Consulting Agreement - Quintiles Transnational Corp. and A. M. Pappas & Associates LLC
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of the 1st day
of January, 2000 by and between Quintiles Transnational Corp., a North Carolina
corporation (the "Company") and A. M. Pappas & Associates, LLC, a North Carolina
limited liability company ("AMP&A").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the international contract
healthcare services business (the "Business"); and
WHEREAS, AMP&A has experience beneficial to the Company's
Business and has access to a network of business associates and consultants
("Associates") with experience beneficial to the Company's Business; and
WHEREAS, the Company desires to engage AMP&A to provide
certain consulting services to the Company on the terms and conditions set forth
herein; and
WHEREAS, AMP&A desires to provide consulting services to the
Company as an independent contractor and is willing to do so on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the Company and AMP&A agree as follows:
ARTICLE I
CONSULTING SERVICES
Section 1.01 Engagement. On the terms and subject to the conditions
hereinafter set forth, the Company hereby engages AMP&A to perform consulting
services with respect to the operational, strategic and organizational
development aspects of the Company's Business and on such basis AMP&A hereby
agrees to provide advice and consultation to the Company as set forth on
Schedule A hereto. Notwithstanding any provision in this Agreement to the
contrary, neither AMP&A nor Arthur M. Pappas makes any commitment herein to
invest in or provide financing to the Company. AMP&A is not an investment
company or a broker dealer, and shall not engage hereunder in effecting or
attempting to effect purchases or sales of the Company's securities.
Section 1.02 Status of AMP&A. The Parties hereby acknowledge and agree
that AMP&A will be an independent contractor to the Company and shall have the
responsibility to provide all necessary employees, agents or consultants to
properly perform its obligations hereunder.
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(a) AMP&A understands that it is responsible to pay its own
income tax in accordance with United States law as well as all applicable state
and local taxes. AMP&A further understands that it may be liable for Social
Security ("FICA") tax, to be paid in accordance with all applicable laws with
respect to its own employees.
(b) The Company will not be required to withhold state and
Federal income taxes, or to make payments for FICA, unemployment insurance or
any other payroll taxes, with regard to any employees, agents or consultants of
AMP&A.
(c) Consistent with its duties and obligations under this
Agreement, AMP&A shall at all times maintain sole and exclusive control and
discretion over its business, operations, employees, agents, and consultants and
the manner of performance of the services required to be rendered by AMP&A
hereunder, including with respect to staffing and resource allocation. All
decisions regarding whether or what assistance AMP&A will enlist in performing
services pursuant to this Agreement will be entirely within the discretion of
AMP&A, which will be free to employ or engage any person, firm, corporation or
other entity to assist AMP&A in performing services pursuant to this Agreement,
subject only to the requirements of Section 3.01 hereof regarding the disclosure
of confidential information, and to the requirements of Section 2.01(c)
regarding the services of AMP&A employees.
(d) The Company shall not be responsible for and shall not
obtain worker's compensation, disability benefits insurance, unemployment or
employment security insurance coverage for any person whom AMP&A shall employ or
engage to assist AMP&A in performing services pursuant to this Agreement. To the
extent that any such insurance coverage, or any other type of insurance
coverage, is or shall become required by law, it will be obtained by AMP&A at
its own expense.
(e) AMP&A is not eligible for, nor entitled to, and shall not
participate in, any of the Company's pension, health or other fringe benefit
plans, if any such plans exist, such participation in these fringe benefit plans
being limited solely to the Company's employees.
(f) At no time will either party hold itself out to be the
employer, employee, lessee, sublessee, partner or joint venturer of the other
party. Neither party hereto shall have the express or implied right or authority
to assume or create any obligation on behalf of or in the name of the other
party, or to bind the other party in regard to any contract, agreement or
undertaking with any third party, unless otherwise agreed in a writing signed by
both parties.
(g) AMP&A and its agents, employees and contractors retain the
right to perform work for others during the term of this Agreement, including
work of the same kind as contemplated hereunder, pursuant to Section 3.03
hereof.
Section 1.03. Information about the Company. The Company shall
cooperate with AMP&A and provide to AMP&A all such materials and information
regarding the Company and its business and financial condition as AMP&A may
request from time to time during and in connection with AMP&A's engagement
hereunder. The Company acknowledges that AMP&A will rely primarily upon
information so provided, without any independent investigation, and that AMP&A
does not assume any responsibility for the accuracy or completeness thereof.
