AMENDMENT NO. 9 TO SERVICE AGREEMENT
BETWEEN
INTEGRAMED AMERICA, INC.
AND
SHADY GROVE FERTILTITY REPRODUCTIVE SCIENCE CENTER, P.C.
THIS AMENDMENT NO. 9 TO SERVICE AGREEMENT ("Amendment ") is dated March
22, 2007 by and between IntegraMed America, Inc., a Delaware corporation, with
its principal place of business at Two Manhattanville Road, Purchase, New York
10577 ("IntegraMed") and Shady Grove Fertility Reproductive Science Center,
P.C., a Maryland professional corporation, with its principal place of business
at 15001 Shady Grove Road, Suite 310, Rockville, Maryland 20850 ("Shady Grove").
RECITALS:
WHEREAS, IntegraMed and Shady Grove are parties to a Service Agreement
dated March 12, 1998, as amended (the "Agreement") and
WHEREAS, IntegraMed and Shady Grove 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, IntegraMed and
Shady Grove agree as follows:
1. Section 2.1 "Cost of Services" is hereby amended to add the following
section 2.1.15 at the end thereof:
"Section 2.1.15. Annual software license maintenance fees and hardware
maintenance fees related to MISYS Optimum and software license and maintenance
fees associated with all other software applications utilized by the PC,
including but not limited to HRIS/ON-core, Goldmine, MAS500, Centrix, HelpSTAR,
Secure ID/RSA token and spam reduction services; provided, however, any of such
fees, including fees not identified here, currently being absorbed by IntegraMed
shall continue to be absorbed by IntegraMed and any of such fees, including fees
not identified here, currently being absorbed by PC shall continue to be
absorbed by PC. In the event new software offerings are made available to PC by
IntegraMed, PC shall have the option of selecting its own software, rather than
accepting the IntegraMed offered software. In such event, PC shall hold
IntegraMed harmless from any and all claims PC would have against IntegraMed
under Article 3 of the Agreement regarding services related to computer software
that IntegraMed agrees to provide or make available to PC.
2. Section 3.1.1 is hereby deleted and the following is substituted therefor:
"3.1.1 PC hereby engages IntegraMed for the Services.
IntegraMed agrees to provide the Services in the City of Baltimore and
the Counties of Baltimore, Carroll, Cecil, Harford (collectively, the
Baltimore Area") Charles, St. Mary's, Calvert, Prince George's, Anne
Arundel, Howard, Frederick and Montgomery , Summerset, Worcester,
Wicomico, Dorchester, Caroline and Talbot in the State of Maryland, the
District of Columbia, and the Counties of Loudoun, Fauquier, Fairfax,
Prince William, Stafford and Frederick in the Commonwealth of Virginia
(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."
"PC will also be given the right of first refusal to purchase
the additional counties of Queen Anne's and Kent in the State of
Maryland at the then prevailing Affiliate fee in the event that the
Company has a buyer of Affiliate Services that wants those counties
included in such Affiliate's exclusive territory." In the event PC
conducts business in Queen Anne's and/or Kent counties and no Affiliate
expresses interest in such counties, PC shall not be obligated to
purchase these counties.
3. A new Section 6.5 is hereby added to the Agreement as follows:
" 6.5 Notwithstanding anything herein to the contrary, upon termination
of this Agreement, PC shall continue to have the right to use the tradename
SHARED RISK (R) in accordance with the license agreement attached hereto as
Exhibit 6.5.
4. Section 7.1.4 is hereby deleted in its entirety and the following substituted
therefor:
"7.1.4 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 Maximum Additional Service Fee
- --------------- ---------------------- ------------------------------
2007 10% of PDE 1,171,000
2008 10% of PDE 1,071,000
2009 and thereafter 10% of PDE 1,351,000
Notwithstanding anything in this Section 7.1.4 to the
contrary, beginning January 1, 2007, the minimum annual Additional Service Fee
paid to IntegraMed under this Agreement shall not be less than $540,000 per
year, and the maximum annual Additional Service Fee paid to IntegraMed shall not
exceed the amounts set forth for the above indicated years, but in no event
shall the annual Additional Service Fee exceed 20% of PDE.
It is agreed that commencing with the Effective Date, as
defined in that certain Asset Purchase and Sale Agreement dated of even date
between PC and Greater Baltimore Medical Center, the Maximum Additional Service
Fee shall increase by $271,000. For the years 2007 through 2011, the $271,000
Additional Service Fee shall be paid in accordance with the following chart and
any unpaid portion of the $271,000 Additional Service Fee shall bear interest at
annual rate of six (6%) percent:
- ------------- --------------------------- -------------------------- --------------------
Year Amount Due To IntegraMed Amount to be Paid by PC Amount Owing
- ------------- --------------------------- -------------------------- --------------------
2007 $271,000(1) $171,000 $100,000
- ------------- --------------------------- -------------------------- --------------------
2008 $271,000 $221,000 $150,000
- ------------- --------------------------- -------------------------- --------------------
2009 $271,000 $271,000 $150,000
- ------------- --------------------------- -------------------------- --------------------
2010 $280,000(2) $330,000 $100,000
- ------------- --------------------------- -------------------------- --------------------
2011 $277,000 (3) $377,000 0
- ------------- -------------------------- -------------------------- --------------------
(1) Said amount will be prorated for 2007 based on the Effective Date,
as defined in that certain Asset Purchase and Sale Agreement between PC
and Greater Baltimore Medical Center, Inc of even date. As a result of
prorating the $271,000, the maximum Additional Service Fee for 2007
shall be prorated by a dollar amount equal to the prorated $271,000.
(2) Includes 6% interest on $150,000 owed to IntegraMed.
(3) Includes 6% interest on $100,000 owed to IntegraMed.
5. Section 7.5 is hereby deleted in its entirety and the following substituted
therefor:
"7.5 FIXED ASSET INTEREST. PC will incur no interest on
IntegraMed net fixed assets at the Facilities totaling $2.1 million and
below. PC agrees to pay IntegraMed interest equal to the prime rate of
IntegraMed's primary bank on IntegraMed net fixed assets at the
Facilities between $2.1 million and $2.5 million, and prime plus 2% on
IntegraMed net fixed assets at the Facilities in excess of $2.5
million."
6. The Agreement is hereby amended to add the following new Section 8.1.1 to
Article 8:
"8.1.1 In consideration of a payment in the amount of
$500,000, payable 1/2 upon the Effective Date, as defined in
that certain Asset Purchase and Sale Agreement dated of even
date between PC and Greater Baltimore Medical Center and 1/2
on the first anniversary date of the Effective Date, PC hereby
grants to IntegraMed the exclusive right to provide the
Services to PC in the Baltimore Area."
7. All other provisions of the Agreement, as amended, not in conflict with this
Amendment No. 9 remain in full force and effect.
IN WITNESS WHEREOF, the parties have signed this Amendment No. 9 as the
date first written above.
INTEGRAMED AMERICA, INC.
By: /s/Jay Higham
-----------------------------
Jay Higham, President & CEO
SHADY GROVE FERTILITY REPRODUCTIVE SCIENCE CENTER, P.C.
By: /s/Michael J. Levy
--------------------------------
Michael J. Levy, M.D., President