Consulting Agreement - TLC The Laser Center Inc. and Mainstay Human Resources Corp.
CONSULTING AGREEMENT
THIS AGREEMENT is made as of this 1st day of December, 1996;
BETWEEN:
TLC THE LASER CENTER INC., a corporation incorporated under the laws
of the Province of Ontario
(the "Corporation")
OF THE FIRST PART,
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MAINSTAY HUMAN RESOURCES CORP., a corporation incorporated under the
laws of the Province of Ontario
("MAINSTAY")
OF THE SECOND PART.
RECITALS:
A. The Corporation is the parent company of a group of companies
(collectively, the "TLC Group") involved in the business of providing
excimer laser surgery and other secondary eye care services.
B. MAINSTAY has under contract for her services, Madeline Walker.
C. The Corporation and MAINSTAY wish to enter into this Agreement to set
forth the basis upon which MAINSTAY will make the services of Madeline
Walker available to the Corporation.
NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED
IN THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION (THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED), THE CORPORATION AND MAINSTAY
AGREE AS FOLLOWS:
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1. Definitions
In this Agreement,
"Agreement" means this Agreement and all schedules attached to this agreement,
in each case as they may be amended or supplemented from time to time;
"Business Day" means any day, other than Saturday, Sunday or any statutory
holiday in the Province of Ontario;
"Competitive Business" means a business carried on anywhere in North America
which includes the financing, development and/or operation of laser eye surgery
clinics or secondary eye care clinics in the market areas where the Corporation
carries on, or to the knowledge of MAINSTAY at any time during the term of this
Agreement or any renewals thereof, intends to carry on its business;
"Confidential Information" means all confidential information or proprietary
information, Intellectual Property (including trade secrets) and confidential
facts relating to the business or affairs of the Corporation or the TLC Group
whether or not originated by Madeline Walker including, without limitation, work
products resulting from or related to work or projects performed or to be
performed by the Corporation or the TLC Group, internal personnel and financial
information of the Corporation or the TLC Group, purchasing and internal cost
information, service and operational manuals, the manner and method of
conducting the business of the Corporation or the TLC Group, marketing and
development plans and agreements, price and cost data, price and fee amounts,
pricing and billing policies, quoting procedures, marketing techniques, methods
of obtaining business, forecasts and forecast assumptions and volumes, future
plans and potential strategies of the Corporation or the TLC Group which have
been or are being discussed, ideas concerning proposed eye surgery clinics,
contracts and their contents, patient and affiliated doctor services, data
provided by patients and affiliated doctor services, and the type, quantity and
specifications of products and services, purchased, leased, licensed, engaged,
employed or received by the Corporation or the TLC Group or by clients of the
Corporation or the TLC Group, business plans, patients, affiliated doctor and
vendor lists, business deals with any of these, financing, acquisition,
development, licensing and distribution agreements and budgets and investment
opportunities and structures;
"Contract Term" means the Term and renewals thereof;
"Contract Year" means any 12 month period commencing on December 1, and ending
on November 30;
"Disability" means the mental or physical state of Madeline Walker such that
Madeline Walker has been unable as a result of illness, disease, mental or
physical disability or similar cause, as determined by a legally qualified
medical practitioner selected by the Corporation, to fulfil
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MAINSTAY'S obligations under this Agreement either for any consecutive 180 day
period or for any period of 180 days (whether or not consecutive) in any
consecutive 365 day period;
"Intellectual Property" means all legally recognized rights which result or
derive from Madeline Walker's services provided to the Corporation or the TLC
Group or with the knowledge, use or incorporation of Confidential Information,
and includes but is not limited to, developments, inventions, designs, works of
authorship, improvements and ideas, whether or not patentable or copyrightable,
conceived or made by Madeline Walker (individually or in collaboration with
others) during the Contract Term or which result from or derive from the
Corporation's or the TLC Group's resources or which are reasonably related to
the business of the Corporation or the TLC Group other than any of the foregoing
in respect of which MAINSTAY provides written notice thereof to the Corporation
prior to any material work being undertaken by Madeline Walker, whereby MAINSTAY
requests that all such rights which may result or derive from such work be
excluded from the definition of "Intellectual Property" and the Chief Executive
Officer of the Corporation provides written notice to MAINSTAY of its agreement
with such request;
"Person" means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor, administrator or
other legal personal representative, regulatory body or agency, government or
governmental agency, authority or entity however designated or constituted;
"Term" has the meaning set out in Section 3; and
"Termination Event" means:
(i) the failure of MAINSTAY, through Madeline Walker to carry out its
obligations hereunder after notice by the Corporation of the failure
to do so and an opportunity for MAINSTAY to correct the same within
a reasonable time from the date of receipt of such notice;
(ii) theft, fraud, dishonesty or misconduct by MAINSTAY or its employees
involving the property, business or affairs of the Corporation or
the carrying out of MAINSTAY'S obligations; or
(iii) any material breach by MAINSTAY of any term of this Agreement.
