Among
INTEGRAMED PHARMACEUTICAL SERVICES, INC.,
IVP PHARMACEUTICAL CARE, INC.,
And
INTEGRAMED AMERICA, INC.
THIS MANAGEMENT AGREEMENT ("Agreement"), dated effective as of April
21, 1999 (the "Effective Date"), is made and entered into by and among
IntegraMed Pharmaceutical Services, Inc., a Texas corporation with its principal
place of business at 2833 Trinity Square Drive, Suite 170, Carrollton, Texas
75006 ("IPSI"), IVP Pharmaceutical Care, Inc., a Texas corporation with its
principal place of business at 2833 Trinity Square Drive, Suite 105, Carrollton,
Texas 75006 ("IVP"), and IntegraMed America, Inc., a Delaware corporation with
its principal place of business at One Manhattanville Road, Purchase, New York
10577 ("IntegraMed").
RECITALS
0.1 WHEREAS, IVP is a licenced pharmacy specializing in dispensing
ingestable, injectable, and infusion drugs, pharmaceuticals, and products
related to the treatment of human infertility, pursuant to the prescription of a
duly licensed and authorized physician ("Pharmaceutical Products"), to end-user
patients ("Customers");
0.2 WHEREAS, IntegraMed has developed, and may develop in the future,
relationships with certain Reproductive Science Centers in the United States and
the infertility medical practices associated therewith, as set forth on Exhibit
0.2 attached hereto, as may be amended from time to time (such existing and any
future Reproductive Science Centers and associated infertility medical practices
shall hereinafter be referred to collectively as the "Medical Practices");
0.3 WHEREAS, IPSI is a for-profit corporation formed by IntegraMed to
be engaged in the retail distribution of Pharmaceutical Products to Customers of
the Medical Practices ("Pharmaceutical Services");
0.4 WHEREAS, IntegraMed owns all of the outstanding capital stock of
IPSI and has agreed to provide advertising, promotional, and marketing services
to IPSI under the terms and conditions set forth herein (the "Marketing
Services");
0.6 WHEREAS, IntegraMed desires to cause IPSI to engage IVP to provide
such management, administrative, business, and pharmacy services as are
necessary and appropriate for the conduct and day-to-day administration of
IPSI'S Pharmaceutical Services (the "Management Services"); and
0.7 WHEREAS, IVP has agreed to be retained by IPSI to perform the
Management Services, under the terms and conditions set forth herein;
0.8 NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual covenants and obligations set forth herein, and for such other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby covenant and agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, the following
definitions shall apply:
1.1.1 "Cost of Operations" shall mean a monthly fee paid by
IPSI to IVP on the first day of each month for the items described in
Section 2.1 below. Cost of Operations shall equal that percentage of
the Net Revenues of IPSI realized or accrued during the immediately
preceding month as set forth on Exhibit 1.1.1 attached hereto, as may
be amended from time to time.
1.1.2 "Cost of Pharmaceutical Products" shall mean the cost of
Pharmaceutical Products sold on behalf of IPSI to Customers of Medical
Practices and shall equal IVP's wholesale cost for such Pharmaceutical
Products, as set forth on Exhibit 1.1.2 attached hereto, as may be
amended from time to time.
1.1.3 "Collections" shall mean all payments actually received
by or on behalf of IPSI from the distribution of Pharmaceutical
Products and the provision of Pharmaceutical Services.
1.1.4 "Cycle Kit" shall mean the packaging format and patient
education materials that IVP supplies to Customers under the tradename
"Cycle Kit(TM)."
1.1.5 "Dedicated Assets" shall mean those fixed assets,
including equipment, furniture, and systems, purchased by IPSI and
dedicated exclusively to the provision of Pharmaceutical Services by or
on behalf of IPSI.
1.1.6 "Direct Costs" shall mean the cost of outside
accountants and attorneys who provide services directly to IPSI.
1.1.7 "Employees" shall mean such accounting, nursing,
pharmacy, secretarial, receptionist, and billing and collections
personnel necessary for IPSI to provide Pharmaceutical Services. Such
Employees may be employees exclusively of IPSI, exclusively of IVP, or
may be independent contractors or leased employees.
1.1.8 "Facilities" shall initially mean the office and space,
including furniture and fixtures, situated initially at 2833 Trinity
Square Drive, Suite 170, Carrollton, Texas 75006, or such additional
facilities determined by the JOB to be necessary to conduct the
Pharmaceutical Services.
1.1.9 "Fiscal Year" shall mean the 12-month period beginning
January 1 and ending December 31 of each year.
1.1.10 "GAAP" shall mean generally accepted accounting
principles applied to public companies in the United States.
1.1.11 "JOB" shall mean the Joint Operating Board described in
Section 5.1 below.
1.1.12 "Just-in-time basis" shall mean that Pharmaceutical
Products shall be delivered to IPSI at a point in time contemporaneous
with the time for distribution by IPSI to Customers; provided, however,
a minimal inventory, not to exceed the dollar amount set forth on
Exhibit 1.1.12 attached hereto, as may be amended from time to time,
may be maintained at the Facilities at all times during the Term of
this Agreement (as defined in Section 8.2 below).
1.1.13 "month" shall mean a calendar month.
1.1.14 "Net Revenues" shall mean gross revenues that are
earned and recorded in accordance with GAAP less contractual sales
discounts.
ARTICLE 2
COST OF OPERATIONS AND ADDITIONAL MANAGEMENT FEE
2.1 OPERATIONS. Operations shall include, and Costs of Operations shall
reimburse, cover, and fully compensate IVP for, the following costs and
expenses, which shall be paid on behalf of IPSI to IVP:
2.1.1 Salaries, fringe benefits, payroll taxes, and other
costs of employing or retaining Employees.
2.1.2 Expenses incurred in the recruitment of Employees for
IPSI, including, but not limited to employment agency fees, relocation
and interviewing expenses, and any actual out-of-pocket expenses of IVP
personnel in connection with such recruitment effort;
2.1.3 Any sales and use taxes assessed against IVP related to
the operation of IPSI'S business;
2.1.4 Lease payments, depreciation expense (determined in
accordance with GAAP), interest, and property taxes directly relating
to the Facilities and equipment, utilities, waste removal, and all
other expenses of the Facilities described in Section 3.2 below;
2.1.5 Professional and regulatory licensure fees;
2.1.6 Insurance premiums that are paid with respect to the
insurance delineated in Article 11 below.
2.1.7 Such other costs and expenses actually incurred by IVP
reasonably necessary for the provision of the Management Services under
this Agreement.
2.2 Notwithstanding anything to the contrary contained herein, Cost of
Operations shall not include the following:
2.2.1 Direct Costs;
2.2.2 The Additional Management Fee;
2.2.3 Any federal or state income or franchise taxes of IPSI
or IVP; or
2.2.4 Cost of Pharmaceutical Products.
ARTICLE 3
DUTIES AND RESPONSIBILITIES OF IVP
3.1 MANAGEMENT SERVICES AND ADMINISTRATION. IVP agrees to provide the
Management Services provided for in this Section 3.1, all of which shall be
covered by and included in the Cost of Operations and the Additional Management
Fee, if any.
