Exhibit 10.5
CONSULTING AGREEMENT
This Agreement (the "Agreement"), entered into as of January 14, 2000
(the "Effective Date"), is between Integra LifeSciences Corporation, a
Delaware corporation having a place of business at 311-C Enterprise Drive,
Plainsboro, New Jersey 08536 ("Integra"), and George J. Connell (hereinafter
referred to as "Consultant").
WHEREAS, Clinical Neuro Systems Holdings LLC, a wholly-owned subsidiary
of Integra ("Purchaser"), has acquired substantially all of the assets of
Clinical Neuro Systems, Inc. ("CNS"), a manufacturer of neurosurgical
products, and certain assets relating to the distribution of CNS' products
owned by Surgical Sales Corporation (trading as Connell Neurosurgical)
("Connell"), pursuant to an Asset Purchase Agreement dated as of the date
hereof (the "Purchase Agreement");
WHEREAS, all of the outstanding capital stock of both CNS and Connell is
held by Consultant;
WHEREAS, Consultant has expertise in the field of marketing, sales and
manufacture of neurosurgical products;
WHEREAS, Integra desires to hire Consultant as a consultant to Integra
to assist in the transition of the CNS business and otherwise to advise
Integra in the marketing, sales, distribution and manufacture of
neurosurgical devices;
WHEREAS, in consultant's role as Consultant to Integra, Consultant will
work closely with Integra materials, proprietary information, Confidential
Information and market strategies and it is therefore considered reasonable
and necessary that Consultant comply with the provisions of this Agreement
and the Purchase Agreement related to confidentiality and non-competition.
NOW THEREFORE, the parties mutually agree as follows:
1. DEFINITIONS.
1.1 Affiliate. The term "Affiliate" means with respect to a party to
this Agreement, any corporation, company, limited liability
company, partnership, joint venture and/or firm (i) which controls,
is controlled by or is under common control with such party, or
(ii) in which such party or any parent or subsidiary owns, or has a
contractual right to acquire, an equity interest, or (iii) which
has been licensed by such party or its parent or subsidiary, or
which has retained such party or its parent or subsidiary, to
perform research with respect to, or to commercially exploit, such
party's or its parent's or subsidiary's technological assets.
1.2 Confidential Information. The term "Confidential Information" means
information, documents or other materials which may be unpublished,
including without limitation, information or documents furnished to
Consultant for purposes of Consultant's performance hereunder or
which are otherwise furnished to or come to the attention of
Consultant, unpatented technical and other information which is not
in the public domain, information in written form marked
"Confidential", information disclosed orally by Integra to
Consultant whether or not identified as "Confidential", information
that consists of, or relates to, any unpublished patent application
and material embodiments thereof, technical specifications,
concepts, discoveries, data, formula, inventions, procedures for
experiments and tests and results of experimentation and testing,
results of research, specifications and techniques, economic
information, business or research strategies, trade secrets,
existing and potential customers, suppliers, markets, contracts,
prices, products, personnel, strategies, policies, systems,
procedures, technologies, know-how, information, processes,
inventions, formulations, applications, operating manuals, services
information concerning current, future or proposed products and
services, product and service descriptions, financial or customer
or client or prospective client or client lists and printouts,
records, and any or all other information, data or material
relating to the business, trade secrets and technology of Integra
and/or any of its Affiliates. "Confidential Information" shall not
include any information to the extent that any such information as
of the date of disclosure to Consultant was (i) known to Consultant
and such knowledge can be substantiated by reasonable
documentation; (ii) disclosed in published literature; (iii)
generally available to the industry; or (iv) obtained by Consultant
from a third party, provided that such third party had no
obligation of confidentiality to Integra or any of its Affiliates
relating to the Confidential Information.
1.3 Contract Period. The term "Contract Period" means the period
beginning with the Effective Date of this Agreement and ending on
the date on which this Agreement terminates in accordance with the
provisions of Section 6 (Term and Termination; Survival) hereof.
1.4 Field. The term "Field" means the manufacture or sale of any
medical device sold or used in hospital intensive care units,
including without limitation, cranial access kits, cranial access
pressure devices, drainage bags and catheters.
