MANAGEMENT SERVICES AND ADMINISTRATIVE AGREEMENT
This MANAGEMENT SERVICES AND ADMINISTRATIVE AGREEMENT (this
"Agreement") is made effective as of the 1st day of April 2003 (the "Effective
Date"), by and between BioDelivery Science International, Inc., a Delaware
corporation ("BDSI"), and Bioral Nutrient Delivery, LLC, a Delaware limited
liability company ("BND").
WHEREAS, BND has been formed to develop a technological means of
delivering nutrients for the use and/or sale in the processed food and beverage
industries; and
WHEREAS, BDSI and BND desire to set forth in this Agreement certain
terms and conditions relating to services to be performed by BDSI (through its
employees) for BND (collectively, the "Services").
NOW, THEREFORE, in consideration of the mutual promises and
undertakings set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledge by the parties, the
parties hereto agree as follows:
1. Term; Termination. The term of this Agreement shall begin as of the Effective
Date and, unless sooner terminated in accordance with subsections (a), (b) or
(c) of this Section 1 or any other provision of this Agreement, shall continue
until April 1, 2004 (such term, the "Initial Term"). This Agreement will
terminate at the conclusion of the Initial Term. At such time, BDSI and BND will
evaluate the need for continuation of the provision of the Services by BDSI.
Notwithstanding the foregoing, this Agreement may be terminated at any
time in the following circumstances:
(a) BDSI, in its sole and absolute discretion, may at any time cancel this
Agreement upon thirty (30) days prior written notice to BND;
(b) If either party commits a material breach of this Agreement, and such
material breach is either not curable or is curable but remains uncured for
thirty (30) days after written notice of such material breach is delivered to
the breaching party, then the non-breaching party may immediately terminate this
Agreement by providing the breaching party with written notice of such
termination. The right of termination provided in this Section 1(b) is not
exclusive of any remedies to which either party may otherwise be entitled at law
or in equity in the event of a breach of this Agreement.
(c) In the event that either party hereto (i) becomes insolvent or shall cease
to pay its debts when due; or (ii) is found bankrupt by any judicial,
administrative or other appropriate agency having jurisdiction, whether
voluntary or involuntary, and such insolvency is not corrected or such
bankruptcy declaration is not vacated within thirty (30) days, then the other
party shall have the right to immediately terminate this Agreement by providing
the bankrupt/insolvent party written notice of such termination.
2. Engagement; BDSI Employees. BND hereby engages BDSI as an independent
contractor to perform the Services during the Initial Term, and BDSI accepts
such engagement. BDSI will be responsible for the selection, hiring and
termination of the employees listed on Schedule A. BDSI will further be
responsible for the provision to such employees of all compensation and benefits
to such employees and the administration all employee-related programs
(including, without limitation, payroll and withholding). An employee of BDSI
who is providing Services to BND hereunder shall be allowed to simultaneously
provide services to BDSI.
3. Lease of Space.
(a) Commencing on and as of the Effective Date, and continuing on a
month-to-month basis thereafter for the duration of the Initial Term, BDSI shall
sublease to BND (the "Intercompany Lease") a portion of the real estate leased
by BDSI at 000 Xxxxx Xxxxxx Xxxxxx, Administrative Building No. 4, Xxxxxx, XX
00000 (the "BDSI Leased Space"). The portions of the BDSI Leased Space subject
to the Intercompany Lease may, depending on the occupancy requirements of BND,
fluctuate from time to time during the term of the Intercompany Lease. On not
less than a quarterly basis commencing with the calendar quarter beginning Xxxxx
0, 0000, XXXX and BND shall determine in good faith the portion of the BDSI
Leased Space then occupied by BND (the "BND Occupied Space") for purposes of the
payment obligations of BND set forth in Section 3(b) below.
(b) The monthly rent payable by BND under the Intercompany Lease shall be equal
to (i) BND's proportionate share, based on the then current BND Occupied Space,
of the monthly out-of-pocket cost to BDSI for all utilities (other than
telephone and telecom services), taxes and maintenance, cleaning, security and
repair fees paid by BDSI with respect to the BDSI Leased Space and (ii) BND's
proportionate share, based on usage, of the monthly out-of-pocket cost to BDSI
for the provision of third party telephone and telecom services to BND
(c) The Intercompany Lease will continue on a month-to-month basis and shall
terminate on April 1, 2004, unless earlier terminated by BDSI or BND on at least
thirty (30) days prior written notice.
4. Consideration; Expenses. BDSI shall provide the Services to BND in
consideration of the future benefits to inure to BDSI's through its ownership of
equity interests in BND and its licensing of certain technology rights to BND.
In the event that BDSI incurs evaluation, research or development costs on
behalf of BND in connection with a potential licensing program with a
third-party, BND shall reimburse such costs to BDSI on a case by case basis only
if a final license agreement is signed with such third-party. BND shall
reimburse BDSI for such costs promptly following the execution of any such
license agreement.