3.1.1 IPSI hereby appoints IVP as IPSI'S sole and exclusive
manager and administrator of all of its day-to-day operations and
business functions and grants IVP all the necessary authority to carry
out its duties and responsibilities pursuant to the terms of this
Agreement.
3.1.2 IVP shall, on behalf of IPSI, bill patients and collect
fees for Pharmaceutical Products supplied to Customers of the Medical
Practices. IPSI hereby appoints IVP during the Term of this Agreement
to be its true and lawful attorney-in-fact, for the following purposes:
(a) to bill patients in IPSI'S name and on its behalf; (b) to collect
accounts receivable resulting from such billing in IPSI'S name and on
its behalf; (c) to receive payments from insurance companies,
prepayments received from health care plans, and all other third-party
payors; (d) to open in the name of IPSI such savings, checking, and
other accounts at such financial institutions as IVP deems appropriate;
(e) to take possession of and endorse in the name of IPSI any notes,
checks, money orders, and other instruments received in payment of
accounts receivable; and (f) with the consent of IPSI, not to be
unreasonably withheld, to initiate the institution of legal proceedings
in the name of IPSI, to collect any accounts and monies owed to IPSI,
to enforce the rights of IPSI 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 IVP shall supervise and maintain (on behalf of IPSI) all
files and records relating to the operations of the Facilities,
including, but not limited to, accounting and billing records,
prescription records, and collection records. Prescription records
shall at all times be and remain the property of IVP and shall be
located at the Facilities and be readily accessible to IPSI. IVP'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 records
relating to patients 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. IVP may utilize 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. IPSI shall
have unrestricted access to all of such records at all times.
3.1.4 IVP shall supply to IPSI all reasonably necessary
management, administrative, supervisory, nursing, pharmacy, clerical,
accounting and bookkeeping Employees necessary to provide, and IVP
shall provide, quality and competent pharmacy services to Customers of
IPSI. IVP shall provide such computer services, printing, postage and
duplication services, and any other necessary or appropriate
administrative services reasonably necessary for the operation of
IPSI'S Pharmaceutical Services. IVP shall have the responsibility for
hiring, supervising, promoting, reprimanding, suspending, and/or
reinstating and terminating all Employees consistent with IVP's
policies and procedures applicable to IVP's own employees.
3.1.5 IVP shall arrange for such legal and accounting services
as may be reasonably required in the ordinary course of the IPSI'S
operation; provided, however, that IVP shall have no authority to
arrange for any legal or accounting services to the extent that the
interests of IVP and IPSI in the matter in question shall be adverse.
IVP will provide IPSI with all bookkeeping services necessary to
support IPSI'S Pharmaceutical Services, including, without limitation,
maintenance, custody, and supervision of all business records, papers,
documents, ledgers, journals and reports, and the preparation,
distribution, and recordation of all bills and statements for services
rendered by IPSI, including the billing and completion of reports and
forms required by insurance companies, governmental agencies, or other
third-party payors.
3.1.6 IVP shall open appropriate bank accounts in the name of
IPSI and shall deposit the proceeds of all Capitalization Loans and all
Collections in such bank accounts and pay Costs of Operations, Costs of
Pharmaceutical Products, Direct Costs, the Additional Management Fee,
if any, taxes, the repayment of Capitalization Loans, and the
distribution of Net Profits from such bank accounts.
3.1.7 In connection with any Pharmaceutical Products sold to
IPSI, IVP shall provide CycleKits and any patient educational materials
in the same manner as it provides such to Customers purchasing
Pharmaceutical Products directly from IVP.
3.2 FACILITIES.
3.2.1 IVP shall arrange for such Facilities reasonably
necessary for the proper operation of IPSI'S Pharmaceutical Services.
IVP shall arrange for and ensure that 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. IVP shall ensure the cleanliness of the Facilities, and
timely maintenance and cleanliness of the equipment, furniture, and
furnishings located therein. IVP shall consult with IPSI regarding the
condition, use, and needs for the Facilities, including equipment,
services, and improvements thereto. The Facilities may be rented and/or
purchased and may be designated for IPSI'S sole and exclusive use
and/or may be shared with IVP or with any person or entity. A
description of the initial Facilities are set forth on Exhibit 3.2.1
attached hereto.
3.2.2 In the reasonable judgment of the JOB based on
recommendations of IVP, IVP and the IPSI may establish such other or
additional Facilities for the operation of the business of IPSI.
3.2.3 IVP (a) shall purchase for its own account at its own
cost, and shall maintain in its own inventory, sufficient
Pharmaceutical Products as may be necessary from time to time to
satisfy IPSI'S Pharmaceutical Services in a timely fashion; (b) shall
sell to IPSI, at the Cost of Pharmaceutical Products, only such
Pharmaceutical Products as are necessary to fill the orders of
Customers of the Medical Practices on a just-in-time basis; and (c)
shall distribute such Pharmaceutical Products to Customers of the
Medical Practices in accordance with all applicable laws and
regulations and as prescribed by physicians associated with the Medical
Practices. Cost of Pharmaceutical Products shall be paid by IPSI to IVP
under the following schedule: Pharmaceutical Products sold during the
first 15 days of a month shall be paid for on the 25th day of such
month; Pharmaceutical Products sold during the 16th day through the end
of the month shall be paid on the 10th day of the immediately
succeeding month.
3.3 FINANCIAL PLANNING AND GOALS. IVP shall prepare an annual capital
and operating budget for IPSI reflecting the anticipated revenues and expenses
and sources and uses of capital for growth of IPSI'S business at the Facilities.
IVP shall present the budget to the JOB for its approval at least 30 days prior
to the commencement of the Fiscal Year. If the JOB does not agree on the budget
or any aspect thereof for any Fiscal Year, the budget, or portion of the budget
in disagreement, for the preceding Fiscal Year shall serve as the budget until
such time as a budget is the subject of agreement.
3.4 FlNANCIAL STATEMENTS.
3.4.1 IVP shall arrange for the preparation of, and within 30
days following the end of each Fiscal Year shall present to IPSI, (a) a
balance sheet, dated as of the last day of such Fiscal Year; (b) a cash
flow statement showing the cash flows for the month and for the entire
Fiscal Year then concluded; and (c) a statement showing the income and
expenses of IPSI for the month and for the entire Fiscal Year then
concluded. At the election of IntegraMed expressed in writing to IVP at
least 90 days prior to the end of a Fiscal Year, the financial
statements referred to in this Section 3.4 shall be audited by
PriceWaterhouseCoopers or other independent certified public account
approved by the JOB. IVP's failure to present annual financial
statements to IPSI in accordance with this Section 3.4.1 within 45 days
following the end of the Fiscal Year shall be deemed a material breach
subject to Section 9.1.2 below.
