Document:

exv10w62

Exhibit 10.62

First Amended And Restated Management Agreement

Among

IntegraMed America, Inc.

And

Foulk & Whitten Nevada Center for Reproductive Medicine, P.C.

And

Nevada Reproductive Labs

     This First Amended and Restated Management Agreement (“Agreement”) is dated December
1, 2009, (“Effective Date”) by and among IntegraMed America, Inc., a
Delaware corporation, with its principal place of business at Two Manhattanville Road, Purchase,
New York 10577 (“Management Company”), Foulk & Whitten Nevada Center for Reproductive Medicine,
P.C., a Nevada professional corporation, with its principal place of business at 645 Sierra Rose
Drive, Suite 205, Reno, Nevada 89511 (“NCRM”) and Nevada Reproductive Labs, Inc., a Nevada
corporation, with its principal place of business at 645 Sierra Rose Drive, Suite 205, Nevada 89511
(“NRL”), Management Company, NCRM and NRL are individually referred to herein as a “Party” and
jointly, as “Parties.”

Recitals:

     NCRM specializes in gynecological services, treatment of human infertility encompassing the
provision of in vitro fertilization and other assisted reproductive services (“Infertility
Services”). NCRM provides Infertility Services through Russell A. Foulk, M.D. and Scott J.
Whitten, M.D., the shareholders of NCRM. Drs. Foulk and Whitten are collectively referred to as
“Physicians.” NCRM also contemplates providing Infertility Services through other physician
employees. Physicians have entered or will enter into employment agreements with NCRM on or about
the date of execution of this Agreement.

     NRL specializes in embryology services and provides the same to NCRM on an exclusive basis.

     Management Company is in the business of making available to medical and embryology providers
such as NCRM and NRL certain assets (principally, facilities and equipment) and support services,
primarily consisting of (i) financial management; (ii) administrative systems; (iii) clinical and
laboratory organization and function; (iv) marketing and (v) operations management. Such support
services and the provision of certain fixed assets are collectively referred to as “Business
Services.”

 

 

     NCRM and NRL believe the Business Services will benefit them and desire Management Company’s
assistance with various aspects of NCRM’s medical practice and NRL’s embryology laboratory through
the utilization of the Business Services as more particularly set forth herein. NCRM and NRL
acknowledge and agree that the Business Services being made available to them require their
cooperation and collaboration, and that Management Company, in making the Business Services
available, makes no warranty or representation that the Business Services will achieve NCRM’s or
NRL’s desired goals and objectives except as expressly provided in this Agreement.

     In addition, NCRM desires access to capital for funding its growth and development, and
Management Company desires to provide such capital or access to capital as provided herein.

     On or about January 1, 2004, Regents Management, LLC (“Regents Management”) and NCRM entered
into an agreement titled Master Management Agreement (the “Former NCRM Agreement”) whereby Regents
Management agreed to provide certain business services to NCRM. Regents Management assigned to
Regents Management- Nevada, a Nevada general partnership (“Regents-Nevada”), all its rights and
obligations under the Former NCRM Agreement effective September 30, 2008.

     On or about January 1, 2004, Regents Management and NRL entered into an agreement titled
Master Management Agreement ( the “Former NRL Agreement”) whereby Regents Management agreed to
provide certain business services to NRL. Regents Management assigned to Regents-Nevada all its
rights and obligations under the Former NRL Agreement effective September 30, 2008.

     On December 1, 2009, Management Company acquired all the partnership interests of
Regents-Nevada from Russell A. Foulk, M.D., Cristin C. Slater, M.D. and Scott J. Whitten, M.D.
resulting in Management Company succeeding to all of Regents-Nevada’s interest under the Former
NCRM and NRL Agreements. The parties now desire to amend and restate the Former NCRM and NRL
Agreements in their entirety on the terms and conditions set forth herein.

     NCRM and NRL are collectively hereinafter referred to as NCRM.

     NOW THEREFORE, in consideration of the above recitals which the parties incorporate into this
Agreement, the mutual covenants and agreements herein contained and other good and valuable
consideration, NCRM hereby agrees to purchase from Management Company the Business Services and
Management Company agrees to provide the Business Services to NCRM on the terms and conditions
provided herein.

Article 1

Definitions

     1.1 Definitions. For the purposes of this Agreement, the following
definitions shall apply:

			
	 	 	 
	Nevada Center for Reproductive
Medicine Business Service Agreement
	 	Page 2 of 36

 

     1.1.1 “Adjustments” shall mean adjustments for refunds, discounts, contractual
adjustments, professional courtesies, and other activities that do not generate a
collectible fee as reasonably determined by Management Company and NCRM. Adjustments shall
not include Bad Debt.

     1.1.2 “Additional Service Fee” shall mean a monthly fee paid by NCRM to Management
Company in an amount equal to a percentage of NCRM’s monthly PDE.

     1.1.3 “Assets” shall mean those fixed assets utilized in connection with the operation
of NCRM’s medical practice, including, but not limited to, fixed assets and leasehold
improvements.

     1.1.4 “Bad Debt” shall mean all or a portion of an account, loan or note receivable
considered to be uncollectible in accordance with Generally Accepted Accounting
Principles (“GAAP”),

     1.1.5 “Base Service Fee” shall mean a monthly fee paid by NCRM to
Management Company in an amount equal to a percentage of NCRM’s monthly Physician and
Other Professional Revenues.

     1.1.6 “Business Services” shall mean Management Company making available certain
personnel and assets (including, without limitation, all facilities and equipment necessary
to operate NCRM’s medical practice for the provision of Infertility Business Services) and
support services, primarily consisting of (i) financial management; (ii) administrative
systems; (iii) clinical and laboratory organization and function; (iv) marketing and
(v) operations management, all as more fully set forth in Article 3.

     1.1.7 “Cost of Services” shall have the meaning set forth in Article 2.

     1.1.8 “Facilities” shall mean the medical offices and clinical spaces of NCRM,
including any satellite locations, related businesses and all medical group business
operations of NCRM, which are utilized by NCRM in its medical practice.

     1.1.9 “Fiscal Year” shall mean the 12-month period beginning January 1 and ending
December 31 of each year.

     1.1.10 “Infertility Services” shall mean gynecological services, treatment of human
infertility encompassing the provision of in vitro fertilization and other assisted
reproductive services provided by NCRM or any Physician Employee and Other
Professional Employee.

     1.1.11 “Management Company Overhead” shall mean salaries, bonuses, payroll taxes and
benefits for Management Company’s corporate office employees, rent and expenses related to
the operation of the Management Company corporate office, travel and entertainment expenses
for corporate employees.

Page 3 of 36

 

     1.1.12 “Other Professional Employee” shall mean a non-physician individual who
provides services, including nurse anesthetists, physician assistants, nurse
practitioners, psychologists, and other such professional employees who generate
professional charges, but shall not include Technical Employees.

     1.1.13 “Physician-Employee” shall mean an individual, including any NCRM physician
owner and any other physician who is an employee of NCRM or is under contract with NCRM,
including physicians employed by entities with whom NCRM has contracted, to provide
Infertility Services to NCRM’s patients and is duly licensed as a physician in the where
NCRM provides Infertility Services.

     1.1.14 “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 NCRM as a result of professional medical and laboratory services furnished to patients by
Physicians and Physician-Employees and Other Professional Employees and, except as described
in the next succeeding sentence, 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, ultrasound fees from businesses owned or operated by Physicians and,
including, but not limited to, contributions by pharmaceutical and other companies for
marketing and research activities). Physician and Other Professional Revenues shall not
include (i) board attendance fees and other compensation in connection with board
memberships; provided, the compensation for board related activities does not exceed $5,000
in the aggregate, annually, per Physician, and (ii) other services where Physician does not
provide professional medical services such as testimony and consultation for
litigation-related proceedings, lectures, passive investments, fundraising, or writing
(“Permitted Services”; the compensation from Permitted Services may be retained by a
Physician or Physician-Employee without limit, subject to Section 4.7.5
hereof; Physician and Other Professional Revenues are sometimes referred to
herein as “Revenues.”

     1.1.15 “Pre-distribution Earnings” (“PDE”) shall mean (i) Physician and Other
Professional Revenues, less (ii) Cost of Services and the Base Service Fee.

     1.1.16 “Receivables” shall mean and include all rights to payment for services rendered
or goods sold, including, without limitation, accounts receivables, contract rights, chattel
paper, documents, instruments and other evidence of patient indebtedness to NCRM, policies
and certificates of insurance relating to any of the foregoing, and all rights to payment,
reimbursement or settlement or insurance or other medical benefit payments assigned to NCRM
by patients or pursuant to any Preferred Provider, HMO, capitated payment agreements or
other agreements between NCRM and a payer, recorded each month (net of Adjustments).

     1.1.17 “Technical Employees” shall mean embryologists and other laboratory personnel,
ultrasonographers, phlebotomists and technicians who provide services to NCRM.

Page 4 of 36

 

Article 2

Cost of Services

     2.1 “Cost of Services” shall mean all ordinary and necessary expenses of NCRM and all direct
ordinary and necessary operating expenses, without mark-up, of Management Company, exclusive of
Management Company Overhead, incurred in connection with products and/or services that are
specific to NCRM or customized for NCRM or that are related to volume-based usage by NCRM,
including, without limitation, the following costs and expenses, whether incurred by Management
Company or NCRM:

     2.1.1 Salaries and fringe benefits of all Management Company and other employees
employed at NCRM Facilities, along with payroll taxes or all other taxes and charges now or
hereafter applicable to such personnel, and services of independent contractors;

     2.1.2 Marketing expenses incurred by or on behalf of NCRM, such as costs of printing
marketing materials, media placements, and consumer seminars;

     2.1.3 Any sales and use taxes assessed against NCRM related to the operation of NCRM’s
medical practice;

     2.1.4 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;

     2.1.5 Legal fees paid by Management Company or NCRM to outside counsel in connection
with matters specific to the operation of NCRM such as regulatory and other issues specific
to jurisdictions in which NCRM operates; provided, however, legal fees incurred by the
parties relative to the execution or performance of this Agreement or as a result of a
dispute between the parties under this Agreement shall be borne by each party and shall not
be considered a Cost of Services; and provided, further any cost related to disputes between
or among Physicians shall not be considered Cost of Services and are outside the scope of
this Agreement.

     2.1.6 Health benefits provided to Physicians and Physician-Employees,
including health and life insurance and long-term disability;

     2.1.7 All insurance necessary to operate NCRM including fire, theft, general liability
professional liability and malpractice insurance for Physicians and Physician-Employees of
NCRM, and Other Professional and Technical Employees provided by Management Company;

Page 5 of 36

 

     2.1.8 Professional licensure fees and board certification fees of Physician-Employees,
and Other Professional Employees rendering Infertility Services on behalf of NCRM;

     2.1.9 Membership in professional associations and continuing professional
education for Physicians and Physician-Employees and Other Professional Employees;

     2.1.10 Risk Management Program described in Section 3.8 herein;

     2.1.11 Cost of filing fictitious name permits pursuant to this Agreement;

     2.1.12 Cost of supplies, medical and administrative, and all direct general and
administrative expenses, including but not limited to travel and entertainment expenses,
dues and subscriptions, and other business related expenses, such as cellular telephone,
relative to NCRM; and

     2.1.13 Such other costs and expenses directly incurred by Management Company related to
NCRM’s operations which are included in the annual operation budget referred to in Section
5.2.1 or otherwise approved by NCRM in writing.

     2.1.14 Cost incurred by Management Company with respect to specific requests for
services from NCRM that are outside those provided for in this Agreement. For such requested
services, Management Company and NCRM will mutually determine how such specific requests
will be carried out, as well as how charges and costs, including, but not limited to travel,
will be applied.

     2.1.15 NCRM’s Bad Debt.

     2.1.16 Costs incurred by Management Company with respect to Business Services
related to a specific activity requested by NCRM that are in excess of those Business
Services typically provided to other medical providers for the same activity, including, but
not limited to additional travel and staffing.

     2.1.17 Such costs charged by third-party vendors that are, in turn, allocated among
network practices. For example, and not by way of limitation, costs to install and maintain
telecommunication lines linking NCRM to the Management Company data center; 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
ICRM, including but not limited to HRIS/ON-core, Goldmine, MAS500, Centrix, HelpSTAR, Secure
ID/RSA token and spam reduction services provided by Management Company; insurance premiums
for professional liability and other insurance coverages, and; any other cost or expense
that is allocated among the network practices based on volume usage.”

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     2.1.18 Such additional training that NCRM may request from Management Company beyond
basic training for such applications as ARTworks® or in connection with basic Marketing and
Sales training.”

     2.1.19 Base salary up to $250,000 for two years for one new physician employed by NCRM;
 provided, however, such new hire must be approved by the Practice Management Board and
provided, further, (i) “new physician” shall mean a physician whose hiring is not to
replace a physician who has left NCRM within 12 months prior to the employment of the new
physician, but whose hiring increases NCRM’s full-time equivalent (“FTE”) physicians to a
number greater than NCRM’s FTE physicians for the previous 12 months; and (ii) “new
physician” shall not mean a physician providing Infertility Services to patients in
“Territory” during the 12 month period immediately preceding employment by NCRM.

     2.2 Notwithstanding anything to the contrary contained herein, Cost of Services shall
not include costs of the following:

     2.2.1 Any federal or state income taxes of NCRM or Management Company other than
as provided above;

     2.2.3 The Base Service Fee;

     2.2.4 Except as set forth in Section 2.1.19, any amount paid to or on behalf of any
Physician or Physician-Employee including salary, payroll taxes, draw or pension
contributions (all of which come out of NCRM’s share of PDE);

     2.2.5 Management Company’s cash outlay to acquire capital assets for which
depreciation expense is to be charged as a Cost of Services under Section 2.1.4.

     2.2.6 Management Company Overhead.

Article 3

Duties and Responsibilities of Management Company

     3.1 Business Services and Administration.

     3.1.1 NCRM hereby engages Management Company to provide the Business Services within
the Counties of Churchill, Douglas, Elko, Humboldt, Lander, Lyon, Pershing, Storey and
Washoe in Nevada (the “Territory”), and NCRM agrees to limit its use of the Business
Services to the Territory, without prior written consent from Management Company. Any time
during the Term, in the case of Clark County, Nevada, Management Company may provide the
Business Services to another medical practice in such County after giving NCRM written
notice of NCRM’s right of first refusal to establish an office and practice within such
County, provided the terms of the relationship between Management Company and the other
medical practice are not more favorable to

Page 7 of 36

 

the other medical practice than the terms set forth in the written notice from Management
Company to NCRM.

     None of the Business Services made available to NCRM include any physician medical
functions.

     3.1.2 Management Company will, on behalf of NCRM and as directed by NCRM, bill patients
timely and collect professional fees for Infertility Business Services rendered by NCRM at
the Facilities, outside the Facilities for NCRM’s hospitalized patients, and for all other
Infertility Business Services rendered by any Physician-Employee or Other Professional
Employees. NCRM hereby appoints Management Company for the term hereof to be its true and
lawful attorney-in-fact, for the following purposes: (i) bill patients in NCRM’s name and on
its behalf; (ii) collect Receivables resulting from such billings in NCRM’s name and on its
behalf (recognizing that successfully collecting Receivables may be dependent on NCRM’s
participation and cooperation, NCRM will reasonably cooperate with respect to Management
Company’s collection efforts, and policies and procedures established by the Practice
Management Board governing the collection of Receivables); (iii) receive payments from
insurance companies, prepayments from health care plans, and all other third-party payers;
(iv) take possession of and endorse in the name of NCRM (and/or in the name of any Physician
Employee or Other Professional Employee rendering Infertility Business Services to patients
of NCRM) any notes, checks, money orders, and other instruments received in payment of
Receivables; and (v) at NCRM’s request, initiate the institution of legal proceedings in the
name of NCRM, with NCRM’s cooperation, to collect any accounts and monies owed to NCRM, to
enforce the rights of NCRM as creditor under any contract or in connection with the
rendering of any service by NCRM, and to contest adjustments and denials by governmental
agencies (or its fiscal intermediaries) as third-party payers.

