EXHIBIT 10.20(A)
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") is entered into as of January 31,
1998 by and between Xxxxxx Pharmaceuticals, Inc. (the "Company"), Royce
Laboratories, Inc., a wholly-owned subsidiary of the Company ("Royce"), and
Xxxxxxx XxXxxxx (the "Consultant").
RECITAL:
A. Consultant is employed by Royce and the Company pursuant to the terms
of that certain Employment Agreement (the "Employment Agreement") dated as of
April 16, 1997 among Consultant, the Company and Royce.
B. Consultant terminated his employment with the Company and Royce for
Good Reason (as such term is defined in the Employment Agreement) effective as
of January 31, 1998 ("Separation Date").
C. Pursuant to the terms of the Employment Agreement, upon termination by
Consultant of Consultant's employment with the Company for Good Reason, the
Company is required to enter into this Agreement with Consultant to set forth
the terms upon which Consultant shall provide certain consulting services to the
Company, all on the terms and subject to the conditions set forth herein.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual promises herein contained
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. ENGAGEMENT. Royce hereby engages Consultant as a consultant to the
Company and Royce, and Consultant hereby agrees to be so engaged, all on the
terms and subject to the conditions set forth in this Agreement. The parties
hereto agree that, upon the request of the Company or Royce from time to time
during the Term (as herein defined), at no additional charge, Consultant shall
perform up to ten (10) hours of consulting services per month for and on behalf
of the Company and/or Royce at such times to be mutually agreed upon by the
Company and Consultant; provided, however, that (i) such monthly services shall
not be cumulative and will be lost if not performed in any month; and (ii) if
such services are required to be performed in person, such services shall be
provided in increments of five consecutive hour periods. Consultant may provide
additional consulting services to the Company or Royce on terms (including
payment terms) and at times mutually agreed upon by Consultant, on the one hand,
and the Company or Royce, on the other hand.
2. OPTIONS. The Company hereby acknowledges and agrees that, during the
Term, all options granted to Consultant pursuant to Section 4(f) of the
Employment Agreement shall continue to vest in accordance with the terms
thereof.
3. EXPENSES. The Company agrees to reimburse Consultant for all reasonable
expenses incurred by him in providing consulting services under this Agreement
in accordance with the Company's policies and practices regarding expense
reimbursement then in effect.
4. TERM. Subject to the terms and conditions set forth herein and unless
otherwise terminated earlier as provided herein, this Agreement shall commence
on and as of the Separation Date and shall terminate on April 16, 2002 (the
"Term").
5. OFFICER POSITIONS. Effective as of the Separation Date, Consultant
hereby resigns as an employee, officer and director of Royce and as an employee
and officer of the Company and such resignation is accepted by Royce and the
Company, as the case may be.
6. RESTRICTIVE COVENANTS AND CONFIDENTIALITY. Consultant hereby
acknowledges and agrees that Sections 9, 10, 11, 12 and 13 of the Employment
Agreement shall remain in full force and effect in accordance with their
respective terms for the time periods set forth therein regardless of the
termination of Consultant's employment and/or consulting relationship with the
Company and Royce. Subject to the terms and conditions of the Employment
Agreement, Company and Royce acknowledge Royce's obligations to make the
payments to Consultant required by Section 7(c) of the Employment Agreement.
7. RELEASE BY CONSULTANT. Consultant, for himself and for his
predecessors, successors, personal representatives, heirs, agents and assigns
(collectively, the "Releasing Parties"), hereby releases and discharges each of
the Company, Royce and their respective stockholders, directors, officers,
employees, affiliates, attorneys, agents and representatives and their
predecessors, successors, personal representatives, heirs, agents and assigns,
(collectively, the "Consultant's Released Parties"), from any and all actions,
causes of action, suits, charges, complaints, claims, liabilities, obligations,
controversies, assessments, judgments, proceedings, deficiencies, losses, fines,
penalties, costs, damages and expenses (including, without limitation, expenses
of investigation and attorney's and expert witnesses' fees and disbursements),
of any nature whatsoever, at law or in equity, including without limitation any
claims arising under the Age Discrimination in Employment Act (collectively, the
"Released Claims"), which the Releasing Parties had, now have, or hereafter may
have against any of Consultant's Released Parties, relating to Consultant's
employment with the Company and Royce or the termination of Consultant's
employment with the Company and Royce. Notwithstanding the provisions of this
Section 8, the Consultant's Released Parties shall not be released from their
respective obligations contained in (a) this Agreement; (b) Section 7(c) of the
Employment Agreement; and (c) the Company's option grants to Consultant.
