Document:

Exhibit 10.3

 

CERTAIN MATERIAL (INDICATED BY [***]) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SERVICE AGREEMENT

 

This Service Agreement (the “Agreement”) made as of June 20, 2011 (the “Effective Date”) by and between VENTIV COMMERCIAL SERVICES, LLC, a New Jersey limited liability company (“Ventiv”) and DEPOMED, INC., a California corporation (“Client”).  Ventiv and Client may each be referred to herein as a “Party” and collectively as the “Parties”.

 

1.             The Services - Ventiv will provide Client with a field force that shall consist of one hundred and sixty-four (164) full-time sales representatives (collectively the “Ventiv Sales Representatives”) who shall Detail Client’s Product (as defined in Section 2 below), five (5) Regional Training and Administrative Managers (each an “RTAM” and collectively the “RTAMs”), one dedicated Project Manager and one shared National Business Director.  The RTAMs, shared Project Manager, shared National Business Director and the Ventiv Sales Representatives may collectively be referred to herein as the “Project Team”.  The RTAMs shall be hired and employed by Ventiv will be responsible for a variety of employee relations matters such as conflict resolution and disciplinary actions with respect to the Ventiv Sales Representatives as well as assisting with the implementation and administration of human resources functions, operations and processes for the Project Team.  A “Detail” means a face-to-face contact by a Ventiv Sales Representative with Targets (identified by Client) and involves a presentation highlighting the Product features and benefits for its approved indications.  The Ventiv Sales Representatives shall distribute  Product samples and Product Literature (as defined in Section 3(a)(iii)) to Targets.  A “Target” is a physician identified by Client and validated by Ventiv (for the fee set forth in Exhibit A, Section IV(d)) as a potential prescriber for the Products.  In connection with the promotion of Client’s Products, Ventiv shall provide the following services (collectively, the “Services”):

 

(a)           Implementation - (i) recruit and train the Ventiv Sales Representatives, with training consisting of five (5) days of home study and five (5) days of initial training to occur prior to Deployment (as defined in Section 1(b) below), (ii) develop program procedures, (iii) implementation of the call plan (which shall be established and maintained by Client) for use by the Ventiv Sales Representatives in detailing Client’s Product, (iv) customize program processes, and (v) establish program performance parameters, goals and metrics.

 

(b)           Deployment - (i) Deployment of the Ventiv Sales Representatives (salary, possible bonus, fleet vehicle, benefits, and table PC), (ii) Deployment of the RTAMs (salary, possible bonus, benefits and table PC); (iii) office costs/operational supplies; and (iv) operational support.  The Parties anticipate that the Ventiv Sales Representatives will begin employment on or about [***] and will be deployed and commence detailing the Product on or about [***] (the “Deployment” or “Deployment Date”).

 

(c)           Meetings - The length of training and, POA meetings shall be determined by Client.  All meetings shall be billed to Client as a pass-through expense (other than initial training pursuant to Section 1 (a) above) in accordance with a budget for each such meeting 

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

 

provided in advance by Client.

 

(d)           Reports - Ventiv shall provide Client with standard reports in accordance with Exhibit C attached hereto.  Any customized or “non-standard” reports (i.e., reports requiring material changes in the nature of the data or formatting) requested by Client shall be prepared by Ventiv for Client and Client shall pay Ventiv [***] Dollars ($[***]) per hour for the preparation of such customized or “non-standard” reports.

 

(e)           Sample Accountability - Ventiv shall implement a sampling program (including sample accountability) in accordance with Exhibit B attached hereto.  The sampling program shall be consistent with all applicable state and federal laws as well as all statutes, laws, ordinances, rules and regulations of all governmental and regulatory authorities (collectively, the “Laws”), including but not limited to the Prescription Drug Marketing Act and its implementing regulations (“PDMA”).  Client shall be responsible for shipment of Product samples and literature to the Ventiv Sales Representatives in accordance with PDMA guidelines and shall confirm and provide documentation of such shipments to Ventiv within twenty-four hours.  Ventiv will reconcile such shipping information and Client will investigate all discrepancies.  Ventiv shall provide reasonable cooperation in connection with investigations conducted by Client.  Client is responsible for taking all action required or suggested by the Food and Drug Administration (“FDA”), including but not limited to: reporting of adverse events, confirming all returned samples and, where applicable, notifying the FDA, and all supplemental communications with respect to any of the above.

 

(f)            Compliance with Laws - Ventiv shall be responsible for (i) ensuring that the Services under this Agreement are performed in compliance with all Laws; (ii) ensuring that only Product Literature approved by Client are distributed by the Ventiv Sales Representatives; (iii) promoting the Product in a manner that complies in all respects with Laws, including but not limited to, the Federal Food, Drug and Cosmetic Act (“FDCA”), PDMA, the healthcare fraud and abuse laws (including but not limited to the federal healthcare program antikickback statute, 42 U.S.C. § 1320a-7b(b)), and the PhRMA Code on Interactions with Healthcare Professionals; (iv) reasonably cooperating with Client, at Client’s expense, to conduct any necessary recalls of the Product and/or Product Literature; and (v) ensuring that no employee of Ventiv responsible for any of the Services of this Agreement have been debarred or excluded from participating in any federal healthcare program.

 

(g)           Identification and Validation of Targets.  Client shall identify the Targets and Ventiv shall validate such Targets.  The fee for such validation services is set forth on Exhibit A attached hereto.

 

(h)           The territory where the Product will be promoted will be the United States (the “Territory”).

 

2.           The Product; Right to Sell; Market - Client’s Product is Gralise (the “Product”). The Product shall be promoted by Ventiv under trademarks owned by or licensed to Client and is a product which is either owned by Client and/or as to which Client has all lawful authority necessary to market and sell the Product.  This Agreement does not constitute a grant to Ventiv

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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of any property right or interest in the Product, trademarks, patents or patent applications owned by or licensed to Client and/or any other intellectual property rights which Client owns now or in the future.  Ventiv recognizes the validity of and the title to all of Client’s owned or licensed trademarks, trade names and trade dress in any country in connection with the Product, whether registered or not.  Client represents to Ventiv that to the best of its knowledge, neither the trademarks, trade names or trade dress referenced above, nor the promotion of the Product by Ventiv, infringes on any intellectual property or product marketing rights of any third party.

 

3.           Client Responsibilities - (a)  Client shall be responsible for:

 

(i)            identification of Targets and provision of a Target list and Territory alignment,

 

(ii)           establishment and maintenance of a call plan (the “Call Plan”) for use by the Ventiv Sales Representatives in detailing Client’s Product,

 

(iii)          production and distribution of Product samples and Product promotional materials and literature (collectively, the “Product Literature”) to Ventiv in accordance with  all  applicable Laws, including but not limited to the PDMA,

 

(iv)          reviewing and approving all of its Product Literature and for ensuring all such materials comply with all Laws.

 

(v)           hiring Client Manager(s), all of whom shall be Client employees and Client shall be responsible for salary, bonus, benefits and all employment matters with respect to such Client Managers,

 

(vi)          informing Ventiv promptly of any changes which Client believes are necessary or appropriate in the Product Literature or in information concerning the Product in order to be in compliance with all Laws,

 

(vii)         working with Ventiv to  design, manage and implement the incentive compensation bonus plan for the Ventiv Sales Representatives,

 

(viii)        obtaining third party data, and

 

(ix)           timely responding to any and all inquiries concerning a Product from any licensed practitioner.

 

(b)           Client acknowledges that Ventiv is a service provider and is being retained pursuant to the terms set forth herein.  Client will design a marketing and promotion program (the “Program”), to be followed, implemented, managed and supported by Ventiv. Client represents and warrants that it is responsible for ensuring the Program (i.e., Program design, Targets, Territory alignment, Call Plan, Program materials, Product Literature, etc.) adheres to all Laws.  Ventiv represents and warrants that it will properly adhere to the designed Client Program and ensure implementation of Client’s Program adheres to all Laws.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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4.           Training - The training responsibilities of the Parties are as follows:

 

(a)           Ventiv shall be responsible for training members of the Project Team concerning: selling skills, Ventiv human resource policies, procedures and administration and other applicable Ventiv internal human resource and general compliance policies and procedures.

 

(b)           Client shall be responsible for training members of the Project Team concerning all Product specific information including Product complaint handling procedures, applicable specific Client health care compliance policies and Client customer service policies and procedures, orientation to Client’s business, compliance with all Laws, and adverse event reporting policies and procedures.  The Parties agree to work together to mutually determine if, when, and at what cost additional training shall be provided to members of the Project Team.

 

5.           Ventiv Compensation - Ventiv shall receive compensation for the Services provided hereunder as set forth in Exhibit A attached hereto and made a part hereof.

 

6.             Confidentiality; Ownership of Property (a) During the performance of the Services contemplated by this Agreement, each Party may learn confidential, proprietary, and/or trade secret information of the other Party (“Confidential Information”).  The Party disclosing Confidential Information shall be referred to as the “Disclosing Party” and the Party receiving Confidential Information shall be referred to as the “Receiving Party.”

 

Confidential Information means any information, unknown to the general public, which is disclosed by the Disclosing Party to the Receiving Party under this Agreement.  Confidential Information includes, without limitation, technical, trade secret, commercial and financial information about either Party’s (a) research or development; (b) marketing plans or techniques, contacts or customers; (c) organization or operations; (d) business development plans (i.e., licensing, supply, acquisitions, divestitures or combined marketing); (e) products, licenses, trademarks, patents, other types of intellectual property or any other contractual rights or interests (including without limitation processes, procedures and business practices involving trade secrets or special know-how) and (f) in the case of Ventiv, the names, addresses, phone numbers and work assignments of Ventiv employees.  The Receiving Party shall neither use nor disclose Confidential Information of the Disclosing Party for any purpose other than is specifically allowed by this Agreement.

