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EXHIBIT 10.7
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this Agreement ), made and entered into as
of the 1st day of November, 1997, by and between Opticon Medical Inc., an Iowa
corporation (the "Company"), and Xx. Xxxxx X. Xxxxxx, an individual resident of
Des Moines, Iowa, the inventor and founder of the Company ("Consultant").
WHEREAS, The Company desires to retain Consultant to render consulting
and advisory services for the Company on the terms and conditions set forth in
this Agreement, and Consultant desires to be retained by the Company on such
terms and conditions.
NOW THEREFORE, In consideration of the premises, the respective
covenants and commitments of the Company and Consultant set forth in this
Agreement, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and Consultant agree as follows:
1. RETENTION OF CONSULTANT; SERVICES TO BE PERFORMED. The Company
hereby retains Consultant to render such consulting and advisory services as the
Company may request relating to the design, development, manufacture and
distribution of urology, uro-gynecology and urinary continence care products.
Consultant hereby accepts such engagement and agrees to perform such services
for the Company upon the terms and conditions set forth in this Agreement.
During the term of this Agreement, Consultant shall devote such portion of his
business time, attention, skill and energy to the business of the Company as may
be reasonably required to perform the services required by this Agreement, and
shall assume and perform to the best of his ability such reasonable
responsibilities and duties as shall be assigned to Consultant from time to time
by the Company. During the term of this Agreement, Consultant shall report to
the Company's Chief Executive Officer.
2. TERM. The term of this Agreement shall commence as of the date of
this Agreement and shall continue for a continuous period of four (4) years.
3. COMPENSATION. As compensation in full for Consultant's services
hereunder, the Company shall pay to Consultant a consulting fee of One Hundred
Ten Thousand Dollars ($110,000) per year for the first and second year of the
term of this Agreement, and Seventy-five Thousand Dollars ($75,000) per year for
the third and fourth years of the term of this Agreement. The consulting fee
shall be payable to Consultant in twelve (12) monthly payments paid at the end
of each calendar month during the term of this Agreement.
4. EXPENSES. Consultant shall be reimbursed by the Company in
accordance with the policies and procedures that are established from time to
time by the Company for all reasonable and necessary out-of-pocket expenses that
are pre-approved by the Chief Executive Officer of the Company and incurred by
Consultant in performing his duties under this Agreement, including, without
limitation, reasonable travel expenses incurred by Consultant in rendering
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services outside of Des Moines, Iowa, long-distance telephone charges, and
expenses related to assigning the Inventions (as defined in Section 5) to the
Company.
5. PATENTS AND RELATED MATTERS.
a. NOTIFICATION AND DISCLOSURE. Consultant shall promptly
notify the Company in writing of the existence and nature of, and shall promptly
and fully disclose to the Company, any and all ideas, designs, practices,
processes, apparatus, improvements, inventions, devices, methods, know-how or
products, whether patentable or unpatentable or protectable by copyright or
other intellectual property law, made, developed, perfected, devised, conceived
or first reduced to practice by Consultant, during the period of Consultant's
consulting arrangement with the Company and/or within one (1) year after
termination of this Agreement, relating either directly or indirectly to the
business, products, practices or techniques of the Company as contemplated at
such time (hereinafter referred to as "Inventions"). As of the date of this
Agreement, the Company deems its field of business to be urology, uro-gynecology
and urinary continence care products and services, including but not limited to
all variations of the Opticon devices currently being developed by the Company.
b. OWNERSHIP AND PATENTING OF INVENTIONS. All such Inventions
shall be the sole and exclusive property of the Company or its nominee, and
during the term of this Agreement and thereafter, whenever requested to do so by
the Company, Consultant shall execute and assign any and all applications,
assignments and other instruments that the Company shall deem necessary or
convenient in order to apply for and obtain Letters Patent of the United States
and/or of any foreign countries for such Inventions and in order to assign and
convey to the Company or its nominee the sole and exclusive right, title and
interest in and to such Inventions. Consultant will render aid and assistance to
the Company in any interference or litigation pertaining to such Inventions, and
all expenses reasonably incurred by Consultant at the request of the Company
shall be borne by the Company. To the extent that any patents, copyrights, or
patent developments are the result of Employee's work and efforts, the Company
agrees to identify Consultant in the patent application as the founder of the
Company, if appropriate, and as either the developer or inventor of the
particular patent device.
c. LIMITATION. The provisions of this Section 5 shall not
apply to any Invention meeting all of the following conditions:
(1) such Invention was developed entirely on
Consultant's own time;
(2) such Invention was made without the use of any of
the equipment, supplies, facility or trade secret
information of the Company;
(3) such Invention does not relate to the fields of
urology, uro-gynecology or urinary continence
care;
(4) such Invention does not relate (i) directly to
the business of the Company, or (ii) to the
Company's actual or demonstrably anticipated
research or product development; and
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(5) such Invention does not result from any work
performed by Consultant for the Company.