3.4.2 IVP shall prepare, and within six days following the end
of each month shall present to IPSI, (a) an unaudited balance sheet,
dated as of the last day of such month; (b) a cash flow statement
showing the cash flow for the month and for the Fiscal Year to date;
and (c) a statement showing the income and expenses of IPSI for such
month and for the Fiscal Year to date.
3.5 INVENTORY AND SUPPLIES. IVP shall order and purchase inventory and
supplies, other than Pharmaceutical Products governed by Section 3.2.3 of this
Agreement, and such other materials that are reasonably requested by IPSI to
enable IPSI'S Pharmaceutical Services to be conducted in a cost-effective
manner.
3.6 LICENSES AND PERMITS. IVP shall, on behalf of and in the name of
IVP or, at the election of IVP, in the name of IPSI, coordinate and maintain all
pharmacy and other licenses, permits, and certificates of authority necessary
for the conduct of IPSI'S Pharmaceutical Services.
ARTICLE 4
DUTIES AND RESPONSIBILITIES OF INTEGRAMED AND IPSI
4.1 USE OF FACILITIES. IntegraMed shall take such reasonable steps as
are necessary to cause IPSI to use and occupy, and IPSI shall use and occupy,
the Facilities exclusively for the purpose of providing Pharmaceutical Services
to Customers of Medical Practices.
4.2 LICENCES AND PERMITS. IntegraMed and IPSI covenant to use diligent
efforts to cooperate with IVP in order to obtain necessary licenses, permits,
and certificates of authority necessary for IPSI to conduct Pharmaceutical
Services.
4.3 PARTICIPATION IN MANAGEMENT. IPSI, while delegating all of the
day-to-day operations of its business through this Management Agreement, shall
nonetheless actively participate in such management through its participation in
the JOB and the presence of its Employees at the Facilities. IntegraMed, as the
sole shareholder of IPSI, shall participate in the supervision of IPSI through
(a) its election of its representative to the JOB; and (b) its review,
supervision, and/or audit of the Management Services provided under this
Agreement. IntegraMed hereby agrees that all compensation, expenses, and travel
costs for its officers, directors, employees, and consultants, other than
Employees, shall be paid by IntegraMed.
4.4 COOPERATION WITH IVP. IPSI and IntegraMed agree that during the
Term of this Agreement, they will use their best efforts to cause their officers
and employees to execute such documents, agreements, notifications, and consents
and take such steps reasonably necessary to assist IVP in conducting its
Management Services under this Agreement and in billing and collecting for
Pharmaceutical Products sold.
4.5 SALES AND MARKETING. Marketing Services on behalf of IPSI shall be
performed exclusively by IntegraMed at its sole cost and expense. IntegraMed
shall prepare an annual sales and marketing plan for IPSI detailing its
anticipated activities in such regard. IntegraMed shall present the plan to the
JOB for its approval at least 45 days prior to the commencement of the Fiscal
Year. If the JOB does not agree on the plan or any aspect thereof for any Fiscal
Year, the plan, or portion of the plan in disagreement, for the preceding Fiscal
Year shall serve as the plan until such time as a plan is the subject of
agreement.
4.6 ADDITIONAL COVENANTS OF IPSI AND INTEGRAMED. IPSI hereby covenants
that, during the Term of this Agreement, it will not do any of the following:
(a) except with the consent of the JOB, enter into any line of business other
than the sale of Pharmaceutical Products and Pharmaceutical Services pursuant to
this Agreement; (b) incur any indebtedness except as contemplated in this
Agreement; or (c) merge, consolidate, liquidate, or sell all or substantially
all of its assets. IntegraMed hereby covenants that, during the Term of this
Agreement, it will not sell, assign, convey, or transfer its stock in IPSI.
Either of IPSI'S or IntegraMed's breach of this Section 4.6 shall be deemed a
material breach subject to Section 9.1.2 below.
ARTICLE 5
JOINT DUTIES AND RESPONSIBILITIES
5.1 FORMATION AND OPERATION OF JOINT OPERATIONS BOARD. IVP and
IntegraMed shall establish a Joint Operations Board ("JOB"), which shall be
responsible for developing management and administrative policies for the
overall operation of IPSI. IntegraMed and IVP shall each be entitled to elect
two members to the JOB, provided, however, that each party shall be allowed only
one vote on each matter submitted to the JOB for its vote. The representatives
of IntegraMed and IVP on the JOB shall be either directors or executive officers
of their respective parties.
5.2 DUTIES AND RESPONSIBILITIES OF THE JOB. The JOB shall have the
following duties and responsibilities:
5.2.1 ANNUAL BUDGETS AND MARKETING PLANS. All annual capital
and operation budgets prepared by IVP, and all sales, marketing,
advertising, and promotions plans prepared by IntegraMed, shall be
subject to the review, amendment, approval, and/or disapproval of the
JOB. Approval shall not be unreasonably withheld.
5.2.2 CAPITAL IMPROVEMENTS AND EXPANSION. Except as otherwise
provided herein, any capital improvements with respect to any
Facilities and expansion plans with respect to IPSI shall be reviewed
and approved by the JOB and shall be based upon the best interests of
IPSI, and shall take into account capital priorities, economic
feasibility, productivity and then current market and regulatory
conditions.
5.2.3 CAPITALIZATION LOANS. The JOB shall have the sole power
to authorize and direct Capitalization Loans.
5.2.4 STRATEGIC PLANNING. The JOB shall develop long-term
strategic plans, from time to time.
5.2.5 RETAIL PRICING POLICIES. The JOB shall establish retail
pricing policies.
5.2.6 PROVIDER CONTRACT. The JOB shall have veto authority
over all managed care, PPO, HMO, Medicare risk and other provider
contracts.
ARTICLE 6
FEES
6.1 IVP's FEES. IVP shall be paid the following for its Management
Services rendered pursuant to this Agreement:
6.1.1 The Cost of Operations; and
6.1.2 An Additional Management Fee, accrued and paid monthly,
but reconciled to IPSI'S annual results of operations, equal to 50% of
the net income before tax (determined in accordance with GAAP and
without reference to the Additional Management Fee), provided, however,
that at any time during which Capitalization Loans are outstanding,
payment (but not accrual) of the Additional Management Fee shall be
limited to Net Available Cash of IPSI. "Net Available Cash" of IPSI
shall mean the amount resulting from (a) all Collections and other
income actually received during the preceding month; less the sum of
(b) all Costs of Pharmaceutical Products; (c) all Cost of Operations
for such month; (d) Direct Costs for such month; (e) the payment of
interest and the repayment, if any, of the current principal portion of
all Capitalization Loans during such month; and (f) a reserve, in an
amount determined by the JOB, for anticipated expenses, capital needs,
or contingencies of IPSI and for the payment of all applicable income,
franchise, property, and payroll taxes of IPSI for such month
(calculated after deduction of expenses of the Additional Management
Fee).
