EXHIBIT 10.45
9
OMEGA ORTHODONTICS, INC.
CONSULTING AGREEMENT
THIS AGREEMENT, dated as of January 1, 1998, between XX.
XXXX X. XXXXXXXX, of Buffalo, New York (the "Consultant") and
OMEGA ORTHODONTICS, INC., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, pursuant to that certain Employment Agreement dated
as of May 1, 1997 by and between the Consultant and the Company
(the "Employment Agreement"), the Consultant has been an employee
of the Company;
WHEREAS, the Consultant and the Company desire to terminate
the Employment Agreement and the employment relationship
contemplated thereby;
WHEREAS, the Company desires to retain the Consultant for
the period and upon and subject to the terms herein provided, and
the Consultant is willing to agree to be retained by the Company
upon and subject to the terms herein provided;
NOW, THEREFORE, for the reasons set forth above, and in
consideration of the mutual promises and agreements hereinafter
set forth, the Company and the Consultant agree as follows:
1. Employment Termination and Consulting Retention.
1.1 Employment Termination. The Company and the Consultant
hereby terminate the Employment Agreement, effective as of the
close of business on December 31, 1997, and agree that the
employer/employee relationship contemplated thereby shall and
does similarly terminate.
1.2 Consulting Retention. Subject to the terms and
conditions set forth in this Agreement, the Company hereby
retains the Consultant to provide consulting services to the
Company as its Director of Affiliate Programs. The Consultant
hereby accepts such retention and agrees to provide such services
to the Company in such capacity for the period of this Agreement.
1.3 Consulting Services. The Consultant's services shall
include: all design, scheduling the installation and following up
on the effectiveness of all the managerial systems used by the
Company's affiliated orthodontic practices as outlined in the
Affiliate Optimization Program, as revised from time to time;
management of the effectiveness and productivity of the
consultants used to optimize and maintain the affiliate
practices' programs; and additional services that the Consultant
and the Company agree upon. Such services shall be rendered on
an "on-call" basis, and the Consultant shall be reasonably
available at times during normal business hours and shall use his
best efforts to promote the interests of the Company. The parties
acknowledge and agree that, notwithstanding the foregoing, the
Consultant may continue his orthodontic consulting business and
may continue to pursue his academic and writing endeavors;
provided, however, that such endeavors shall neither materially
adversely affect or impair his ability to meet his obligations
hereunder.
2. Term of Agreement.
The term of this Agreement shall be for a period of three
(3) years commencing on January 1, 1998 (the "Effective Date")
and expiring at midnight on the day immediately preceding the
third anniversary of the Effective Date, unless terminated prior
to that date as provided in Section 6 of this Agreement.
Commencing on the third anniversary of the Effective Date, and
on each anniversary thereafter, the term of this Agreement shall
be automatically extended for an additional year, unless either
party gives notice of termination as provided in Section 6 of
this Agreement.
3. Independent Contractor.
The Consultant is retained by the Company only for the
purpose and to the extent herein set forth, and the Consultant's
relationship to the Company shall, during the period of the
Consultant's services hereunder, be that of an independent
contractor. Accordingly, the Consultant shall be responsible for
the payment of all federal, state and local income taxes, social
security taxes, self-employment taxes, sales taxes, unemployment
insurance taxes and similar taxes attributable to the fees paid
by the Company to the Consultant pursuant to this Agreement. The
Consultant shall not participate in the Company's employee
benefit plans and programs and his compensation shall be governed
exclusively by the terms of this Agreement. Neither party to
this Agreement and none of their respective agents, employees,
representatives, or independent contractors shall (i) be
considered an agent, employee or representative of the other
party for any purpose whatsoever; (ii) have any authority to make
any agreement or commitment for the other party or to incur
liability or obligation in the other party's name or on its
behalf; or (iii) represent to third parties that any of them has
any right so to bind the other party hereto.
4. Compensation of Consultant.
4.1. Consulting Fee. During the term of this Agreement,
the Company shall pay to the Consultant as compensation for the
services to be performed by the Consultant a consulting fee of
$10,000 per month (the "Consulting Fee"). The Consulting Fee
shall be payable in semi-monthly installments.