 

Upon the expiration or termination of this Agreement, the Receiving Party shall return to the Disclosing Party all tangible forms of Confidential Information, including any and all copies and/or derivatives of Confidential Information made by either Party or their employees as well as any writings, drawings, specifications, manuals or other printed or electronically stored material based on or derived from, Confidential Information.  Any material or media not subject to return must be destroyed.  The Receiving Party shall not disclose to third parties any Confidential Information or any reports, recommendations, conclusions or other results of work under this Agreement without prior consent of an officer of the Disclosing Party.  The obligations set forth in this Section 6, including the obligations of confidentiality and non-use shall be continuing and shall survive the expiration or termination of this Agreement and will continue for a period of five (5) years therefrom.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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The obligations of confidentiality and non-use set forth herein shall not apply to the following: (i) Confidential Information at or after such time that it is or becomes publicly available through no fault of the Receiving Party; (ii) Confidential Information that is already independently known to the Receiving Party as shown by prior written records; (iii) Confidential Information at or after such time that it is disclosed to the Receiving Party by a third party with the legal right to do so; (iv) Confidential Information required to be disclosed pursuant to judicial process, court order or administrative request, provided that the Receiving Party shall so notify the Disclosing Party sufficiently prior to disclosing such Confidential Information as to permit the Disclosing Party to seek a protective order.

 

(b)           All materials and documents supplied to either Party during the Term of this Agreement, including but not limited to sales force automation software, report designs, and sales training materials shall be the sole and exclusive property of the originator of those materials and developments.  Each Party agrees to hold all such property and developments, confidential in accordance with this Section 6 of the Agreement.

 

7.           Independent Contractors  (a) Ventiv and its directors, officers, employees and all members of the Project Team are at all times independent contractors with respect to Client.  No member of the Project Team shall be deemed to be an employee of Client.  Ventiv is solely responsible for withholding federal, state, or local income tax or other payroll tax of any kind on behalf of its employees.  Ventiv employees are not eligible for, are not entitled to, and shall not participate in any of Client’s benefit plans or programs, including but not limited to, any pension plan, welfare plan, profit sharing plan or any other “employee pension benefit plan”, or insurance plan or any other “employee welfare benefit plan” or “employee benefit plan” (as those terms are defined by the Employee Retirement Income Security Act of 1974, as amended) or any other plan, program, fringe, award, bonus, perquisite or other benefit (such as, but not limited to, vacation and holiday pay) incident to employment offered from time to time by Client.  Ventiv is responsible for the payment of all required payroll taxes, whether federal, state, or local in nature, including, but not limited to income taxes, Social Security taxes, Federal Unemployment Compensation taxes, and any other fees, charges, licenses, or similar payments required by law.

 

(b)             Ventiv shall not be responsible for any cost, however, attributable to: (i) any actions by Client that caused a person provided by Ventiv to perform services under this Agreement to be reclassified as an employee of Client, (ii) any unlawful or discriminatory acts of Client, and (iii) any benefits payable under any employee benefit plan (as such term is defined Section 3(3) of ERISA), and any other incentive compensation, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance and other similar fringe or employee benefit plans, programs or arrangements that may be sponsored at any time by Client or any of its Affiliates that cause any Ventiv employee to be reclassified as an employee of Client.

 

8.           Ventiv Personnel  (a) Client may not employ or retain any Ventiv employee performing services pursuant to this Agreement during the Term of this Agreement or within [***]  after the termination of this Agreement without the prior written approval of Ventiv, which may be withheld by Ventiv in its sole and absolute discretion.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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(b)  Unless as otherwise set forth in Section 12 below, Client agrees during the Term of this Agreement and for [***] thereafter not: (i) to provide any contact information (including name, address, phone number or e-mail address) concerning any Project Team member to any third party which provides or proposes to provide to Client services that are the same or are substantially similar to the Services being provided by Ventiv pursuant hereto, or (ii) to assist actively in any other way such a third party in employing or retaining a Project Team member for such purpose.  Client shall pay or cause the third party to pay Ventiv $[***] for each Ventiv employee so employed or retained as liquidated damages for breach of this Section 8(b).

 

9.           Indemnification and Limitation of Liability  (a) Ventiv shall indemnify and hold Client, its officers, directors, agents and employees harmless from and defend against any and all third party liabilities, losses, proceedings, actions, damages, claims or expenses of any kind, including costs and reasonable attorneys’ fees which result from: (i) any negligent or willful acts or omissions by Ventiv, its agents, directors, officers, or employees, or (ii) any material breach of this Agreement by Ventiv, its agents, directors, officers or employees.

 

(b)  Client shall indemnify and hold Ventiv, its officers, directors, agents, and employees harmless from and defend against any and all third party liabilities, losses, proceedings, actions, damages, claims or expenses of any kind, including costs and reasonable attorneys’ fees which result from: (i) any negligent or willful acts or omissions by Client, its agents, directors, officers or employees, (ii) any material breach of this Agreement by Client, its agents, directors, officers, or employees, (iii) any claim that the Client Program or Detailing of the Product (including, without limitation, the patents listed in the Orange Book for the Product) and/or use of Client’s name or any Product Literature, infringes the intellectual property rights of a third party, or (iv) the Products, including but not limited to any product liability claims, whether arising out of warranty, negligence, strict liability (including manufacturing, design, warning or instruction claims) or any other product based statutory claim.

 

(c)  Any indemnity available hereunder shall be dependent upon the Party seeking indemnity providing prompt written notice to the indemnitor of any claim or lawsuit giving rise to the indemnity provided, however, that failure to comply with this notice requirement shall not reduce the indemnitor’s indemnification obligation except to the extent that the indemnitor is prejudiced as a result.  Thereafter, the indemnitor shall have control over the handling of the claim or lawsuit, and the indemnitee shall provide reasonable assistance to the indemnitor in defending the claim.  The indemnitee may participate, at its own cost, in the handling of the claim.

 

(d)  Client shall reimburse Ventiv for all reasonable actual out-of-pocket expenses incurred by Ventiv in connection with responses to subpoenas and other similar legal orders issued to Ventiv in respect to Client’s Product or the Services performed under this Agreement. However, Client shall have no obligation to reimburse Ventiv for any such expenses (and to the extent paid by Client to Ventiv, shall be repaid by Ventiv to Client) arising out of, in connection with or otherwise relating to actions or omissions of Ventiv or its employees, officers, directors and/or affiliates that violate this Agreement or Law.

 

(e)     Neither Party shall be liable to the other Party with respect to any subject matter

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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of this Agreement under any contract, tort, negligence, strict liability, breach of warranty (express or implied) or other theory for any indirect, incidental, special, exemplary, punitive or consequential damages, nor for any loss of revenues or loss of profits, even if advised of the possibility of such damages.  For clarification, this limitation shall not apply to the parties indemnification obligations set forth in Sections 9(a) and 9(b) above, and Client’s reimbursement obligations set forth in Section 9(d) above.  As further clarification, this Section 9(e) is not intended to restrict or prevent either Party from seeking and obtaining direct damages for a breach of this Agreement.

 

10.        Term - The Agreement shall be in effect as of the Effective Date and shall remain in effect until the second anniversary of the Deployment Date (the “Term”).  The period from the Deployment Date until the day prior to the one year anniversary of the Deployment Date shall be referred to herein as “Year One” and the period from the one year anniversary of the Deployment Date through the end of the Term shall be referred to herein as “Year Two”.  This Agreement will renew for additional periods of one year each (each an “Additional Term”), upon written agreement by the Parties to be executed at least ninety (90) days prior to the end of the Term.  The compensation to Ventiv for any Additional Term must be agreed upon and set forth in the written agreement between the Parties.

 

11.        Termination - (a)     This Agreement may be terminated by Ventiv or Client by providing the other Party with written notice as follows:

 

(i)            by Ventiv, if payment to Ventiv by Client is not made when due and such payment is not made within ten (10) days from the date of notice to Client of such nonpayment; or

 

(ii)           by either Party, in the event that the other Party has committed a material breach of this Agreement and such breach has not been cured within thirty (30) days of receipt of written notice from the non-breaching Party of such breach; or

 

(iii)          by either Party, in the event that the other Party has become insolvent or has been dissolved or liquidated, filed or has filed against it, a petition in bankruptcy and such petition is not dismissed within sixty (60) days of the filing, makes a general assignment for the benefit of creditors; or has a receiver appointed for a substantial portion of its assets; or

 

(iv)          by Client providing Ventiv with at least [***] prior written notice; provided however, under no circumstances shall the actual termination date be prior to the [***] anniversary of the Deployment Date; or

 

(v)           by Ventiv providing Client with at least [***] prior written notice; provided however, under no circumstances shall the actual termination date be prior to the [***] anniversary of the Deployment Date.

 

(b)           In the case of: (i) any termination of this Agreement by Client or Ventiv under Section 11 of this Agreement (other than termination by Client pursuant to Section 11(a)(ii) or (iii)), or (ii) upon Client conducting a Conversion pursuant to Section 12 of this

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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Agreement, or (iii) at the end of Term (or any Additional Term), Client shall (in addition to all other payment obligations under this Agreement) promptly pay (or if paid by Ventiv, promptly reimburse Ventiv): the amount due any lessor or rental agent of the equipment leased or owned by Ventiv and provided exclusively to Client’s employees (i.e., fleet vehicles, laptops, handheld PDA’s, etc. (collectively, the “Equipment”)), for any early termination of the lease or rental agreement.  Ventiv shall make a good faith effort to mitigate Client’s liability for such amount due by attempting to reassign the Equipment for use in connection with services being provided by Ventiv to a third party.  In addition, Client may elect to either: (x) in the event the Equipment is owned by Ventiv, transfer the Equipment and pay an amount equal to the net book value (if any) of the Equipment on the books of Ventiv at the time of the transfer event, or in the event the Equipment is subject to a lease or finance lease, the Equipment may be transferred to Client (subject to the last sentence of this Section 11(b) and Client shall assume the responsibility for all further payments due (including costs associated with the transfer), or (y) pay Ventiv the net loss to Ventiv on such Equipment determined by the difference between the net book value of such Equipment and the actual net price received by Ventiv for the disposal of such Equipment, plus any amounts due by Ventiv in connection with the lease or rental termination and costs associated with the disposal of said Equipment.  Any proposed transfer of Equipment shall be subject to Client establishing its own relationship and credit with the entity that Ventiv contracted with to lease or rent such Equipment.