5. Confidential Information. BDSI acknowledges that the information,
observations and data relating to the business of BND and the Services performed
hereunder ("Confidential Information") are the property of BND, regardless of
how, when or in what capacity BDSI obtained any such Confidential Information,
and shall use such Confidential Information only for the purposes set forth in
this Agreement, and shall not knowingly disclose such Confidential Information
to any other person, firm or corporation (except as required by law, rule or
regulation applicable to BDSI) without the prior written consent of BND, unless
and to the extent that such Confidential Information: (i) shall have otherwise
become publicly available other than as the result of a disclosure by BDSI in
breach hereof, (ii) becomes available to BDSI on a nonconfidential basis from a
source other than BND which BDSI believes is not prohibited from disclosing such
information to BDSI by obligation to BND, (iv) is known by BDSI prior to its
receipt from BND without any obligation of confidentiality with respect thereto,
or (v) is developed by BDSI independently of any disclosures made by BND to BDSI
of such information. The parties agree that the covenant described above
regarding Confidential Information shall survive the termination of this
Agreement for a period of five (5) years. BDSI (A) covenants to inform any
officers or employees of BDSI who perform Services to BND of the terms of this
Section 4 and (B) shall be liable for the breach by such persons of the terms of
this Section 4.
6. Representations and Warranties. Each of the parties represents and warrants
that (a) it is duly incorporated, formed or organized and validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization, with full power, authority and legal right to execute, deliver and
perform its obligations under this Agreement; (b) this Agreement has been duly
authorized, executed and delivered and is a legal, binding obligation,
enforceable in accordance with its terms; (c) there are no actions, suits or
proceedings pending or threatened that if determined adversely to the party
would have a material adverse effect on the financial condition or operation of
such party, and (d) that it will perform its obligations hereunder in accordance
with applicable laws.
7. Disclaimer of Other Warranties. THE SERVICES ARE PROVIDED TO BND "AS IS".
EXCEPT FOR ANY EXPRESS WARRANTIES MADE BY BDSI UNDER THIS AGREEMENT, BDSI MAKES
NO WARRANTIES OR REPRESENTATIONS, INCLUDING BUT NOT LIMITED TO ANY EXPRESSED OR
IMPLIED WARRANTIES ABOUT THE MERCHANABILITY, FITNESS FOR ANY PARTICULAR PURPOSE,
SYSTEM INTEGRATION, OR DATA ACCURACY ABOUT ANY ITEM OR SERVICE PROVIDED TO THE
COMPANY PURSUANT TO THE TERMS HEREOF.
8. Compliance With Laws. Both parties shall comply with all federal, state and
local laws, statutes, rules, regulations and ordinances in any way related to
this Agreement.
9. Trademarks. No right or license to any name, trade name, trademark or service
xxxx or other identity owned by either of the parties hereto shall be deemed to
be granted to the other by any provision hereof or construed from the
performance of this Agreement by either party.
10. Further Assurances. Each of the parties covenants and agrees to execute and
deliver such additional instruments and other documents and shall take such
reasonable further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement.
11. Indemnification.
(a) Indemnification by BDSI. BDSI shall defend, indemnify and hold BND, its
officers, members, directors, employees and consultants harmless from and
against any and all claims, suits or demands, threatened or filed ("Claims") for
liability, damages, losses, costs and expenses (including the costs and expenses
of attorneys and other professionals), at both trial and appellate levels,
arising from or relating to (i) breach of the representations, warranties,
agreements and obligations of BDSI hereunder and (ii) the Services provided to
BND pursuant to this Agreement. The foregoing indemnification shall not apply to
any Third Party Claims to the extent are caused by the negligence of BND.
(b) Indemnification by BDSI. BND shall defend, indemnify and hold BDSI, its
officers, directors, employees and consultants harmless from and against any and
all Claims for liability, damages, losses, costs and expenses (including the
costs and expenses of attorneys and other professionals), at both trial and
appellate levels, relating or arising out of breach of the representations,
warranties, agreements and obligations of BND hereunder. The foregoing
indemnification shall not apply to any Claims to the extent caused by the
negligence of BDSI.
(c) Notice. In the event that either party seeks indemnification under Sections
11(a) or (b), the party seeking indemnification agrees to (i) promptly inform
the other party of the Claim, (ii) in the case of a third party claim (A) permit
the other party to assume direction and control of the defense or claims
resulting therefrom (including the right to settle it at the sole discretion of
that Party), and (B) cooperate as reasonably requested (at the expense of that
party) in the defense of the Claim.
12. Non-Assignment; Successors. This Agreement shall be binding upon and shall
inure to the benefit of BND and its successors and permitted assigns and shall
be binding upon and shall inure to the benefit of the BDSI and its successors
and permitted assigns. Neither party may assign its rights or delegate its
obligations hereunder without the prior written consent of the other party.
13. Severability. If any provision of this Agreement is deemed invalid or
unenforceable by any court of competent jurisdiction or under any statute,
regulation, ordinance, or other rule of law, such provision shall be deleted or
modified, at the election of the parties, but only to the extent necessary to
comply with such ruling, statute, regulation, ordinance or rule, and the
remaining provisions of this Agreement shall remain in full force and effect.
