EXHIBIT 10.8
COLLABORATION AGREEMENT
BETWEEN HEALTHCARE COMPUTING SYSTEMS, INC.
AND XXXXX XXXXXXX, M.D.
In order to facilitate and encourage a continued collaboration between
themselves, Healthcare Computing Systems, Inc., a corporation located at 000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000 ("HCS") and Xxxxx
Xxxxxxx, M.D., an individual located at 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 ("PS") hereby agree to the following terms and
conditions to govern their relationship under this Agreement.
1. INTERIM AGREEMENT.
The parties agree to the following:
a. That this general Agreement may be replaced, through mutual written
consent, by a more definitive agreement at such time as either of the
parties fell it is prudent to do so.
b. That, unless replaced or extended by a subsequent agreement, the term
of this Agreement shall be from March 5, 1996 through December 31,
1997.
c. That, should HCS divide itself into, reorganize into, or create de
novo one or more related companies ("HCS Related Companies"), then PS'
participation in each such HCS Related Company shall be at least equal
to the level of participation (consulting status, equity allocation,
participation on Board of Directors, option of becoming an employee,
reimbursement for expenses, general terms) as described for
participation in HCS below.
2. CONSULTING RELATIONSHIP.
a. Until the parties should agree to having PS become an employee, as
described in Section 3 below, PS's relationship to HCS shall be that
of a consultant and an independent contractor.
b. Unless otherwise agreed by the parties, PS shall waive his usual and
customary hourly consulting fee and shall instead be reimbursed
through the allocation of equity in HCS, as described in Section 5
below.
c. Until and unless changed otherwise by mutual agreement, PS shall bear
the HCS title of "Senior Vice President for Corporate Development" and
shall report to Dr. Xxxxx Xxxxxxxx, Chief Executive Officer of HCS.
d. PS shall assist HCS in defining its business strategy and
organizational structure; in creating one or more business plans
appropriate for the organization(s) suggested by the business plan(s);
in obtaining investment financing for HCS or the HCS Related
Companies; and in negotiating business agreements with prospective
customers of HCS. Should HCS desire PS' further participation in HCS
in additional ways, beyond those specified in the prior sentence, then
HCS and PS shall negotiate additional mutually satisfactory additional
payments for such increased participation.
e. PS shall be available for HCS related work at his sole discretion, at
times and from locations of PS's choice.
f. PS shall be considered an independent contractor and is not an
employee of HSC. PS shall be responsible for the payment of any taxes
based on his gross or net income.
3. EMPLOYMENT OPTION.
a. Both parties are interested in the possibility of PS becoming an
employee of HCS. Upon initial investor funding of HCS and upon
arriving at a mutually satisfactory
agreement on PS's position, reporting relationships, responsibilities,
salary, and compensation package, PS will have the option of becoming
a salaried employee of Healthcare Computing Systems, Inc. (HCS).
b. Such an employment of PS by HCS would be defined solely in terms of
PS's active, conceptual involvement in the day-to-day business of HCS,
but will not be defined in the context of a set, timed effort. Upon
such employment, PS may render his services at or from any location
that he may select.
c. Should PS become an employee, he shall participate in an employee
incentive stock option plan where PS will vest "X" additional shares
or "Y" additional percentage points of the total equity of HCS over a
time, where X and Y are commensurate with the employee incentive stock
option plans of the other top-level employees of HCS.
4. SEAT ON THE BOARD OF DIRECTORS.
a. PS will be appointed to the Board of Directors of HCS and any HCS
Related Companies that may be formed throughout the term hereof. This
appointment is not contingent on PS being, or becoming, an employee of
HCS or of any HCS Related Companies.
b. HCS will procure Officers and Directors' liability insurance as soon
as possible and shall add PS as a named insured on such a policy for
the term of PS's appointment to such Board hereunder; similarly, such
coverage will be obtained for PS' participation in any HCS Related
Companies.
