Exhibit 10.49
1
CONSULTING AGREEMENT
THIS AGREEMENT dated February 20, 1998 ("Agreement") sets forth
the terms, conditions, obligations and benefits by and between
Company Orthodontics, Inc., a Delaware Corporation, with offices
at Boston, MA (hereinafter the "Company") and Xxxxx X. Xxxxxx, of
Newton, MA (hereinafter the "Consultant") for the provision of
the services set forth below.
WHEREAS, the Company desires to retain Consultant for the period
and upon and subject to the terms and conditions herein provided;
and
WHEREAS the Consultant is willing to agree to be retained by
Company upon and subject to the terms herein provided;
NOW THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein and for other good and
valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
RETENTION OF CONSULTANT
Company agrees to retain Consultant as a legal and business
management consultant and advisor in connection with the
operation of the Company's business.
TERM OF AGREEMENT
Consultant agrees to be retained by Company and Company agrees to
retain Consultant for a period of three (3) years, commencing
March 9, 1998, and expiring on March 9, 2001 (hereinafter the
"Term"), unless this Agreement is terminated prior to such date
in accordance with the terms of this Agreement. Commencing on
March 9, 2001 and on each March 9, thereafter, the term of this
Agreement shall be automatically extended for an additional year
unless either party gives notice of termination as provided in
this Agreement. Such notice to be delivered at least 90 days
prior to the date of termination.
SPECIFIC DUTIES AND RESPONSIBILITIES
During the term of this Agreement, and any extension thereof, the
Consultant shall render legal and business management services to
the Company in the capacity of Chief Legal Officer and shall be
available to the Company at all times reasonably requested by the
Company to serve in the aforementioned capacity and as an officer
of the Company.
INDEPENDENT CONSULTANT
The Consultant is retained by the Company only for the purpose
and the extent herein set forth and the Consultant's relationship
to the Company shall, during Term, be that of an independent
Consultant (except that Consultant shall be considered an officer
of the Company but not an Consultant). 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 Consultant benefit plans and
programs and the Consultants compensation shall be governed
exclusively by the terms of this Agreement.
WORKING FACILITIES
Consultant shall be provided with an office, and other
administrative support, such as a computer, technical assistance,
and such other facilities and services as reasonably necessary
for the performance of Consultant's work.
FRINGE BENEFITS
The Consultant shall not be entitled to and shall have no claim
under this Agreement or otherwise against the Company for any so-
called fringe benefits, including but not limited to: paid
vacation, health insurance, life insurance, long terms disability
insurance, participation in a profit sharing or pension plan,
paid sick leave or family leave.
LIABILITY COVERAGE
Company will maintain standard directors and officers liability
insurance coverage in a reasonable amount of no less than One
Million ($1,000,000.00) Dollars to idemnify Consultant from any
claims made against him in his capacity as Chief Legal Officer.
Such insurance shall name Consultant as an additional insured and
such insurance shall have appropriate waivers of subrogation and
release of liability.
BOARD RELATIONSHIP
Consultant shall be generally responsible to the Chief Financial
Officer of Company, shall meet with the Chief Financial Officer
as the needs of Company dictate, and shall attend Board of
Directors and other meetings as the Chief Financial Officer deems
necessary.
PROFESSIONAL INSURANCE, SUBSCRIPTIONS AND DUES
Company agrees to reimburse Consultant for all reasonable costs
for the retention by Consultant of professional liability
insurance, acquisition of journals and dues for professional
organizations, including Massachusetts Bar Dues, related to the
performance of his duties and responsibilities under this
Agreement. Any such journals will remain the property of
Company.
EXPENSES
Company agrees to reimburse Consultant for all out-of-pocket
expenses, including, but not limited to telephone charges, food,
travel and lodging, incurred in the course of all Company related
business, whether in state or out of state.
