EXHIBIT 10.5
CONSULTING AGREEMENT
This AGREEMENT (this "Agreement") made as of the 20th day of April
2007, by and between SurgiLight, Inc., a Florida corporation having its
office at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (the "Company"),
and Xxxxxxx Xxxxxx, residing at 00000 Xxxxxxxx Xxxxx, Xxxx Xxxxxx, XX 00000,
("Consultant").
WITNESSETH
WHEREAS, the Company and GEM SurgiLight Investors, LLC ("GEM") have
entered into a Secured Line of Credit Agreement, of even date herewith (the
"Credit Agreement"), whereby GEM extended a $2.5 million secured line of
credit to the Company and GEM has agreed to purchase shares of preferred
stock for an aggregate purchase price of $500,000 in preferred stock
(collectively, the "Financing"), and .
WHEREAS, Consultant shall resign as the Chief Executive Officer,
Chairwoman and a director of the Company upon the initial closing of the
Financing; and
WHEREAS, as of December 14, 2006, the Company was obligated to pay
Consultant an aggregate of $1,052,301.43 (the "Obligations") secured by
Intangible Assets.; and pursuant to the terms of the Loan Agreement dated
January 30, 2002, the Loan Agreement dated October 22, 2002 and the Addendum
to Loan Agreement dated December 15, 2004 (hereinafter collectively referred
to as the "Loan Agreement").
WHEREAS, the Company believes it is in its best interest to engage
Consultant as an independent contractor to provide consulting services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter contained, the parties hereto do hereby agree as
follows:
1. Responsibilities. Consultant shall assist management of the
Company in organizing, coordinating and administering the operations of the
Company, specifically, but not limited to, helping the Company receive the
approval of the US Food and Drug Administration for certain of its goods
and/or services. Consultant will be available for consulting services in
person or by telephone, on a reasonable basis, as needed by the Company.
Consultant's responsibilities may include travel, but any such travel will
require the Consultant's consent.
2. Term. The term of the consultancy hereunder shall be for a
period commencing on the initial closing of the Financing (the "Effective
Date") and terminating on the first anniversary thereof (the "Term").
Either party may terminate this Agreement after one year with two months
written notice to the other party. Upon termination, all fees and expenses
owed to Consultant shall be paid in full within 15 days.
3. Consideration. In consideration for the services to be
rendered hereunder and the obligations of Consultant hereunder, the Company
agrees to pay Consultant a fee at the rate of $250 per hour (the "Hourly
Fee") payable at the end of each month, upon acceptance by the Company of
Consultant's invoice detailing the work performed and the time input. Travel
shall be billed one way at the Hourly Fee.
4. Repayment of Obligations. On the Effective Date, the Company
shall pay to Consultant one-half of the Obligations by wire transfer to an
account designated by Consultant (the "Initial Payment"). Subsequent to the
Initial Payment, and in full satisfaction of all of its Obligations, the
Company shall pay to Consultant the balance of the Obligations in 12 equal
monthly installments, the first such payment commencing on the first day of
the second calendar month following the Initial Payment. By way of example,
if the Initial Payment occurred on February 15, the first of twelve monthly
installments would occur on April 1. Interest or other charges shall accrue
on the unpaid balance of the Obligations subsequent to December 14, 2006, at
the rate of the lesser of 12% per annum or the maximum rate of interest
permitted under applicable law, and payable as follows: (a) in the event
that any payments of the Obligations are not made on or before the date due,
then all interest accrued hereunder on the then outstanding Obligations shall
be added to the Obligations and payable in equal amounts on the remaining
installments due under this Agreement and (b) in the event that all payments
described herein are made on or before the dates due, then all interest
accrued hereunder shall be waived. The Obligations shall continue to be
secured by all Intangible Property, including patents, assigned patents,
patent licenses and patents pending as disclosed in the UCC-1 filed on
December 17, 2004 and the Loan Agreement. All other terms of the Loan
Agreement shall remain in effect unless specifically superseded by this
Agreement.
5. Default on Repayment of Obligations. If the Company fails to
make a wire transfer of the equal monthly installment on the first day of the
month and fails to cure such default within 10 days after notice from
Consultant or if the Company shall be in default under its obligations to GEM
under the Credit Agreement, the Company shall be deemed in breach of this
Agreement and each and all of the following remedies will occur:
i) The entire remaining balance of the Obligations will become
due and payable immediately.
ii) The Consultant may terminate this agreement immediately,
except for Sections 9-12.. Upon termination, all amounts owed Consultant for
services under this Agreement will become due and payable; and
iii) The Consultant may, without further notice or demand,
resort to any remedies available to Consultant under its security interest
and/or the Loan Agreement.