1.5 Integra Group. The term "Integra Group" means Integra and its
Affiliates.
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2. SERVICES TO BE PERFORMED BY CONSULTANT.
2.1 Consulting Services. Subject to the terms and conditions of this
Agreement, throughout the Contract Period Consultant agrees to
render such consulting services relating to the manufacture,
marketing or sale of products in the Field, as may be requested
from time to time by or at the direction of the Chief Executive
Officer of Integra.
2.2 Amount of Time for Consulting Projects. Consultant agrees to be
available to the Integra Group to render consulting services for an
aggregate of not more than 1000 hours during the Contract Period
and, subject to such limitation, not more than 125 hours in any
calendar month. Consultant's consulting services will be carried
out at the facilities of Consultant's principal place of business
or the Integra Group, or at such other location as may be agreed to
by Integra and Consultant.
3. COMPENSATION AND REIMBURSEMENT.
3.1 Compensation Rate. Integra agrees to pay Consultant a retainer of
$50,000 per three month period. Integra agrees to pay Consultant
within ten (10) days of the beginning of each fiscal quarter,
provided, however, that the first such payment shall be made on the
Closing Date, as defined in the Purchase Agreement.
3.2 Expense Reimbursement. Integra will reimburse Consultant for all
reasonable travel (approved by Integra prior to such travel) and
out-of-pocket expenses incurred on Integra's behalf, e.g., travel
expenses to meet with Integra associates or to represent Integra at
business meetings and other miscellaneous documented expenses such
as fax, telephone and postage. Consultant agrees to submit receipts
for all possible reimbursements as a condition to such
reimbursement.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Interest in Work Product. Consultant's employer presently has no
interest, and during the course of Consultant's performance of his
obligations hereunder to Integra Group, shall not acquire any
interest, in the results of the work product or other work
conducted by Consultant for the Integra Group; and
4.2 No Conflict. Consultant agrees and represents and warrants that
neither the Consultant's performance of the consulting services for
the Integra Group in the Field, nor the assignment of any of
Consultant's rights to Integra, conflicts with, or constitutes a
breach of or a default under any applicable agreement, contract or
other instrument to which Consultant is a party or by which
Consultant is bound.
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5. ADDITIONAL COVENANTS OF CONSULTANT.
5.1 Confidentiality Covenants. Consultant acknowledges and agrees that
in the course of, or incident to, Consultant's consulting
relationship with the Integra Group, one or more members of the
Integra Group may provide to Consultant, or Consultant may
otherwise become exposed to, Confidential Information. Consultant
acknowledges that obtaining the Confidential Information is
intended, and is necessary, to enable Consultant to perform
Consultant's duties or other functions for the Integra Group as
provided herein. Consultant recognizes and agrees that the
confidentiality of the Confidential Information is necessary to the
ability of the Integra Group to compete effectively with its
competitors. Consultant recognizes and acknowledges that, in many
instances, Integra and/or its Affiliates are bound by contractual
or other obligations to hold and use confidential information
received from third parties in confidence, and that Consultant's
failure to do so may constitute a breach of such obligations.
Consultant therefore acknowledges and agrees that Consultant's
undertakings herein with respect to the use and dissemination of
such third party Confidential Information are made and intended for
the benefit not only of the Integra Group but also of all parties
that provide the Integra Group with Confidential Information. In
light of the foregoing, Consultant agrees that:
5.1.1 Confidentiality and Non-Use. During the term of Consultant's
consulting relationship with the Integra Group and at all
times thereafter, except as required in the performance of
Consultant's duties or other functions for the Integra Group,
Consultant will not disclose such Confidential Information to
any third party. Consultant will not use such Confidential
Information to compete with or adversely affect the business
or operations of Integra or its Affiliates or those doing
business with them. Consultant will not use the name of any
member of the Integra Group, or the name of any member of the
Integra Group's staff, in connection with any publicity,
without the prior written approval of Integra.
