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EXHIBIT 10.7
FORM OF SERVICE AGREEMENT
THIS SERVICE AGREEMENT (this "Agreement"), dated as of _______________
__________________, 199_, by and between The Plastic Surgery Company, a Georgia
corporation, formerly known as Better Image, Inc., and its successors and
assigns ("BII"), and _____________________, a ___________________ (the
"Practice").
RECITALS:
WHEREAS, the Practice owns and operates a cosmetic and reconstructive
surgery practice with offices located in the facilities (identified in Exhibit
A, as amended from time to time collectively, the "Center"), and furnishes
specialized medical care to the general public through the services of the
surgeon or surgeons affiliated with the Practice at the Center (the "Surgeons");
and
WHEREAS, BII is a company which has been formed to own certain assets
of, provide personnel and business development services to, and manage the
business affairs of cosmetic and reconstructive surgery practices;
WHEREAS, the Practice and BII mutually desire to enter into a business
relationship under the terms of this Agreement.
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
I. RESPONSIBILITIES AND OBLIGATIONS OF BII
1.1. General. BII shall provide the Practice with practice management,
financial and marketing services, and such equipment, and support personnel as
reasonably required by the Practice to operate the Center, as determined by the
Surgeon and BII. The Practice hereby agrees that BII shall have all power and
authority reasonably necessary to manage the business affairs of the Practice at
the Center and carry out BII's duties hereunder, as determined by the Practice
and subject to the requirements of the applicable federal and state laws and
regulations relating to the practice of medicine. Notwithstanding anything
contained herein to the contrary, the Practice (or the Surgeon as appropriate)
shall retain full control over all aspects of and decisions directly affecting
the course of treatment of any patients of the Practice.
1.2. Equipment. BII shall provide or arrange for on behalf of the
Practice the furnishings and equipment reasonably required for the operation of
the Center, and shall provide for the maintenance and upkeep of the foregoing as
a Center Expense (as hereinafter defined); provided, however, that the Practice
shall maintain complete control over and shall make all decisions directly
affecting the care, custody and control over all medical equipment. In addition,
BII shall evaluate and consult with the Practice on the needs and adequacy of
equipment and
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furnishings at the Center. Unless the Practice chooses to directly purchase
furnishings, equipment and related assets in the future, BII shall purchase such
assets and lease such assets to the Practice under a capital leasing arrangement
with such terms as mutually agreed to by the Practice and BII. If the Practice
chooses to purchase such assets, then it shall depreciate such assets in
accordance with generally accepted accounting principles ("GAAP").
1.3. Facilities. Upon request of the Practice, and if permitted by
applicable state laws and regulations, BII may, in its sole discretion, provide
or arrange for, on behalf of the Practice, the offices and facilities reasonably
required by the Practice to provide its medical services. All office space and
facilities provided by BII to the Practice hereunder shall be leased to the
Practice by BII at a rental amount equal to all costs incurred by BII under a
lease or other agreement, which rental amount shall be a Center Expense. BII
shall provide for the maintenance and upkeep of the facilities and office space
provided by BII as a Center Expense; provided, however, that the Practice shall
maintain complete control, care and custody of such facilities.
1.4. Personnel and Payroll. Except for the Surgeons and other personnel
required by applicable state laws or regulations to be employed by the Practice,
BII shall employ all of the staff reasonably required for the operation of the
Center, as determined by the Practice in consultation with BII. Additionally,
BII shall be responsible for the performance of all payroll and payroll
accounting functions.
1.5. Business Systems, Procedures and Forms. In consultation with the
Practice, BII shall develop and establish business systems and procedures for
the Practice at the Center that are designed to improve operating efficiency.
BII shall provide training to the Center's staff in the implementation and
operation of such business systems and procedures. The Practice expressly
acknowledges and agrees that it shall have no property rights in the foregoing
systems and procedures, and further agrees that such systems and procedures
shall be deemed to constitute Confidential Information (as hereinafter defined)
and subject to the restrictions on the use, appropriation, and reproduction of
such Confidential Information provided for hereunder.