     3.1.3 Management Company will provide the administrative services function of
supervising and maintaining (on behalf of NCRM) all files and records relating to the
operations of the Facilities, including but not limited to accounting and billing records,
including for billing purposes, patient medical records, and collection records. Patient
medical records shall at all times be and remain the property of NCRM and shall be located
at the Facilities and be readily accessible for patient care. Management Company’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 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. Management Company shall have access to
such records in order to provide the Business 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. NCRM shall have unrestricted access to all of its records at
all times.

Page 8 of 36

 

     3.1.4 Management Company will provide, as requested by NCRM, 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
NCRM’s medical practice at the Facilities.

     3.1.5 With NCRM’s cooperation and participation, Management Company will design and
direct the implementation of appropriate marketing programs for NCRM. NCRM’s
participation is essential in developing such marketing program and
accordingly, will designate one or more physicians to work with Management Company in
designing and implementing such marketing programs.

     3.1.6 Management Company, upon request of NCRM, will assist NCRM in recruiting
additional physicians, including Management Company providing such
administrative functions as advertising for and identifying potential candidates, checking
credentials, and arranging interviews; provided, however, NCRM shall interview and make the
ultimate decision as to the suitability of any physician to become associated with NCRM.
All physicians recruited by Management Company and accepted by NCRM shall be employees of
or independent contractors to NCRM.

     3.1.7 Management Company will assist NCRM in negotiating any managed care contracts to
which NCRM desires to become a party. Management Company will provide administrative
assistance to NCRM in fulfilling its obligations under any such contract.

     3.1.8 Management Company will arrange, in consultation with NCRM, for legal and
accounting services as may otherwise be reasonably required in the ordinary course of
NCRM’s operation.

     3.2 Facilities. NCRM shall determine the nature and extent of the
facilities reasonably needed for NCRM’ medical practice and Management Company will assist NCRM in
obtaining such Facilities, including providing administrative support, effort and resources in
obtaining the Facilities, including all furniture, equipment and furnishings necessary for 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 NCRM’s medical practice at the Facilities. Management Company will arrange
for the cleaning of the Facilities, and timely maintenance and cleanliness of the equipment,
furniture and furnishings located therein. Management Company will advise, counsel and
collaborate with NCRM regarding the condition, use and needs for the Facilities, the improvements
thereto, equipment and services.

     3.3 Executive Director and Other Personnel.

     3.3.1 Executive Director. Management Company will employ
an Executive Director, approved by the Practice Management Board, as defined in Section 5.1, to
manage and administer all of the day-to-day business functions of the Facilities.

Page 9 of 36

 

The Executive Director’s compensation and benefits shall be approved by Practice Management
Board. NCRM agrees not to offer any compensation or benefits to the Executive Director other
than those approved by the Practice Management Board.

     3.3.2 Personnel. Management Company will provide, as requested by
NCRM, Other Professional Employees, Technical Employees, support and administrative
personnel, clerical, secretarial, bookkeeping and collection personnel reasonably
necessary for the efficient operation of NCRM at the Facilities. Such personnel must be
approved by NCRM, but will be under the direction and supervision of the Executive
Director, except that Technical Employees and Other Professional Employees subject to the
professional supervision of NCRM. The compensation of such personnel shall be approved by
NCRM and NCRM may request that any of such personnel be terminated in its reasonable
discretion and in such event, all cost and expenses associated with such termination shall
be a Cost of Services.

     3.4 FInancial Planning and Goals. Management Company, in collaboration with
NCRM, will prepare, for the approval of the Practice Management Board, an annual capital and
operating budget (the “Budget”) reflecting the anticipated Revenues and Cost of Services, sources
and uses of capital for growth of NCRM’ practice and for the provision of Infertility Services at
the Facilities. Management Company will present the Budget to the Practice Management Board for
its approval at least thirty (30) days prior to the commencement of the Fiscal Year. If the
Practice Management Board can not agree on the Budget for any Fiscal Year during the term of this
Agreement, the Budget for the preceding Fiscal Year will serve as the Budget until such time as a
new Budget is approved.

     3.5 Financial Statements. Management Company will deliver to NCRM monthly
financial statements (“Financial Statements”) within thirty (30) days after the end of each
calendar month. Such Financial Statements will comprise, on a monthly and year-to-date basis, a
statement of NCRM’ Revenues and Cost of Services and PDE, as hereinafter defined.

     3.6 Tax Planning and Tax Returns. Management Company will not be
responsible for any tax planning or tax return preparation for NCRM, but will provide support
documentation in connection with the same. Such support documentation will not be destroyed
without NCRM’ consent.

     3.7 Inventory and Supplies. For the account of NCRM, Management Company
shall order and purchase inventory and supplies, and such other materials which are requested by
NCRM to enable NCRM to deliver Infertility Services in a cost-effective quality manner.

     3.8 Risk Management. Management Company shall assist NCRM in
the development of a Risk Management Program and in meeting the standards of such Program.

     3.9 Personnel Policies and Procedures. Management Company
shall develop, in cooperation with NCRM, personnel policies, procedures and guidelines, governing
office behavior, protocol and procedures which will aid in compliance with applicable laws and
guidelines related to employment and human resources management.

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     3.10 Licenses and Permits. Management Company will coordinate and
assist NCRM in its application for and efforts to obtain and maintain all federal, state and local
licenses, certifications and regulatory permits required for or in connection with the operations
of NCRM and equipment located at the Facilities, other than those relating to the practice of
medicine or the administration of drugs by Physicians and Physician-Employees.

     3.11 Subcontracted Business Services. Subject to prior approval of NCRM,
which approval shall not be unreasonably withheld, Management Company is expressly authorized to
subcontract with other persons or entities for any of the services that Management Company is
required to perform pursuant to this Agreement. NCRM expressly agrees and acknowledges that Management
 Company is contemporaneously with entering into this Agreement is entering into a Submanagement Agreement
with its parent entity, IntegraMed America, Inc. (“IntegraMed”) who will be performing Management
 Company’s obligations under this Agreement.
Provided, however, that Management Company shall
disclose any term of this Agreement to any subcontractor or potential subcontractor of Management
Company who does or will perform services to NCRM to the extent the subcontractor or potential
subcontractor will perform significant or continuing functions for NCRM which are specific
obligations of Management Company hereunder and shall incorporate such terms into such subcontract,
including but not limited to the restrictive provisions of Section 3.1.1 hereof. No such
subcontract will limit the overall responsibility of Management Company for compliance with
the terms and provisions of this Agreement unless NCRM specifically agrees in writing. Nothing
in this Section 3.11 shall apply to contracts entered into by Management Company that relate to
services not required to be performed directly by Management Company such as payroll services.

     3.12 Access to Protected Health Information. In connection with
the Business Services provided by Management Company pursuant to this Agreement, Management
Company and its employees, representatives and agents will have access to protected health
information (“PHI”) maintained by NCRM. In connection with such PHI, Management Company
contemporaneous with entering into this Agreement will enter into a Business Associate Agreement
with NCRM, substantially in the form of Exhibit 3.12, in accordance with the regulations
promulgated under the Health Insurance Portability & Accountability Act of 1996.

Article 4

Duties and Responsibilities of NCRM

     4.1 Timely Performance. NCRM, in engaging Management Company
to provide the Business Services described in this Agreement, acknowledges that NCRM’s timely
performance of its duties and responsibilities as delineated in this Article 4 are material to this
Agreement and to Management Company’s interest.

     4.2 Professional Services. NCRM shall use its best efforts to cause its
Physicians and Physician-Employees to provide Infertility Services to NCRM patients in compliance
at all times with ethical standards, laws and regulations applying to the practice of

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medicine in the applicable jurisdiction which such Physician or Physician-Employee provides
Infertility Services on behalf of NCRM. NCRM shall ensure that each Physician,
Physician-Employee, any Other Professional Employee employed by NCRM, and any other professional
provider associated with NCRM is duly licensed to provide the Infertility Services being rendered
within the scope of such provider’s practice. In addition, NCRM shall require each Physician and
Physician-Employee to maintain a DEA number and appropriate medical staff privileges as determined
by NCRM during the term of this Agreement. In the event that any disciplinary actions or medical
malpractice actions are initiated against any Physician, Physician-Employee or other professional
provider, NCRM shall promptly inform the Executive Director and provide the underlying facts and
circumstances of such action, and the proposed course of action to resolve the matter. Periodic
updates, but not less than monthly, shall be provided to Management Company.

     4.3 Medical Practice. NCRM shall use and occupy the Facilities exclusively
for the purpose of providing Gynecology, Infertility Services, and related services and activities
and shall use its best efforts to comply with all applicable laws and regulations and all
applicable standards of medical care, including, but not limited to, those established by the
American Society of Reproductive Medicine. The medical practice conducted at the Facilities shall
be conducted solely by Physicians employed by NCRM and Physician-Employees employed by or serving
as independent contractors to NCRM, and Other Professional Employees employed by NCRM. No other
physician or medical practitioner shall be permitted to use or occupy the Facilities without the
prior written consent of Management Company, except in the case of a medical emergency, in which
event, notification shall be provided to Management Company as soon after such use or occupancy as
possible.

     4.4 Employment of Physician and Other Professional Employees. In the event
NCRM shall determine that additional physicians are necessary, NCRM shall undertake and use its
best efforts to select physicians who, in NCRM’s judgment, possess the credentials and expertise
necessary to enable such physician candidates to become affiliated with NCRM for the purpose of
providing Infertility Services. NCRM shall cause each Physician-Employee to enter into an
employment or service agreement with NCRM or their respective professional association which is a
partner of NCRM (“Physician Employment Agreement”) in such form as is mutually and reasonably
acceptable to NCRM and Management Company. Upon NCRM’ request, Management Company shall consult with
and advise NCRM respecting the hiring, compensation, supervision, evaluation and termination of
Physician-Employees.

     4.5 Continuing Medical Education NCRM shall require its Physician-Employees
to participate in such continuing medical education as NCRM deems to be reasonably necessary for
such physicians to remain current in the provision of Infertility Services.

     4.6 Professional Insurance.

      4.6.1 NCRM shall maintain professional liability coverage at all times during
the Term, in limits of not less than $1,000,000.00 per occurrence, $3,000,000.00 in the
aggregate, unless the Practice Management Board determines that such limits can be lowered or
should be increased. If possible, under the terms of the insurance coverage, NCRM shall use its
best

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efforts to cause Management Company to be named an additional named insured to the extent
reasonably available at no additional cost or expense. Upon request of Management Company, evidence
of such coverage shall be provided to Management Company. Management Company, in conjunction with medical practices
in the Management Company network, maintains a malpractice captive insurance company, ARTIC, Ltd.
 (“ARTIC”). As a member of the Management Company network, in lieu of maintaining professional liability
coverage as provided for in this Section 4.6.1, NCRM is eligible to become a member of ARTIC provided it meets the
underwriting requirements and pays applicable premiums and fees. As an ARTIC member, NCRM is required to participate
 in the Management Company Risk Management Program.

     4.7 Direction of Practice NCRM, as a continuing condition of
Management Company’s obligations under this Agreement, shall at all time during the Term be and
remain legally organized and operated to provide Infertility Services in a manner consistent with
state and federal laws. NCRM, through its physicians, is expected to provide leadership in its
market area and reasonably cooperate with Management Company in Management Company’s efforts to
make the Business Services available to NCRM. In furtherance of which:

     4.7.1 NCRM shall operate and maintain at the Facilities a full-time practice of
medicine specializing in the provision of Infertility Services and shall maintain and
enforce the Physician Employment Agreements or in such other form as is mutually and
reasonably agreed to by NCRM and Management Company in writing. NCRM covenants that it shall
not employ any physician, or have any physician as a shareholder, unless said physician
shall sign the Physician Employment Agreement prior to assuming the status as employee
and/or shareholder. NCRM covenants that should a physician become a shareholder of
NCRM, that a condition precedent to the issuance of the shares shall be the ratification of
this Service Agreement. The relationship between NCRM and physicians who independently
contract with NCRM to provide services shall be in such other form as is mutually and
reasonably agreed to by NCRM and Management Company in writing.

     4.7.2 NCRM shall not terminate the Physician Employment Agreement(s) of any Physician,
except in accordance with the Physician Employment Agreement(s). NCRM shall not amend or
modify the Physician Employment Agreements in any material manner, nor waive any material
rights of NCRM thereunder without the prior written approval of Management Company, which
approval will not be unreasonably withheld, and it shall be deemed unreasonable for
Management Company to withhold consent of an amendment or modification mandated by the
necessity of compliance with applicable law. NCRM covenants to enforce the terms of each
Physician Employment Agreement, including but not limited to any terms confirming a
Physician-Employee’s commitment to practice medicine solely through NCRM for a specified
number of years. Attached hereto as Exhibit 4.7.2 are copies of all Physician
Employment Agreement.

     4.7.3 Recognizing that Management Company would not have entered into this Agreement
but for NCRM’s covenant to maintain and enforce the Physician Employment

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Agreements with any physician now employed or physicians who may hereafter become employees
of NCRM, and in reliance upon such Physician-Employee’s observance and performance of the
non-competition and non-solicitation obligations under the Physician Employment Agreements,
any damages, liquidated damages, compensation, payment or settlement received by NCRM from a
physician whose employment is terminated shall be considered to be Physician and Other
Professional Revenues.

     4.7.4 NCRM shall retain that number of Physician-Employees as are reasonably necessary
and appropriate for the provision of Infertility Services. Each Physician-Employee shall
hold and maintain a valid and unrestricted license to practice medicine in the applicable
jurisdiction where such Physician-Employee provides Infertility Services on behalf of NCRM,
and all full-time Physician-Employees shall be board eligible in the practice of gynecology,
with training in the subspecialty of infertility and assisted reproductive medicine. NCRM
shall be responsible for paying the compensation and benefits, as applicable, for all
Physician-Employees, and for withholding, as required by law, any sums for income tax,
unemployment insurance, social security, or any other withholding required by applicable
law. Management Company, at the request of NCRM, will establish and administer the
compensation with respect to such Physician-Employees in accordance with the written
agreement between NCRM and each Physician Employee. Management Company shall neither control
nor direct any Physician in the performance of Infertility Services for patients, and
Management Company will not unreasonably interfere with the employer-employee relationship
between NCRM and its Physician-Employees.

     4.7.5 NCRM and its Physician-Employees shall provide patient care and clinical backup
as required for the proper provision of Infertility Services to patients of NCRM at NCRM’
Facilities. NCRM shall require that its full-time Physician-Employees devote
substantially all of their professional time, effort and ability to NCRM’s practice,
including the provision of Infertility Services and the development of such practice, and
that Permitted Services, of any Physician-Employee do not interfere with such
Physician-Employees full time practice of Infertility Services at NCRM’ Facilities.

     4.7.6 NCRM shall obtain and maintain necessary licenses and operate its clinical
laboratory and tissue bank services in accordance with all applicable laws
and regulations. NCRM agrees that the Medical Director or Tissue Bank Director, if
applicable, shall be Physician-Employees or Other Professional Employees, if applicable, of
NCRM who meet the qualifications required by applicable State law or regulation, and that
should there be a vacancy in any such position, NCRM will cause another Physician-Employee
or Other Professional Employee, if applicable, to fill such vacancy in accordance with
applicable State law.

     4.7.7 NCRM acknowledges that it bears all medical obligations to patients treated at
the Facilities and covenants that it is responsible for all tissue, specimens, embryos or
biological material (“Biological Materials”) kept at the Facilities on behalf of the
patients (or former patients) of NCRM, except for the negligence, willful or intentional
misconduct of Management Company’s employees; provided, however, this

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shall not apply to circumstances where an Management Company employee is acting under the
direction or supervision of a Physician-Employee. In the event of a termination or
dissolution of NCRM, or the termination of this Agreement for any reason, NCRM and the
Physicians will have the obligation to account to patients and to arrange for the storage
or disposal of such Biological Materials in accordance with patient consent and the ethical
guidelines of the American Society of Reproductive Medicine (“Relocation Program”).
Management Company, in such event, will, at the request of NCRM, assist in the
administrative details of such a Relocation Program for so long as NCRM shall request and
an appropriate fee shall be paid during that time. These obligations shall survive the
termination of this Agreement.

