AMENDMENT NO. 2 TO MANAGEMENT AGREEMENT
Among
INTEGRAMED AMERICA, INC.
AND
REPRODUCTIVE ENDOCRINE & FERTILITY CONSULTANTS, P.A.
And
MIDWEST FERTILITY FOUNDATIONS & LABORATORY, INC.
THIS AMENDMENT NO. 2 TO MANAGEMENT AGREEMENT ("Amendment No. 2"), dated
July 1, 1998 by and among IntegraMed America, Inc., a Delaware corporation, with
its principal place of business at One Manhattanville Road, Purchase, New York
10577 ("INMD") and Reproductive Endocrine & Fertility Consultants, P.A., a
professional association, doing business as Reproductive Science Associates,
having its principal place of business at Two Brush Creek, Suite 500, Kansas
City, Missouri 64112, and Midwest Fertility Foundations & Laboratory, Inc., a
Kansas corporation, having its principal place of business at Two Brush Creek,
Suite 500, Kansas City, Missouri 64112. (Reproductive Endocrine & Fertility
Consultants, P.A. and Midwest Fertility Foundations & Laboratory, Inc. are
collectively referred to as "PA").
RECITALS:
WHEREAS, INMD and PA entered into a Management Agreement dated November
1, 1995 (the "Management Agreement"), which was amended May 22, 1997 ("Amendment
No. 1"), pursuant to which INMD agreed to provide certain management and
administrative services to PA; and
WHEREAS, INMD and PA wish to amend further the Management Agreement, in
pertinent part, to, among other things, (i) modify the management fee payment
and (ii) provide for joint responsibilities and duties under the Management
Agreement, as amended.
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and as contained in the Management Agreement, as amended, INMD
and PA agree as follows:
1. Section 7.1.4 of the Management Agreement is hereby deleted in its
entirety and the following hereby substituted therefor, effective July 1, 1998:
"7.1.4 an additional Service Fee equal to 20% of PDE, paid monthly but
reconciled to PA's annual results of operations evidenced by PA's Financial
Statements; provided, however, the first $25,000 of PDE, quarterly, shall inure
to the benefit of PA. INMD shall be paid 20% of all PDE in excess of $25,000,
quarterly, during the term of this Agreement."
2. Paragraph 2 of Amendment No. 1 is hereby deleted in its entirety
effective July 1, 1998 and the resultant Section 7.3.1 of the Management
Agreement is hereby amended by deleting the same and substituting the following
therefor, effective July 1, 1998:
"7.3.1 Any amounts advanced hereunder shall be considered Service Fees
as provided for in Section 7.1 and shall be repaid by INMD retaining 55% of PA's
80% PDE allocation provided for in Section 7.1.4, after the first $25,000 of PDE
is received by PA on a quarterly basis; provided, however, INMD agrees to delay
effecting retention of 55% of PA' 80% PDE in excess of $25,000 on a quarterly
basis until January 1, 1999 in order for PA to develop a sustained profit stream
between the date hereof and January 1, 1999."
3. Paragraph 3 of Amendment No 1 is hereby deleted in its entirety,
effective July 1, 1998 and the resultant Section 7.4 of the Management Agreement
is hereby amended by deleting the same and substituting the following therefor:
"7.4 INMD will seek, at its sole costs and expense, with PA's
assistance on a best-efforts basis, a medical practice practicing in a medical
area complimentary to PA's medical practice ("Co- Tenant") to occupy the
Facility on a co-extensive basis with PA. INMD will, after identification of and
negotiations with such Co-Tenant, establish a reasonable occupancy fee
("Occupancy Fee") to be paid to INMD by the Co-Tenant, and will establish an
appropriate method for PA's and Co- Tenant's sharing of INMD's management and
administrative services, with Co-Tenant paying a reasonable cost ("Co-Tenant's
Prorata Costs") for such services and INMD crediting PA's Costs of Services,
monthly, for Co-Tenant's Prorata Costs and Occupancy Fee. The selection of a
Co-Tenant shall be subject to PA's approval which will not be unreasonably
withheld and INMD will determine which INMD employees and services will be made
available to Co-Tenant, all on a non-exclusive basis, with PA's consent which
will not be unreasonably withheld."
4. The Management Agreement is hereby amended to add the following
Article:
"Article 13
JOINT DUTIES AND RESPONSIBILITIES
13.1 FORMATION AND OPERATION OF JOINT PRACTICE MANAGEMENT BOARD. INMD
and PA will establish a Joint Practice Management Board which will be
responsible for developing management and administrative policies for the
overall operation of PA. The Joint Practice Management Board will consist of
designated management representative(s) from INMD, one or more PA owners, as
determined by PA, such other practice physicians, as appropriate. In the case of
any matter requiring a formal vote, PA shall have one (1) vote and INMD shall
likewise have one (1) vote.
13.2 DUTIES AND RESPONSIBILITIES OF THE JOINT PRACTICE MANAGEMENT
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 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 PA shall be reviewed and
approved by the Joint Practice Management Board and shall be based upon
the best interests of PA, 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 PA.
13.2.5 ANCILLARY SERVICES. The Joint Practice Management Board
shall approve ancillary services rendered by PA.
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 PA; provided, however, that
unanimous consent of PA designated members of the Joint Practice
Management Board shall be necessary to discontinue any existing PA
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 PA. The
approval of the Joint Practice Management Board shall be required for
any modifications to the restrictive covenants contained in any
physician agreement.
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."
4. All other provisions of the Management Agreement and Amendment
No. 1 not in conflict with this Amendment No. 2 remain in full force and effect.
5. This Amendment No. 2 may be executed in any number of separate
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have signed this Amendment No. 2 as the
date first written above.
INTEGRAMED AMERICA, INC.
By:/s/Donald S. Wood
----------------------------------
Donald S. Wood, Pd.D., President,
Reproductive Science Center Division
REPRODUCTIVE ENDOCRINE & FERTILITY CONSULTANTS, P.A.
By:/s/Elwyn M. Grimes
---------------------------------------------
Elwyn M. Grimes, M.D., President
MIDWEST FERTILITY FOUNDATIONS & LABORATORY, INC.
By:Elwyn M. Grimes
---------------------------------------------
Elwyn M. Grimes, M.D., President