EXHIBIT 10.9
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement (the "Agreement") is made
this 21st day of November, 2003 by and between Advanced Aesthetics,
Inc., a Delaware corporation ("AAI") and Xxxxx Xxxxxxx Medicine (`JH"), acting
through The Xxxxx Xxxxxxx Health System Corporation, a Maryland corporation
("JHHS") and The Xxxxx Xxxxxxx University, a Maryland corporation ("JHU")
RECITALS
1. AAI is a company dedicated to providing a nationwide, comprehensive
suite of medical and non-medical services arid products for aesthetic
enhancement in a hospitality environment.
2. JHU is a university that has medical, nursing and public health
schools and JHHS is a hospital system; together, both are international
leaders in the education of physicians and medical scientists in
biomedical research, and in the application of medical knowledge to
patient care.
3. AAI has assembled leading cosmetic medical professionals to serve on
its medical board to set clinical policy and provide insight and
advanced market knowledge of clinical innovation in the field of
aesthetic medicine.
4. AAI has developed proprietary techniques and processes to both
deliver and measure the benefit of cosmetic medical procedures.
5. AAI desires to obtain certain services from JH as described in this
Agreement.
6. JH has a high degree of interest in advancing the cosmetic medical
capabilities for both the plastic surgery and dermatology faculty of
JHU as well as the cosmetic medical center of JHHS and JHU in Green
Spring Station.
7. JH desires to gain access to and utilize AAI's proprietary
techniques and processes for concierge services, diagnostic
capabilities and integrated modalities for its Green Spring Station
Cosmetic Center. JH also desires to have the right to partner with AAI
in neighboring markets so as to benefit from "market exclusivity" using
AAI's proprietary techniques and processes.
8. Both parties acknowledge one another's commitment to optimum client
outcomes (in medical aesthetic results as well as in standard medical
measures) and in elevating the standards of care in the cosmetic
medical field.
9. Both parties have an interest in broadening their relationship and
will continue, without obligation, discussions in that regard
NOW THEREFORE, in consideration of the premises, and of the
mutual covenants and conditions contained herein, JH and AAI agree as follows:
1. Consulting Services. JH will provide consulting services to AAI
(the "Services") consisting of:
(a) Review and assessment of AAI's medical delivery protocol
document. This document will contain the topics set forth in EXHIBIT
1. These Services will be delivered within thirty (30) days of the
execution of this Agreement and are expected to require no more than
ten (10) work-days to complete. As AAI develops additional
protocols, these will be submitted to JH for review and assessment
from time to time.
(b) Consultation on the development of outcomes studies
methodologies. These Services will be delivered within a timeframe
to be mutually agreed to by AAI and JHU. Should AAI, either itself
or through third parties, conduct outcomes studies, publish or
disseminate the results of outcomes studies, and cite advice
received from JH or JH personnel, AAI will ensure that a disclosure
statement accompanies all such publication or dissemination. The
disclosure statement will read "Under a consulting services
agreement, Xxxxx Xxxxxxx received payment from AAI for providing
advice with respect to this study."
Services with respect to outcomes studies will be limited strictly
to advice on how to perform such studies. JH will not participate in any actual
studies. JH will perform the Services in good faith and through the reasonable
exercise of the professional judgment of its faculty and staff who are engaged
to provide the Services. JH DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. JH and AAI acknowledge their intent to discuss
collaborative research opportunities in the future. If both parties elect to
proceed and mutually acceptable terms can be agreed upon, they would enter into
a separate contract with respect to such opportunities.
Additionally, JH is open to advising and participating on AAI's
medical board subject to resolving potential conflicts of interest as determined
in JH's sole discretion.
2. Use of Xxxx
(a) Subject to the prior written approval of JH, JH agrees
that AAI may make a factual statement in its medical collateral
materials in both print and electronic media (the "AAI Materials")
describing the specific Services provided by JH as of the date of
use or distribution of the AAI Materials in question. It is
understood the AM Materials may be referred to by AAI as part of its
concierge consultation process. It is understood that, over time, if
more Services are provided by JH, the number of factual statements
referring to JH may increase at JH's sole discretion. No reference
may be made to Services to be provided in the future.
Provided all other conditions are met, JH, by signing this Agreement, gives its
approval for: (a) references to the Xxxx that are consistent with the statements
set forth on EXHIBIT 2 to this Agreement, provided that, JH reserves the right
to approve the specific media and context in which the Xxxx is used including
the frequency of usage and juxtaposition with other content,
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and (b) use of the Xxxx in the pamphlets of AAI and on AAI's website in the
manner depicted in the specific examples attached to EXHIBIT 2 Any reference to
JH that is not consistent with the examples on EXHIBIT 2, or any other use of
the Xxxx, shall be subject to the prior written approval of JH, which may be
granted or denied in Its sole discretion. The Xxxx in any event shall initially
be used only in descriptive text within AAI Materials. JH will consider in the
future, but without obligation, allowing the Xxxx to be placed on medical
facilities of AAI in a form approved by JH according to its institutional
standards and with prior written approval from JH, which approval may be granted
or denied in JH's sole discretion. Except as described in the previous sentence,
the Xxxx shall not be physically placed on, or otherwise used to brand, any
product, letterhead or other tangible property of AAI. The Xxxxx Xxxxxxx name,
any derivatives of such name, and any logos or symbols of JH or any of its
affiliates are herein collectively called the "Xxxx".