     4.7.8 NCRM will designate certain physicians to (i) work with Management Company in
designing and implementing marketing plans, (ii) participate in marketing strategy
sessions, and (iii) identify targeted referral sources and managed care
opportunities.

     4.7.9 NCRM agrees to participate in the IntegraMed’s network activities and programs,
including, but not limited to, the Council of Physicians and Scientists and offering
IntegraMed’s AttainTM IVF Refund Program to NCRM patients, and participating in other
product and service offering IntegraMed has in effect from time to time. NCRM shall be
entitled to offer the Attain IVF Refund Program or any successor program on an exclusive
basis in the Territory, as defined in this Agreement, to its patients so long as 80% of
NCRM “private pay” patients apply for the Attain IVF Refund Program during each 12-month
period of the Term beginning with the Effective Date.

     4.8 Practice Development, Collection Efforts and Network Involvement. NCRM
agrees that during the term of this Agreement, NCRM covenants for itself and will use reasonable
efforts to cause its Physician-Employees to:

     4.8.1 Execute such documents and take such steps reasonably necessary to assist billing
and collecting for patient services rendered by NCRM and its Physician-Employees;

     4.8.2 Promote NCRM’s medical practice and participate in marketing efforts developed by
Management Company as provided for in Section 3.1.5.

     4.8.3 Reasonably cooperate with respect to Management Company’s collection efforts, and
policies and procedures governing the collection of Receivables; and

     4.8.4 Comply with all applicable laws and regulations, federal, state and local.

     4.9 No Grant of License; Independent Contractors. NCRM may not
use IntegraMed service names, acquired or developed trade names, trademarks, or related logos of
IntegraMed (the “IntegraMed Trade Names”) in conjunction with the provision of Infertility
Services. NCRM will use its own legal entity name, and will not use the IntegraMed Trade Names as
any part of that name. NCRM will not allow its clinic or its Infertility Services to

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become substantially associated with the IntegraMed Trade Names. IntegraMed is an independent
contractor, and neither party may hold themselves out as agents, employees, partners, or
representatives of one another. Neither party may bind the other to any contract.

     4.10 Internet Marketing. Pursuant to Section 3.1.5, IntegraMed agrees to
provide marketing services, including designing marketing plans for implementation by NCRM for
practice development. In performing such marketing, IntegraMed may maintain the Web site
www.integramed.com or successor site, and will engage in other marketing efforts designed
to benefit NCRM and other independent clinics for which IntegraMed performs services. IntegraMed
will link to NCRM on that site, and will list NCRM in its other marketing efforts and materials, as
appropriate. NCRM may also, in its discretion, state expressly that it has retained IntegraMed as
a manager, but this is not permission to make a trademark use of the IntegraMed Trade Names, nor
may NCRM use any IntegraMed Trade Name to identify its own Infertility Services or its clinics. For
example, NCRM may, but is not required to, add to its Web site a link to the IntegraMed Web site,
together with the phrase “an independent member of the IntegraMed Network” or “an independent
IntegraMed affiliate”. One of these two phrases must also be used by NCRM in connection with any
marketing materials or other communications that mention that IntegraMed is providing the Business
Services to NCRM.

     4.11 Disclaimer of Representations. The parties agree that neither IntegraMed
nor its employees or agents has made any guarantee or representation that: (i) it will find markets
or patients or locations for ICRM; (ii) it will purchase products or services from NCRM; (iii) NCRM
will derive income of any particular level or amount. NCRM acknowledges that it is experienced in
providing Infertility Services, will produce marketing plans with assistance and counsel from
IntegraMed, and will not be relying on IntegraMed’s efforts in providing the Infertility Services.

     4.12 Rights Upon Termination.

     4.12.1 Upon termination of this Agreement, NCRM shall within 30 days of the
termination (i) refrain from making any further link or reference to its former
relationship with IntegraMed and (ii) return to IntegraMed all proprietary materials
including, but not limited to, consents, policy and procedure manuals, Risk Management and
Clinical Standards Review Manuals (“Proprietary Materials”).

     4.13 NCRM’s failure (except as otherwise provided herein) to cease using the
Proprietary Materials at the termination or expiration of this Agreement will result in
immediate and irreparable damage to IntegraMed and to the rights of any licensee of
IntegraMed. There is no adequate remedy at law for such failure. In the event of such
failure, IntegraMed 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 the decision on the application for such permanent injunction,
IntegraMed shall be entitled to a temporary restraining order, without prejudice to any
other remedy available to IntegraMed. All such remedies hereunder shall be at the expense of
NCRM and shall not be a Cost of Services.

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Article 5

Joint Duties and Responsibilities

     5.1 Formation and Operation Of Practice Management Board. Management Company and NCRM will establish a practice management board (“Practice
Management Board”), which will be responsible, to assist NCRM, in developing management and
administrative policies for the overall operation of NCRM. The Practice Management Board
will consist of designated representatives from Management Company as determined by
Management Company, designated representatives of NCRM as determined by NCRM, the Executive
Director and the Medical Director. It is the intent and objective of Management Company and
NCRM that they agree on the overall provision of the Business Services to NCRM. In the case
of any matter requiring a formal vote, NCRM shall have one (1) vote and Management Company
shall have one (1) vote; provided, however, the determination with respect to adding
Shareholders, or hiring or firing of Physician-Employees shall be determined solely by
NCRM. The desire is that Management Company and NCRM agree on matters of operations and
that, if they disagree, they will have to work cooperatively to resolve any disagreement.
The Practice Management Board shall meet at least three (3) times per calendar year and
will maintain minutes of all meetings, which minutes shall, among other things, reflect all
decisions of the Practice Management Board.

     5.2 Duties and Responsibilities of The Practice Management Board. With the
assistance of Management Company, the Practice Management Board shall have, among others, the
following duties and responsibilities:

     5.2.1 Annual Budgets and profitability. Review and approve
annual capital and operation budgets prepared by Management Company. The parties covenant
and agree to use their respective best efforts to assist the Practice Management Board in
achieving the projected budgets. NCRM and Management Company agree that, recognizing changes
in circumstances, annual budgets and forecast are subject to revisions.
Accordingly, the Practice Management Board may, from time to time, propose to modify the
annual budgets, as needed, including without limitation, staff reductions, so that NCRM
operates in a profitable mode which means that PDE is positive on a monthly basis. NCRM’s
approval of such modifications shall not be unreasonably withheld and shall become part of
the Budget. Further, NCRM agrees that in the event NCRM incurs operational losses at any
point during the term of this Agreement, nothing herein shall obligate Management Company to
incur losses under this Agreement in order to sustain NCRM’s operations. For example,
Management Company may take appropriate steps to reduce its Cost of Services in order to
avoid negative PDE at any point.

     5.2.2 Capital Improvements and Expansion. Except as otherwise
provided herein, any renovation and expansion plans, and capital equipment expenditures with
respect to NCRM shall be reviewed and approved by the Practice Management Board and shall be
based upon the best interests of NCRM, and shall take into account capital priorities,
economic feasibility, physician support, productivity and then current market and regulatory
conditions.

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     5.2.3 Marketing Budget. NCRM shall assist in the development of an
annual marketing budget and plan prepared by Management Company for approval by the Practice
Management Board. All annual advertising and other marketing budgets prepared by Management
Company shall be subject to the review, amendment, approval and disapproval of the Practice
Management Board.

     5.2.4 Strategic Planning. The Practice Management Board shall
develop long-term strategic plans.

     5.2.5 Physician Hiring. Make recommendations regarding the number
and type of physicians required for the efficient operation of NCRM; provided, the final
determination on physician hiring shall be made by NCRM.

     5.2.6 Executive Director. The Practice Management Board will direct
the day-to-day functions of the Executive Director in implementing the policies agreed by
the Practice Management Board. The Executive Director shall meet with the Medical Director
on a regular basis as reasonably requested by either party to discuss issues pertaining to
NCRM. Salary and fringe benefits paid to the Executive Director shall be approved by the
Practice Management Board. The Practice Management Board will conduct an annual evaluation
of such individual’s performance.

Article 6

Financial Arrangements

     6.1 Compensation. The compensation set forth in this Article 6 is
being paid to Management Company in consideration of the substantial commitment made, capital
provided and services to be rendered by Management Company hereunder and is fair and reasonable.
Management Company shall be paid the following amounts (collectively “Compensation”):

     6.1.1 an amount reflecting all Cost of Services (whether incurred by
Management Company or NCRM) paid or accrued by Management Company pursuant to the terms of
this Agreement.

     6.1.2 during each year of this Agreement commencing with the Effective Date, a Base Service Fee, paid monthly but reconciled to annual Revenues, of an amount
equal to six percent (6%) of NCRM’s Revenues.

     6.1.3 commencing with the Effective Date, an additional service fee (“Additional Service Fee”) paid monthly but reconciled
to Fiscal Year operating results of NCRM, equal to fifteen percent (15%) of PDE.

     It is understood and agreed that the Additional Service Fee is paid to Management
Company in the event NCRM achieves positive PDE. Nothing herein shall be interpreted to

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mean that if PDE is negative, Management Company makes a contribution to NCRM to cover
any such operating losses.

     6.2 Accounts Receivable.

     6.2.1 On or before the 20th business day of each month, commencing with the first
month following the Effective Date, Management Company shall reconcile the Receivables of
NCRM arising during the previous calendar month. Subject to the terms and conditions of
this Agreement, NCRM hereby sells and assigns to Management Company as absolute owner, and
Management Company hereby purchases from NCRM all Receivables hereafter owned by or arising
in favor of NCRM on or before the 20th business day of each month. Management Company shall
transfer or pay such amount of funds to NCRM equal to the Receivables less Compensation due
Management Company pursuant to Section 6.1. NCRM shall cooperate with Management Company
and execute all necessary documents in connection with the purchase and assignment of such
Receivables to Management Company or at Management Company’s option, to its lenders. All
collections in respect of such Receivables shall be deposited in a bank account at a bank
designated by Management Company. To the extent NCRM comes into possession of any payments
in respect of such Receivables, NCRM shall direct such payments to Management Company for
deposit in bank accounts designated by Management Company.

     6.2.2 Any Medicare or Medicaid Receivables due to NCRM shall be excluded from the
operation of Section 6.2.1 hereof. Any such Receivables shall be subject to agreement of
NCRM and Management Company with respect to the collection thereof.

     6.2.3 NCRM will be charged monthly interest at an annualized rate equal to the Prime
Rate charged by Management Company’s primary bank on Receivables with average days sales
outstanding (“DSO”) greater than 60 days for a trailing three-month period. For example,
if prime is 6% and NCRM’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 on the
last day of that same three-month period NCRM’s Receivables are $1.5 million, then
NCRM’s DSO equal 97 days ($1.5 million divided by $15,389), resulting in interest being
charged for the month on $569,393.00 of NCRM’s Receivables ($15,389 times 37 days) at a
rate of 0.5% (6% prime rate divided by 12), or a $2,846.97 interest charge. Any application
of this Section 6.2.3 shall exclude Bad Debt from the determination of Receivables subject
to an interest payment.

     6.2.4 On or before the 20th business day of each month, commencing with the
month following the Effective Date, Management Company shall remit to NCRM the PDE
generated for the previous calendar month.

     6.3 Advances. Management Company may advance necessary funds for NCRM to meet
Cost of Services and, to meet Physician distributions (through their respective professional
associations), and Physician-Employee salaries; provided, however, nothing herein shall obligate
Management Company to incur Cost of Services and Physician salary Advances in

Page 19 of 36

 

excess of Revenues under this Agreement in order to sustain NCRM’s operations. As security for
such Advances, NCRM shall deliver to Management Company with the execution of this Agreement a
Security Agreement in the form of Exhibit 6.3 hereto giving Management Company a
collateral interest in all Receivables of NCRM and PDE payable to NCRM Shareholders. Management
Company shall, in its sole discretion, be entitled to take any and all necessary action to prevent
financial losses, in the form of Cost of Services on behalf of NCRM, to Management Company in the
event NCRM’s Cost of Services exceed NCRM’s Revenues at any point during the Term of this
Agreement. Notwithstanding anything herein to the contrary, no Advances will be made by Management
Company to satisfy Physician-Employee draws, salaries or pension contributions, unless requested
by NCRM.

     6.3.1 Any Advance hereunder shall be a debt owed to Management Company by NCRM and
shall be repaid in twelve equal installments plus accrued interest on the first day of each
month following any Advance. To the extent PDE is available for distribution to Physicians
for a particular month; Management Company is authorized to deduct any outstanding Advance
from the PDE prior to distribution to the Physicians to pay any installment then due.

     6.3.2 Interest expense will be charged on an Advance and will be computed at the Prime
Rate charged by Management Company’s primary bank.

     6.3.3 In addition to the Security Agreement provided for in Section 6.3, NCRM agrees
to enter into a Continuing General Limited Security Agreement in the form of Exhibit
6.3.3 with Management Company’s current bank, Bank of America, National Association in
connection with assigning to Bank of America, the Receivables identified in Section 6.2
that are otherwise assigned to Management Company pursuant to the Security Agreement
identified in Section 6.3.

     6.4 Build Out and Capital Commitment.

     Management Company agrees to invest sufficient capital to build, equip and supply appropriate
office and laboratory space for NCRM to conduct its medical practice at the Facilities. As an
expression of Management Company’s commitment to the growth of NCRM’ practice, Management Company
agrees to maintain, during the term of this Agreement, an ongoing investment in the Facilities and
equipment, of an amount up to $250,000.00 (“Capital Commitment”) without an interest charge. Any
amount invested by Management Company in NCRM’s medical Facilities in excess of $250,000.00 will
be charged to NCRM as a capital cost at an interest rate equal to the Prime Rate, plus two percent
(2%), charged by Management Company’s primary bank.

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Article 7

Term, Service Rights, Payments, And Other Commitments

     7.1 This Agreement shall begin on the Effective Date and shall continue for twenty-five years
(the “Term”), with automatic successive twenty-five year terms (each, a “Renewal Term”), unless
sooner terminated as herein provided. In the event either party elects not to renew this Agreement
at the expiration of the Term or a Renewal Term, said party shall give the other not less than one
(1) year’s prior written notice of its intention not to renew at the expiration of the Term or a
Renewal Term.

     7.2 In consideration of the considerable investment of time and resources in NCRM expected by
Management Company, NCRM grants to Management Company the exclusive right to provide the Business
Services to NCRM.

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 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 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.

     8.1.2 Material Breach. If either party believes that the other party has
materially breached its obligations hereunder, then the non-breaching party (“Accuser”) shall give
notice (“Breach Notice”) to the breaching party (“Accused”), setting forth in detail the basis for
the belief (“Accusation”) and indicating that the Accused must cure said breach within 30 days
(“Cure Period”).

     (a) If the Accused, in good faith denies the Accusation, then the Accused shall give notice
within the Cure Period to the Accuser demanding an arbitration of whether there has been a material
breach of this Agreement. Such arbitration shall be conducted in accordance with Section 11.7
hereof and the parties agree, in good faith, to commence the arbitration within 60 days of the
Breach Notice and participate in the arbitration in a “time is the essence of the arbitration”
basis.

     (b) If the Accused agrees with the Breach Notice and cures the Material Breach within the Cure
Period, no further action will be required by either party.

Page 21 of 36

 

     (c) If the Accused agrees with the Breach Notice, but the breach is not curable within the
Cure Period and the Accused is making diligent efforts to cure the breach during the Cure Period
(“Good Faith Cure Efforts”), the parties shall continue to operate under the terms and conditions
of this Agreement. If after the exercise of such Good Faith Cure Efforts, the Accused shall be
unable to cure the breach within 60 days from the Breach Notice, the Accuser shall, in good faith,
extend the time in which to cure the breach, upon request of the Accused. In the event the Accuser
does not extend the time in which to cure the breach, the Accused shall be entitled to arbitrate
pursuant to Section 11.7 whether the Accused is entitled to an extension in order to cure the
breach.

     (d) It is the intent of the parties that in the event of a material breach hereunder, the
Accused shall the have the opportunity to a full determination of whether there was a material
breach, before this Agreement terminates. If as a result of arbitration, there is a finding
(“Finding”) of a material breach, the Accuser shall be entitled to terminate this Agreement and
the applicable section of Article 9 shall govern.