6.2 PRIORITY OF PAYMENTS. IVP, IntegraMed, and IPSI hereby covenant
that all payments from accounts of IPSI shall be paid by IPSI to IVP and
IntegraMed in the following order of priority: (a) the payment of Costs of
Pharmaceutical Products; (b) the payment of Costs of Operations; (c) the payment
of Direct Costs; (d) the payment or reserve for payment of interest accrued on
Capitalization Loans to IVP and IntegraMed (or other lender), pari passu; (e)
the payment or reserve for payment of the current portion of the Capitalization
Loans to IVP and IntegraMed (or other lender), pari passu; and (f) the payment
of the Additional Management Fee to IVP and the payment of dividends to
IntegraMed (not to exceed the amount of the Additional Management Fee) pari
passu.
ARTICLE 7
CAPITALIZATION LOANS
7.1 CAPITALIZATION LOANS.
7.1.1 IVP hereby covenants and agrees to lend to IPSI, and
IntegraMed covenants and agrees to lend to or to securing financing
from another source to lend to IPSI, within five days following the
first meeting of the JOB, 50% of the aggregate funds determined by the
JOB to be sufficient and necessary to secure the IPSI pharmacy
licensure in the States in which the JOB intends IPSI to transact
business, to provide initial operating capital, and to finance other
start-up costs identified by the Board (the "Initial Loans"). IVP shall
have no obligation to transfer such funds to IPSI unless and until IPSI
delivers to IVP proof of receipt of a matching amount of funds from
IntegraMed or another source. Such Initial Loans shall be evidenced by
Promissory Notes substantially in the form of Exhibit 7.1.1 attached
hereto.
7.1.2 In the event that, from time to time, the JOB determines
that IPSI requires additional capital to finance operating deficits
and/or capital expenditures of IPSI, IVP hereby covenants and agrees to
lend to IPSI, and IntegraMed covenants and agrees to lend to or to
securing financing from another source to lend to IPSI, within five
days following the meeting of the JOB authorizing such loans, 50% of
the aggregate funds determined by the JOB to be sufficient and
necessary to finance such operating deficits and/or capital
expenditures ("Subsequent Loans"). IVP shall have no obligation to
transfer such funds to IPSI unless and until IPSI delivers to IVP proof
of receipt of a matching amount of funds from IntegraMed or another
source. Such loan shall be evidenced by Promissory Notes substantially
in the form of Promissory Notes representing the Initial Loans.
7.1.3 The Initial Loans and all Subsequent Loans, if any
(collectively, the "Capitalization Loans"), shall bear interest at the
30-Year Treasury Note rate, and interest shall be paid by IPSI no less
than annually. All Capitalization Loans shall be unsecured obligations
of IPSI, without a fixed term, and the principal thereon shall be paid
solely out of Net Profits of IPSI. "Net Profits" of IPSI shall mean the
amount resulting from the following: (a) all Collections, together with
other income actually received, during the preceding Fiscal Year (or
other such other period determined by the JOB); less the sum of (b) all
costs of Pharmaceutical Products sold to IPSI'S Customers during such
period; (c) all Cost of Operations for such period; (d) all Direct
Costs for such period; (e) the payment of interest on all
Capitalization Loans during such period; (f) the payment of, or reserve
for, all applicable income, property, and payroll taxes of IPSI for
such period; and (g) a reserve, in an amount determined by the JOB, for
anticipated expenses, capital needs, or contingencies of IPSI.
ARTICLE 8
EXCLUSIVE MANAGEMENT RIGHT, TERM AND RENEWAL
8.1 IPSI grants IVP the exclusive right to manage IPSI during the Term
of this Agreement.
8.2 The term of this Agreement shall begin on the Effective Date of
this Agreement and shall expire on the date 10 years after such date (unless
this Agreement is renewed from time to time as provided in this Section 8.2) or
on any earlier date if this Agreement is terminated pursuant to Article 9 below
(the Effective Date through the date of final expiration or termination shall be
referred to as the "Term of this Agreement"). 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.
ARTICLE 9
TERMINATION OF THE AGREEMENT
9.1 TERMINATION. This Agreement may be terminated by any party to this
Agreement in the event of the following, provided, however, that no party having
the right to terminate this Agreement shall be obligated to exercise such right:
9.1.1 INSOLVENCY. If a receiver, liquidator, or trustee of any
party shall be appointed by court order, or a petition to reorganize
shall be filed against any party under any bankruptcy, reorganization,
or insolvency law, and shall not be dismissed within 90 days, or if any
party shall file a voluntary petition in bankruptcy or make assignment
for the benefit of creditors, then either of the other parties may
terminate this Agreement upon 10 days prior written notice to the other
parties.
9.1.2 MATERIAL BREACH. If any party shall materially breach
its obligations hereunder, then either of the other parties 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. It shall be a material breach of the
obligation to provide Management Services for IVP to provide Management
Services in a manner inconsistent with the generally prevailing
standard of care in the delivery of pharmacy services to Customers, or
to provide Management Services in a commercially unreasonable manner or
in a manner that wastes or destroys the assets or reputation of IPSI.
IntegraMed and/or IPSI shall have the burden of proving that IVP has
failed to provide Management Services in a commercially reasonable
manner or has destroyed the assets or reputation of IPSI in an
arbitration proceeding or court of competent jurisdication.
9.1.3 ILLEGALITY. Any 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 any
party that 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 any party under this Agreement are unlawful and such
assertion is not contested by such party (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. Notwithstanding this paragraph, the parties acknowledge that
this Agreement serves the interests of all of the parties. For these
reasons, the parties agree to make such amendments to this Agreement as
are necessary to conform to the opinions, reviews, and/or orders of
regulatory and/or administrative agencies of any jurisdiction, such as
to preserve the legality of this Agreement, provided that such are not
to the material financial detriment of any party.
9.1.4 TERMINATION UPON LOSS OF LICENSE. IPSI may terminate
this Agreement upon 10 days prior written notice to IVP should IVP's
license to practice pharmacy, in any jurisdiction where Pharmaceutical
Services are provided to Customers of Medical Practices, is suspended,
revoked, or not renewed. Any loss, revocation, or failure to renew
licenses of IVP shall be deemed a material breach of this Agreement by
the party or parties whose negligence, fault, or failure to provide
necessary information is the primary cause of such loss, revocation, or
non-renewal.
9.1.5 TERMINATION UPON UNPROFITABILITY. In the event that, at
any time following the date nine months from the Effective Date of this
Agreement, IPSI does not have net income determined in accordance with
GAAP for any period of six consecutive months, then any party may
terminate this Agreement upon 30 days prior written notice to the other
parties.
9.1.6 Terminations pursuant to Sections 9.1.1 through 9.1.3
and the second sentence of Section 9.1.4 inclusive shall be deemed
termination for cause ("Termination for Cause"), and shall be made by
delivering a termination notice, detailing the reasons therefor, to the
non-terminating party, and providing the opportunity to cure under the
provisions of Section 9.1.2 above. Terminations pursuant to the first
sentence of Section 9.1.4 or pursuant to Section 9.1.5 shall be deemed
termination without cause ("Termination without Cause").