CONSULTATION
Consultant retains the right to render consulting and teaching
services to other organizations. Any and all fees for such
consulting and teaching shall belong to Consultant. Any
consultation or teaching services rendered within normal working
hours or taking more than twenty hours per week shall be subject
to prior approval by the Chief financial Officer of Company.
COMPENSATION
In consideration of the consulting services to be performed by
Consultant as set forth herein, the Company shall pay each month,
for during the Term, to Consultant a monthly fee of seven
thousand three hundred fifty dollars (7,350.00) per month ("Base
Fee). Payments shall be direct deposit to such account as
Consultant shall designate.
No less frequently than annually, Company's Chief financial
Officer shall review Consultant's performance and shall provide
Consultant with an appropriate bonus to the extent warranted by
said review.
STOCK OPTIONS
In addition to the payment of the Base Fee set fourth above, upon
execution of this Agreement, Company shall irrevocably grant to
Consultant a non-qualified stock option under the Company's
Incentive Stock Plan an option to acquire Twenty Five Thousand
(25,000) shares of Company's Common stock at an exercise price
equal to the average price per share for the week ending February
13, 1998.
(b) Consultant's options shall vest in three equal installments
of $8,333, per year, beginning March 2, 1999 and fully on March
2, 2001, provided, however, if Company is to be sold, liquidated,
merged with another corporation or if the current ownership no
longer maintains 50% of the ownership of Company or surviving
corporation, the time for exercise of all unexercised portions of
Consultant's stock option shall be accelerated to the day
immediately prior to the effective date of such sale,
liquidation, merger or loss of control.
(c) The option shall be non-transferable except that said
options shall inure to the benefit of Consultant's heirs in the
event of his death. This option shall survive termination of
this Agreement.
TERMINATION
By Consultant
Consultant may voluntarily terminate his services with Company at
any time during the Term upon ninety (90) days' written notice of
voluntary termination.
By Company
1. For Cause
Company may terminate Consultant's services hereunder for
Good Cause upon notice to Consultant setting forth in detail
the nature of such Good Cause. The following, ad determined
by the Board of Directors in its reasonable judgment, shall
constitute Good Cause for termination:
(a) Consultant's consistent refusal to perform (other than by
reason of disability or for reasons outside Consultants
reasonable control), without just cause, or for material
negligence in the performance of, his duties and responsibilities
to Company or any of its affiliates;
(b) Material breach by Consultant of any provision of this
Agreement;
(c) Other conduct by Consultant that is substantially harmful to
the business, interests or reputation of Company or any of its
affiliates.
2. Without Cause
In the event of Consultant's death or permanent disability,
a substantial reduction in his duties or offices or if
Company terminates his services for any reason other than a
termination for cause as set forth above, in addition to
this other rights and remedies, Company shall pay Consultant
a lump sum representing the total aggregate amount of the
Base Fee for the entire Term of the Agreement. Company
shall give Consultant three (3) months written notice prior
to any termination of services. This provision shall
survive termination of this Agreement.
3. Termination By Company in the Event of a Change of Control
Notwithstanding any other provision of the Agreement to the
contrary, if Company terminates Consultant within six (6)
months of a Change of Control of Company as defined in this
subparagraph, Company shall pay Consultant a lump sum
representing the total aggregate value of the Base Fee which
would have been earned by Consultant during the Terms of the
Agreement. Company shall give Consultant sixty (60) days'
written notice of said termination. Notwithstanding any
other provision of the Agreement, Consultant shall have the
right to terminate his services with Company within six (6)
months of Change of Control of Company as defined in this
subparagraph upon thirty (30) days' written notice of said
termination. Upon Consultant exercising said right to
terminate his services upon a Change of Control, Company
shall pay Consultant a lump sum representing the total value
of the Base Fee which would have been earned by Consultant
during the Terms of the Agreement. This provision shall
survive termination of this Agreement.