     8.2 Termination By Management Company for Professional Disciplinary Actions.
NCRM shall be obligated to suspend a physician whose authorization to practice medicine is
suspended, revoked or not renewed. Management Company may terminate this Agreement upon 10 days
prior written notice to NCRM if a Physician’s authorization to practice medicine is suspended,
revoked or not renewed and NCRM has failed to suspend such physician; provided, however, such
action may not be taken until NCRM has been given 30 days to resolve such physician’s authorization
to practice medicine. NCRM shall notify Management Company within five (5) days of a notice that
a physician’s authorization to practice medicine is suspended, revoked or not renewed or that
formal disciplinary action has been taken against a physician which could reasonably lead to a
suspension, revocation or non-renewal of a physician’s license.

     8.3 Termination at the expiration of a Term or Renewal Term. In the event
either party gives not less than one (1) year’s prior written notice of its intent not to renew at
the expiration of the Term or a Renewal Term, this Agreement shall automatically expire at the end
of the Term or Renewal Term.

Article 9

Purchase of Assets — Obligations and Options

     9.1 Termination by Management Company. If Management Company
terminates this Agreement due to the insolvency of NCRM (Section 8.1.1), or for a Finding of
material breach by NCRM (Section 8.1.2), or NCRM fails to suspend a physician whose license is
suspended, revoked or not renewed (Section 8.2), the following shall apply:

     9.1.1 On the closing date (the “Closing Date”) for purposes of consummating the
termination, NCRM shall:

Page 22 of 36

 

     (a) Pay to Management Company in immediately available funds, an amount equal to the
net book value (in accordance with GAAP) of all Management Company Assets at all Facilities
made available to NCRM by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount equal to the
uncollected accounts receivable purchased from NCRM immediately prior to the Closing Date
which have not been charged to NCRM as a Bad Debt under Cost of Services;

     (c) Pay to Management Company, in immediately available funds, an amount equal to
$1.32 million, plus 50% of NCRM’s PDE in excess of $1.32 million for the 12-month period
ending the month prior to termination of this Agreement.

     (d) Provide to Management Company a Consent to Assignment from each landlord of real
estate leased by Management Company for the benefit of NCRM to the extent each landlord is
willing to provide such consent. The parties shall endeavor to obtain a consent that
includes a release of Management Company from any further obligations or liability under
the leases as of the Closing Date, except for liabilities accruing prior to the Closing
Date, and shall satisfy any requirements provided for in the assignment provisions of the
applicable leases;

     (e) Hire all Management Company employees working at the Facilities or make provision
for their termination, without liability to Management Company after the Closing Date.

     (f) Pay to Management Company in immediately available funds any outstanding
liabilities under this Agreement, including any and all loans or Advances

     (g) Execute such documents and perform such acts as may be reasonably necessary to
accomplish the transactions required to effect the termination.

     For purposes of Sections 9.1, 9.2 9.3 and 9.4 the Closing Date shall mean 90 days following
termination of this Agreement.

     9.2 Termination By NCRM In the event this Agreement is terminated by NCRM as
a result of the insolvency of Management Company (8.1.1) or a Finding of a material breach by
Management Company (8.1.2), the following shall apply:

     9.2.1 On the Closing Date for purposes of consummating the termination, NCRM shall:

     (a) Pay to Management Company in immediately available funds, an amount equal to the
net book value (in accordance with GAAP) of all Management Company Assets at all Facilities
made available to NCRM by Management Company, in the event NCRM opts to acquire the Assets;

Page 23 of 36

 

     (b) Pay to Management Company in immediately available funds, an amount equal to the
uncollected accounts receivable purchased from NCRM immediately prior to the Closing Date
which have not been charged to NCRM as a Bad Debt under Cost of Services;

     (c) Have the option of assuming leases for office and equipment used directly for the
operation of NCRM’s business. In such event, a Consent to Assignment from each landlord of
real estate leased by Management Company for the benefit of NCRM to the extent each
landlord is willing to provide such consent shall be obtained. NCRM shall endeavor to
obtain a consent that include a release of Management Company from any further obligations
or liability under the leases as of the Closing Date, except for liabilities accruing prior
to the Closing Date and shall satisfy any requirements provided for in the assignment
provisions of the applicable leases;

     (d) Hire all Management Company employees working at the Facilities or make provision
for their termination, without liability to Management Company after the Closing Date.

     (e) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (f) Execute such documents and perform such acts as may be reasonably necessary to
accomplish the transactions required to effect the termination.

     9.3 Termination Under Section 8.3 By NCRM. In the event
NCRM elects to terminate this Agreement pursuant to Section 8.3 hereof, the following shall apply:

     9.3.1 On the Closing Date for purposes of consummating the termination, NCRM
shall:

     (a) Pay to Management Company in immediately available funds, an amount equal to the
net book value (in accordance with GAAP) of all Management Company Assets at all Facilities
made available to NCRM by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount equal to the
uncollected accounts receivable purchased from NCRM immediately prior to the Closing Date
which have not been charged to NCRM as a Bad Debt under Cost of Services;

     (c) Pay to Management Company, in immediately available funds, an amount equal to $1.32
million, plus 50% of NCRM’s PDE in excess of $1.32 million for the 12-month period ending
the month prior to termination of this Agreement.

     (d) A Consent to Assignment from each landlord of real estate leased by Management
Company for the benefit of NCRM to the extent each landlord is willing to provide such
consent. NCRM shall endeavor to obtain a consent that includes a release of

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Management Company from any further obligations or liability under the leases as of the
Closing Date, except for liabilities accruing prior to the Closing Date and shall satisfy
any requirements provided for in the assignment provisions of the applicable leases;

     (e) Hire all Management Company employees working at the Facilities or make provision
for their termination, without liability to Management Company after the Closing Date.

     (f) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (g) Execute such documents and perform such acts as may be reasonably necessary to
accomplish the transactions required to effect the termination.

     9.4 Expiration of the Term or a Renewal Term. In the event this
Agreement expires at the end of the Term or a Renewal Term, the following shall apply:

     9.4.1 On the last day of the Term, NCRM shall:

     (a) Pay to Management Company in immediately available funds, an amount equal to the
net book value (in accordance with GAAP) of all Management Company Assets at all Facilities
made available to NCRM by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount equal to the
uncollected accounts receivable purchased from NCRM immediately prior to the Closing Date
which have not been charged to NCRM as a Bad Debt under Cost of Services;

     (c) Pay to Management Company, in immediately available funds, an amount equal to $1.32
million, plus 50% of NCRM’s PDE in excess of $1.32 million for the 12-month period ending
the month prior to termination of this Agreement

     (d) Provide to Management Company a Consent to Assignment from each landlord of real
estate leased by Management Company for the benefit of NCRM to the extent each landlord is
willing to provide such consent. The parties shall endeavor to obtain a consent that include
a release of Management Company from any further obligations or liability under the leases
as of the Closing Date, except for liabilities accruing prior to the Closing Date, and shall
satisfy any requirements provided for in the assignment provisions of the applicable leases;

     (e) Hire all Management Company employees working at the Facilities or make provision
for their termination, without liability to Management Company for payments owed to
Employees for services rendered after the Closing Date.

     (f) Pay to Management Company in immediately available funds any outstanding liabilities under this Agreement, including any and all loans or Advances

Page 25 of 36

 

     (g) Execute such documents and perform such acts as may be reasonably necessary to
accomplish the transactions required to effect the termination.

     9.5 Transfer of Ownership

     Upon receipt of payments due under this Article 9 and other payments due, Management Company
shall transfer ownership and possession of the Assets, and assign all right, title and interest in
and to and obligations under the Lease(s) to NCRM and return to NCRM all security deposits. NCRM
shall have the option of receiving full credit on the payments due under this Article 9 for all
liens, encumbrances or security interest, or of having Management Company transfer ownership of the
Assets free and clear of all liens, encumbrances or security interests thereon.

     9.6 Nothing in this Article 9 shall be construed to provide for Management Company
for an amount greater than the original Right to Service Fee, except for the repayment of the
Exclusive Right to Service Fee provided for in Section 9.3. l(c).

Article 10

Insurance

     10.1 NCRM shall carry professional liability insurance, covering itself and its
employees providing Infertility Services under this Agreement in accordance with Section 4.6
hereof.

     10.2 NCRM and Management Company shall provide written notice to the other at least thirty
(30) days in advance of the effective date of any reduction, cancellation or termination of the
insurance required to be carried by each hereunder.

Article 11

Miscellaneous

     11.1 Independent Contractor. Management Company and NCRM
are independent contracting parties. In this regard, the parties agree that:

     11.1.1 The relationship between Management Company and NCRM 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 Management
Company and NCRM;

     11.1.2 Notwithstanding the authority granted to Management Company herein, Management
Company and NCRM agree that NCRM shall retain the full authority to direct all of the
medical, professional, and ethical aspects of its medical practices;

Page 26 of 36

 

     11.1.3 Any powers of NCRM not specifically vested in Management Company
by the terms of this Agreement shall remain with NCRM;

     11.1.4 NCRM shall, at all times, be the sole employer of the Physician-
Employees, the Other Professional Employees required by law to be employees of
NCRM and all other professional personnel engaged by NCRM 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 that are employees of NCRM;

     11.1.5 No party shall have the right to participate in any benefits, employment
programs or plans sponsored by the other party on behalf of the other party’s employees,
including, but not limited to, workers’ compensation, unemployment insurance, tax
withholding, health insurance, life insurance, pension plans or any profit
sharing arrangement;

     11.1.6 In no event shall any party be liable for the debts or obligations of any other
party except as otherwise specifically provided in this Agreement; and

     11.1.7 Matters involving the internal agreements and finances of NCRM,
including but not limited to the distribution of professional fee income among
Physician
Employees and, if applicable, Other Professional Employees who are
providing
professional services to patients of NCRM, and other employees of NCRM, disposition
of NCRM property and stock, accounting, tax preparation, tax planning, and pension and
investment planning, hiring and firing of physicians, decisions and contents of
reports to
regulatory authorities governing NCRM and licensing, shall remain the
sole
responsibility of NCRM and the individual Physicians.

     11.2 Force Majeure. No party shall be liable to the other parties 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.

     11.3 Equitable Relief. Without limiting other possible remedies available
to a non-breaching party for the breach of the covenants contained herein, including the right of
Management Company to cause NCRM to enforce any and all provisions of the Physician Employment
Agreements described in Section 4.3 hereof, 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.

Page 27 of 36

 

     11.4 Prior Agreements; Amendments. This Agreement supersedes all prior
agreements and understandings between the parties as to the subject matter covered hereunder
including the Former NCRM and NRL Agreements, 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.

     11.5 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, except that NCRM acknowledges and agrees that Management Company may assign this Agreement
to any affiliate, which for purposes of this Agreement, shall include any parent or subsidiary of
Management Company, without the consent of NCRM, provided Management Company shall remain liable
for its obligations hereunder. 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.

     11.6 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.

     11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada irrespective of the principal place of business of
the parties hereto. Any and all claims, disputes, or controversies arising under, out of, or in
connection with this Agreement or any beach thereof, except for equitable relief sought pursuant to
Section 11.3 hereof, shall be determined by binding arbitration in the State of Nevada, City of
Reno (hereinafter “Arbitration”). The party seeking determination shall subject any such dispute,
claim or controversy to the American Arbitration Association, and the rules of commercial
arbitration thereof shall govern. The Arbitration shall be conducted and decided by a single
arbitrator, unless the parties mutually agree, in writing at the time of the Arbitration, to three
arbitrators. In reaching a decision, the arbitrator(s) 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 arbitrator(s). Any application to
compel Arbitration, confirm or vacate an arbitral award or otherwise enforce this Section 11.7
shall be brought in the Courts of the State of Nevada or the United States District Court for the
District of Nevada.

     11.8 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
taken as a whole,

Page 28 of 36

 

     11.9 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.

     11.10 Notices. Any notice or other communication required by or which
may be given pursuant to this Agreement shall be in writing and mailed, certified or registered
mail, postage prepaid, return receipt requested, or overnight delivery service, such as FedEx or
DHL Express, prepaid, and shall be deemed given when received. Any such notice or communication
shall be sent to the address set forth below:

11.10.1 If for Management Company:

Jay Higham., President

IntegraMed America, Inc.

Two Manhattanville Road

Purchase, New York 10577

With a copy to:

Claude E. White, General Counsel

IntegraMed America, Inc.

Two Manhattanville Road

Purchase, New York 10577

11.10.2 If for NCRM:

Russell A. Foulk, President

Foulk & Whitten Nevada Center for Reproductive Medicine

645 Sierra Rose Drive

Suite 205

Reno, Nevada 89511-4026

With a copy to:

Richard H. Breit, Esq.

Richard H. Breit, P.A.

8551 West Sunrise Boulevard

Suite 300

Plantation, Florida 33322-4007

     Any party hereto, by like notice to the other parties, may designate such other address or
addresses to which notice must be sent.

Page 29 of 36

 

     11.11 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, including the Former NCRM and NRL Agreements, whether oral or written, with respect to such
subject matter.

     11.12 No Medical Practice by Management Company. Management Company will
not engage in any activity that constitutes the practice of medicine, and nothing contained in this
Agreement is intended to authorize Management Company to engage in the practice of medicine or any
other licensed profession.

     11.13 Confidential Information.

     11.13.1 During the initial term and any renewal term(s) of this Agreement, the parties
may have access to or become acquainted with each other’s 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, no 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, except in connection with the performance or
enforcement of this Agreement, or the benefit of any Person any Confidential Information,
no matter how or when acquired, of another 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. No party shall
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 the proprietor and shall be returned to the proprietor immediately
upon any termination of this Agreement.

     11.13.2 Confidential Information shall not include information which (i) is or becomes
known through no fault of a party hereto; (ii) is learned by a party from a third-party
legally entitled to disclose such information; or (iii) was already known to a party at the
time of disclosure by the disclosing party.

     11.13.3 In order to minimize any misunderstanding regarding what information
is considered to be Confidential Information, Management Company or NCRM will designate at
each others request the specific information which Management Company or NCRM considers to
be Confidential Information.

     11.14 Indemnification.

     11.14.1 Management Company agrees to indemnify and hold harmless
NCRM, 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

Page 30 of 36

 

connection with any act or failure to act by Management Company related to the performance
of its duties and responsibilities under this Agreement. The obligations contained in this
Section 11.14.1 shall survive termination of this Agreement. This indemnification
provision shall apply to both third-party claims and second-party claims, including, but
not limited to, claims, actions, damages, losses, expenses, or costs (including, but not
limited to, reasonable attorneys’ fees and court costs) incurred by one party to this
Agreement as a result of an act, or omission to act, on the part of the other party, its
agents, or employees pursuant to this Agreement

     11.14.2 NCRM agrees to indemnify and hold harmless Management Company, 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 NCRM related to the performance of its duties
and responsibilities under this Agreement. The obligations contained in this Section
11.14.2 shall survive termination of this Agreement. This indemnification provision shall
apply to both third-party claims and second-party claims, including, but not limited to,
claims, actions, damages, losses, expenses, or costs (including, but not limited to,
reasonable attorneys’ fees and court costs) incurred by one party to this Agreement as a
result of an act, or omission to act, on the part of the other party, its agents, or
employees pursuant to this Agreement

     11.14.3 In the event of any claims or suits in which Management Company and/or NCRM
and/or their directors, officers, employees and servants are named, each of Management
Company and NCRM 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.

     11.15 The Parties have participated in the drafting and preparation of this Agreement and
this Agreement shall be construed as a whole according to the fair meaning and not for or
against any party.

Page 31 of 36

 

     IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and
year first above written.

Foulk & Whitten Nevada Center For Reproductive medicine, P.C.

	 	 	 	 	 
	 	 	 
	By:  	/s/ Russell A. Foulk
 	 	 
	 	Russell A. Foulk, M.D., President 	 	 
	 	 	 	 
	 
	Nevada Reproductive Labs, Inc. 