6. PROTECTION OF TRADE SECRETS, KNOW-HOW AND/OR OTHER CONFIDENTIAL
INFORMATION OF THE COMPANY.
a. CONFIDENTIAL INFORMATION. Except as permitted or directed
by the Company's Board of Directors, during the term of this Agreement or at any
time thereafter, Consultant shall not divulge, furnish or make accessible to
anyone or use in any way (other than in the ordinary course of the business of
the Company) any confidential or secret knowledge or information of the Company
which Consultant has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his engagement
by the Company (including employment by the Company prior to the date of this
Agreement), whether developed by himself or by others, concerning any trade
secrets, confidential or secret designs, processes, formulae, plans, devices or
material (whether or not patented or patentable) directly or indirectly useful
in any aspect of the business of the Company, any customer or supplier lists of
the Company, any confidential or secret development or research work of the
Company, or any other confidential information or secret aspects of the business
of the Company. Consultant acknowledges that the above-described knowledge or
information constitutes a unique and valuable asset of the Company acquired at
great time and expense by the Company and that any disclosure or other use of
such knowledge or information other than for the sole benefit of the Company
would be wrongful and would cause irreparable harm to the Company. Both during
and after the term of this Agreement, Consultant will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. At the termination of the consulting period under this Agreement,
Consultant shall deliver to the Company all tangible, written, graphical,
machine readable and other materials (including all copies) in his possession or
under his control containing or disclosing Confidential Information. The
foregoing obligations of confidentiality, however, shall not apply to any
knowledge or information which is now published or which subsequently becomes
generally publicly known in the form in which it was obtained from the Company,
other than as a direct or indirect result of the breach of this Agreement by
Consultant.
b. COPYRIGHTABLE MATERIAL. All right, title, and interest in
all copyrightable material which Consultant shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
this Agreement, will be the property of the Company and are by this Agreement
assigned to the Company along with ownership of any and all copyrights in the
copyrightable material. Consultant agrees to execute all papers and perform all
other acts necessary to assist the Company to obtain and register copyrights on
such materials in any and all countries. Where applicable, works of authorship
created by Consultant for the Company in performing his responsibilities under
this Agreement shall be considered "works made for hire" as defined in the U.S.
Copyright Act.
c. KNOW-HOW AND TRADE SECRETS. All know-how and trade secret
information conceived or originated by Consultant which arises out of the
performance of his obligations or
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responsibilities under this Agreement or any related material or information
shall be the property of the Company, and all rights therein are by this
Agreement assigned to the Company.
7. TERMINATION. Notwithstanding any contrary provision contained
elsewhere in this Agreement, this Agreement and the rights and obligations of
the Company and Consultant hereunder (other than the rights and obligations of
the parties under Section 5 or 6) shall be terminated upon the occurrence of any
of the following events:
a. Immediately in the event of Consultant's death; or
b. Immediately in the event that Consultant suffers or incurs
any disease, injury or other mental or physical impairment or disorder which
renders Executive unable to render his normal services under this Agreement, for
a period in excess of ninety consecutive (90) days; or
c. Immediately in the event that Consultant is convicted of
any crime (excluding traffic violations or other minor offenses), or engages in
any activities that constitute a material violation of normal standards of
business ethics; or
d. Immediately in the event that Consultant willfully refuses
to comply with or implement reasonable policies and work direction established
by the Company, or upon thirty (30) days prior written notice to Consultant if
Consultant has failed in any material respect to perform his responsibilities
hereunder and such default is not cured within such thirty (30) day period.
In the event this Agreement is terminated pursuant to this Section 7
prior to the expiration of the term hereof, Consultant shall be entitled to
receive his monthly consulting fee through the date of termination, but all
other rights to receive consulting fees shall terminate on such date.