1.6. Purchasing, Accounts Payable and Inventory Control. In
consultation with the Practice, BII shall purchase and maintain as a Center
Expense all inventory and supplies required by the Practice at the Center;
provided, however, that the Practice shall have the right to purchase its
inventory and supplies from the supplier of the Practice's choice. The prices
charged to the Practice for such inventory and supplies shall be the same as the
prices paid by BII. BII shall be responsible for and shall establish and
maintain systems for the handling and processing of all purchasing and payment
activities and for the performance of all payroll and payroll accounting
functions of the Practice.
1.7. Information Systems and Accounting. BII shall establish, maintain
and train the Center's staff in the use of information systems to produce
financial and operational information concerning the Center's operations. BII
shall analyze such information on an ongoing basis in order to advise the
Practice on ways of improving operating efficiencies. BII shall provide or
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arrange for all accounting and bookkeeping services related to the Center's
operations, provided that such services are incurred in the ordinary course of
business.
1.8. Malpractice Insurance. BII shall use reasonable efforts to
obtain for the Surgeon, under its blanket policies, malpractice insurance that
meets the coverage requirements hereunder as a Center Expense.
1.9. Consumer Awareness. The parties expressly acknowledge and agree
that the Practice shall exercise control over all policies and decisions
relating to pricing, credit, refunds, warranties and advertising. Subject to the
foregoing, in consultation with the Surgeon, BII shall design and execute a
consumer awareness plan to promote the Surgeon's professional services. In
connection with such consumer awareness plan, BII shall advise the Surgeon on
establishing and maintaining a plan for patients' payment for medical services
on an installment plan basis. All such consumer awareness activities shall be
conducted in compliance in all material respects with all applicable laws and
regulations governing advertising by the medical profession.
1.10. Planning. BII shall assess and advise the Practice on the
establishment of cosmetic and reconstructive surgery offices in new locations
and, subject to mutual agreement, shall provide assistance to the Practice in
the opening of such new offices, including assistance in the location of such
offices and in the sale of existing practices, as appropriate.
1.11. Financial Services. On a continuous basis, the accounts
receivable of the Practice shall be deposited with BII in the Practice Account
(as hereinafter defined), and BII shall use the funds collected from such
accounts receivable to pay the Service Fee (as hereinafter set forth) and the
expenses of the Practice, including the Center Expenses each month, and shall
return to the Practice any funds remaining after payment in full of such items
each month. BII shall be responsible for (i) billing and collecting payments for
all medical services rendered by the Surgeon to his patients and for all other
professional and Center services (except for billing and collecting in
accordance with Medicare or Medicaid programs), with all such billing and
collecting to be done in the name of the Entity; (ii) receiving payments from
patients, insurance companies and all other third party payors; (iii) taking
possession of and endorsing in the name of the Practice any notes, checks, money
orders, insurance payments and other instruments received in payment of accounts
receivable; (iv) preparing and submitting to the Surgeon monthly operating data
and quarterly financial reports with respect to the operation of the Center; and
(v) paying all Center Expenses. No funds from the Medicare or Medicaid programs
shall be billed or collected by any person or Practice other than the Medicare
or Medicaid recognized provider, provided, however, that all such funds
collected shall be immediately deposited into the Practice Account upon receipt
thereof. The Practice and the Surgeon hereby appoint BII for the term of this
Agreement to be their true and lawful attorney-in-fact for the purposes set
forth herein.
1.12. Disbursement of Funds. (a) All monies collected for the Practice
by BII pursuant to Section 1.11 above shall be deposited into an account (the
"Practice Account") with a bank whose deposits are insured with the Federal
Deposit Insurance Corporation. The Practice Account shall constitute the sole
property of, and shall bear the name of the Practice, but BII shall have
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authority as the Practice's agent to make all disbursements therefrom. BII shall
account to the Practice monthly for all monies so disbursed from the Practice
Account. From the funds collected and deposited each month by BII in the
Practice Account, BII shall make the following disbursements, among others,
promptly when payable in the following order:
(i) Payment of the Service Fee (as hereinafter defined);
(ii) All sums due and payable by the Practice as Center
Expenses; and
(iii) The balance to the Surgeons and for compensation payable
to the employees of the Practice, and all taxes and assessments payable
to local, state and Federal governments in connection with the
employment of such personnel.
(b) In the event that the funds in the Practice Account are, at any
time, insufficient to cover current expenses, excluding the payment of
compensation to the Surgeons, BII shall notify the Practice and BII shall
advance to the Practice the necessary funds to pay such current expenses for the
benefit of the Practice. Such advances shall be deemed to be loans to the
Practice to be repaid upon such terms as agreed to by the Practice and BII,
which indebtedness shall be deemed a Center Expense; provided, however, that the
outstanding principal amount of such indebtedness exceeding the amount of total
accounts receivable purchased by BII from the Practice pursuant to that certain
Agreement and Plan of Reorganization shall bear interest at an annual rate
adjusted on the first calendar day of each month to reflect that certain rate
from time to time published by the Wall Street Journal as the prime rate, as of
the last business day of the immediately preceding month for which such prime
rate was published (the "Prime Rate"), plus one percent (1%).
1.13. Records. BII shall supervise, manage, organize and develop
systems with respect to all files and records relating to the operation of the
Center, including, without limitation, accounting, billing, patient records, and
collection records. Patient records shall at all times remain the property of
the Surgeon and shall be located at the Center so that they are readily
accessible for patient care. The management of all files and records shall
comply with applicable state and federal laws and regulations. BII shall use its
reasonable efforts to preserve the confidentiality of patient medical records
and use information contained in such records only for the limited purpose
necessary to perform the services set forth herein; provided, however, that in
no event shall a breach of said confidentiality be deemed a default hereunder.
II. OBLIGATIONS OF THE PRACTICE
2.1. Employment of Surgeons and Rendering of Patient Care. The
Practice shall be responsible for the employment and professional supervision of
all Surgeons and other personnel required to be employed by the Practice by
applicable state laws and regulations, and all medical care rendered to patients
shall be rendered by such Surgeons. In addition, the Surgeons shall be
responsible for the direct professional supervision of all nurses and
technicians in their rendering of patient care. The Surgeons and other employees
of the Practice shall not have any claim
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hereunder, or otherwise, against BII for salary, vacation pay, sick leave,
unemployment insurance, workers' compensation, disability benefits or employee
benefits of any kind.
2.2. Professional Services. The Practice shall use and occupy the
offices and facilities designated on Exhibit A, exclusively for the practice of
cosmetic and reconstructive surgery services, and shall comply with all
applicable laws, regulations, rules, ordinances and all standards of medical
care. It is expressly acknowledged by the parties that the surgical practice
conducted at the Center shall be conducted solely by the Surgeons associated
with the Practice, and no other surgeon shall be permitted to use or occupy the
Center, except as provided in Exhibit B. The Practice shall provide professional
services to patients hereunder in compliance at all times with ethical
standards, and laws and regulations applying to the medical profession. The
Practice shall ensure that each Surgeon providing medical services to patients
at the Center is licensed by the state in which such services are provided. In
the event that any disciplinary, medical malpractice or other actions are
initiated against any such Surgeon, the Practice shall immediately notify BII of
such action and the underlying facts and circumstances. The Practice shall
cooperate with and participate in quality assurance/utilization review programs
established by BII or mandated by accreditation and/or licensure standards
applicable to the practice of medicine.
2.3. Records. The Practice will keep or cause to be kept accurate,
complete and timely medical and other records of all patients. Such records
shall be sufficient to enable BII, on behalf of the Practice, to obtain payment
for the services provided by the Surgeons at the Center.
2.4. Employment Agreement. The parties recognize that the services to
be provided by BII are feasible only if the Practice operates an active surgical
practice to which it and each Surgeon devote their full time and attention.
Simultaneously with the execution of this Agreement, each Surgeon who is or
becomes an equity owner of the Practice or who delivers patient care at the
Center on an average of more than ten (10) days per month, whether on the date
hereof or at any time during the term of this Agreement, shall enter into an
employment agreement with the Practice in substantially the form attached hereto
as Exhibit C.
2.5. Confidentiality. The Practice agrees and acknowledges that all
materials provided by BII or a BII Affiliate (as hereinafter defined) to the
Practice or a Practice Agent (as hereinafter defined), including all trade
secrets, constitute "Confidential Information" and are disclosed in confidence
and with the understanding that such materials constitute valuable business
information developed by BII at great expenditures of time, effort, and money.
Trade secrets are property rights protected by law and, for purposes of this
Agreement, shall have the meaning provided under applicable state and federal
law. The Practice shall not, directly or indirectly, without the express prior
written consent of BII, use or disclose such Confidential Information for any
purpose other than in connection with the services to be rendered hereunder. The
Practice shall (i) keep strictly confidential and hold in trust all Confidential
Information and not disclose such Confidential Information to any third party
without the express prior written consent of BII; and (ii) impose this
obligation of confidentiality on the Practice's affiliates, co-owners,
associates, partners, employees, shareholders, members and independent
contractors (collectively, the
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"Practice Agents"). The Practice acknowledges that the disclosure of
Confidential Information to it by BII is done in reliance upon its
representations and covenants hereunder. Upon expiration or termination of this
Agreement by either party for any reason whatsoever, the Practice shall
immediately return and shall cause all Practice Agents to immediately return to
BII all Confidential Information (except to the extent such Confidential
Information includes patient information), and the Practice shall not, and shall
cause all Practice Agents not to, thereafter use, appropriate, or reproduce such
Confidential Information. The Practice further expressly acknowledges and agrees
that any such use, appropriation, or reproduction of any such Confidential
Information by any of the foregoing after the expiration or termination of this
Agreement will result in irreparable injury to BII, that the remedy at law for
the foregoing would be inadequate, and that in the event of any such use,
appropriation, or reproduction of any such Confidential Information after the
termination or expiration of this Agreement, BII, in addition to any other
remedies which may be available to it, shall be entitled to injunctive or other
equitable relief. As used in this Agreement, the term "BII Affiliate" shall mean
(i) each corporation or other business Practice directly or indirectly
controlling, controlled by, or under common control with BII and (ii) each
cosmetic and reconstructive surgery practice to which BII provides management or
consulting services other than the Practice, the employees and principals of
such practices, and each corporation or other business Practice directly or
indirectly controlling, controlled by, or under common control with each such
practice or the principals thereof.
2.6. Leases. If BII provides any facilities to the Practice, the
Practice shall sublease from BII the facilities leased by BII at which the
Practice is practicing pursuant to the form of Center Sublease Agreement
attached hereto as Exhibit D. All such Center Sublease Agreements shall include
a provision whereby the Practice maintains complete care, custody and control
over such space. The lease expenses incurred by the Practice in connection with
the Center Sublease Agreement will be deemed "Center Expenses" hereunder.
2.7. Covenant Not to Compete. During the term of this Agreement, the
Practice, and each of its shareholders, agree not to establish, develop or open
any offices for the provision of cosmetic and reconstructive surgical services
within a ten (10) mile radius of any facility comprising the Center (the "Area
of Dominant Influence") without the express prior written consent of BII. For a
period of two (2) years following the termination of this Agreement, the
Practice and each of its shareholders shall be prohibited within the Area of
Dominant Influence (i) from advertising in print (except for yellow page
advertising and announcements for the opening of a practice) or electronic media
of any kind, (ii) from soliciting in any manner patients, surgeons or staff
associated with the Center, and (iii) from soliciting any referrals from any
physician who referred one or more patients to the Center within the three (3)
years prior to the date of such termination. In the event the Practice
terminates this Agreement pursuant to Section 5.2(b), then this covenant not to
compete shall be void and of no further effect.
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III. FINANCIAL ARRANGEMENTS
3.1. Service Fees. The Practice shall pay to BII a fee for the services
provided hereunder (the "Service Fee"), subject to the provisions of Section 3.3
below, 15% of Net Cash. Except as otherwise provided herein, the amounts to be
paid to BII under this section shall be payable monthly in arrears on the date
that the Practice's financial statements for such period are completed. The
amounts shall be paid based upon the previous month's operating results of the
Center. Upon preparation of quarterly financial statements within forty-five
(45) days after the end of each calendar quarter, adjustments to the Service Fee
for the applicable quarter, if any are required, shall be made. Any amounts
owing to the Practice (as a result of a quarterly adjustment) shall be remitted
by BII to the Practice. Any amounts owing to BII by the Practice (as a result of
a quarterly adjustment) shall be deemed a Center Expense and paid as provided
herein.
3.2. Center Expenses. BII shall be responsible for the payment of all
Center Expenses, as defined below, during the term of this Agreement. BII shall
have no authority to incur Center Expenses without the approval of the Practice.
3.3. Definitions. For the purposes of this Agreement, the following
definitions shall apply and shall comply with generally accepted accounting
principles:
(a) "Adjustments" shall mean any adjustments to Net Cash for
refunds and other items that do not generate a fee.
(b) "Center Expenses" shall mean all operating and
non-operating expenses incurred in the operation of the Center,
excluding any state and federal income taxes, and including, without
limitation:
(i) Salaries, benefits, payroll taxes, workers
compensation, health insurance, 401(k) and other benefit
plans, and other direct costs of all employees of BII at the
Center, including nurses (but excluding all Surgeons);
provided that only expenses for health insurance, 401(k) and
other benefit plans approved by the Practice shall be
included;
(ii) Obligations of BII under leases or subleases
entered into in connection with the operation of the Center;
(iii) Personal property and intangible taxes assessed
against BII's assets used in connection with the operation of
the Center, commencing on the Effective Date (as hereinafter
defined) of this Agreement;
(iv) Malpractice insurance expenses and Surgeon recruitment
expenses as agreed by BII and the Practice;
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(v) Property, casualty and liability insurance for the
Center and its operations;
(vi) Amortization of intangible asset value;
(vii) Depreciation of all assets owned by BII and
used by the Practice in the operation of the Center;
(viii) Repayment of any advances (and the interest
thereon) made by BII to the Practice pursuant to Section
1.12(b);
(ix) Advertising and other consumer awareness
expenses attributable to the promotion of the Center and/or
its Surgeon(s) and consented to by the Practice; and
(x) Other expenses incurred by BII with the written
consent of the Practice in carrying out its obligations
hereunder for the benefit of the Center or the Practice;
provided, however, that such expenses shall not include BII's
home office overhead expenses.
(c) "Contract" shall mean the agreement entered into by
patients with the Practice for the provision of surgical services at a
predetermined fee.
(d) "Net Cash" shall mean all revenue resulting from fees and
charges for each month earned and collected by and on behalf of the
Practice as a result of professional medical services personally
furnished to patients by the Surgeons and those under the Surgeon's
supervision and other fees or income generated by the Practice, less
any Adjustments.
3.4. Additional Facilities. In the event that the parties agree to
add an additional facility at which the Practice or Surgeons will provide
services, the Service Fee payable to BII shall be determined by aggregating the
results of the operations of each additional facility with the results of the
operations of the existing Center and such fees payable to BII shall be
calculated in accordance with Article III. As part of its strategic growth
strategy, BII may, in its sole discretion, provide capital support or arrange
favorable funding for surgical practice expansion and development. Any
expenditures on practice growth, acquisition or development shall be subject to
approval by BII's Board of Directors.
IV. INSURANCE AND INDEMNITY
4.1. Insurance to be Maintained by the Practice. Throughout the
term of this Agreement, the Practice shall maintain comprehensive professional
liability insurance with limits of not less than $1,000,000 per claim and with
aggregate policy limits of not less than $3,000,000
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per Surgeon providing services at the Center and a separate limit for the
Practice or such other amounts as required by applicable state laws,
regulations, rules or directives. The Practice shall be responsible for all such
liabilities in excess of the limits of such policies. BII shall negotiate for
and cause premiums to be paid with respect to such insurance. Premiums and
deductibles with respect to such policies shall be a Center Expense.
4.2. Insurance to be Maintained by BII. Throughout the term of this
Agreement, BII shall provide and maintain, as a Center Expense, comprehensive
general liability and property insurance covering the Center premises and
operations.
4.3. Tail Insurance Coverage. The Practice shall cause each individual
Surgeon providing services at the Center to enter into an agreement with the
Practice that upon termination of such Practice's relationship with the Surgeon,
for any reason, tail insurance coverage for a period of three (3) years will be
purchased by each Surgeon. Such provisions may be contained in employment
agreements, restrictive covenant agreements or other agreements entered into by
the Practice and the individual Surgeons, and the Practice hereby covenants with
BII to enforce such provisions relating to the tail insurance coverage or to
provide such coverage at the expense of the Practice.
4.4. Additional Insureds. If permitted under applicable law, the
Practice shall have BII named as an additional insured on the Practice's
professional liability insurance programs.
4.5. Indemnification. The Practice shall indemnify, hold harmless and
defend BII, its officers, directors, shareholders, members, and employees, from
and against any and all liabilities, losses, damages, claims, causes of action,
and expenses (including reasonable attorneys' fees), whether or not covered by
insurance, caused or asserted to have been caused, directly or indirectly, by or
as a result of the performance of medical services or the performance of any
intentional acts, negligent acts or omissions by the Practice and/or its
affiliates, shareholders, members, agents, employees, Surgeons and/or
subcontractors (other than BII) prior to and after the date of this Agreement
and throughout the term hereof. BII shall indemnify, hold harmless and defend
the Practice, and its directors, shareholders, members and employees, from and
against any and all liabilities, losses, damages, claims, causes of action, and
expenses (including reasonable attorneys' fees), caused or asserted to have been
caused, directly or indirectly, by or as a result of the performance of any
intentional acts, negligent acts or omissions by BII, a BII Affiliate and/or
their agents, employees and/or subcontractors (other than the Practice) during
the term of this Agreement.
V. TERM AND TERMINATION
5.1. Term of Agreement. This Agreement shall commence on the date BII
closes the sale of $20,000,000 of BII's common stock in an initial public
offering (the "IPO") pursuant to a registration statement on Form S-1 (the
"Effective Date") and shall expire on the twenty fifth (25th) anniversary
thereof unless earlier terminated pursuant to the terms hereof.
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5.2. Termination by the Practice. The Practice may terminate this
Agreement as follows:
(a) In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by BII, or upon other action taken
or suffered, voluntarily or involuntarily, under any federal or state law for
the benefit of debtors by BII, except for the filing of a petition in
involuntary bankruptcy against BII which is dismissed within ninety (90) days
thereafter, the Practice may give written notice of the immediate termination of
this Agreement.
(b) In the event BII shall materially default in the performance of
any duty or obligation imposed upon it hereunder and such default shall continue
for a period of ninety (90) days after written notice thereof has been provided
to BII by the Practice (which notice shall contain specific details of the
reason for such default), the Practice may terminate this Agreement; provided,
however, if the nature of such default is such that cure is not capable within
said 90-day period, then BII shall have such additional time as may be required
to effect and complete such cure; provided that BII shall commence such cure
within the aforesaid 90-day period and shall prosecute such cure to completion
with reasonable diligence.
(c) In the event that a "Change in Control" (as herein defined)
occurs with respect to BII, the Practice may, within ten (10) days after the
expiration of the Approval Period (as herein defined), terminate this Agreement
by providing five (5) days prior written notice to BII. For purposes of this
Section, "Change in Control" means an acquisition or aggregation of any voting
securities of BII by a "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) immediately after which such person is or
becomes the beneficial owner, directly or indirectly, of 15% or more of the
combined voting power of BII's then outstanding voting securities; provided,
however, that no acquisition or aggregation of BII's voting securities shall be
deemed a "Change in Control" if such acquisition or aggregation (i) has the
prior approval of BII's board of directors, or (ii) is approved by BII's board
of directors within sixty (60) days after BII receives notice of such
acquisition or aggregation (the "Approval Period").
5.3. Termination by BII. BII may terminate this Agreement as follows:
(a) In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by the Practice, or upon other
action taken or suffered, voluntarily or involuntarily, under any federal or
state law for the benefit of debtors by the Practice, except for the filing of a
petition in involuntary bankruptcy against the Practice which is dismissed
within thirty (30) days thereafter, BII may give written notice of the immediate
termination of this Agreement.
(b) In the event the Practice shall materially default in the
performance of any duty or obligation imposed upon it hereunder, and such
default shall continue for a period of thirty (30) days after written notice
thereof has been given to the Practice by BII, BII may terminate this Agreement.
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5.4. Actions after Termination. Upon termination of this Agreement by
either party for any reason other than a default by the Practice, or upon
expiration of this Agreement, the Practice may, and upon termination of this
Agreement by BII due to the reasons set forth in Section 5.3(b) hereof, the
Practice shall:
(a) Purchase all improvements, additions or leasehold improvements
which have been made by BII and which relate solely to the performance of its
obligations under this Agreement at adjusted book value;
(b) Assume all debt and all contracts, payables and leases which are
obligations of BII and which relate solely to the performance of its obligations
hereunder; and
(c) Purchase from BII at adjusted book value all of the equipment of
the Center, including all replacements and additions thereto made by BII
pursuant to the performance of its obligations hereunder, and all other assets,
including inventory and supplies, tangibles and intangibles (including but not
limited to accounts receivable), set forth on the balance sheet prepared for the
month most recently ended prior to the date of such termination in accordance
with GAAP to reflect operations of the Center, and the depreciation,
amortization and other adjustments of assets shown on such balance sheet.
5.5. Closing of Repurchase by the Practice and Effective Date of
Termination. Unless another form of payment is agreed to by BII at the time, the
Practice shall pay cash to BII for (i) the assets repurchased pursuant to
Section 5.4 and (ii) an amount equal to the Service Fee that would have been
payable hereunder based on Net Cash earned prior to the termination of this
Agreement. The amount of the purchase price for such assets shall be reduced by
the amount of debt and liabilities of BII assumed by the Practice and shall also
be reduced by any payment BII has failed to make under this Agreement. The
Practice and all Surgeons shall execute such documents as may be required to
assume the liabilities set forth in Section 5.4(c) and shall use its or their
best efforts to remove BII from any liability with respect to such repurchased
assets and with respect to any property leased or subleased by BII. The closing
date for repurchase shall be determined by the Practice, but shall in no event
occur later than 180 days from the date of the notice of termination. In the
event of a repurchase pursuant to Section 5.4, the termination of this Agreement
shall become effective upon the closing of the sale of the assets. From and
after any termination, each party shall provide the other party with reasonable
access to books and records then owned by it to permit such requesting party to
satisfy reporting and contractual obligations which may be required of it.
5.6. Patient Records. Upon termination of this Agreement, the Practice
shall retain all patient medical records maintained by the Practice or BII in
the name of the Practice. During the term of this Agreement, and thereafter, the
Practice or its designee shall have reasonable access during normal business
hours to the Practice's and BII's records relating to the Practice, including,
but not limited to, records of collections, expenses and disbursements as kept
by BII in performing BII's obligations under this Agreement, and the Practice
may copy any or all such records at the Practice's expense.
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VI. INDEPENDENT CONTRACTOR
6.1. Practice's Control Over Medical Services. Notwithstanding the
authority granted to BII herein, BII and the Practice agree that the Surgeon(s),
personally or through any medical employees or agents, shall have control or
supervision over the provision of all professional services, with the sole
authority to direct the professional, and ethical aspects of the surgical
practice. BII shall have no authority, directly or indirectly, to perform, and
shall not perform, any medical function. BII may, however, advise the Practice
as to the relationship between the Practice's performance of medical functions
and the overall administrative and business functions of its practice.
6.2. Independent Relationship. The Practice and BII intend to act and
perform as independent contractors, and the provisions hereof are not intended
to create any partnership, joint venture, agency or employment relationship
between the parties.
6.3. Other Professionals. No provision of this Agreement is intended to
limit BII's right, authority, or ability under applicable law to contract with
other surgeons or physicians, or to employ, contract with, or enter into any
partnership or joint venture with any healthcare professional; provided that the
exercise of such right, authority or ability does not contravene the terms of
this Agreement.
6.4 Patient Care. Nothing in this Agreement is intended to interfere,
or shall be construed as interfering, in any way with the Surgeon(s)'s ability
to independently exercise professional and ethical judgment in the performance
of his patient care responsibilities.
VII. GENERAL PROVISIONS
7.1. Assignment. This Agreement shall be assignable by BII to any
person, firm or corporation that controls or is under common control with BII.
This Agreement shall not be assignable by the Practice. Subject to this
provision, this Agreement shall be binding upon the parties hereto, and their
successors and assigns.
7.2. Whole Agreement; Modification. There are no other agreements or
understandings, written or oral, between the parties regarding this Agreement,
the Exhibits and the Schedules, other than as set forth herein. This Agreement
shall not be modified or amended except by a written document executed by both
parties to this Agreement, and such written modification(s) shall be attached
hereto.
7.3. Notices. All notices required or permitted by this Agreement shall
be in writing and shall be addressed as follows:
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To BII: The Plastic Surgery Company
Two Midtown Plaza, Suite 1220
0000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Esquire
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
To the Practice: --------------------------------
--------------------------------
--------------------------------
Attn:
Telecopier:
Telephone:
or to such other address as either party shall notify the other.
7.4. Waiver of Provisions. Except as otherwise provided in this Section
7.4, any waiver of any terms and conditions hereof must be in writing, and
signed by the parties hereto. The waiver of any of the terms and conditions of
this Agreement shall not be construed as a waiver of any other terms and
conditions hereof. The parties acknowledge that BII is not authorized or
qualified to engage in any activity which may be construed or deemed to
constitute the practice of medicine.
7.5. Governing Law. The validity, interpretation and performance of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Georgia without regard to the conflict of laws principals thereof.
7.6. Compliance with Applicable Laws. Both parties shall comply with
all applicable federal, state and local laws, regulations and restrictions in
the conduct of their obligations under this Agreement.
7.7. Severability. The provisions of this Agreement shall be deemed
severable and if any portion shall be held invalid, illegal or unenforceable for
any reason, the remainder of this Agreement shall be effective and binding upon
the parties.
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7.8. Additional Documents. Each of the parties hereto agrees to
execute any document or documents that may be requested from time to time by the
other party to implement or complete such party's obligations pursuant to this
Agreement.
7.9. Attorneys' Fees. If legal action is commenced by either party to
enforce or defend its rights under this Agreement, the prevailing party in such
action shall be entitled to recover reasonable costs actually incurred and
reasonable attorneys' fees in addition to any other relief granted.
7.10. Confidentiality. Neither party hereto shall disseminate or
release to any third party any information regarding any provision of this
Agreement, or any financial information regarding the other (past, present or
future) that was obtained by the other in the course of the negotiation of this
Agreement or in the course of the performance of this Agreement, without the
other party's written approval; provided, however, the foregoing shall not apply
to information which is required to be disclosed by law, including federal or
state securities laws, or pursuant to court order.
7.11. Contract Modifications for Subsequent Legal Events. In the event
any state or federal laws or regulations, now existing or enacted or promulgated
after the effective date of this Agreement, are interpreted by judicial
decision, a regulatory agency or legal counsel for both parties in such a manner
as to indicate that the structure of this Agreement may be in violation of such
laws or regulations, the Practice and BII shall amend this Agreement as
necessary to bring this Agreement into compliance with such state or federal law
or regulation. To the maximum extent possible, any such amendment shall preserve
the underlying economic and financial arrangements between the Practice and BII.
7.12. Remedies Cumulative. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be considered exclusive
of any other remedy available to any party, but the same shall be distinct,
separate and cumulative and may be exercised from time to time as often as
occasion may arise or as may be deemed expedient.
7.13. Language Construction. The language in all parts of this
Agreement shall be construed, in all cases, according to the parties' intent and
the parties hereto acknowledge that each party and its counsel have reviewed and
revised this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
7.14. No Obligation to Third Parties. None of the obligations and
duties of BII or the Practice under this Agreement shall in any way or in any
manner be deemed to create any obligation of BII or of the Practice to, or any
rights in, any person or Practice not a party to this Agreement.
7.15. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same Agreement.
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7.16. Singular and Plural; Gender. Where the context so requires or
permits, the use of the singular form includes the plural, and the use of the
plural form includes the singular, and the use of any gender includes any and
all genders.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
PRACTICE:
---------------------------------------
By:
------------------------------------
Title:
---------------------------------
BII:
THE PLASTIC SURGERY COMPANY
By:
------------------------------------
Xxxxxxxx X. Xxxxxxx, Chairman
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