8. RELEASE BY COMPANIES. The Company and Royce hereby release and
discharge Consultant, his predecessors, successors, personal representatives,
heirs, agents and assigns (the
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"Companies' Released Parties"), from any and all Released Claims which the
Company or Royce had, now have, or hereafter may have against any of the
Companies' Released Parties, relating to Consultant's employment with the
Company and Royce or the termination of Consultant's employment with Company and
Royce. Notwithstanding the provisions of this Section 9, the Companies' Released
Parties shall not be released from their respective obligations contained in (a)
this Agreement; (b) Sections 7(c), 9, 10, 11, 12 and 13 of the Employment
Agreement; and (c) the Company's options grants to Consultant.
9. WAIVER. The Company, Royce and Consultant acknowledge that they are
aware that statutes exist which render null and void releases and discharges of
any claims, rights, demands, liabilities, actions and causes of action which are
unknown to the releasing or discharging party at the time of execution of said
release and discharge. All parties hereby expressly waive, surrender and agree
to forego any protection to which they would otherwise be entitled against one
another by virtue of the existence of any statute in any jurisdiction,
including, but not limited to, California. IT IS EXPRESSLY UNDERSTOOD AND AGREED
THAT ALL RIGHTS UNDER SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA
ARE EXPRESSLY WAIVED BY EACH PARTY. SECTION 1542 READS AS FOLLOWS:
SECTION 1542. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH A DEBTOR.
10. TERMINATION FOR DEATH, DISABILITY OR CAUSE. The Company may terminate
this Agreement and Consultant's consulting arrangement with the Company and
Royce as follows:
(a) DEATH. In the event of the death of Consultant, this Agreement
shall terminate as of the date of death.
(b) DISABILITY. This Agreement shall terminate in the event that
Consultant shall, because of physical or mental illness or incapacity, be unable
to perform the duties and services to be performed by him under this Agreement
for a consecutive period of three months or such shorter periods aggregating
three months in any 12-month period.
(c) TERMINATION FOR CAUSE. Company may terminate Consultant's
consulting arrangement with Company and this Agreement at any time for Cause.
"Cause" shall mean: (i) a material breach or violation by Consultant of his
obligations under Sections 9, 10, 11, 12 or 13 of the Employment Agreement; (ii)
a material breach or violation by Consultant of his obligations under any
provision of this Agreement (other than Sections 9, 10, 11, 12 or 13 of the
Employment Agreement) or the failure of Consultant to materially perform his
duties or responsibilities hereunder (unless said material default is caused by
a Disability) after Consultant has been given
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at least thirty (30) days prior written notice together with an opportunity to
cure said breach, violation or failure during such thirty (30) day period;
provided, however, that Consultant shall only have the right to cure one breach
in any twelve consecutive month period during the Term; or (iii) actions by
Consultant constituting fraud and/or embezzlement.
11. NO PARTNERSHIP NOR JOINT VENTURE; INDEPENDENT CONTRACTOR.
(a) The parties hereto intend by this Agreement solely to effect the
appointment of Consultant as an independent contractor. No other relationship is
intended to be created between the parties hereto. Subject to Consultant's
rights and interests as a security holder of the Company, nothing in this
Agreement shall be construed as (i) giving Consultant any rights as an owner of
the business of the Company or Royce, (ii) giving the Company or Royce any
rights as a partner in or owner of any business of Consultant, (iii) entitling
Consultant to control in any manner the conduct of the Company's or Royce's
business or (iv) entitling the Company or Royce to control in any manner the
conduct of Consultant's business.
(b) In performing the services described in this Agreement,
Consultant shall at all times operate as an independent contractor, maintaining
his own organization as distinct and separate from that of the Company and
Royce. Nothing in this Agreement shall be deemed to create or constitute the
relation of employer and employee between the Company and/or Royce, on the one
hand, and Consultant, on the other hand. Consultant, Royce and the Company
hereby acknowledge (i) that Consultant shall be solely responsible for and shall
pay all taxes in respect of Consultant's income and engagement hereunder, (ii)
Consultant has requested that the Company not withhold taxes and other amounts
from any payments of compensation to Consultant hereunder, and (iii) Consultant
shall be solely responsible for his health insurance, retirement and disability
protection and all other so-called "fringe benefits" and the Company or Royce
shall not in any way be responsible therefor, except as otherwise required by
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA").