 	 	 
	By:  	/s/ Russell A. Foulk
 	 	 
	 	Russell A. Foulk, M.D., President 	 	 
	 	 	 	 
	 
	IntegraMed America, Inc.

 	 	 
	By:  	/s/ Amin Neghabat
 	 	 
	 	Amin Neghabat, Sr. Vice President 	 	 
	 	Western Region 	 	 

Page 32 of 36

 

	 	 	 	 	 

Exhibit 3.12

Business Associate Agreement

Page 33 of 36

 

Exhibit 4.7.2

Physician Employment Agreements

Page 34 of 36

 

Exhibit 6.3

Security Agreement

Page 35 of 36

 

Exhibit 6.3.3

Continuing Limited Security Agreement

Page 36 of 36exv10w63

Exhibit 10.63

Management Agreement

Between

IntegraMed America, Inc.

And

Utah Fertility Center, P.C.

     This Management Agreement (“Agreement”) is dated December 1, 2009 (“Effective Date”)
by and between IntegraMed America, Inc. a Delaware corporation, with its principal place of
business at Two Manhattanville Road, Purchase, New York 10577 (“Management Company”) and Utah
Fertility Center, P.C., a Utah professional corporation, with its principal place of business at
1988 West, 930 North, Pleasant Grove, Utah 84062 (“UFC”). IntegraMed and UFC are individually
referred to herein as a “Party” and jointly, as “Parties.”

Recitals:

     UFC specializes in gynecological services, treatment of human infertility encompassing the
provision of in vitro fertilization and other assisted reproductive services (“Infertility
Services”). UFC provides Infertility Services through Russell A. Foulk, M.D., Cristin C. Slater,
M.D. and Scott J. Whitten, M.D., the shareholders of UFC. Drs. Foulk, Slater and Whitten are
collectively referred to as “Physicians.” UFC also contemplates providing Infertility Services
through other physician employees. Physicians have entered or will enter into employment
agreements with UFC on or about the date of execution of this Agreement.

     IntegraMed is in the business of making available to medical providers such as UFC certain
assets (principally, facilities and equipment) and support services, primarily consisting of (i)
financial management; (ii) administrative systems; (iii) clinical and laboratory organization and
function; (iv) marketing and (v) operations management. Such support services and the provision of
certain fixed assets are collectively referred to as “Business Services.”

     UFC believes the Business Services will benefit its medical practice and desires IntegraMed’s
assistance with various aspects of UFC’s medical practice through the utilization of the Business
Services as more particularly set forth herein. UFC acknowledges and agrees that the Business
Services being made available to UFC require UFC’s cooperation and collaboration, and that
IntegraMed, in making the Business Services available, makes no warranty or representation that
the Business Services will achieve UFC’s desired goals and objectives except as expressly provided
in this Agreement.

     In addition, UFC desires access to capital for funding its growth and development, and
IntegraMed desires to provide such capital or access to capital as provided herein.

 

 

     NOW THEREFORE, in consideration of the above recitals which the parties incorporate into this
Agreement, the mutual covenants and agreements herein contained and other good and valuable
consideration, UFC hereby agrees to purchase from IntegraMed the Business Services and IntegraMed
agrees to provide the Business Services to UFC on the terms and conditions provided herein.

Article 1

Definitions

     1.1 Definitions. For the purposes of this Agreement, the following
definitions shall apply:

     1.1.1 “Adjustments” shall mean adjustments for refunds, discounts, contractual
adjustments, professional courtesies, and other activities that do not generate a
collectible fee as reasonably determined by IntegraMed and UFC. Adjustments shall not
include Bad Debt.

     1.1.2 “Additional Service Fee” shall mean a monthly fee paid by UFC to IntegraMed in an
amount equal to a percentage of UFC’s monthly PDE.

     1.1.3 “Assets” shall mean those fixed assets utilized in connection with the operation
of UFC’s medical practice, including, but not limited to, fixed assets and leasehold
improvements.

     1.1.4 “Bad Debt” shall mean all or a portion of an account, loan or note receivable
considered to be uncollectible in accordance with Generally Accepted Accounting Principles
(“GAAP”),

     1.1.5 “Base Service Fee” shall mean a monthly fee paid by UFC to IntegraMed in an
amount equal to a percentage of UFC’s monthly Physician and Other Professional Revenues.

     1.1.6 “Business Services” shall mean IntegraMed making available certain personnel and
assets (including, without limitation, all facilities and equipment necessary to operate
UFC’s medical practice for the provision of Infertility Business Services) and support
services, primarily consisting of (i) financial management; (ii) administrative systems;
(iii) clinical and laboratory organization and function; (iv) marketing and (v) operations
management, all as more fully set forth in Article 3.

     1.1.7 “Cost of Services” shall have the meaning set forth in Article 2.

     1.1.8 “Facilities” shall mean the medical offices and clinical spaces of UFC, including
any satellite locations, related businesses and all medical group business operations of
UFC, which are utilized by UFC in its medical practice.

			
	 	 	 
	Utah Fertility Center Management Agreement
	 	Page 2 of 35

 

 

     1.1.9 “Fiscal Year” shall mean the 12-month period beginning January 1 and ending
December 31 of each year.

     1.1.10 “Infertility Services” shall mean gynecological services, treatment of human
infertility encompassing the provision of in vitro fertilization and other assisted
reproductive services provided by UFC or any Physician Employee and Other Professional
Employee.

     1.1.11 “Management Company Overhead” shall mean salaries, bonuses, payroll taxes and
benefits for Management Company corporate office employees, rent and expenses related to the
operation of the Management Company corporate office, travel and entertainment expenses for
corporate employees.

     1.1.12 “Other Professional Employee” shall mean a non-physician individual who provides
services, including nurse anesthetists, physician assistants, nurse practitioners,
psychologists, and other such professional employees who generate professional charges, but
shall not include Technical Employees.

     1.1.13 “Physician-Employee” shall mean an individual, including any UFC physician owner
and any other physician who is an employee of UFC or is under contract with UFC, including
physicians employed by entities with whom UFC has contracted, to provide Infertility
Services to UFC’s patients and is duly licensed as a physician in the where UFC provides
Infertility Services.

     1.1.14 “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 UFC as a result of professional medical and laboratory services furnished to patients by
Physicians and Physician-Employees and Other Professional Employees and, except as described
in the next succeeding sentence, 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, ultrasound fees from businesses owned or operated by Physicians and,
including, but not limited to, contributions by pharmaceutical and other companies for
marketing and research activities). Physician and Other Professional Revenues shall not
include (i) board attendance fees and other compensation in connection with board
memberships; provided, the compensation for board related activities does not exceed $5,000
in the aggregate, annually, per Physician, and (ii) other services where Physician does not
provide professional medical services such as testimony and consultation for
litigation-related proceedings, lectures, passive investments, fundraising, or writing
(“Permitted Services”; the compensation from Permitted Services may be retained by a
Physician or Physician-Employee without limit, subject to Section 4.7.5 hereof; Physician
and Other Professional Revenues are sometimes referred to herein as “Revenues.”
Additionally, it is understood and agreed that “Physician and Other Professional Revenues”
shall not include compensation for teaching activities at a medical school, teaching
hospital or college, subject to Section 4.7.5.

			
	 	 	 
	 
	 	Page 3 of 35

 

 

     1.1.15 “Pre-distribution Earnings” (“PDE”) shall mean (i) Physician and Other
Professional Revenues, less (ii) Cost of Services and the Base Service Fee.

     1.1.16 “Receivables” shall mean and include all rights to payment for services
rendered or goods sold, including, without limitation, accounts receivables, contract
rights, chattel paper, documents, instruments and other evidence of patient indebtedness to
UFC, policies and certificates of insurance relating to any of the foregoing, and all
rights to payment, reimbursement or settlement or insurance or other medical benefit
payments assigned to UFC by patients or pursuant to any Preferred Provider, HMO, capitated
payment agreements or other agreements between UFC and a payer, recorded each month (net of
Adjustments).

     1.1.17 “Technical Employees” shall mean embryologists and other laboratory personnel,
ultrasonographers, phlebotomists and technicians who provide services to UFC.

Article 2

Cost of Services

     2.1 “Cost of Services” shall mean all ordinary and necessary expenses of UFC and all direct
ordinary and necessary operating expenses, without mark-up, of Management Company, exclusive of
Management Company Overhead, incurred in connection with products and/or services that are
specific to UFC or customized for UFC or that are related to volume-based usage by UFC, including,
without limitation, the following costs and expenses, whether incurred by Management Company or
UFC:

     2.1.1 Salaries and fringe benefits of all Management Company and other employees
employed at UFC Facilities, along with payroll taxes or all other taxes and charges now or
hereafter applicable to such personnel, and services of independent contractors;

     2.1.2 Marketing expenses incurred by or on behalf of UFC, such as costs of printing
marketing materials, media placements, and consumer seminars;

     2.1.3 Any sales and use taxes, or any city, state or local taxes assessed against UFC
related to the operation of UFC’s medical practice or its tangible personal property;

     2.1.4 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;

     2.1.5 Legal fees paid by Management Company or UFC to outside counsel in connection
with matters specific to the operation of UFC such as regulatory and other issues specific
to jurisdictions in which UFC operates; provided, however, legal fees incurred by the
parties relative to the execution or performance of this Agreement or as a

			
	 	 	 
	 
	 	Page 4 of 35

 

 

result of a dispute between the parties under this Agreement shall be borne by each party
and shall not be considered a Cost of Services; and provided, further any cost related to
disputes between or among Physicians shall not be considered Cost of Services and are
outside the scope of this Agreement.

     2.1.6 Health benefits provided to Physicians and Physician-Employees, including health
and life insurance and long-term disability;

     2.1.7 All insurance necessary to operate UFC including fire, theft, general liability
professional liability and malpractice insurance for Physicians and Physician-Employees of
UFC, and Other Professional and Technical Employees provided by Management Company;

     2.1.8 Professional licensure fees and board certification fees of Physician-Employees,
and Other Professional Employees rendering Infertility Services on behalf of UFC;

     2.1.9 Membership in professional associations and continuing professional education for
Physicians and Physician-Employees and Other Professional Employees;

     2.1.10 Risk Management Program described in Section 3.8 herein;

     2.1.11 Cost of filing fictitious name permits pursuant to this Agreement;

     2.1.12 Cost of supplies, medical and administrative, and all direct general and
administrative expenses, including but not limited to travel and entertainment expenses,
dues and subscriptions, and other business related expenses, such as cellular telephone,
relative to UFC; and

     2.1.13 Such other costs and expenses directly incurred by Management Company related to
UFC’s operations which are included in the annual operation budget referred to in Section
5.2.1 or otherwise approved by UFC in writing.

     2.1.14 Cost incurred by Management Company with respect to specific requests for
services from UFC that are outside those provided for in this Agreement. For such requested
services, Management Company and UFC will mutually determine how such specific requests will
be carried out, as well as how charges and costs, including, but not limited to travel, will
be applied.

     2.1.15 UFC’s Bad Debt.

     2.1.16 Costs incurred by Management Company with respect to Business Services related
to a specific activity requested by UFC that are in excess of those Business Services
typically provided to other medical providers for the same activity, including, but not
limited to additional travel and staffing.

			
	 	 	 
	 
	 	Page 5 of 35

 

 

     2.1.17 Such costs charged by third-party vendors that are, in turn, allocated among
network practices. For example, and not by way of limitation, costs to install and maintain
telecommunication lines linking UFC to the Management Company data center; 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 UFC, including but not limited to HRIS/ON-core, Goldmine, MAS500, Centrix,
HelpSTAR, Secure ID/RSA token and spam reduction services provided by Management Company;
insurance premiums for professional liability and other insurance coverages, and; any other
cost or expense that is allocated among the network practices based on volume usage.”

     2.1.18 Such additional training that UFC may request from Management Company beyond
basic training for such applications as ARTworks® or in connection with basic Marketing and
Sales training.”

     2.1.19 Base salary up to $250,000 for two years for one new physician employed by UFC
; provided, however, such new hire must be approved by the Practice Management Board and
provided, further, (i) “new physician” shall mean a physician whose hiring is not to
replace a physician who has left UFC within 12 months prior to the employment of the new
physician, but whose hiring increases UFC’s full-time equivalent (“FTE”) physicians to a
number greater than UFC’s FTE physicians for the previous 12 months; and (ii) “new
physician” shall not mean a physician providing Infertility Services to patients in
“Territory” during the 12 month period immediately preceding employment by UFC.

     2.2 Notwithstanding anything to the contrary contained herein, Cost of Services shall not
include costs of the following:

     2.2.1 Any federal or state income taxes of UFC or Management Company other than as
provided above;

     2.2.3 The Base Service Fee;

     2.2.4 Except as set forth in Section 2.1.19, any amount paid to or on behalf of any
Physician or Physician-Employee including salary, payroll taxes, draw or pension
contributions (all of which come out of UFC’s share of PDE);

     2.2.5 Management Company’s cash outlay to acquire capital assets for which depreciation
expense is to be charged as a Cost of Services under Section 2.1.4.

     2.2.6 Management Company Overhead.

Article 3

Duties and Responsibilities of Management Company

			
	 	 	 
	 
	 	Page 6 of 35

 

 

     3.1 Business Services and Administration.

     3.1.1 UFC hereby engages Management Company to provide the Business Services within the
Counties of Carbon, Duchesne, Emery, Juab, Orem, Sanpete, Summit, Tooele, Utah and Wasatch
in Utah (the “Territory”), and UFC agrees to limit its use of the Business Services to the
Territory, without prior written consent from Management Company. Any time during the Term,
in the case of Salt Lake County, Utah, Management Company may provide the Business Services
to another medical practice in such County after giving UFC written notice of UFC’s right of
first refusal to establish an office and practice within such County, provided the terms of
the relationship between Management Company and the other medical practice are not more
favorable to the other medical practice than the terms set forth in the written notice from
Management Company to UFC.

     None of the Business Services made available to UFC include any physician medical
functions.

     3.1.2 Management Company will, on behalf of UFC and as directed by UFC, bill patients
timely and collect professional fees for Infertility Business Services rendered by UFC at
the Facilities, outside the Facilities for UFC’s hospitalized patients, and for all other
Infertility Business Services rendered by any Physician- Employee or Other Professional
Employees. UFC hereby appoints Management Company for the term hereof to be its true and
lawful attorney-in-fact, for the following purposes: (i) bill patients in UFC’s name and on
its behalf; (ii) collect Receivables resulting from such billings in UFC’s name and on its
behalf (recognizing that successfully collecting Receivables may be dependent on UFC’s
participation and cooperation, UFC will reasonably cooperate with respect to Management
Company’s collection efforts, and policies and procedures established by the Practice
Management Board governing the collection of Receivables); (iii) receive payments from
insurance companies, prepayments from health care plans, and all other third-party payers;
(iv) take possession of and endorse in the name of UFC (and/or in the name of any Physician
Employee or Other Professional Employee rendering Infertility Business Services to patients
of UFC) any notes, checks, money orders, and other instruments received in payment of
Receivables; and (v) at UFC’s request, initiate the institution of legal proceedings in the
name of UFC, with UFC’s cooperation, to collect any accounts and monies owed to UFC, to
enforce the rights of UFC as creditor under any contract or in connection with the rendering
of any service by UFC, and to contest adjustments and denials by governmental agencies (or
its fiscal intermediaries) as third-party payers.

     3.1.3 Management Company will provide the administrative services function of
supervising and maintaining (on behalf of UFC) all files and records relating to the
operations of the Facilities, including but not limited to accounting and billing records,
including for billing purposes, patient medical records, and collection records. Patient
medical records shall at all times be and remain the property of UFC and shall be located

			
	 	 	 
	 
	 	Page 7 of 35

 

 

at the Facilities and be readily accessible for patient care. Management Company’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 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. Management Company shall have access to such
records in order to provide the Business 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. UFC shall have unrestricted access to all of its records at all times.

     3.1.4 Management Company will provide, as requested by UFC, 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 UFC’s medical
practice at the Facilities.

     3.1.5 With UFC’s cooperation and participation, Management Company will design and
direct the implementation of appropriate marketing programs for UFC. UFC’s participation is
essential in developing such marketing program and accordingly, will designate one or more
physicians to work with Management Company in designing and implementing such marketing
programs.