ARTICLE 10
RIGHTS UPON TERMINATION
10.1 If this Agreement is Terminated for Cause by IPSI or IntegraMed,
then:
10.1.1 IPSI shall have the right, but not the obligation, to
sell to IVP (and if exercised by IPSI, IVP shall have the obligation to
purchase from IPSI) all Dedicated Assets, at their net book value
determined in accordance with GAAP as of the date of termination.
10.1.2 IPSI shall have the right, but not the obligation, to
assume all leases for Facilities and Dedicated Assets (to the extent
that such leases are not in the name of IPSI), or if the assumption is
not permitted, to make all payments to IVP called for under such leases
and to enjoy uninterrupted use of such Facilities and Dedicated Assets.
10.1.3 IPSI shall elect its course of action, with respect to
Sections 10.1.1 and 10.1.2 above, by the service of a written notice on
IVP 30 days prior to the date of termination.
10.1.4 Any and all Capitalization Loans payable to IVP,
outstanding at the date of termination, shall be deemed paid in full,
and no further payments of interest and/or principal shall be due or
payable thereon.
10.1.5 The provisions of Articles 11 and 12.1 shall be of no
force and effect.
10.1.6 The license granted by Article 13 shall cease, and IPSI
shall cease to use any such Tradename and cease to utilize any written
materials, for delivery to Customers of Pharmaceutical Products,
supplied by IVP.
10.2 If this Agreement is Terminated for Cause by IVP, then:
10.2.1 IVP shall have the right, but not the obligation, to
purchase from IPSI (and if exercised by IVP, IPSI shall have the
obligation to sell to IVP), all Dedicated Assets at their net book
value determined in accordance with GAAP as of the date of termination.
10.2.2 IVP shall have the right, but not the obligation, to
assume all leases for Facilities and Dedicated Assets, or if the
assumption is not permitted, to make all payments to IPSI called for
under such leases and to enjoy uninterrupted use of such Facilities and
Dedicated Assets.
10.2.3 IVP shall elect its course of action, with respect to
Sections 10.2.1 and 10.2.2 above, by the service of a written notice on
IPSI 30 days prior to the date of termination.
10.2.4 Any and all Capitalization Loans payable to IVP,
outstanding at the date of termination, shall be paid by IPSI or
IntegraMed immediately.
10.2.5 The provisions of Articles 11 and 12.2 shall be of no
force and effect.
10.2.6 The license granted by Article 13 shall cease, and IPSI
shall cease to use any such Tradename and cease to utilize any written
materials, for delivery to Customers of Pharmaceutical Products,
supplied by IVP.
10.3 If this Agreement is Terminated without Cause by any party, then:
10.3.1 If IVP is the non-terminating party, then (a) IVP shall
be entitled to the immediate payment of any outstanding IVP
Capitalization Loans; (b) the provisions of Section 12.1 shall continue
to apply for the periods specified therein; and (c) the license granted
by Article 13 shall cease, and IPSI shall cease to use any such
Tradename and cease to utilize any written materials, for delivery to
Customers of Pharmaceutical Products, supplied by IVP.
10.3.2 If IPSI and IntegraMed are the non-terminating parties,
then (a) IPSI shall be entitled, as liquidated damages, to an amount
equal to the aggregate amount of any and all outstanding Capitalization
Loans (other than IVP's Capitalization Loans); (b) the provisions of
Section 12.2 shall continue to apply for the periods specified therein;
and (c) the license granted by Article 13 shall cease, and IPSI shall
cease to use any such Tradename and cease to utilize any written
materials, for delivery to Customers of Pharmaceutical Products,
supplied by IVP.
10.3.3 The terminating party shall waive the right to payment
for any outstanding Capitalization Loans (or if Capitalization Loans
are provided by a source other than IntegraMed, a termination by IPSI
or IntegraMed shall waive the right to payment for any outstanding
Capitalization Loans for such other source).
10.3.4 The terminating party shall bear any (a) accounting and
bookkeeping; and (b) severance/vacation costs associated with any
Employees which directly result from the termination.
10.4 In the event that this Agreement is terminated for any reason,
then IVP shall cease dispensing Pharmaceutical Products to Customers of IPSI as
of the date of notice of termination, and IVP and IPSI covenant to utilize their
best efforts, for a period 90 days prior to the termination date and 30 days
thereafter, or, if the required notice of termination be only 30 days, then for
the notice period and 90 days post-termination, to fully cooperate so as to
effect a transition of the operation to IPSI, the collection of all accounts
receivable earned as of the termination date and the payment of all trade and
accounts payable as of the termination date, including, if applicable,
Capitalization Loans (the "Transition Period"). For any services provided by IVP
during a Transition Period that extend beyond the termination date, IVP shall be
paid a reasonable fee to be agreed upon between the IVP and IPSI, but in no
event shall such amount be less than the Cost of Operations and Additional
Management Fee, if any, that would have been earned by IVP during the Transition
Period had the Agreement not so terminated.
ARTICLE 11
INSURANCE
11.1 IVP, at its own cost, shall secure and carry 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, for professional
negligence and general liability. Such insurance shall name IPSI and IntegraMed
as additional named insureds. IVP shall also carry a policy of public liability
and property damage insurance with respect to the Facilities under which the
insurer agrees to indemnify IPSI and IntegraMed, subject to ordinary
deductibles, 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 IVP. The minimum
limits of liability of such insurance shall be $1 million combined single limit
covering bodily injury and property damage. IPSI and IntegraMed shall be
additional named insureds under the terms of such insurance coverages. A
certificate of insurance evidencing such policies shall be presented to IPSI
within 30 days after the execution of this Agreement. Failure to provide such
certificate(s) with such period shall constitute a material breach by IVP
hereunder subject to the procedures of Section 9.1.2 above.
11.2 IVP shall provide IPSI with written notice, at least 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 12
NON-SOLICITATION AND NON-COMPETITION
12.1 During the Term of this Agreement, and for a period of two years
after the termination thereof (except as provided in Section 10 above), neither
IntegraMed nor IPSI shall, either individually or through an affiliate, (a)
enter into any agreement with another independent person or entity, other than
IVP, to provide Management Services substantially similar to the Management
Services required under this Agreement; (b) market or sell any pharmaceuticals
to any end-user patients except through IPSI during the Term of this Agreement;
or (c) employ or solicit for employment any employee of IVP, or contact any
employee of IVP for the purpose of encouraging such employees to leave the
employment of IVP.
