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EXHIBIT 10.3
CONSULTING SERVICES AGREEMENT
This AGREEMENT (the "Agreement") dated as of August 16, 1996, is by and
between:
VISTA LASER CENTERS OF THE PACIFIC, INC., a Nevada corporation (herein
called the "Company"); and
VISTA TECHNOLOGIES INC., a Nevada corporation (herein called "Vista").
1. ENGAGEMENT. The Company hereby engages the services of Vista as a
consultant to the Company, and Vista hereby accepts such engagement, all subject
to the terms and conditions set forth in this Agreement and effective on
completion of the Company IPO defined below.
2. BUSINESS AND TERRITORY OF THE COMPANY AND PRIOR INVESTMENT BY VISTA
2.1. The Company, upon completion of an initial public offering of the
Company's securities generating at least $6,000,000 in gross cash proceeds to
the Company (the "IPO"), will own and manage outpatient surgical centers (the
"LVC CENTERS") in the states of California and Nevada providing facilities,
equipment and various support services to qualified ophthalmologists and
optometrists for vision correction by use of advanced laser technology, focusing
in particular on laser vision correction of common refractive disorders such as
myopia, hyperopia and astigmatism ("LVC CARE"). The target market of the Company
will be the states of California and northern Nevada, in particular all of
California north of and including San Xxxx Obispo and Reno, Nevada (the
"Territory"). The parties understand that the Company is in the development
stage and plans to engage in certain development activities relating to its plan
of operation prior to completing an IPO.
2.2. The Company will apply a portion of proceeds from the IPO adequate
to establish one or more Company-owned and managed LVC Centers. The first such
LVC Centers will be located in Sacramento, California. Such facility will be
leased at a rate competitive with similar office space in the immediate area,
and will be equipped with equipment selected by the Company's Board of Directors
adequate to establish and maintain an advanced, state-of-the art refractive and
ophthalmic LVC Center.
2.3 Vista hereby agrees that the Company shall have the option to
acquire the additional territory of all of California south of San Xxxx Obispo
("Southern California") by opening at least four (4) full-service (including
laser equipment) LVC Centers in Southern California within the later of one (1)
year after the effective date of the IPO or February 16, 1998. The Company shall
receive the written consent of Vista to the material details of each of such
proposed LVC Center prior to such opening; however, such Vista consent shall not
be unreasonably withheld. Upon the opening of the fourth
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full-service LVC Center in Southern California to which Vista consented,
Southern California shall be added to the definition of "Territory" as set forth
in Section 2.1 above for the remaining term of this Agreement.
2.4. The parties acknowledge that Vista currently owns 600,000
restricted shares of the Company's Common Stock. The parties further acknowledge
that Vista has experience in the ownership and operation of LVC Centers in
Europe and has access to personnel experienced in the administration of a
publicly-owned corporation.
3. SERVICE XXXX OF VISTA
3.1 Vista has applied to the U.S. Patent and Trademark Office for a
service xxxx on the xxxx "Vista Laser Center" as applied to LVC Care (the
"Service Xxxx").
3.2 Vista hereby grants to the Company and its subsidiaries the right
to the full use of the Service Xxxx in the Company's Territory as defined
hereinabove during the term of this Agreement as described in Section 7 below.
Upon the expiration of this Agreement pursuant to Section 7 below, the Company
shall cease all use of the Service Xxxx and shall immediately take action to
change the Company's name to a name which will not be confused with the Service
Xxxx.
3.3 Vista hereby agrees that it shall not use, and it shall not execute
any agreement which provides for any other company to use, the Service Xxxx in
the Territory during the term of this Agreement and/or in Southern California
during the first year following the date of this Agreement. Further, Vista shall
not aid, provide assistance to, support or benefit any competitor, direct or
indirect, of the Company within the Territory during the term of this Agreement
and/or in Southern California during the first year following the IPO.
4. CONSULTING SERVICES. During the term of this Agreement, Vista
covenants and agrees to provide the following services to the Company:
(a) Advice and assistance as to developments in LVC Care available to
Vista as a result of Vista's ownership and operation of LVC centers in Europe.
(b) Advice and assistance in obtaining corporate financing for the
Company.
(c) Advice and assistance in the location and negotiation of suitable
facility leases for LVC Centers required by the Company and in seeking equipment
financing alternatives.
(d) Advice and assistance in communication and coordinating activities
of mutual interest with other companies providing laser vision correction
facilities, equipment and support services to health care professionals,
including other such companies in areas outside of the Company's targeted
regional markets that may be hereafter sponsored by Vista as well as entities
that are not affiliated with Vista.
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(e) Advice and assistance as to accounting requirements and legal
compliance with periodic reporting obligations of the Company to the U.S.
Securities and Exchange Commission.
(f) Advice and assistance as to legal compliance with federal and state
laws and regulations relating to the nature of the Company's relationships and
compensation provisions with health care professionals.
(g) Advice and assistance concerning investor relations activities and
requirements of the Company and coordinating communications with market-markers
for the Company's publicly traded securities.
(h) Advice and assistance as to the Company's legal compliance in the
United States with rules and regulations at the federal and state level
affecting Company operations in the health care industry and the manner in which
the Company may establish and operate LVC Centers.
5. CONSULTING FEES PAYABLE TO VISTA BY THE COMPANY. In consideration of
all consulting services rendered and the Service Xxxx granted to the Company and
its subsidiaries hereunder, the Company shall pay Vista the following consulting
fees during the term of this Agreement as described in Section 7 below:
(a) an amount equal to 5% of the LVC Center Revenues received
by the Company and its majority-owned subsidiaries during the term of this
Agreement, payable within 15 days after the end of each month. (Majority-owned
subsidiaries shall mean any corporation or other business entity in which at
least a majority of the voting capital stock or other voting rights are
beneficially owned or controlled by the Company. To the extent that revenues
received by the Company are revenues attributable to a majority-owned subsidiary
in which less than 100% of the equity is owned by the Company, the portion of
that subsidiary's revenues on which the 5% shall be based shall be the Company's
percentage interest in such revenues based upon its percentage ownership of the
equity in said majority-owned subsidiary).
(b) an amount equal to 2 1/2% of the LVC Center Revenues
actually received by the Company during the term of this Agreement that are
attributable to any subsidiaries of the Company that are not majority-owned
subsidiaries, payable within 15 days after the end of each month. No consulting
fees shall be payable on such revenues unless they are actually collected by the
Company.
For the purposes of this Agreement, "LVC Center Revenues" shall mean revenues
received by the Company and its subsidiaries for use of their LVC Center
facilities and equipment and for providing support and patient referral services
to health care professionals relating to LVC Care at LVC Centers.
The Company shall provide Vista with a detailed accounting of its LVC
Center Revenues within 15 days after the end of each month, together with such
additional
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detail as Vista or its authorized representatives shall request. In the event of
any overpayment or underpayment of compensation to Vista hereunder in any month,
the amount thereof shall be credited or charged as an adjustment to amounts due
in the next month of this Agreement until such overpayment or underpayment has
been offset.
6. OTHER COVENANTS AND AGREEMENTS OF THE PARTIES.
6.1. In consideration of its subscription to the Company's Common Stock
and the services to be provided by Vista hereunder, the Company covenants and
agrees that during the term of this Agreement it will use the Company's best
efforts to cause at least two (2) nominees designated by Vista, and reasonably
satisfactory to the Company's Board of Directors, to be elected as directors on
the Company's Board of Directors.
6.2. Vista agrees to establish and maintain a Vista Medical Advisory
Board, and to adopt a stock option program for members of the Vista Medical
Advisory Board, during the term of this Agreement.
Vista's Medical Advisory Board will consist ophthalmologists
and optometrists who will meet and confer each year at the American Academy of
Ophthalmology annual meeting and at additional meetings, if any, as may be
called from time to time by the Executive Committee of Vista's Medical Advisory
Board. The Executive Committee of Vista's Medical Advisory Board shall consist
of approximately five ophthalmologists and approximately five optometrists, one
of whom shall be a health care professional designated by the Company meeting
credential requirements of such Executive Committee. The Executive Committee of
Vista's Medical Advisory Board shall establish credential requirements for
members of the Medical Advisory Board and shall administer the Vista Medical
Advisory Board. Members of the Vista Medical Advisory Board shall be compensated
as determined in accordance with policies established from time to time by
Vista's board of directors.