4.2. Benefits. Unless otherwise permitted by resolution of
the Board of Directors, the Consultant shall not be entitled to
participate, during the term he is retained hereunder, in any
employee benefit or deferred compensation plans established by
the Company.
4.3. Office and Secretary. The Consultant shall provide
his own office and secretarial help as needed to perform his
duties hereunder, subject to reimbursement by the Company as
provided in Subsection 4.4 hereof for providing such office and
secretarial help. The parties understand and agree that such
office shall be located at 00 Xxxxx Xxxxxxxxx, Xxxxxxx, Xxx Xxxx,
unless the parties agree otherwise.
4.4. Reimbursement of Expenses. The Company shall provide
for the payment or reimbursement of all reasonable and necessary
expenses incurred by the Consultant in connection with the
performance of his duties under this Agreement. The parties
understand and agree that the Consultant may maintain a charge
card account in his name for his exclusive use for reimbursable
expenses and that the Company will reimburse the Consultant
utilizing the monthly charge account statement. in accordance
with the Company's expense reimbursement policy, as such may
change from time to time.
4.5. Stock Option. Pursuant to the Employment Agreement,
the Company granted the Consultant an incentive stock option (the
"Incentive Option") under the Company's Incentive Stock Plan (the
"Plan") to acquire 50,000 shares of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), at an exercise
price equal to $6.00 per share. The Plan and the agreement
effecting the Incentive Option (the "Option Agreement") provide
that the Incentive Option will expire three months after the
termination of the Consultant's employment under the Employment
Agreement. The Company and the Consultant, desiring to convert
the Incentive Option into a non-qualified option on substantially
the same terms as the Incentive Option, hereby agree to amend the
Option Agreement to provide for the grant of a non-qualified
option to acquire 50,000 shares of the Common Stock at an
exercise price of $6.00 per share with the same vesting and other
terms as provided in the Option Agreement, other than those terms
which relate specifically to the treatment of the Incentive
Option as an incentive stock option under the Plan.
5. Representations.
The Consultant hereby represents and warrants that this
Agreement constitutes his valid and binding obligation
enforceable in accordance with its terms and that the execution,
delivery and performance of this Agreement does not violate any
agreement, arrangement or restriction of any kind to which the
Consultant is a party or by which he is bound.
6. Termination.
6.1 Termination by the Company. The Company may terminate
this Agreement immediately upon the occurrence of any of the
following: (a) the Consultant's death; (b) the Company
determines that the Consultant has furnished deceptive or
fraudulent information to the Company; or (c) the Consultant
engages in criminal, unprofessional, unethical or fraudulent
conduct and the Consultant is found guilty of such conduct by any
entity or governmental agency of competent jurisdiction.
6.2 Termination upon Breach. Either party may terminate
this Agreement upon breach by the other of any material term in
this Agreement, which breach has not been cured to the reasonable
satisfaction of the non-breaching party within thirty (30) days
after notice of such breach.
6.3 Termination upon Expiration. Either party may
terminate this Agreement at the end of the initial term or any
extension of this Agreement by giving the other party ninety (90)
days prior written notice of such termination.
6.4 Rights upon Termination. Upon termination of this
Agreement, the Consultant shall be entitled to receive such
compensation, if any, accrued under the terms of this Agreement,
but unpaid, as of the date of said termination.
7. Confidentiality.
The Consultant agrees to hold in strict confidence all
information concerning any matters affecting or relating to the
business of the Company, including without limiting the
generality of the foregoing its manner of operation, plans,
protocols, processes, computer programs, tenant lists, client
lists, marketing information and analysis, or other data, without
regard to whether all of the foregoing matters will be deemed
confidential or material. Such information does not include the
systems, forms, books, manuals, concepts and anything relating to
the Consultant's copyrighted material referred to in Section 8
hereof. The Consultant agrees that he will not, directly or
indirectly, use the Company's information for the benefit of
others than the Company or disclose or communicate any of such
information in any manner whatsoever other than to the directors,
officers, Consultants, agents and representatives of the Company
who need to know such information, who shall be informed by the
Consultant of the confidential nature of such information and
directed by the Consultant to treat such information
confidentially. Upon the Company's request, the Consultant shall
return all information furnished to him related to the business
of the Company.