12.2 During the Term of this Agreement, and for a period of two years
after the termination thereof (except as provided in Section 10 above), IVP
shall not, either individually or through an affiliate, (a) market or sell any
Pharmaceutical Products to any patients of the Medical Practices except through
IPSI (and subject to the terms of this Agreement), provided, however, that this
prohibition shall not apply to the Medical Practices identified on Exhibit 12.2
attached hereto who had Customers that had purchased Pharmaceutical Products
from IVP prior to the Effective Date of this Agreement; or (b) employ or solicit
for employment any Employee of IPSI (other than Employees who are employees of
or shared employees with IVP or independent contractors), IntegraMed, or their
affiliates ("IPSI Employees"), or contact any IPSI Employees for the purpose of
encouraging such employees to leave their employment.
ARTICLE 13
Licenses and Confidential Information
13.1 GRANT OF LICENSE. During the Term of this Agreement, IVP hereby
grants to IPSI a nonexclusive, personal, nonassignable, nontransferable,
royalty-free license to use the "Cycle Kit" tradename ("Tradename") in IPSI'S
business. IPSI hereby acknowledges IVP's exclusive ownership of the Tradename.
13.2 TRADE SECRETS, PROPRIETARY AND CONFIDENTIAL INFORMATION. IPSI
hereby acknowledges that it shall have access to and become familiar with
certain management information systems, trade secrets, and proprietary and
confidential information of IVP, as described and scheduled on Exhibit 13.2
("Confidential Information"). IPSI hereby acknowledges IVP's exclusive ownership
of Confidential Information and agrees not to use or disclose such Confidential
Information without the prior written consent of IVP, which consent may be
withheld by IVP in its sole and absolute discretion. IPSI shall not photocopy or
otherwise duplicate any Confidential Information of another 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 IVP and shall be returned to the proprietor
immediately upon any termination of this Agreement.
ARTICLE 14
MISCELLANEOUS
14.1 FURTHER ASSURANCES. Each party hereto agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
14.2 PRIOR AGREEMENTS; AMENDMENTS. This Agreement and the accompanying
exhibits represent the entire agreement and understanding of the parties hereto
and 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 all 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.
14.3 ASSIGNMENT; BINDING EFFECT. This Agreement and the rights and
obligations hereunder may not be assigned without the prior written consent of
all of the parties, and any attempted assignment without such consent shall be
void and of no force and effect. Subject to such limitations on assignment, 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.
14.4 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 or
relinquishment of such right at any other time or times.
14.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. Any and all claims,
disputes, or controversies arising under, out of, or in connection with this
Agreement or any breach thereof, shall be determined by binding arbitration in
Washington, D.C. (hereinafter "Arbitration"). The party seeking determination
shall subject any such dispute, claim or controversy to the American Arbitration
Association, Washington, D.C., and the rules of commercial arbitration of the
selected entity shall govern. The Arbitration shall be conducted and decided by
three 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,
including any liquidated damages provision. 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 or otherwise enforce
this Section shall be brought only in the Courts of the States of New York or
Texas or the United States District Courts for the Southern District of New York
or the Northern District of Texas, to whose jurisdiction for such purposes IPSI,
IntegraMed, and IVP hereby irrevocably consent and submit.
14.6 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.
14.7 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.
14.8 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:
14.8.1 If for IPSI:
Gerardo Canet, President & CEO
IntegraMed Pharmaceutical Services, Inc.
One Manhattanville Road
Purchase, NY 10577-2100
14.8.2 If for IVP:
Von L. Best, President & CEO
IVP Pharmaceutical Care, Inc.
2833 Trinity Square Drive
Suite 105
Carrollton, TX 75006
14.8.3 If for IntegraMed:
Gerardo Canet, President & CEO
IntegraMed America Inc.
One Manhattanville Road
Purchase, NY 10577-2100
Either party hereto, by like notice to the other parties, may designate
such other address or addresses to which notice must be sent.
14.9 INDEMNIFICATION.
14.9.1 IVP agrees to indemnify and hold harmless IPSI and
IntegraMed, their shareholders, directors, officers, employees and
servants from any suits, claims, actions, losses, liabilities or
expenses (including reasonable attorney's fees and costs) arising out
of or in connection with any act or failure to act by IVP related to
the performance of its duties and responsibilities under this
Agreement. The obligations contained in this Section 14.9.1 shall
survive termination of this Agreement.
14.10.2 IPSI and IntegraMed each agree to indemnify and hold
harmless IVP, its shareholders, directors, officers, employees and
servants from any suits, claims, actions, losses, liabilities or
expenses (including reasonable attorney's fees and costs) arising out
of or in connection with any act or failure to act by IPSI or
IntegraMed related to the performance of its duties and
responsibilities under this Agreement. The obligations contained in
this Section 14.9.2 shall survive termination of this Agreement.
14.11 In the event of any claims or suits in which IVP, IntegraMed,
and/or IPSI and/or their directors, officers, employees and servants are named,
each of IVP, IntegraMed, and IPSI 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.
14.12 Promptly after the receipt by IPSI or IntegraMed of notice of any
claim or commencement of any action or proceeding subject to indemnification
delineated in Section 14.9.1 ("asserted liability"), IPSI or IntegraMed, as the
case may be, will demand such indemnification from IVP and proffer the defense
to IVP. IVP may thereafter, at its option, assume such defense at its own
expense and by its own counsel. IVP shall provide written notice to IPSI or
IntegraMed, as the case may be, within 20 days, of its assumption or declination
of such defense. If IVP shall undertake to compromise any asserted liability, it
shall promptly notify IPSI or IntegraMed, as the case may be, of its intention
to do so and IPSI or IntegraMed, as the case may be, agrees to cooperate fully
and promptly with IVP and its counsel in the compromise and defense of any
asserted liability. IVP shall not enter into any non-monetary settlement
hereunder without the prior written consent of IPSI or IntegraMed, as the case
may be. Notwithstanding the foregoing, IPSI or IntegraMed, as the case may be,
shall have the right to participate in the compromise or defense of any asserted
liability with its own counsel and at its own expense.
14.13 Promptly after the receipt by IVP of notice of any claim or
commencement of any action or proceeding subject to indemnification delineated
in Section 14.9.2 ("asserted liability"), IVP will demand such indemnification
from IPSI or IntegraMed, as the case may be, and proffer the defense to such
party. Such party may thereafter, at its option, assume such defense at its own
expense and by its own counsel. Such party shall provide written notice to IVP,
within 20 days, of its assumption or declination of such defense. If IPSI or
IntegraMed, as the case may be, shall undertake to compromise any asserted
liability, it shall promptly notify the IVP of its intention to do so and IVP
agrees to cooperate fully and promptly with IVP and its counsel in the
compromise and defense of any asserted liability. Neither IPSI nor IntegraMed
shall enter into any non-monetary settlement hereunder without the prior written
consent of IVP. Notwithstanding the foregoing, IVP shall have the right to
participate in the compromise or defense of any asserted liability with its own
counsel and at its own expense.
14.14 CONSTRUCTION. Each party and its counsel have participated fully
in the review and revision of this Agreement. In construing this Agreement, it
shall be deemed to have been drafted jointly.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above written.
IVP PHARMACEUTICAL CARE, INC.