As a material part of its compensation program for members of
the Vista Medical Advisory Board, Vista agrees to cause stock options (granted
at an option exercise price equal to fair market value on the date of grant) to
be to be granted to one credentialed health care professional designated by the
Company which are at least equal in amount to the most favorable stock option
package granted to any other member of the Vista Medical Advisory Board.
7. TERM AND TERMINATION.
7.1. The initial term of this Agreement shall commence effective with
the successful completion of the Company's IPO and shall continue for a period
of ten (10) years following the completion of the Company's IPO unless earlier
terminated in accordance with the following provisions:
7.1.1. In the event the Company's IPO has not been
successfully
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completed on or before December 31, 1996, this Agreement may be terminated by
Vista at its sole discretion at any time thereafter upon thirty (30) days prior
written notice to the Company unless the Company's IPO is completed during such
30 day period of grace. If this Agreement is terminated in accordance with this
Section 7.1.1, the parties shall be released from all obligations hereunder.
7.1.2. In the event the Company or Vista shall be in material
breach of any other covenant or agreement on its part to be performed in this
Agreement, this Agreement may be terminated by the other party at its sole
discretion at any time thereafter upon thirty (30) days prior written notice
unless such material breach has been cured during such 30 day period of grace.
7.2. Upon the expiration of the initial ten (10) year term of this
Agreement, this Agreement shall be automatically renewed for successive periods
of five (5) years each unless any party hereto shall provide the other party
with written notice of its intent to terminate this Agreement at least six (6)
months prior to the expiration of the then current term of this Agreement or any
renewal thereof.
8. DISPUTE RESOLUTION.
8.1. In the event of a dispute between the parties to this Agreement,
the parties agree to promptly meet and confer with the goal of settling such
dispute. If the parties are unable to a reach a prompt, amicable agreement
concerning such dispute, the parties agree to submit the matter to non-binding
mediation. If the parties cannot agree on a mediator, the Judicial Arbitration
and Mediation Service, Inc., San Francisco, California office ("J.A.M.S") will
be requested to provide a mediator with expertise in consulting agreements. The
mediation fee, in any, shall be divided equally between the parties.
8.2. Failing the resolution of their dispute by mediation, any dispute
or claim in law or in equity arising out of this Agreement or any resulting
transaction shall be decided by neutral, binding arbitration in accordance with
Part 3, Title 9 of the California Code of Civil Procedure, and not by court
action except as provided by California law for judicial review of arbitration
proceedings. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. The parties to the arbitration shall
have the right to discovery in accordance with the California Discovery Act
(Code of Civil Procedure 2016 et. seq.). The arbitrator shall be agreed on by
the parties or appointed by request and according to procedures of J.A.M.S. The
losing party shall pay the J.A.M.S.'s fees, the other party's reasonable fees,
costs and necessary disbursements. The filing of a judicial action to enforce
the recording of a notice of pending action, or order of attachment,
receivership, injunction or other provisional remedies shall not constitute a
waiver of the right to arbitrate (or mediate) under this (or the preceding)
provision.
9. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail,
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postage prepaid, or by commercial overnight courier (such as Federal Express,
DHL, etc.) with written verification of receipt, to the last known principal
office of the other party hereto.
10. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed by a waiver of any
subsequent breach.
11. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California.
12. ASSIGNMENT. The rights and obligations of the parties to this
Agreement shall inure to the benefit of and shall be binding upon their
respective successors and assigns.
13. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, modification,
extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day first written above.
"Company" VISTA LASER CENTERS OF THE PACIFIC, INC.
By:________________________________
J. Xxxxxx Xxxxxxx, Chairman
"Vista" VISTA TECHNOLOGIES INC.
By:________________________________
Xxxxxx X. Xxxxxxx, President
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