EXHIBIT 10.16
Dated the 9th day of September 1999
CONSULTANCY AGREEMENT
BETWEEN
(1) Mobile P.E.T. Systems, Inc.
(2) Dr. Piers Xxxxxxxx Xxxxxxx
Xxxxxx-Xxxxxxxx & Boxalls
00 Xxxxxxx'x Xxx Xxxxxx
Xxxxxx XX0X 0XX
Tel. 0000 000 0000
THIS AGREEMENT is made the _______________ day of _____________ 1999
BETWEEN:
1. MOBILE P.E.T. SYSTEMS, INC., a Company Incorporated in the State of
Delaware (EIN Number 00-0000000) with its Principal Offices located at
0000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of
America ("the Company"); and
2. DR. PIERS XXXXXXXX XXXXXXX of 00 Xxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxx
X0X 0XX ("the Consultant").
1. DEFINITIONS
The following terms shall have the following meanings:
1.1 "Board" The Board of Directors of the Company.
1.2 "Commencement Date" The 1st day of September 1999.
1.3 "Term" From the Commencement Date to 31st
December 2000 and unless and until
this Agreement is determined by either
party in accordance with clause 7.
2. APPOINTMENT
The Company appoints the Consultant as a consultant of the business of
the Company for the Term to provide the services set out herein.
3. THE OBLIGATIONS OF THE CONSULTANT
3.1 During the Term the Consultant shall unless prevented by ill-health
devote such of his time, attention and abilities in the business of the
Company as the Consultant and the Company shall deem reasonably
necessary provided that the Consultant shall not act as an advisor,
consultant or employee of or for any other Positron Emission Tomography
(P.E.T.) Service.
3.2 The Consultant's obligations shall be to oversee on behalf of the
Company the clinical operations of the P.E.T. services provided in
London at the London P.E.T. Centre, located at 000 Xxxxxx Xxxxxx.
Xxxxxx X0 or such other premises as may be provided by the Company after
consultation with the Consultant. The Consultant may be titled Clinical
Director of the London P.E.T. Centre but shall not be a Director or act
as a shadow Director of the Company. The services of the Consultant will
include the clinical marketing of P.E.T. to physicians and expanding the
UK clinical operation of the Company and in order to carry out his
obligations the Consultant shall have with the approval of the Company
power to employ or engage the services of administrative and clinical
staff in the name of and on behalf of the Company and shall monitor the
quality reporting of scans by nuclear isotope physicians so employed or
engaged and shall liaise with potential referring physicians.
3.3 In carrying out his services to the Company the Consultant shall not be
required to carry out any routine office administration of the London
P.E.T. Centre or be involved in the pricing or billing of work carried
out at the Centre, nor the supply of physics or isotopes or the day to
day working and quality control of the P.E.T. scanner.
3.4 The Consultant shall not be required to be present at the London P.E.T.
Centre on a routine basis but will be available for consultation to the
office staff.
3.5 As part of his services the Consultant will be appointed and serve as a
member of the Medical Advisory Board of the Company and shall assist the
promotion of the business of the Company in the United States and in
Europe.
3.6 The Consultant will participate with other clinicians on the Medical
Advisory Board and provide input to the management of the Company with
regard to technology, clinical utilisation and other medical trends of
which the Company should be made aware.
3.7 In connection with his services the Consultant shall report to the Board
through the Chief Executive Officer of the Company.
3.8 All services of the Consultant shall be provided in London and the
Consultant shall not be required to travel overseas in order to provide
services to the Company other than attending one meeting of the Medical
Advisory Board each year in the United States of America.
4. CONSIDERATION
4.1 In consideration for the services to be rendered by the Consultant
under this Agreement the Company shall:
4.1.1 On the signing of this Agreement grant the Consultant the
options to acquire
(a) 50,000 shares (the "First Option") and
(b) 25,000 Shares ("the Second Option") in the Company in
accordance with the terms of the Share Option Deed set
out in the First Schedule hereto.
4.1.2 Pay to the Consultant a Management Fee equal to 5% of the
net profit of the operations of the Company in the United
Kingdom in accordance with the provisions set out in the
Second Schedule hereto.