6. Expenses. The Consultant will require the Company's advanced
written authorization for reimbursement of any individual out-of-pocket
expense Consultant incurs in excess of $100. Expenses in excess of $100,
which have been authorized in writing, will be prepaid before the expense is
incurred. Reimbursement of any and all expenses not prepaid by Company is to
be made in accordance with the Company expense reimbursement system. Proper
supporting documentation and other information requested by the Company
should be included with the expense reports.
7. Provision of Services. It is understood and acknowledged
by the parties that Consultant shall be obligated to work diligently in
fulfilling her responsibilities hereunder during the Term and to render
advice upon the reasonable request of the Company, in good faith. Consultant
shall report to such person that the Company may designate from time to time
designate.
8. Office. Consultant may select whether to work at the Company's
office, her residence or any other reasonable location.
9. Confidentiality. The Company contends that in the course of this
engagement by the Company, Consultant's job responsibilities may require that
she be given access to confidential and trade secret information that is the
property of the Company, its owners, its client(s), or other organizations
with which the Company conducts its business. Consultant also had access to
Confidential Information during her engagement by the Company as Chief
Executive Officer, director and consultant. Consultant's responsibilities
with respect to any Confidential Information (as described above and
hereinafter defined) are defined below.
For a period of four years following the Effective Date ("Non-
Disclosure Period"), Consultant agrees to use her utmost diligence to guard
and protect from disclosure all Confidential Information, except as required
by regulatory agencies. Further, Consultant agrees that she will not, during
the Non-Disclosure Period, use for herself or others, or divulge to others,
including other employees or non-employees of the Company, except where
required to do so in the course of her duties, any Confidential Information
which she may develop, obtain or learn about during or as a result of her
engagement by the Company unless authorized to do so by the Company in
writing. Notwithstanding the prohibitions herein, if the Consultant is
required by law to disclose certain of the Confidential Information, she may
do so, but, if permitted by applicable law, Consultant shall give the Company
at least five business days notice of the need to disclose and the precise
information which Consultant is required to disclose. If in the discharge of
Consultant's responsibilities for Company, she develops new information
related to the laser treatment of Presbyopia, that will also constitute
property of the Company.
Consultant acknowledges that Consultant has made a reasonable effort to
return to the Company all material Confidential Information of the Company in
the Consultant's possession as of the date hereof. The Company has inspected
the Confidential Information returned by Consultant and believes that
Consultant has made a reasonable effort to return to the Company all material
Confidential Information of the Company in the Consultant's possession as of
the date hereof. In the event that either party becomes aware of any
material Confidential Information in the possession of Consultant prior to
the Effective Date, or in the event that Consultant obtains possession of any
other material Confidential Information prior to the Effective Date,
Consultant agrees that as of the Effective Date (or at such time as either
party discovers that Consultant is in possession of such Confidential
Information), Consultant shall make a reasonable effort to deliver to the
Company all computer disks, records, papers, or materials of any kind in any
media which may contain material Confidential Information of the Company that
was in her possession immediately prior to the Effective Date. Consultant
agrees that upon specific written request of the Company, but no later than
the termination of this Agreement, she will return any computer disks,
records, papers, or materials of any kind in any media which may contain
Confidential Information that she obtains after the Effective Date.
"Confidential Information" includes, but not limited to all of the
Company's information in whatever form (including without limitation visual,
oral, electronic data, or written), including Infrared technologies,
technologies concerning the treatment of presbyopia with lasers, operation,
all software and software codes, security information, FDA regulations,
applications, financial data and related financial information, joint
ventures, business, supplier information of the Company's hardware and/or
system parts, all software codes, design, customers and potential customers,
products, solutions, operations, services, technical specifications etc,
regardless of whether such information is marked "Confidential," which
Consultant came into possession or knowledge of while employed by Company as
an employee or engaged by the Company as a consultant and, and in the course
of her duties and responsibilities for Company and not from any outside
source.
Nothing in this Agreement shall prevent Consultant from using
information which (i) is or becomes generally known to the public; (ii) is
obtained by Consultant from a third party; (iii) is or was independently
developed by Consultant without use of the Company's Confidential Information
or (iv) was known to Consultant prior to her association with Company.