 

(c)           Upon the effective date of such termination, the parties shall have no further obligation to each other (other than those set forth in Sections 3(b), 6, 7, 8, 9, 12, and 13 (i)), except that Client shall pay the amounts set forth or provided for in Exhibit A of this Agreement through the actual date of termination.

 

12.        Conversion (Selective Hiring and Block Conversion)

 

(a)           Notwithstanding Section 8 of this Agreement, during the Term (or any Additional Term) and after the Deployment Date, Client may solicit, employ or retain one or more Ventiv Sales Representatives performing Services hereunder (a “Selective Hiring”).  Client shall give sixty (60) days prior written notice to Ventiv of any Selective Hiring.  Should there be Selective Hiring by Client, Ventiv will backfill the respective position so as to maintain the previously agreed upon number of Ventiv Sales Representatives performing Services hereunder.  In the event Client wishes to implement a Selective Hiring during the Term (or any Additional Term), Client shall pay Ventiv $[***] as a recruitment fee for each replacement/backfill Ventiv Sales Representative.

 

(b)           Notwithstanding Section 8 of this Agreement, Client may solicit, employ or retain one or more Ventiv Sales Representatives performing Services hereunder and Ventiv shall not backfill the respective position (a “Block Conversion”) provided that: (i) such hiring may not occur prior to the first anniversary of the Deployment Date (as defined in Exhibit A) and (ii) Client provides at least ninety (90) days prior written notice to Ventiv of any Block Conversion.  In the event Client wishes to implement a Block Conversion, Client shall pay Ventiv a Conversion fee based upon the date of the actual Block Conversion, in accordance with the following:

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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[***]
    	
 
    	
Commencement of
   [***] until [***]
   anniversary of
   Deployment Date
    	
 
    	
[***]
   anniversary of
   Deployment
   Date until end of
   [***]
    	
 
    	
After [***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ventiv   Sales Representative Conversion Fee
    	
 
    	
No   conversion permitted
    	
 
    	
$
    	
[***]
    	
 
    	
$
    	
[***]
    	
 
    	
$
    	
[***]
    
												

 

(b)           Client understands and agrees that Ventiv cannot guaranty that any Sales Representative will agree to participate in a Selective Hiring or Block Conversion.

 

(c)           In the event Client implements a Selective Hiring or Block  Conversion, the Parties agree that any and all training materials made available to the Ventiv Sales Representatives will be immediately returned to Ventiv, it being understood and agreed that the Ventiv proprietary training modules constitutes valuable and proprietary information of Ventiv and is subject to the confidentiality obligations set forth in Section 6 of this Agreement.  Within five (5) days of implementing a Selective Hiring or Block  Conversion, Client shall return to Ventiv any originals and copies of the Ventiv proprietary training modules which had been in possession of the converted Ventiv Sales Representatives.

 

(d)           In the event Client conducts a Selective Hiring or Block  Conversion (collectively, a “Conversion”) and the converted Ventiv Sales Representative had been provided with use of a fleet automobile leased, rented or owned by Ventiv and Client wishes to commence an arrangement with the fleet vendor to assume such cars (and all associated costs and liabilities) under Client’s name, the converted Ventiv Sales Representative may only to continue to have access to such automobile following the Conversion if Client either: (i) registers the fleet automobile under its name; or (ii) ensures that Ventiv remains named as an additional insured under Client’s automobile insurance policies until such time as the vehicle is registered in Client’s name (which shall occur no later than three (3) months following the Conversion). The Parties understand and agree that it is solely Client’s obligation to ensure one of the above actions are taken and Client shall be responsible for indemnifying, defending and holding Ventiv harmless for all damages resulting from Client’s failure to take such action.  The Parties further agree that on the effective date of the Conversion, Client shall destroy the Ventiv insurance card(s) in the fleet vehicle(s) of the converted Ventiv Sales Representative.

 

13.        Miscellaneous  (a)  Each Party represents to the other that the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action; that the Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable in accordance with its terms (except to the extent enforcement is limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general principles of equity); and that this Agreement and performance hereunder does not violate or constitute a breach under any organizational document of such Party or any contract,

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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other form of agreement, or judgment or order to which such Party is a party or by which it is bound.

 

(b)           Each Party undertakes to maintain appropriate insurance in commercially reasonable amounts with financially capable carriers, including in the case of Client product liability insurance in the amount of at least $[***] million.  Each Party shall name the other Party as an additional insured on all liability insurance coverage. In addition, upon written request, each Party will provide the other with evidence of coverage complying with this Section.

 

(c)           Neither Ventiv nor Client may assign this Agreement or any of its rights, duties or obligations hereunder without the other Party’s prior written consent, provided, however, that either Ventiv or Client may assign its rights, duties and obligations as part of an acquisition of Ventiv or Client, as the case may be, so long as the acquirer (i) is a financially capable business entity and (ii) expressly assumes in writing those rights, duties and obligations under this Agreement and this Agreement itself, and (iii) is not a competitor of the other Party.

 

(d)           In the event Client elects to add a second product to be Detailed by the Ventiv Sales Representatives, Client shall provide Ventiv with written notice (the “Second Product Notice”).  Unless Ventiv provides written objection to Client to the proposed additional product being Detailed by the Ventiv Sales Representatives (for good cause set forth in the objection notice), within ten (10) business days of Ventiv’s receipt of the Second Product Notice, the Parties shall agree upon and execute an amendment to this Agreement setting forth all terms and conditions applicable to the Detailing of the additional product by the Ventiv Sales Representatives.  The Parties agree that the amendment shall address additional pass-through costs associated with the additional product, additional product training and impact on the Performance Fees (set forth in Section III of Exhibit A).  The term “Product” as set forth herein shall be defined to include such additional product identified in the executed amendment to this Agreement.

 

(e)           This Agreement supersedes all prior arrangements and understandings between parties related to the subject matter of this Agreement.

 

(f)            Noncompliance with the obligations of this Agreement (other than payment obligations) due to a state of force majeure, the laws or regulations of any government, regulatory or judicial authority, war, civil commotion, destruction of facilities and materials, fire, flood, earthquake or storm, labor disturbances, shortage of materials, failure of public utilities or common carriers, and any other causes beyond the reasonable control of the applicable Party, shall not constitute a breach of contract.

 

(g)           If any provision of this Agreement is finally declared or found to be illegal or unenforceable by a court of competent jurisdiction, both parties shall be relieved of all obligations arising under such provision, but, if capable of performance, the remainder of this Agreement shall not be affected by such declaration or finding.

 

(h)           This Agreement, including any attachments or exhibits entered into hereunder, contains all of the terms and conditions of the agreement between the parties and constitutes the

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

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complete understanding of the parties with respect thereto.  No modification, extension or release from any provision hereof shall be affected by mutual agreement, acknowledgment, acceptance of contract documents, or otherwise, unless the same shall be in writing signed by the other Party and specifically described as an amendment or extension of this Agreement.

 

(i)            Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, not including any dispute relating to patent validity or infringement, shall be settled by arbitration administered by the American Arbitration Association (“AAA”) under rules in effect on the effective date of this agreement.  Prior to arbitration, under this section, the Parties shall first attempt in good faith to resolve any controversy or claim among themselves.  In the event resolution is not obtained within a reasonable time, any Party may submit the dispute to arbitration five (5) business days following written notice by one Party to the other Party. The arbitrator(s) shall apply the law of the State of New York, without reference to rules of conflict of law, to the merits of any dispute or claim not related to patent validity or infringement.  Any other choice of law clause contrary in this Agreement notwithstanding, the arbitration shall be governed by the United States Arbitration Act.

 

Within 15 days after receipt of such demand, a Qualified Arbitrator, as defined below, shall be named by the Arbitration Committee of the AAA.  A “Qualified Arbitrator” means an arbitrator (i) selected from the AAA, (ii) who is neutral, (iii) has experience resolving disputes  of a similar nature to those at issue in any arbitration hereunder and (iv) has either: (x) at least 10 years of judicial experience or (y) at least 10 years of practice as a lawyer and at least 5 years of experience as an arbitrator.

 

Except as provided in the following sentence, each party to any such matter shall be responsible for its own costs and expenses incurred in connection with the arbitration, including, without limitation, its attorneys’ and accountants’ fees and expenses.  The fees and expenses of the Qualified Arbitrator and any administrative expenses of the AAA shall be divided between the parties.

 

The arbitration hearing shall take place in New York, New York or such other location as the parties shall mutually agree (in writing), and shall be concluded within 10 days of its commencement unless otherwise ordered by the Qualified Arbitrator and the award thereon shall be made within 10 days after the close of the submission of evidence.  The Qualified Arbitrator shall conduct such evidentiary or other hearing as he or she deems necessary or appropriate and such Qualified Arbitrator shall be entitled to review such records and documents that the Qualified Arbitrator deems reasonably necessary or appropriate.  An award rendered by the Qualified Arbitrator appointed pursuant to this Agreement shall be final, binding and unappealable on all parties to the proceeding and judgment on such award may be entered by any party in any court having jurisdiction.

 

(j)            For the convenience of the Parties, this agreement may be executed in counterparts and by facsimile or email exchange of pdf signatures, each of which counterpart shall be deemed to be an original, and both of which taken together, shall constitute one agreement binding on both Parties.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

11

 

(k)           Any notices required or permitted under this Agreement shall be given in person or sent by first class, certified mail to:

 

Ventiv:

 

Ventiv Commercial Services, LLC
 500 Atrium Drive
 Somerset, New Jersey 08873
 Attention:

 

with a copy to:

 

David S. Blatteis, Esq.
 Norris, McLaughlin & Marcus, P.A.
 721 Route 202-206
  P.O. Box 5933
 Bridgewater, NJ 08807-5933

 

Client:

 

Depomed Inc.
 1360 O’Brien Drive
 Menlo Park, CA 94025

 

Attention:  General Counsel

 

or to such other address or to such other person as may be designated by written notice given from time to time during the term of this Agreement by one Party to the other.

 

WHEREFORE, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.