4.2 In addition to the consideration payable under clause 4.1 above the
Company shall on each anniversary of the date of this Agreement
grant to the Consultant an option to acquire 10,000 shares in the
Company ("the Third Option") in accordance with the term of the
Share Option Deed set out in the First Schedule hereto provided
that the Third Option shall only be granted if at each relevant
anniversary of the date of this Agreement the Consultant was a
member during the preceding year of the Medical Advisory Board of
the Company or any similar Board or Committee that may have
replaced the Medical Advisory Board.
4.3 In addition to the considerations payable under clause 4.1 and 4.2
above, the Company shall grant to the Consultant an option to
acquire 10,000 shares on 31st December 1999, 30,000 shares on 31st
December 2000, 30,000 shares on 31st December 2001, 30,000 shares on
31st December 2002 and 30,000 shares on 31st December 2003 ("the
Fourth Option") in accordance with the terms of the Share Option
Deed set out in the First Schedule hereto provided that this share
option ("the Fourth Option") shall only be exercisable if at the
relevant date set out above the Consultant was a member of the
Medical Advisory Board of the Company or any similar board or
committee that may have replaced the Medical Advisory Board.
5. ADMINISTRATIVE ARRANGEMENTS
5.1 The Company shall reimburse to the Consultant all reasonable travelling
and other expenses properly incurred by him in the performance of his
services under this Agreement provided that the Company may require any
such expenses to be duly vouched by written evidence where procurable.
5.2 The Company shall procure that the London P.E.T. Centre shall be
provided with such sufficient funds as the Consultant shall advise is
necessary for the remuneration of staff employed or engaged to provide
services at the London P.E.T. Centre and all costs incurred in
administering the Centre including expenses incurred by the Consultant.
5.3 The Consultant shall be empowered to draw on such funds by signing
cheques or other payment authorities on behalf of the Company up to a
total of L5,000 on any one cheque or authority, provided that all
payments in favour of the Consultant shall be authorised in advance in
writing by the chief executive officer of the Company or a member of the
Board.
5.4 The Consultant or his personal representatives shall be entitled to a
rateable proportion of the sum or sums payable to the Consultant under
clause 4 for any broken portion of any year during which his engagement
under this Agreement subsists and shall be entitled to exercise his
share options in accordance with the provisions set out in the Share
Option Deed set out in the First Schedule.
6. VALUE ADDED TAX
6.1 All sums payable under this Agreement unless otherwise stated are
exclusive of VAT or other duties or taxes.
6.2 Any VAT or other duties or taxes payable in respect of such sums shall
be payable in addition to such sums.
7. TERMINATION
7.1 This Agreement may be terminated:
7.1.1 By either party serving on the other six months written notice of
termination of this
Agreement to expire on 31st December in any year.
7.1.2 By either party by immediate written notice if the other party
shall have committed a serious or fundamental breach of this
Agreement not capable of remedy within thirty days.
7.1.3 By 90 days notice in the event that either party shall have
committed a breach of this Agreement which is capable of remedy
and such breach has not been remedied within thirty days of the
giving of such notice.
7.1.4 By 90 days notice by either party in the event that the
Consultant shall be unable to provide consultancy services to the
Company due to ill-health for a consecutive period of more than
three months.
7.2 Any notices given under this clause shall be given in accordance with
the provisions of clause 10.2 below.
7.3 The appointment of the Consultant to the Medical Advisory Board of the
Company may be terminated by 90 days notice by either party hereto
expiring on the anniversary of the date of this Agreement. The
resignation or removal of the Consultant from the Medical Advisory Board
shall not determine this Agreement provided that in the event that the
appointment of the Consultant to the Medical Advisory Board is
terminated by the Company the Consultant shall be entitled to give 90
days notice of termination of this Agreement.
8. LIABILITY AND INDEMNITY
8.1 The Company shall maintain full insurance cover in relation to any
claims against the Company or the Consultant in relation to the business
of the London P.E.T. Centre and all services to be provided by the
Company or the Consultant in the United Kingdom and by any staff
employed by or engaged to provide services for the Company and the
Company authorises the Consultant to procure such insurance cover in the
name of the Company as the Consultant deems necessary.
8.2 The Company shall indemnify and keep indemnified the Consultant from and
against all and any claims, loss, damage or liability and any legal fees
and costs or expenses incurred in respect of any
claim against the Consultant or the Company in relation to the services
referred to in clause 8.1.
