EXHIBIT 10.7
EXHIBIT F
EMPLOYMENT AGREEMENT
OF
,M.D.
WITH
INTERNAL MEDICINE SPECIALISTS, INC.
THIS AGREEMENT is made and entered into effective as of the ________ day of
November, 1997 (the "Effective Date"), by and between INTERNAL MEDICINE
SPECIALISTS, INC., a Florida corporation (hereinafter referred to as "the
Corporation") and , M.D. (hereinafter referred to as "Physician").
WHEREAS, the Corporation is engaged in the practice of medicine solely
through its physician employees;
WHEREAS, the Corporation is a wholly-owned subsidiary of PHC Holding
Corporation, a Georgia corporation ("PHC-SUB");
WHEREAS, PHC-SUB is a wholly-owned subsidiary of Physician Health
Corporation, a Delaware corporation ("PHC"); and
WHEREAS, Physician is duly licensed as a Doctor of Medicine in the State of
Florida; and
WHEREAS, the Corporation desires to employ Physician and Physician desires
to accept or continue such employment during the term of this Agreement upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and the benefits
accruing to the parties hereto, the parties agree as follows:
1. Employment. The Corporation hereby agrees to employ or to continue to
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employ Physician, and Physician hereby agrees to accept such employment, to
render services on behalf of the Corporation as a Doctor of Medicine.
2. Devotion to Employment. During the term of this Agreement, Physician
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shall devote his or her full time on behalf of the Corporation, and he or she
shall not engage in any other gainful employment; provided, however, that
nothing contained herein shall prohibit Physician from performing certain non-
patient related personal services outside his employment by the Corporation
(e.g., speeches involving honoraria or expert witness services involving expert
witness fees) or from having a financial interest in or a financial arrangement
with the facilities identified on EXHIBIT A hereto.
3. Term. The term of this Agreement shall commence on the Effective Date
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and shall continue for five (5) years (the "Initial Term"), unless terminated
pursuant to the provisions set forth below. This Agreement shall automatically
renew for successive five (5) year terms unless terminated pursuant to the
provisions set forth below.
4. Compensation.
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(a) Stock Options. On the date hereof, the Corporation shall grant
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to Physician options under its 1995 Stock Option Plan to acquire up to 10,000
shares of the voting common stock of PHC. The Stock Option Agreement shall be
in substantially the form attached hereto as EXHIBIT B-1.
(b) Cash Compensation.
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(i) For purposes of this Agreement:
"Direct Physician Revenue" shall mean, for any period, the amounts
collected by the Corporation attributable to professional services
rendered by Physician on behalf of the Corporation during such
period;
"Common Physician Revenue" shall mean, for any period, the amounts
collected by the Corporation attributable to Physician's share
(such relative share to be determined by the Joint Policy
Committee) of any ancillary services performed by the Corporation
during such period; provided such share shall be in compliance with
all state and federal regulations. Common Physician Revenue shall
not include New Physician Employee Net Income as defined in this
Section 4(b)(i) below;
"Total Physician Revenue" shall mean Direct Physician Revenue plus
Common Physician Revenue;
"Direct Operational Expenses" shall mean, for any period, the
Operational Expenses (as defined in EXHIBIT C attached hereto) paid
for such period by the Corporation directly attributable to
Physician;
"Common Operational Expenses" shall mean, for any period,
Physician's allocable share of any common Operational Expenses paid
by the Corporation for such period, as determined by the accountant
regularly engaged by the Corporation
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"Total Operational Expenses" shall mean Direct Operational
Expenses plus Common Operational Expenses, provided that Total
Operational Expenses shall in no event include the Management
Fee;
"Physician Net Income" shall mean, for any period, Total
Physician Revenue less the Total Operational Expenses;
The "Management Fee" shall be, for the first five (5) years of
this Agreement, (x) [PHYSICIAN'S CONTRIBUTION] plus (y) fifteen
percent (15%) of the annual Physician Net Income in excess of
[PHYSICIAN'S CONTRIBUTION] plus Physician's 1996 Compensation for
such year. After such five (5) year period, the Management Fee
shall be fifteen percent (15%) of the Physician Net Income per
year; and
"New Physician Employee Net Income" shall mean, for the first
three (3) years following such New Physician Employee's initial
employment by the Corporation, the sum of the Direct Physician
Revenue plus Common Physician Revenue attributable to such
physician, reduced by the sum of Direct Operational Expenses plus
Common Operational Expenses for such physician; and, following
the third anniversary of such New Physician Employee's initial
employment by the Corporation, the sum of the Direct Physician
Revenue plus Common Physician Revenue attributable to such
physician, reduced by the Common Operational Expenses. For
purposes of this Agreement, a New Physician Employee shall mean
any physician first providing professional medical services on
behalf of the Corporation after the Effective Date of this
Agreement.
(ii) For any period, Physician shall receive as compensation
for his or her services rendered hereunder (the "Cash Compensation") the
Physician Net Income less the Management Fee for such period. Notwithstanding
the foregoing, the Cash Compensation paid to Physician shall be subject to
adjustments as determined by the Original Physician Employees engaged in the
practice of nephrology/gastroenterology.
(iii) For all periods during the term of this Agreement, the
Corporation shall pay to Physician, Physician's share (such relative share to be
determined by the Original Physician Employees) of such percentage of the New
Physician Employee Net Income generated by each such New Physician Employee as
is set forth in Section 3.18 of the Bylaws of the Corporation.
(c) Method of Payment. Physician's Cash Compensation shall be paid to
Physician in two (2) monthly payments (the "Monthly Payments") and four (4)
quarterly bonuses (the "Quarterly
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Bonuses"), provided the division between such Monthly Payments and Quarterly
Bonuses shall be mutually agreed upon by Physician and the Corporation. The
Monthly Payments shall be based on the accounts receivable of the Corporation
attributable to professional services rendered by Physician on behalf of the
Corporation during the respective payment period of this Agreement, taking into
account adjustments to the accounts receivable based upon the historical
collection rate on such receivables by the Corporation, and the expenses as set
forth in Section 4(b), and the division of the Cash Compensation between the
Monthly Payments and the Quarterly Bonuses as agreed upon by Physician and the
Corporation. Adjustments to the payments made to Physician as Cash Compensation
shall be made to reconcile the monthly payments made based on accounts
receivable with amounts actually collected and due under this Section 4 within
forty-five (45) days after the end of each calendar quarter during the term of
this Agreement. At such quarterly intervals, the Corporation shall determine the
actual amounts due Physician pursuant to this Section 4 for each such calendar
quarter, with such amounts to be calculated on an annualized basis. The
Corporation shall notify the Physician of the amount, if any, due from one party
to another as a result of such adjustments within sixty (60) days of the end of
each calendar quarter. If payment is due from one party to the other, such
amount shall be taken as an adjustment to the subsequent Quarterly Bonus,
provided, however, that in the event such payment is due by Physician to the
Corporation on such calculations and the subsequent Quarterly Bonus is not
sufficient to cover the amount of such payment, the Corporation may, at its
discretion, offset such amount due from the Physician against the Monthly
Payments due the Physician for succeeding calendar months. Notwithstanding the
foregoing, in the event the Physician Net Income is less than the Management
Fee, the Physician shall nonetheless remain obligated to pay the Management Fee
when due.
(d) Signing Bonus; Right to Repurchase. In consideration of
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Physician's execution of this Agreement and as compensation for the services to
be rendered by Physician on behalf of the Corporation hereunder, the Corporation
shall deliver ___ shares of the voting common stock of PHC (the "PHC Shares") to
Physician upon execution of this Agreement by Physician. However, if during the
Initial Term of this Agreement the Physician terminates this Agreement for any
reason, other than pursuant to Sections 10(b) and (c) hereof, or if the
Corporation terminates this Agreement for any reason, other than for death or
disability pursuant to Section 10(a)(ii) hereof, the Corporation shall have the
right, exercisable for a period of ninety (90) days following such termination,
to purchase from the Physician for $.0001 per share the number of PHC Shares
calculated as follows:
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Total number of PHC Shares multiplied by A, where A equals:
Years from Effective
Date to termination A Equals
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1 or less 1.000
After 1 .798
After 2 .696
After 3 .594
After 4 .492
Physician agrees to make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended (the "Code") on a form acceptable to
PHC and filed with the Internal Revenue Service, to treat the PHC Shares
received pursuant to this Section 4(d) as if they were substantially vested upon
execution of this Agreement. The Corporation agrees to loan to Physician the
amount necessary for Physician to pay any Federal and State income taxes due by
Physician as a result of the issuance of PHC Shares pursuant to this Section
4(d) (the "Tax Loan"), including the amount pursuant to the Physician's election
under Section 83(b) of the Code with respect to the PHC Shares received pursuant
to this Section 4(d). The Tax Loan will be made within ten (10) days prior to
the date such taxes are due and will be evidenced by a promissory note in the
form agreed to by the Corporation and Physician on the date hereof.
The Tax Loan shall bear interest at the lowest rate which may be
utilized without incurring any "original issue discount" as defined in Section
1273 of the Code and shall require payment of interest and principal beginning
on the date that Physician's PHC Shares are tradeable without restriction on the
public market based on a sixty (60) month amortization. The principal balance
of the Tax Loan and any interest accrued thereon shall be forgiven by PHC if the
Corporation is repurchased by any of the Original Physician Employees (as
defined in Section 10(a)(i) below) pursuant to the Practice Repurchase Agreement
(as defined in Section 19(a) below).
(e) Stock Bonus. Upon the Effective Date, Physician shall be granted
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options to purchase ____ shares of Voting Common stock of PHC (the "Stock Bonus
Options"). Such Stock Bonus Options shall be substantially in the form attached
hereto as EXHIBIT B-2. The exercise price for Stock Bonus Options shall be a
price equal to one hundred twenty-five percent (125%) of the price at which the
shares of common stock of PHC are offered to the public through an initial
public offering. Stock Bonus Options granted Physician shall vest as follows:
one hundred (100) Stock Bonus Options on each of the first seven anniversaries
of the Effective Date, and Three Thousand Nine (3,009) shares on each of the
eighth, ninth and tenth anniversaries of the Effective Date. All Stock Bonus
Options shall expire no less than five (5) years after the date on which each
such Stock Bonus Options vests, provided such exercise period is in compliance
with PHC's then existing Qualified Stock Option Plan.
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(f) Withholding FICA, FUTA. Physician's salary and stock bonus, if
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any, shall be subject to, and reduced by, applicable federal income tax
withholding and FICA tax, and any other taxes imposed by law.
(g) Review of Compensation by Joint Policy Committee. The Joint
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Policy Committee, on behalf of the Physician and pursuant to the terms of the
Bylaws of the Corporation, shall have the right to review the Corporation's
computation or allocation of the Cash Compensation, Monthly Payments, Quarterly
Bonuses, Operational Expenses, Physician Net Income or stock bonus related to
Physician and to resolve any disputes arising out of such review pursuant to the
terms set forth in the Bylaws.
5. Fringe Benefits. During the term of this Agreement, Physician shall be
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entitled to all fringe benefits offered generally to the Corporation's physician
employees as established or modified from time to time by the Corporation,
according to the terms of the Corporation's Bylaws, subject always to the rules
in effect regarding participation in such plans. Physician shall not be entitled
to any other fringe benefits as a result of his or her employment with the
Corporation.
6. Business Expenses. Except as otherwise provided herein, the
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Corporation shall pay, either directly or by reimbursement to Physician, such
reasonable and necessary business expenses incurred by him or her (not including
entertainment expenses, which shall be the sole responsibility of Physician) in
the course of his or her employment by the Corporation as are consistent with
the Corporation's policies in existence from time to time, subject to such
dollar limitations and verification and record keeping requirements as may be
established from time to time by the Corporation. Such expenses shall include,
but shall not be limited to, occupational license fees, membership dues in
professional organizations, educational expenses, and subscriptions to
professional journals. Such expenses shall be taken into account in determining
Physician's annual Physician Net Income under Section 4(b) above.
7. Vacation and Sick Leave. Physician shall be entitled to such paid
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vacation time and paid sick leave as shall be authorized by the Corporation,
according to the terms of the Corporation's Bylaws, from time to time. All
vacations shall be taken by Physician at such time or times as may be approved
by the Joint Policy Committee of the Corporation. There will be no carryover of
unused vacation time or sick leave from one year to another, and there shall be
no additional compensation paid to Physician by the Corporation for such unused
vacation time or sick leave.
8. Time Off. Physician shall be entitled to such time off with pay for
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attendance at seminars, courses, meetings and conventions as is authorized by
the Corporation according to the terms of its Bylaws. The specific seminars,
courses, meetings and conventions to be attended by Physician shall be subject
to the prior approval of the Joint Policy Committee of the Corporation
established pursuant to its Bylaws.
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9. Automobile. Physician, as a condition of his or her employment, shall
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provide an automobile for use in the conduct of his or her duties on behalf of
the Corporation, and the Corporation shall pay to Physician a reasonable
allowance determined by the Corporation to defray the cost of insurance, gas,
oil, repairs, maintenance and other expenses incurred by Physician in connection
with the operation of such automobile. Any expenses in excess of said allowance
shall be the sole responsibility of Physician. Physician shall be required to
maintain written records of the percentage of total miles for which such
automobile is used by Physician for business purposes and for personal purposes,
respectively. Physician's records shall reflect the amount of mileage,
destination and purpose of each trip treated by Physician as for business.
10 Termination of Employment.
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(a) Termination by the Corporation.
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(i) The Corporation shall be entitled to terminate this Agreement
upon (1) the conviction of Physician of a felony or a crime involving moral
turpitude provided, however, that, during the Initial Term of this Agreement,
termination pursuant to this Section 10(a)(i)(1) shall require the approval of
at least seventy-five percent (75%) of the individual physicians who are
signatories to that certain Merger Agreement dated as of October 29, 1997 (the
"Merger Agreement") who are still employees of the Corporation (the "Original
Physician Employees"); (2) the commission of an act of fraud by Physician
against the Corporation; (3) at the request of at least seventy-five percent
(75%) of the Original Physician Employees, upon Physician's failure or refusal
to faithfully and diligently perform his or her duties pursuant to this
Agreement; (4) Physician's gross neglect in the performance of his or her duties
pursuant to this Agreement; (5) the loss, or suspension for a period longer than
six months, of Physician's license to practice medicine in the State of Florida;
(6) the permanent loss of Physician's privileges following all due process at
any hospital or medical facility at which Physician may be primarily required to
perform services; (7) Physician being not insurable for professional liability
insurance for any reason whatsoever; (8) Physician's status as an approved
medical provider under the federal Medicare/Medicaid system being revoked, or
suspended for a period greater than six (6) months, provided, however, that such
six (6) month period shall not apply if the Physician is the subject of a
criminal investigation for Medicare/Medicaid Violations; (9) Physician willfully
committing any act materially harmful to the Corporation or any of its patients
provided, however, that during the Initial Term of this Agreement, termination
pursuant to this Section 10(a)(i)(9) shall require the approval of at least
seventy-five percent (75%) of the Original Physician Employees; or (10)
Physician becoming chemically dependent, as hereinafter defined in Section
10(b)(iii), on alcohol or any drugs (termination upon the occurrence of items 1-
10 of this Section 10(a)(i) is hereinafter referred to as "termination for
cause"). Termination for cause shall occur only upon at least forty-five (45)
days advance written notice of the proposed termination and the specific
reason(s) therefor, and then only if, in the reasonable judgment of the
Corporation, the specific reason(s) for termination have not been corrected
within such period. Should the Corporation terminate this Agreement for any of
the foregoing reasons, Physician will be entitled to receive the compensation
provided for in Section 4 hereof until the effective date of termination.
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(ii) This Agreement shall terminate upon the death, permanent
disability, or full retirement of Physician. The determination of "permanent
disability" shall be made by reference to the permanent disability policy
maintained by the Corporation for the Physician or, in the absence of such a
policy, by an independent physician mutually agreed upon by the Physician (or a
representative of Physician if he is unable to make such decision) and the
Corporation.
(iii) Physician shall be considered to have a "chemical dependency"
or be "chemically dependent" on alcohol or any drugs if the Corporation's Joint
Policy Committee, in its reasonable discretion, determines that Physician is
chemically dependent and requests that Physician submit to an independent
medical or psychological examination, the results of which confirm a chemical
dependency. Physician shall not be terminated for chemical dependency if this is
a first occurrence of chemical dependency by Physician and Physician enters an
approved treatment program and successfully continues such program through its
completion. If Physician refuses to submit to an independent examination to
determine if there is a chemical dependency, or does not successfully complete
the treatment program, or if there is a chemical dependency and such individual
refuses to enter a treatment program, or if this is the second or subsequent
occurrence of a chemical dependency, then the Corporation shall be entitled to
terminate this Agreement pursuant to this Section 10(a).
(iv) In addition to the foregoing, the Corporation may terminate
this Agreement, and have no further liability or obligation hereunder, if
Physician materially breaches any term or condition of this Agreement or any
other agreement between the Corporation or any of its affiliates and Physician,
and such cessation or breach continues uncured for a period of ninety (90) days
(the "Physician Cure Period") after Physician's receipt of written notice
specifying such breach (the "Physician Material Breach"); provided, however,
that if at the end of the Physician Cure Period the Corporation does not believe
that the Physician Material Breach has been cured, the Corporation shall, prior
to having the right to terminate under this Section 10(a)(iv), submit the
following issues directly to arbitration in accordance with the provisions of
Section 22(b) hereof: (i) whether Physician has materially breached this
Agreement and (ii) the amount of income the Corporation has foregone as the
result of such breach, without giving effect to consequential or punitive
damages (the "Corporation Lost Income Amount"). Should (X) such arbitration
determine finally that Physician has materially breached any term or condition
of this Agreement and (Y) Physician (i) fails to pay the Corporation the
Corporation Lost Income Amount within ninety (90) days after receipt of written
notice specifying such amount or (ii) continues the Physician Material Breach
after thirty (30) days following receipt of such notice, the Corporation may
terminate this Agreement by delivery of written notice to the Physician.
(b) Termination By Physician Upon Financial Breach or Bankruptcy. The
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Physician may terminate this Agreement, and have no further liability or
obligation hereunder, except as provided herein, upon the occurrence of the
following events:
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(i) If the Corporation materially breaches its obligation to make
any payment to the Physician required pursuant to this Agreement (a "Financial
Breach"), and such Financial Breach remains uncured for a period of seventy-five
(75) days after receipt by the Corporation and Banque Paribas of written notice
specifying such Financial Breach and Physician's intent to terminate this
Agreement hereunder.
(ii) In the event of the occurrence of one or more of the following
events described below (each an "Event of Bankruptcy"):
(a) PHC or the Corporation files a voluntary petition or an
involuntary petition is filed against either of them under any provision of any
bankruptcy act (whether bankruptcy, reorganization, arrangement, composition,
extension or otherwise);
(b) PHC or the Corporation seeks, consents to, applies for
or acquiesces to the appointment of a receiver;
(c) PHC or the Corporation makes an assignment for the
benefit of creditors;
(d) PHC or the Corporation submits an offer by composition or
extension to creditors or a committee of creditors or a liquidating agent is
appointed with respect to PHC or the Corporation.
(c) Termination By Physician Upon Non-Financial Breach. In the event
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the Physician determines that there has been a material breach by the
Corporation of the terms of this Agreement, other than a Financial Breach, or
during the term of this Agreement, a breach of any of the provisions of the
Corporation's Bylaws regarding the decision-making authority granted to the
Joint Policy Committee which provisions are hereby incorporated herein by
reference and made a part hereof, or a breach of any other agreements between
the Corporation or any of its affiliates and Physician (any such breach being
referred to herein as a "Nonfinancial Breach"), and such Nonfinancial Breach
remains uncured for a period of ninety (90) days after the Corporation's receipt
of written notice specifying such breach (the "Corporation Cure Period"), the
Physician shall, prior to having the right to terminate, submit the following
issues directly to arbitration in accordance with Section 22(b) hereof: (i)
whether the Corporation has materially breached this Agreement and (ii) if the
Corporation has materially breached this Agreement, the amount of income
Physician has foregone as a result of the Nonfinancial Breach, without giving
effect to consequential or punitive damages (the "Physician Lost Income
Amount"). Should (X) such arbitration determine finally that the Corporation
has materially breached this Agreement and (Y) the Corporation or Banque Paribas
(i) fails to pay to Physician the Physician Lost Income Amount within ninety
(90) days after the receipt by each of the Corporation and Banque Paribas of
written notice specifying the Physician Lost Income Amount or (ii) continue the
Nonfinancial Breach after thirty (30) days following receipt of such notice,
Physician may terminate this Agreement by delivery of written notice to
Corporation and Banque Paribas.
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(d) Voluntary Termination. Physician may terminate this Agreement
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at any time, by delivering to the Corporation written notice of such intention
not less than one (1) year prior to the effective date of termination (the
effective date of termination specified in such notice shall be referred to
herein as the ("Notice Date")). Notwithstanding the foregoing, if notice of
termination is given by Physician to the Corporation, then the Corporation shall
have the option of advancing the effective date of such termination to a date
not less than ninety (90) days from receipt of such notice from Physician (the
"Accelerated Date"). In the event that Physician gives written notice of
voluntary termination as provided in this Section 10(d) and the Corporation
elects to accelerate the date of termination, the effective date of termination
for the purpose of calculating the number of PHC Shares subject to repurchase by
the Corporation pursuant to Section 4(d) and for the purpose of calculating the
Liquidated Damages pursuant to Section 10(f) shall be the Notice Date given in
the Physician's notice.
(e) Right of Offset. In the event that Physician's employment with
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the Corporation is terminated for any reason, the Corporation shall have the
right to offset any indebtedness, whether or not evidenced by a promissory note
and whether or not mature or due and payable, owed by Physician to the
Corporation against any compensation due to Physician, whether salary, bonus or
deferred compensation, under this Agreement. Additionally, in the event that
Physician's employment with the Corporation is terminated for any reason, the
Corporation shall have the right to offset the following amounts against any
compensation due to Physician, whether salary, bonus or deferred compensation,
under this Agreement:
(i) Expenses paid or incurred by the Corporation, or to be
paid or incurred by the Corporation, directly attributable to Physician; and
(ii) Expenses paid or incurred by the Corporation, or to be
paid or incurred by the Corporation, on behalf of Physician to the extent
Physician will benefit from such expenses following the date of termination of
Physician's employment with the Corporation, including, without limitations,
amounts paid or incurred or to be paid or incurred by the Corporation for yellow
page advertising that will benefit Physician after the date of termination of
his or her employment with the Corporation.
(f) Early Termination. In the event this Agreement is terminated
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during the Initial Term pursuant to the provisions of Sections 10(a), 10(b)(i),
or 10(c) or in the event the Physician voluntarily terminates this Agreement
during the Initial Term pursuant to the provisions of Section 10(d) hereof,
Physician shall, within ninety (90) days after such termination, pay to the
Corporation, as "Liquidated Damages", and not as a penalty, the amount
determined in accordance with the formula set forth on EXHIBIT D-1 attached
hereto provided, however, that if the Physician is permanently retiring from the
practice of medicine, the Physician shall pay Liquidated Damages in accordance
with the formula set forth on EXHIBIT D-2 attached hereto. In the event this
Agreement is terminated pursuant to Section 10(d) hereof, the Liquidated Damages
shall be paid by the Physician pursuant to this Section 10(f) within ninety (90)
days after the earlier of the Accelerated Date or the
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Notice Date. Physician acknowledges and agrees that the Liquidated Damages
payment does not constitute a penalty and is a fair and reasonable payment to
the Corporation in light of the substantial expenditure of capital and other
resources the Corporation will make under this Agreement to maintain, develop
and expand the medical practice of the Physician and the Corporation. Physician
further acknowledges and agrees that the actual losses to be suffered by the
Corporation in the event of termination of Physician's employment in the Initial
Term will be difficult to ascertain, and that the Liquidated Damages have been
arrived at after a good faith effort to estimate such losses and are reasonable.
The Liquidated Damages payment shall not be required if this Agreement
terminates due to the death or permanent disability of Physician or if this
Agreement terminates as the result of an Event of Bankruptcy pursuant to Section
10(b)(ii) hereof. Additionally, the Liquidated Damages payment shall not be
required if the Original Physician Employees exercise the Repurchase Option (as
defined herein) pursuant to the Practice Repurchase Agreement. Provided
Physician pays the Liquidated Damages Amount in accordance with the provisions
of this Section 10 or exercises the Repurchase Option pursuant to the terms of
the Practice Repurchase Agreement, this Agreement, including without limitation
the restrictive covenants contained in Section 18 (other than Section 18(d)),
shall terminate and be of no further force and effect, except for the provisions
of Section 10(e), Section 15, Section 17 and Section 18(d) hereof
(g) Credentialing Criteria. The Corporation's Joint Policy
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Committee shall, from time to time, establish uniform credentialing criteria
applicable to all physician-employees in order to properly evaluate the
performance of such physician-employee, including Physician. This uniform
credentialing criteria shall include, without limitation, such factors as the
licensing of a physician, the good standing of a physician with payors, and the
continuing medical education taken by a physician. Additionally, the
Corporation's Joint Policy Committee shall establish uniform criteria in the
following areas for the purpose of evaluating the performance of all physician-
employees, including Physician, and in order to compile the data necessary to
compete for, and comply with, managed care contracts: (i) utilization review;
(ii) practice parameters, and (iii) outcome analysis.
11 Fees. The Corporation's Joint Policy Committee shall have the
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authority to review the fees (or a procedure for establishing the fees) to be
charged patients of the Corporation who are treated by Physician in the course
of his or her employment. All sums paid in the way of fees or otherwise for
medical services rendered by Physician shall belong to the Corporation and shall
be included in the Corporation's income. All income received by Physician for
lectures, articles, medical papers, witness fees and other non-patient related
personal services sources shall be retained by the Physician. Exceptions to
these rules may be authorized by a unanimous vote of the Joint Policy Committee
of the Corporation from time to time upon a showing of good cause by Physician.
12 Patients. The Corporation, through its Joint Policy Committee and
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pursuant to its Bylaws, shall have the exclusive authority to determine who will
be accepted as its patients and to designate (or to establish a procedure for
designating) which Physician will treat each patient. It is specifically
understood that all patients treated by Physician are patients of the
Corporation.
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13. Professional Policies and Procedures. Subject to its Bylaws, the
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Corporation shall have the exclusive authority to establish from time to time
the professional policies and procedures to be followed by Physician in treating
his or her patients.
14. Medical Records. All medical records of patients treated by Physician
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within the scope of his or her employment, including, but not limited to,
charts, case histories, x-rays, lab reports and billing and payment information,
shall be the exclusive property of the Corporation. In the event of termination
of Physician's employment with the Corporation, the Corporation shall advise all
active patients under Physician's care of such termination by letter signed by
the Corporation and Physician, which letter shall be sent, if possible, prior to
the date of Physician's departure. The cost of mailing such letters shall be
shared equally by the parties. Physician shall then be entitled to the original
medical records of any patient who files a written request with the Corporation
that his or her records be transferred to Physician, provided that Physician
agrees to make copies of such records available to the Corporation at its
request. The duplication of patient records shall be effected during non-office
hours and the cost of such duplication shall be borne equally by the parties.
15. Reimbursement of Disallowed Amounts. Any sums paid by the Corporation
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to or on behalf of Physician, including, but not limited to, travel expenses,
continuing education costs, car allowance, medical reimbursement and other
fringe benefits, which are subsequently disallowed in whole or in part as a
deductible expense for federal income tax purposes shall be reimbursed by
Physician to the Corporation, to the full extent of the tax paid by the
Corporation as a result of the disallowance, within ninety (90) days after the
final determination thereof. Additionally, any amounts which must be refunded to
payors, fines or penalties attributable to services performed by Physician,
shall be reimbursed by Physician to the Corporation, to the full extent of the
amount paid by the Corporation as a result of such repayment, fine or penalty.
This Section 15 shall survive the termination of this Agreement and the
termination of Physician's employment with the Corporation.
16. Managed Care Contracts. The Corporation and Physician agree that the
----------------------
Corporation shall have the exclusive right to bid on any managed care contracts
with third party payors. Any managed care contracts of the Corporation shall be
the exclusive property of the Corporation. In the event the Corporation does
not enter into a managed care contract with a particular third party payor,
Physician may, if approved by the unanimous vote of the Joint Policy Committee
of the Corporation in its reasonable judgment, individually bid to provide
services through the Corporation with respect to such managed care contract.
17. Professional Liability Insurance. The Corporation shall provide
--------------------------------
professional malpractice liability insurance coverage for Physician in such
amounts as the Corporation deems necessary and appropriate, subject to
Physician's insurability. Upon termination of this Agreement, the Physician
shall be obligated to pay the cost of professional liability reporting
endorsement "tail coverage" insurance for Physician. In such event, if
Physician does not obtain such reporting endorsement coverage by or promptly
following the effective date of termination of employment, then the Corporation
may, at its option, obtain such coverage and may offset the cost of such
coverage
12
against any amounts then due and owing to Physician. Notwithstanding the
foregoing, Physician may satisfy the obligation to obtain reporting endorsement
coverage by obtaining and maintaining in full force and effect, for a period of
not less than five (5) years from the effective date of termination of
employment, professional liability insurance with benefit levels of at least One
Million Dollars ($1,000,000.00) per occurrence and Three Million Dollars
($3,000,000.00) annual aggregate, which specifically includes coverage with
respect to claims arising out of professional services rendered by Physician
during the period Physician provided services to the Corporation.
18. Specific Covenants and Agreements.
---------------------------------
(a) Covenant Not to Compete. Physician covenants and agrees that
-----------------------
during his or her employment hereunder and for a period of two (2) years
commencing on the date of cessation of Physician's employment with the
Corporation, Physician shall not, on his or her own behalf or on behalf of any
person, firm, partnership, association, corporation, or business organization,
entity, or enterprise, either directly or indirectly, conduct a practice of
medicine consisting of or including the practice of gastroenterology/nephrology
medicine within a five (5) mile radius (the "Non-Compete Radius") of the medical
offices of the Corporation at which Physician performs a substantial portion of
the services Physician provides on the Corporation's behalf (the "Medical
Offices") identified on EXHIBIT E attached hereto and incorporated herein by
this reference. Physician acknowledges and agrees that this covenant is intended
to protect the investment that the Corporation has made and will make in the
practice of Physician, and that the restrictions contained herein are reasonable
in duration and geographic scope.
(b) Covenant Not to Solicit Employees. Physician covenants and agrees
---------------------------------
that during his or her employment hereunder and for a period of two (2) years
immediately following the date of cessation of Physician's employment with the
Corporation, Physician shall not, on his or her own behalf or on behalf of any
person, firm, partnership, association, corporation, or business organization,
entity or enterprise, either directly or indirectly, solicit, recruit, entice,
persuade, or induce, or attempt to solicit, recruit, entice, persuade, or
induce, any employee, consultant, or independent contractor employed or
otherwise engaged by the Corporation at the time of cessation of Physician's
employment or within the one (1) year period immediately preceding such date of
cessation, to sever his or her relationship with the Corporation or to be
employed or otherwise engaged in any capacity by any person, firm, partnership,
association, corporation, or business organization, entity, or other enterprise
conducting a business of practicing medicine.
(c) Covenant Not To Solicit Patients. Physician covenants and agrees
--------------------------------
that during his or her employment hereunder and for a period of two (2) years
immediately following the date of cessation of Physician's employment with the
Corporation, Physician shall not, on his or her own behalf or on behalf of any
person, firm, partnership, association, corporation, or business organization,
entity or enterprise, either directly or indirectly, solicit or attempt to
solicit, for the purpose of providing gastroenterology/nephrology medical
services to, any patient of the Corporation who has consulted with, been treated
by or cared for by, or had material contact with Physician,
13
acting on behalf of the Corporation, at any time within the one (1) year period
immediately preceding such date of cessation of Physician's employment.
(d) Covenant Not to Disclose Trade Secrets and Other Confidential
-------------------------------------------------------------
Information. Physician covenants and agrees that from the date hereof and for
-----------
all time he or she shall treat as confidential and shall not use, disclose,
reveal or divulge (except in connection with Physician's performance of his or
her duties to the Corporation, pursuant to this Agreement and as provided in
Section 14 with respect to medical records of patients transferred in accordance
with the terms of Section 14), any and all trade secret information concerning
the Corporation or its business obtained by Physician in any manner during his
or her employment with the Corporation. For purposes hereof, "trade secret
information" shall mean all information including, but not limited to, (i) lists
of actual or potential patients, lists of actual or potential suppliers, lists
of referral sources, lists of third party payors, including without limitation,
managed care entities, insurance companies, and self-insured employers, with
whom the Corporation contracted or from whom the Corporation received an
assignment of benefits or other reimbursement at any time during the term of
this Agreement ("Third Party Payors") and lists of medical service fees, (ii)
any new product developments, special or unique processes or methods, or (iii)
any marketing, sales, advertising or other concepts or plans of the Corporation
or of PHC, technical or nontechnical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, and product plans, which information is known only to the
Corporation and those of its employees in whom the trade secret must be confided
in order to apply the trade secret to its intended use and from which the
Corporation derives actual or potential economic value from the nondisclosure of
such information to persons who can obtain economic value from its disclosure or
use. Physician further covenants and agrees that during his or her employment
hereunder and for a period of five (5) years immediately following the date of
cessation of Physician's employment with the Corporation, Physician shall treat
as confidential and shall not use, disclose, or divulge (except in connection
with Physician's performance of his or her duties to the Corporation), any
confidential business information regarding the Corporation that does not fall
within the definition of "trade secret information" as defined in this Section.
Such confidential business information shall include, without limitation, the
material terms of the Merger Agreement or the agreements contemplated therein,
or any other written agreement between the parties hereto, information disclosed
to, acquired, or learned by Physician as a consequence of his or her employment
by the Corporation and not generally known to or by the Corporation's
competitors or the general public about the business of the Corporation or the
Corporation's financial affairs, all of which is hereby agreed to be the
property of and confidential to the Corporation.
(e) Medical Offices. Physician acknowledges that the Medical Offices at
---------------
which he or she may perform a substantial portion of the services Physician
provides on the Corporation's behalf may change from time to time pursuant to
agreement with the Corporation. Accordingly, Physician agrees that, in the
event of such a change, and as a condition thereto and in consideration thereof,
Physician shall execute and deliver to the Corporation, as may be reasonably
requested by the Corporation, from time to time and upon termination of
employment, an amendment to this Agreement in form satisfactory to the
Corporation for the purpose of amending EXHIBIT E hereto to
14
more properly reflect the Medical Offices at which Physician is then providing a
substantial portion of his services on behalf of the Corporation.
(f) Remedies and Acknowledgments. The Parties hereto agree that: (i)
----------------------------
the covenants and agreements of Physician contained in this Agreement are
reasonably necessary to protect the interests of the Corporation, in whose favor
said covenants and agreements are imposed in light of the nature of the
Corporation's medical practice and the professional involvement of Physician in
such businesses, (ii) the restrictions imposed by this Agreement are not greater
than are necessary for the protection of the Corporation in light of the
substantial harm that the Corporation will suffer should Physician breach any of
the provisions of said covenants or agreements, (iii) the covenants and
agreements of Physician contained in this Agreement are material inducements for
the Corporation to hire or continue the employment of Physician, (iv) by having
access to information concerning the employees, patients and Third Party Payors
of the Corporation, Physician will gain a competitive advantage as to such
parties and (v) the nature, kind and character of the activities Physician is
prohibited from engaging in are reasonable and necessary to protect the
Corporation in that the Corporation will introduce Physician to its employees,
patients and Third Party Payors and other important aspects of its medical
practice. Physician acknowledges and agrees that the covenants set forth in
this Section 18 are intended to protect the investment the Corporation will make
in the practice of Physician, that the restrictions contained herein are
reasonable in duration and geographic scope. Physician further acknowledges and
agrees that any breach of any of the foregoing covenants will result in
irrevocable injury to the Corporation and that the Corporation's remedies at law
for such a breach would be inadequate and that damages would be extremely
difficult to calculate or determine. Accordingly, Physician agrees that, upon a
breach or threatened breach of any of the foregoing covenants, the Corporation
shall, in addition to all other remedies available at law and equity, be
entitled to both preliminary and permanent injunctions to halt or prevent any
such breach or threatened breach. In addition, in the event a court of
competent jurisdiction determines that Physician has breached any of the
foregoing covenants, Physician shall pay all costs of enforcement of the
foregoing covenants, including, but not limited to, court costs and reasonable
attorneys' fees.
(g) Survival. Except as otherwise expressly provided herein, the
--------
provisions of this Section 18 shall survive the termination of Physician's
employment with the Corporation and the termination of this Agreement.
19. Termination of Certain Restrictive Covenants.
---------------------------------------------
(a) In the event (i) PHC fails to access the public market with its
stock (the "IPO") within the sixty-six (66) month period following the Effective
Date, as more particularly set forth in the Practice Repurchase Agreement dated
as of the Effective Date by and among PHC and the Original Physician Employees
(the "Practice Repurchase Agreement"), which is incorporated herein by reference
and made a part hereof, (ii) a Change of Control (as defined in the Practice
Repurchase Agreement) occurs prior to the IPO, or (iii) each of the Employment
Agreements between the Corporation and the Original Physician Employees is
terminated during the Initial Term pursuant to the terms of Sections 10(b) or
10(c) of the respective Employment Agreements, the
15
Original Physician Employees shall have the option (the "Repurchase Option") in
lieu of paying the Liquidated Damages Amount, if required, to repurchase the
common stock or certain assets of Internal Medicine Specialists, Inc., pursuant
to the Practice Repurchase Agreement. If the Original Physician Employees
exercise the Repurchase Option in accordance with the terms of the Practice
Repurchase Agreement, this Agreement, including, without limitation, the
restrictive covenants of Section 18 hereof (other than the provisions of Section
18(d)), but excluding the provisions of Section 10(f), Section 15 and Section
17, shall terminate upon the closing of the Repurchase Option.
(b) Upon (X) the expiration of this Agreement at the end of the
Initial Term or any term thereafter and (Y) the Physician's return to the
Corporation of an amount (the "Non-Compete Buyout Amount") of PHC Shares and
cash equal to forty percent (40%) of (i) the total consideration received by
the Physician pursuant to the Merger Agreement and (ii) the Stock Bonus, if any
received by the Physician on the Effective Date, the restrictive covenants of
Section 18 hereof (other than the provisions of Section 18(d)) shall terminate.
In the event the Physician has liquidated the shares required to be included in
the Non-Compete Buyout Amount, the Physician shall pay cash in an amount equal
to the fair market value of the same number of shares on the earlier of the date
of such shares' liquidation or the date of termination of this Agreement. If
the Physician does not remit the Non-Compete Buyout Amount to the Corporation,
the provisions of Section 18 hereof shall continue in full force and effect for
the time period specified therein.
20. Certain Amendments to Bylaws. During the term of this Agreement, the
----------------------------
Corporation agrees not to amend any of the provisions of Section 3.18 of the
Bylaws of the Corporation or any other provision of the Bylaws concerning the
authority of the Joint Policy Committee established pursuant to Section 3.18 of
the Bylaws to govern the operation of the Corporation without the receipt of the
prior written consent of at least seventy-five percent (75%) of the Original
Physician Employees, unless such amendment is required by applicable law.
21. Severability. The covenants set forth in Sections 18(a) through 18(d)
------------
of this Agreement shall be construed to be separate and distinct from each other
and every other provision of this Agreement. In the event that any court of
competent jurisdiction shall declare any covenant to be invalid, prohibited, or
unenforceable, the remaining covenants and obligations of this Agreement shall
remain independent, divisible, and enforceable. Any such unenforceable or
prohibited provision or provisions may be modified in a court of law to the
fullest extent allowed by the law of such jurisdiction so as to allow such a
provision or provisions to be written in such a manner and to such an extent as
to be enforceable in such jurisdiction under the circumstances. Without
limitation of the foregoing, with respect to Sections 18(a) through 18(d) of
this Agreement, if it is determined that any restriction contained in such
provisions is excessive as to duration or scope, it is intended that such
restriction be enforced for such shorter duration or with such narrow scope as
will render it enforceable.
22. Arbitration and Mediation.
-------------------------
16
(a) Mediation.
---------
(i) Agreement to Use Procedure. Except for any action
--------------------------
brought by the Corporation to enforce the restrictive covenants contained
in Section 18 above, the parties agree to utilize the following procedure
with regard to any contention or claim arising out of or relating to this
Agreement (a "Dispute").
(ii) Initiation of Procedure. The initiating party shall
-----------------------
give written notice to the other party, describing the nature of the
Dispute, its claim for relief and identifying one or more individuals with
authority to resolve the Dispute on such party's behalf. The other party
shall have five (5) business days from receipt of such notice within which
to designate in writing one or more individuals with authority to resolve
the Dispute on such party's behalf.
(iii) Selection of Mediator. Within ten (10) business
---------------------
days from the date of designation by the noninitiating party, the parties
shall make a good faith effort to select a person to mediate the Dispute.
If no mediator has been selected under this procedure, the parties shall
jointly request a State or Federal District Judge of their choosing (or if
they cannot agree, the President of the Orange County, Florida Bar
Association) to supply within ten (10) business days a list of potential
qualified attorney-mediators in Orlando, Florida. Within five (5) business
days of receipt of the list, the parties shall rank the proposed mediators
in numerical order of preference, simultaneously exchange such list, and
select as the mediator the individual receiving the highest combined
ranking. If such mediator is not available to serve, they shall proceed to
contact the mediator who was next highest in ranking until they select a
mediator.
(iv) Time and Place for Mediation; Parties Represented. In
-------------------------------------------------
consultation with the mediator selected, the parties shall promptly
designate a mutually convenient time in Orlando, Florida for the mediation,
such time to be no later than sixty (60) days after selection of the
mediator. In the mediation, each party shall be represented by persons
with authority and discretion to negotiate a resolution of the Dispute, and
may be represented by counsel.
(v) Conduct of Mediation. The mediator shall determine the
---------------------
format for the meetings and the mediation sessions shall be private. The
mediator will keep confidential all information learned in private
17
caucus with any party unless specifically authorized by such party to make
disclosure of the information to the other party. The parties agree that
the mediation shall be governed by the provisions of the Florida Code of
Civil Procedure and such other rules as the mediator shall reasonably
prescribe.
(vi) Fees of Mediator; Disqualification. The reasonable fees
----------------------------------
and expenses of the mediator shall be shared equally by the parties. The
mediator shall be disqualified as a witness, consultant, expert or counsel
for any party with respect to the Dispute and any related matters.
(vii) Confidentiality. Mediation is a compromise negotiation
---------------
for purposes of Federal and State Rules of Evidence and constitutes
privileged communication under Florida law. The entire mediation process is
confidential, and such conduct, statements, promises, offers, views and
opinions shall not be discoverable or admissible in any level proceeding
for any purpose.
(b) Binding Arbitration. If any Dispute cannot be settled through
-------------------
direct discussions, the parties agree to first endeavor to settle the Dispute by
mediation as set forth in Section 22(a) above, before resorting to arbitration.
Thereafter, any Dispute shall be settled solely by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s) may be entered and
enforced in any court having jurisdiction thereof. The parties agree to execute
a complete written Arbitration Agreement (requiring binding arbitration and
setting forth in detail procedures for arbitration) within ten (10) days of the
close of any unsuccessful mediation proceeding or, in the case of a Dispute
brought immediately to arbitration pursuant to the provisions of Section
10(a)(iv) or Section 10(c), within ten (10) days following the expiration of the
Physician Cure Period or the Corporation Cure Period. The parties agree that,
except for any action brought by the Corporation to enforce the restrictive
covenants contained in Section 18 above, the arbitrator(s) shall be instructed
that the arbitration award related to any breach of this Agreement shall be
monetary and limited to the lost income suffered by the non-breaching party or
parties as the result of the breach, without giving effect to consequential or
punitive damages. If the parties cannot agree on a binding Arbitration
Agreement, such agreement shall, within twenty (20) days of the close of the
unsuccessful mediation proceedings, be prepared and submitted to each party by
the mediator and such agreement in the form submitted by the mediator shall be
binding on both parties as to all arbitration procedures.
(c) Breach of Mediation and/or Arbitration Provisions.
-------------------------------------------------
18
(i) Enforcement. In the event any party shall breach the terms
-----------
of Section 22(a) or (b) above regarding mediation and arbitration, the
parties agree the following shall occur:
(1) The non-breaching party may, no earlier than five (5) days
after written notice to the breaching party, apply to a court of
competent jurisdiction for specific enforcement of the mediation
and arbitration procedures set forth herein;
(2) The breaching party shall pay all costs and expenses of
such breach to the non-breaching party, including attorney's
fees, travel expenses and mediator fees;
(3) Upon a judicial determination of a material breach, the
breaching party hereby waives and relinquishes all claims of
treble, punitive damages or similar damages or claims of
irreparable harm concerning the Dispute in question, and further
waives all objections to the non-breaching party's claim of
treble, punitive or similar damages or claims of irreparable
harm concerning said Dispute; and
(4) The breaching party shall pay all other actual and special
damages to the non-breaching parties that result from such
breach.
(ii) Other Damages. In addition to the agreed consequences of
-------------
breach set out above, the parties hereby agree any court obtaining
jurisdiction over the involved Dispute shall, upon the court's
discretion, have the authority to impose the consequences set out in
the Rules of Civil Procedure of that court, for the failure of a party
to cooperate in discovery and pretrial matters, including, but not
limited to, the striking of a party's pleadings, award of attorney's
fees and costs, and such other remedies as the court may deem
appropriate. The remedies set forth in this subparagraph are in
addition to the court's contempt and other judicial powers.
23. Attorney's Fees and Costs. Except as provided in Section 18 above,in
-------------------------
the event a Dispute arises between the parties hereto and suit is instituted,
the prevailing party in such litigation shall be entitled to recover reasonable
attorney's fees and other costs and expenses from the non-prevailing party,
whether incurred at the trial level or in any appellate proceeding.
24. Governing Law; Venue. This Agreement shall be governed by and
---------------------
construed in accordance with the laws of the State of Florida, and venue for any
legal proceeding or action at law
19
arising out of or construing this Agreement shall lie in the state courts of
Orange County, Florida, or the United States District Court for the Middle
District of Florida, Orlando Division.
25. Completeness of Agreement. All understandings and agreements
-------------------------
heretofore made between the parties hereto with respect to the subject matter of
this Agreement are merged into this document which alone fully and completely
expresses their agreement. No change or modification may be made to this
Agreement except by instrument in writing duly executed by the parties hereto
with the same formalities as this document.
26. Notices. Any and all notices or other communications provided for
-------
herein shall be given in writing and shall be hand delivered or sent by United
States mail, postage prepaid, registered or certified, return receipt requested,
addressed as follows:
If to the Corporation:
Internal Medicine Specialists, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxx
with a copy to:
Physician Health Corporation
000 Xxxxxxx Xxxx - Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, M.D., Esq.
If to Physician:
, M.D.
_____________________________
_____________________________
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxx, P.A.
Suntrust Center, Suite 3000
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Any party may, however, from time to time, give notice in the manner specified
in this Section 26 to the other party of some other address to which notices or
other communications to such party shall be sent, in which event, notices or
other communications to such party shall be sent to such address.
20
Any notice or other communication shall be deemed to have been given and
received hereunder as of the date the same is actually hand delivered or, if
mailed, when deposited in the United States mail, postage prepaid, registered or
certified, return receipt requested.
27. Assignment. Neither party to this Agreement may assign its rights or
----------
obligations hereunder without the prior written consent of the other party.
28. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the respective parties hereto, their heirs, legal representatives,
successors and permitted assigns.
29. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, and all of which shall constitute but
one and the same instrument.
30. Captions. The captions appearing in this Agreement are inserted only
--------
as a matter of convenience and in no way define, limit, construe or describe the
scope or intent of any provisions of this Agreement or in any way affect this
Agreement.
31. Equal Preparation. This Agreement shall be construed without regard
-----------------
to the party or parties responsible for its preparation and shall be deemed as
having been prepared jointly by the parties. Any ambiguity or uncertainty
existing in this Agreement shall not be interpreted or construed against any
party hereto. The parties hereto agree that no representations except those
contained herein have been made by any party to induce the execution of this
Agreement by any other party.
32. PHC Guaranty. PHC shall unconditionally guaranty the performance of
-------------
all the obligations and covenants of the Corporation hereunder pursuant to the
Guaranty set forth as EXHIBIT F hereto.
33. Life Insurance. The Physician agrees that the Corporation may obtain,
--------------
at its sole expense (and not as an Operational Expense) and for its sole
benefit, life and/or disability insurance policies on Physician, provided that
the cost of such insurance shall not reduce Physician Net Income. Physician
shall not have any right, title or interest, in or to the proceeds of any such
insurance policies. Physician shall cooperate, as requested by Corporation from
time to time, in obtaining any such insurance policies, including, but not
limited to, submitting to such physical examinations and providing such
information relating to insurability as the Corporation may request from time to
time.
34. New Practice Assistance. In the event Physician elects voluntarily to
-----------------------
terminate Physician's employment under this Agreement and practice medicine
specializing in gastroenterology/nephrology outside the Non-Compete Radius but
within the greater metropolitan Orlando area of the counties of Orange,
Seminole, Osceola, Volusia, Brevard or Lake, Florida, then, provided Physician
agrees to enter into an employment agreement with an affiliate of the
Corporation on terms substantially similar to the terms of employment set forth
in this Agreement, the Corporation shall cause such affiliate to provide or
establish a medical practice for the employment of Physician and the provision
of gastroenterology/nephrology services. Such provision or establishment of a
medical practice shall include at least the following: assistance in selecting a
medical office location, assistance with continuing Physician's existing managed
care contractual relationships or in establishing new ones, assistance with
securing new physician provider numbers as necessary, and
21
provision of all other medical office functions, employee benefits and practice
marketing as were provided to Physician by the Corporation under this Agreement.
In the event Physician enters into an employment agreement with an affiliate of
the Corporation pursuant to this Section 34 within five (5) years of the
Effective Date of this Agreement and satisfactorily continues such employment
until at least the fifth anniversary of the Effective Date of this Agreement,
then the Liquidated Damages Payment set forth in Section 10(g) of this Agreement
shall not be required of Physician.
35. Exclusivity; Right of First Refusal. The Corporation agrees that
-----------------------------------
during the term of this Agreement, without the written consent of Physician,
neither PHC nor any of its affiliates or any of its successors in interest shall
enter into an employment agreement or a practice management agreement with a
physician to engage in the practice of gastroenterology/nephrology within the
Non-Compete Radius of any office of the Corporation or any hospital at which
Physician performs a substantial portion of Physician's hospital based practice
(the "Exclusive Territory"), other than pursuant to an agreement between such
physician and the Corporation that is approved by the Joint Policy Committee of
the Corporation pursuant to the Corporation's Bylaws. In addition, in the event
that PHC or any of its affiliates or any of its successors in interest desires
to (i) enter into an employment agreement or a practice management agreement
with a physician (the "New Physician") who has not previously practiced medicine
in the counties of Orange, Osceola and Seminole, Florida (the "Tri-County Area")
to engage in the practice of gastroenterology/nephrology outside of the
Exclusive Territory but within the Tri-County Area or (ii) establish a de novo
gastroenterology or nephrology practice outside of the Exclusive Territory but
within the Tri-County Area (the "New Practice") then the Corporation, as
determined by a majority vote of the Joint Policy Committee, shall have a right
of first refusal to enter into an employment agreement with the New Physician or
with any physician to be employed at the New Practice pursuant to the
Corporation's Bylaws; provided, however, that if the Corporation as directed by
the Joint Policy Committee does not enter into an employment agreement with such
physician, PHC or any of its affiliates or any of its successors in interest
shall be free to otherwise employ or enter into a practice management agreement
with such physician outside the Exclusive Territory.
22
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and
year set forth above.
WITNESSES: CORPORATION:
INTERNAL MEDICINE
SPECIALISTS, INC.
--------------------------------- By:
--------------------------------
, President
------------------
---------------------------------
EMPLOYEE:
--------------------------------- ------------------------------------
, M.D.
---------------------------------
23
EXHIBIT A
---------
EXEMPT FACILITIES
-----------------
For gastroenterologists: Central Florida Surgical Centers, Inc. and Oakwater
Surgical Center, Inc.
For nephrologists: the Nephrology Network, Oakwater Nephrology Network, Inc.,
East Orlando Dialysis, Inc., North Orlando Dialysis, Inc., West Orange Dialysis,
Inc. and any other existing or future dialysis facility.
Xx. Xxxxxxx: Orlando Clinical Research Center, Inc.
Dr. Caos: Central Florida Clinical Studies, Inc.
24
EXHIBIT B-1
-----------
STOCK OPTION AGREEMENT
----------------------
ATTACHED
--------
25
PHYSICIAN HEALTH CORPORATION
1995 STOCK OPTION PLAN
QUALIFIED STOCK OPTION AGREEMENT
Optionee: , M.D.
Number of shares Optioned: 10,000
Option Price: $6.25
Date of Grant:__________________
1. Grant of Option. Physician Health Corporation (the "Company") hereby
---------------
grants to , M.D. (the "Optionee"), under its Amended & Restated 1995 Stock
Option Plan (the "Plan"), a qualified stock option to purchase, on the terms and
conditions set forth in this agreement ("Option Agreement"), 10,000 shares
("Shares") of its common stock ("Common Stock") at a price equal to $6.25 per
share.
2. Period of Option. This option will expire thirty (30) days following
----------------
the fifth anniversary of the Date of Grant unless earlier terminated in whole or
in part, provided however, that the option to purchase 1,000 shares vesting
herein on the fifth anniversary of the Date of Grant shall expire on the sixth
anniversary of the Date of Grant.
3. Exercise of Option. The terms, times and conditions of exercise of
------------------
this option are as follows:
(a) The option shall vest as follows: 4,000 shares shall vest
immediately, 2,000 shares shall vest on the first anniversary of the Date of
Grant, and 1,000 shares shall vest in each of the second, third, fourth and
fifth anniversaries of the Date of Grant; provided that on each such
anniversary, Optionee is still employed by Internal Medicine Specialists, Inc.
Except as set forth in Section 2 above, no vested portion of this option shall
expire until the expiration of this option.
(b) The terms contained in the Plan are incorporated into and made a
part of this Option Agreement and this Option Agreement shall be governed by and
construed in accordance with the Plan.
(c) The option shall be exercised by written notice directed to the
Secretary of the Company at the principal executive offices of the Company.
Such written notice shall be accompanied by full payment in cash, Common Stock
which was previously acquired by the Optionee, or any combination thereof for
the number of Shares specified in such written notice. The fair market value of
the surrendered Common Stock as of the date of the exercise shall be determined
in valuing Common Stock used in payment for options.
(d) Subject to the terms of this Option Agreement, this option may be
exercised at any time and without regard to any other option to purchase stock
of the Company held by the Optionee.
26
4. Nontransferability. The option is not transferable except by will or
------------------
by the laws of descent and distribution and is subject to the provisions of
Section 9 hereof. The option may be exercised during the lifetime of the
Optionee only by the Optionee.
5. Death or Permanent Disability of Optionee. In the event of the death,
-----------------------------------------
or permanent disability under Optionee's Employment Agreement with Internal
Medicine Specialists, Inc. of the Optionee, Optionee or, in the case of the
Optionee's death, the personal representative of the Optionee may exercise the
option to the extent of all the Shares not previously exercised on the date of
Optionee's death or permanent disability. Such exercise must occur within
twelve (12) months after the date of death of the Optionee or the date of
determination of permanent disability, but in no event after the Expiration Date
of the option.
6. Limitation of Rights. The Optionee or the personal representative of
--------------------
the Optionee shall have no rights as a stockholder with respect to the Shares
covered by the option until the Optionee or the personal representative of the
Optionee shall become the holder of record of such Shares. Neither the Plan,
the granting of the option nor this Option Agreement shall impose any obligation
on the Company or a subsidiary to continue the engagement of Optionee to serve
as an employee on behalf of the Company.
7. Stock Reserve. The Company shall at all times during the term of this
-------------
Option Agreement reserve and keep available such number of Shares of Common
Stock as will be sufficient to satisfy the requirements of this Option
Agreement.
8. Restrictions on Transfer and Pledge. Except as provided in Section 5
-----------------------------------
hereof, the option and all rights and privileges granted hereunder shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of law or otherwise, and shall not be subject to execution, attachment or
similar process.
9. Restrictions on Issuance of Shares. If at any time the Board of
----------------------------------
Directors of the Company shall determine in its discretion, that listing,
registration or qualification of the shares covered by the option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to the exercise of the option, the option may not be exercised in
whole or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors of the Company.
10. Plan Controls. In the event of any actual or alleged conflict between
-------------
the provisions of the Plan and the provisions of this Option Agreement, the
provisions of the Plan shall be controlling and determinative.
11. Successors. This Option Agreement shall be binding upon any successor
----------
of the Company, in accordance with the terms of this Option Agreement and the
Plan.
27
IN WITNESS WHEREOF, the Company, acting by and through its duly authorized
officers, has caused this Option Agreement to be executed, and the Optionee has
executed this Option Agreement, all as of the day and year first above written.
PHYSICIAN HEALTH CORPORATION
By:
------------------------
Name:
Title:
OPTIONEE
By:
------------------------
Printed Name: , M.D.
28
EXHIBIT B-2
-----------
STOCK OPTION AGREEMENT
----------------------
ATTACHED
--------
29
PHYSICIAN HEALTH CORPORATION
1995 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Optionee: , M.D.
Number of shares Optioned: 9,727
Option Price: $6.25
Date of Grant: November ____, 1997
1. Grant of Option. Physician Health Corporation (the "Company") hereby
---------------
grants to , M.D. (the "Optionee"), under its Amended & Restated 1995 Stock
Option Plan (the "Plan"), qualified stock options to purchase, on the terms and
conditions set forth in this agreement ("Option Agreement"), Nine Thousand Seven
Hundred Twenty Seven shares ("Shares") of its common stock ("Common Stock") at a
price equal to the per share price at which shares of Common Stock are first
offered to the public through an initial public offering (the "IPO"); provided,
however, that if the Company has not consummated the IPO prior to the vesting of
any option hereunder, shares purchasable under such option shall be purchasable
at a price equal to $6.25 per share. The parties acknowledge that the fair
market value of the Shares on the Date of Grant is not more than $6.25 per
share.
2. Period of Option. Options granted hereunder will expire on the fifth
----------------
anniversary of the date such option vests unless earlier terminated in whole or
in part.
3. Exercise of Options. The terms, times and conditions of exercise of
-------------------
the options are as follows:
(a) The options shall vest as follows: One Hundred (100) shares shall
vest on each of the first, second, third, fourth, fifth, sixth and seventh
anniversaries of the Date of Grant and Three Thousand Nine (3,009) shares shall
vest on each of the eighth, ninth and tenth anniversaries of the Date of Grant
provided that on each such anniversary, Optionee is still employed by Internal
Medicine Specialists, Inc.
(b) The terms contained in the Plan are incorporated into and made a
part of this Option Agreement and this Option Agreement shall be governed by and
construed in accordance with the Plan.
(c) Options shall be exercised by written notice directed to the
Secretary of the Company at the principal executive offices of the Company.
Such written notice shall be accompanied by full payment in cash, Common Stock
which was previously acquired by the Optionee, or any combination thereof for
the number of Shares specified in such written notice. The fair market value of
the surrendered Common Stock as of the date of the exercise shall be determined
in valuing Common Stock used in payment for options.
30
(d) Subject to the terms of this Option Agreement, these options may
be exercised at any time and without regard to any other option to purchase
stock of the Company held by the Optionee.
4. Nontransferability. The options are not transferable except by will
------------------
or by the laws of descent and distribution and is subject to the provisions of
Section 9 hereof. The options may be exercised during the lifetime of the
Optionee only by the Optionee.
5. Death or Permanent Disability of Optionee. In the event of the death
-----------------------------------------
or permanent disability under Optionee's Employment Agreement with Internal
Medicine Specialists, Inc. of the Optionee, Optionee or, in the case of the
Optionee's death, the personal representative of the Optionee may exercise the
vested options to the extent of all the Shares not previously exercised on the
date of Optionee's death or permanent disability. Such exercise must occur
within twelve (12) months after the date of death of the Optionee or the date of
determination of permanent disability, but in no event after the Expiration Date
of the option.
6. Limitation of Rights. The Optionee or the personal representative of
--------------------
the Optionee shall have no rights as a stockholder with respect to the Shares
covered by the options until the Optionee or the personal representative of the
Optionee shall become the holder of record of such Shares. Neither the Plan,
the granting of the options nor this Option Agreement shall impose any
obligation on the Company or a subsidiary to continue the engagement of Optionee
to serve as a employee on behalf of the Company.
7. Stock Reserve. The Company shall at all times during the term of this
-------------
Option Agreement reserve and keep available such number of Shares of Common
Stock as will be sufficient to satisfy the requirements of this Option
Agreement.
8. Restrictions on Transfer and Pledge. Except as provided in Section 5
-----------------------------------
hereof, the options and all rights and privileges granted hereunder shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of law or otherwise, and shall not be subject to execution, attachment or
similar process.
9. Restrictions on Issuance of Shares. If at any time the Board of
----------------------------------
Directors of the Company shall determine in its discretion, that listing,
registration or qualification of the shares covered by the options upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to the exercise of the option, the options may not be exercised in
whole or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors of the Company.
10. Plan Controls. In the event of any actual or alleged conflict between
-------------
the provisions of the Plan and the provisions of this Option Agreement, the
provisions of the Plan shall be controlling and determinative.
11. Successors. This Option Agreement shall be binding upon any successor
----------
of the Company, in accordance with the terms of this Option Agreement and the
Plan.
31
IN WITNESS WHEREOF, the Company, acting by and through its duly authorized
officers, has caused this Option Agreement to be executed, and the Optionee has
executed this Option Agreement, all as of the day and year first above written.
PHYSICIAN HEALTH CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
OPTIONEE
By:
---------------------------------------
Printed Name: , M.D
32
EXHIBIT C
---------
OPERATIONAL EXPENSES
--------------------
1. "Operational Expenses" shall mean all the expenses incurred by the
Corporation in the operation of the medical practice of the Corporation and such
other expenses of a kind set forth in the Annual Budget (as approved by the
Joint Policy Committee of the Corporation), including, but not limited to, the
following:
(a) Salaries, benefits and other costs relating to the employment or
engagement of employees or independent contractors to provide services for
the Corporation, including a pro-rata share of expenses relating to
employees who provide services to the Corporation and to other persons or
entities;
(b) professional liability insurance premiums and deductibles;
(c) licensure fees, board certification fees, and hospital staff privilege
dues;
(d) obligations under leases or subleases for the medical offices and
equipment;
(e) personal property and intangible taxes assessed against assets used by
the Corporation and other taxes, fees and charges of the Corporation;
(f) charitable contributions approved in the Annual Budget or by a
unanimous vote of the Joint Policy Committee;
(g) depreciation, amortization and all other expenses related to
furniture, fixtures and equipment;
(h) interest expenses on indebtedness incurred by the Corporation, PHC or
PHC-SUB to finance or refinance any obligations of the Corporation;
(i) medical and office supply expenses, including pharmaceuticals;
(j) utility expenses relating to the Medical Offices of the Corporation,
and all other costs relating thereto, including without limitation, costs
of repairs, maintenance, telephone, normal janitorial services, refuse
disposal;
(k) insurance premiums for general comprehensive liability insurance and
workers' compensation for those employees of the Corporation described in
section (a) above;
(l) expenses related to billing and collecting;
(m) expenses relating to the recruitment of physicians and other personnel
(which shall constitute Direct Operational Expenses as defined in Section
4(b) hereof); and
33
(n) costs of membership in professional associations and continuing
professional education expenses.
Operational Expenses shall not include any expenses incurred by the Corporation
prior to the Effective Date of this Agreement whether paid before or after the
Effective Date.
34
EXHIBIT D-1
-----------
LIQUIDATED DAMAGES
------------------
YEARS FROM
EFFECTIVE DATE OF MERGER
AGREEMENT CASH CONSIDERATION
---------------------------------------------
1 or less $500,000 66,611
---------------------------------------------
After 1 500,000 58,325
---------------------------------------------
After 2 500,000 50,040
---------------------------------------------
After 3 500,000 41,754
---------------------------------------------
After 4 500,000 33,467
---------------------------------------------
1. The Liquidated Damages shall be cash in the amount set forth in the above
table. In the alternative, the Physician may return the number of shares of PHC
Voting Stock set forth in the above table.
35
EXHIBIT D-2
-----------
RETIREMENT LIQUIDATED DAMAGES
-----------------------------
YEARS FROM
EFFECTIVE DATE OF MERGER
AGREEMENT CASH CONSIDERATION
----------------------------------------------
2 or less $500,000 64,986
----------------------------------------------
Less than 3 500,000 48,740
----------------------------------------------
Less than 4 500,000 32,493
----------------------------------------------
Less than 5 500,000 16,247
----------------------------------------------
1. The Retirement Liquidated Damages shall be cash in the amount set forth in
the above table. In the alternative, the Physician may return the percentage of
Merger Consideration set forth in the above table.
36
EXHIBIT E
---------
MEDICAL OFFICES
---------------
For purposes of this Agreement, "Medical Office(s)" shall mean those
offices located at:
West Orange Medical Center Condominium
Xxxxx 0
0000 Xxxxx Xxxx 00
Xxxxx, XX
Oakwater Professional Park
Suite 1
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX
SandLake Physicians Building
Suite 206
9430 Turkey Lake Road
Orlando, FL
---------------------- ------------------------------------
Date Corporation Signature
------------------------------------
Physician Signature
AMENDMENT TO EXHIBIT E
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
---------------------- ------------------------------------
Date Corporation Signature
------------------------------------
Physician Signature
37
EXHIBIT F
---------
GUARANTY
--------
THIS GUARANTY is made as of the ____ day of November, 1997 by Physician
Health Corporation, a Delaware corporation ("Guarantor"), in favor of, M.D., an
individual resident of the state of Florida ("EMPLOYEE").
ARTICLE I - BACKGROUND AND AGREEMENT
------------------------------------
1.01 Background. Internal Medicine Specialists, Inc., a Florida
----------
corporation (the "Practice"), and the Physician have entered into that certain
Employment Agreement dated November ____, 1997 (the "Agreement"). This Guaranty
is executed and delivered pursuant to Section 32 of the Agreement.
1.02 Statement of Agreement. For and in consideration of the sum of
----------------------
$10.00 and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by Guarantor, and for the purpose of seeking to induce
the Employee to enter into the Agreement, Guarantor does hereby make the
following guarantees to and agreements with Employee.
ARTICLE II - GUARANTEES
-----------------------
2.01 Guaranty of Payment. Guarantor does hereby unconditionally
-------------------
guarantee to EMPLOYEE the full and prompt payment when due of all compensation
payable by the Practice to EMPLOYEE pursuant to the Agreement (the
"Compensation") when due, during the five (5) year period following the date
hereof.
2.02 Guarantor Obligations. Guarantor does hereby agree that if the
---------------------
Compensation is not paid by the Practice in accordance with its terms for any
reason whatsoever, Guarantor will immediately make such payments. Guarantor
further agrees to pay EMPLOYEE all expenses (including, without limitation,
reasonable attorneys' fees actually paid) paid by EMPLOYEE in endeavoring to
collect all or any portion of the indebtedness evidenced by the Compensation, to
enforce any other obligations guaranteed hereby, or to enforce this Guaranty.
38
ARTICLE III - AGREEMENTS AND WARRANTIES
---------------------------------------
3.01 Consents. Guarantor hereby consents and agrees that EMPLOYEE may
--------
at any time, and from time to time, without notice to or further consent from
Guarantor, either with or without consideration: release and surrender any
property or other security of any kind or nature whatsoever hereafter held by it
or by any person or entity on its behalf or for its account, securing any
indebtedness or liability hereby guaranteed, if any; extend or renew the time
for payment of the Compensation for any period; grant releases, compromises and
indulgences with respect to the Compensation and to any persons or entities now
or hereafter liable thereunder or hereunder; release any other guarantor or
endorser of or other person or entity liable for the Compensation; or take or
fail to take any action of any type whatsoever. No such action which EMPLOYEE
shall take or fail to take in connection with the Compensation, nor any course
of dealing with the Practice or any other person, shall limit, impair or release
Guarantor's obligations hereunder, affect this Guaranty in any way or afford
Guarantor any recourse against EMPLOYEE. Nothing contained in this section
shall be construed to require EMPLOYEE to take or refrain from taking any action
referred to herein.
3.02 Waiver and Subordination. Guarantor hereby expressly waives any
------------------------
right of contribution from or indemnity against the Practice, whether at law or
in equity, arising from any payments made by Guarantor pursuant to the terms of
this Guaranty, and Guarantor acknowledges that Guarantor has no right whatsoever
to proceed against the Practice for reimbursement of any such payments. In
connection with the foregoing, Guarantor expressly waives any and all rights of
subrogation to EMPLOYEE against the Practice, and Guarantor hereby waives any
rights to enforce any remedy which EMPLOYEE may have against the Practice. In
addition to and without in any way limiting the foregoing, Guarantor hereby
subordinates any and all indebtedness of the Practice now or hereafter owed to
Guarantor to all indebtedness of the Practice to EMPLOYEE, and agrees with
EMPLOYEE that Guarantor shall not demand or accept any payment of principal or
interest from the Practice, shall not claim any offset or other reduction of
Guarantor's obligations hereunder because of any such indebtedness.
3.03 Waiver of Defenses. Guarantor hereby waives and agrees not to assert
------------------
or take advantage of any defense based upon: (a) any incapacity, lack of
authority, death or disability of Guarantor or any other person or entity; (b)
any failure of EMPLOYEE to commence an action against the Practice or any other
person or entity (including, without limitation, other guarantors, if any), or
to file or enforce a claim against the estate (either in administration,
bankruptcy, or any other proceeding) of the Practice or any other person or
entity, whether or not demand is made upon EMPLOYEE to file or enforce such
claim; (c) any failure of EMPLOYEE to give notice of the existence, creation or
incurring of any new or additional indebtedness or other obligation or of any
action or nonaction on the part of any other person or entity, in connection
with the Agreement or any obligation hereby guaranteed; (d) any failure on the
part of EMPLOYEE to disclose to Guarantor any facts it may now or hereafter know
regarding the Practice; (e) any lack of acceptance or notice of acceptance of
this Guaranty by EMPLOYEE; (f) any lack of presentment, demand, protest, or
notice of demand, protest or nonpayment with respect to any indebtedness or
obligations under the Agreement; (g) any lack of other notices to which
Guarantor might otherwise be entitled; (h) any invalidity, irregularity or
unenforceability, in whole or in part, of the Agreement; and (i) any action,
39
occurrence, event or matter consented to by Guarantor under Section 3.01 hereof,
under any other provision hereof, or otherwise.
3.04 Liability of Guarantor. This is a guaranty of payment and
----------------------
performance and not of collection. The liability of Guarantor under this
Guaranty shall be direct and immediate and not conditional or contingent upon
the pursuit of any remedies against the Practice or any other person (including,
without limitation, other guarantors, if any). Guarantor waives any right to
require that an action be brought against the Practice or any other person or to
require that resort be had to any collateral or to any balance of any deposit
account or credit on the books of EMPLOYEE in favor of the Practice or any other
person. In the event that, on account of the Bankruptcy Reform Act of 1978, as
amended, or any other debtor relief law (whether statutory, common law, case law
or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which
may be or become applicable, the Practice shall be relieved of or fail to incur
any debt, obligation or liability as provided in the Agreement, Guarantor shall
nevertheless be fully liable therefor. In the event of a default under the
Agreement, EMPLOYEE shall have the right to enforce his rights, powers and
remedies thereunder or hereunder, in any order, and all rights, powers and
remedies available to EMPLOYEE in such event shall be nonexclusive and
cumulative of all other rights, powers and remedies provided thereunder or
hereunder or by law or in equity. If the indebtedness guaranteed hereby is
partially paid by reason of the election of EMPLOYEE to pursue any of the
remedies available to EMPLOYEE, or is otherwise partially paid, this Guaranty
shall nevertheless remain in full force and effect, and Guarantor shall remain
liable for the entire remaining unpaid balance of the indebtedness guaranteed
hereby, even though any rights which Guarantor may have against the Practice may
be destroyed or diminished by the exercise of any such remedy.
ARTICLE IV - GENERAL CONDITIONS
-------------------------------
4.01 Waiver of Rights. Guarantor hereby waives and renounces, to the
----------------
fullest extent permitted by law, all rights to the benefits of any statute of
limitations and any moratorium, reinstatement, marshaling, forbearance,
valuation, stay, extension, redemption, appraisement, exemption and homestead
now or hereafter provided by the Constitution and laws of the United States of
America and of each state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement and collection of the
obligations evidenced by this Guaranty. To the extent permitted by law,
Guarantor also waives any right to a trial by jury, and any right to assert or
interpose any setoff, counterclaim or crossclaim of any nature (unless same
could not be asserted in a separate, unrelated action) in any action relating to
this Guaranty.
4.02 Irrevocability and Revival. This Guaranty shall be irrevocable by
--------------------------
Guarantor and shall remain in effect until all indebtedness guaranteed hereby
has been completely repaid. This Guaranty shall continue to be effective or be
revived and reinstated, as the case may be, in the event that any payment
received by EMPLOYEE of any of the indebtedness guaranteed hereby is returned or
rescinded by reason of any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief of debtors or for
any other reason.
40
4.03 Limit of Validity. If from any circumstances whatsoever fulfillment
-----------------
of any provisions of this Guaranty, at the time performance of such provision
shall be due, shall involve transcending the limit of validity presently
prescribed by any applicable usury statute or any other applicable law, with
regard to obligations of like character and amount, then ipso facto the
---- -----
obligation to be fulfilled shall be reduced to the limit of such validity, so
that in no event shall any exaction be possible under this Guaranty that is in
excess of the current limit of such validity, but such obligation shall be
fulfilled to the limit of such validity. The provisions of this section shall
control every other provision of this Guaranty.
4.04 Applicable Law. This Guaranty shall be interpreted, construed and
--------------
enforced according to the laws of the State of Georgia.
4.05 Miscellaneous. This Guaranty may not be changed orally, and no
-------------
obligation of Guarantor can be released or waived by EMPLOYEE or any officer or
agent of EMPLOYEE, except by a writing signed by a duly authorized officer of
EMPLOYEE. Guarantor has executed this Guaranty individually and not as a partner
of the Practice or any other guarantor. All personal pronouns used herein,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; and the singular shall include the plural and vice versa. Titles
of articles and sections are for convenience only and in no way define, limit,
amplify or describe the scope or intent of any provisions hereof. This Guaranty
contains the entire agreement between Guarantor and EMPLOYEE relating to the
guarantying of the obligations of the Practice under the Agreement by Guarantor
and supersedes entirely any and all prior written or oral agreements with
respect thereto; and Guarantor and EMPLOYEE acknowledge that there are no
contemporaneous oral agreements with respect to the subject matter hereof.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty under seal as of
the date first above written.
GUARANTOR
Physician Health Corporation
By:
-------------------------------
Title:
-------------------------------
41