 

 

	
VENTIV COMMERCIAL SERVICES, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Paul Mignon
    	
 
    
	
 
    	
Name: Paul Mignon
    	
 
    
	
 
    	
Title: COO
    	
 
    

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

12

 

	
DEPOMED INC.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Tammy Cameron
    	
 
    
	
 
    	
Name: Tammy Cameron
    	
 
    
	
 
    	
Title: Vice President,   Finance
    	
 
    

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

13

 

EXHIBIT A

COMPENSATION - FIXED FEES, PASS-THROUGH COSTS,

PERFORMANCE FEES AND BILLING TERMS

 

I.              FIXED FEES

 

(a)           Implementation Fee

 

Client shall pay Ventiv $[***] for implementation fee associated with performance of the Services.   An initial payment of $[***] shall be made within ten (10) days of the date this Agreement is executed and the balance ($[***]) shall be paid no later than ten (10) days prior to the date Ventiv hires the Ventiv Sales Representatives.

 

(b)           Fixed Monthly Fee

 

Commencing [***], Client shall pay Ventiv a Fixed Monthly Fee as follows:

 

	
PERIOD
    	
 
    	
FIXED MONTHLY FEE
    	
 
    
	
Year One 
    	
 
    	
$
    	
[***]
    	
 
    
	
Year Two
    	
 
    	
$
    	
[***]
    	
 
    

 

Payments for any partial month will be pro-rated.

 

(c)           Backfill Recruiting Fee

 

In the event a Ventiv Sales Representative ceases to be employed by Ventiv, Ventiv shall backfill the vacated position and Client shall pay Ventiv a backfill recruiting fee of $[***] for each backfill Ventiv Sales Representative recruited and hired by Ventiv as a Ventiv Sales representative.  Notwithstanding the above, in the event the Ventiv Sales Representative ceases to be employed by Ventiv within [***] of the date such Ventiv employee was hired, there shall be no backfill recruiting fee due from Client.  The training obligations of the Parties with respect to backfill Ventiv Sales Representatives is set forth in Section 4 of this Agreement.

 

(d)           [***]

 

[***]

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

14

 

(e)           [***] -

 

[***]

 

II.            PASS-THROUGH COSTS

 

In addition to the Fixed Fees, certain expenses will be charged to Client on a pass-through basis.  These expenses will be billed to Client at actual cost.  Pass-through costs include:

 

·      Bonuses for the Ventiv Sales Representatives (plus applicable employer portion of taxes)

·      Office supplies, tolls and parking for the Ventiv Sales Representatives

·      Costs for all meetings, including but not limited to POA, national and training meetings

·      Travel and entertainment costs for Project Team

·      DME / marketing expense

·      Sales TRx data and any third party data

·      Interview expense (including travel and entertainment)

·      Turnover training

·      Sample storage

·      Backfill training and travel

·      Licensing and/or credentialing required for the Ventiv Sales Representatives to provide the Services

 

III.           PERFORMANCE FEES

 

(a)           Included in the Monthly Fee (set forth in Section I(b) above, is Ventiv’s annual management fee, a portion of which (the “Performance Fee”) is subject to Company’s achievement of certain performance objectives in Year One and Year Two.

 

(b)           The total annual Performance Fee in Year One is $[***] and the total annual Performance Fee in Year Two is $[***].

 

(c)           The performance objectives for Year One are based on Product [***], each as more fully described below (each a “Performance Objective” and collectively, the “Performance Objectives”).  If Ventiv does not achieve the Performance Objectives, Ventiv will credit Client in accordance with the following.  In the event Ventiv exceeds certain Performance metrics, Ventiv shall invoice Client for such amounts due, in accordance with the following.  Performance objectives for Year Two shall be agreed upon by the Parties, in writing, at least ninety (90) days prior to the commencement of Year Two.

 

(d)           Performance Objectives in Year One:

 

(1)           [***] Objective — [***] percent ([***]%) of the Performance Fee shall be based on achievement [***] which shall be agreed upon by the Parties at least thirty (30) days prior to the [***].

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

15

 

(2)           [***] — [***] percent ([***]%) of the Performance Fee shall be based on [***] percent ([***]%) of the [***] meeting the agreed upon [***], unless otherwise agreed to by the Parties.

 

(3)           [***] Objective — [***] percent ([***]%) of the Performance Fee shall be based on the [***] goal of having at least [***] percent ([***]%) of the [***] agreed to by the Parties.  In the event [***] shall be excluded when calculating the [***] Objective. Ventiv may achieve a portion of the [***] Objective in accordance with the following chart:

 

	
PERCENTAGE OF [***]
    	
 
    	
PERCENTAGE OF
   [***] ACHIEVED
    	
 
    
	
[***]% - [***]%
    	
 
    	
[***]
    	
%
    
	
[***]% - [***]%
    	
 
    	
[***]
    	
%
    
	
[***]% - [***]%
    	
 
    	
[***]
    	
%
    
	
[***]% - [***]%
    	
 
    	
[***]
    	
%
    

 

(4)           Product [***] — [***] percent ([***]%) of the Performance Fee shall be based on  the [***] percent ([***]%), or an alternative [***] (as agreed to by the Parties).  The Parties understand and agree that the [***].  The Parties shall agree on the [***].

 

(5)           [***] to [***] — [***] percent ([***]%) of the Performance Fee shall be based on [***] of the [***], at least [***] percent ([***]%) of the time there are [***].

 

(6)           Average [***] Percentage — [***] percent ([***]%) of the Performance Fee to be determined at the end of the Term, is based on [***].  The [***] shall not be greater than [***] percent ([***]%) during [***] of the Term, which reflects [***].  For clarification, the [***] shall be calculated once [***].  In addition, [***] shall refer to a [***].  Ventiv may achieve a portion of the [***] in accordance with the following chart:

 

	
Average [***] 
    	
 
    	
Percentage of [***] Achieved
    	
 
    
	
Under [***]%
    	
 
    	
[***]
    	
%
    
	
Between [***]% and [***]% 
    	
 
    	
[***]
    	
%
    
	
Between [***]% and [***]%
    	
 
    	
[***]
    	
%
    
	
Between [***]% and [***]%
    	
 
    	
[***]
    	
%
    
	
Between [***]% and [***]%
    	
 
    	
[***]
    	
%
    

 

(e)           The metrics set forth above shall be used solely for the calculation of the Performance Fee.  The failure to meet any of these metrics shall not be considered a breach of the Agreement.

 

(f)            The Parties agree that achievement or nonachievement of one of the Performance Objectives does not impact or effect achievement or nonachievement of the other Performance

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

16

 

Objectives.

 

(g)           In the event this Agreement is terminated prior to the end of the Term, the Parties shall determine if the Performance Objectives have been achieved through the actual termination date; it being understood and agreed that Ventiv shall be entitled to receive all Performance Fees earned (including a pro rata portion) through the actual termination date.

 

IV.           MISCELLANEOUS SERVICES

 

(a)           Realignment and Call Plans - See Exhibit B attached hereto.

 

(b)           Ventiv IC Plan - Ventiv shall manage an incentive compensation program for Ventiv Sales Representatives at no cost to Client.

 

(c)           Client IC Plan - Client shall design an incentive compensation program for the Client District Mangers, Regional Directors and RTAMS and shall provide such plan to Ventiv in writing when completed.  Ventiv shall provide the incentive compensation calculation pursuant to Client’s incentive compensation program at no cost to Client (unless customized, ad-hoc or non-standard reports are requested by Client, in which case Section 1(d) of the Agreement shall apply).  Client is solely responsible for paying its employees amounts due pursuant to Client’s incentive compensation program.

 

(d)           State License Validation Fees

 

Client shall pay Ventiv a one-time set up fee of $[***] and a per-lookup fee in accordance with the following:

 

	
PERIOD
    	
 
    	
AUTOMATED
   LOOKUP
    	
 
    	
MANUAL LOOKUP
    	
 
    
	
Year One 
    	
 
    	
$[***] per lookup
    	
 
    	
$[***] per lookup
    	
 
    
	
Year Two 
    	
 
    	
$[***] per lookup
    	
 
    	
$[***] per lookup
    	
 
    

 

(e)           In the event Client elects to use IREP (proprietary software), Client shall pay Ventiv an incremental monthly fee of $[***] per user per month.

 

V.            BILLING TERMS

 

The Implementation Fee shall be paid by Client to Ventiv pursuant to Section I (a) of this Exhibit A.  Within thirty (30) days of the proposed hire date of the Ventiv Sales Representatives (as agreed to by the Parties), Ventiv shall invoice Client for two (2) months of the Fixed Monthly

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

17

 

Fees (as set forth in this Exhibit A, Section I (b) above).  Ventiv shall refund Client or not invoice Client for the Fixed Monthly Fees for the last two (2) months of the Term.  Commencing on the first month of Deployment, Client will be billed monthly in advance the amount stated above as the Fixed Monthly Fee (as set forth in this Exhibit A, Section I (b) above).  Pass-through Costs (as set forth in Section II above) will be billed to Client at actual cost as incurred by Ventiv.  Bonuses for Ventiv Sales Representatives (as set forth as a pass-through cost in Section II above) shall be paid by Client to Ventiv within ten (10) days of the Parties reaching agreement on the actual amount of the bonuses to be paid.

 

Invoices are due upon receipt.  If not paid within 30 days of date of invoice, there will be a finance charge of 1.5% monthly, applied to the outstanding balance due.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

18

 

EXHIBIT B

SAMPLING OF PRODUCTS TO TARGETS

 

General

 

Ventiv shall cause the Ventiv Sales Representatives to distribute samples of Products to Targets (and shall in no event distribute Samples to non-Targets) as part of the detailing activity of the Ventiv Sales Representatives, under a sampling program (the “Sampling Program”) in accordance with the terms of the Agreement.  Any Sampling Program will be reviewed with and approved (in writing) by Client prior to implementation it being understood that any Sampling Program shall be Client’s program and shall comply in all respect with all Laws.  The program shall be implemented by Ventiv and Ventiv Sales Representatives in a manner that complies in all respects with all Laws.  The Parties agree that Product samples shall not be considered an item of value.

