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CONSULTING AGREEMENT (this “
Agreement ”) dated as of August 14, 2007, between
JDS Pharmaceuticals, LLC, a Delaware limited liability
company (the “ Company ”), and Phillip
Satow, an individual (the “ Consultant
”).
WITNESSETH
WHEREAS
the Company is party to an Agreement and Plan of Merger among Noven
Pharmaceuticals, Inc., a Delaware corporation (“
Parent ”), Noven Acquisition, LLC, a Delaware limited
liability company and wholly-owned subsidiary of Parent, and the
Company dated as of July 9, 2007 (the “ Merger
Agreement ”); and
WHEREAS
the Company desires to retain the Consultant, and the Consultant
desires, to provide the Consulting Services (as defined below) upon
the terms and subject to the conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the Company and
the Consultant hereby agree, intending to be legally bound, as
follows:
ARTICLE I
Consulting
Arrangement
SECTION 1.01.
Term. The term of the Consultant’s consultancy under
this Agreement (the “ Consulting Term ”)
shall commence upon the Closing Date (as defined in the Merger
Agreement) and, unless sooner terminated pursuant to this
Agreement, shall expire 12 months after the Closing
Date (the “ Expiration Date ”). The
Consultant agrees and acknowledges that the Company has no
obligation to extend the Consulting Term or to continue the
consulting relationship with the Company after the Expiration Date
and expressly acknowledges that no promises or understandings to
the contrary have been made or reached.
SECTION 1.02.
Consulting Services. As of the commencement of the
Consulting Term, the Company hereby retains the Consultant, and the
Consultant hereby agrees to serve as a consultant to the Company,
on the terms and subject to the conditions of this Agreement.
During the Consulting Term, the Consultant shall provide consulting
services with respect to the Company’s business as reasonably
requested by the President, Chairman and CEO of the Parent (the
“ CEO ”), the Vice President, Marketing and
Sales of the Parent and such other executive of the Parent (not
less senior than vice president) as may be designated in writing by
the CEO and agreed to in writing by the Consultant (such agreement
not to be unreasonably withheld) (the “ Consulting
Services ”).
SECTION 1.03.
Location. The duties to be performed by the Consultant in
connection with the Consulting Services shall be performed in the
New York City metropolitan area, subject to such reasonable travel
requirements as the parties hereto may agree in good faith are
necessary to fully perform such duties. Expenses related to such
travel shall be reimbursed in accordance with
Section 2.02.
SECTION 1.04.
Time and Effort. Unless otherwise agreed by the parties
hereto, the Consultant shall make himself available (by telephone
or otherwise) on such business days as are requested by the
Company, with reasonable advance notice, and shall, in the
performance of the Consulting Services, spend (a) no more than
20 hours per week during the first three months of the Consulting
Term, (b) no more than 15 hours per week during the second
three months of the Consulting Term and (c) no more than 10
hours per week during the final six months of the Consulting Term,
in each case not including any travel time. During the Consulting
Term, the Consultant shall serve the Company faithfully, loyally,
honestly and to the best of his ability.
SECTION 1.05.
Acknowledgment. The Consultant and the Company each
acknowledge that the Consultant may serve as a member of the board
of directors of Parent (such service, the “ Director
Services ”) and that the Consultant shall be compensated
for any such Director Services by Parent in accordance with the
policies and programs applicable to other non-employee members of
the board of directors of Parent.
ARTICLE II
Compensation
SECTION 2.01.
Service Fee. (a) During the Consulting Term, the
Company shall pay the Consultant a service fee of $250.00 per hour
of Consulting Services provided (the “ Service Fee
”). At the end of each month during the Consulting Term (such
month the “ Specified Month ”), the Consultant
shall furnish the Company with an invoice for the Service Fee for
such Specified Month, together with records substantiating the
hours worked during such Specified Month as requested by the
Company. Within 15 days following receipt of an acceptable
invoice and accompanying records, the Company shall pay the
Consultant the Service Fee for such Specified Month covered by such
invoice, provided that if the Consultant has not spent the Minimum
Number of Hours (as defined below) performing the Consulting
Services during any week during the Consulting Period because the
Company failed to request sufficient Consulting Services to fill
such minimum, the payment with respect to such week shall be no
less than $250 multiplied by the applicable Minimum Number of
Hours. The term “Minimum Number of Hours” shall mean
(i) 10, for each week during the first three months of the
Consulting Term, (ii) 7.5, for each week during the next three
months of the Consulting Term, and (iii) 5, for each week
during the final six months of the Consulting Term.
SECTION 2.02.
Expense Reimbursement. The Company shall reimburse the
Consultant for all necessary and reasonable
“out-of-pocket” business expenses (including business
class travel) incurred on behalf of the Company in the performance
of the Consulting Services, subject to the travel and expense
policy established by the Company from time to time, provided that
the Consultant furnishes to the Company adequate records and other
documentary evidence required to substantiate such
expenditures.
SECTION 2.03.
Secretarial Support . For the first six months of the
Consulting Term and in connection with the Consulting Services, the
Company shall use its commercially reasonable efforts to cause
April Thoren to be exclusively engaged as the Consultant’s
full-time secretary and shall use its commercially reasonable
efforts to cause Ms. Thoren to provide the Consultant with
substantially the same level and type of secretarial support
provided by the Company immediately prior to the consummation of
the Merger; provided that if Ms. Thoren terminates her
employment with the Company or Ms. Thoren’s employment
is terminated at the Consultant’s request, in each case,
prior to the end of the Consulting Term, the Company shall provide
a replacement secretary consistent with the terms described in this
Section 2.03 and shall not be in breach of this
Section 2.03 for providing such a replacement secretary. For
the remainder of the Consulting Term and in connection with the
Consulting Services, the Company shall provide the Consultant with
appropriate secretarial support, as agreed upon in good faith by
the Consultant and the Company.
SECTION 2.04.
Termination of Services. This Agreement and the Consulting
Term shall terminate on the Expiration Date or, if earlier, upon
the death or disability of the Consultant. In the event of any such
termination, the Consultant shall be entitled to receive
(i) any accrued but unpaid Service Fee and
(ii) reimbursement for any unreimbursed business expenses
properly incurred by the Consultant prior to the date of
termination to the extent such expenses are reimbursable under
Section 2.02.
ARTICLE III
Independent Contractor
Status
SECTION 3.01.
Status. (a) It is understood by the parties hereto that
the Consultant shall at all times during the Consulting Term be an
independent contractor of the Company and there shall not be
implied any relationship of employer-employee, partnership, joint
venture, principal and agent or the like by the agreements
contained herein with respect to any Consulting Services
contemplated by this Agreement. The Consultant shall not be
entitled to participate in any employee benefit plans or other
benefits or conditions of employment available to the employees of
the Company and its affiliates by reason of providing the
Consulting Services contemplated by this Agreement.
(b) From the commencement of the Consulting Term, the
Consultant shall not have any authority to act as an agent of the
Company and its affiliates by reason of providing the Consulting
Services contemplated by this Agreement, and the Consultant shall
not represent to the contrary to any person. Under no circumstances
shall the Consultant have or claim to have any power of decision
hereunder in any activity on behalf of the Company, nor shall the
Consultant have the power or authority hereunder to obligate, bind
or commit the Company in any respect, in either case by reason of
providing the Consulting Services contemplated by this Agreement.
With respect to the provision of the Consulting Services, the
Consultant shall not (i) direct the work of any employee of
the Company, (ii) make any management decisions on behalf of
the Company or (iii) undertake to commit the Company to any
course of action in relation to third persons. Although the Company
may specify the results to be achieved by the Consultant and may
control and direct him in that regard, the Company shall not
exercise or have the power to exercise such level of control over
the Consultant as would indicate or establish that a relationship
of employer and employee exists between the Company and the
Consultant by reason of providing the Consulting Services
contemplated by this Agreement. Subject to the terms of this
Agreement, the Consultant shall have full and complete control over
the manner and method of rendering the Consulting Services
hereunder.
SECTION 3.02.
Taxes. To the extent consistent with applicable law, the
Company shall not withhold or deduct from any amounts payable under
this Agreement any amount or amounts in respect of income taxes or
other employment taxes of an
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