12. CONSULTANT'S OTHER ACTIVITIES. Consultant has advised Company that he
intends to become the President and Chief Executive Officer of AMDG, Inc.
("AMDG") after his resignation from Company and Royce. Consultant has advised
Company and Royce regarding the business of AMDG and Company and Royce hereby
acknowledge that, as long as AMDG does not engage in the development,
manufacture, sale or marketing of generic pharmaceutical products, (i) such
activity shall not be grounds for termination of this Agreement; (ii) such
future employment shall not reduce the Company's and Royce's obligations to make
the payments required by Section 7(c) of the Employment Agreement; and (iii)
such activity shall not be deemed to violate the provisions of Section 11 of the
Employment Agreement.
13. COMPANY GUARANTY. Company hereby guarantees to Consultant the due and
punctual payment and performance in full of all of the obligations of Royce
contained in this Agreement.
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13. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be
in writing and shall be deemed given (i) when delivered in person at the time of
such delivery or by telecopy with receipt of transmission indicating the date
and time (provided, however, that notice delivered by telecopy shall only be
effective if such notice is also delivered by hand or deposited in the United
States mail, postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by telecopy), (ii) when received if given by a
nationally recognized overnight courier service or (iii) two (2) business days
after being deposited in the United States mail, postage prepaid, registered or
certified mail, addressed as follows:
If to Consultant:
Xxxxxxx XxXxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Villa 16
Xxxxxxx Xxxxx, Xxxxxx 00000
If to the Company or Royce:
Xxxxxx Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxx
and/or at such other addresses and/or to such other addressees as may be
designated by notice given in accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted assigns.
As to Consultant, this Agreement is a personal service contract and shall not be
assignable by Consultant, but all obligations and agreements of Consultant
hereunder shall be binding upon and enforceable against Consultant and
Consultant's personal representatives, heirs, legatees and devices.
(c) The parties adopt the Recitals to this Agreement and agree and
affirm that construction of this Agreement shall be guided thereby; this
Agreement contains all of the agreements between the parties with respect to the
subject matter hereof; and this Agreement supersedes all other agreements, oral
or written, between the parties hereto with respect to the subject matter
hereof.
(d) No change or modification of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto. No waiver
of any provisions of this Agreement shall be valid unless in writing and signed
by the waiving party. No waiver of any of
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the provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provision, whether or not similar, nor shall any waiver constitute
a continuing waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall,
for any reason, be invalid or unenforceable, such provisions (or portions
thereof) shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions of this Agreement (or portions
thereof) shall nevertheless be valid, enforceable and of full force and effect.
(f) The section or paragraph headings or titles herein are for
convenience of reference only and shall not be deemed a part of this Agreement.
(g) This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which when taken together
shall constitute a single instrument.
(h) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by
the laws of the State of Florida applicable to contracts made in that State
(other than any conflict of laws rule which might result in the application of
the laws of any other jurisdiction).
14. CONTRACTUAL CAPACITY. The parties agree that each has entered into
this Agreement knowingly and voluntarily with an understanding of its
ramifications. Consultant represents and agrees that he has read this Agreement
and understands it and that, except as stated herein, no promise or inducement
has been offered for this Agreement. Consultant further represents and
acknowledges that he has been advised in writing by the Company through this
Agreement that he should consult with an attorney prior to signing this
Agreement, that he has had a period of 21 days to consider this Agreement prior
to executing it, and that he has in fact consulted with his own attorney who has
negotiated this Agreement on his behalf.
15. EFFECTIVE DATE. It is agreed that Consultant has a period of seven (7)
days commencing on the first day after he has executed this Agreement during
which he may revoke this Agreement. Notice of such revocation must be personally
delivered or sent next day overnight delivery by reputable carrier to Xxxxxx
Pharmaceuticals, Inc., 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attn: Xx. Xxxxx
Xxxx. This Agreement shall become effective on the first day following
expiration of this seven-day period ("Effective Date"); provided however, that
if this Agreement is not revoked prior to the Effective Date or otherwise deemed
unenforceable, the consulting relationship shall begin on and as of the
Separation Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
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Xxxxxxx XxXxxxx
XXXXXX PHARMACEUTICALS, INC.
By:
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Title:
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ROYCE LABORATORIES, INC.
By:
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Title:
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