 

In connection with the foregoing, Client expressly authorizes Ventiv to distribute the Product samples during the Term (or any Additional Term) of this Agreement.

 

If the Sampling Program provides for the shipment of samples to Ventiv’s affiliate, Promotech Research Associates, Inc. for distribution by Ventiv to the Ventiv Sales Representative (and thereafter to Targets), Ventiv shall store the samples of the Products and distribute the samples to Targets (and shall in no event distribute samples to non-Targets) in compliance with all applicable legal requirements, including, without limitation, the PDMA.  If the Sampling Program to which this Exhibit is attached provides for the distribution of samples by Client directly to the Ventiv Sales Representatives, Client shall be responsible for storage and distribution in accordance with applicable legal requirements, including, without limitation, the PDMA. Client shall nonetheless retain all risk of loss with respect to samples of the Products. Furthermore, Client shall at all times maintain its own insurance with respect to loss, damage or destruction of the Products.

 

Responsibility for Sample Distribution and Storage

 

Ventiv shall be responsible for any necessary storage of samples in the aggregate and for distribution of samples to the Ventiv Sales Representatives. Ventiv Sales Representatives shall be accountable for samples received by Ventiv Sales Representatives (including any storage of samples by individual Ventiv Sales Representatives).

 

State License Number for Targets

 

If requested in writing by Client, a list of Targets utilized by the Ventiv Sales Representatives shall be validated by Ventiv against a current list of state license numbers.  The fees for such service are set forth in Section IV of Exhibit B.  All additions, changes and off-list potential Targets shall be validated in advance by Ventiv.

 

Sample Accountability Records

 

Ventiv shall utilize a security and audit program that includes allowance for all of: random, for cause and periodic physical inventories of samples delivered to the Sales Representatives consistent with the PDMA and applicable regulations of the Food and Drug

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

19

 

Administration (“FDA”).  In the course of utilizing that program Ventiv will generate Inventory Records, Reconciliation Reports and Summary Report as required by the regulations of the FDA.

 

Written Accountability Policies

 

Ventiv will prepare written policies, provide instruction and testing concerning those policies and (with the cooperation of Client) gather all required information concerning Sample Accountability issues to assure that Ventiv is in compliance with the requirements of the regulations of the FDA covering the sampling services (if any) provided by Ventiv.  Those written policies and procedures will address: (i) the inventory process, (ii) an inventory schedule, (iii) the audit standards for detecting falsified and incomplete records, (iv) what is a significant loss and how it is to be identified, (v) responsibility for notifying the FDA, (vi) system for monitoring samples to identify the loss or theft of samples and (vii) the standards for storage of samples.  Those written policies and procedures shall be provided to and accepted in writing by Client.  In addition, Client shall prepare written policies and procedures covering shipping of samples by Client and return of samples, as applicable. Client shall provide Ventiv with a written copy of Client’s written policies and procedures.

 

Audit Services

 

Ventiv will develop audit procedures, random selection audits, operational guidelines, proposed timelines and checklists to allow testing and demonstration of PDMA compliance.  These procedures will include random and for-cause audit criteria, on-site inventory, inspection of sample storage locations, interviews of Sales Representatives and reconciliation services and reports. The on-site inventory of the samples in the possession of a Ventiv Sales Representative and related interview of that Ventiv Sales Representative (with accompanying reconciliation services and report) shall constitute a “physical audit.”  A physical audit, as requested by Client, shall be conducted with respect to Ventiv Sales Representatives with appropriate subsequent reconciliation of samples provided to that Ventiv Sales Representative. In addition to any other physical audits, performed by either Client or Ventiv, required by the PDMA and/or regulations thereunder and/or by the applicable written policies and procedures for the sample accountability program, a physical audit shall be conducted on each Ventiv Sales Representative upon termination of employment either by Client or Ventiv.  Random signature audits will be performed by Ventiv and the results reported to Client.

 

Shipment of Samples

 

If Client is shipping samples directly to the Ventiv Sales Representatives, Client shall be responsible for those shipments, including using appropriate delivery verification system and confirmation documentation. Under any Sampling Program, Client shall provide Ventiv with a written description of that delivery verification system and copies of the conformation documentation forms.  Client shall provide Ventiv with all PDMA-related information concerning shipped samples as required by FDA regulations, i.e., including lot numbers.  This information may be delivered either electronically or on paper but in either case within 24 hours of the shipment of the samples. Client shall also provide all information reasonably necessary to allow Ventiv to verify the receipt of shipped samples.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

20

 

Ventiv will ensure they receive a copy of all documents confirming shipments of samples to the Sales Representatives, whether by Ventiv, a warehouse or Client. Ventiv will, in all cases, reconcile the receipt of samples by each Ventiv Sales Representative with the samples shipped to that Sales Representative, based upon the shipping records provided to it and acknowledged of delivery provided by the Sales Representatives.  All discrepancies between the sample shipping records (whether by Ventiv, warehouse or Client and the acknowledgment of delivery by the Sales Representatives shall be identified by Ventiv and reported to Client within five (5) days of discovery.  All loss of samples or potential loss of samples shall be investigated by Client.  To the extent either party uses a third party vendor to provide any shipping and/or delivery verification services, that party shall insure that the third party vendor is compliant with all applicable federal and state laws, including the PDMA and the regulations of the FDA.

 

Returns

 

Client shall be responsible for confirming all returns of samples by Ventiv or the Ventiv Sales Representatives.  Client will provide Ventiv with written confirmation of sample returns promptly after receipt by Client of the returned sample.  The Parties recognize that Ventiv will reconcile sample data and account for samples based (in part) on the return confirmations provided by Client.  Client shall not remove, destroy or otherwise impair the availability of the returned samples until either Ventiv confirms the return of samples in the quantities reported by the Sales Representative or, if Ventiv has not begun such confirmation after the passage of thirty (30) days following notice to Ventiv.

 

Access to Records

 

Ventiv shall provide Client access in less than twenty-four (24) hours.

 

Notification of Client; of FDA

 

Upon Ventiv’s discovery that any Product samples have been lost or stolen, Ventiv shall, within twenty-four (24) hours, report such theft or loss to Client.  Client will be responsible for determining whether a “theft” or a “significant loss” has occurred under the PDMA and the regulations of the FDA. Client shall also be responsible for determining whether there is “reason to believe” that a diversion of a sample or falsification of a sample record by a Ventiv Sales Representation has occurred.  Client is responsible for reporting the theft or loss to the FDA.

 

Recalls

 

Ventiv shall maintain such traceability records at the product code level on samples of the Products as may be necessary to permit a recall or field correction of the Product.  The decision to conduct and the right to control a recall shall be solely Clients.  Ventiv shall cooperate fully with Client in connection with any recall efforts affecting the Product.

 

Accountability Training

 

The Parties recognize that a Sampling Program will require incremental training in sample accountability.  Ventiv, with the assistance of Client, will provide, as part of the training, all

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

21

 

Ventiv Sales Representatives with training which addresses sampling matters.  Ventiv will consult with Client to assure that the Ventiv Sales Representatives will use detail bags and report forms which are acceptable to Client.  Should Ventiv and/or Client determine that follow-on training is necessary in the future, Client will be responsible for the reasonable costs associated with such follow-on training.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

22

 

EXHIBIT C

SALES REPORTS AND ANALYSIS

 

Work to be performed

 

	
Database
    	
 
    	
Base assumptions
    	
 
    	
Standard
   Annual
   Frequency
    	
 
    	
Standard
   Timing
    	
 
    	
Typical
   Turnaround
    
	
Initial   Data Loads
    	
 
    	
Data   provided from one source in basic Ventiv provided layout
    	
 
    	
1
    	
 
    	
3-6 weeks prior to deployment
    	
 
    	
5 business days
    
	
Universe   Deletions
    	
 
    	
Data   provided from one source in basic Ventiv provided layout
    	
 
    	
4
    	
 
    	
Quarterly
    	
 
    	
5 business days
    
	
Universe   Merges
    	
 
    	
Data   provided from one source in basic Ventiv provided layout
    	
 
    	
4
    	
 
    	
Quarterly
    	
 
    	
5 business days
    
	
Universe   Additions
    	
 
    	
Data   provided from one source in basic Ventiv provided layout
    	
 
    	
12
    	
 
    	
monthly
    	
 
    	
5 business days
    
	
Universe   Zip/Terr Changes
    	
 
    	
Standard   (zip code :from territory : to territory) format
    	
 
    	
4
    	
 
    	
Quarterly
    	
 
    	
5 business days
    
	
Minor   realignments (less than 25% of universe changes)
    	
 
    	
Standard   (zip code: from territory: to territory) format
    	
 
    	
4
    	
 
    	
Quarterly
    	
 
    	
10 Business Days
    
	
Target   changes
    	
 
    	
 
    	
 
    	
4
    	
 
    	
Quarterly
    	
 
    	
5 business days
    
	
Data   Extracts: Physician Universe
    	
 
    	
Format   as agreed upon by Client and Ventiv
    	
 
    	
12
    	
 
    	
monthly
    	
 
    	
 
    
	
Data   Extracts: CID Data for Physicians
    	
 
    	
Format   as agreed upon by Client and Ventiv
    	
 
    	
12
    	
 
    	
monthly
    	
 
    	
 
    
	
Data   Extracts to third party vendors
    	
 
    	
standard   format-no charge for setup-per run charge (TBD with
    	
 
    	
 
    	
 
    	
 
    	
 
    	
10 days for initial set up/ run/qc time
    

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

23

 

Work to be performed

 

	
Database
    	
 
    	
Base assumptions
    	
 
    	
Standard
   Annual
   Frequency
    	
 
    	
Standard
   Timing
    	
 
    	
Typical
   Turnaround
    
	
 
    	
 
    	
complexity.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
thereafter
    

 

	
Standard
   Reports
    	
 
    	
Base assumptions
    	
 
    	
Standard

Frequency
    	
 
    	
Standard

Timing
    	
 
    	
Level
    	
 
    	
Delivery
   Mechanism
    
	
Call   Activity
    	
 
    	
Standard   Format 

 

SFA   synchronized data
    	
 
    	
Daily
    	
 
    	
Updated   every morning by 8am
    	
 
    	
Nat.,   RD,DM
    	
 
    	
Portal
    
	
Territory   Summary
    	
 
    	
Adapted   to specific activity measurements and goals within set up matrix (calls,   targets only, reach, frequency, sample distribution)

 

Up   to 3 promoted products
    	
 
    	
Weekly
    	
 
    	
By   Wednesday of each week.

