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EXHIBIT 10.4
SERVICES AGREEMENT
THIS SERVICES AGREEMENT, entered into as of the 9th day of September,
1996, is by and between Vision 21, Inc. ("Vision 21") and Xxxxxxx X.
Xxxxxxxxx, M.D. ("Xxxxxxxxx").
RECITALS
X. Xxxxxxxxx is a nationally recognized medical doctor
specializing in ophthalmology;
X. Xxxxxxxxx has provided services to Vision 21 in assisting in
developing a business plan for Vision 21 to develop the Midwestern United
States region of its business; and
C. Vision 21 also desires to obtain future services from
Xxxxxxxxx and Xxxxxxxxx desires to provide services to Vision 21, all upon the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
Section 1. Services to be Provided. Xxxxxxxxx agrees to provide
the following services to Vision 21 throughout the term of this Agreement:
(a) provide consulting services to assist with the
clinical operations and management of Vision 21's affiliated regional
ophthalmology and optometry practices.
(b) render advisory services to Vision 21 in connection
with identifying potential ophthalmology and optometry practices for
integration into Vision 21's integrated eye care system.
(c) serve as Vision 21's National Medical Director.
(d) serve as a member of Vision 21's Board of Directors
beginning approximately in December 1996.
(e) perform such other services as may from time to time
be requested by Vision 21.
Section 2. Term. This Agreement shall remain in effect for a
period of five (5) years; provided, however, it may be sooner terminated by
Vision 21 or Xxxxxxxxx "with cause" upon prior written notice describing the
basis therefor. For purposes of this Agreement termination by Vision 21 "with
cause" shall mean any of the following: (i) a breach of any material term of
this Agreement by Xxxxxxxxx which breach remains uncured after thirty (30) days
notice thereof; (ii) the death or disability of Xxxxxxxxx; (iii) restriction,
suspension or revocation of Xxxxxxxxx'x license to practice medicine by any
governmental or administrative body; or (iv) misconduct of Xxxxxxxxx involving
fraud, moral turpitude or dishonesty. A termination by Xxxxxxxxx "with cause"
shall mean any of the following: (i) a breach of any material term of this
Agreement by Vision 21 which remains uncured after thirty (30) days notice
thereof; or (ii) the filing of a petition in bankruptcy by or against Vision 21
or if Vision 21 becomes
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insolvent, makes an assignment for the benefit of creditors or generally
becomes unable to pay its debts as they become due. In the event of a
termination of this Agreement by Vision 21 with cause, Vision 21 shall be
obligated to pay Xxxxxxxxx only such compensation that is due through the date
of termination.
Section 3. Time Devoted to Services. It is anticipated that
Xxxxxxxxx will not be devoting all of his time fulfilling his obligations under
this Agreement, however, Xxxxxxxxx is expected to devote a minimum average of
twelve days per three month periods under this Agreement.
Section 4. Compensation. As compensation for the services
rendered by Xxxxxxxxx, Vision 21 agrees to pay Xxxxxxxxx an initial annual sum
of $60,000 during the term of this Agreement. Payment shall begin September,
1996 and shall be paid in equal monthly installments at the end of each month.
Each year at the anniversary of this Agreement, Vision 21's Compensation
Committee shall consider what, if any, addition to annual compensation shall be
made, and its determination shall be binding. In addition to the annual cash
payments, Xxxxxxxxx shall be granted immediately 173,642 shares of Vision 21
common stock representing three (3%) of the outstanding common stock of the
Company prior to the acquisition of the founding practices. Forty percent
(40%) of such shares granted shall be non-forfeitable at the time of this
grant. Should Vision 21 terminate this Agreement with cause at any time during
the term hereof, the following shares shall be forfeited and returned to Vision
21:
TERMINATION % OF SHARES
OCCURS DURING FORFEITED
---------------- ---------
9/1/96 - 8/31/97 60%
9/1/97 - 8/31/98 45%
9/1/98 - 8/31/99 30%
9/1/99 - 8/31/00 15%
It is further agreed that if all or substantially all of the
outstanding shares of Vision 21 are acquired by an outside entity, then one
hundred percent (100%) of Xxxxxxxxx'x shares shall be non-forfeitable.
The appropriate number of shares will be lettered to reflect the
forfeiture restrictions. The parties agree that Xxxxxxxxx is an independent
contractor and, as such, shall be responsible for the payment of all federal,
state and local withholding, income and unemployment taxes or charges due or
assessed against all compensation paid hereunder.
A. Warranties, Representations and Agreements by Xxxxxxxxx
Regarding the Shares. In connection with the Shares, Xxxxxxxxx hereby warrants
and represents (i) that the Shares are being acquired for his own account and
for investment, and not with a view to, or in connection with, any distribution
or sale thereof, (ii) that he has not made any agreement with any other person
or entity concerning such Shares, (iii) that his financial condition is such
that it will not be necessary for him to dispose of such Shares in the
foreseeable future, and (iv) that he is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Act. Furthermore,
Xxxxxxxxx agrees to indemnify and hold Vision 21 harmless from and against any
claim, liability, cost or expense, including
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reasonable attorneys' fees, arising from any alleged unlawful sale or offer to
sell or transfer any of the Shares by Xxxxxxxxx.