10. No Disparaging, Untrue or Misleading Statements. During the Non-
Disclosure Period, the Consultant and the Company each agree that they shall
not make to any third party (including past or present customers, employees,
business associates, and/or media) any disparaging, untrue, negative,
defamatory or misleading written or oral statements about or relating to each
other or any of their respective products or services (or about or relating
to any officers, directors, agents, employees, or other persons acting on
their behalf), or any of their respective employment or business practices or
policies.
11. Non-Solicitation & Covenant Not to Compete. The Consultant
hereby covenants and agrees to the following:
a. For a period ending four (4) years from the Effective Date
(the "Restrictive Period"), Consultant shall not solicit for her own account
or for others or hire, directly or indirectly, any employee of the Company or
any person who was an employee of the Company within one year prior to the
Effective Date, in any capacity whatsoever, nor attempt to induce, directly
or indirectly, any employee of the Company to leave the employ of the Company
to work for her or any entity with which she is providing services as an
employee, consultant or otherwise.
b. For the Restrictive Period, Consultant shall not at any time,
anywhere in the world, either directly or indirectly, engage in, with or for
any enterprise, institution, business, or company, whether or not for profit,
which is competitive with any business in which the Company is engaged as of
the Effective Date related to the manufacture, distribution, sale and
licensing of ophthalmologic equipment, products or services for the treatment
or correction of Presbyopia, either as a director, officer, consultant,
advisor, employee, director, stockholder or otherwise of or through any
corporation, partnership, association, sole proprietorship or other entity,
including, but not limited to Biolase Technology, Inc. or PresbyCorp (or
their affiliates, successors or licensees). Ownership of, by Consultant, her
spouse or children, not more than four percent (4%) of the total debt or
equity capital of any such competitive enterprise or business, where the
stock is listed on a national securities exchange or on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or the OTCBB or National Quotation System "pink sheets.", shall not be deemed
in violation of the covenants contained in this paragraph.
c. For the Restrictive period, Consultant shall not interfere
with any business relationship between the Company and any of its customers,
licensors, licensees clients, agents or subagents, including, but not limited
to, the solicitation of such persons.
d. Consultant acknowledges that if the Consultant shall breach or
threaten to breach any provision of this Section 11, the damages to the
Company may be substantial, although difficult to ascertain, and money
damages will not afford the Company an adequate remedy. Therefore, if the
provisions of this Section 11 are violated, in whole or in part, the Company
shall be entitled to specific performance and injunctive relief, without
prejudice to other remedies the Company may have at law or in equity. If a
court of competent jurisdiction deems any provision of this Section 11 to be
too broad in time, scope, or area, it is expressly agree that such provision
shall be reformed to the maximum degree that would not render it
unenforceable.
12. Breach of Non-Disparagement and Confidentiality Provisions.
The Parties acknowledge that the provisions set forth in Sections 9 and 10
of this Agreement are essential terms. A violation by any party to this
Agreement of such provision(s) shall be a material breach of this Agreement.
A breach by any party to this Agreement of Sections 9 and 10, shall entitle
the non-breaching party(s) to recover such damages as may be shown to have
resulted from any violation and/or to seek such other remedies as are
available under applicable law, including specific performance and injunctive
relief. If any term or provision of Section 9 and 10, or the application
thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of such Section or Sections or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of Section 9 and 10 shall be valid and enforceable to
the fullest extent permitted by law.
13. Conflicting Agreements. Consultant represents that this is not a
contract of employment nor is there any other contract in existence between
herself and the Company or any other person, corporation or partnership that
conflicts with the provisions of this Agreement, except the Loan Agreement.
This Agreement supersedes in all respects the current consulting agreement
between the Consultant and the Company.
14. Independent Contractor. Consultant shall perform her services
hereunder as an independent contractor and not as an employee of the Company
or an affiliate thereof. It is expressly understood and agreed to by the
parties hereto that Consultant shall have no authority to act for, represent,
or bind the Company or any affiliate thereof in any manner, except as may be
agreed to expressly by the Company in writing from time to time. It is
understood and hereby expressly authorized that if the Company continues to
use the services of the Consultant as a Regulatory Consultant or Regulatory
Monitor, all actions taken on behalf of the Company and approved by the
Company in those roles will be binding on the Company. The Consultant may
employ others to perform services for the Company upon the written
authorization of the Company. Consultant acknowledges and agrees further
that, since she is not an employee of the Company, the Company shall not be
responsible for the withholding or payment of any taxes for or to her.
Consultant shall not represent to third parties that she is an officer,
director or employee of the Company.
15. Release. The parties acknowledge that as of the
Effective Date, the Company shall have no obligations to Consultant except as
set forth in this Agreement and the Loan Agreement; the Consultant shall have
no obligations to the Company except as set forth herein; and, as of the
Effective Date, the Company and Consultant have executed, the Mutual General
Release attached hereto as Exhibit A.
16. Modification of Lien. As a inducement for and in
consideration for GEM providing the Financing, a portion of the proceeds of
which Financing shall satisfy a portion of the Company's Obligations, the
security interest of Consultant to the assets of the Company shall be pari
passu with the interest of GEM and Xxxxxx Xxxxxxxxx, Ph.D. to such assets as
provided in the intercreditor agreement attached hereto as Exhibit B and
subject to the provisions of Section 5. Said security interest of
Consultant, her heirs and assigns, shall be extinguished upon completion of
the payments by the Company of the Obligations. The security interest of
Consultant shall remain superior to GEM until the Effective Date payment is
made. The parties agree to execute and deliver following the Effective Date
and meeting of the above conditions, any instrument, document, or other paper
and take any other action that is necessary to modify Consultant's security
interest.
17. Condition Precedent. The timely receipt by Consultant of the
Initial Payment is a condition precedent to all obligations of Consultant
under this Agreement If the Initial Payment is not made as required under
this Agreement, then this Agreement shall be deemed null and void in its
entirety and of no further force and effect.
18. Assignment. This Agreement and all rights hereunder are personal
to the Consultant and shall not be assignable and any purported assignment in
violation thereof shall not be valid or binding on the Company.
19. Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
20. Entire Agreement, Waiver, Amendment. This Agreement constitutes
the whole agreement between the parties hereto and there are no terms other
than those stated herein. No variation hereof shall be deemed valid unless
in writing and signed by the parties hereto, and no discharge of the terms
hereof shall be deemed valid unless by full performance by the parties hereto
or by writing signed by the parties hereto. No waiver by either party of any
provision or condition of this Agreement to be performed shall be deemed a
waiver of similar or dissimilar provisions and conditions at the same time or
any prior or subsequent time. This Agreement supersedes and replaces any and
all present, written or oral, agreements of employment between the parties
hereto, and all such agreements are hereby deemed canceled, revoked and of no
further force or effect.
21. Notices. Any notice, request, demand or other communications
required or permitted pursuant to this Agreement shall be in writing and
shall be deemed to have been properly given if delivered in person or by
courier or other overnight carrier, by facsimile transmission (with
confirmation of receipt) or by certified or registered mail, postage prepaid
and return receipt requested, to each party hereto at the address indicated
above or at any other address as may be designated from time to time by
written notice to each party. If notice is sent to the Company, a copy of
such notice shall be sent to Xxxxxx X. Xxxxxxxx, XxXxxxxxxx & Xxxxx, LLP, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000. Notice under this Agreement shall be
deemed given upon delivery.
22. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Florida, without giving effect
to its conflict of law principles. Consultant and the Company agree that all
disputes arising out of or concerning the terms of this Agreement will be
subject solely to binding arbitration. The arbitrator selection and conduct
of the arbitration will be pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. The place of the arbitration shall be
in Orange County, Florida and judgment on the award may be entered in any
court having jurisdiction thereof. If either party believes it is necessary
to undertake discovery on asserted statutory claims, such party shall apply
to the arbitrator or arbitrators for rights to undertake discovery and the
arbitrator shall allow discovery sufficient for either party to adequately
arbitrate, vindicate, or defend the statutory claims, including access to
essential documents and witnesses. At the conclusion of the arbitration, the
arbitrator or arbitrations shall issue a decision in writing setting forth
the essential findings and conclusions, and this decision is subject to
review, confirmation, correction, or vacation pursuant to the provisions Code
of Civil Procedure 1285 through 1288.8 in effect at the time the decision is
rendered. The prevailing party in any action arising under this Agreement
shall be entitled to reimbursement of the costs of such action, including
reasonable attorney's fees.
23. Indemnification. Consultant shall be indemnified by Company in
performance of her duties hereunder, unless Consultant's actions, in a court
of law, shall be adjudicated as grossly negligent.
IN WITNESS WHEREOF, the parties have hereunto set their respective
hands and seals causing these presents to be executed as of the day and year
first above written.
SURGILIGHT, INC. CONSULTANT
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxx, President Xxxxxxx Xxxxxx, Ph.D.
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