 

Monthly   (Within 10 business days of close of the month)
    	
 
    	
Nat.,   RD,DM

 

 

Rep
    	
 
    	
Portal

 

 

Email
    
	
InVentiv   intelligence
    	
 
    	
Adapted   to specific activity measurements and goals within set up matrix (calls,   targets only, reach, frequency, sample distribution and monthly prescriber   /product data)

 

Up   to 3 promoted products and 6 competitive products
    	
 
    	
Weekly   SFA data

 

Monthly   Sales Data
    	
 
    	
15th   of each month
    	
 
    	
Nat.,   RD,DM
    	
 
    	
Portal
    
	
Competitive   Analysis
    	
 
    	
Adapted   to specific product/market definition

 

Monthly   Prescriber based product level prescription data

 

Up   to 3 promoted
    	
 
    	
Monthly
    	
 
    	
5   business days post receipt of last data input and quality control release.
    	
 
    	
Nat.,   RD,DM

 

Rep
    	
 
    	
Portal

 

Email
    

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

24

 

	
 
    	
 
    	
products

 

Reps   also receive a Top 25 report
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Activity/Productivity   aka Impact Report
    	
 
    	
Adapted   to specific product/market definition

 

Up   to 3 promoted products

 

Monthly   Prescriber based product level prescription data
    	
 
    	
Monthly
    	
 
    	
5   business days post receipt of last data input and quality control release.
    	
 
    	
Nat.,   RD,DM

 

Rep
    	
 
    	
Portal

 

Email
    

 

*All customizations, expedited timeframes or increases to standard frequency of tasks will be performed at hourly rate. All Customization is scoped and signed off by client before processing includes set-up, generation and QC of report.

 

	
Other   available services: Scoped for workload, materials, programming , quality   control and data needs to determine applicable costing at $[***] per hour
    
	
Custom/Non-Standard   and Ad hoc Reporting
    
	
Web   portal access for representatives
    
	
Web   Portal Customizations
    
	
Data   Extract Set Up and Modification
    
	
Data   Set up For Third Party Data Extracts
    
	
Payor   based Reporting
    
	
Web   Based Universal Maintenance
    
	
inVentiv   Intelligence for Representatives
    
	
Weekly   Competitive Analysis* -assumes the purchase of weekly prescriber based data
    
	
Structured   Ad hoc Analytics Hours by Tier
    
	
CDC   Data Reporting - assumes the purchase of Monthly CDC based data
    
	
Recommendation   Data Reporting
    

 

Additional report samples can be made available.

 

Confidential Information, indicated by [***] has been omitted from this filing and filed separately with the Securities Exchange Commission

 

25Exhibit 10.1

 

US GOLD CORPORATION

 

AND

 

WILLIAM FAUST

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

July 27, 2011

 

CONFIDENTIAL

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made the 27th day of July, 2011 between US Gold Corporation, a Colorado corporation (the “Employer”), and Mr. William Faust (the “Employee”).

 

RECITALS

 

WHEREAS, the Employer desires to secure the employment of the Employee for the position of Chief Operating Officer of the Corporation;

 

AND WHEREAS, the Employee desires employment with the Employer;

 

NOW THEREFORE, in consideration of the mutual covenants contained in this Agreement, the sufficiency of which are acknowledged, the Employer and the Employee agree as follows:

 

ARTICLE 1

TERM OF EMPLOYMENT

 

1.1           Employment.  Effective with the date of this Agreement, the Employer agrees to employ the Employee and the Employee agrees to be employed by the Employer upon the terms and conditions hereinafter set forth. This Agreement replaces any previous agreement between the Employer and the Employee.

 

1.2           Term.  The employment of the Employee by the Employer as provided herein shall commence on August 1, 2011 (the “Commencement Date”) and shall continue until the Agreement is terminated in accordance with Article 4 herein.

 

1.3           Place of Performance.  In connection with the Employee’s employment by the Employer, the Employee shall be based out of Nevada or New Mexico, USA, except for required travel on the Employer’s business to the extent reasonable and necessary for the performance of the duties of the Employee. The Employee acknowledges that in connection with the Employee’s employment, frequent travel to Mexico may be required and that such travel entails certain risks. The Employer and Employee have read, agree to, and have signed the indemnity set out in Appendix “A”.

 

ARTICLE 2

DUTIES OF THE EMPLOYEE

 

2.1           Duties.  The Employee shall be employed with the title of Chief Operating Officer and shall be subject to the general direction and control of, and shall report jointly to the Senior Vice President and the President/Chairman or his designate.  The Employee shall have such duties as are customarily performed by the Chief Operating Officer, and such other duties as may be assigned from time to time by the Board of Directors or the Senior Vice President.

 

2

 

Such duties shall include, by way of example only, those set out in Appendix “B” to this Agreement.

 

2.2           Extent of Duties.  The Employee shall devote substantially his full time, best efforts, attention and energies to the business of the Employer.  During the term of this Agreement, the Employee shall not be employed with or provide services to any person, firm or entity other than the Employer; provided, however, that Employee may participate as a non-executive director or serve on advisory boards of other private or public entities, in charitable, civic and benevolent organizations, so long as none of these endeavors interfere with his obligations to the Employer. Employee will be allowed to assist his former employer, Crystallex International Corporation in the sale of remaining mining equipment and in their arbitration case against the government of Venezuela so long as neither of these endeavors interfere with his obligations to the Employer.

 

2.3           Disclosure of Information. The Employee acknowledges that all records, data, materials and information and copies thereof and all information relating to any procedures, investors, suppliers, services, policies and practice, cost and expense structure, business, prospects and business/organizational opportunities and plans of the Employer and all financial and geological information, as well as the Employer’s trade secrets (as defined by the Colorado Uniform Trade Secrets Act, Colorado Revised Statute § 7-74-101, et seq.), and other information relating to the business and affairs of the Employer (all of which are hereinafter collectively called the “Confidential Information”) disclosed to, obtained or acquired by the Employee, is and shall remain the exclusive property of the Employer, the disclosure of which may be highly detrimental to the best interests of the Employer.  Therefore, the Employee agrees that:

 

(i)                                     The Employee will hold in strictest confidence and not disclose, reproduce, publish or use in any manner during his employment or at any time after termination for any reason, without the express authorization of the Employer, any Confidential Information, except as such disclosure or use may be required in connection with the Employee’s work for the Employer.

 

(ii)                                  Upon request or upon the date of termination of the Employee’s employment, the Employee will deliver to the Employer, and not retain or deliver to anyone else, any and all Confidential Information and all notes, memoranda, documents and in general, any and all materials, electronic or written, and any and all material or property relating to the Employer’s business.

 

2.3.1        Employee agrees that if he violates the provisions of this Article 2.3, it would be difficult to determine the damages and lost profits which the Employer would suffer as a result of such breach including, but not limited to, losses attributable to lost Confidential Information and/or increased competition.  Accordingly, in the event of a breach or threatened breach by the Employee of the provisions of this Article 2.3, the Employer shall be entitled to a restraining order or an injunction (i) restraining the Employee from disclosing, in whole or in part, any Confidential Information or from rendering any services to any person,

 

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firm, corporation, association or other entity to whom such Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed; and/or (ii) requiring that the Employee deliver to the Employer all Confidential Information, documents, notes, memoranda and any and all discoveries or other material upon termination of the Employee’s employment with the Employer.  The Employee agrees the Employer does not need to post a bond or other security to obtain such a restraining order or injunction, and Employee waives his right to require such a bond or other security.  Nothing herein shall be construed as prohibiting the Employer from pursuing other remedies available to the Employer for such breach or threatened breach, including the recovery of damages from the Employee.  The Employee’s obligations in this Article 2.3 shall survive the termination of the Employee’s employment with the Employer, howsoever caused.

 

2.4                                 Former Employers and Former Employment/Qualifications. Employee represents to the Employer that he:

 

(i)                                     is not a party to any agreement or understanding, written or oral, which may restrict the Employee in any manner from engaging in any activities which Employee may be required or expected to perform in connection with his duties as Chief Operating Officer with the Employer;

 

(ii)                                  will not disclose or use any confidential information that belongs to a former employer or other third party for the Employer’s benefit without the prior consent of such party;

 

(iii)                               has returned or destroyed any papers in his possession which contain a former employer’s or other third parties’ confidential information which Employee has a duty not to disclose; and

 

(iv)                              has truthfully submitted an accurate record of past employment and professional qualifications, as set forth in the curriculum vitae/resume submitted to the Employer.

 

ARTICLE 3

COMPENSATION OF THE EMPLOYEE

 

3.1           Salary and Perquisites.  (a) For his services under this Agreement, the Employee shall be paid a salary at the rate of US$ 300,000 per annum during the term hereof; (b) the salary provided shall be paid in equal semi-monthly installments in accordance with the Employer’s normal practices; and (c) Employer shall make and remit all required withholding and employment taxes on any compensation paid or payable to Employee hereunder who is a permanent resident of the state of Nevada, USA. The Employee and Employer have agreed to review salary and other compensation arrangements on or about the date which is twelve (12) months from the date of this Agreement if the Agreement has not been previously terminated.

 

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3.2           Initial Grant of Options. (a) For his services under this Agreement, the Employee shall be entitled to receive an initial grant of 300,000 stock options in the Employer (or its successor, as the case may be), to be issued on and priced based on the closing price of the Employer’s common shares on the NYSE on such date that is five (5) days following the closing date of the proposed business combination with Minera Andes Inc. In the event that the proposed business combination with Minera Andes Inc. is not completed, then such options shall be issued and priced based on the closing price on such date that is five (5) days following the public announcement that the proposed transaction has been withdrawn, cancelled or otherwise terminated.  To the extent permissible, the options shall be granted as “incentive” options under the Employer’s Equity Incentive Plan and shall be subject to all the terms and conditions of that Plan.  The Employee may also be considered for additional options in the sole discretion of the Employer’s Board of Directors.