5.1.2 Required Disclosure. If Consultant is required by law to
disclose any Confidential Information, it will, sufficiently
in advance in order to permit Integra to take steps to prevent
such disclosure, notify Integra and prior to any disclosure
shall consult with and assist Integra in obtaining a
protective order or other appropriate remedy. In any event,
Consultant will disclose only that portion of the Confidential
Information which is legally required and will use best
efforts to assure that confidential treatment is accorded any
Confidential Information so disclosed.
5.1.3 Return of Confidential Information. Upon request by Integra
at any time, Consultant will promptly return to Integra the
original and all copies of all
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non-oral Confidential Information and will, upon request,
certify in writing to Integra as to its compliance with this
paragraph.
5.1.4 No Grant of Rights. Nothing in this Agreement shall be
construed to grant Consultant any right or license under any
patent or trade secret owned, used or licensed by Integra or
its Affiliates.
5.2 No Participation of Others. Consultant agrees not to allow any
person to assist or participate in the consulting work performed
hereunder unless and until such person has executed an agreement
with Integra, satisfactory in form and substance to Integra,
concerning confidentiality and intellectual property and patent
rights.
5.3 Covenant Not to Compete. Except as permitted in Section 10.9 of the
Purchase Agreement, Consultant agrees that, unless acting with the
prior written consent of Integra, which consent may be granted or
denied in the sole discretion of Integra, neither Consultant nor
any of his Affiliates will, directly or indirectly, for a period of
three (3) years after the Closing Date (as defined in the Purchase
Agreement) anywhere in the United States or in any other country,
directly or indirectly:
(a) (i) own, manage, operate, control, consult with, participate
in, or be connected in any manner with the ownership,
management, operation, or control of any business which
engages, directly or indirectly, in the marketing, sale or
distribution of any of the following (collectively, the
"Protected Products"): (A) any medical device for treating
central nervous system (i.e., brain and spine) pathologies
that is used in hospital intensive care units, neuro-intensive
care units or emergency rooms; or (B) any products used for
cranial access, management of intracranial hypertension,
drainage of cerebrospinal fluid and any products related
thereto, including, without limitation, catheters, sensors and
drainage systems; (ii) be or become a stockholder, partner,
owner, agent of, or a consultant to or give financial or other
assistance to, any person or entity considering engaging in
any such activities or so engaged; (iii) seek in competition
with the business of Purchaser or any affiliate of Purchaser
to procure orders for Protected Products from or do business
with any customer of Purchaser or any affiliate of Purchaser
with respect to Protected Products; (iv) solicit, or contact
with a view to the engagement or employment by, any
Transferred Employee (as defined in the Purchase Agreement) or
other person or entity who is an employee or contractor of
Purchaser or any affiliate of Purchaser; (v) seek to contract
with or engage (in such a way as to adversely affect or
interfere with the business of Purchaser or any affiliate of
Purchaser) any person or entity who has been contracted with
or engaged to manufacture, assemble, supply or deliver
Protected Products; or (vi) engage in or participate in any
effort or act to induce any of the customers, associates,
consultants,
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or employees of Purchaser or any affiliate of Purchaser
(including without limitation any Transferred Employee) to
take any action which is disadvantageous to Purchaser or any
affiliate of Purchaser; and
(b) contact, induce, solicit or influence any client of the
Business (as defined in the Purchase Agreement) or of
Purchaser or any affiliate of Purchaser to cause such client
to terminate or reduce in any material way its relationship
with the Business and/or Purchaser or any affiliate of
Purchaser.
In the event that the provisions of this Section 5.3 should
ever be deemed to exceed the time or geographic limitations or
any other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in
such jurisdiction to the maximum permitted by applicable law.
Consultant specifically acknowledges and agrees that the
foregoing restrictions are reasonable and necessary to protect
the legitimate interests of Integra, that Integra would not
have entered into this Agreement in the absence of such
restrictions, that any violation of such restrictions will
result in irreparable injury to Integra, that the remedy at
law for any breach of the foregoing restrictions will be
inadequate, and that, in the event of any such breach,
Integra, in addition to any other relief available to it,
shall be entitled to temporary injunctive relief before trial
from any court of competent jurisdiction as a matter of course
and to permanent injunctive relief without the necessity of
quantifying actual damages.