By: /s/Von L. Best
-------------------------------
Von L. Best, President and CEO
INTEGRAMED PHARMACEUTICAL SERVICES, INC.
By: /s/ Gerardo Canet
--------------------------------
Gerardo Canet, President and CEO
INTEGRAMED AMERICA, INC.
By: /s/Gerardo Canet
--------------------------------
Gerardo Canet, President and CEO
EXHIBIT 0.2
IntegraMed America Inc. Reproductive Science Centers Network
1. Reproductive Science Center of Boston
2. Reproductive Science Associates- Mineola, New York and Stoney Brook, New York
3. Reproductive Science Center of the Bay Area Fertility and Gynecology
Medical Group
4. Reproductive Science Associates- Kansas City, Missouri
5. Reproductive Science Center at the Walter Reed Army Medical Center
6. Institute of Reproductive Medicine and Science of Saint Barnabas
Medical Center
7. Fertility Centers of Illinois
8. Shady Grove Fertility Centers
EXHIBIT 1.1.1
Cost of Operations
(% of Net Revenue)
--------------------------------------------------------------------------
Monthly Cost Of
Net Revenue Operations
--------------------------------------------------------------------------
$25,000 Or Below 22.84%
$50,000 Or Below 17.15%
$100,000 Or Below 14.30%
$200,000 Or Below 12.86%
$400,000 Or Below 12.16%
$800,000 Or Below 11.81%
$1,250,000 Or Below 11.68%
$1,500,000 Or Below 11.64%
EXHIBIT 1.1.2
Cost of Pharmaceutical Products
IVP will purchase Pharmaceutical Products and will use its wholesale
license to resell to IPSI on a just-in-time basis. IVP will pass along its
utilization and market-share rebates to IPSI; however, IVP will not pass along
its 2% Gonal F special rebate, its trade discounts received as incentive for
timely payment, or its discounts on bulk purchases as defined below. These
guidelines yield the following rebate structure as of the Effective Date of this
Agreement:
Qualifying Rebates (Passed along to IPSI):
1. The variable Serono market-share rebates and the Serono Gonal F Sales Force
rebate.
2. The Organon utilization rebates.
3. The Ferring market-share rebates.
Non-Qualifying Rebates (Kept by IVP):
1. All rebates given as incentive for timely payment (e.g., 2% 30/ Net 31).
2. The Serono 2% Gonal F special rebate.
Other Issues:
1. A few manufacturers, e.g., TAP, do not offer any rebates, and IVP buys
at Wholesale Acquisition Cost (WAC). These products will be billed at
net invoice +2%.
2. From time to time, IVP may receive additional discounts from
manufacturers for committing to bulk purchases. The quantities usually
represent a three- to 12-month supply, and the value of the discounts
is partially offset by IVP's cost of capital, storage costs, and
property taxes. These discounts will not be passed along to IPSI.
3. WAC will be the basis by which all products are sold to IPSI.
Qualifying rebates that are taken by IVP at time of payment will be
passed to IPSI on IVP's invoice. Qualifying rebates that are received
via check from the manufacture at a later time will be estimated and
accrued in the IPSI monthly financials.
EXHIBIT 1.1.12
Pharmaceutical Products Kept On The Shelf
($15,000 Maximum)
2x2 Nonsterile Gauze
Alcohol Prep Pads
Amoxil Cap 500mg
Aygestin Tab 5mg
Climara Dis 0.05mg
Climara Dis 0.1mg
Clomid 50mg
Clomiphene Citrate 50mg
Demulen 1/35 28 Tabs
Dexamethasone Tab 0.25mg
Dexamethasone Tab 0.5mg
Dexamethasone Tab 0.5mg
Doxycycline Hyclate Cap 100mg
Estrace Tab 0.5mg
Estrace Tab 1mg
Estrace Tab 2mg
Estraderm Dis 0.1mg
Estradiol Tab 0.5mg
Estradiol Tab 1mg
Estradiol 2mg
Folic Acid Tab 1mg
Heparin Sodium DCU Inj 20000ml
Heparin Sodium Inj 10000ml
Medrol Tab 16mg
Medrol Tab 4mg
Medrol Tab 8mg
Methylprednisolone Tab 4mg
Ortho-Novum 1/35 21 Tabs
Ortho-Novum 7/7/7 28 Tabs
Ovcon 35/21 Tabs
Ovu Quick 9 day
Ovu Quick 6 day
Parlodel Tab 2.5mg
Prednisone Tab 10mg
Prednisone Tab 20mg
Prednisone Tab 5mg
Prenate Ultra Tab
Serophene Tab 50mg
Stuartnatal Plus Tab Plus
Synarel Sol 2mg/ml
Tetracycline HCL Cap 500mg
Vivelle Dis 0.1mg
EXHIBIT 3.2.1
[floor plan to be inserted here]
EXHIBIT 7.1.1
Form of Promissory Notes Representing Capitalization Loans
NON-NEGOTIABLE PROMISSORY NOTE
BORROWER: IntegraMed Pharmaceutical Service, Inc.
2833 Trinity Square Drive
Suite 170
Carrollton, Texas 75006
LENDER: ________________________________________
________________________________________
________________________________________
PRINCIPAL AMOUNT: $150,000.00
INDEX: 30-Year Treasury Bill Rate
INITIAL RATE: 5.25%
DATE OF NOTE: April __, 1999
PROMISE TO PAY. Borrower promises to pay to Lender, in lawful money of the
United States of America, the principal amount of One Hundred Fifty Thousand
Dollars and Zero Cents ($150,000.00) or so much as may be outstanding, together
with interest on the unpaid outstanding principal balance, on December 31, 2009
(the "Maturity Date"), or earlier as provided herein.
DESCRIPTION OF NOTE. This Note represents a Capitalization Loan, as defined in
that certain Management Agreement dated April ___, 1999, by and among, inter
alia, Borrower and Lender (the "Management Agreement").
CHOICE OF USUARY CEILING AND INTEREST RATE. The interest rate on this Note has
been implemented under the "Indicated Rate Ceiling" as referred to in Article
5069-1.04(a)(1) of Vernon's Texas Civil Statutes, as amended ("V.T.C.S."). The
terms, including the rate, or index, formula, or provision of law used to
compute the rate, on the Note, will be subject to revision as to current and
future balances, from time to time, by notice from Lender in compliance with
Article 5069-1.04(i) V.T.C.S.
PAYMENT. Except as provided herein, Borrower shall pay this loan in one payment
of all outstanding principal plus all accrued unpaid interest on the Maturity
Date. Borrower shall make regular yearly payments of accrued but unpaid interest
beginning December 31, 1999, and all subsequent interest payments are due on the
same day of each year thereafter. Interest on this Note is computed on a 365/360
simple interest basis; i.e., by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding,
unless such calculation would result in a usurious rate, in which case interest
shall be calculated on a per diem basis of a year of 365 or 366 days, as the
case may be. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.