Xxxxxxxxx also represents he is aware that the Shares have not been
registered under either federal law or the applicable law of any state or other
jurisdiction, and that the sale or resale of the Shares will not be permitted
under federal or state law unless such Shares are first registered or the sale
is a transaction that is exempt from registration under both federal and state
laws. Furthermore, Xxxxxxxxx agrees to refrain from any sale of the Shares
except pursuant to registration or exemption from registration.
Xxxxxxxxx agrees that if, contrary to his foregoing stated intentions,
he should later desire to dispose of or transfer any of the Shares in any
manner, he will not do so without first obtaining (a) an opinion of independent
counsel satisfactory to Vision 21 to the effect that the proposed disposition
or transfer may lawfully be made without registration of the Shares pursuant to
the Act, including but not limited to Rule 144 promulgated under the Act, and
applicable state securities laws, or (b) such registration (it being expressly
understood that Vision 21 will have no obligation to register the Shares for
this purpose). Xxxxxxxxx also consents to the placing of a stop transfer
notification on Vision 21's securities records with respect to the Shares.
Xxxxxxxxx consents to the placement of the following restrictive
legend on all stock certificates representing the Shares:
"The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, or
the securities laws of any state. The securities have been
acquired for investment and may not be sold, offered for sale
or transferred in the absence of an effective registration
under the Securities Act of 1933, as amended, and any
applicable state securities laws or an opinion of counsel
satisfactory in form and substance to counsel for Vision 21
that the transaction will not result in a violation of federal
or state securities laws."
"The securities represented by this Certificate are subject
to forfeiture in accordance with the terms of the Services
Agreement dated as of September 1, 1996."
Xxxxxxxxx also represents that he has been fully appraised of, and is
totally aware of the nature of, the investment in Vision 21 being made and the
financial risks thereof. In addition, Xxxxxxxxx has been offered access to all
of Vision 21's books, records, information, agreements and documents that he
has deemed necessary and appropriate under the circumstances and has had the
opportunity to ask questions of and receive answers from management of Vision
21. Xxxxxxxxx represents that Vision 21 has made no representation of any kind
as to the value of the Shares.
B. Registration Rights. Xxxxxxxxx shall have the following
registration rights with respect to those Shares that are no longer subject to
forfeiture hereunder:
(a) Piggyback Registration. If Vision 21 at any time
proposes to register on Form S-1 any of its securities under the Act in order
to consummate a public offering of any of its securities
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in the form of an underwritten offering, Vision 21 shall request that the
managing underwriter of such underwritten offering include the Shares in such
registration. If such managing underwriter agrees to include any of the Shares
in the underwritten offering, Vision 21 shall give prompt written notice to
Xxxxxxxxx specifying the form and manner and other relevant facts involved in
such proposed registration. Upon the written request of Xxxxxxxxx, delivered
to Vision 21 within 30 days of receipt of Vision 21's notice (which request
shall specify the number of Shares intended to be included in such offering),
Vision 21 shall include such Shares in such registration, provided, however,
that:
(i) If, at any time after giving such written
notice of its intention to register any of its securities and prior to the
effective date of the registration statement filed in connection with such
registration, Vision 21 shall determine for any reason not to register such
securities at its sole election, Vision 21 may give written notice of such
determination to Xxxxxxxxx and thereupon shall be relieved of its obligation to
register any Shares in connection with such registration;
(ii) If the managing underwriter in such
underwritten offering shall advise Vision 21 that it declines to include a
portion or all of the Shares requested by Xxxxxxxxx to be included in the
registration, then distribution of all or a specified portion of the Shares
shall be excluded from such registration and Vision 21 shall give Xxxxxxxxx
prompt notice of the number of Shares excluded; and
(iii) The maximum number of Shares that Xxxxxxxxx
may request to include in any single offering shall be twenty percent (20%) of
the Shares.
(b) Demand Registration. In the event Xxxxxxxxx has not
sold all of the maximum allowable Shares (20%) pursuant to above section (a)
and if Vision 21 shall receive, at any time after 180 days after the effective
date of Vision 21's registration statement filed pursuant to the Act, a written
request from Xxxxxxxxx that Vision 21 file a registration statement under the
Act covering the registration of the Shares, Vision 21 shall, as soon as
practicable, effect the registration of the Shares pursuant to the Act;
provided, however, that the maximum number of Shares that Xxxxxxxxx may request
to be registered shall be twenty percent (20%) of the Shares and the minimum
number of Shares that Xxxxxxxxx may request to be registered shall be ten
percent (10%) of the Shares. Vision 21 shall be obligated to effect only one
such registration under this section(b).
(c) S-8 Registration. In the event that the Shares are
eligible for registration on Form S-8 under the Act, Vision 21 may, in lieu of
(a) or (b) above, effect the registration of the Shares on Form S-8.