6. TERM AND TERMINATION; SURVIVAL.
6.1 Initial Term. Unless sooner terminated as provided in this Section,
this Agreement shall terminate one year after the Effective Date.
6.2 Early Termination. Integra may terminate this Agreement at any time
prior to the end of the initial term set forth in Section 6.1 if
Consultant breaches any of the material terms of this Agreement and
has not cured such breach to the reasonable satisfaction of Integra
within two (2) weeks after receiving written notice thereof from
Integra. Integra will remain obligated for all payments accrued
prior to the effective termination or expiration of this Agreement.
6.3 Survival. Anything in this Agreement to the contrary
notwithstanding, Consultant's obligations under Sections 4, 5 and 7
shall survive termination of this Agreement for any reason.
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7. MISCELLANEOUS PROVISIONS.
7.1 Notices. All notices, demands or other communications required or
permitted to be given pursuant to this Agreement shall be effective
only if given in writing the delivery of which is verified:
To Integra: Integra LifeSciences Corporation
311-C Enterprise Drive
Plainsboro, New Jersey 08536
Attention: Law Department
Phone: (609) 275-0500
Fax: (609) 275-1082
To Consultant: George J. Connell
425 Lionville Road
Downingtown, Pennsylvania 19335
or to such other person, address or fax number as either party may
hereafter designate to the other by notice given in accordance with
this Section 7.1.
7.2 Remedies and Equitable Relief. No remedy herein conferred is
intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or
in equity or by statute or otherwise. Consultant acknowledges that
damages alone will not be an adequate remedy for any breach or
violation of its obligations hereunder and that, in addition to any
other remedies to which Integra may be entitled hereunder or
otherwise, Integra shall be entitled to injunctive relief,
including specific performance, with respect to such obligations in
any court of competent jurisdiction.
7.3 Waiver. No waiver by any party hereto or any failure by any other
party hereto to keep or perform any covenant or condition of this
Agreement shall be deemed to be a waiver of any preceding or
succeeding breach of the same or other covenant or condition. No
failure to enforce any provision hereof shall operate as a waiver
thereof or be deemed to be a release of any rights granted
hereunder.
7.4 Severability. If any provision of this Agreement would be held or
made invalid or unenforceable by a court decision, statute, rule or
otherwise, such provision shall be construed in such a way as to
make it valid and enforceable to the maximum extent possible. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the remaining provisions of this Agreement, which
shall be enforceable to the maximum extent permitted by law.
7.5 Independent Contractors. For purposes of this Agreement and in
connection with any activity hereunder, Consultant and any person
associated with Consultant
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shall at all times be independent contractors and not agents or
employees of Integra.
7.6 Third Party Beneficiaries. Consultant acknowledges and agrees that
the Affiliates of Integra are intended third party beneficiaries of
this Agreement and all rights and benefits granted to Integra
hereunder are intended to and shall run in favor of all such
Affiliates, including any person hereinafter acquired by or which
acquires Integra, or any of its Affiliates, by merger, sale or
exchange of stock, consolidation, purchase of assets or otherwise.
7.7 Assignment and Binding Effect. This Agreement is personal and
Consultant may not assign, transfer (including transfers by
operation of law) or otherwise dispose of all or any portion of its
rights under this Agreement without the prior written consent of
Integra, and any such purported assignment will be void. Integra
may assign this Agreement to any entity or person without
Consultant's consent. This Agreement shall be binding on the
respective successors and permitted assigns of the parties hereto.
7.8 Governing Law and Jurisdiction. This Agreement shall be construed,
interpreted and enforced in accordance with, and governed by, the
laws of the Commonwealth of Pennsylvania, regardless of the effect
of choice of law principles of such laws.
7.9 Headings. The headings in this Agreement are for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
7.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
CLINICAL NEURO SYSTEMS HOLDINGS LLC GEORGE J. CONNELL
By: Integra LifeSciences Corporation, ---------------------------------
its sole member
By:
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Stuart M. Essig
Chief Executive Officer
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