Section 1.04. Attendance at Meetings. At the Company's request, AMP&A
shall use its reasonable best efforts to cause Arthur M. Pappas, President of
AMP&A, or another employee
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or consultant acceptable to the Company to attend the Company's Board of
Directors meetings and other meetings and conferences.
ARTICLE II
COMPENSATION AND INDEMNIFICATION
Section 2.01 Consulting Fee.
(a) The Company shall pay AMP&A for the direct services of its
President, Arthur M. Pappas, ************ for each day of consulting work in the
United States (each, a "USA Work Day") and ************* for each day of
consulting work in markets other than the United States (each, an "International
Work Day"); provided, however, that (i) the minimum aggregate consulting fee
(exclusive of expenses) payable by the Company to AMP&A per Contract Year shall
be Two Hundred Thousand Dollars ($200,000); and (ii) AMP&A shall not invoice the
Company for (or be required to render services of Arthur M. Pappas in respect
of) such fees in excess of $220,000 during any Contract Year without the prior
approval of the person designated by the Company to receive notices under
Section 4.03 of this Agreement (or by any other person so designated by the
Company). Collectively, USA Work Days and International Work Days shall be
referred to herein as "Work Days". Each USA Work Day shall consist of eight (8)
accumulated hours of consulting time and each International Work Day shall
consist of ten (10) accumulated hours of consulting time, which shall include
travel on behalf of or at the request of the Company. As used in this Agreement,
the term "Contract Year" shall mean any twelve (12) month period beginning on
the date of this Agreement or on any anniversary thereof. The Company and AMP&A
shall review and renegotiate in good faith on a semi-annual basis the consulting
fees set forth above in this Section 2.01(a).
(b) At the Company's reasonable request, as evidenced by the
prior approval of the person designated by the Company to receive notices under
Section 4.03 of this Agreement (or by any other person so designated by the
Company), AMP&A will provide the services of other AMP&A employees and
associates (in addition to Arthur M. Pappas) and the Company shall pay AMP&A for
such services at AMP&A's normal and customary billing rates. Payment for
services provided by AMP&A employees and associates other than Arthur M. Pappas
shall not apply toward the minimum aggregate consulting fee set forth in Section
2.01(a), nor shall such services be subject to the maximum aggregate consulting
fee that can be billed without the Company's prior consent.
(c) The Company upon receipt of an invoice shall pay AMP&A
SIXTEEN THOUSAND SIX HUNDRED SIXTY-SIX DOLLARS ($16,666.00) per month, payable
in advance on the first day of each month (the "Retainer Fee"). Promptly
following the end of each month, AMP&A shall provide the Company with a
statement showing the total fee for services rendered during such month. Such
fees shall be calculated in accordance with the consulting rates specified in
this Section 2.01. In the event that the fee based upon services rendered
exceeds the Retainer Fee, the Company shall pay AMP&A the difference within
fifteen (15) days of receipt of invoice. In the event that the aggregate
Retainer Fee for a calendar quarter exceeds the total fees invoiced based upon
services rendered during such period, AMP&A shall (i) credit the difference to
the Company in the form of services that AMP&A shall perform without further
charge during the succeeding six month period or (ii) in the event of
termination of this Agreement for any reason, AMP&A shall promptly refund the
difference to the Company.
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(d) In the event of termination of this Agreement for any
reason, AMP&A shall render a final invoice, due and payable promptly following
receipt by the Company, for all services performed by AMP&A prior to termination
and for all expenses incurred or committed to by AMP&A prior to termination.
(e) Except as otherwise provided, the Company shall pay all
compensation to AMP&A pursuant to this Agreement in United States dollars.
Section 2.02 Expenses. The Company shall reimburse AMP&A within fifteen
(15) days of receipt of AMP&A's invoice for all reasonable out-of-pocket and
administrative expenses incurred by AMP&A in performing services pursuant to
this Agreement, including, without limitation, travel, food, lodging, telephone
and telecopier expenses, as well as the fees and expenses of any third party
consultants engaged by AMP&A in connection with rendering services hereunder.
