Biovail Corporation International
0000 Xxxxxx Xxxxx
Xxxxxxxxxxx
Xxxxxxx X0X, XX0 Xxxxxx
July 13, 1999
Xx. Xxxxxxx X. Xxxxx
c/x Xxxxx Technologies Ltd.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Dear Xx. Xxxxx,
This letter will confirm that, for good and valuable considerations, the
sufficiency of which is hereby acknowledged, including the execution of the
Option Agreement between us of even date herewith, we agree to execute with you
a Consulting Agreement in the form attached as Exhibit A on the occurrence of a
Triggering Event. A "Triggering Event" shall be the exercise of the option
contained in the Option Agreement and acquisition, by tender offer, merger or
otherwise, of more than 50%, in one or a series of transactions, of the equity
securities, assets or business of Fuisz Technologies Ltd. (the "Company") by
Biovail or any of its subsidiaries or affiliates ("Biovail"). This agreement
shall be governed by Delaware law. The term of this agreement shall be one year
from the date hereof (the "Term").
If the foregoing accurately reflects our understanding, please so indicate
below and return a copy to me.
Sincerely,
BIOVAIL CORPORATION INTERNATIONAL
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
Accepted and Agreed:
/s/ Xxxxxxx X. Xxxxx, M. D.
---------------------------
Xxxxxxx X. Xxxxx, M. D.
BIOVAIL CORPORATION INTERNATIONAL
0000 XXXXXX XXXXX
XXXXXXXXXXX
XXXXXXX X0X, XX0 XXXXXX
As of _____, 19__
Xx. Xxxxxxx X. Xxxxx
c/x Xxxxx Technologies Limited
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Re: Consulting Agreement
Dear Xx. Xxxxx:
We refer to the Option Agreement dated July 13, 1999 among Xxxxxxx X. Xxxxx,
M.D., an individual resident in the State of Virginia (the "Consultant"),
Biovail Corporation International, an Ontario Corporation ("Biovail"), and
[Escrow Agent]
The parties agree as follows:
1. The Consultant shall provide non-exclusive consulting services to
Biovail and/or its subsidiaries or affiliates (collectively the
"Company") from time to time during the Term (as defined below), at
such times and in such manner that shall be agreed to by each of the
parties; provided, that the Consultant shall not be obligated to
provide any specified services or minimum number of days or hours of
service hereunder or provide services with respect to any particular
assignment or task. Prior to the Consultant becoming engaged in
providing any services hereunder, the Consultant and the Company shall
meet and confer as to the nature and extent of such services. Such
services may include, without limitation, business, strategic and
marketing advice to the Company's senior executive officers, strategic
business planning, special projects and other special advice.
2. (a) The Company shall pay to the Consultant an amount equal to
$2,000,000 on the first anniversary of this Agreement; provided that
if the Company and/or affiliate of the Company has acquired an
interest of 80% or more, in one or a series of transactions, of the
equity securities, assets or business of Fuisz Technologies Ltd. on or
prior to July 13, 2010, the Company shall pay the Consultant an amount
equal to $500,000 on the last business day of each succeeding March,
June,
Consulting Agreement
July 13, 1999
Page 2
September and December, prorated for partial quarters, for the period
from the date of acquisition of such 80 percent interest until a total
of $6,000,000 has been paid under this Section. Such amounts shall be
paid by check to the Consultant. The Consultant, and not the Company,
shall be individually responsible for paying any withholding taxes and
other deductions. In addition, such amounts shall be paid
irrespective of the disability or death of the Consultant during
the Term (in the event of such death, such amounts shall be paid to
the Consultant's estate or designated beneficiaries). The amounts
described above shall be in full consideration of any and all
consulting services provided by the Consultant during the Term. The
Company shall have the right to terminate this letter agreement at any
time, upon five days' prior notice to the Consultant; provided, that
in the event of such termination, the Company shall continue to be
liable for the payments described above to the Consultant at the time
and in the amounts set forth above.
(b) In the event that the Company requests that the Consultant provide
consulting services with respect to any particular matter or
engagement and the Consultant provides such services, the Company
shall reimburse to the Consultant the Consultant's reasonable and
actual out-of-pocket costs and expenses in connection therewith upon
furnishing of proper documentation; provided, that the Consultant
shall not incur any such cost or expense in excess of $1,000 without
the prior consent of the Company.
(c) For the avoidance of doubt, the parties agree that the Company
shall not be required to provide health, medical or other insurance or
any other pension, payment or other benefits to the Consultant or his
family.
3. Each of the parties agrees to keep and maintain this letter agreement
and the transactions contemplated hereby in strict confidence and not
to disclose this letter agreement, the contents or substance hereof or
the parties hereto, in each case, without the prior written consent
of the other party; provided, that the foregoing restrictions on
disclosure shall not apply to the extent (but solely to the extent)
required by applicable law or administration or judicial process. The
parties acknowledge that this letter agreement may be disclosed if the
Company acquires an interest in Fuisz Technologies Ltd.
4. NON-COMPETITION and NON-SOLICITATION.
Consulting Agreement
July 13, 1999
Page 3
(a) The Consultant agrees that, during the Term, the Consultant shall
not engage in any business which actively competes with the business
of the Company to the extent that Consultant is actually rendering
services involving such business pursuant to the Consulting Agreement.
