.2 ACCOUNTS RECEIVABLE. On the 15th business day of each month, IVFA shall
provide P.C. with a reconciliation of the accounts receivable of P.C. arising
during the previous
-10-
calendar month. Accounts receivable shall be defined as all receivables recorded
each month (net of Adjustments) on the books of P.C. IVFA shall transfer or pay
such amount of funds to P.C. 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 IVFA and execute all necessary documents in
connection with the assignment of such accounts receivable to IVFA or, at IVFA's
option, to its lenders. All collections in respect of such accounts receivable
shall be deposited in a bank account at a bank designated by IVFA. To the extent
P.C. comes into possession of any payments in respect of such accounts
receivable, P.C. shall direct such payments to IVFA for deposit in bank accounts
designated by IVFA. Although it is the intention of the parties that IVFA
purchase and thereby become owner of the accounts receivable of P.C., in case
such purchase shall be ineffective for any reason, P.C. is concurrently herewith
entering into a Security Agreement in the form attached as Exhibit D to grant a
security interest in the accounts receivable to IVFA.
6.3 ADVANCES. In addition to the purchase of the Accounts Receivable set
forth in 6.2, above, IVFA agrees to advance funds to P.C., to provide new
services, utilize new technologies, fund projects such as new and replacement
equipment, provide working capital or fund mergers of other physicians or
physician groups into P.C. Such advances shall be made only with the consent of
the P.C.
6.3.1 Any amounts advanced hereunder shall be considered Service Fees
as provided for in Section 6.1 and shall be repaid monthly in such amounts
as agreed by the affected parties.
6.3.2 Interest expense will be charged for funds advanced and will be
computed at the Prime Rate used by IVFA's primary bank in effect at the
time of the advance.
ARTICLE 7
TERM AND RENEWAL
7.1 The term of this Agreement shall begin January 1, 1996 and shall expire
ten (10) 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 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.
-11-
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 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.
8.1.2 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.
8.1.3 ILLEGALITY. Either 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 either 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 IVFA 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.
8.1.4 ECONOMIC INFEASIBILITY. 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.
-12-
8.2 TERMINATION BY IVFA FOR PROFESSIONAL DISCIPLINARY ACTIONS. IVFA may
terminate this Agreement upon 10 days prior written notice to P.C. if Xx.
Xxxxxxxx XxXxxxx'x, Medical Director of P.C. , authorization to practice
medicine is suspended, revoked or not renewed.
ARTICLE 9
INSURANCE
9.1 IVFA 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. IVFA
shall also carry a policy of public liability and property damage insurance with
respect to the Facilities under which the insurer agrees to indemnify IVFA
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 IVFA. 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 an additional insured on IVFA's public
liability and property damage insurance policies. A certificate of insurance
evidencing such policies shall be presented to P.C. within thirty (30) days
after the execution of this Agreement.
9.2 P.C. shall carry professional liability insurance covering P.C. and
P.C.'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 IVFA within thirty (30) days after the execution of this
Agreement. Failure to provide such certificates within such period shall
constitute a material breach by P.C. hereunder.
9.3 P.C.and IVFA 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 10
MISCELLANEOUS
10.1 INDEPENDENT CONTRACTOR. IVFA and P.C. are independent contracting
parties. In this regard, the parties agree that the relationship between IVFA
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 IVFA and P.C.
-13-
10.1.1 Notwithstanding the authority granted to IVFA herein, IVFA 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 practice;
10.1.2 Any powers of P.C. not specifically vested in IVFA by the terms
of this Agreement shall remain with P.C.;
10.1.3 P.C. shall, at all times, be the sole employer of the Physician
Employees, the Other Professional Employees 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;
10.1.4 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;
10.1.5 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
10.1.6 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 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 P.C. and licensing, shall remain the sole responsibility of P.C.
and the individual Physician Stockholder(s).
10.2 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.
10.3 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 IVFA and P.C. shall not be used in any manner or on behalf of
IVFA in any advertising or promotional materials or otherwise without P.C.'s
prior written consent. However, IVFA 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.
-14-
10.4 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.
10.5 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.
10.6 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 IVFA may assign this Agreement to any
subsidiary or affiliate of IVFA without the consent of P.C. 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.
10.7 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.
10.8 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.
10.9 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.
10.10 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.
-15-
10.11 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:
10.11.1 If for IVFA at:
IVF America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxx, Vice President, Northeast Region
With a copy to:
IVF America, Inc.
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 000000-0000
Attention: Xxxxxx Xxxxx, General Counsel
10.11.2 If for P.C. at:
MPD Medical Associates (MA), P.C.
x/x Xxxxxxxxx-Xxxxxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxxx XxXxxxx
With a copy to:
Either party hereto, by like notice to the other party, may designate such other
address or addresses to which notice must be sent.
10.12 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.
-16-
10.13 NO MEDICAL PRACTICE BY IVFA. IVFA will not engage in any activity
that constitutes the practice of medicine, and nothing contained in this
Agreement is intended to authorize IVFA to engage in the practice of medicine or
any other licensed profession.
10.14 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 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.
10.15 INDEMNIFICATION.
10.15.1 IVFA 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
IVFA related to the performance of its duties and responsibilities under
this Agreement. The obligations contained in this Section 10.15.1 shall
survive termination of this Agreement.
10.15.2 P.C. agrees to indemnify and hold harmless IVFA, 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 10.15.2
shall survive termination of this Agreement.
-17-
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
September 29, 1995.
IVF AMERICA, INC.
By: /s/ Xxxx Xxxxx, Vice President
------------------------------
Xxxx Xxxxx, Vice President
MPD MEDICAL ASSOCIATES (MA), P.C.
By: /s/ Xxxxxxxx XxXxxxx, MD
------------------------
XXXXXXXX XXXXXXX, MD
-18-
EXHIBIT A
DESCRIPTION OF OFFICE AND FACILITIES
TO BE PROVIDED BY IVFA TO P.C.
Office space and amenities at Deaconess-Waltham Hospital, Hope Avenue, Waltham,
Massachusetts or an equivalent location.
EXHIBIT B
PHYSICIAN EMPLOYMENT AGREEMENT
See attached
EXHIBIT C
PROFIT ALLOCATION FORMULA
Profit allocation between P.C. and IVFA is based on predistribution
earnings ("PDE"). For purposes of this profit allocation formula, PDE shall be
equal to (1) Physician and Other Professional Revenues less (2) Cost of
Services, Base Management Fee, as such terms are defined in this Agreement, and
any advance made to P.C. by IVFA pursuant to Section 6.3 of this Agreement. PDE
shall be allocated 60% to IVFA and 40% to P.C. for all physician salaries(but
not less than the amount necessary for the P.C. to pay individual physicians
still employed by P.C. at year-end their annual salaries as established in the
budget). The distribution among physicians of the amount above budgeted
physician salaries (40% of actual PDE less budgeted physician salaries) shall be
agreed to by P.C. and IVFA annually. By way of example, the 1995 physician
salary expenses have been targeted at $870,000. If 40% of PDE is in excess of
$870,000, then that amount in excess of $870,000 will be shared among the
physicians in equal proportion of each physician's salary to total budgeted
physician salary.
EXHIBIT D
SECURITY AGREEMENT (ACCOUNTS RECEIVABLE)
See attached