5. EQUITY ALLOCATION.
Unless and until PS were to become an employee of HCS, PS' primary
compensation for his work will be in the form of allocation and receipt of
equity in HCS and HCS Related Companies. This allocation of equity to PS
shall proceed as follows:
a. At PS's completion of the first iteration of the business plan and
strategy for HCS, PS will receive 5% of the total equity of HCS.
b. Upon receipt by HCS or HCS Related Companies of the first payment from
the funding source (or sources) that have made a commitment to fund
the requirements in the business plan(s), PS will receive an
additional 2.5% of the total equity of HCS and any HCS Related
Companies.
c. Upon receipt by HCS or HCS Related Companies of the last/final payment
from funding source (sources) as above, PS will receive an additional
2.5% of the total equity of HCS and any HCS Related Companies.
d. Any equity paid as described above shall vest immediately upon its
allocation to PS.
e. HCS' obligation for payment of the equity allocation, as outlined
above, and PS's vesting in such equity allocation, shall survive any
termination of this Agreement; they shall also apply should PS become
an employee of HCS.
f. Should HCS transform or reorganize into one or more HCS Related
Companies, PS's equity allocation in each such HCS Related Company
shall be at least equal to the percentages and levels described above.
g. PS's equity in HCS or any HCS Related Companies shall not be diluted
unless, as defined in the Articles of Incorporation of HCS, the Board
of Directors votes to dilute the total equity of HCS. Furthermore,
any dilution of PS' equity will be less than or equal to the dilution
of the shares owned by Cybermarche, Inc., Xxxxx Xxxxxxxx, Xxxxx
Xxxxxxx, and Xxxxxx Xxxxx. Furthermore, if at any future time the
Board of Directors elects to change any of the founder's shares to
undilutable shares, PS' equity will also be changed in this way, so
that the percentage of undilutable equity that PS holds will be at
least equal to and may be more than the percentage of undilutable
equity held by any of the individuals above, or at least equal to or
may be more than 1/6th the total undilutable equity held by
Cybermarche, Inc.
6. EXPENSES.
a. PS will be reimbursed in full by HCS for any expenses that he incurs
while doing business on the behalf of and/or in the name of HCS.
b. These expenses will be paid in full in U.S. dollars within 3 weeks
from their submission to HCS.
c. PS shall obtain approval (oral and written) from HCS's Chief Executive
Officer in advance of undertaking any travel for or on behalf of HCS
and prior to incurring any expenses that are estimated to exceed U.S.
$500.
7. GENERAL.
a. This Agreement supersedes all prior agreements between the parties,
whether written or oral.
b. Neither party shall be liable to the other for incidental, indirect,
special or consequential damages, or for lost profits, savings or
revenues of any kind, whether or not it has been advised of the
possibility of such damages.
c. Neither party shall be held responsible for any delay or failure in
performance under this Agreement arising out of any cause beyond its
control or due to any force of nature, events or Acts of God or the
non-performance of third parties.
d. HCS shall fully indemnify, hold harmless and defend PS against any and
all claims, or threatened claims, by third parties related PS' actions
under this Agreement.
e. HCS shall obtain a general liability policy as soon as it is feasible,
and shall add PS as a named insured under such a general liability
policy for the term of PS's services hereunder.
f. In no event shall PS's liability to HCS or any of its current or
prospective agents, employees, shareholders, suppliers or customers,
exceed in the aggregate the lesser of: a) the total compensation paid
to PS hereunder; or b) the sum of ten thousand dollars ($10,000).
g. Nothing in this Agreement shall be deemed or construed to restrict PS
from providing any products or services of any kinds, to any party,
for any reason, under any terms, at any time. In particular, but
without limitation, nothing in this Agreement shall be deemed or
construed to restrict PS from developing or providing any products or
services to any parties other than HCS, including without limitation,
management, clinical and computer systems and services related
consulting, and computer systems, software and hardware, even if these
should be similar in scope, methodology or result to work performed
under this Agreement. Nothing in this Agreement shall prevent either
party from performing work of any kind (including developing or
providing any products or services) for any third parties, including
without limitation customers, affiliates, or competitors of the other
party. Nothing in this Agreement shall prevent either party from
recruiting or contracting with any employees, agents or subcontractors
of the other party. Nothing in this Agreement shall be deemed or
construed to prevent PS from establishing any type of an organization
or from becoming affiliated (in any conceivable manner) with any
third parties at any time.
h. Should any dispute arise between the parties, HCS and PS shall use
their best efforts to resolve such dispute amicably, expeditiously and
fairly and shall document the resolution of such dispute in writing.