2. Scope of Services
The Corporation hereby retains MAINSTAY to provide the services of Madeline
Walker as follows:
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(i) to provide consulting services to the Corporation in the capacity of
a senior executive officer, namely chief operating officer, which
shall include advising the Corporation on all operational aspects of
laser vision correction clinics, as well as head office operating
procedures and other professional matters relating to establishing
and conducting laser eye surgery clinics in North America; and
(ii) to provide such further advice and assistance to the Corporation in
connection with its laser eye surgery clinics and head office
operations as the Corporation may reasonably request from time to
time.
MAINSTAY hereby acknowledges that the services to be rendered by it hereunder
will be provided to the TLC Group as a whole as well as the Corporation.
3. Contract Period
The term of this Agreement will commence on December 1, 1996 (or such earlier
time as may be agreed upon between MAINSTAY and the Corporation) for a term of
three (3) years ending on November 30, 1999 (the "Term"). Thereafter, the Term
shall be automatically extended for successive periods of one year unless either
party gives notice of termination within 60 days before or after the applicable
renewal date.
4. Performance of Duties
During the Contract Term, MAINSTAY shall cause Madeline Walker to faithfully,
honestly and diligently provide the services herein contracted for to the
Corporation and the TLC Group as are designated by the Chief Executive Officer
or the Board of Directors of the Corporation to a maximum of 48 weeks per
Contract Year. MAINSTAY will cause Madeline Walker (except in the case of
illness or accident) to devote sufficient time and effort to the services herein
contracted for so as to use her best efforts to promote the interests of the
Corporation, provided however, the Corporation acknowledges that its provision
of services through Madeline Walker shall be that she will substantially spend
her work week providing services to the Corporation, and the balance pursuing
other interests such as management and human resource consulting. MAINSTAY
appreciates that the services herein contracted for involve travel, and agrees
to cause Madeline Walker to travel as reasonably required in order to fulfil
MAINSTAY'S obligations hereunder.
5. Fees
(a) Basic Remuneration. The Corporation will pay MAINSTAY for the
services of Madeline Walker hereunder an annual contract fee (the
"Fee") throughout each year of the Term in an amount equal to
$145,000.00 (Cdn.) plus any applicable Goods and Services Tax. The
Fee shall be increased 10% per year for each of the second and third
years of the Term. MAINSTAY acknowledges that Madeline Walker is
under contract with MAINSTAY and MAINSTAY shall be
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solely responsible for deduction for any applicable income taxes and
other required deductions, such as Canada Pension Plan and
Unemployment Insurance contributions payable by or in respect of
Madeline Walker pursuant to her arrangements with MAINSTAY and
hereby indemnifies and saves the Corporation harmless in respect
thereof. Unless otherwise agreed in writing, the Fee will be payable
in equal instalments monthly in arrears in each month during each
Contract Year, the first payment to be made on or about December 1,
1996.
(b) Bonus and Share Options. During any Contract Year in which MAINSTAY
makes Madeline Walker available to provide services to the
Corporation, Madeline Walker will be entitled to participate in any
applicable fund, plan or arrangement relating to a senior management
executive of the Corporation in effect generally from time to time
with respect to the Corporation, in accordance with and subject to
the terms thereof, including, without limitation;
(i) such bonus remuneration, if any, in respect of each Contract
Year during the Contract Term (including, without limitation,
any Contract Year during which this Agreement terminates), as
the board of directors or Chief Executive Officer of the
Corporation, in their sole discretion, may authorize; and
(ii) share options in accordance with the Corporation's Share
Option Plan, if any, in respect of each Contract Year during
the Contract Term.