 

3.3           Vacation and Public Holidays.  The Employee shall be entitled to twenty (20) days paid vacation per year of employment (accrued on a monthly basis) provided that the Employee shall schedule such vacation time with the agreement of the Senior Vice President and shall use his best efforts to schedule such vacation time so as not to substantially interfere with the Employer’s business.   In the event the Company implements a vacation or similar policy in the future, such policy shall supersede this Agreement. The Employee shall also be entitled to take all paid United States-recognized public holidays customarily extended by the Employer to executive employees of the Employer.

 

3.4           Medical, Health and Dental Insurance Coverage.  The Employer shall provide medical and health insurance coverage to the Employee and (as applicable) his spouse or partner with coverage generally consistent with that extended by the Employer to other executive employees of the Employer who reside in the US and are required to travel to Mexico and South America.  This coverage shall include major medical, dental, vision and pharmacy benefits, basic life and disability insurance coverage, and special coverage during travel outside the US or Canada. Such coverage shall be subject to the conditions set out in the applicable plans and/or insurance contracts.

 

3.5           Expense Reimbursement. The Employee shall be entitled to prompt reimbursement for all reasonable and necessary expenses incurred by the Employee in the performance of his duties hereunder.  The Employee shall provide the Employer with proper receipts and substantiation for such expenses.  The Employer shall advance reasonable estimates of such expenses upon request of the Employee.

 

ARTICLE 4

TERMINATION OF EMPLOYMENT AND NON-SOLICITATION

 

4.1           TERMINATION.  This Agreement and the Employee’s employment hereunder may be terminated only as follows:

 

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4.1.1        Death.  This Agreement shall automatically terminate upon the death of the Employee during the term of this Agreement.  In such event, the Employer shall pay to the Employee’s estate (i) any unpaid wages earned by the Employee to the date of his death, and (ii) any accrued and unpaid vacation pay earned by the Employee.  The Employer shall have no further obligations to the Employee’s estate.

 

4.1.2        Disability. This Agreement shall automatically terminate if Employer gives Employee notice that Employee is disabled.  For purposes of this Article 4.1.2, a “disability” means the Employee is unable to perform the customary duties of his position with the Employer by reason of a medically-determinable physical or mental impairment which can be expected to result in death or to be of long-continued and of indefinite duration, as determined in the sole discretion of the Employer.  In the event of a termination due to Employee’s disability, the Employer shall pay to the Employee any unpaid wages earned by the Employee through the effective date of his disability and any accrued and unpaid vacation pay earned by the Employee. The Employer shall have no further obligations to the Employee.

 

4.1.3        Termination by the Employer for Cause.  The Employer may terminate the Employee’s employment hereunder at any time without notice for “Cause.”  For purposes of this Agreement, “Cause” shall mean: (1) the willful and continued failure by the Employee substantially to perform his duties hereunder (other than any such failure resulting from the Employee’s disability as defined in Article 4.1.2 herein), (2) the willful engaging by the Employee in misconduct which is materially injurious to the Employer; (3) the violation by the Employee of the provisions of this Agreement, (4) the Employee’s misappropriation (or attempted misappropriation) of any of the Employer’s funds or property, whether tangible, intangible, or intellectual in nature; (5) the Employee’s conviction of, the indictment for (or its procedural equivalent), or the entering of a guilty plea or plea of no contest with respect to, a felony, the equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment; (6) the Employee’s act of fraud, dishonesty, or any other act of negligent, reckless, or willful misconduct; (7) the Employee breaches any fiduciary, contractual, statutory, common law, or other legal duty owed to the Employer; (8) the Employee refuses or fails to implement or carry out any lawful instructions issued by the Employer which are consistent with Employee’s position, duties, and responsibilities; or (9) any circumstance which hinders the Employer from operating its business or otherwise hinders, delays or prevents the Employer from receiving income or increases its overhead to an extent the Employer reasonably decides to reduce, modify, suspend, or cease its business. In the event of a termination for Cause, the Employer shall pay to the Employee any unpaid wages earned by the Employee to the date of his termination and any accrued and unpaid vacation pay earned by the Employee. The Employer shall have no further obligations to the Employee.

 

4.1.4        Termination by the Employer Without Cause. Notwithstanding other provisions of this Agreement, the Employer may terminate the Employee’s employment without Cause immediately upon written notice from the Employer to the Employee pursuant to paragraph 4.1.6 below.  In the event of a termination without Cause, the

 

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Employer shall pay to the Employee any unpaid wages earned by the Employee to the date of his termination and any accrued and unpaid vacation pay earned by the Employee.  In addition, and only upon the Employee’s execution of an agreement releasing any and all actions, causes of actions, suits, claims, demands and entitlements whatsoever which the Employee has or may have against the Employer, its affiliates and any of their respective directors, officers, employees, successors and assigns arising out the Employee’s hiring, employment and the termination of Employee’s employment or this Agreement, Employer will provide Employee with two (2) months pay for each completed year of service up to a maximum of twelve(12) months pay Employee has had with the Employer.  The Employer shall have no further obligations to the Employee.

 

4.1.5.       Termination by the Employee — Change of Control.  The Employee may terminate this Agreement by providing at least 120 days prior written notice to the Employer upon the effective date of a Change of Control.  A Change of Control is defined as:

 

(1)                                  any change in the direct or indirect ownership of, or control or direction over, voting securities of US Gold as a result of which a person, or a group of persons acting jointly or in concert within the meaning of the Securities Act (Ontario), is in a position to exercise effective control over the US Gold; or

 

(2)                                  any change in the direct or indirect ownership of, or control or direction over, assets of US Gold as a result of which a person, or group of persons acting jointly or in concert within the meaning of the Securities Act (Ontario), acquires or is in a position to exercise effective control or direction over more than 50% of the assets (measured by fair market value) of US Gold.

 

(3)                                  any forced takeover by a government entity that results in diminished ability to manage the assets to achieve Corporate goals and objectives.

 

The Employee acknowledges that for the purposes of this Agreement, a business combination, merger, or other corporate transaction by the Employer with Minera Andes Inc. (or any of its affiliates) shall not constitute a change of control.

 

In the event of a termination in the event of a change of control, the Employer shall pay to the Employee any unpaid wages earned by the Employee to the date of his termination and any accrued and unpaid vacation pay earned by the Employee.  In addition, and only upon the Employee’s execution of an agreement releasing any and all actions, causes of actions, suits, claims, demands and entitlements whatsoever which the Employee has or may have against the Employer, its affiliates and any of their respective directors, officers, employees, successors and assigns arising out the Employee’s hiring, employment and the termination of Employee’s employment or this Agreement, Employer will provide Employee with three (3) months pay for each completed year of service up to a maximum of twenty four (24) months pay Employee has had with the Employer.  The Employer shall have no further obligations to the Employee. Receipt of the payment pursuant to this section is conditional upon the Employee’s execution of an agreement releasing any and all actions, causes of actions, suits, claims, demands and entitlements whatsoever which the Employee has or may have against

 

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the Employer, its affiliates and any of their respective directors, officers, employees, successors and assigns arising out the Employee’s hiring, employment and the termination of Employee’s employment or this Agreement. If notice to the Employer is not given within 15 days following the effective date of a Change of Control then this provision, as it relates that that specific Change of Control, shall be of no further force or effect.

 

4.1.6.       Other Termination by the Employee.  The Employee may terminate this Agreement by providing at least 60 days prior written notice to the Employer. The Employer may in its discretion waive all or part of such period of notice.  In the event of such termination of employment, the Employer shall pay to the Employee any unpaid wages earned by the Employee to the date of termination and any accrued and unpaid vacation pay earned by the Employee.  The Employer shall have no further obligations to the Employee.

 

4.1.7.       Notice of Termination to be in Writing.  Any termination of the Employee’s employment by the Employer or by the Employee shall be communicated by written notice of termination to the other party.

 

4.2           Non-Solicitation. Employee shall not, during the term of this Agreement and for a period of eighteen (18) months following the termination of this Agreement for any reason, on his own behalf or on behalf of or in connection with any other person or entity, without the prior written consent of the Employer, directly or indirectly, in any capacity whatsoever, alone through or in connection with any person or entity, offer employment or engagement to or solicit the employment or engagement of or otherwise entice away from the employment or engagement of the Employer, any individual who is employed or engaged by the Employer.

 

ARTICLE 5

GENERAL PROVISIONS

 

5.1           Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

 

5.2           Entire Agreement. This Agreement (includes all Appendices) supersedes any and all other agreements, whether oral or in writing, between the parties with respect to the employment of the Employee by the Employer.  Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by either party, or anyone acting on behalf of any party, that are not embodied in this Agreement, and that no agreement, statement, or proxies not contained in this Agreement shall be valid or binding.

 

5.3           Assignment.  The Employee may not assign his rights and obligations under this Agreement to any person or entity except with the express consent in writing of the Employer. The Employer may assign its rights and obligations under this Agreement to any affiliate of the Employer or successor to the Employer’s business by providing notice of such assignment in writing to the Employee.

 

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5.4          Notices.  For purposes of this Agreement, notices, demands and all other communications provided for in or required by this Agreement shall be in writing and shall be deemed to have been duly given and effective immediately when delivered personally, or within three days following mailing by registered mail, return receipt requested, postage prepaid, or immediately following delivery by fax or e-mail with receipt confirmation followed by mail delivery, addressed as follows:

 

	
If   to the Employee:
    	
William   Faust
   310 Sunset Springs Ct.
   Sparks, NV 89441, USA
    
	
 
    	
 
    
	
If   to the Employer:
    	
US   Gold Corporation
   99 George Street, 3rd Floor
   Toronto, Ontario M5A2N4
   Canada
   Fax: 647 258 0408
   Attn: Legal Counsel
    

 

or such other address as either party may have furnished to the other in writing in accordance herewith.

 

5.5          Severability.  If any provision of this Agreement is rendered unenforceable by any court of competent jurisdiction, such unenforceability shall not affect the enforceability of any other provision of this Agreement.