Any disputes that cannot be resolved amicably shall be exclusively
resolved by binding arbitration in Los Angeles, California under the
then prevailing rules of the American Arbitration Association. The
decision of the arbitrator will be entitled to enforcement in any
court of competent jurisdiction. As part of the award, the prevailing
party shall be entitled to recover reasonable fees for its time and to
recover all costs, including attorney fees and costs, incurred in
enforcing its rights under this Agreement.
i. The Parties have each had the opportunity to review this Agreement
with their legal counsel. Neither party shall be considered to be the
author of this Agreement
j. In the event that a court of competent jurisdiction and last resort
holds that a particular provision or requirement of this Agreement is
in violation of any applicable law, each such provision or requirement
shall be enforced only to the extent it is not in violation of such
law or is not otherwise unenforceable and all other provisions and
requirements of this Agreement shall remain in full force and effect.
Accepted by:
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HCS PS
/s/ Xxxxx Xxxxxxxx, M.D. 3/15/96 /s/ Xxxxx Xxxxxxx, M.D. 3/16/96
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Signature Date Signature Date
Xxxxx Xxxxxxxx, M.D. Xxxxx Xxxxxxx, M.D.
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Name
Chief Executive Officer
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Title
AMENDMENT AND ADDENDUM TO
"COLLABORATION AGREEMENT BETWEEN HEALTHCARE COMPUTING
SYSTEMS, INC. AND XXXXX XXXXXXX, M.D."
This Amendment and Addendum to the "Collaboration Agreement between
Healthcare Computing Systems, Inc. and Xxxxx Xxxxxxx, M.D." executed March 16,
1996 ("the Agreement") is entered into by and among Healthcare Computer Systems,
Inc. ("HCS"), Xxxxx Xxxxxxx, M.D. ("Xxxxxxx") and CareFlow/Net, Inc.
("CareFlow").
1. The parties acknowledge that Xxxxxxx has fully performed all of his
obligations to HCS pursuant to the Agreement. As consideration in full for
performance of his obligations under the Agreement and for all of his efforts
relating to the formation and development of HCS, CareFlow and their respective
business, Xxxxxxx has been issued 100 shares of the Common Stock of HCS
("Xxxxxxx'x Shares"). Xxxxxxx shall retain Sptizer's Shares, and they shall
constitute full satisfaction of any and all obligations of HCS, CareFlow or any
successor or affiliate of HCS or CareFlow to Xxxxxxx regarding compensation or
issuance of equity for his efforts to date, or his retention as a consultant or
participation as an officer or director, pursuant to the Agreement or otherwise.
2. Xxxxxxx shall receive his pro-rata portion of stock in CareFlow or any
successor entity (which shall be personally delivered to him as soon as any
shares in CareFlow or any successor are issued) based on the same formula as the
Founding Shareholders of HCS (i.e., Friedman, Shank, Shattle, Kankanahalli,
Xxxxxxxxxxx, Xxxxxxx, Karinthi and the Reddys, both of whose shares are in the
name of their daughter). Xxxxxxx'x Shares will be subject, on an identical
basis with the shares held by the Founding Shareholders, to any escrow
provisions required of pre-offering shares by Xxxxx or the managing underwriter
or placement agent in connection with any public or private financing of HCS,
CareFlow or any successor entity, provided, however, that Xxxxxxx'x Shares shall
not be subject to any lock up agreement or other contractual restriction on sale
and may be sold directly or through any broker or dealer of his choice in
accordance with the provisions of Rule 144 and/or other applicable federal and
state securities laws.
3. HCS and CareFlow have permission to use all materials previously
delivered by Xxxxxxx to HCS, including materials copyrighted by Xxxxxxx and
including but not limited to the business plan Xxxxxxx prepared for HCS. Such
use shall be on a non-exclusive basis, and shall be subject to the terms and
conditions of the Agreement.
4. Neither HCS nor CareFlow shall use Xxxxxxx'x name for commercial
purposes without his prior written permission.
5. Xxxxxxx hereby resigns as a director of HCS effectively immediately,
and acknowledges that neither HCS, CareFlow nor any successor entity shall be
obligated to appoint Xxxxxxx to be an officer, director, consultant or employee.
6. Except as expressly modified herein, the Agreement shall remain in
full force and effect.
HEALTHCARE COMPUTING SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxx Dated As of January 28, 1997
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Xxxxx Xxxxxxxx, M.D.
President
CAREFLOW/NET, INC.
By: /s/ J. Xxxxxx Xxxxxx Dated As of January 28, 1997
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J. Xxxxxx Xxxxxx
President
/s/ Xxxxx Xxxxxxx Dated As of January 28, 1997
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Xxxxx Xxxxxxx, M.D.