MAINSTAY hereby acknowledges and consents to Madeline Walker
receiving any bonus or share options directly in order to facilitate
any tax, estate or R.R.S.P. planning in recognition of the
non-transferability of options pursuant to the Corporation's Share
Option Plan.
If a change of Control (as defined by the Business Corporations Act (Ontario) of
TLC occurs, if TLC is merged into or consolidated with another corporation under
circumstances where TLC is not the surviving corporation, if TLC is liquidated,
or sells or otherwise disposes of substantially all of its assets to another
corporation while unexercised options remain outstanding under the Share Option
Plan, then all outstanding options held by Mainstay or Madeline Walker shall be
vested and shall be fully exercisable as of the effective date of any such
change of control, merger, consolidation, liquidation or sale.
6. Expenses
The Corporation will, upon presentation of expense statements or receipts and
such other supporting documentation as the Corporation may reasonably require,
pay or reimburse MAINSTAY in accordance with the Corporation's expense policies
for all travel and out-of-pocket expenses reasonably incurred or paid by
MAINSTAY in the performance by Madeline Walker of the services herein contracted
for.
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7. Termination
(a) Notice. This Agreement may be terminated by the Corporation at any
time:
(i) without prior notice and without further obligations to
MAINSTAY for Disability or if a Termination Event occurs.
Termination of this Agreement by the Corporation pursuant
hereto may be undertaken only under the authority of a
resolution of the board of directors of the Corporation
approved by 80% of the directors.
(ii) upon 90 days prior written notice, provided however that if
this Agreement is so terminated an amount equal to $200,000.00
shall be payable to MAINSTAY within 30 days following notice
of such termination, such payment is acknowledged by the
parties to be liquidated damages and not as a penalty. Each of
the parties acknowledges that the amount equal to $200,000.00
is a reasonable estimate of the damages that will occur to
MAINSTAY in the event of termination of this Agreement
pursuant to Section 7(a) shall occur, particularly due to the
previous full time occupation of Madeline Walker as a
management consultant and the time that will be required for
her to establish another full time management consulting
practice. Termination of this Agreement by the Corporation
pursuant hereto may be undertaken only under the authority of
a resolution of the board of directors of the Corporation
approved by 80% of the directors.
(b) This Agreement will be automatically terminated, without further
obligation on the part of the Corporation or the TLC Group (except
as to the pro-rata payments of amounts owing to such date) upon the
death of Madeline Walker.
(c) Effective Date. The effective date on which this Agreement will be
deemed to have been terminated will be:
(i) in the case of termination under Section 7(a), 30 days
following delivery of notice of termination; and
(ii) in the case of termination pursuant to Section 7(b), on the
date of death.
(d) No Other Obligations. Except for payment of all amounts owing
hereunder to the effective date of a termination or as otherwise
provided herein, neither MAINSTAY or Madeline Walker will be
entitled to receive any payment arising out of or relating to this
Agreement. MAINSTAY on its own behalf and on behalf of its employees
hereby waives any claims against the Corporation for or in respect
of termination pay, severance pay, or on account of loss of office
or employment or notice in lieu thereof or damages in lieu thereof
and MAINSTAY
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hereby indemnifies and saves the Corporation harmless in respect
thereof.
(e) Termination by Mainstay. Following the expiration of the Term, this
Agreement may be terminated by MAINSTAY at any time on 90 days prior
written notice.
8. Return of Materials Upon Termination
Upon termination of this Agreement, MAINSTAY shall cause its employees to
promptly deliver to the Corporation all property of or belonging to or
administered by the Corporation or the TLC Group, including, without limitation,
all documents, manuals, customer, patient, affiliated doctor, supplier, product
and proprietary lists, data, records, computer programs, codes, materials,
prototypes, products, samples, analyses, reports, marketing materials,
equipment, tools and devices relating or pertaining to any Intellectual Property
or Confidential Information, including all copies or reproductions of the same.
9. Non-Competition Agreement
MAINSTAY acknowledges the competitive and proprietary nature of the business
carried on by the Corporation and the TLC Group and the interests of the
Corporation and the TLC Group limiting, on a reasonable basis, the availability
of those primary consultants providing services to Competitive Businesses.
