Exhibit 10.18
XXXXXX & XXXXXXXXX LLP
000 XXXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXX XXXX 00000
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Xxxxxxx X. Xxxxxx Telephone (000) 000-0000
Xxxx X. Xxxxxxxxx Facsimile (000) 000-0000
January 8, 2003
QMed, Inc.
00 Xxxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx, CFO
Re: Monthly Retainer Agreement
Dear Xx. Xxxxxxx:
This letter, subject to the Audit Committee's approval as described in
Section 7, below, confirms the agreement of QMed, Inc. (the "Company") to retain
this firm to provide certain recurring legal services described below.
1. MONTHLY RETAINER.
The Company will pay us a monthly retainer fee of $7,000, which will be
applied toward the legal services described more specifically in paragraph 2 to
be rendered during the following month. Out-of-pocket expenses will be
reimbursed in full separately as provided in paragraph 4. The Company
understands and agrees that this monthly retainer fee represents 1/12th of the
estimated legal fees (based on our established hourly rates) that the Company
would incur for such services to be provided during an entire year from December
1, 2002 to November 30, 2003, consisting primarily of an ordinary cycle of
periodic filings with the Securities and Exchange Commission and related
matters, and that this arrangement requires us to allocate resources to the
Company's account and possibly to forego the representation of other clients in
order to be available to serve the Company's recurring need for these legal
services. Accordingly, the Company agrees that:
(a) the monthly retainer fee of $7,000 will be paid within the first 5
business days of each month by wire transfer to the account designated
on Schedule A;
(b) no portion of the monthly retainer fee will be refunded to the Company;
QMed, Inc.
January 8, 2003
Page 2
(c) in the event the Company terminates our relationship before November
30, 2003, the Company agrees that our fees for legal services will be
the greater of the sum of the monthly retainer fees billed during the
months in which we actually provided legal services to the Company or
the full amount of our attorneys' normal hourly charges to the date of
such termination;
(d) We will provide the Company a monthly report of actual time spent on
its matters and will review the monthly rate with the Company mid-year
to determine whether the monthly retainer should be adjusted
prospectively.
2. SERVICES COVERED BY THE MONTHLY RETAINER.
The following services will be performed for the Company and, subject
to paragraph 1(d) above, or our subsequent agreement to the contrary, the agreed
fee for these services will be the monthly retainer fee:
(a) Review, preparation and filing of proxy statements and regular periodic
reports (Forms 10-K and 10-Q) with the Securities and Exchange
commission and the preparation and filing of reports on Form 8-K other
than with respect to the acquisition or disposition of assets or other
extraordinary transactions;
(b) Preparation of consents and minutes for the annual meetings of
directors and shareholders and the appointment of officers;
(c) Development and implementation of a Section 16 compliance program
(relative to the filing of Forms 3, 4 and 5);
(d) Coordination and attendance of meetings of the Company's Board of
Directors, committees thereof, and shareholders and the review and
maintenance of the minutes of such meetings;
(e) Review, advise and assist the Company in developing policies and
procedures in response to regulatory requirements arising under the
Sarbanes Oxley Act of 2002, including:
(i) officer and director loan policies;
(ii) review of periodic reports;
(iii) code of ethics and corporate conduct;
(iv) officer certifications; and
QMed, Inc.
January 8, 2003
Page 3
(v) forming and maintenance of appropriate committees of the board
of directors.
(f) Coordination of the Company's equity compensation arrangements
including its stock option plans;
(g) Review of all press releases;
(h) Rendering routine legal opinions in connection with the transfer of
outstanding securities; and
(i) Telephone consultations concerning procedures and requirements under
federal and state securities laws, ordinary business and commercial
credit (but not material financing) transactions, shareholder relations
and general corporate activities.
We wish to encourage you to consult with us by telephone whenever a
question of a legal nature arises without concern that the Company will incur
liability for additional legal fees and thus will try to include such
consultations within the monthly retainer fee to the greatest extent reasonably
possible. If requested by you, we will attend senior executive staff meetings at
the Company's executive office once each month to facilitate the flow of
information.
3. SERVICES NOT COVERED BY THE MONTHLY RETAINER AND SUBJECT TO HOURLY
BILLING.
Unless we agree in writing to the contrary, we will xxxx you for all
services which are not set forth in paragraph 2 in accordance with our customary
billing practices. Although it is impossible to describe each type of service
which will not be covered by the monthly retainer fee, the following examples
are illustrative:
(a) Business combinations, reorganizations or acquisitions or dispositions
of assets;
(b) Public or private offerings of securities, significant bank credit
facilities and other material financing transactions;
(c) Litigation or arbitration;
(d) Tax advice;
(e) Implementation or revision of employee benefit plans;
(f) Extraordinary shareholders' meetings; and
QMed, Inc.
January 8, 2003
Page 4
(g) Delivery of written legal opinions, except as set forth above.
It is understood that initial consultations regarding the matters
described in this paragraph 3 will be considered covered by the monthly retainer
fee unless and until we must devote substantial time and attention to the matter
in the form of meetings, legal research or the preparation or review of
substantive legal documents such as memoranda, letters of intent, agreement or
pleadings.
4. REIMBURSEMENT OF EXPENSES.
The Company will reimburse us for all out-of-pocket expenses incurred
in the course of performing legal services. These expenses may include, but are
not necessarily limited to, charges for photocopies, telecopies, long distance
telephone calls, computerized legal research, attorney travel and overtime
expenses, secretarial overtime and related expenses, postage, courier services,
court filing and witness fees and court reporter and deposition transcript
expenses. Reimbursable expenses ordinarily will be billed along with our fees,
although for larger amounts, we may ask the Company to advance the expenses to
us or pay them directly to the third-party supplier. Because there is often a
delay in receiving invoices from third-party suppliers until after the time we
submit a xxxx, we will either issue a supplemental xxxx for these miscellaneous
items or estimate them in our final xxxx.
5. BILLING.
We will xxxx the Company monthly for our fees and expenses and, except
as otherwise set forth herein, payment will be made by the Company within 30
days after receipt of our bills. Payments received will first be applied to
legal fees and then to expenses.
6. LATE FEES.
Amounts past due more than 60 days will incur a late charge of 1% per
month of the total balance. Late charges will continue to accrue at the same
rate on any unpaid balance during any collection effort until the entire xxxx is
paid in full, whether before or after judgment. The firm shall be entitled to
recover reasonable attorneys' fees, costs and expenses in connection with any
efforts to collect unpaid balances.
7. APPROVAL AND EFFECTIVE DATE.
The financial terms of this agreement are subject to the review and
approval of the Audit Committee of the Company's Board of Directors. The
proposal will be submitted to such committee at its next regular meeting (but
not later than February 28, 2003) with the favorable recommendation of the
QMed, Inc.
January 8, 2003
Page 5
Company's management. The $3,000 per month increase from our current monthly
retainer included in this proposal, will be effective retroactive to November 1,
2002 and the difference of $3,000 per month commencing December 1, 2002 ($9,000)
so earned will be, if approved, paid within 5 days of approval by the Audit
Committee.
Please call me if you have any questions about the terms of this letter
agreement. If the terms of this letter agreement are acceptable to you, please
signify the Company's agreement to retain this firm on those terms by signing
the enclosed copy of this letter in the space provided below and returning it to
me. We are pleased to have the opportunity to be of continuing service to the
Company and look forward to working with you.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
HHS/md
Enclosure
cc: Xxxxxxx X. Xxx
ACCEPTED AND AGREED TO:
QMED, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, CFO
Dated: February 10, 2003