8.3 All business carried out and services provided by or on behalf of the
Company in the United Kingdom shall be in accordance with all laws and
regulations applying in the United Kingdom and the Company shall
indemnify the Consultant from and against all and any loss, damage or
liability arising from any breach of this provision.
9. SECRECY
The Consultant shall not at any time during the Term divulge and shall
use his best endeavours to prevent the divulging to any person any
confidential information relating to the business or affairs of the
Company other than with the consent of the Company or as may be required
by law.
10. GENERAL
10.1 This Agreement contains the whole agreement between the parties and
supersedes any prior agreement between the parties whether written
or oral and no variation of this Agreement shall be made except by a
document in writing signed by both parties.
10.2 Any notice to be served on either party by the other shall be sent
by facsimile transmission or electronic mail or by prepaid
registered post to the address of the relevant party shown at the
head of this Agreement and shall be deemed to have been received by
the addressee seven days after the same has been posted or
twenty-four hours after dispatch if sent by facsimile transmission
or by electronic mail to the correct facsimile number or electronic
mail address of the addressee.
10.3 This Agreement shall be governed by English law in every
particular, including formation and interpretation, and shall be
deemed to have been made in England and the parties hereto submit to
the non-exclusive jurisdiction of the English Courts.
10.4 During the Term the Consultant shall be an independent contractor
and not an employee of the Company and in such capacity the
Consultant shall bear exclusive responsibility for the
payment of National Insurance Contributions as a self-employed
person and for the discharge of any income tax and (subject to
clause 5) VAT liability arising out of remuneration for the services
provided by him under this Agreement.
10.5 The Consultant shall not be subject to directions from the Company
as to the manner in which he shall perform the services to be
provided by him.
10.6 The Company shall not assign or sub-contract any of its rights or
duties under this Agreement without the consent in writing of the
Consultant and the Consultant shall not delegate or assign or
sub-contract any of his rights or duties under this Agreement.
10.7 The Consultant shall upon termination of his engagement as a
Consultant immediately deliver up to the Company all documents,
specifications and property belonging to the Company which may be in
his possession or under his control.
10.8. If before the end of the Term the engagement of the Consultant shall
be terminated by reason of the winding up of the Company for the
purpose of amalgamation or reconstruction or the Company is a party
to any arrangement for amalgamation not involving winding up and the
Consultant shall be offered an engagement with the amalgamated or
reconstructed company for a period not less than the unexpired part
of the Term and on terms identical (mutatis mutandis) to the terms
of this Agreement the Consultant shall have no claim against the
Company in respect of such termination.
SIGNED by the Consultant and on behalf of the Company on the above date.
THE FIRST SCHEDULE
(THE SHARE OPTION DEED)
This Deed is made the 9th day of September 1999
BETWEEN:
1. MOBILE P.E.T. SYSTEMS, INC., a Company Incorporated in the State of
Delaware (EIN Number 00-0000000) with its principal offices located at
0000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of
America ("the Company"); and
2. DR. PIERS XXXXXXXX XXXXXXX of 00 Xxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxx
X0X 0XX ("the Consultant").
RECITALS
The Consultant has been appointed a Consultant to the Company and it is
proposed that the Company will grant options to the Consultant in respect of
the Option Shares on the terms and conditions set out in this Deed.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATIONS
In this Agreement the following expressions have the meanings set out
below (unless the context otherwise requires):
1.1 "the First Option" means the option granted to the Consultant by clause 2.
1.2 "the Second Option" means the option granted to the Consultant by clause 3.
1.3 "the Third Option" means the option granted to the Consultant by clause 4.
1.4 "the Fourth Option" means the option granted to the Consultant by clause 5.
1.5 "the Option Shares" means the number of Shares in respect of which the Options have been
granted but subject to variation pursuant to clause 8.
1.6 "the Options" means together the First Option, the Second Option, the Third Option and
the Fourth Option.
1.7 "the Shares" means the Common Shares of the Company.
1.8 "the Subscription Price" means the prices set out in clauses 2, 3, 4 and 5 below in respect of the
Options subject to variation pursuant to clause 8.
2. GRANT OF THE FIRST OPTION
In consideration of the sum of US$1 (the receipt of which is acknowledged
by the Company) the Company grants the Consultant the right to subscribe
for 50,000 (Fifty thousand) Shares or any of them at a price of US$3.0
per Share.
3. GRANT OF THE SECOND OPTION
In consideration of the sum of US$1 (the receipt of which is
acknowledged by the Company) the Company grants the Consultant the right
to subscribe for 25,000 (Twenty-five thousand) Shares or any of them at
a price of US$1 per Share.
4. GRANT OF THE THIRD OPTION
4.1 In consideration of the sum of US$1 (the receipt of which is
acknowledged by the Company) the Company grants the Consultant the right
to subscribe for 10,000 (Ten thousand) Shares in the Company on the 1st
day of January 2000 and on the 1st day of January in each subsequent
year provided that the Consultant was a member of the Medical Advisory
Board of the Company during the year preceding each such date.
4.2 The price payable by the Consultant shall be an amount per Share equal
to the average weighted price for the Shares of the Company quoted on
the NASD-OTC Bulletin Board or such other market or stock exchange in
the United States upon which the Shares are traded or listed during the
year from the 1st day of January 1999 to 1st January 2000 and each
subsequent year.
4.3 Within fourteen days of the 1st day of January 2000 and each
subsequent anniversary of that date the Company shall notify the
Consultant of the average weighted price of the Shares in the
Company during the preceding year which shall be the Subscription
Price for the Third Option for that year. The notification by the
Company shall include a certificate by the auditors of the
Company that the Subscription Price has been accurately
calculated and such notification shall be binding on the Company
and the Consultant save where manifestly incorrect.
5.1 GRANT OF THE FOURTH OPTION
In consideration of the sum of US$1 (the receipt of which is
acknowledged by the Company) the Company grants the Company
the right to subscribe for
5.1.1 10,000 Shares on the 31st day of December 1999 at a price
of US$1 per Share;
5.1.2 30,000 Shares on the 31st day of December 2000 at a price
of US$1.50 per Share;
5.1.3 30,000 Shares on the 31st day of December 2001 at a price
of US$2 per Share;
5.1.4 30,000 Shares on the 31st day of December 2002 at a price
of US$2.50 per Share; and
5.1.5 30,000 Shares on the 31st day of December 2003 at a price of
US$3 per Share.
5.2 The options granted in this clause are conditional upon the
Consultant being a member of Medical Advisory Board of the
Company on the relevant dates when the options become
exercisable.
6. EXERCISING THE OPTIONS
6.1 The Options may be exercised at any time after the Options shall have
been granted provided that the Options shall be exercised in any
event not later than two years after the dates upon which such Option
of part of such Option shall have become exercisable.
6.2 The Options shall be exercisable by the Consultant or in the event of
the Consultant's death by personal representatives of the Consultant
within six months of his death.
6.3 The Options shall be exercisable in respect of all or part of the
Option Shares or the balance of the
Shares comprised in the Options by notice in writing given
by the Consultant to the Company.
6.4 The notice of exercise of the Options shall be accompanied
by a remittance for the aggregate of the Subscription Price
payable.
6.5 Within thirty days of the receipt of the notice of
exercise the Company shall allot the Shares in respect of
which the Options have been validly exercised and shall
issue a definitive certificate in respect of the Shares
allotted.
6.6 Save for any rights determined by reference to a date on
or before the date of the notice to exercise the Options
the Shares allotted under this clause shall rank pari
passu and as one class with the other issued Shares of the
Company at the time of exercise of the Options.
7. TAKEOVERS, MERGERS AND WINDING-UP
7.1 If any person, firm or corporation obtains control of the Company as a
result of making a general offer to acquire the whole of the issued
ordinary Share Capital of the Company which is made on condition that
if it is satisfied the person, firm or corporation making the offer
will have control of the Company or a general offer to acquire all the
Shares in the Company then the Options which are exercisable at that
time may be exercised within one month of the date when the Company
notifies the Consultant that the person making the offer has obtained
control of the Company and any conditions subject to which the offer
is made have been satisfied and to the extent that the Options have
not been exercised by the end of such period they shall lapse.
7.2 If there shall be a reconstruction of the Company or its
amalgamation with another company or companies as a result
of which the shares in the Company shall cease to be
listed or the Company goes into liquidation, the Options
then exercisable may be exercised within one month after
the Company has notified the Consultant of such event and
to the extent that the Options have not been exercised by
the end of such period they shall lapse.
7.3 In the event that the Options shall lapse under the
provisions of clause 7.1 or 7.2 above the Company shall
pay to the Consultant a sum equal to the value of the
Option Shares less the
Subscription Price which would have been payable by the Consultant if
the Consultant had exercised the Options in full.
8. VARIATION OF SHARE CAPITAL
8.1 In the event of any capitalisation, consolidation, sub-division or
reduction of the share capital of the Company or any rights issue or
other variation of capital taking place after the date of this Deed, the
number of Shares comprised in the Options and the Subscription Price may
be varied in such manner as the Directors of the Company shall determine
and as the Auditors of the Company shall certify in writing to be in
their opinion fair and reasonable.
8.2 The Company shall notify the Consultant of any such variation under
clause 8.1.
9. GENERAL
9.1 The Company will at all times keep available sufficient unissued Shares to
satisfy the exercise to the full extent still possible of the Options
taking account of any other obligations of the Company to issue Shares.
9.2 This Deed shall not form part of any contract for the provision of
services by the Consultant to the Company and the rights and obligations
of the Consultant under any such agreement with the Company shall not be
affected by this Deed or any right he may have under it and the rights
granted by this Deed shall not be dependent upon the performance of any
such agreement.
9.3 No variation to the terms of this Deed shall be effective unless agreed
in writing by the parties.
9.4 Any notice or communication to be given by either party to the other
shall be sent by facsimile transmission or electronic mail or by
pre-paid registered post to the address of the relevant party shown at
the head of this Deed and shall be deemed to have been received by the
addressee seven days after the same has been posted or 24 hours after
despatch if sent by facsimile transmission or by electronic mail to the
correct facsimile number or electronic mail address of the addressee.
9.5 The Consultant hereby authorises Xxxxx Xxxxx Investment Management
Limited or such other
stockbrokers as he may notify to the Company from time to time to give
notice of exercise of the Options to the Company and the Company shall
accept any such notice given on behalf of the Consultant.
9.6 This Deed shall be governed by English law in every particular, including
formation and interpretation, and shall be deemed to have been made in
England and the parties hereto submit to the non-exclusive jurisdiction
of the English Courts.
Signed as a Deed by the Consultant and on behalf of the Company the day and
year first above written.
THE SECOND SCHEDULE
(The Management Fee Payable to the Consultant)
1. The Management Fee payable to the Consultant under clause 4.1.2 shall be
five per cent of the Net Profits made by the Company in respect of the
Company's PET business in the United Kingdom.
2. "Net Profits" shall mean the profits of the business operations of the
Company in the United Kingdom less all expenses properly incurred in
relation to the operations of the Company in the United Kingdom but
excluding
(a) any administration costs or expenses incurred outside the United
Kingdom attributable to the United Kingdom operations; and
(b) any interest payments and financing costs and any taxation whether
payable in the United Kingdom or elsewhere.
3. The Net Profits shall be calculated as of January 15th of each year and
if not agreed by the Company and the Consultant within 21 days
thereafter the calculation of the Net Profits shall be referred to an
independent expert for determination (who shall be a Chartered
Accountant agreed by the parties or in the absence of agreement selected
by the President for the time being of the Institute of Chartered
Accountants) whose decision shall be final and binding on the parties
and whose costs shall be borne equally by the Parties.
4. If the Net Profits are agreed by the parties payment shall be made to the
Consultant not later than one month after the end of the relevant year
and if referred to the independent expert shall be paid seven days after
the expert's decision has been delivered.
5. For the period to the 15th January 2000 the fee payable to the Consultant
shall be five per cent of the Net Profits for the period from the
commencement of the UK operations of the Company to 15th January 2000
notwithstanding the fact that the Consultant has not acted as Consultant
during the whole of that period.
Signed for and on behalf of
P.E.T. SYSTEMS INC
/s/ Xxxx X. Xxxxx
---------------------------
Director
Signed by the said
DR PIERS XXXXXXXX XXXXXXX
/s/ Xxxxx X. Xxxxxxx
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