8. NONCOMPETITION AGREEMENT. The Consultant agrees that during the term
of this Agreement and for a period of two (2) years beginning on the termination
of this Agreement, the Consultant shall not directly or indirectly, as an
individual or as a director, officer, employee, consultant, partner, investor or
in any other capacity with any corporation, partnership or other person or
entity, other than the Company, engage in the business of developing,
manufacturing, selling or distributing urology, uro-gynecology or urinary
continence care products. This restriction shall not be deemed to prevent the
Consultant from owning, as a passive investment, less than 5% of the issued and
outstanding shares of any class of securities of an issuer whose securities are
listed on a national securities exchange or publicly traded in an
over-the-counter market.
9. MISCELLANEOUS.
a. ASSIGNMENT. This Agreement and the rights and obligations
of the parties hereunder shall not be assignable, in whole or in part, by either
party without the prior written consent of the other party, except that the
Company may, without the consent of Consultant, assign its rights and
obligations under this Agreement to any corporation, firm or other business
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entity with or into which the Company may merge or consolidate, or to which the
Company may sell or transfer all or substantially all of its assets, or of which
50% or more of the equity investment and of the voting control is owned,
directly or indirectly, by, or is under common ownership with, the Company.
b. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Iowa.
c. ENTIRE AGREEMENT. This Agreement evidences the entire
understanding and agreement of the parties hereto relative to the consulting
arrangement between Consultant and the Company and the other matters discussed
herein. This Agreement supersedes any and all other agreements and
understandings, whether written or oral, relative to the matters discussed
herein. This Agreement may only be amended by a written document signed by both
Consultant and the Company.
d. INJUNCTIVE RELIEF. Consultant acknowledges that it would be
difficult or impossible to fully compensate the Company for damages resulting
from any breach by Consultant of the provisions of Sections 5, 6 and 8 of this
Agreement. Accordingly, in the event of any actual or threatened breach of such
provisions, the Company shall (in addition to any other remedies that it may
have) be entitled to temporary and/or permanent injunctive relief to enforce
such provisions, and such relief may be granted without the necessity of proving
actual damages.
e. SEVERABILITY. To the extent any provision of this Agreement
shall be determined to be invalid or unenforceable, such provision shall be
deleted from this Agreement, and the validity and enforceability of the
remainder of such provision and of this Agreement shall be unaffected. In
furtherance of and not in limitation of the foregoing, Consultant expressly
agrees that should the duration of or geographical extent of, or business
activities covered by, any provision of this Agreement be in excess of that
which is valid or enforceable under applicable law, then such provision shall be
construed to cover only that duration, extent or activities that may validly or
enforceably be covered. Consultant acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement shall be construed in
a manner that renders its provisions valid and enforceable to the maximum extent
(not exceeding its express terms) possible under applicable law.
f. STATUS OF CONSULTANT. In rendering services pursuant to
this Agreement, Consultant shall be acting as an independent contractor and not
as an employee or agent of the Company. As an independent contractor, Consultant
shall have no authority, express or implied, to commit or obligate the Company
in any manner whatsoever, except as specifically authorized from time to time in
writing by an authorized representative of the Company, which authorization may
be general or specific. Nothing contained in this Agreement shall be construed
or applied to create a partnership or joint venture. Consultant shall be
responsible for the payment of all federal, state or local taxes payable with
respect to all amounts paid to Consultant under this Agreement; provided,
however, that if the Company is determined to be liable for collection and/or
remittance of any such taxes, Consultant shall immediately reimburse the Company
for all such payments made by the Company.
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g. ARBITRATION. Except as provided in Section 9(d), any claims
or disputes between the Company and Consultant arising from or related to the
performance, breach, termination or meaning of this Agreement shall be resolved
by arbitration in Des Moines, Iowa in accordance with the applicable rules of
the American Arbitration Association. The fees and costs of the arbitrator(s) as
determined by the arbitrator(s) shall be paid by the party who is unsuccessful
in such arbitration. The decision of the arbitrator(s) shall be final and
binding upon both parties. Judgment of the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, The Company and Consultant have executed this
Agreement as of the date set forth in the first paragraph.
By /s/ Xxxxxxx X. Post
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Xxxxxxx X. Post, Chief Executive
Officer and President
/s/ X. X. Xxxxxx
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Xx. Xxxxx X. Xxxxxx
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