The parties acknowledge that Xx. Xxxxx is a party to an existing
consulting agreement with a company which may be viewed as a
competitor and which does not obligate Xx. Xxxxx to accept any
specific assignment.
(b) The Consultant shall not, directly or indirectly, during the
Term or for one year thereafter, request or cause any suppliers or
customers with whom the Company has a business relationship to
cancel or terminate any such business relationship with the
Company.
(c) The Consultant shall not, during the Term or for one year
thereafter, (i) directly or indirectly, solicit, encourage or
induce in any manner, any current employee of the Company to
terminate, for any reason, his or her employment with the company
or (ii) directly or indirectly, hire or offer to hire any former
employees of the Company or its subsidiaries unless any such
former employee (A) approaches the Consultant without encouragement
by the Consultant and (B) such former employee has not been
employed by the Company for at lease six months at the time of such
former employee approaching the Consultant.
(d) If any portion of the restrictions set forth in this [Section 4]
should, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity or enforceability of the
remainder of such restrictions shall not thereby be adversely
affected.
5. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) The Consultant shall not, while this Agreement is in effect or at
any time following termination of this Agreement, disclose or permit
to be known (other than as is required in the regular course of his
duties or required by law (in which case the Consultant shall give the
company prior written notice of such required disclosure), any
information acquired by him in the course of his activities on behalf
of the Company hereunder and known to him to be confidential. This
confidentiality obligation shall not apply to any information which
(I) thereafter becomes publicly available other than pursuant to a
breach of this [Section 5], directly or indirectly, by the Consultant,
(ii) was in the
Consulting Agreement
July 13, 1999
Page 4
public domain prior to disclosure to the Consultant, or (iii) is
disclosed to the Consultant by a third party not in violation of any
obligations of confidentiality to the Company.
(b) All confidential information and documents relating to the
Company shall be the exclusive property of the Company. Upon
termination of this Agreement, all documents, records, reports,
writings and other similar documents containing confidential
information, including copies thereof, then in the Consultant's
possession or control shall be returned to the Company.
6. INVENTIONS AND DISCOVERIES.
(a) The Consultant shall promptly and fully disclose to the Company,
with all necessary detail for a complete understanding of the same,
all developments, know-how, discoveries, inventions, improvements,
concepts, ideas, writings, formulae, processes and methods (whether
copyrightable, patentable or otherwise) made, received, conceived,
acquired or written, by the consultant, solely or jointly with others
in the course of rendering the services to be provided hereunder on
behalf of the Company hereunder (collectively the "Subject Matter").
(b) The Consultant xxxxxx agrees to assign and transfer to the
company all his rights, title and interest in and to the Subject
Matter, to deliver to the Company any and all drawings, notes,
specifications and data relating to the Subject Matter, and to
execute, acknowledge and deliver all such further papers, including
applications for copyrights or patents, as may be necessary to
obtain copyrights and patents for any thereof in any and all countries
and to vest title thereto to the Company.
7. In the event that the Company requests that the Consultant provide
services hereunder to the Company or its subsidiaries or affiliates,
and the Consultant provides such services, the parties agree that the
Company will indemnify and hold harmless the Consultant from and
against any and all loss, cost or expense incurred by the Consultant
in connection with the providing of such services; provided, that the
Company will not indemnify the Consultant from and against such losses
and expenses arising out of the gross negligence or willful misconduct
on the part of the Consultant.
8. Nothing therein shall create a partnership or agency relationship
Consulting Agreement
July 13, 1999
Page 5
between the parties hereto, and nothing herein shall authorize the
Consultant to bind or commit the Company in any respect. The
Consultant shall conduct himself at all times during in the Term in a
manner consistent with the foregoing.
9. (a) This letter agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without
regard to principles of conflicts of laws. Each party consents to the
exclusive jurisdiction of any federal or state court sitting in the
County, City and State of Delaware over any dispute arising or
referred herein and agrees to waive any defense such jurisdiction as a
result of an inconvenient forum or similar matter. This letter
agreement (i) shall be binding upon and inure to the benefit of the
parties' respective successors and assigns; (ii) may be executed in
counterparts and delivered by facsimile transmission; (iii)
constitutes the entire agreement between the parties relating to the
subject matter hereof and supersedes any and all prior agreements,
arrangements or understandings between the parties; and (iv) does not
conflict with any other agreement, arrangement or understanding to
which the Consultant is a party.
(b) The Company has full corporate and other power and authority to
execute and deliver this letter agreement and to consummate the
transactions contemplated hereby, and such execution, delivery and
performance have been duly authorized by all requisite corporate
actions.
(c) The Company shall have the right to assign all of its right,
title and interest, herein to an affiliate corporation or to a
non-affiliate corporation, Intelligent Polymers, Ltd. Consultant
shall be notified of any such assignment ten (10) days in advance
thereof. Notwithstanding such assignment, the Company agrees to
remain responsible for all financial obligations hereunder.
Please indicate your agreement to the foregoing by signing a copy of this letter
agreement where indicated below.
Consulting Agreement
July 13, 1999
page 6
Very truly yours,
BIOVAIL CORPORATION INTERNATIONAL
By:
------------------------------
Name:
Title:
