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Exhibit 10.6
BETTER IMAGE, INC.
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into as
of the 1st day of June, 1997, by and between XXXXXXXX X. XXXXXXX ("Consultant"),
and BETTER IMAGE, INC. ("BII"), a Georgia corporation with its headquarters in
Atlanta, Georgia. Because BII desires to retain Consultant and because
Consultant desires to be retained by BII, both parties, in consideration of the
mutual and exchanged promises and agreements contained herein, particularly the
non-disclosure, non-solicitation and non-competition covenants set forth in
Sections 5, 6 and 7, and of fees paid and services rendered hereunder, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agree as follows:
Section 1. Consulting Term. Subject to the terms contained in this
Agreement, BII seeks to retain Consultant as a consultant. Consultant shall be a
consultant to BII until the termination of Consultant's engagement as a
consultant to BII pursuant to Section 4, which period shall be referred to in
this Agreement as the "Consulting Term."
Section 2. Consulting. During the Consulting Term, BII shall engage
Consultant as a consultant and as an independent contractor and Consultant shall
act as a consultant to BII, rendering financial and general business services
and such other consultation as the Board of Directors of BII shall from time to
time reasonably request. Consultant shall have the right to (i) enter into
negotiations, including but not limited to letters of intent, with respect to
potential business combinations, (ii) engage underwriters and other advisors
with respect to potential business combinations and sales of stock of the
Corporation, (iii) engage such other consultants as Consultant deems necessary
in connection with services to be provided to the Corporation and (iv) designate
or engage, at his discretion, and at any time, agents to act on Consultant's
behalf in fulfilling any duties or obligations of Consultant pursuant to this
Agreement. During the Consulting Term, Consultant will not engage in any
activities in conflict with the best interests of BII or of any Affiliate. As
used in this Agreement, the term "Affiliate" shall mean each corporation or
other business entity directly or indirectly controlling, controlled by, or
under common control with BII. It is understood that the rights of the
Consultant outlined above all require the advance approval and consent of BII
and its Board of Directors.
Section 3. Consulting Fee, Expenses, Warrant.
(a) Consulting Fee. BII shall pay Consultant a consulting fee
of Four Hundred Twenty-eight Thousand Dollars ($428,000), (the "Consulting
Fee"), $8,000 will be paid monthly commencing June 1, 1997 with the balance, net
of payments made, paid at the effective date of the Initial Public Offering. For
purposes of this Agreement, "Initial Public Offering" shall mean a public
offering of equity securities of BII, or an Affiliate, that is effected through
a firm commitment underwriting and pursuant to a registration statement declared
effective under the Securities Act of 1933. Due to Consultant's being an
independent contractor during the Consulting Term, BII shall not withhold any
taxes from the Consulting Fee, unless otherwise required by law. As an
independent contractor,
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Consultant shall not be entitled to any benefits or payments not expressly
provided for in this Section 3.
(b) Expenses. In addition to the Consulting Fee, Consultant
shall be entitled to reimbursement by BII for all actual, reasonable and direct
expenses incurred by him in the performance of his duties hereunder, provided
such expenses are properly characterized as being business expenses that are
properly tax deductible for BII. Consultant shall provide BII with written
documentation of such expenses in form complying with the records required of
BII by the Internal Revenue Service and appropriate state authorities for tax
deductibility purposes in such cases, and reimbursement for each item of
approved expenses shall be made within a reasonable time after receipt by BII of
the written documentation thereof.
(c) Warrant. In addition to the Consulting Fee, as further
consideration for his services hereunder, Consultant shall be issued a Warrant
to purchase Three Hundred Thousand (300,000) shares of the common stock of BII,
(the "Warrant") at the net initial public offering price per share, which
Warrant shall be exercisable upon and only upon the closing of an Initial Public
Offering. The Warrant shall have a term of five (5) years from the effective
date of the IPO.
Section 4. Termination.
(a) Consulting Term. Notwithstanding anything herein to the
contrary, the Consulting Term shall terminate upon the earlier to occur of the
following:
(i) September 30, 1998;
(ii) The death or Permanent Disability (as defined
below) of Consultant; for purposes of this Agreement, the term "Permanent
Disability" shall mean that by reason of any physical or mental incapacity or
other cause Consultant has been unable, or it is reasonably determined by the
Board of Directors of BII that Consultant will be unable, for a period of at
least 180 substantially consecutive days to perform its duties and
responsibilities to BII pursuant to this Agreement in a reasonably satisfactory
manner; or
(iii) The expiration of six (6) months after the
receipt by BII of Consultant's written notice of resignation as a consultant
pursuant to this Agreement; and
(iv) The delivery by BII to Consultant of BII's
written notice of termination of Consultant's engagement as a consultant to BII
pursuant to this Agreement for Cause; for purposes of this Agreement, the term
"Cause" shall mean any conduct by Consultant involving moral turpitude,
conviction of Consultant of any felony, fraud or theft, any misconduct or gross
negligence on the part of Consultant in complying with the terms of this
Agreement or in performing any of his duties for BII, including knowing failure
to disclose or stop the dishonesty of others, dishonesty of Consultant, any
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act on the part of Consultant of fraud, deceit or misappropriation, any failure
or refusal on the part of Consultant to perform his duties under this Agreement
or to obey lawful directives from the Board of Directors of BII or its
designees, any breach by consultant of any obligation under this Agreement or
any other agreement with BII, any act on the part of Consultant in violation of
the spirit or terms of the Non-disclosure, Non-solicitation or Non-competition
covenants contained in this Agreement, regardless of whether those covenants are
deemed or held to be legally unenforceable, any act or omission by Consultant
that has the potential of injuring the reputation of BII, failure of Consultant
to adhere to any written or established policy of BII.
(b) Effect of Termination.
(i) Upon the termination of the Consulting Term
pursuant to this Section 4, by reason of the death or Permanent Disability of
Consultant, BII shall be obligated to Consultant or Consultant's Personal
Representative, as the case may be, for the Consulting Fee only if the Initial
Public Offering has become effective prior to the date of such termination of
the Consulting Term. Upon the termination of the Consulting Term for Cause,
Consultant shall forfeit any and all right to the Consulting Fee, unless the
Initial Public Offering has closed prior to such termination of the Consulting
Term. For purposes of this Agreement, the term "Personal Representative" shall
mean any person acting in a representative capacity as the executor or
administrator of Consultant's estate or the duly appointed guardian of the
property of Consultant or any attorney-in-fact acting for Consultant pursuant to
a valid and binding power of attorney.
(ii) Notwithstanding anything else in this Agreement
to the contrary, the provisions of Sections 4, 5 and 6 hereof shall survive the
termination of the Consulting Term pursuant to this Section 4.
Section 5. Non-Disclosure of Trade Secrets and Confidential
Information.
(a) Trade Secrets Defined. As used in this Agreement, the term
"Trade Secrets" shall mean all secret, proprietary or confidential information
regarding BII and each Affiliate or BII or Affiliate activities, including any
and all information not generally known to, or ascertainable by, persons not
employed by BII or any Affiliate, the disclosure or knowledge of which would
permit those persons to derive actual or potential economic value therefrom or
to cause economic or financial harm to BII or any Affiliate. Such information
shall include, but not be limited to, customer lists, computer software
(including, without limitation, source code, object code and manuals), customer
billing information, technical information regarding BII or any Affiliate
products or services, prices paid by customers, purchase and supply information,
current and future development and expansion or contraction plans of BII or any
Affiliate, sales and marketing techniques, information concerning personnel
assignments and operations of BII or any Affiliate and matters concerning the
financial affairs, future plans and management of BII or any Affiliate. "Trade
Secrets" shall not include information that has become generally available to
the public by the act of one who has the right to disclose such information
without violating any right or privilege of BII or any Affiliate. This
definition shall not limit
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any definition of "trade secrets" under state or federal law.
(b) Non-Disclosure of Trade Secrets. Throughout the term of
this Agreement and at all times after the date that this Agreement terminates
for any reason, Consultant shall not directly or indirectly transmit or disclose
any Trade Secret of BII or any Affiliate to any person, concern or entity, and
shall not make use of any such Trade Secret, directly or indirectly, for himself
or for others, without the prior written consent of BII, except (i) to the
extent such disclosure is consistent with Consultant's duties hereunder or (ii)
for a disclosure that is required by a law or regulation or court order, in
which latter case Consultant shall provide BII prior written notice of such
disclosure and an opportunity to contest such disclosure.
(c) Confidential Information Defined. As used in this
Agreement, the term "Confidential Information" shall mean all information
regarding BII or any Affiliate, BII's or any Affiliate's activities, BII's or
any Affiliate's business or BII's or any Affiliate's customers that is not
generally known to persons not employed by BII but that does not rise to the
level of a Trade Secret and that is not generally disclosed by BII practice or
authority to persons not employed by BII. "Confidential Information" shall not
include information that has become generally available to the public by the act
of one who has the right to disclose such information without violating any
right or privilege of BII. This definition shall not limit any definition of
"confidential information" or any equivalent designation under state or federal
law.
(d) Non-Disclosure of Confidential Information. During the
Consulting Term and for two (2) years thereafter, Consultant shall not directly
or indirectly transmit or disclose any Confidential Information to any person,
concern or entity, or make any use of any such Confidential Information,
directly or indirectly, for himself or for others, without the prior written
consent of BII, except to the extent such disclosure is consistent with
Consultant's duties hereunder. Upon termination of the Consulting Term,
Consultant will return all Trade Secrets and all Confidential Information of BII
and Affiliates, including without limitation, any documents, notes, analyses,
compilations or other materials incorporation or based on any Trade Secrets or
Confidential Information of BII or any Affiliate.
(e) Injunctive Relief. Consultant acknowledges that the
nondisclosure covenants contained in this Section are a reasonable means of
protecting and preserving BII's and any Affiliate's interest in the
confidentiality of this information. Consultant agrees that any breach of these
covenants will result in irreparable damage and injury to BII or Affiliates and
that BII will be entitled to injunctive relief in any court of competent
jurisdiction without the necessity of posting any bond. Consultant also agrees
that any such injunctive relief shall be in addition to any damages that may be
recoverable by BII.
(f) Enforceability of Covenants. Consultant and BIII agree
that Consultant's obligations under these non-disclosure covenants are separate
and distinct from its obligations under other provisions of this Agreement, and
a failure or alleged
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failure of BII to perform its obligations under any provision of this Agreement
shall not constitute a defense to the enforceability of these non-disclosure
covenants.
Section 6. Non-Solicitation.
(a) For a period of eighteen (18) months after the date
hereof, Consultant or affiliates shall not directly or indirectly recruit or
attempt to recruit or make an offer of employment to become engaged in a
business that competes with BII to any person who is then an employee, officer,
director or independent contractor of BII or any Affiliate or who has terminated
such employment or relationship without the consent of BII or any Affiliate
within one hundred eighty (180) days of such recruitment or offer. This
non-solicitation provision will also apply to offers of employment as
independent consultants.
(b) Consultant covenants that he will not take or use any
customer lists or supplier lists of BII or any affiliate and that he will, for a
period of thirty-six (36) months following the date hereof, refrain from
soliciting or attempting to solicit directly or by assisting others, any
business from any of BII's or any Affiliate's, (i) customers, including actively
sought prospective customers, or (ii) suppliers or manufacturers whose products
are marketed or sold by BII or any Affiliate, including actively sought
prospective suppliers or manufacturers whose products are marketed or sold by
BII or any Affiliate, and with whom Consultant has "material contact" (as
defined below) during the Consulting Term, for purposes of providing products or
services that are similar to or competitive with those provided by BII or any
Affiliate. For the purposes of this Section 6(b), "material contact" exists
between Consultant and each customer or potential customer and each current or
potential supplier or manufacturer whose products are marketed or sold by BII or
any Affiliate with whom Consultant dealt (either in person or in writing) in
connection with the provision of his consulting service hereunder.
Section 7. Non-Competition.
(a) During Consultant's engagement by BII as a contractor and
for a period of two (2) years following the termination of such engagement for
any reason whatsoever, the Consultant shall not (except on behalf of or with the
prior written consent of BII), either directly or indirectly, on the
Consultant's own behalf or on behalf of others (i) solicit, divert, appropriate
to or accept on behalf of any Competing Business (as such term is hereinafter
defined), or (ii) attempt to solicit, divert, appropriate to or accept on behalf
of a Competing Business, any business from any plastic surgeon, customer, client
or patient or actively sought prospective plastic surgeons, customer, client or
patient of BII with whom the Consultant has had contact, or whose contacts with
BII have been supervised by the Consultant, or about whom the Consultant has
acquired proprietary information in the course of his or her engagement.
(b) During Consultant's engagement by BII as a contractor and
for a period of two (2) years following the termination of such engagement for
any reason whatsoever, the Consultant shall not (except on behalf of or with the
prior written consent of BII), within the Continental United States (the
"Area"), either directly or indirectly, on his
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or her own behalf or in the service or on behalf of others, (i) be engaged in or
perform services in any capacity for any Competing Business which involves
duties and responsibilities similar to the services provided by Consultant to
BII, (ii) take or cause to be taken any action of whatever nature which would
require, or undertake any engagement or at the time of taking such action could
reasonably be expected to result in, the disclosure or use of proprietary
information; or (iii) own, manage, operate, join, contract with, or participate
in the ownership, management or control of or be engaged in or be connected in
any manner with (whether as principal, partner, shareholder, director, officer,
employee, agent, consultant or otherwise) any business which is or may be
competitive in any manner with the business engaged in by BII; it being
understood that the business engaged in by BII includes, but is not limited to,
consulting services for, and management of the practices of plastic surgeons. It
is the express intention of the parties that the Area, as herein defined, is
related to the area where the Consultant performs or performed services on
behalf of BII under this Agreement as of, or within a reasonable time prior to,
the termination of the Consultant's engagement hereunder.