Section 2.03 Limited Liability. With regard to the services to be
performed by AMP&A (which term shall include its affiliates and its and their
respective officers, directors, employees, agents and consultants in this
Section 2.03) pursuant to the terms of this Agreement, AMP&A shall not be liable
in any manner whatsoever under this Agreement or otherwise to the Company, or to
anyone who may claim any right due to AMP&A's relationship with the Company,
except for damages determined in a final judgment by a court of competent
jurisdiction to have resulted from actions taken or omitted due to AMP&A's
willful misconduct, gross negligence or knowing violation of law.
Notwithstanding the foregoing, AMP&A shall not have any liability for any
special, incidental or consequential damages, including without limitation
damages for any loss of opportunity, revenue or profit, for or in connection
with the engagement contemplated hereby or the existence, furnishing,
functioning, use or application of any information, data, documentation, work
product, conclusion, recommendation or report provided pursuant to this
Agreement, regardless of whether AMP&A shall have been advised or should have
known of the possibility of such damages. **************** The parties agree
that this limitation of liability shall apply to services performed by AMP&A
hereunder, and not to provisions of this Agreement generally, including, without
limitation, observance of Section 3.01 below.
Section 2.04 Indemnification.
(a) The Company shall indemnify and hold AMP&A (which term
shall include its affiliates and its and their employees, agents and consultants
in this Section 2.04) free and harmless to the full extent permitted by law or
in equity, for and from any and all losses, obligations, liabilities, damages,
costs, expenses, claims, actions, judgments, attorneys' fees and attachments,
joint or several, arising from or in connection with third-party claims under
this Agreement or any third-party claim, matter or transaction occurring prior
to the date hereof related to AMP&A's services hereunder, except to the extent
the same shall be determined in a final judgment by a court of competent
jurisdiction to have resulted from actions taken or omitted due to AMP&A's
willful misconduct, gross negligence or knowing violation of law.
(b) Subject to Section 2.03, AMP&A shall indemnify and hold
the Company (which term shall include its affiliates and its and their
employees, agents and consultants in this Section 2.04) free and harmless to the
full extent permitted by law or in equity, for and from any and all losses,
obligations, liabilities, damages, costs, expenses, claims, actions,
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judgments, attorneys' fees and attachments, joint or several, arising from or in
connection with third-party claims under this Agreement or any third-party
claim, matter or transaction occurring prior to the date hereof related to
AMP&A's services hereunder, but only to the extent the same shall be determined
in a final judgment by a court of competent jurisdiction to have resulted from
actions taken or omitted due to AMP&A's willful misconduct, gross negligence or
knowing violation of law.
(c) At its option, the Company shall defend AMP&A against any
such claim or action or obtain separate counsel for AMP&A. If AMP&A is provided
separate counsel, the fees and expenses of such counsel shall be indemnified
expenses hereunder. The Company further agrees that it will not, without the
prior written consent of AMP&A, settle, compromise, or consent to entry of
judgment in respect of any matter for which AMP&A may seek indemnification
hereunder unless AMP&A is the beneficiary of a general release from any and all
liability in connection therewith.
(d) At its option, AMP&A shall defend the Company against any
such claim or action or obtain separate counsel for the Company. If the Company
is provided separate counsel, the fees and expenses of such counsel shall be
indemnified expenses hereunder. AMP&A further agrees that it will not, without
the prior written consent of the Company, settle, compromise, or consent to
entry of judgment in respect of any matter for which the Company may seek
indemnification hereunder unless the Company is the beneficiary of a general
release from any and all liability in connection therewith.
Section 2.05 Certain Acts. The parties understand and agree that the
limitations on liability contained in Section 2.03 and the Company's
indemnification contained in Section 2.04(a), as well as the limitation of
AMP&A's indemnification in Section 2.04(b), shall not apply to acts arising from
AMP&A's violation of Section 3.01 hereof or to any AMP&A employee's violation of
duties of a director of the Company.
Section 2.06 Force Majeure. AMP&A shall not be liable to the Company
nor be deemed to have defaulted under or breached this Agreement for any
failures, errors, delays or other conditions or consequences arising from or
caused by events beyond AMP&A's control, including, without limitation,
sabotage, failures or delays in transportation, equipment or communication,
labor disputes, accidents or acts of nature.
ARTICLE III
DISCLOSURE AND BUSINESS OPPORTUNITIES
Section 3.01 Disclosure of Confidential Information.
(a) In the course of AMP&A's engagement hereunder, AMP&A may
have access to confidential information and trade secrets relating to the
Company's business. During the term of this Agreement and thereafter for a
period of five (5) years, AMP&A shall not directly or indirectly disclose to any
third person any such confidential information or trade secrets without the
Company's prior consent, except as required by law or in the course of AMP&A's
engagement hereunder.
(b) The following information shall not be considered
confidential or secret:
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(i) Information which is already or hereafter becomes
generally available to the public, except as a result of the
breach of AMP&A's duty of confidentiality hereunder.
(ii) Information which AMP&A received from a third
party which had the right to possess and to disclose the
information.
(iii) The existence of this Agreement and the
consulting relationship between AMP&A and the Company.
Section 3.02 Disclosure of Consulting Relationship. AMP&A shall have
the right to disclose the existence of this consulting relationship with the
Company pursuant to this Agreement; provided, however, that AMP&A shall not
disclose any confidential information or trade secrets of the Company covered by
Section 3.01 hereof, and that any disclosures to the media shall be made only
with the consent of the Company.
Section 3.03 Other Business Opportunities. Neither this Agreement nor
any policy of the Company shall prevent or restrict AMP&A from engaging in any
other business activities for its own account or on behalf of others including,
without limitation, business activities of the type conducted by the Company, or
from investing in or performing any consultation services for any other
individual or entity including, without limitation, investing in or performing
the type of consultation provided under or contemplated by this Agreement for
any individual or entity engaged in business activities of the type conducted by
the Company. AMP&A shall inform the Company of all other individuals and
entities engaged in business activities of the type conducted by the Company for
whom AMP&A provides or intends to provide consultation services, or with whom
AMP&A holds a directorate. The Company acknowledges and agrees that (a) AMP&A
may obtain information about other companies and persons in the course of
AMP&A's activities therewith; (b) except with such companies' or persons'
consent, AMP&A will not make such information available to the Company, nor will
AMP&A make any such information about the Company available to such companies or
persons except as permitted by this Agreement; and (c) the Company shall not
assert any claim or defense against AMP&A for AMP&A's failure to furnish any
such information to the Company or by reason of AMP&A's activities with such
other companies and persons.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Termination. This Agreement shall remain in effect for one
(1) year from the date hereof, provided, however, that either party may
terminate this Agreement upon two (2) weeks' written notice to the other if the
parties are unable to renegotiate AMP&A's consulting fee rates to the parties'
mutual good faith satisfaction pursuant to Section 2.01(a) above. AMP&A shall
render a final invoice upon termination as provided in Section 2.01 above.
Section 4.02 Severability. If any provision or portion of this
Agreement is judicially or administratively interpreted or construed as being in
violation of controlling law in any jurisdiction, such provision or portion
shall be inoperative in such jurisdiction and the remainder
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of this Agreement shall remain binding upon the parties hereto in such
jurisdiction with the Agreement as a whole unaffected elsewhere.
Section 4.03 Notices and Other Communications. Every notice required
under or contemplated by this Agreement shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be notified or
one (1) day after deposit with any nationally recognized overnight carrier or
three (3) days after deposit with the U.S. Post Office by registered or
certified mail, postage prepaid and addressed to the party to be notified as
follows:
To AMP&A: A. M. Pappas & Associates, LLC
Chapel Hill-Nelson Hwy.
Beta Building, Suite 420
Durham, NC 27713
Attn.: Mr. Arthur M. Pappas
To the Company: Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 300
Morrisville, NC 27560
Attn: John S. Russell
Senior Vice President and General Counsel
or at such other address as the intended recipient previously shall have
designated by written notice to the other party in like manner. It is the
responsibility of the party giving notice to obtain a receipt for delivery of
the notice, if that party considers such a receipt advisable.
Section 4.04 Counterparts. This Agreement may be executed in any number
of counterparts and each counterpart shall constitute an original instrument,
but all such separate counterparts shall constitute one and the same instrument.
Section 4.05 Law to Govern. The validity, construction and
enforceability of this Agreement shall be governed in all respects by the law of
the State of North Carolina without regard to its conflicts of laws rules and
the parties hereby irrevocably consent to the non-exclusive jurisdiction and
venue of the State and Federal courts located within North Carolina.