Accordingly, MAINSTAY agrees that neither it nor any of its employees will,
either during the Term or any renewal thereof or for a period of 24 months
thereafter, directly or indirectly, in any manner whatsoever including, without
limitation, either individually, or in partnership, jointly or in conjunction
with any other Person, or as an employee, principal, agent, consultant, adviser,
director or shareholder
(a) be engaged in any undertaking;
(b) have any financial or other interest (including an interest by way
of royalty or other compensation arrangements) or in respect of the
business of any Person which carries on a business; or
(c) advise, lend money to, guarantee the debts or obligations of or
permit the use of the MAINSTAY'S name or any part thereof by any
Person which carries on a business;
anywhere in North America, if the undertaking or the business, as the case may
be, is a Competitive Business.
Nothing in this Section 9 will operate to prevent (i) MAINSTAY or Madeline
Walker from owning, on a passive investment basis, up to 5% of the issued shares
of a Competitive Business,
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the shares of which are traded on a recognized stock exchange or traded in the
over-the-counter market in Canada or elsewhere.
10. Non-Solicitation of Employees or Consultants
MAINSTAY acknowledges the importance to the business carried on by the TLC Group
of the human resources engaged and developed by the TLC Group and the unique
access that MAINSTAY'S employees with the TLC Group offers to interfere with
these resources. Accordingly, MAINSTAY covenants that neither it nor any of its
employees will, during the Contract Term and for the period of 24 months
thereafter, directly or indirectly, employ, be employed by, enter into a
partnership or other association with or retain as an independent contractor or
be retained as an independent contractor by an employee of or consultant to the
Corporation or the TLC Group or induce or solicit, or attempt to induce, any
such person to leave that person's employment or engagement.
11. Confidentiality
Neither MAINSTAY nor any of its employees will, during the Contract Term and at
any time thereafter, directly or indirectly, other than as required pursuant
hereto use or disclose to any Person any Confidential Information unless;
(a) the Confidential Information is available to the public or in the
public domain at the time of such disclosure or use, without breach
of this Agreement or any similar agreement between the Corporation
and others; or
(b) disclosure of the Confidential Information is required to be made by
any law, regulation, governmental authority or court, provided that
before disclosure is made, notice of the requirement is provided to
the Corporation is afforded an opportunity to dispute the
requirements for disclosure.
MAINSTAY and its employees obligations under this Section 12 are to remain in
effect in perpetuity and will exist and continue in full force and effect
notwithstanding any breach or repudiation or any alleged breach or repudiation
of this Agreement by the Corporation.
12. Copyright
During the Contract Term, MAINSTAY agrees that it and its employees will
disclose to the Corporation all Intellectual Property developed by Madeline
Walker, either or in collaboration with others, which relates directly or
indirectly to the business of the Corporation or the TLC Group. MAINSTAY
acknowledges and agrees that all right, title and interest of any kind
whatsoever in and to the Intellectual Property, including the foregoing and any
copyrights, is and will be the exclusive property of the Corporation and the
Corporation will have absolute discretion to determine how such Intellectual
Property is used. All work done during the Contract Term by Madeline Walker or
MAINSTAY for the Corporation or a member of the
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TLC Group is a work in respect of which the Corporation or the member of the
TLC, as the case may be, shall be deemed to be the first author for copyright
purposes. Copyright will vest in the Corporation or the relevant member of the
TLC Group, as the case may be. MAINSTAY on its own behalf and on behalf of
Madeline Walker hereby waives all moral rights that either may have in the
Intellectual Property and agrees that this waiver may be invoked by the
Corporation, and by any of its authorized agents or assignees, to use any of the
Intellectual Property. MAINSTAY agrees that to execute all such instruments and
do all such things as may be reasonably necessary or desirable to give full
effect to the foregoing and will cooperate and assist the Corporation and the
TLC Group in enforcing their rights under this paragraph.
13. Certain Warranties, Covenants and Remedies
(a) MAINSTAY agrees that its obligations as set forth in Sections 8, 9,
10, 11 and 12 will be deemed to have commenced as of the date on
which services are or have been provided by MAINSTAY to the
Corporation before or after the date hereof.
(b) MAINSTAY acknowledges that a material breach or threatened material
breach of any of Sections 8, 9, 10, 11 and 12 will result in the
Corporation and it shareholders suffering irreparable harm which is
not capable of being calculated and which cannot be fully or
adequately compensated by the recovery of damages alone.