For purposes of this Agreement, "Change of Control" means
any one of the following:
(a) Any change in ownership of 25% or more of the assets of
Company;
(b) Any change in the composition of Company's Board of
Directors ("Board") such that those individuals who, as of March
9, 1998, were members of the Board cease for any reason to
constitute at least a majority of the Board;
(c) A liquidation or dissolution of Company;
(d) The disposal of all or substantially all of the assets of
Company;
(e) Any merger or consolidation of Company with, or any
acquisition of Company by, any other person or entity.
EFFECT OF TERMINATION
Upon termination of this Agreement as provided herein,
neither party shall have any further obligation hereunder
except for (a) obligations, promises or covenants contained
herein that expressly extend beyond the term of this
Agreement or which necessitate acts or omissions to occur
beyond the term of this Agreement; (b) obligations accruing
prior to the date of termination.
LIMITATIONS OF LIABILITY AND INDEMNIFICATION
Notwithstanding anything in this Agreement to the contrary
in no event, and under no circumstances shall Consultant be
liable for any form of direct, indirect, special, incidental
or consequential damages arising in any way out of or in
relation to the performance of its obligations under this
Agreement. Company hereby releases Consultant from any and
all liability and agrees to indemnify, defend and hold
harmless Consultant from and against any and all claims,
including claims of professional negligence or misconduct,
shareholder and third party claims, demands or judgments
make against Consultant as a result of Consultants
performance of this Agreement. The foregoing shall apply
whether any such claims or liability arise in contract, tort
or otherwise, irrespective of fault negligence or strict
liability.
NOTICES
All notices and other communications hereunder shall be in
writing and shall be deemed to have been given three days
after having been delivered or mailed by first-class,
registered or certified mail, or twelve hours after having
been sent by fax or telegram, charges prepaid, as follows:
(a) if to Consultant, at 00 Xx. Xxx Xxxxxx, Xxxxxx, XX 00000
or to such other person(s) or address(es) as Consultant
shall have furnished to Company in writing; and (b) if to
Company, Xxxxxx Xxxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, XX
00000, or to such other person(s) or address(es) as Company
shall have furnished to the Consultant in writing.
ASSIGNABILITY
In the event that Company shall be merge with, or
consolidated into, any other corporation, or in the event
that it shall sell and transfer substantially all of its
assets to another corporation or entity, the terms of this
Agreement shall inure to the benefit of, and be assumed by,
the corporation or entity resulting from such merger or
consolidation, or to which Company's assets shall be sold
and transferred. This Agreement shall not be assignable by
Consultant.
ENTIRE AGREEMENT
This Agreement contains the entire agreement between Company
and Consultant with respect to the subject matter hereof and
there have been no oral or other prior agreements of any
kind whatsoever as a condition, precedent or inducement to
the signing of this Agreement or otherwise concerning this
Agreement or the subject matter hereof.
AMENDMENTS
This Agreement may not be amended, nor shall any change,
waiver, modification, consent or discharge be effected
except by written instrument executed by Company and
Consultant.
SEVERABILITY
If any part of any term or provision of this Agreement shall
be hold or deemed to be invalid, inoperative or
unenforceable to any extent by a court of competent
jurisdiction, such circumstance shall in no way affect any
other term or provision of this Agreement, the application
of such term or provision in any other circumstances, or the
validity or enforceability of this Agreement.
GOVERNING LAW
This Agreement shall be governed by and construed an
enforced in accordance with the law of the Commonwealth of
Massachusetts, without regard to conflict of law principles.
Each party agrees to the exclusive jurisdiction of any state
or federal court located within Massachusetts.
WITNESS OUR HANDS AND SEALS THIS 20th DAY OF FEBRUARY, 1998.
CONSULTANT COMPANY ORTHODONTICS INC.
/s/ Xxxxx X. Xxxxxx By: /s/ C. Xxxx Xxxxxxx
Xxxxx X. Xxxxxx Xx. Xxxx Xxxxxxx
Chairman of the Board
WITNESS
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
