AMENDMENT NO. 8 TO MANAGEMENT AGREEMENT
BETWEEN
INTEGRAMED AMERICA, INC.
AND
FERTILITY CENTERS OF ILLINOIS, S.C.
THIS AMENDMENT NO. 8 TO MANAGEMENT AGREEMENT ("Amendment No. 8"), dated
September 24, 2001 by and between IntegraMed America, Inc., a Delaware
corporation, with its principal place of business at One Manhattanville Road,
Purchase, New York 10577 ("INMD") and Fertility Centers of Illinois, an Illinois
Medical Service corporation, with a place of business at 3703 West Lake Avenue,
Suite 310, Glenview, Illinois corporation, ("PC").
RECITALS:
WHEREAS, INMD and PC are parties to a Management Agreement dated
February 28, 1997, as amended (the "Agreement");and
WHEREAS, INMD and PC wish to amend further the Agreement, in pertinent
part to clarify certain financial and other terms and conditions;
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and as contained in the Agreement, as amended, INMD and PC
agree as follows:
1. Section 2.1.2 is hereby deleted and the following is substituted
therefor:
"2.1.2 Expenses incurred in the recruitment of additional
physicians for PC including, but not limited to employment agency fees,
travel and relocation expenses; and, (i) through December 31, 2001 up
to $175,000 for the first 12 months of each new physician's employment
to cover base salary, and (ii) commencing January 1, 2002, up to
$250,000 annually for a period of three (3) years for each new
physician's employment to cover base salary; provided, however, any
such hire must be approved by the Joint Practice Management Board on a
case-by-case basis; and provided, further, "additional physician" shall
mean a new physician whose hiring is not to replace a physician who has
left PC within 12 months prior to the employment of the new physician,
but whose hiring increases PC's full-time equivalent ("FTE") physicians
to a number greater than PC's FTE physicians for the previous 12
months."
2. Section 3.1.1 is hereby deleted in its entirety and the following
substituted therefor:
"3.1.1 PC hereby engages IntegraMed for the Services.
IntegraMed agrees to provide the Services only in the Counties of Cook,
DuPage, Kane, Lake and Will in the State of Illinois (collectively, the
"Territory"), and PC agrees to limit its use of the Services to the
Territory, without prior written consent of IntegraMed. None of the
Services made available to PC include any physician medical functions."
3. A new Section 4.9 is hereby added to Article 4 as follows:
"4.9 Participate in IntegraMed network activities and programs
including, but not limited to, using best efforts in offering
IntegraMed Pharmaceutical Services to patients and participating in
other product and service offerings IntegraMed has in effect from time
to time."
4. Section 6.1.3 is hereby deleted in its entirety and the following
substituted therefor:
"6.1.3 through December 31, 2002, a Base Service Fee, paid
monthly, of an amount equal to six percent (6%) of the first
$8.0 million of PC's Revenues; five percent (5%) of PC's
Revenues over $8.0, but less than $12.0 million; and four
percent (4%) of PC's Revenues of $12.0 million and above; and
commencing January 1, 2003, a Base Service Fee, paid monthly,
of an amount equal to six percent (6%) of the first $8.0
million of PC's Revenues; five percent (5%) of PC's Revenues
over $8.0 million, but less than $12.0 million; four percent
(4%) of PC's Revenues of $12.0 million or more, but less than
$16.0 million; and three percent (3%) of PC's Revenues of
$16.0 million or more."
5. Section 6.1.4 is hereby deleted in its entirety and the following
substituted therefor:
"6.1.4 during each year of this Agreement, an Additional
Service Fee, paid monthly but reconciled quarterly, in
accordance with the following table:
Applicable Year Additional Service Fee
2001 12% of Revenue, not to exceed 20% of PDE
2002 12% of Revenue, not to exceed 18% of PDE
2003 12% of Revenue, not to exceed 16% of PDE
2004 12% of Revenue, not to exceed 14% of PDE
2005 12% of Revenue, not to exceed 12% of PDE
2006 and thereafter 12% of Revenue, not to exceed 10% of PDE
Notwithstanding anything in this Section 6.1.4 to the contrary,
beginning January 1, 2006, the minimum annual Additional Service Fee paid to
IntegraMed under this Agreement shall not be less than $932,484 per year but in
no event shall exceed 20% of PDE, and the maximum annual Additional Service Fee
paid to IntegraMed shall not exceed $1,865,000."
6. The Agreement is hereby amended to add the following new Section 6.4 to
Article 6:
"6.4 PC will be charged monthly interest at an annualized rate
of prime plus two percent (2%) on Receivables with an average
days sales outstanding ("DSO") greater than 60 days for a
trailing three-month period. For example, if prime is 6% and
PC's Revenues are $1,385,000 for a three-month period, the
average Revenues per day (assuming 90 days in such three-month
period) equals $15,389. If the average of PC's Receivables
resulting from the sum of the Receivables on the last day of
the month and the last day of each of the preceding two months
divided by three are $1.0 million, then PC's DSO equal 65
($1.0 million divided by $15,389), resulting in interest being
charged for the month on $76,945 of PC's Receivables ($15,389
times 5 days) at the rate of .67% (6% prime plus 2% divided by
12), or a $515.53 interest charge."
7. The Agreement is hereby amended to add the following new Section 6.5 to
Article 6:
"6.5 FIXED ASSET INTEREST. PC agrees to pay IntegraMed
interest equal to the prime rate, plus two (2%) percent of
IntegraMed's primary bank on IntegraMed net fixed assets at
the Facilities in excess of $952,251.00."
8. The Agreement will be captioned "Business Service Agreement between
IntegraMed America, Inc. and Fertility Centers of Illinois, S.C..," and all
references to "management services" shall mean "business services," and all
references to "Management Company" shall refer to "IntegraMed."
9. All other provisions of the Agreement, as amended, not in conflict with
this Amendment No. 8 remain in full force and effect.
IN WITNESS WHEREOF, the parties have signed this Amendment No. 8 as the
date first written above.
INTEGRAMED AMERICA, INC.
By: /s/Gerardo Canet
--------------------------------
Gerardo Canet, President
FERTILITY CENTERS OF ILLINOIS, S.C.
By: /s/Aaron S. Lifchez
---------------------------------
Aaron S. Lifchez, M.D., President