Section 4.06 Written Agreement to Govern. This Agreement sets forth the
entire understanding and supersedes all prior and contemporaneous agreements
between the parties relating to the subject matter contained herein and merges
all prior and contemporaneous discussions between them, and no party shall be
bound by any definition, condition, representation, warranty, covenant or
provision other than as expressly stated in or contemplated by this Agreement or
as subsequently shall be set forth in writing and executed by a duly authorized
representative of the party to be bound thereby.
Section 4.07 Assignability. Neither this Agreement nor any right or
obligation hereunder is assignable in whole or in part, whether by operation of
law or otherwise, by either party hereto without the express written consent of
the other party and any such attempted assignment shall be void and
unenforceable. Notwithstanding the above, AMP&A may assign all of its rights
hereunder to or cause services required of AMP&A hereunder to be performed by
any entity or association owned or controlled by AMP&A without the Company's
prior written
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consent. This Agreement and the rights and obligations hereunder shall be
binding upon, and shall inure to the benefit of any proper successor or
assignee.
Section 4.08 No Waiver of Rights. All waivers hereunder must be made in
writing, and failure of any party at any time to require another party's
performance of any obligation under this Agreement shall not affect the right
subsequently to require performance of that obligation. Any waiver of any breach
of any provision of this Agreement shall not be construed as a waiver of any
continuing or succeeding breach of such provision or a waiver or modification of
the provision.
Section 4.09 Attorneys' Fees. If any obligation to compensate AMP&A
arising out of this Agreement shall not be paid when due and AMP&A shall engage
an attorney to collect that indebtedness, the Company shall be liable to pay to
the AMP&A reasonable attorneys' fees as well as all other costs and expenses
incurred with respect to the collection of that indebtedness.
Section 4.10 Subject Headings. The subject headings of the Articles and
Sections of this Agreement are included for the purposes of convenience only,
and shall not affect the construction or interpretation of any of the provisions
of this Agreement.
Section 4.11. Survival. Notwithstanding any provision in this Agreement
to the contrary, the provisions of Sections 2.01 (Consulting Fee) and 2.02
(Expenses) (but only as to amounts owing and accrued), 2.03 (Limited Liability),
2.04 (Indemnification), 3.01 (Disclosure of Confidential Information), 3.03
(Other Business Opportunities) and 4.12 (Non-Solicitation) hereof shall survive
any termination of this Agreement and AMP&A's engagement hereunder.
Section 4.12. Non-Solicitation. During the term of this Agreement and
for six (6) months after the termination hereof, the Company shall not, without
the payment to AMP&A of a separation fee in an amount equal to fifty percent
(50%) of such person's total compensation package being offered, but not less
than $1,000,000, directly or indirectly employ or otherwise engage any officer,
director, employee or agent of AMP&A or any of its affiliates.
Section 4.13. Dispute Resolution. Each party shall use its respective
best, good faith efforts to resolve amicably any dispute arising out of or in
any way relating to this Agreement or AMP&A's engagement by the Company. The
parties shall submit any such dispute not so resolved and concerning the
determination of AMP&A's fees hereunder to the accounting firm of Arthur
Andersen (or any other "Big Five" accounting firm upon which the parties shall
agree) for resolution, and such firm's determination shall be final and binding
upon the parties. The parties shall submit any other such dispute not so
resolved to mediation and, if necessary, binding arbitration administered in
Raleigh, North Carolina by the American Arbitration Association in accordance
with its then-current commercial rules. Subject to Section 4.05 above, any court
of competent jurisdiction may enter judgment upon any accounting determination
or arbitration award so made.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
COMPANY:
QUINTILES TRANSNATIONAL CORP.
By: /s/ John Russell
------------------------------------------
Name: John Russell
----------------------------------------
Title: Senior Vice President & General Counsel
---------------------------------------
A. M. PAPPAS & ASSOCIATES, LLC
By: /s/ Ford S. Worthy
------------------------------------------
Ford S. Worthy
Vice President
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SCHEDULE
A
SERVICES REQUESTED:
1. Assist in obtaining strategic referrals and developing Quintiles' core
business;
2. Assist in the development of Quintiles' business activities in the Asia
Pacific region and in other areas of the world as requested by the
Company.
3. Assist in the development of the emerging biotechnology company
strategy.
4. Assist in the general areas of operational, strategic and
organizational development and provide support as needed for
acquisitions, recruitment, etc.
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