     3.1.6 Management Company, upon request of UFC, will assist UFC in recruiting additional
physicians, including Management Company providing such administrative functions as
advertising for and identifying potential candidates, checking credentials, and arranging
interviews; provided, however, UFC shall interview and make the ultimate decision as to the
suitability of any physician to become associated with UFC. All physicians recruited by
Management Company and accepted by UFC shall be employees of or independent contractors to
UFC.

     3.1.7 Management Company will assist UFC in negotiating any managed care contracts to
which UFC desires to become a party. Management Company will provide administrative
assistance to UFC in fulfilling its obligations under any such contract.

     3.1.8 Management Company will arrange, in consultation with UFC, for legal and
accounting services as may otherwise be reasonably required in the ordinary course of UFC’s
operation.

     3.2 Facilities. UFC shall determine the nature and extent of the facilities
reasonably needed for UFC’ medical practice and Management Company will assist UFC in obtaining
such facilities, including providing administrative support, effort and resources in obtaining the
facilities, including all furniture, equipment and furnishings necessary for 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

			
	 	 	 
	 
	 	Page 8 of 35

 

 

conducting UFC’s medical practice at the Facilities. As of the date of this Agreement, UFC has
identified medical office space located at 1988 West, 930 North, Pleasant Grove, Utah 84062 ( the
“Facilities”) which is under construction with an anticipated opening in January 2010. Management
Company will arrange for the cleaning of the Facilities, and timely maintenance and cleanliness of
the equipment, furniture and furnishings located therein. Management Company will advise, counsel
and collaborate with UFC regarding the condition, use and needs for the Facilities, the
improvements thereto, equipment and services.

     3.3 Executive Director and Other Personnel.

     3.3.1 Executive Director. Management Company will employ an Executive
Director, approved by the Practice Management Board, as defined in Section 5.1, to manage
and administer all of the day-to-day business functions of the Facilities. The Executive
Director’s compensation and benefits shall be approved by Practice Management Board. UFC
agrees not to offer any compensation or benefits to the Executive Director other than those
approved by the Practice Management Board.

     3.3.2 Personnel. Management Company will provide, as requested by
UFC, Other Professional Employees, Technical Employees, support and administrative
personnel, clerical, secretarial, bookkeeping and collection personnel reasonably necessary
for the efficient operation of UFC at the Facilities. Such personnel must be approved by
UFC, but will be under the direction and supervision of the Executive Director, except that
Technical Employees and Other Professional Employees subject to the professional
supervision of UFC. The compensation of such personnel shall be approved by UFC and UFC may
request that any of such personnel be terminated in its reasonable discretion and in such
event, all cost and expenses associated with such termination shall be a Cost of Services.

     3.4 Financial Planning and Goals. Management Company, in collaboration with
UFC, will prepare, for the approval of the Practice Management Board, an annual capital and
operating budget (the “Budget”) reflecting the anticipated Revenues and Cost of Services, sources
and uses of capital for growth of UFC’ practice and for the provision of Infertility Services at
the Facilities. Management Company will present the Budget to the Practice Management Board for its
approval at least thirty (30) days prior to the commencement of the Fiscal Year. If the Practice
Management Board can not agree on the Budget for any Fiscal Year during the term of this Agreement,
the Budget for the preceding Fiscal Year will serve as the Budget until such time as a new Budget
is approved.

     3.5 Financial Statements. Management Company will deliver to UFC monthly
financial statements (“Financial Statements”) within thirty (30) days after the end of each
calendar month. Such Financial Statements will comprise, on a monthly and year-to-date basis, a
statement of UFC’ Revenues and Cost of Services and PDE, as hereinafter defined.

     3.6 Tax Planning and Tax Returns. Management Company will not be responsible
for any tax planning or tax return preparation for UFC, but will provide support

			
	 	 	 
	 
	 	Page 9 of 35

 

 

documentation in connection with the same. Such support documentation will not be destroyed
without UFC’ consent.

     3.7 Inventory and Supplies. For the account of UFC, Management Company shall
order and purchase inventory and supplies, and such other materials which are requested by UFC to
enable UFC to deliver Infertility Services in a cost-effective quality manner.

     3.8 Risk Management. Management Company shall assist UFC in
the development of a Risk Management Program and in meeting the standards of such Program.

     3.9 Personnel Policies and Procedures. Management Company
shall develop, in cooperation with UFC, personnel policies, procedures and guidelines, governing
office behavior, protocol and procedures which will aid in compliance with applicable laws and
guidelines related to employment and human resources management.

     3.10 Licenses and Permits. Management Company will coordinate and
assist UFC in its application for and efforts to obtain and maintain all federal, state and local
licenses, certifications and regulatory permits required for or in connection with the operations
of UFC and equipment located at the Facilities, other than those relating to the practice of
medicine or the administration of drugs by Physicians and Physician-Employees.

     3.11 Subcontracted Business Services. Subject to prior approval of UFC, which
approval shall not be unreasonably withheld, Management Company is expressly authorized to
subcontract with other persons or entities for any of the services that Management Company is
required to perform pursuant to this Agreement. Provided, however, that Management Company shall
disclose any term of this Agreement to any subcontractor or potential subcontractor of Management
Company who does or will perform services to UFC to the extent the subcontractor or potential
subcontractor will perform significant or continuing functions for UFC which are specific
obligations of Management Company hereunder and shall incorporate such terms into such subcontract,
including but not limited to the restrictive provisions of Section 3.1.1 hereof. No such
subcontract will limit the overall responsibility of Management Company for compliance with
the terms and provisions of this Agreement unless UFC specifically agrees in writing. Nothing in
this Section 3.11 shall apply to contracts entered into by Management Company that relate to
services not required to be performed directly by Management Company such as payroll services.

     3.12 Access to Protected Health Information. In connection with
the Business Services provided by Management Company pursuant to this Agreement, Management
Company and its employees, representatives and agents will have access to protected health
information (“PHI”) maintained by UFC. In connection with such PHI, Management Company
contemporaneous with entering into this Agreement will enter into a Business Associate Agreement
with UFC, substantially in the form of Exhibit 3.12, in accordance with the regulations
promulgated under the Health Insurance Portability & Accountability Act of 1996.

Page 10 of 35

 

Article 4

Duties and Responsibilities of UFC

     4.1 Timely Performance. UFC, in engaging Management Company
to provide the Business Services described in this Agreement, acknowledges that UFC’s timely
performance of its duties and responsibilities as delineated in this Article 4 are material to this
Agreement and to Management Company’s interest.

     4.2 Professional Services. UFC shall use its best efforts to cause its
Physicians and Physician-Employees to provide Infertility Services to UFC’ patients in compliance
at all times with ethical standards, laws and regulations applying to the practice of medicine in
the applicable jurisdiction which such Physician or Physician-Employee provides Infertility
Services on behalf of UFC. UFC shall ensure that each Physician, Physician-Employee, any Other
Professional Employee employed by UFC, and any other professional provider associated with UFC is
duly licensed to provide the Infertility Services being rendered within the scope of such
provider’s practice. In addition, UFC shall require each Physician and Physician-Employee to
maintain a DEA number and appropriate medical staff privileges as determined by UFC during the term
of this Agreement. In the event that any disciplinary actions or medical malpractice actions are
initiated against any Physician, Physician-Employee or other professional provider, UFC shall
promptly inform the Executive Director and provide the underlying facts and circumstances of such
action, and the proposed course of action to resolve the matter. Periodic updates, but not less
than monthly, shall be provided to Management Company.

     4.3 Medical Practice. UFC shall use and occupy the Facilities exclusively
for the purpose of providing Gynecology, Infertility Services, and related services and activities
and shall use its best efforts to comply with all applicable laws and regulations and all
applicable standards of medical care, including, but not limited to, those established by the
American Society of Reproductive Medicine. The medical practice conducted at the Facilities
shall be conducted solely by Physicians employed by UFC and Physician-Employees employed by or
serving as independent contractors to UFC, and Other Professional Employees employed by UFC. No
other physician or medical practitioner shall be permitted to use or occupy the Facilities without
the prior written consent of Management Company, except in the case of a medical emergency, in
which event, notification shall be provided to Management Company as soon after such use or
occupancy as possible.

     4.4 Employment of Physician and Other Professional Employees. In the event
UFC shall determine that additional physicians are necessary, UFC shall undertake and use its best
efforts to select physicians who, in UFC’s judgment, possess the credentials and expertise
necessary to enable such physician candidates to become affiliated with UFC for the purpose of
providing Infertility Services. UFC shall cause each Physician-Employee to enter into an
employment or service agreement with UFC or their respective professional association which is a
partner of UFC (“Physician Employment Agreement”) in such form as is mutually and reasonably
acceptable to UFC and Management Company. Upon UFC’ request, Management Company shall consult with
and advise UFC respecting the hiring, compensation, supervision, evaluation and termination of
Physician-Employees.

Page 11 of 35

 

     4.5 Continuing Medical Education UFC shall require its Physician-Employees to
participate in such continuing medical education as UFC deems to be reasonably necessary for such
physicians to remain current in the provision of Infertility Services.

     4.6 Professional Insurance. UFC shall maintain professional liability
coverage at all times during the Term, in limits of not less than $1,000,000.00 per
occurrence, $3,000,000.00 in the aggregate, unless the Practice Management Board determines that
such limits can be lowered or should be increased. If possible, under the terms of the insurance
coverage, UFC shall use its best efforts to cause Management Company to be named an additional
named insured to the extent reasonably available at no additional cost or expense. Upon request of
Management Company, evidence of such coverage shall be provided to Management Company.

     4.7 Direction of Practice UFC, as a continuing condition of Management
Company’s obligations under this Agreement, shall at all time during the Term be and remain legally
organized and operated to provide Infertility Services in a manner consistent with state and
federal laws. UFC, through its physicians, is expected to provide leadership in its market area
and reasonably cooperate with Management Company in Management Company’s efforts to make the
Business Services available to UFC. In furtherance of which:

     4.7.1 UFC shall operate and maintain at the Facilities a full-time practice of medicine
specializing in the provision of Infertility Services and shall maintain and enforce the
Physician Employment Agreements or in such other form as is mutually and reasonably agreed
to by UFC and Management Company in writing. UFC covenants that it shall not employ any
physician, or have any physician as a shareholder, unless said physician shall sign the
Physician Employment Agreement prior to assuming the status as employee and/or shareholder.
UFC covenants that should a physician become a shareholder of UFC, that a condition
precedent to the issuance of the shares shall be the ratification of this Service Agreement.
The relationship between UFC and physicians who independently contract with UFC to provide
services shall be in such other form as is mutually and reasonably agreed to by UFC and
Management Company in writing.

     4.7.2 UFC shall not terminate the Physician Employment Agreement(s) of any Physician,
except in accordance with the Physician Employment Agreement(s). UFC shall not amend or
modify the Physician Employment Agreements in any material manner, nor waive any material
rights of UFC thereunder without the prior written approval of Management Company, which
approval will not be unreasonably withheld, and it shall be deemed unreasonable for
Management Company to withhold consent of an amendment or modification mandated by the
necessity of compliance with applicable law. UFC covenants to enforce the terms of each
Physician Employment Agreement, including but not limited to any terms confirming a
Physician-Employee’s commitment to practice medicine solely through UFC for a specified
number of years. Attached hereto as Exhibit 4.7.2 are copies of all Physician
Employment Agreement.

     4.7.3 Recognizing that Management Company would not have entered into this Agreement
but for UFC’s covenant to maintain and enforce the Physician Employment

Page 12 of 35

 

Agreements with any physician now employed or physicians who may hereafter become
employees of UFC, and in reliance upon such Physician-Employee’s observance and
performance of the non-competition and non-solicitation obligations under the Physician
Employment Agreements, any damages, liquidated damages, compensation, payment or
settlement received by UFC from a physician whose employment is terminated shall be
considered to be Physician and Other Professional Revenues.

     4.7.4 UFC shall retain that number of Physician-Employees as are reasonably necessary
and appropriate for the provision of Infertility Services. Each Physician-Employee shall
hold and maintain a valid and unrestricted license to practice medicine in the applicable
jurisdiction where such Physician-Employee provides Infertility Services on behalf of UFC,
and all full-time Physician-Employees shall be board eligible in the practice of gynecology,
with training in the subspecialty of infertility and assisted reproductive medicine. UFC
shall be responsible for paying the compensation and benefits, as applicable, for all
Physician-Employees, and for withholding, as required by law, any sums for income tax,
unemployment insurance, social security, or any other withholding required by applicable
law. Management Company, at the request of UFC, will establish and administer the
compensation with respect to such Physician-Employees in accordance with the written
agreement between UFC and each Physician Employee. Management Company shall neither control
nor direct any Physician in the performance of Infertility Services for patients, and
Management Company will not unreasonably interfere with the employer-employee relationship
between UFC and its Physician-Employees.

     4.7.5 UFC and its Physician-Employees shall provide patient care and clinical backup as
required for the proper provision of Infertility Services to patients of UFC at UFC’
Facilities. UFC shall require that its full-time Physician-Employees devote
substantially all of their professional time, effort and ability to UFC’s practice,
including the provision of Infertility Services and the development of such practice, and
that Permitted Services, of any Physician-Employee do not interfere with such Physician-
Employees full time practice of Infertility Services at UFC’ Facilities.

     4.7.6 UFC shall obtain and maintain necessary licenses and operate its clinical
laboratory and tissue bank services in accordance with all applicable laws
and regulations. UFC agrees that the Medical Director or Tissue Bank Director, if
applicable, shall be Physician-Employees or Other Professional Employees, if applicable, of
UFC who meet the qualifications required by applicable State law or regulation, and that
should there be a vacancy in any such position, UFC will cause another Physician-Employee
or Other Professional Employee, if applicable, to fill such vacancy in accordance with
applicable State law.

     4.7.7 UFC acknowledges that it bears all medical obligations to patients treated at the
Facilities and covenants that it is responsible for all tissue, specimens, embryos or
biological material (“Biological Materials”) kept at the Facilities on behalf of the
patients (or former patients) of UFC, except for the negligence, willful or intentional
misconduct of Management Company’s employees; provided, however, this shall not apply to

Page 13 of 35

 

circumstances where an Management Company employee is acting under the direction or
supervision of a Physician-Employee. In the event of a termination or dissolution of UFC, or
the termination of this Agreement for any reason, UFC and the Physicians will have the
obligation to account to patients and to arrange for the storage or disposal of such
Biological Materials in accordance with patient consent and the ethical guidelines of the
American Society of Reproductive Medicine (“Relocation Program”). Management Company, in
such event, will, at the request of UFC, assist in the administrative details of such a
Relocation Program for so long as UFC shall request and an appropriate fee shall be paid
during that time. These obligations shall survive the termination of this Agreement.

     4.7.8 UFC will designate certain physicians to (i) work with Management Company in
designing and implementing marketing plans, (ii) participate in marketing strategy
sessions, and (iii) identify targeted referral sources and managed care
opportunities.

     4.7.9 UFC agrees to participate in the IntegraMed’s network activities and programs,
including, but not limited to, the Council of Physicians and Scientists and offering
IntegraMed’s AttainTM IVF Refund Program to UFC patients, and participating in other product
and service offering IntegraMed has in effect from time to time. UFC shall be entitled to
offer the Attain IVF Refund Program or any successor program on an exclusive basis in the
Territory, as defined in this Agreement, to its patients so long as 80% of UFC “private
pay” patients apply for the Attain IVF Refund Program during each 12-month period of the
Term beginning with the Effective Date.

     4.8 Practice Development, Collection Efforts and Network Involvement. UFC
agrees that during the term of this Agreement, UFC covenants for itself and will use reasonable
efforts to cause its Physician-Employees to:

     4.8.1 Execute such documents and take such steps reasonably necessary to assist billing
and collecting for patient services rendered by UFC and its Physician-Employees;

     4.8.2 Promote UFC’s medical practice and participate in marketing efforts developed by
Management Company as provided for in Section 3.1.5.

