CONSULTING AGREEMENT
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This Agreement is made as of this 22nd day of December, 1997,
by and between Transworld HealthCare, Inc. ("Transworld") and
Xxxxxx X. Fine ("Consultant").
R E C I T A L S
WHEREAS, Consultant has extensive experience in the area of healthcare
operations and desires to render consulting services to Transworld related to
the foregoing; and
WHEREAS, Transworld requires such consulting services for its
subsidiaries known as Health Management, Inc. ("HMI"), Respiflow,
Inc., Dermaquest, Inc. and M.K. Diabetic Support Services, Inc.;
(each of the three foregoing companies is hereinafter collectively
referred to as the "Florida Subsidiaries"); and
WHEREAS, Transworld believes that it can utilize Consultant's services
for the purposes of, among other things, assisting the Company in (1) winding
up its HMI operations, (2) seeking contribution for obligations related to the
Florida Subsidiaries, and (3) selling the Company's nursing subsidiary known as
Transworld Home Healthcare - Nursing Division, Inc. ("Transworld Nursing"); and
WHEREAS, Consultant wishes to enter into an agreement with Transworld
to perform consulting services as set forth below.
NOW, THEREFORE, the parties agree as follows:
1. Compensation. Transworld agrees to retain Consultant as
an independent contractor for the purpose of rendering
various forms of consulting services up to forty (40)
hours per week. As compensation for these services,
Transworld agrees to compensate Consultant, through the
Term, in the sum of $120,000, payable in equal monthly
installments of $20,000. Transworld shall also reimburse
Consultant for his reasonable travel expenses incurred in
performing the duties set forth herein upon presentation
of appropriate supporting documentation.
2. Duties. The value of Consultant's advice is not
measurable in any quantitative manner and Consultant
shall render advice and assistance in good faith but
shall not be obligated to spend any specific amount of time
in doing so. Consultant shall provide advice and assistance
to the Company concerning the following:
A. winding up Transworld's HMI operations, including
negotiating trade payables, early buy-outs and/or
subletting of facilities leases and other post-
closing matters;
B. securing funds from the former owners of the Florida
Subsidiaries related to obligations arising from the
OIG audit of the Florida Subsidiaries which
commenced in July, and additional bad debt reserves
which have been incurred by the Transworld in
December, 1997 for Dermaquest, Inc.
("Dermaquest");
C. negotiating and consummating the sale of the stock
of Transworld Nursing to a third party;
D. monitoring the collection of HMI accounts
receivable by Counsel Corporation ("Counsel") and
liaison with Counsel regarding the disbursements to
Transworld of any amounts held in escrow accounts
related thereto;
E. resolving any outstanding issues which relate to
HMI employment matters; and
F. assisting any other consultants who also may be
retained by Transworld for the purpose of
performing services which relate to the winding up
of HMI's operations.
3. Bonus Compensation. Consultant shall be entitled to
additional compensation related to the duties
specifically outlined above in Section 2(A) through 2(C),
above, as follows:
A. if Consultant successfully negotiates the post-
closing HMI matters at or below the targets set
forth below which relate to Consultant's activities
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as outlined in Section 2(A), above, then Consultant
shall be entitled to immediate vesting of 20,000
shares (the "Bonus Shares") of the 60,000 shares
granted to Consultant pursuant to that certain Stock
Option Agreement dated as of August 13, 1997 (a copy
of which is attached hereto as Exhibit "A"), which
options are in addition to the 115,000 options due
Consultant under the Letter Agreement executed
contemporaneously herewith; provided, however, that
the Bonus Shares must be exercised, upon vesting,
within ninety (90) days following the termination of
this Agreement:
(1) the HMI account payable related to Novartis
must be no greater than $1,350,000; and
(2) the termination of the lease obligations
for the HMI facilities located in Chicago,
Pittsburgh and New York, and the
termination of the obligations for related
furniture, fixtures and equipment,
collectively, shall result in obligations
to the Company of no more than 1.1 million
(net of any sales proceeds).
B. if Consultant's efforts result in the payment of
6.5 million (the "Target Recovery") to Transworld
from any or all of the former owners of the Florida
Subsidiaries as outlined in Section 2(B) above,
then Transworld shall pay Consultant $100,000 (it
being understood that Consultant shall receive no
additional compensation hereunder if the
consideration paid to Transworld is less than the
Target Recovery); provided, however, that the
Target Recovery (i) must actually be paid to and
received either by Transworld or an agreed upon
escrow agent in a single, lump sum cash payment,
and (ii) must be final, unconditional and not
contingent or repayable by Transworld for any
reason.