The above limitations on use and disclosure shall not apply
to information which the Consultant can demonstrate: (a) was
known to the Consultant before joining the Company and was not
contributed to the Company by the Consultant; (b) is learned by
the Consultant from a third party entitled to disclose it; or (c)
becomes known publicly other than through the Consultant. The
parties hereto stipulate that all such information is material
and confidential and gravely affects the effective and successful
conduct of the business of the Company and the Company's good
will, and that any breach of the terms of this Section 7 shall be
a material breach of this Agreement. The terms of this Section 7
shall remain in effect during the term of this Agreement and for
a period of two (2) years thereafter.
8. Use of Proprietary Information.
8.1 Company Proprietary Information. The Consultant
recognizes that the Company possesses a proprietary interest in
all of the information described in Section 7 and has the
exclusive right and privilege to use, protect by copyright,
patent or trademark, manufacture or otherwise exploit the
processes, ideas and concepts described therein to the exclusion
of the Consultant, except as otherwise agreed between the Company
and the Consultant in writing. The Consultant expressly agrees
that any products, inventions, discoveries or improvements made
by the Consultant, his agents or affiliates, during the term of
this Agreement, based on or arising out of the information
described in Section 7 shall be the property of and inure to the
exclusive benefit of the Company. The Consultant further agrees
that any and all products, inventions, discoveries or
improvements developed by the Consultant and intended solely for
the use of the Company (whether or not able to be protected by
copyright, patent or trademark) during the term or any extension
hereof shall be promptly disclosed to the Company and shall be
used exclusively by the Company.
8.2 Consultant Proprietary Information. The Company
recognizes that the forms, systems and concepts used to develop
certain of the Company's manuals, forms, systems and concepts are
copyrighted property of the Consultant and The Bio-Engineering
Co., of Buffalo, NY (the "Consultant Proprietary Information"),
and that the Consultant and The Bio-Engineering Co. retain the
legal rights to the Consultant Proprietary Information and may
continue to use, publish and do whatever the Consultant and The
Bio-Engineering Co. deem appropriate with the Consultant
Proprietary Information. The Company acknowledges and agrees
that the Company may only use the Consultant Proprietary
Information for the betterment of its affiliated orthodontic
practices and may not publish, sell or in any way use the
Consultant Proprietary Information for any other purpose or
transfer to any other entity that the Company wishes to, without
the prior written consent of the Consultant and The Bio-
Engineering Co.
9. Non-Competition Agreement.
9.1. Non-Competition. The Consultant agrees that, during
the term of this Agreement and for a period of one (1) year
thereafter, he shall not, without the prior written consent of
the Company, directly or indirectly, own, manage, operate,
control, be connected with as an officer, consultant, partner,
consultant or otherwise, or otherwise engage or participate in,
except as a consultant of the Company, or any corporation
directly or indirectly controlled by it, any corporation or other
business entity engaged in providing consulting services to the
orthodontic industry, except his orthodontic consulting business
referred to in Section 1.3 hereof. Notwithstanding the
foregoing, the ownership by the Consultant of less than two
percent (2%) of any class of the outstanding capital stock of any
corporation conducting a business competitive with the Company
which is regularly traded on a national securities exchange or an
over-the-counter market shall not be a violation of the foregoing
covenant.
The Consultant hereby acknowledges and agrees that the
provisions set forth in this Subsection 9.1 constitute a
reasonable restriction on his ability to compete with the
Company.
9.2. Non-Solicitation. Without the prior written consent
of the Company, during the term of this Agreement and for a
period of one (1) year thereafter, the Consultant shall not
contact or solicit, directly or indirectly, any customer, client,
affiliate orthodontist or orthodontic entity, tenant or account
whose identity the Consultant obtained through association with
the Company, regardless of the geographical location of such
customer, client, affiliate orthodontist or orthodontic entity,
tenant or account, nor shall the Consultant, directly or
indirectly, entice or induce, or attempt to entice or induce, any
employee of the Company to leave such employ, nor shall the
Consultant employ any such person in any business similar to or
in competition with that of the Company during the term of this
Agreement and for a period of one (1) year thereafter. The
Consultant hereby acknowledges and agrees that the provisions set
forth in this Subsection 9.2 constitute a reasonable restriction
on his ability to compete with the Company.
9.3. Savings Provision. The parties hereto agree that, in
the event a court of competent jurisdiction shall determine that
the geographical or durational elements of this covenant are
unenforceable, such determination shall not render the entire
covenant unenforceable. Rather, the excessive aspects of the
covenant shall be reduced to the threshold which is enforceable,
and the remaining aspects shall not be affected thereby.
9.4. Equitable Relief. The Consultant acknowledges that
the extent of damages to the Company from a breach of Sections 7,
8 and 9 of this Agreement would not be readily quantifiable or
ascertainable, that monetary damages would be inadequate to make
the Company whole in case of such a breach, and that there is not
and would not be an adequate remedy at law for such a breach.
Therefore, the Consultant specifically agrees that the Company is
entitled to injunctive or other equitable relief from a breach of
Sections 7, 8 and 9 of this Agreement, and hereby waives and
covenants not to assert against a prayer for such relief that
there exists an adequate remedy at law, in monetary damages or
otherwise.
10. Assignment.
The Consultant may not assign any of his rights or
obligations hereunder without the prior written consent of the
Company.
11. Entire Agreement.
This Agreement contains the complete agreement concerning
the consulting arrangement between the parties and shall, as of
the effective date, supersede all other agreements or
arrangements between the parties with regard to the subject
matter hereof.
12. Binding Agreement.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns. The
obligations of the Company under this Agreement shall not be
terminated by reason of any liquidation, dissolution, bankruptcy,
cessation of business or similar event relating to the Company.
This Agreement shall not be terminated by reason of any merger,
consolidation or reorganization of the Company, but shall be
binding upon and inure to the benefit of the surviving or
resulting entity.
13. Modification.
No waiver or modification of this Agreement or of any
covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged
therewith and no evidence of any waiver or modification shall be
offered or received in evidence of any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
thereunder, unless such waiver or modification is in writing,
duly executed as aforesaid.
14. Severability.
All agreements and covenants contained herein are severable,
and in the event any of them shall be held to be invalid or
unenforceable by any court of competent jurisdiction, this
Agreement shall be interpreted as if such invalid agreements or
warrants were not contained herein.
15. Manner of Giving Notice
All notices, requests and demands to or upon the respective
parties hereto shall be sent by hand, certified mail, overnight
air courier service or telecopier (if within a reasonable time a
permanent copy is given by any of the other methods described
above), in each case with all applicable charges paid or
otherwise provided for, addressed as follows or to such other
address as may hereafter be designated in writing by the
respective parties hereto:
To Company:
Omega Orthodontics, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Consultant:
Xxxx X. Xxxxxxxx
00 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Such notices, requests and demands shall be deemed to have been
given or made on the date of delivery if delivered by hand or by
telecopy and on the next following date if sent by mail or by air
courier service.
16. Waiver.
If either party should waive any breach of any provision of
this Agreement, such party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any
other provision of this Agreement.
17. Remedies.
In the event of a breach of this Agreement, the non-
breaching party will be entitled to such legal and equitable
relief as may be provided by law, and shall further be entitled
to recover all costs and expenses, including reasonable
attorneys' fees, incurred in enforcing the non-breaching party's
rights hereunder.
18. Headings.
The headings have been inserted for convenience only and
shall not be deemed to limit or otherwise affect any of the
provisions of this Agreement.
19. Choice of Law.
It is the intention of the parties hereto that this
Agreement and the performance hereunder be construed in
accordance with, under and pursuant to the laws of the State of
Delaware without regard to the jurisdiction in which any action
or special proceeding may be instituted.
20. Counterparts.
This Agreement may be executed in two (2) counterparts, each
of which shall be deemed an original, and both of which together
shall constitute one and the same instrument.
INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first stated above.
COMPANY:
OMEGA ORTHODONTICS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
CONSULTANT
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