Accordingly, MAINSTAY agrees that the Corporation will be entitled
to interim and permanent injunctive relief, specific performance and
other equitable remedies, in addition to any other relief to which
the Corporation may become entitled.
(c) MAINSTAY'S obligations under each of Sections 8, 9, 10, 11 and 12
are to remain in effect in accordance with their terms and will
exist and continue in full force and effect notwithstanding any
breach or repudiation, or alleged breach or repudiation, of this
Agreement by the Corporation.
(d) MAINSTAY represents, warrants and covenants that:
(i) it will at all times during this Agreement retain the services
of Madeline Walker; and
(ii) it will not provide the services of any of its employees to a
Competitive Business during the term hereof.
14. Co-Operation
MAINSTAY will co-operate and will cause Madeline Walker to co-operate in all
respects with the Corporation if a question arises as to whether Madeline Walker
has a Disability. Without limitation, Madeline Walker will authorize her medical
doctor or other health care specialist to
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discuss any medical condition with the Corporation and will as reasonably
requested by the Corporation submit to examination by a medical doctor or other
health care specialist selected by the Corporation.
15. Residence
MAINSTAY represents and warrants that it is not a non-resident of Canada for
purposes of the Income Tax Act (Canada).
16. Notices
Any notice or other communication required or permitted to be given hereunder
must be in writing, delivered by facsimile or by hand-delivery as hereinafter
provided. Any such notice or other communication, if sent by facsimile, will be
deemed to have been received on the Business Day following the sending, or if
delivered by hand to Madeline Walker will be deemed to have been received at the
time it is delivered to her or, if delivered to Madeline Walker or the
Corporation at the applicable address noted below, when it is delivered to the
individual designated below or to an individual at such address having apparent
authority to accept deliveries on behalf of the addressee. Notice of change of
address will also be governed by this Section. Notices and other communications
must be delivered as follows:
(a) if to MAINSTAY:
2908 S. Sheridan Way
Suite 301
3rd Floor
Oakville, Ontario
(b) if to the Corporation
206 Laird Drive
Suite 100
Toronto, Ontario
M4G 3W4
Attention: Chief Executive Officer
Fax No. (416) 467-6882
17. Headings
The inclusion of headings in this Agreement is for convenience of reference only
and its not to affect the construction or interpretation hereof.
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18. Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and severable and
a declaration of invalidity or unenforceability of any provision by a court of
competent jurisdiction will not affect the validity or enforceability of any
other provision hereof.
19. Entire Agreement
This Agreement constitutes the entire agreement between the parties pertaining
to the subject matter of this Agreement. This Agreement supersedes and replaces
all prior agreements, if any, written or oral, with respect to the subject
matter hereof. There are no warranties, representations or agreements between
the parties in connection with the subject matter of this Agreement except as
specifically set forth or referred to in this Agreement. No reliance is placed
on any representations, opinion, advice or assertion of fact made by the
Corporation, the TLC Group or its directors, officers and agents to MAINSTAY,
except to the extent that the same has been reduced to writing and included as a
term of this Agreement. Accordingly, there will be no liability, either in tort
or inc contract, assessed in relation to any such representation, opinion,
advice or assertion of fact, except to the extent aforesaid.
20. Waiver, Amendment
Except as expressly provided in this Agreement, no amendment or waiver of this
Agreement will be binding unless executed in writing by the party to be bound
thereby. No waiver of any provision of this agreement will constitute a waiver
of any other provisions nor will any waiver of any provision of this Agreement
constitute a continuing waiver unless otherwise expressly provided. Neither this
Agreement nor any part thereof may be assigned without the prior written consent
of the other party hereto.
21. Governing Law
This Agreement will be governed by and construed in accordance with the laws of
the Province of Ontario.
22. Counterparts
This Agreement may be signed in counterparts. Each counterpart will constitute
an original document and all counterparts, taken together, will constitute one
and the same instrument. Executed counterparts may be delivered by telecopier.
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IN WITNESS WHEREOF the parties have executed this Agreement.
MAINSTAY HUMAN RESOURCES CORP.
Per: /s/ M. D. Walker
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TLC THE LASER CENTER INC.
Per: /s/ R. J. Kelly
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