C. if Consultant negotiates and successfully
consummates the sale of the stock of Transworld
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Nursing to a third party as set forth in Section
2(C), above, then Consultant shall be paid, upon the
closing of such transaction, a fee equal to one
percent (1%) of the amount by which the purchase
price exceeds $4 million (the "Transaction Bonus");
provided, however, that the Transaction Bonus shall
not be paid to Consultant unless and until (i) each
portion of the purchase price is actually paid to
and received by Transworld or an agreed upon escrow
agent in a single, lump sum cash payment; (ii) the
purchase price is final, unconditional and not
contingent or repayable by Transworld for any
reason; and (iii) the sale is consummated within
ninety (90) days following the effective date of
this Agreement.
4. Term. The term of this Agreement shall be for a period
of six (6) months from the date first set forth above,
subject to the provisions set forth below in Paragraphs
5 and 14. However, Consultant shall receive the bonus
compensation described in Sections 3A and 3B above for
any transaction that occurs within one year of the
expiration of the term of this Agreement as a result of
Consultant's efforts during the term of this Agreement.
5. Termination. Transworld shall be entitled to immediately
terminate this Agreement with Consultant for Cause (as
defined below), upon which Consultant shall only be
entitled to the unpaid portion of the compensation set
forth in Section 1 herein through the date of termination
and shall not be entitled to any additional compensation
as set forth in Section 3 herein (to the extent that
Consultant has not otherwise already been paid
thereunder). For purposes of this Section 5, "Cause"
shall exist if Consultant (i) fails, in any material
respect, to perform his obligations hereunder as provided
herein; (ii) has been convicted of a crime related to the
Company or its affairs which constitutes a felony under
applicable law or, during the Term, has taken any action
or omitted to act, the result of which could have an
adverse effect on the Company or its affiliates, or their
businesses, prospects, or affairs; or (iii) has committed
any act which constitutes fraud or gross negligence under
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applicable law related to these transactions.
6. Indemnification. Each party agrees to indemnify and
defend the other party against all losses and claims for
damages which arise as a result of the indemnifying
party's negligence or wilful misconduct in the
performance of its or his duties hereunder.
7. Relationship of Parties. None of the provisions of this
Agreement are intended to create nor shall be deemed or
construed to create any relationship between the parties
hereto other than that of independent contractors solely
for the purpose of effecting the provisions of this
Agreement. Neither of the parties hereto, nor any of
their respective officers, directors or employees, shall
act as nor be construed to be the agent, employee or
representative of the other. Consultant shall not be
entitled to any benefits of any kind from Transworld.
8. Taxes. Consultant shall be responsible for the payment
of all taxes which may arise under or be due and owing as
a result of this Agreement.
9. Notices. Notices required pursuant to this Agreement
shall be deemed given if delivered via certified mail,
postage fully prepaid, via Federal Express, or via
facsimile to the addresses listed below:
If to Transworld:
Transworld HealthCare, Inc.
Attention: General Counsel
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Consultant:
Xxxxxx X. Fine
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Each party agrees to notify the other party upon a change in
the addresses set forth above.
10. Confidentiality. Consultant agrees, during the Term of
this Agreement, not to disclose the terms of this
Agreement, as well as any information regarding
Transworld's programs, products or services, to any third
parties without the express written consent of
Transworld. Transworld may disclose this Agreement or
any of the terms hereof if, in its opinion, such
disclosure is required by law or contract.
11. Entire Agreement. This Agreement and the Letter
Agreement executed contemporaneously herewith set forth
the entire agreement between the parties with respect to
the terms and conditions set forth herein and supersede
all oral and written agreements, understandings, and
memoranda between them.
12. Choice of Law. This Agreement shall be governed by and
construed with the laws of New York, without reference to
its rules on conflicts of law.
13. Attorneys' Fees. If an action is instituted by either
party to enforce the terms of this Agreement, the
prevailing party shall be entitled to recover its
reasonable attorneys' fees and costs.
14. Condition Precedent to Agreement Becoming Effective.
Notwithstanding anything contained herein to the contrary,
this Agreement shall not become effective until the Effective
Date (as defined in the Letter Agreement) of that certain
letter agreement dated December 29, 1997, by and between
Consultant and Transworld (the "Letter Agreement").
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
TRANSWORLD HEALTHCARE, INC. CONSULTANT:
By:/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Fine
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Xxxxxxx X. Xxxxxxxx Xxxxxx X. Fine
Vice President
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