 

5.6          Article Headings.  The article headings used in this Agreement are for convenience only and shall not affect the construction of any terms of this Agreement.

 

5.7          Amendments.  This Agreement may be amended only by written agreement signed by both the Employer and the Employee.

 

5.8          Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute only one legal instrument.  This Agreement shall become effective when an original or copy thereof bears the signatures of both parties hereto.  It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart instrument.

 

5.9          Arbitration.  The Employer and the Employee agree that any issue or dispute arising out of or relating to the application, interpretation, effect or alleged violation of the Agreement shall be finally settled by binding arbitration in the City of Toronto in the Province of Ontario in accordance with the then existing National Arbitration Rules of the ADR Institute of Canada, Inc. and the arbitration award may be entered in any court having jurisdiction thereof.  Each party shall pay fifty percent (50%) of all fees and costs of the arbitrator(s) as well as all the fees and costs of its own counsel and witnesses, and all other

 

9

 

fees and costs associated with the preparation and presentation of the party’s case, unless the arbitrator(s) decide otherwise.  However, the prevailing party in such arbitration proceeding shall be entitled to reimbursement of its reasonable attorneys’ fees and costs by the non-prevailing party, as determined by the arbitrator(s).

 

Employee agrees that the Employer has advised him that he should obtain independent legal advice in connection with the terms of this Agreement. Employee confirms that he has either obtained such advice or chosen not to do so and that he fully understands the terms and conditions set out herein and agrees to be bound by them.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
EMPLOYER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
US Gold Corporation
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Ian J. Ball
    	
 
    	
 
    
	
 
    	
Ian   J. Ball
    	
 
    	
 
    
	
 
    	
Sr.   Vice President
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EMPLOYEE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   William Faust
    	
 
    	
 
    
	
William   Faust
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness
    	
 
    	
 
    
	
Print   Name:
    	
 
    	
 
    

 

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Appendix “A” — Disclaimer of Liability in Connection with Work Related Travel

 

Having read the Disclaimer of Liability set out below, the undersigned hereby releases, remises, quit claims and forever discharges US Gold Corporation, including all its officers, directors, employees, and agents, either in their individual capacities or by reason of their relationship to US Gold Corporation or their successors, from any and all claims and demands, the undersigned or his heirs, representatives, executors, administrators, or any other persons acting on behalf of himself, or on behalf of his estate, have or may have whatsoever with respect to the intended purpose of travel in connection with his employment with US Gold Corporation

 

Disclaimer of Liability

 

1.              Although US Gold Corporation has made reasonable attempts to plan for the undersigned’s health, safety and comfort, US Gold Corporation has no right to control any service provider’s operations or procedures and cannot be liable for any personal injury or property damage which may occur due to:

 

a.              Wrongful, negligent or arbitrary acts or omission on the part of a service provider, its employees and others not under the direct control of US Gold Corporation;

 

b.              Defects or failure of any aircraft vessel, vehicle or other equipment instrumentally under control of such service providers.

 

2.              Carriage by land, sea and air is subject to the terms and conditions of the carrier and to international conventions, which may limit liability. Land, sea or air travel is also subject to operational decisions of carrier and air and sea ports which may result in cancellations, delays or diversions over which US Gold Corporation has no control and for which US Gold Corporation accepts no liability whatsoever.

 

3.              Travel in and to any the destination country where US Gold Corporation operates, including Mexico, comes with certain risks to person and property including, but not limited to, the risk of the threat of hostilities, civil strife, industrial disputes, terrorist unrest, active or threatened, natural disaster, fire or adverse weather conditions. US Gold Corporation cannot be liable for any harm to person, property, variation in the proposed itinerary, any failure to meet its intended purpose in the destination country or any other adverse event beyond the control of US Gold Corporation.

 

4.              The Employee and Employer will work together, in good faith, to ensure the safety of the Employee.

 

5.              The Employee acknowledges that he will make inquiry as to the safety of work-related travel and will advise the Employer if so deemed unsafe.

 

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6.              The Employee shall have no obligation to conduct work or travel where he has advised the Employer that he has a reasonable expectation of danger or an unsafe work environment.

 

The undersigned hereby acknowledge that in connection with the entering into this Agreement, they have read the above Disclaimer of Liability and agree to its terms.

 

	
EMPLOYER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
US Gold Corporation
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Ian J. Ball
    	
 
    	
 
    
	
 
    	
Ian   J. Ball
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EMPLOYEE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   William Faust
    	
 
    	
 
    
	
William   Faust
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness
    	
 
    	
 
    

 

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Appendix “B” — DUTIES AND FUNCTIONS

 

Position Description

 

Chief Operating Officer (COO)

US Gold Corporation

 

GENERAL

 

The COO, reporting to the Senior Vice President and the President/Chairman, is responsible for the overall strategic and operational leadership of the company’s mining operations and projects initially located in Mexico and Nevada. Within this context, the COO will oversee the development, start-up, and operation of the mine(s) and the ongoing operations of the mines thereafter.

 

SPECIFIC RESPONSIBILITIES

 

1.0 Senior Executive Team Leadership

 

As a member of the senior executive team, deals with major policy and operational issues and provides leadership to US Gold’s overall business. As a senior leader, embraces and practices the values of US Gold.

 

2.0 Corporate Strategic Plan

 

In collaboration with the Board and executive team, assists in the formulation of strategic plans that charts the future course of the company’s operations. The plans will identify critical issues that must be addressed in order to realize the future vision and will set short, medium and long-term objectives and strategies.

 

3.0 Annual Operating Plan

 

Formulates and recommends to the Senior Vice President an Annual Operating Plan for the mining operations that will support the achievement of the objectives established in the Corporate Strategic Plan. The achievement of the key objectives in the Plan, which will have specific start-up dates, competitive costs, production targets and identified financial results, will be the primary responsibility of the COO.

 

Submits to the Senior Vice President a quarterly analysis of progress in achieving objectives, sets out rationale for variances and recommends modifications to the Plan for the remainder of the year.

 

4.0 Organization and Management of Staff

 

Develops and maintains an effective organizational structure that reflects operational needs and prescribes the responsibilities of staff as they relate to the accomplishment of the objectives established in the Annual Operating Plan.

 

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Ensures the development of a strong, effective team that works as a cohesive unit both within and between operational units in the achievement of business objectives.

 

5.0 Leadership

 

Provides strong leadership to all employees in order to capitalize on the full potential of this critical resource. Enlists and engages all members of the team in the corporate vision, values and goals.

 

6.0 Employee Relations

 

Works closely with all Managers in other locations as well as all employees to ensure US Gold remains an open, collaborative, and progressive workplace.

 

7.0 Resource Acquisitions, Allocation and Utilization

 

Ensures the acquisition and most effective allocation of the necessary fiscal, human and physical resources to allow the mine(s) to operate in the most effective and efficient manner.

 

Oversees capital expenditure programs and introduces technical process innovations to enhance productivity, increase revenues and improve competitiveness through reduced costs.

 

Ensures that control, monitoring and performance standards and mechanisms are in place to measure the use of all the mines resources.

 

8.0 Operational Leadership

 

Identifies opportunities and proposes new methods of improving existing operations with a focus on safety, environmental and social responsibility and performance results.

 

Ensures the effectiveness of operations through on-going assessments, coaching and training in strategic areas to maintain industry leadership and the highest levels of productivity, quality, safety, and environmental standards.

 

9.0 Health and Safety

 

In conjunction with all members of the management team, participates in the strategic planning to set objectives and targets for improving health and safety performance at the mine. Ensures this strategic priority is communicated throughout the operations.

 

10.0 Financial Administration

 

Responsible with the site managers for the preparation of all capital and operating budgets. The COO will have responsibility for monitoring and accountability for ensuring overall performance through implementation of appropriate controls.

 

11.0 Internal Communications

 

Is visible throughout the projects and mines and communicates relevant corporate information internally. Facilitates constructive and collaborative transfer of information within and between operating units.

 

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12.0 External Relationships

 

Developing and maintaining positive and productive relationships with the communities in which US Gold operates, along with suppliers, customers and other stakeholders, is paramount.

 

13.0 Business, Political and Economic Environment

 

Keeps abreast of the business, political and economic climate in which US Gold operates. Prepares the mine to meet the challenges presented by new laws, regulations, trends, technologies and developments in the market.

 

REPORTING RELATIONSHIPS

 

Reports to: Senior Vice President and President/Chairman, jointly.

Directly manages: Operational Managers of each project site and appropriate technical staff at the projects, mine or corporate level as required.

 

PRIORITY CRITERIA

 

1.0 Experience: The candidate will ideally bring:

· Senior operations experience in the mining industry;

· Experience with base metals mines, preferably open pit;

· International experience;

· Successful experience in a start-up environment, opening a new mine.

 

2.0 Mining Expertise: A track record of success operating a mine or group of mines. Brings a deep understanding of the industry, the science, research and development, and production issues. Has been able to focus all employees on both quality and safety programs. Has demonstrated commitment to enhancing efficiency and cost effectiveness through the introduction of appropriate leading edge techniques. Has a track record of enhancing bottom line performance through the management of capital investments.

 

3.0 Strategic: Sophisticated planning capability with demonstrated experience leading an integrated strategic and operational planning process. Strong intellectual and strategic thinking skills. Is able to see the big picture and drill down into operational issues.

 

4.0 Leadership: A coach, mentor and motivator of people with strong relationship building and team orientation. Proven ability to enthusiastically provide a team of professionals with vision and leadership. Able to attract, retain and motivate a highly competent senior management team. Able to encourage cross company teamwork and break down barriers at all levels within the organization.

 

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5.0 Interpersonal Skills: Articulate, persuasive and inspirational. Highly effective at relating to the workforce, individual employees, the general public, the business community, and local communities. An excellent listener.

 

6.0 External Relations: A track record of success building positive, collaborative relationships with communities and governments.

 

7.0 Character: Through actions, has demonstrated commitment to integrity, honesty and openness. Keeps focused on achievement of vision and goals.

 

8.0 Languages: Ability to speak Spanish is an asset.

 

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