     4.8.3 Reasonably cooperate with respect to Management Company’s collection efforts, and
policies and procedures governing the collection of Receivables; and

     4.8.4 Comply with all applicable laws and regulations, federal, state and local.

     4.9 No Grant of License; Independent Contractors. UFC may not
use IntegraMed service names, acquired or developed trade names, trademarks, or related logos of
IntegraMed (the “IntegraMed Trade Names”) in conjunction with the provision of Infertility
Services. UFC will use its own legal entity name, and will not use the IntegraMed Trade Names as
any part of that name. UFC will not allow its clinic or its Infertility Services to become
substantially associated with the IntegraMed Trade Names. IntegraMed is an independent

Page 14 of 35

 

contractor, and neither party may hold themselves out as agents, employees, partners, or
representatives of one another. Neither party may bind the other to any contract.

     4.10 Internet Marketing. Pursuant to Section 3.1.5, IntegraMed agrees to
provide marketing services, including designing marketing plans for implementation by UFC for
practice development. In performing such marketing, IntegraMed may maintain the Web site
www.integramed.com or successor site, and will engage in other marketing efforts designed
to benefit UFC and other independent clinics for which IntegraMed performs services. IntegraMed
will link to UFC on that site, and will list UFC in its other marketing efforts and materials, as
appropriate. UFC may also, in its discretion, state expressly that it has retained IntegraMed as a
manager, but this is not permission to make a trademark use of the IntegraMed Trade Names, nor may
UFC use any IntegraMed Trade Name to identify its own Infertility Services or its clinics. For
example, UFC may, but is not required to, add to its Web site a link to the IntegraMed Web site,
together with the phrase “an independent member of the
IntegraMed Network” or “an independent
IntegraMed affiliate”. One of these two phrases must also be used by UFC in connection with any
marketing materials or other communications that mention that IntegraMed is providing the Business
Services to UFC.

     4.11 Disclaimer of Representations. The parties agree that neither IntegraMed
nor its employees or agents has made any guarantee or representation that: (i) it will find markets
or patients or locations for ICRM; (ii) it will purchase products or services from UFC; (iii) UFC
will derive income of any particular level or amount. UFC acknowledges that it is experienced in
providing Infertility Services, will produce marketing plans with assistance and counsel from
IntegraMed, and will not be relying on IntegraMed’s efforts in providing the Infertility Services.

     4.12 Rights Upon Termination.

     4.12.1 Upon termination of this Agreement, UFC shall within 30 days of the termination
(i) refrain from making any further link or reference to its former relationship with
IntegraMed and (ii) return to IntegraMed all proprietary materials including, but not
limited to, consents, policy and procedure manuals, Risk Management and Clinical Standards
Review Manuals (“Proprietary Materials”).

     4.13 UFC’s failure (except as otherwise provided herein) to cease using the Proprietary
Materials at the termination or expiration of this Agreement will result in immediate and
irreparable damage to IntegraMed and to the rights of any licensee of IntegraMed. There is
no adequate remedy at law for such failure. In the event of such failure, IntegraMed 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
the decision on the application for such permanent injunction, IntegraMed shall be entitled
to a temporary restraining order, without prejudice to any other remedy available to
IntegraMed. All such remedies hereunder shall be at the expense of UFC and shall not be a
Cost of Services.

Page 15 of 35

 

Article 5

Joint Duties and Responsibilities

     5.1 Formation and Operation Of Practice Management Board.
Management Company and UFC will establish a practice management board (“Practice
Management Board”), which will be responsible, to assist UFC, in developing management and
administrative policies for the overall operation of UFC. The Practice Management Board will
consist of designated representatives from Management Company as determined by Management Company,
designated representatives of UFC as determined by UFC, the Executive Director and the Medical
Director. It is the intent and objective of Management Company and UFC that they agree on the
overall provision of the Business Services to UFC. In the case of any matter requiring a formal
vote, UFC shall have one (1) vote and Management Company shall have one (1) vote; provided,
however, the determination with respect to adding Shareholders, or hiring or firing of
Physician-Employees shall be determined solely by UFC. The desire is that Management Company and
UFC agree on matters of operations and that, if they disagree, they will have to work
cooperatively to resolve any disagreement. The Practice Management Board shall meet at least three
(3) times per calendar year and will maintain minutes of all meetings, which minutes shall, among
other things, reflect all decisions of the Practice Management Board.

     5.2 Duties and Responsibilities of The Practice Management Board. With the
assistance of Management Company, the Practice Management Board shall have, among others, the
following duties and responsibilities:

     5.2.1 Annual Budgets and profitability. Review and approve
annual capital and operation budgets prepared by Management Company. The parties covenant
and agree to use their respective best efforts to assist the Practice Management Board in
achieving the projected budgets. UFC and Management Company agree that, recognizing changes
in circumstances, annual budgets and forecast are subject to revisions.
Accordingly, the Practice Management Board may, from time to time, propose to modify the
annual budgets, as needed, including without limitation, staff reductions, so that UFC
operates in a profitable mode which means that PDE is positive on a monthly basis. UFC’s
approval of such modifications shall not be unreasonably withheld and shall become part of
the Budget. Further, UFC agrees that in the event UFC incurs operational losses at any point
during the term of this Agreement, nothing herein shall obligate Management Company to incur
losses under this Agreement in order to sustain UFC’s operations. For example, Management
Company may take appropriate steps to reduce its Cost of Services in order to avoid negative
PDE at any point.

     5.2.2 Capital Improvements and Expansion. Except as otherwise
provided herein, any renovation and expansion plans, and capital equipment expenditures with
respect to UFC shall be reviewed and approved by the Practice Management Board and shall be
based upon the best interests of UFC, and shall take into account capital priorities,
economic feasibility, physician support, productivity and then current market and regulatory
conditions.

     5.2.3 Marketing Budget. UFC shall assist in the development of an
annual marketing budget and plan prepared by Management Company for approval by the

			
	 	 	 
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Practice Management Board. All annual advertising and other marketing budgets prepared by
Management Company shall be subject to the review, amendment, approval and disapproval of
the Practice Management Board.

     5.2.4 Strategic Planning. The Practice Management Board shall
develop long-term strategic plans.

     5.2.5 Physician Hiring. Make recommendations regarding the number
and type of physicians required for the efficient operation of UFC; provided, the final
determination on physician hiring shall be made by UFC.

     5.2.6 Executive Director. The Practice Management Board will direct
the day-to-day functions of the Executive Director in implementing the policies agreed by
the Practice Management Board. The Executive Director shall meet with the Medical Director
on a regular basis as reasonably requested by either party to discuss issues pertaining to
UFC. Salary and fringe benefits paid to the Executive Director shall be approved by the
Practice Management Board. The Practice Management Board will conduct an annual evaluation
of such individual’s performance.

Article 6

Financial Arrangements

     6.1 Compensation. The compensation set forth in this Article 6 is
being paid to Management Company in consideration of the substantial commitment made, capital
provided and services to be rendered by Management Company hereunder and is fair and reasonable.
Management Company shall be paid the following amounts (collectively “Compensation”):

     6.1.1 an amount reflecting all Cost of Services (whether incurred by
Management Company or UFC) paid or accrued by Management Company pursuant to the terms of
this Agreement.

     6.1.2 a Base Service Fee, paid monthly but reconciled to annual Revenues, of an amount
equal to six percent (6%) of UFC’s Revenues.

     6.1.3 an additional service fee (“Additional Service Fee”) paid monthly but reconciled
to Fiscal Year operating results of UFC, equal to fifteen percent (15%) of PDE. It is
understood and agreed that the Additional Service Fee is paid to Management Company in the
event UFC achieves positive PDE. Nothing herein shall be interpreted to mean that if PDE is
negative, Management Company makes a contribution to UFC to cover any such operating losses.

     6.2 Accounts Receivable.

     6.2.1 On or before the 20th business day of each month, commencing with the first
month following the Effective Date, Management Company shall reconcile the

			
	 	 	 
	 	 	Page 17 of 35

 

 

Receivables of UFC arising during the previous calendar month. Subject to the terms and
conditions of this Agreement, UFC hereby sells and assigns to Management Company as
absolute owner, and Management Company hereby purchases from UFC all Receivables hereafter
owned by or arising in favor of UFC on or before the 20th business day of each month.
Management Company shall transfer or pay such amount of funds to UFC equal to the
Receivables less Compensation due Management Company pursuant to Section 6.1. UFC shall
cooperate with Management Company and execute all necessary documents in connection with
the purchase and assignment of such Receivables to Management Company or at Management
Company’s option, to its lenders. All collections in respect of such Receivables shall be
deposited in a bank account at a bank designated by Management Company. To the extent UFC
comes into possession of any payments in respect of such Receivables, UFC shall direct
such payments to Management Company for deposit in bank accounts designated by Management
Company.

     6.2.2 Any Medicare or Medicaid Receivables due to UFC shall be excluded from the
operation of Section 6.2.1 hereof. Any such Receivables shall be subject to agreement of
UFC and Management Company with respect to the collection thereof.

     6.2.3 UFC will be charged monthly interest at an annualized rate equal to the Prime
Rate charged by Management Company’s primary bank on Receivables with average days sales
outstanding (“DSO”) greater than 60 days for a trailing three-month period. For example,
if prime is 6% and UFC’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 on the
last day of that same three-month period UFC’s Receivables are $1.5 million, then UFC’s
DSO equal 97 days ($1.5 million divided by $15,389), resulting in interest being charged
for the month on $569,393.00 of UFC’s Receivables ($15,389 times 37 days) at a rate of 0.5%
( 6% prime rate divided by 12), or a $2,846.97 interest charge. Any application of this
Section 6.2.3 shall exclude Bad Debt from the determination of Receivables subject to an
interest payment.

     6.2.4 On or before the 20th business day of each month, commencing with the
month following the Effective Date, Management Company shall remit to UFC the PDE generated
for the previous calendar month.

     6.3 Advances. Management Company may advance necessary funds for UFC to meet
Cost of Services and, to meet Physician distributions (through their respective professional
associations), and Physician-Employee salaries; provided, however, nothing herein shall obligate
Management Company to incur Cost of Services and Physician salary Advances in excess of Revenues
under this Agreement in order to sustain UFC’s operations. As security for such Advances, UFC shall
deliver to Management Company with the execution of this Agreement a Security Agreement in the form
of Exhibit 6.3 hereto giving Management Company a collateral interest in all Receivables of
UFC and PDE payable to UFC Shareholders. Management Company shall, in its sole discretion, be
entitled to take any and all necessary action to prevent financial losses, in the form of Cost of
Services on behalf of UFC, to Management Company in the event UFC’s Cost of Services exceed UFC’s
Revenues at any point during the Term of this Agreement. Notwithstanding anything herein to the
contrary, no Advances will be made by

			
	 	 	 
	 	 	Page 18 of 35

 

 

Management Company to satisfy Physician-Employee draws, salaries or pension contributions, unless
requested by UFC.

     6.3.1 Any Advance hereunder shall be a debt owed to Management Company by UFC and
shall be repaid in twelve equal installments plus accrued interest on the first day of each
month following any Advance. To the extent PDE is available for distribution to Physicians
for a particular month; Management Company is authorized to deduct any outstanding Advance
from the PDE prior to distribution to the Physicians to pay any installment then due.

     6.3.2 Interest expense will be charged on an Advance and will be computed at the Prime
Rate charged by Management Company’s primary bank.

     6.3.3 In addition to the Security Agreement provided for in Section 6.3, UFC agrees to
enter into a Continuing General Limited Security Agreement in the form of Exhibit
6.3.3 with Management Company’s current bank, Bank of America, National Association in
connection with assigning to Bank of America, the Receivables identified in Section 6.2
that are otherwise assigned to Management Company pursuant to the Security Agreement
identified in Section 6.3.

     6.4 Build Out, Capital Commitment and Post-Opening Expenses.

     6.4.1 Build Out of the Facilities. UFC has commenced build-out of
the Facilities provided for in Section 3.2 as of the date hereof. Management Company agrees
to provide UFC $500,000.00 (the “Build-out Amount”) in connection with the build-out which
will be considered part consideration for the Exclusive Service Right referenced in Section
7.2. On or about the Opening Date, Management Company will purchase from UFC the fixed
assets, at their net book value, associated with the Facilities.

     6.4.2 Capital Commitment. Management Company agrees to invest sufficient
capital to build, equip and supply appropriate office and laboratory space for UFC to
conduct its medical practice at the Facilities. As an expression of Management
Company’s commitment to the growth of UFC practice, Management Company agrees to maintain,
during the term of this Agreement, an on-going investment in the Facilities and equipment,
of an amount up to $500,000.00(“Capital Commitment”) without an interest charge. Any
amount invested by Management Company in UFC’s medical Facilities in excess of $500,000.00
will be charged to UFC as a capital cost at an interest rate equal to the Prime Rate, plus
two (2%) percent charged by Management Company’s primary bank.

     6.4.3 Post-Opening Expenses. Management Company agrees that
in addition to the Build-out Amount provided for in Section 6.4.1, Management Company will
set aside $200,000.00, plus up to $50,000.00 for tax purposes, (“Operating Losses
Commitment”) which will be made available to UFC to fund any operating deficit. After 12
months from the Opening Date, UFC can request that Management Company remit to UFC any
unused portion of the Operating Losses Commitment.

			
	 	 	 
	 	 	Page 19 of 35

 

 

Article 7

Term, Service Rights, Payments, And Other Commitments

     7.1 This Agreement shall begin on the Effective Date and shall continue for twenty- five years
(the “Term”), with automatic successive twenty-five year terms (each, a “Renewal Term”), unless
sooner terminated as herein provided. In the event either party elects not to renew this Agreement
at the expiration of the Term or a Renewal Term, said party shall give the other not less than one
(1) year’s prior written notice of its intention not to renew at the expiration of the Term or a
Renewal Term.

     7.2 In consideration of the considerable investment of time and resources in UFC, including,
but not limited to, the Build-Out Amount, Operating Losses Commitment and Capital Commitment,
expected by Management Company, UFC grants to Management Company the exclusive right (“Exclusive
Service Right”) to provide the Business Services to UFC.

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 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 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.

          8.1.2 Material Breach. If either party believes that the other party has
materially breached its obligations hereunder, then the non-breaching party (“Accuser”) shall give
notice (“Breach Notice”) to the breaching party (“Accused”), setting forth in detail the basis for
the belief (“Accusation”) and indicating that the Accused must cure said breach within 30 days
(“Cure Period”).

          (a) If the Accused, in good faith denies the Accusation, then the Accused shall give notice
within the Cure Period to the Accuser demanding an arbitration of whether there has been a
material breach of this Agreement. Such arbitration shall be conducted in accordance with Section
11.7 hereof and the parties agree, in good faith, to commence the arbitration within 60 days of
the Breach Notice and participate in the arbitration in a “time is the essence of the arbitration”
basis.

			
	 	 	 
	 	 	Page 20 of 35

 

 

          (b) If the Accused agrees with the Breach Notice and cures the Material Breach within the Cure
Period, no further action will be required by either party.

          (c) If the Accused agrees with the Breach Notice, but the breach is not curable within the
Cure Period and the Accused is making diligent efforts to cure the breach during the Cure Period
(“Good Faith Cure Efforts”), the parties shall continue to operate under the terms and conditions
of this Agreement. If after the exercise of such Good Faith Cure Efforts, the Accused shall be
unable to cure the breach within 60 days from the Breach Notice, the Accuser shall, in good faith,
extend the time in which to cure the breach, upon request of the Accused. In the event the Accuser
does not extend the time in which to cure the breach, the Accused shall be entitled to arbitrate
pursuant to Section 11.7 whether the Accused is entitled to an extension in order to cure the
breach.

          (d) It is the intent of the parties that in the event of a material breach hereunder, the
Accused shall the have the opportunity to a full determination of whether there was a material
breach, before this Agreement terminates. If as a result of arbitration, there is a finding
(“Finding”) of a material breach, the Accuser shall be entitled to terminate this Agreement and
the applicable section of Article 9 shall govern.

     8.2 Termination By Management Company for Professional Disciplinary Actions.
UFC shall be obligated to suspend a physician whose authorization to practice medicine is
suspended, revoked or not renewed. Management Company may terminate this Agreement upon 10 days
prior written notice to UFC if a Physician’s authorization to practice medicine is suspended,
revoked or not renewed and UFC has failed to suspend such physician; provided, however, such action
may not be taken until UFC has been given 30 days to resolve such physician’s authorization to
practice medicine. UFC shall notify Management Company within five (5) days of a notice that a
physician’s authorization to practice medicine is suspended, revoked or not renewed or that formal
disciplinary action has been taken against a physician which could reasonably lead to a suspension,
revocation or non-renewal of a physician’s license.

     8.3 Termination at the expiration of a Term or Renewal Term. In the event
either party gives not less than one (1) year’s prior written notice of its intent not to renew at
the expiration of the Term or a Renewal Term, this Agreement shall automatically expire at the end
of the Term or Renewal Term.

Article 9

purchase
of Assets — Obligations and Options

     9.1 Termination by Management Company. If Management Company
terminates this Agreement due to the insolvency of UFC (Section 8.1.1), or for a Finding of
material breach by UFC (Section 8.1.2), or UFC fails to suspend a physician whose license is
suspended, revoked or not renewed (Section 8.2), the following shall apply:

			
	 	 	 
	 	 	Page 21 of 35

 

 

     9.1.1 On the closing date (the “Closing Date”) for purposes of consummating the
termination, UFC shall:

     (a) Pay to Management Company in immediately available funds, an amount
equal to the net book value (in accordance with GAAP) of all Management Company
Assets at all Facilities made available to UFC by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount
equal to the uncollected accounts receivable purchased from UFC immediately prior to
the Closing Date which have not been charged to UFC as a Bad Debt under Cost of
Services;

     (c) Pay to Management Company, in immediately available funds, an amount
equal to $250,000.00.

     (d) Provide to Management Company a Consent to Assignment from each
landlord of real estate leased by Management Company for the benefit of UFC to the
extent each landlord is willing to provide such consent. The parties shall endeavor to
obtain a consent that includes a release of Management Company from any further
obligations or liability under the leases as of the Closing Date, except for
liabilities
accruing prior to the Closing Date, and shall satisfy any requirements provided for in
the
assignment provisions of the applicable leases;

     (e) Hire all Management Company employees working at the Facilities or
make provision for their termination, without liability to Management Company after
the
Closing Date.

     (f) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (g) Execute such documents and perform such acts as may be reasonably
necessary to accomplish the transactions required to effect the termination.

     For purposes of Sections 9.1, 9.2 9.3 and 9.4 the Closing Date shall mean 90 days following
termination of this Agreement.

     9.2 Termination By UFC In the event this Agreement is terminated by
UFC
as a result of the insolvency of Management Company (8.1.1) or a Finding of a material breach by
Management Company (8.1.2), the following shall apply:

     9.2.1 On the Closing Date for purposes of consummating the termination, UFC shall:

     (a) Pay to Management Company in immediately available funds, an amount equal to
the net book value (in accordance with GAAP) of all Management Company

Page 22 of 35

 

     Assets at all Facilities made available to UFC by Management Company, in the event UFC
opts to acquire the Assets;

     (b) Pay to Management Company in immediately available funds, an amount
equal to the uncollected accounts receivable purchased from UFC immediately prior to
the Closing Date which have not been charged to UFC as a Bad Debt under Cost of
Services;

     (c) Have the option of assuming leases for office and equipment used directly
for the operation of UFC’s business. In such event, a Consent to Assignment from each
landlord of real estate leased by Management Company for the benefit of UFC to the
extent each landlord is willing to provide such consent shall be obtained. UFC shall
endeavor to obtain a consent that include a release of Management Company from any
further obligations or liability under the leases as of the Closing Date, except for
liabilities accruing prior to the Closing Date and shall satisfy any requirements
provided
for in the assignment provisions of the applicable leases ;

     (d) Hire all Management Company employees working at the Facilities or
make provision for their termination, without liability to Management Company after
the
Closing Date.

     (e) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (f) Execute such documents and perform such acts as may be reasonably
necessary to accomplish the transactions required to effect the termination.

     9.3 Termination Under Section 8.3 By UFC. In the event UFC
elects to terminate this Agreement pursuant to Section 8.3 hereof, the following shall apply:

     9.3.1 On the Closing Date for purposes of consummating the termination, UFC shall:

     (a) Pay to Management Company in immediately available funds, an amount
equal to the net book value (in accordance with GAAP) of all Management Company
Assets at all Facilities made available to UFC by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount
equal to the uncollected accounts receivable purchased from UFC immediately prior to
the Closing Date which have not been charged to UFC as a Bad Debt under Cost of
Services;

     (c) Pay to Management Company, in immediately available funds, an amount
equal to $250,000.00.

Page 23 of 35

 

     (d) A Consent to Assignment from each landlord of real estate leased by
Management Company for the benefit of UFC to the extent each landlord is willing to
provide such consent. UFC shall endeavor to obtain a consent that includes a release
of
Management Company from any further obligations or liability under the leases as of
the
Closing Date, except for liabilities accruing prior to the Closing Date and shall
satisfy
any requirements provided for in the assignment provisions of the applicable leases ;

     (e) Hire all Management Company employees working at the Facilities or
make provision for their termination, without liability to Management Company after
the
Closing Date.

     (f) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (g) Execute such documents and perform such acts as may be reasonably necessary to accomplish the transactions required to effect the termination.

     9.4 Expiration of the Term or a Renewal Term. In the event this
Agreement expires at the end of the Term or a Renewal Term, the following shall apply:

     9.4.1 On the last day of the Term, UFC shall:

     (a) Pay to Management Company in immediately available funds, an amount
equal to the net book value (in accordance with GAAP) of all Management Company
Assets at all Facilities made available to UFC by Management Company;

     (b) Pay to Management Company in immediately available funds, an amount
equal to the uncollected accounts receivable purchased from UFC immediately prior to
the Closing Date which have not been charged to UFC as a Bad Debt under Cost of
Services;

     (c) Pay to Management Company, in immediately available funds, an amount
equal to $250,000.00.

     (d) Provide to Management Company a Consent to Assignment from each
landlord of real estate leased by Management Company for the benefit of UFC to the
extent each landlord is willing to provide such consent. The parties shall endeavor to
obtain a consent that include a release of Management Company from any further
obligations or liability under the leases as of the Closing Date, except for
liabilities
accruing prior to the Closing Date, and shall satisfy any requirements provided for in
the
assignment provisions of the applicable leases;

     (e) Hire all Management Company employees working at the Facilities or
make provision for their termination, without liability to Management Company for
payments owed to Employees for services rendered after the Closing Date.

Page 24 of 35

 

     (f) Pay to Management Company in immediately available funds any
outstanding liabilities under this Agreement, including any and all loans or Advances

     (g) Execute such documents and perform such acts as may be reasonably
necessary to accomplish the transactions required to effect the termination.

     9.5 Transfer of Ownership

     Upon receipt of payments due under this Article 9 and other payments due, Management Company
shall transfer ownership and possession of the Assets, and assign all right, title and interest in
and to and obligations under the Lease(s) to UFC and return to UFC all security deposits. UFC
shall have the option of receiving full credit on the payments due under this Article 9 for all
liens, encumbrances or security interest, or of having Management Company transfer ownership of
the Assets free and clear of all liens, encumbrances or security interests thereon.

     9.6 Nothing in this Article 9 shall be construed to provide for Management Company
for an amount greater than the original Right to Service Fee, except for the repayment of the
Exclusive Right to Service Fee provided for in Section 9.3. l(c).

     9.7 Nothing in this Agreement shall create any personal responsibility or liability on
any of the shareholders of UFC to repay any amounts due to the Management Company by UFC
other than the liability of the shareholder described in the Personal Responsibility Agreement
dated December 1, 2009 that he or she executed in favor of Management Company

Article 10

Insurance

     10.1 UFC shall carry professional liability insurance, covering itself and its employees
providing Infertility Services under this Agreement in accordance with Section 4.6 hereof.

     10.2 UFC and Management Company shall provide written notice to the other at least
thirty (30) days in advance of the effective date of any reduction, cancellation or
termination of
the insurance required to be carried by each hereunder.

Article
11 

Miscellaneous

     11.1 Independent Contractor. Management Company and UFC are independent
contracting parties. In this regard, the parties agree that:

     11.1.1 The relationship between Management Company and UFC 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

Page 25 of 35

 

principal-agent, employer-employee, or master-servant relationship
between Management Company and UFC;

     11.1.2 Notwithstanding the authority granted to Management Company herein,
Management Company and UFC agree that UFC shall retain the full authority to direct
all of the medical, professional, and ethical aspects of its medical practices;

     11.1.3 Any powers of UFC not specifically vested in Management Company by
the terms of this Agreement shall remain with UFC;

     11.1.4 UFC shall, at all times, be the sole employer of the Physician-Employees,
the Other Professional Employees required by law to be employees of UFC and all other
professional personnel engaged by UFC 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 that are
employees
of UFC;

     11.1.5 No party shall have the right to participate in any benefits, employment
programs or plans sponsored by the other party on behalf of the other party’s
employees,
including, but not limited to, workers’ compensation, unemployment insurance, tax
withholding, health insurance, life insurance, pension plans or any profit
sharing
arrangement;

     11.1.6 In no event shall any party be liable for the debts or obligations of any
other party except as otherwise specifically provided in this Agreement; and

     11.1.7 Matters involving the internal agreements and finances of UFC, including
but not limited to the distribution of professional fee income among Physician
Employees
and, if applicable, Other Professional Employees who are providing professional
services
to patients of UFC, and other employees of UFC, disposition of UFC property and stock,
accounting, tax preparation, tax planning, and pension and investment planning, hiring
and firing of physicians, decisions and contents of reports to regulatory authorities
governing UFC and licensing, shall remain the sole responsibility of UFC and the
individual Physicians.

     11.2 Force Majeure. No party shall be liable to the other parties 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.

     11.3
 Equitable Relief.Without limiting other possible remedies available to a
non-breaching party for the breach of the covenants contained herein, including the right of
Management Company to cause UFC to enforce any and all provisions of the Physician

Page 26 of 35

 

Employment Agreements described in Section 4.3 hereof, 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.

     11.4 Prior Agreements; Amendments. This Agreement supersedes all prior
agreements and understandings between the parties as to the subject matter covered hereunder
including the Former Agreement, 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.

     11.5
 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,
except that UFC acknowledges and agrees that Management Company may assign this
Agreement to any affiliate, which for purposes of this Agreement, shall include any parent or
subsidiary of Management Company, without the consent of UFC, provided Management
Company shall remain liable for its obligations hereunder. 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.

     11.6
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.

     11.7
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah irrespective of the principal place of business
of
the parties hereto. Any and all claims, disputes, or controversies arising under, out of, or
in
connection with this Agreement or any beach thereof, except for equitable relief sought
pursuant
to Section 11.3 hereof, shall be determined by binding arbitration in the State of Utah, City
of
Provo (hereinafter “Arbitration”). The party seeking determination shall subject any such
dispute, claim or controversy to the American Arbitration Association, and the rules of
commercial arbitration thereof shall govern. The Arbitration shall be conducted and decided by
a
single arbitrator, unless the parties mutually agree, in writing at the time of the
Arbitration, to
three arbitrators. In reaching a decision, the arbitrator(s) 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 arbitrator(s). Any
application to compel Arbitration, confirm or vacate an arbitral award or otherwise enforce
this
Section 11.7 shall be brought in the Courts of the State of Utah or the United States District
Court for the District of Utah.

Page 27 of 35

 

     11.8 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
taken as a whole.

     11.9 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.

     11.10 Notices. Any notice or other communication required by or which
may be given pursuant to this Agreement shall be in writing and mailed, certified or registered
mail, postage prepaid, return receipt requested, or overnight delivery service, such as FedEx or
DHL Express, prepaid, and shall be deemed given when received. Any such notice or communication
shall be sent to the address set forth below:

          11.10.1 If for Management Company:

Jay Higham., President

Regents Management, LLC

c/o IntegraMed America, Inc.

Two Manhattanville Road

Purchase, New York 10577

With a copy to:

Claude E. White, General Counsel

IntegraMed America, Inc.

Two Manhattanville Road

Purchase, New York 10577

Plantation, Florida 33322-4007

          11.10.2 If for UFC:

Russell A. Foulk, M.D., President

Utah Fertility Center, P.C.

1988 West, 930 North

Pleasant Grove, Utah 84062

With a copy to:

Richard H. Breit, Esq.

Richard H. Breit, P.A.

8551 West Sunrise Boulevard

Suite 300
Plantation, Florida 33322-4007

Page 28 of 35

 

 

     Any party hereto, by like notice to the other parties, may designate such other address or
addresses to which notice must be sent.

     11.11 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, including the Former Agreement, whether oral or written, with respect to such subject
matter.

     11.12 No Medical Practice by Management Company. Management Company will
not engage in any activity that constitutes the practice of medicine, and nothing contained in this
Agreement is intended to authorize Management Company to engage in the practice of medicine or any
other licensed profession.

     11.13 Confidential Information.

     11.13.1 During the initial term and any renewal term(s) of this Agreement, the parties
may have access to or become acquainted with each other’s 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, no 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, except in connection with the performance or
enforcement of this Agreement, or the benefit of any Person any Confidential Information,
no matter how or when acquired, of another 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. No party shall
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 the proprietor and shall be returned to the proprietor immediately
upon any termination of this Agreement.

     11.13.2 Confidential Information shall not include information which (i) is or becomes
known through no fault of a party hereto; (ii) is learned by a party from a third-party
legally entitled to disclose such information; or (iii) was already known to a party at the
time of disclosure by the disclosing party.

     11.13.3 In order to minimize any misunderstanding regarding what
information is considered to be Confidential Information, Management Company or UFC will
designate at each others request the specific information which Management Company or
UFC considers to be Confidential Information.

     11.14 Indemnification.

Page 29 of 35

 

 

     11.14.1 Management Company agrees to indemnify and hold harmless UFC, 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 Management Company related to the performance of its duties and
responsibilities under this Agreement. The obligations contained in this Section 11.14.1
shall survive termination of this Agreement. This indemnification provision shall apply to
both third-party claims and second-party claims, including, but not limited to, claims,
actions, damages, losses, expenses, or costs (including, but not limited to, reasonable
attorneys’ fees and court costs) incurred by one party to this Agreement as a result of an
act, or omission to act, on the part of the other party, its agents, or employees pursuant
to this Agreement

     11.14.2 UFC agrees to indemnify and hold harmless Management Company, 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 UFC related to the performance of its duties
and responsibilities under this Agreement. The obligations contained in this Section
11.14.2 shall survive termination of this Agreement. This indemnification provision shall
apply to both third-party claims and second-party claims, including, but not limited to,
claims, actions, damages, losses, expenses, or costs (including, but not limited to,
reasonable attorneys’ fees and court costs) incurred by one party to this Agreement as a
result of an act, or omission to act, on the part of the other party, its agents, or
employees pursuant to this Agreement

     11.14.3 In the event of any claims or suits in which Management Company and/or UFC
and/or their directors, officers, employees and servants are named, each of Management
Company and UFC 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.

     11.15 The Parties have participated in the drafting and preparation of this Agreement and
this Agreement shall be construed as a whole according to the fair meaning and not for or
against any party.

Page 30 of 35

 

 

     IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and
year first above written.

	 	 	 	 
	 	Utah Fertility Center, P.C.

 	 
	 	By:  	/s/ Russell A. Foulk
 	 
	 	 	Russell A. Foulk, M.D., President 	 
	 	 	 	 
	 
	 	IntegraMed America, Inc.

 	 
	 	By:  	/s/ Amin Neghabat
 	 
	 	 	Amin Neghabat, Sr. Vice President 	 
	 	 	Western Region 	 
	 

Page 31 of 35

 

 

Exhibit 3.12

Business Associate Agreement

Page 32 of 35

 

 

Exhibit 4.7.2

Physician Employment Agreements

Page 33 of 35

 

 

Exhibit 6.3

Security Agreement

Page 34 of 35

 

 

Exhibit 6.3.3

Continuing Limited Security Agreement

Page 35 of 35

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