(d) In no event shall Vision 21 be required to register
any Shares at any time that (i) Vision 21 has no equity securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended, (ii)
registration is not required to effect public sale of the Shares; or (iii) the
Shares are subject to forfeiture.
(e) Xxxxxxxxx agrees to cooperate with Vision 21 in all
respects in connection with any registration of the Shares, including, timely
supplying all information and executing and returning all documents requested
by Vision 21 and its managing underwriter in connection with the registration
and sale of the Shares.
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(f) Vision 21 shall not be required to include any of the
Shares in an underwritten offering of Vision 21's securities unless Xxxxxxxxx
accepts the terms of the underwriting as agreed upon between Vision 21 and the
underwriters selected by it, and agrees to execute and/or deliver such
documents in connection with such registration as Vision 21 or the managing
underwriter may request.
(g) Xxxxxxxxx agrees to indemnify and hold Vision 21, its
officers, directors, shareholders, representatives and underwriters harmless
from and against any claim, liability, cost or expense (including reasonable
attorneys' fees) arising from or based upon any acts, omissions or statements
by Xxxxxxxxx in connection with any registration of the Shares.
(h) Xxxxxxxxx shall pay all (or a pro rata portion in the
case of piggyback registration) expenses related to the registration of the
Shares including, but not limited to, printing expenses, registration fees,
blue sky fees, listing fees, fees and disbursements of counsel for Vision 21,
underwriting discounts and selling commissions.
(i) Vision 21 shall not be obligated to keep any
registration statement effective for more than forty (40) days.
(j) Any registration statement provided herein may be
extended, suspended or delayed by Vision 21 for a period of up to ninety (90)
days if, upon the advice of counsel, at the time such registration statement is
required to be filed, or at the time Vision 21 is required to cause such
registration statement to become effective, such delay is advisable and in the
best interests of Vision 21.
(k) The registration rights set forth in this Agreement
shall expire upon termination or expiration of this Agreement.
Section 5. Confidentiality.
(a) Xxxxxxxxx acknowledges that, in the course of
providing services hereunder, Xxxxxxxxx staff will learn certain confidential
information about Vision 21's business. Xxxxxxxxx agrees that it will keep all
such information strictly confidential, and that he will cause his employees,
contractors, advisors and agents to do the same.
(b) The parties acknowledge that the provisions of
paragraphs (a) of this Section 5 shall not apply to any information which (i)
had been rightfully in the possession of the recipient prior to its disclosure
to the recipient; (ii) had been in the public domain prior to its disclosure to
the recipient; (iii) has become part of the public domain by publication or by
any other means except an unauthorized act or omission on the part of the
recipient; (iv) had been supplied to the recipient without restriction by a
third party who is under no obligation to maintain such information in
confidence; or (v) is required to be disclosed pursuant to the order of a court
of competent jurisdiction.
(c) The terms of this Section 5 shall survive the
expiration or termination of this Agreement.
Section 6. Covenant Not To Compete. Xxxxxxxxx agrees that for
the term of this Agreement and for a period of two years after termination
hereof. Xxxxxxxxx shall not give advice or assistance to, render services for,
or own any interest in, any competitor of Vision 21.
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Expressly excepted from the non-compete are the relationships between
Xxxxxxxxx and Laser Vision Centers, Inc., Midwest Surgical Services, Inc.,
Ocular Surgery News, Chiron, Inc., Storz, Visitec, Xxxxxxxxx Cleaning and
Construction, Ophthalmology Consultants, and CIBA.
Section 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO SUCH STATE'S RULES
CONCERNING CONFLICTS OF LAWS. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT IS WAIVED.
Section 8. Arbitration. Any dispute or disagreement arising
between the parties hereto in connection with this Agreement, which is not
settled to the mutual satisfaction of the parties within thirty (30) days (or
such longer period as may be mutually agreed upon) from the date that either
party informs the other in writing that such dispute or disagreement exists,
shall be submitted to arbitration in Tampa, Florida to a member of the American
Arbitration Association ("AAA") to be mutually appointed by the parties (or, in
the event the parties cannot agree on a single such member, to a panel of three
members selected in accordance with the rules of the AAA). The dispute or
disagreement shall be settled in accordance with the Commercial Arbitration
Rules of the AAA and the decision of the arbitrator(s) shall be final and
binding upon the parties and judgment may be obtained thereon in a court of
competent jurisdiction. The prevailing party shall be entitled to recover from
the other party the fees and expenses of the arbitrator(s) as well as
reasonable attorneys' fees, costs and expenses incurred by the prevailing
party.
Section 9. Entire Agreement. This Agreement reflects the entire
agreement between the parties hereto with respect to the subject matter hereof
and no provision hereof may be modified or waived unless such modification or
waiver is in writing and is signed by both of the parties hereto.
Section 10. Binding Effect. The provisions of this Agreement
shall be binding upon and inure to the benefit of Vision 21, its successors and
assigns. This Agreement shall not be assignable by Xxxxxxxxx.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXXXXX VISION 21, INC., A FLORIDA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx, M.D. By:/s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, M.D. Xxxxxxxx X. Xxxxxxxx
President and
Chief Executive Officer
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