(b) All AAI Materials that refer to the Xxxx and each instance
of a proposed reference to JH in public relations activities will be
subject to consultation with and the final approval of JH as
described above, with appropriate lead time in each case. Unless
otherwise agreed in writing by fl requests for approval of a
reference to the Xxxx shall be submitted at least fourteen (14) days
in advance. The associate director of the School of Medicine Office
of Corporate Communications (currently Xx. Xxxxx Xxxxxxxx) will
serve as JH's first source of review and the sole contact with
media. No JH faculty, staff, student or administrator or any other
person associated with JH will be made available to the media unless
it is with the express, written consent of the associate director of
the School of Medicine Office of Corporate Communications.
3. Intellectual Property
(a) AAI will permit JH to use, without charge, hi its Cosmetic
Center in Baltimore, Maryland AAI's proprietary service techniques
and customer service informational material and all enhancements and
upgrades to such material, including, without limitation, any
material not previously developed with JH. AAI will make such
material available to JH upon request and will, in good faith,
cooperate with JH as needed in its implementation (without charge
for a responsible and customary degree of assistance in such
implementation). This permission is limited to a single Baltimore
site only and shall not be transferred without the prior written
approval of AAI.
(b) If JH develops, in whole or in part, service techniques,
customer service information or other intellectual property as a
result of providing the Services, such intellectual property shall
belong solely to JH, JHHS or JHU and, as such, can be used by them
without restriction or limitation or any compensation to AAI (though
AAI shall have a non-exclusive license to use for the Term of this
Agreement intellectual property which JH makes available to AAI as
part of the Services without compensation other than as set forth in
this Agreement). If AAI and JH agree in writing to co-develop
service techniques, AAI's license for such co- developed techniques
shall continue after the Term of Agreement as set forth in any such
separate agreement.
4. Consideration. The consideration for the Services and the limited
use by AAI of the Xxxx shall be as follows:
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(a) AAI will pay faculty of the JHU School of Medicine fees in
the amount of $5,000 per day (or $700 per hour) to perform the
Services outlined in Section 1 of this Agreement. Payment will be
within thirty (30) days after invoicing by JH.
(b) In addition to the compensation for Services, AAI, in
consideration for the limited use of the Xxxx permitted by this
Agreement, will:
(i) Pay JH the sum of $300,000 per year in quarterly
increments of $75,000 each commencing on December 1, 2003 and
continuing on the first day of March, June, September and
December of each calendar year during the Term of this
Agreement; and
(ii) Issue to JH contemporaneously with the execution of
this Agreement 500 shares of the Series E Preferred Stock, par
value S per share, of AAI (the "Preferred Shares"), having the
rights and privileges set forth in the certificate of
designation attached hereto as EXHIBIT 5
As referenced in Recital 9 to this Agreement, the parties will explore a
broader relationship (the "Phase 2 Relationship"). If the Phase 2 Relationship
is agreed upon, the consideration to JH will be enhanced as follows: (a) the
annual compensation for usage of the Xxxx will be increased to $1 million
payable in equal quarterly installments plus a one time additional payment of
$500,000 to be paid in equal quarterly installments following the opening of
AAI's initial proprietary ambulatory surgery center (as described in the
hereinafter defined Business Plan), and (b) AAI will issue to JH additional
Preferred Shares in an amount to be negotiated in good faith.
5. Term. This Agreement shall be in effect through November 21, 2008
(the "Term"). Thereafter, this Agreement shall renew for additional
three-year periods unless either party shall provide written notice of
termination to the other party no later than 120 days prior to the then
current expiration date. Notwithstanding anything in this Agreement to the
contrary, either AAI or JH may elect, in its sole discretion, to terminate
this Agreement by written notice to the other party if the Phase 2
Relationship has not been agreed upon on or before November 30, 2004.
6. Representations and Warranties of JH. JH represents and warrants
to AAI as follows:
6.1 Authorization; Validity of Agreement; No Violation.
(a) JH has the requisite power and authority to (i) perform
this Agreement and each other document to be performed pursuant to
this Agreement (collectively, with this Agreement, the "JH
Documents") to which JH is a party, and (ii) consummate the
transactions contemplated hereby and thereby.
(b) JH has duly authorized, executed and delivered this
Agreement and each of the other JH Documents to which it is or will
be a party.
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(c) This Agreement and each other JH Document are valid and
binding obligations of JH, enforceable against JH in accordance with
their terms and do not violate any law or agreement applicable to
JH.
6.2 Investment Undertaking. JH acknowledges that the Preferred
Shares and the shares of common stock, par value $.0l per share, of
AAI issuable upon conversion of the Preferred Shares will be
"restricted securities" within the meaning of Rule 144 of the
General Rules and Regulations under the Securities Act of 1933
("Rule 144"). JH is acquiring the Preferred Shares for its own
account and not with a view to their distribution within the meaning
of Section 2(11) of the Securities Act of 1933. JHHS and JHU are
"accredited investors," as defined in Rule 501 of Regulation D under
the Securities Act of 1933. JH understands that Rule 144 requires
that the Preferred Shares and the shares of common stock issuable
upon conversion may not be disposed of for a period of at least one
year. JH understands that it must bear the economic risk of the
investment in the Preferred Shares and the shares of common stock
issuable upon conversion of the Preferred Shares indefinitely
because such shares may not be sold, hypothecated or otherwise
disposed of unless subsequently registered under the Securities Act
of 1933 and applicable state securities laws, or an exemption from
registration is available.
7. Representations and Warranties of AAI. AAI represents and
warrants to JH as follows:
7.1 Authorization Validity of Agreement; No Violation.
(a) AAI has the requisite capacity and authority to perform
this Agreement and each other document to be performed pursuant to
this Agreement (collectively, with this Agreement, the "AAI
Agreements") to which it is a party and to consummate the
transactions contemplated hereby and thereby.
(b) AAI has duly authorized, executed and delivered this
Agreement and each of the other AAI Agreements.
(c) This Agreement and each other AAI Agreement is a valid and
binding obligation of AAI, enforceable against it in accordance with
their respective terms and do not violate any law or agreement
applicable to AAI
7.2 Shares Duly Authorized. The Preferred Shares and Common
Stock issuable upon conversion thereof have been duly authorized and
upon issuance in accordance with their terms will be duly and
validly issued and non-assessable.
8. Other Agreements of the Parties. In addition to the other provisions of
this Agreement, the parties agree as follows:
8.1 Licenses: Professional Insurance; and Hiring Standards. AAI will
cause (i) all medical centers and other facilities of AAI to be fully licensed
by all appropriate agencies, and (ii) each such center or other facility to
carry all required liability and professional insurance. In hiring all
physicians, nurses, technical support
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staff and other personnel who will be involved in the delivery of medical
services, AAI will comply with hiring standards and requirements acceptable to
JH. AAI will provide JH with copies of all such standards and requirements and,
within fifteen (15) days after request by JH, evidence that AAI has adhered to
them in its hiring practices. In any event, AAI shall at a minimum maintain the
insurance coverages set forth on EXHIBIT 3 to this Agreement. Such insurance
shall name JHHS, JHU and their affiliates as additional insureds and provide
that JH will receive thirty (30) days advance written notice of any change in,
or cancellation of, coverage. AAI shall provide certificates evidencing such
insurance to JH within fifteen (15) days after request.
8.2 Business Plan. AAI will operate each facility, and conduct its
business generally, in accordance with the Business Plan (the "Business Plan")
dated October 2003 (a copy of which has been delivered to JH) or as otherwise
determined by X.XX's board of directors. If AAI's board of directors determines
to operate its business other than in accordance with the Business Plan, JH may
elect, in its sole discretion, to terminate this Agreement on ninety (90) days
written notice to AAI.
8.3 Billing Procedures. AAI shall be responsible for assuring,
throughout the term of this agreement, that all of its billing procedures are
fully in accord with the requirements of all applicable public and private
payers and applicable laws and regulations.
8.4 Maryland/Washington, D.C. Market. AAI will not enter the
Maryland/Washington, D.C. Market as described on EXHIBIT 4 to this Agreement
(the "Market") other than in partnership with JH. In the event that JH declines
to open another medical center in the Market in partnership or other affiliation
with AAI, AAI will not conduct operations in the Market unless and until JH
consents in writing to such operations by AAI (which consent may be granted or
denied by JH in its sole discretion). In addition, JH shall have the right to
expand its operations in Baltimore, Maryland into any other portion of the
Market independently and not in partnership or other affiliation with AAI.
8.5 Non-Disclosure of Confidential Information
(a) Each party shall not, and each party shall cause its officers,
directors, employees, agents, accountants and counsel not to, communicate or use
to the detriment of the other party or for the benefit of any other person any
Confidential information (hereinafter defined) relating to the other party.
(b) For purposes of this Agreement:
(i) "Confidential Information" shall mean; Any data or
information pertaining to the arrangement between the parties
contemplated by this Agreement that is specifically designated as
"CONFIDENTIAL". To the extent consistent with the foregoing,
Confidential Information includes, without limitation, contracts and
contractual relations with customers and suppliers, computer
software programs (including object code and source code), database
technologies, systems,
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structures and architectures, business acquisition plans and new
personnel acquisition plans. "Confidential Information" shall not
include any information that: (i) is or becomes publicly known other
than as a result of a breach by Recipient Party (hereinafter
defined) or its representatives of this Agreement; (ii) has been or
shall be otherwise independently acquired by or developed by
Recipient Party without violating the terms of this Agreement; or
(iii) is known by Recipient Party or its representatives prior to
its disclosure to Recipient Party by Disclosing Party (hereinafter
defined).
(ii) "Disclosing Party" shall mean the party disclosing
Confidential Information to the other party. "Recipient Party" shall
mean the party receiving Confidential Information from the other
party.
(c) In the event Recipient Party receives a court order or other
governmental or administrative decree of appropriate and sufficient
jurisdiction requiring disclosure of Disclosing Party's Confidential
Information, Recipient Party shall give Disclosing Party reasonable
written notice prior to such disclosure in order to permit Disclosing
Party, at its expense, to seek a protective order. Recipient Party shall
also cooperate with Disclosing Party in seeking a protective order, and
release only so much of Disclosing Party's Confidential information as is
required by such order.
8.6 Stockholders Agreement. Concurrently herewith, the parties are
entering into a stockholders agreement (the "Stockholders Agreement") relating
to the transfer of the shares of AAI to be received hereunder which agreement is
annexed as Exhibit 6
8.7 Registration Rights Agreement. Concurrently herewith, the
parties are entering into a registration rights agreement (the "Registration
Rights Agreement") which provides JH with the right to register the shares of
Common Stock underlying the Preferred Shares as provided therein which agreement
is annexed as Exhibit 7.
8.8 Late Payments. Any payment due pursuant to this Agreement that
is not made by AAI within fifteen (15) days of the date due shall: (i) be
subject to a 3% late charge which is intended to cover in part the
administrative expense incurred by JH in handling a late payment, and (ii)
accrue interest from the date due until paid in full at the rate of 10% per
annum.
9. Control of Xxxx
(a) The rights granted to make reference to the Xxxx by this
Agreement arc non-divisible and shall not be transferred or sub-licensed in
whole or in part without the prior written consent of JH, which consent may be
granted or denied in its sole discretion.
(b) Notwithstanding anything to the contrary contained in this
Agreement, X.XX may not use the Xxxx in any manner that JH, in its sole
discretion, deems to be illegal, vulgar, obscene, in bad taste or inconsistent
with the professional image and reputation of JH.
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(c) AAI recognizes the substantial value and goodwill associated
with the Xxxx and that the Xxxx has acquired a secondary meaning as being
synonymous with medical services and education of the highest quality arid
pioneering health and medical research. AAI agrees that it will conduct its
businesses in accordance with such standards of quality and professionalism and
in compliance with all applicable laws, so as to protect the goodwill embodied
in the Xxxx and the reputation of JH, JHHS and JHU. All marketing and promotion
of AAI's services using the Xxxx shall be done in a dignified, tasteful and
professional manner in keeping with the standards of JH.
(d) JH shall have the right, but not the obligation, to request at
any time samples of then current AAI Materials for quality control purposes. JH
shall advise AAI in writing of any use which is inconsistent with this Agreement
(an "Inconsistent Use Notice"), and AAI shall immediately cease such use.
Notwithstanding the foregoing, JH shall not have the right to send an
Inconsistent Use Notice with respect to any use previously approved by JH
pursuant to this Agreement.
(e) In addition to any other rights or remedies of JH set forth in
this Agreement, AAI shall pay JH the sum of $10,000 for each instance of an
intentional and controllable misuse of the Xxxx. Such fee represents an
administrative charge to defray costs and expenses of JH in monitoring use of
the Xxxx. It does not constitute a license for such misuse nor does it in any
manner affect JH right to seek injunctive relief or damages.
10. Protection of the Xxxx
(a) AAI agrees that, except f the rights granted expressly in this
Agreement, AAI shall have no right, title or interest in the Xxxx, and that the
Xxxx is the sole property of JH and its affiliated entities. AAI shall not
challenge, or cause a third party to challenge, the validity and ownership by JH
and its affiliated entities of the Xxxx, or seek to register, defend, compromise
or dispute any rights in and to the Xxxx.
(b) AAI shall advise JH of any apparent infringement of the Xxxx of
which it becomes aware and will cooperate with 313 in the prosecution of any
action brought to protect the Xxxx. JH shall have the sole and exclusive right
to xxx for an alleged infringement of the Xxxx and to retain all recoveries and
any other revenues deriving therefrom.
(c) Each party agrees to give the other prompt written notice of any
claim or legal proceeding which is threatened or actually instituted against
such party by any third party involving the rights to the Xxxx as licensed under
this Agreement and to cooperate in good faith in the resolution of the matter.
(d) AA1 shall execute any additional documents and provide any
information and consents as are reasonably necessary in order to effect the
protection of the Xxxx as licensed under this Agreement.
11. Indemnification
(a) AAI agrees to indemnify, defend and hold harmless JH and its
respective employees, officers, directors, physicians, agents, and all related
and affiliated
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entities (including JHHS and JHU) (collectively, the "Xxxxxxx Parties") for any
losses, claims, damages or liabilities, including, without limitation,
attorneys' fees and court costs (collectively, the "Claims"), arising out of or
with respect to (i) any injury or damage caused by any services Or goods sold or
otherwise provided by AAI including medical diagnosis and treatment, or (ii) any
negligent action or negligent omission of AAI, or (iii) any breach by AAI of
this Agreement or (iv) any use of the Xxxx in connection with the business of
AAI; provided that, such indemnification obligation shall be reduced in an
equitable manner to the extent any Claim arises in part from a negligent act or
omission by JH or its affiliates or a material breach by JH or its affiliates of
this Agreement. In the event any claim, action or proceeding is brought against
any of the Xxxxxxx Parties, which is subject to indemnification under this
Section, AAI, upon written notice from the Xxxxxxx Parties, shall defend or
settle the same at AM's sole cost and expense with legal counsel reasonably
satisfactory to the Xxxxxxx Parties. If AAI' fails to assume the defense of any
matter subject hereto within a reasonable period of time after such written.
Notice, the Xxxxxxx Parties may proceed to defend or settle the matter with
legal counsel of their own selection at AAI's cost and expense. The Xxxxxxx
Parties shall cooperate with AAI in the defense or settlement of any claim
subject to indemnification under this Section. All compromises and settlements
shall require the prior written consent of the Xxxxxxx Parties, which consent
shall not be unreasonably withheld.
(b) JH agrees to indemnify, defend and hold harmless AAI and its
respective employees, officers, directors, agents, and affiliated entities
(collectively, the "AAI Parties") for any Claims arising out of or with respect
to: (i) any allegation that the use of the Xxxx as permitted under this
Agreement infringes the proprietary rights of any third party, (ii) any
negligent acts or negligent omissions of JH, or its affiliated entities, or
their employees, consultants, physicians, agents or representatives, or (iii)
any breach by JH or its affiliates of this Agreement; provided that, such
indemnification obligation shall be reduced in an equitable manner to the extent
any Claim arises in part from a negligent act or omission by AAI or a breach by
AAI of this Agreement. In the event any claim, action or proceeding is brought
against the AAI Parties which is subject t indemnification under this Section,
JH upon written notice from the AAI Parties, shall defend or settle the same at
JH sole cost and expense with legal counsel reasonably satisfactory to the AAI
Parties. If JH fails to assume the defense of any matter subject hereto within a
reasonable period of time after such written nonce, the AAI Parties may proceed
to defend or settle the matter with legal counsel of their own selection at JH
cost and expense. The AAI Parties shall cooperate with JH in the defense or
settlement of any claim subject to indemnification under this Section. All
compromises and settlements shall require the prior written consent of the AAI
Parties, which consent shall not be unreasonably withheld.
(c) These indemnification provisions shall survive termination of
this Agreement for any reason.
12. Termination of Right to Use Xxxx.
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JH shall have the right to require AAI to cease any reference to or
use of the Xxxx: (a) if an Event of Default by AAI occurs and continues beyond
any applicable notice and cure period set forth in Section 13 of this Agreement,
or (b) in the event JH determines in good faith that AAI is not operating its
business in conformance with protocols and quality standards acceptable to JH,
or (e) in the event JH determines in good faith that AAI has conducted its
business in a manner that materially and adversely reflects on the image and
reputation of JH, JHHS or JHU because of the affiliation with AAI. JH shall not
exercise its rights pursuant to the previous clauses (b) and (c) without first
providing to AAI a sixty (60) day period in which to explain the situation and
state bow it intends to remedy it. If not satisfied at the end of such sixty
(60) day period, JH, at its option, may prohibit further `use of the Xxxx. Upon
exercise of the right to terminate use of the Xxxx as described above or `upon
termination of this Agreement for any reason, AAI shall have no further right to
use the Xxxx and shall immediately cease use of the Xxxx. AAI consents to
injunctive relief in the event of any misuse or unauthorized use of the Xxxx.
13. Default; Termination
(a) Termination by AAI. AAI shall have the right to terminate this
Agreement upon the occurrence of any of the following events provided that such
intent to terminate is expressly stated in any Notice (hereinafter defined) of
default described below:
(i) If JH fails to perform any material term, condition, or
provision contained in this Agreement and such default continues for
sixty (60) days after Notice to remedy same from AAI; provided that,
in the event such default on the part of JH cannot be remedied
within sixty (60) days and JH has promptly and diligently proceeded
with action to remedy such default, then JH shall be allowed such
additional time as shall be reasonable to remedy the default;
(ii) If JH files a voluntary bankruptcy or goes into
liquidation voluntarily or enters into any composition or
arrangement with or for the benefit of creditors of Hi, or allows
any final, non-appealable judgment or involuntary bankruptcy filed
against JH to remain unsatisfied or not dismissed for a period of
sixty (60) days; or
(iii) If any representation or warranty of JH in this
Agreement proves to be false or misleading in any material respect.
(b) Termination by JH. JH shall have the tight to terminate this
Agreement upon the occurrence of any of the following events provided that such
intent to terminate is expressly stated in arty Notice of default described
below:
(i) If AAI fails to make any payment to JH when due pursuant
to this Agreement and such failure continues uncured for fifteen
(15) days after Notice from JH; provided that, AAI shall be entitled
to notice of a monetary def only once during each Contract Year (the
term Contract Year meaning each consecutive twelve (12) month period
from the date of this Agreement), with JH having a right to
terminate
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immediately upon Notice and `with no cure period upon a second
monetary default within a Contract Year;
(ii) If AAI misuses the Xxxx and such misuse continues for
five (5) days after Notice from JN provided that AAI shall only be
entitled to one (I) Notice for a specific misuse of the Xxxx and, in
the event of a reoccurrence of such misuse for which a Notice has
been given, 311 may terminate this Agreement immediately upon Notice
and with no further cure period;
(iii) If AAI fails to perform any other material term,
condition, or provision contained in this Agreement (exclusive of
those described in paragraphs (i) and (ii) above) and such default
continues for sixty (60) days after Notice to remedy same from M
provided that, in the event such def on the part of AAI cannot be
remedied within sixty (60) days and AAI has proceeded promptly and
diligently with action to remedy such default, then AAI shall be
allowed such additional time as shall be reasonable to remedy the
default (such extended cure period shall apply only to this
subparagraph (iii) and not to any other def set forth in this
Section (b);
(iv) If AAI files a voluntary bankruptcy or goes into
liquidation voluntarily, or enters into any composition or
arrangement with or for the benefit of creditors of AAI, or allows
any final, non judgment or involuntary bankruptcy filed against AAI
to remain unsatisfied or not dismissed for a period of sixty (60)
days;
(v) If any representation or warranty of AAI in this Agreement
proves to be false or misleading in any material respect; or
(vi) If AAI defaults under the Stockholders Agreement or
Registration Rights Agreement and such default continues uncured
beyond any applicable notice and cure period.
(c) Upon termination of this Agreement pursuant to this Section 13, all
obligations of the parties shall terminate except those under Section 11.
14. Damages
(A) EXCEPT TO THE EXIENT ENCOMPASSED WITHIN A THIRD PARTY CLAIM
INDEMNIFIED AGAINST PURSUANT TO SECTION 11, NOTWITHSTANDING ANYTHING CONTAINED
IN THIS AGREEMENT TO THE CONTRARY, .JH, JHU, JHHS AND AAI SHALL NOT BE LIABLE IN
ANY MANNER FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES. EACH PARTY
IRREVOCABLY WAIVES ITS RIGIIT TO SEEK SPECIAL, CONSEQUENTIAL OR INCIDENTAL
DAMAGES AND ACKNOWLEDGES NAT SUCH WAIVER IS A MATERIAL INDUCEMENT FOR THE OTHER
PARTY TO ENTER INTO THIS AGREEMENT.
(B) AAI AGREES THAT NO XXXXXXX PARTY (INCLUDING, WITHOUT LIMITATION,
..JH, JHU AND JHHS) SHALL BE UABLE TO AAI FOR ANY ACTIONS, DAMAGES, CLAIMS,
LL&BUATLES, COSTS, EXPENSES OR LOSSES IN ANY WAY
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ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SERVICES PERPORMED HEREUNDER
FOR AN AGGREGATE AMOUNT IN EXCESS OF THE GREATER OF (A) $250,000, OR (B) THE
SUMS ACTUALLY PAID TO JH PURSUANT TO THIS AGREEMENT.
15. Miscellaneous
15.1 Force Majeure. Neither JH nor AAI shall be liable for any
delays resulting from circumstances or causes beyond its reasonable control,
including, without limitation, fire or other casualty, act of God, strike or
labor dispute, war, terrorism or other violence, or any law, order or
requirement of any governmental agency or authority. Nothing contained in this
Section, though, shall excuse payment of a monetary obligation.
15.2 Independent Contractor. Each party to this Agreement is an
independent contactor. None of the provisions of this Agreement is intended to
create, nor shall be deemed or construed to create, any employer-employee
partnership, joint venture, or other relationship between such parties.
15.3 No Third-Party Beneficiaries. The obligations of each party to
this Agreement shall inure solely t the benefit of the other party, and no
person or entity shall be a third party beneficiary of this Agreement.
15.4 Preparation. Each party and its respective legal counsel have
cooperated in the drafting of this Agreement. This Agreement shall be deemed,
therefore, to be their joint work product and shall not be construed against any
party on the basis of its preparation.
15.5 Survival of Representation and Warranties. Each party has the
right to rely upon the representations and warranties of the other contained
herein and the documents referred to herein all of which shall continue in full
force and effect after the closing hereunder.
15.6 Transaction Fees and Expenses. Each party hereto shall bear all
costs incurred by it in connection with this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing, X.XX shall reimburse M for
all reasonable and necessary travel and other business related expenses incurred
by JH in connection with the performance of JH's agreements hereunder, provided
that such expenses shall be subject to prior approval by AAI, which approval
will not be unreasonably withheld or delayed. Such e shall be reimbursed within
thirty (30) days after the submission by JH of appropriate documentation with
respect thereto. Reimbursable expenses include, without limitation, business
class airfare (unless otherwise mutually agreed), lodging in hotels of mutually
acceptable quality, meals, ground transportation, gratuities and mutually agreed
upon hotel expenses.
15.7 Notices. All notices or other communications to be given
hereunder ("Notice") shall be in writing and sent by (i) messenger or a
recognized national overnight courier service for next day delivery with receipt
therefor, (ii) certified
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or registered mail, postage paid, return receipt
requested, (iii) facsimile transmission with a copy thereof sent on the same day
by postage paid first-class mail or (iv) by personal delivery to such party at
the following address:
To AAI:
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000X
Xxxx Xxxx Xxxxx, XX 00000
Attention: President
Tetecopier No.: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
To JH:
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
with copies to:
The Xxxxx Xxxxxxx Health System Corporation
000 X. Xxxxx Xxxxxx, Xxxxxxxxxxxxxx 000
Xxxxxxxxx, Xxxxxxxx 0 0000-0000
Attention: General Counsel
Telecopier No.: (000) 000-0000
The Xxxxx Xxxxxxx University
0000 X. Xxxxxxx Xxxxxx, 000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
or such other address as either party hereto may at any time,
or from time to time, direct by Notice given to the other party in accordance
with this Section 15.7.
15.8 Amendment Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective unless in writing and signed by or on
behalf of the party against whom the same is sought to be enforced.
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15.9 Governing Law; Jurisdiction; Jury Trial This Agreement shall be
governed by, and interpreted and enforced in accordance with, the laws of the
State of Maryland.
Each of the parties hereto hereby irrevocably consents and submits to the
exclusive jurisdiction of the United States District Court for the Northern
Division of the State of Maryland in connection with any proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby, waives
any objection to venue in such Court (unless such Court lacks jurisdiction with
respect to such proceeding, in which case, each of the parties hereto
irrevocably consents to the jurisdiction of the courts of Xxxxxx County in the
State of Maryland in connection with such proceeding and waives any objection to
venue in the courts of Xxxxxx County) and agrees that service of any summons,
complaint, notice or other process relating to such proceeding may be effected
in the manner provided by Section 15.7. EACH PARTY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH THIS
AGREEMENT OR ANY MATTER OR CONTROVERSY ARISING OUT OF, OR IN CONNECTION WITH,
THIS AGREEMENT OR THE TRANSACTIONS DESCRIBED HEREIN. THIS WAIVER IS MADE
KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH COUNSEL.
15.10 Remedies. In the event of any actual or prospective breach or
default by any party hereto, the other party shall be entitled to
equitable relief, including remedies in the nature of injunction and
specific performance. Nothing contained herein and no election of any
particular remedy shall be deemed to prohibit or limit any party from
pursuing, or be deemed a waiver of the right to pursue, any other remedy
or relief available now or hereafter ex at law or in equity (whether by
statute or otherwise) for such actual or prospective breach or default,
including the recovery of damages.
15.11 Severability. The provisions hereof are severable and if any
provision of this Agreement shall be determined to be legally invalid,
inoperative or unenforceable in any respect by a court of competent
jurisdiction, then the remaining provisions hereof shall riot be affected,
but shall, subject to the discretion of such court, remain in full force
and effect, and any such invalid, inoperative or unenforceable provision
shall be deemed, without any further action on the part of the parties
hereto, amended and limited to the extent necessary to render such
provision valid, operative and enforceable.
15.12 Assignment. This Agreement arid all of the provisions hereof
shall be binding upon arid inure to the benefit of the parties hereto and
their successors (whether by operation of law or otherwise) and including
a purchaser of the business, stock or assets of a party hereto; provided
that, JH may elect, in its sole discretion, to terminate this Agreement if
Control (hereinafter defined) of AAI is acquired by a pharmaceutical
company or by a manufacturer or distributor of alcohol, weapons or
pornography or by any other person or entity whose ownership of AAI would
impair the image and reputation of JH as determined by JH in its sole
discretion. "Control" means either: (a) ownership, directly or indirectly,
of more than fifty percent (50%) of the stock or voting interests in AAI,
or (b) the right, directly or indirectly, to direct the executive decision
making of AAI by contract or otherwise, including, without limitation, by
ability
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to appoint a controlling number of the members of the board of directors
of AAI. In addition, JH may assign this Agreement at any time to a
wholly-owned subsidiary of JHU and JHHS and, in such event, shall have no
further obligation or liability under this Agreement from and after the
date of such assignment. Except as aforesaid, no party shall assign any
rights or delegate any obligations hereunder. AAI acknowledges, however,
that JHHS and JHU may subcontract with other affiliates for performance of
certain of the Services. Such subcontracting shall not create any direct
liability of other affiliates to AAI.
15.13 Entire Agreement. This Agreement, together with the Exhibits
and other documents referred to herein, required to be delivered pursuant to the
terms hereof or delivered simultaneously herewith, contains the terms of the
entire agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, commitments, understandings,
discussions, negotiations or arrangements of any nature relating thereto.
15.14 Sole Discretion. Wherever in this Agreement JH has the right
to make a decision in its "sole discretion," AAI acknowledges and agrees that
the decision of JH shall not be subject to question or challenge in any manner
by AAI. AAI waives any right it may otherwise have, if any, to question or
challenge any such decision of JH.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first listed above.
ADVANCED AESTHETICS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------------------
Xxxxxxx Xxxxxxxx
Chairman
XXXXX XXXXXXX MIDICINE
Acting through
The Xxxxx Xxxxxxx Health System Corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxx
The Xxxx Xxxxxxx University
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxx
S-1
EXHIBIT LIST
Exhibit 1 -- Contents of AAI's Medical Delivery Protocol document
Exhibit 2 -- Examples of Name Usage
Exhibit 3 -- Insurance
Exhibit 4 -- Description of Maryland/Washington, DC Market
Exhibit S -- Certificate of Designation
Exhibit 6 -- Stockholders Agreement
Exhibit 7 -- Registration Rights Agreement
S-2
EXHIBIT 1: THE AAI MEDICAL DELIVERY PROTOCOLS DOCUMENT
1. Physician accreditation process - the process used to approve (i)
plastic surgeons, (ii) cosmetic dermatologists and (iii) cosmetic dentists
for participation in AAI's medical delivery
2. AAI Modalities -- (i) The use of an aesthetics concierge, (ii)
the use of a protocol- driven concierge consultation process, (iii) the
standardization of pre and post procedure physician evaluations, (iv) the
fusion of spa service in the delivery of cosmetic dermatology procedures,
(v) the use of aesthetic diagnostic tools to measure aesthetic improvement
for clients that undergo AAI cosmetic medical treatments (vi) pie and post
surgical support services for clients that undergo plastic surgery
3. ASC's -- the capabilities and credentials of AAI's partnered
ASC's Assigning cases to physicians - the triage process that AAI will use
to connect AAI clients with physicians.
4. Responsible client migration from non-medical to medical services
- the protocols and training that AAT will use to responsibly facilitate
non-medical (salon) clients pursuing cosmetic medical procedures
5. Quality assurance and safety -- the process that AAI will use to
insure client safety and AAI's compliance with all of its medical delivery
protocols
6. Measuring outcomes -- how AAI intends to measure outcomes for (i)
adverse medical events and (ii) aesthetic improvements
7. Medical governance -- how AAI will make its medical decisions
S-3
EXHIBIT 2: EXAMPLES OF ACCEPTABLE USES OF NAME ON COLLATERAL
MEDICAL MATERIALS AND AS REFERENCED DURING AAI'S CONCIERGE
CONSULTATION PROCESS
1. Xxxxx Xxxxxxx Medicine's Plastic Surgery and Dermatology
Departments have reviewed The Advanced Aesthetics Institute's processes
for; (i) selecting its physicians, (ii) designing its facilities, (iii)
fostering client safety, and (iv) measuring aesthetic improvement results.
2. Xxxxx Xxxxxxx Medicine has reviewed The Advanced Aesthetics
Institute's processes for; (i) selecting its physicians, (ii) designing
its facilities, (iii) fostering client safety, and (iv) measuring
aesthetic improvement results.
3. Xxxxx Xxxxxxx Medicine's Plastic Surgery and Dermatology
Departments have reviewed The Advanced Aesthetics institute's key medical
delivery processes for fostering client safety.
4. Xxxxx Xxxxxxx Medicine has reviewed The Advanced Aesthetics
Institute's key medical delivery processes for fostering client safety.
AAI shall provide samples of proposed use of the Xxxx in AAI's pamphlets and
website, and these samples shall be review and approved by ill in accordance
with Section 2 of the Agreement.
S-4
EXHIBIT 3: MINIMUM INSURANCE COVERAGES FOR AAI
o General liability ($1 million/$3 million)
o D&O and Employee Practices Liability ($3 million)
o Umbrella coverage ($4 million)
S-5
EXHIBIT 4: DESCRIPTION OF THE MARYLAND/WASHINGTON DC MARKET
All of Maryland, all of the District of Columbia and the following cities and
counties of Northern Virginia: City of Alexandria, City of Fairfax, City of
Falls Church, City of Manassas Park, City of Winchester, Town of Leesburg, Town
of Vienna, Town of Warrenton, Fairfax County, Londoun County, Arlington County,
Prince Xxxxxxx County, Culpeper County, FauquierCounty, Xxxxxxxx County, and
Shenandoah County.
S-6
EXHIBIT 5: CERTIFICATE OF DESIGNATION
Within thirty (30) days after execution of this Agreement. AAI agrees to execute
a Certificate of Designation of Series E Preferred Stock, with terms
satisfactory to M and substantially in the form attached hereto as EXHIBIT 5-I
failure to execute such certificate within the 30-day time period shall be
deemed a default by AAI under the terms of this Agreement.
S-7