14. Notices. Any notice, request, demand or other communication given under this
Agreement shall be in writing and shall be deemed sufficiently given either: (i)
upon the date received by the intended recipient if delivered by hand, overnight
courier, or via facsimile, provided confirmation of receipt is retained; or (ii)
three (3) days following the date deposited in the United States Mail, certified
with return receipt requested, postage prepaid, in either case addressed to the
recipient at such address as may be provided by the recipient for the receipt of
notices.
15. Relationship of Parties. Nothing contained in this Agreement shall be
construed as constituting BDSI or BND as the franchiser, franchisee, partner,
broker, joint venturer or agent of the other. Each party is an independent
contractor and neither has nor shall have any power, right or authorization to
bind the other or to assume or create any obligations or responsibilities,
express or implied, on behalf of the other or in the other's name.
16. Captions; Interpretation. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The terms of this Agreement are the product of
negotiation between the parties and are not to be construed as being drafted
solely by one party, and no presumption is to arise therefrom in favor of either
party.
17. No Third Party Beneficiaries. This Agreement is entered into solely between
and may only be enforced by the parties hereto. This Agreement shall not be
deemed to create any rights in any third parties, including any employees,
vendors or independent contractors of BDSI, or to create any obligations of a
party to any third parties.
18. Entire Agreement; Non-Waiver. This Agreement sets forth the entire
understanding of the parties hereto and constitutes the entire Agreement between
the parties with respect to the matters contained herein, and supersedes all
prior oral or written representations, proposals, correspondence, discussions,
negotiations and agreements. No change, modification, waiver, agreement or
understanding, oral or written, in any way purporting to waive or modify the
terms hereof shall be binding on either party hereto unless contained in a
written document expressly described as an amendment to, waiver of or extension
of this Agreement and unless such document is duly executed by both parties. A
waiver by either party of any breach or failure to enforce any term or condition
of this Agreement shall not in any way affect, limit or waive such party's right
at any time to enforce strict compliance with that or any other term or
condition of this Agreement.
19. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Jersey without regard to its conflict of laws provisions or any
other provision of New Jersey law that would require or permit the application
of the substantive law of any other jurisdiction to govern this Agreement.
20. Counterparts. This Agreement may be signed in two counterparts and by
facsimile, each of which shall be an original and, which taken together shall
constitute one instrument.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
BIODELIVERY SCIENCES INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. X'Xxxxxxx, Xx., M.D.
Title: President and CEO
BIORAL NUTRIENT DELIVERY, LLC
By: /s/ Xxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxx X. XxXxxxx
Title: Secretary, Treasurer and CFO
[Schedule A Follows]
EGSC LLP/DRAFT/
January 27, 2003/v.1
SCHEDULE A
SERVICES
BDSI will provide the following Services to BND:
1. Xxxxxxx X. X'Xxxxxxx, Xx. and Xxxxx X. XxXxxxx, BDSI's CEO and CFO,
respectively, will spend approximately twenty percent (20%) of their
professional time attending to the affairs of BND. Such persons shall undertake
the following on behalf of BND: (i) structure and enter into research and
development and/or evaluation agreements relating to the technology licensed
from BDSI; (ii) structure and enter into sublicense agreements relating to the
technology licensed from BDSI; (iii) supervise research projects and (iv) manage
outlicensing relationships.
2. Scientific and technical services and personnel, including research and
development of BDSI's licensed encochleation technology for use in the food and
beverage processing sector.
3. Accounting, bookkeeping, internal auditing, and payroll services,
including advice related thereto, such services and advice to be provided by, or
under the supervision of, BDSI's internal accounting, auditing and payroll
staff. Preparation or supervising the preparation of any tax returns or other
documents required or which may be filed with any federal, state, local or
foreign government or other governmental authority, instrumentality or
subdivision thereof.
4. Assistance in organizational matters, assistance in preparation of
financial reports related to the operation of BND, employee compensation,
incentive and retirement plans.
5. Human resources and personnel advice and services, including, but not
limited to, providing or supervising the performance of the administration of
employee insurance plans, retirement plans, and other employee benefit plans so
long as same are substantially similar to those which are provided by BDSI to
its own employees.
6. Management information and data processing services, including, but not
limited to, providing or supervising software and hardware selection and
maintenance.
7. Providing or supervising the provision of legal advice and services,
including, but not limited to, assistance with respect to claims that become or
may become the subject of litigation, supervising the preparation and review of
documents involving loans, financing transactions, employment and employee
benefits matters, real estate matters, contractual documents, documents relating
to any applicable reporting requirements promulgated by any federal, state,
local or foreign government or other governmental authority, instrumentality or
subdivision thereof, consultation related to legal and administrative
proceedings, and consultation related to compliance with applicable laws and
regulations; provided, that all lawyers providing legal services to BND shall do
so as counsel to BND.