MANDATORY PREPAYMENT. Borrower shall make mandatory prepayments from time to
time equal to a portion of the "Net Profits" of Borrower, as defined in Section
7.1.3 of the Management Agreement, for such periods as Borrower and Lender may
mutually agree from time to time, such portion to equal the percentage that the
outstanding principal amount of the Capitalization Loan represented by this Note
bears to the outstanding principal amount of all Capitalization Loans subject to
the Management Agreement. This Note is also subject to acceleration, or this
Note may be deemed paid in full, upon the occurrence of certain events described
in Article 10 of the Management Agreement.
OPTIONAL PREPAYMENT. Borrower may pay without penalty all or any portion of the
amount owed prior to the Maturity Date. All prepayments will be applied first
against accrued but unpaid interest and then against the outstanding principal
balance.
VARIABLE INTEREST RATE. The interest rate on this Note may be subject to change
from time to time based on changes in the coupon rate for new issuances of
30-Year U.S. Treasuries (the "Index"). Lender shall inform Borrower of the
current Index rate upon Borrower's request. The interest rate change will not
occur more frequently than once in any three-month period. The Index currently
is 5.25% per annum. The interest rate to be applied prior to the Maturity Date
to the unpaid principal balance of this Note initially will be at a rate equal
to the Index, resulting in an Initial Rate of 5.25% per annum, and shall
thereafter be equal to the greater of the Initial Rate or the Index, adjusted if
necessary for the maximum rate limitation described below. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law. For purposes of this Note, the "maximum rate allowed
by applicable law" means the lesser of (a) the maximum rate of interest
permitted under federal or other law applicable to the indebtedness evidenced by
this Note; or (b) the "Indicated Rate Ceiling" as referred to in Article
5069-1.04(a)(1) V.T.C.S.
POST-MATURITY DATE RATE. The Post-Maturity Date Rate on this Note is the maximum
rate allowed by applicable law. Borrower shall pay interest on all sums due
after the Maturity Date at the Post-Maturity Date Rate.
DEFAULT. Borrower will be in default, unless waived or deferred by Lender in
writing, upon the occurrence of any of the following events: (a) Borrower fails
to make any payment when due; (b) Borrower breaches any covenant, obligation,
representation, or warranty Borrower has made to Lender, or Borrower fails to
perform promptly at the time and strictly in the manner provided in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender, including the Management Agreement; (c) any representation or
statement made or furnished to Lender by Borrower or on Borrower's behalf is
false or misleading in any material respect; or (d) Borrower becomes insolvent,
a receiver is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced either
by Borrower or against Borrower under any bankruptcy or insolvency laws.
If any default, other than a default in payment, is curable, it may be cured
(and no event of default shall have occurred) if Borrower, after receiving
written notice from Lender demanding cure of such default: (a) cures the default
within 15 days; or (b) if the cure requires more than 15 days, immediately
initiates steps that Lender deems in Lender's reasonable discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
LENDER=S OBLIGATIONS; THIRD-PARTY CURE AND SUBSTITUTION. In the event of a
default in payment that is not waived by Lender, or any other default by
Borrower that is not cured pursuant to the immediately preceding paragraph,
Lender shall give written notice to the Company, attention Gerardo Canet,
specifying the type and, in the case of a default in payment, amount of such
default. The Company shall have the right, within 10 days following such written
notice, to cure such default and succeed to all of the rights and obligations of
Borrower under this Note.
LENDER'S RIGHTS. Upon default by Borrower, Lender may, subject to the Management
Agreement, declare the entire indebtedness, including the unpaid principal
balance on this Note, all accrued unpaid interest, and all other amounts, costs,
and expenses for which Borrower is responsible under this Note or any other
agreement with Lender pertaining to this loan, immediately due, without notice,
and Borrower must pay such amount. Lender may hire an attorney to help collect
this Note if Borrower does not pay, and Borrower will pay Lender's reasonable
attorneys' fees. Borrower also will pay Lender all other amounts actually
incurred by Lender as court costs, lawful fees for filing, recording, or
releasing to any public office any instrument securing this loan; the reasonable
costs actually expended for repossessing, storing, preparing for sale, and
selling any security; and fees for noting a lien on or transferring a
certificate of title to any titled collateral offered as security for this loan,
or premiums or identifiable charges received in connection with the sale of
authorized insurance. This Note has been delivered to Lender and accepted by
Lender in the State of Texas. If there is a lawsuit, and if the transaction
evidenced by this Note occurred in Dallas County, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Dallas County, the State
of Texas. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other. This Note shall be governed by and construed in accordance with the
laws of the State of Texas and applicable federal laws.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the enforceability of the rest of the Note. In particular, this
provision means (among other things) that Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for, charge, collect, take,
reserve, or receive (collectively referred to herein as "charge or collect"),
any amount in the nature of interest or in the nature of a fee for this loan,
which would in any way or event (including demand, prepayment, or acceleration)
cause Lender to charge or collect more for this loan than the maximum rate
allowed by applicable law. Any such excess interest or unauthorized fee shall,
instead of anything stated to the contrary, be applied first to reduce the
principal balance of this loan, and when the principal has been paid in full, be
refunded to Borrower. The right to accelerate all sums due under this Note does
not include the right to accelerate any interest that has not otherwise accrued
on the date of such acceleration, and Lender does not intend to charge or
collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to Lender for the use, forbearance, or detention of sums due
hereunder shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full term of the loan evidenced
by this Note until payment in full so that the rate or amount of interest on
account of the loan evidence hereby does not exceed the applicable usuary
ceiling. Lender may delay or forgo enforcing any of its rights or remedies under
this Note without losing them. Borrower and any other person who signs,
guarantees, or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest, notice of dishonor, notice of intent
to accelerate this Note, and notice of acceleration of this Note. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker, or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or collateral; or impair,
fail to realize upon, or perfect Lender's security interest in the collateral
without the consent or notice to anyone. All such parties also agree that Lender
may modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made.
SECURITY. This Note is unsecured.
IN WITNESS WHEREOF, I have set my hand hereto as of the date first
written above.
BORROWER:
/s/Gerardo Canet
--------------------------------
Gerardo Canet, President and CEO
EXHIBIT 12.2
IVP's Prior Relationships with Medical Practices
1. Reproductive Science Center of Boston
2. Shady Grove Reproductive Science Centers, Inc.
3. Institute of Reproductive Medicine and Science of Saint
Barnabas Medical Center
EXHIBIT 13.2
IVP's Trade Secrets, Proprietary, and Confidential Information
1. All information related to IVP that is not directly related to IPSI.
2. IVP retail pricing structure.
3. All internal policies and procedures used by IVP.
4. IVP's rebate structure with all pharmaceutical drug manufacturers
and distributors.
5. IVP's business plans and strategies.
6. IVP's customer relationships, referral sources, payors, and patients. 7.
IVP's dispensing and drug utilization data. 8. IVP's trade names and
programs developed for its direct-to-patient distribution services. 9. Any
other material, programs, or systems that IVP deems as confidential.