(c) "Competing Business" means any business organization of
whatever form directly engaged in any business or enterprise which is the same
as, or substantially the same as, the Business of BII.
Section 8. Arbitration.
(a) The parties will attempt through good faith
negotiation to resolve their disputes. The term "disputes" includes, without
limitation, any disagreements between the parties concerning the existence,
formation, interpretation and implementation of this Agreement. If the parties
are unable to resolve their disputes by negotiation, either party may commence
arbitration by sending a written notice of arbitration to the other party. The
notice will state the dispute with particularity.
(b) There will be one arbitrator. If the parties fail
to select a mutually acceptable arbitrator within ten (10) days after the notice
of arbitration, a single arbitrator will be appointed as soon as possible on the
request of either party by the American Arbitration Association in Atlanta,
Georgia. The fee payable to the arbitrator will be based upon the then current
fee schedule of the American Arbitration Association and will be advanced one
half by each party, upon the written request of the arbitrator or the American
Arbitration Association.
(c) The parties will have reasonable rights of
discovery.
(d) Except as set forth in this Section, the
arbitrator will conduct the arbitration according to the Commercial Arbitration
Rules of the American Arbitration Association. Arbitration will take place in
Atlanta, Georgia unless the parties otherwise agree. The arbitrator will base
the decision on the express language of this Agreement. Within ten (10) days
after the arbitrator is appointed, or as soon thereafter as will be reasonably
practicable, the arbitrator will conduct a hearing on the dispute. Each party
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may make written submissions to the arbitrator, and each party will have a
reasonable opportunity for rebuttal, but no longer than ten (10) days. As soon
as reasonably practicable, but not later than ten (10) days after the hearing is
completed, the arbitrator will arrive at a final decision, which will be reduced
to writing, signed by the arbitrator and mailed to each party and its legal
counsel.
(e) All decisions of the arbitrator will be final,
and binding on both parties, and (except as provided below) will constitute the
only method of resolving disputes. Judgment may be entered upon the decision in
accordance with applicable law in any court having jurisdiction.
(f) This arbitration section and all decisions of the
arbitrator will be specifically enforceable in a court of law, or in the
arbitral tribunal.
Section 9. Miscellaneous.
(a) Severability. The covenants set forth in this
Agreement shall be considered and construed as separate and independent
covenants. Should any part or provision of any covenant be held invalid, void or
unenforceable in any court of competent jurisdiction, such invalidity, voidness
or unenforceability shall not render invalid, void or unenforceable any other
part or provision of this Agreement. If any portion of the foregoing provisions
is found to be invalid or unenforceable by a court of competent jurisdiction
because of its duration, the territory, the definition of activities or the
definition of information covered is invalid or unreasonable in scope, the
invalid or unreasonable term shall be redefined, or a new enforceable term
provided, such that the intent of BII and Consultant in agreeing to the
provisions of this Agreement will not be impaired and the provision in question
shall be enforceable to the fullest extent of the applicable laws.
(b) Waiver. The waiver by any party to this Agreement
of a breach of any of the provisions of this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach.
(c) Governing Law. This Agreement shall be deemed to
be made in and shall in all respects be interpreted, construed and governed by
and in accordance with the laws of the State of Georgia (without giving effect
to the conflict of law principles thereof). No provision of this Agreement or
any related documents shall be construed against, or interpreted to the
disadvantage of, any party hereto, by any court or any governmental or judicial
authority by reason of such party having or being deemed to have structured or
drafted such provision.
(d) Entire Agreement. This Agreement is intended by
the parties hereto to be the final expression of their agreement with respect to
the subject matter hereof and this is the complete and exclusive statement of
the terms of their agreement, notwithstanding any representations, statements or
agreements to the contrary heretofore made. This Agreement supersedes any former
agreements governing the same subject matter. This Agreement may be modified
only by a written instrument signed by each of
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the parties hereto.
(e) Assignability. This Agreement may not be assigned
by either party without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CONSULTANT: COMPANY:
BETTER IMAGE, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Chairman
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