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Professional Services Agreement - UDLP Holding Corp. and General J. H. Binford Peay, III

United Defense

                         Professional Services Agreement

This Professional Services Agreement ('Agreement') dated as of the 1st day of
December 1997, is entered into by and between UDLP Holding Corporation, a
Delaware corporation having a place of business at 1525 Wilson Boulevard, Suite
700, Arlington, VA 22209 (hereinafter referred to as the 'Company') and General
J. H. Binford Peay, III (USA Ret), having his principal office at 4621 Bay to
Bay Boulevard, Tampa, FL 33629 (hereinafter referred to as 'Director'). United
Defense desires the services of Director and Director desires to perform such
services. In consideration of the mutual covenants contained herein, the parties
agree as follows:

 1. Statement of Work

 Commencing on the date first herein written, Director shall perform the
 services for United Defense as specifically directed by the authorized
 representative(s) of United Defense as are described below:

         Serve as member of the Board of Directors of the Company, and
         if requested by the Company, one or more of its affiliates.

2. Payment

(a) In consideration of such services, subject to the terms and conditions of
this Agreement, and as Director's sole and entire compensation under or in
relation to this Agreement, United Defense shall pay Director compensation as

         $25,000/year, plus expenses and options to acquire 1,000 shares of the
         stock of the Company's affiliate, United Defense Industries, Inc.

(b) Payment of fees under this Agreement shall be made within thirty (30) days
of receipt by United Defense of invoices submitted by Director from time to time
as appropriate, but not more frequently than monthly, which invoices are to be
supported by a written summary of the work actually performed and the time
expended thereon by the Director during such billing period. United Defense
shall also reimburse Director for its reasonable out-of-pocket expenses
incurred, requested or authorized by United Defense. Reimbursements of expenses
hereunder will be made on the basis of itemized statements submitted by
Director, which statements are to include actual bills, receipts, invoices or
other evidence of expenditures. Aggregate payments of all compensation hereunder
shall not exceed $100,000.

(c) Time spent in travel shall not be deemed to be time spent in connection
with this Agreement except to the extent that work is actually performed during
travel periods. Director shall comply with United Defense's travel policies,
except as otherwise agreed by United Defense in writing. Director shall not
incur any expense on behalf of United Defense except as contemplated by
paragraph 2 above or upon the prior written approval of United Defense. From
time to time upon request by United Defense, Director shall permit audit of
Director's compliance with the terms of this Agreement by United Defense
employees and/or representatives of any Governmental agencies to which United
Defense is or may be accountable. Any consulting work and related expenses which
do not accord with applicable laws, regulations, United Defense standards of
conduct or the terms of this Agreement, shall not be reimbursed.

3. Inventions and Data

(a) The term 'subject invention' as used in this Agreement means any invention,
discovery, improvement, design, idea or suggestion, whether or not patentable,
conceived and/or first actually reduced to practice by Director, whether
acting alone or jointly with others, in the course of or as a result of any
work for United Defense. The term 'subject data' as used in this Agreement means
any writings, sound recordings, pictorial reproductions, drawings or other
graphic representation and works of any similar nature, whether or not
copyrightable, which are prepared by Director, whether acting alone or jointly
with others, in the course of or as a result of any work for United Defense.

(b) All subject inventions and subject data are and shall remain the property of
United Defense, its successors or assigns, or its nominees, whether or not
United Defense obtains patent or copyright protection thereon. Director shall
(i) promptly disclose all subject inventions and subject data to United Defense;
(ii) assist United Defense upon request to procure and/or maintain patents,
copyrights and trade secrets throughout the world on said inventions and data;
and (iii) assist United Defense to record the existence of the right, title and
interest to said inventions and data in United Defense, at United Defense's
expense, including the execution of documents sought or required by United
Defense or any Governmental agency.

4. Confidential Treatment of Information

(a) Director shall not, either during or after the term of this Agreement,
directly or indirectly publish or disclose to any third party any information
(including but not limited to subject inventions or subject data) pertaining in
any way to the business of United Defense, its customers or suppliers, which is
developed, acquired or derived from association with United Defense, unless
United Defense gives written authorization to do so. Such information shall not
be used apart from United Defense business without written approval of United
Defense. Such prohibition against disclosure to others shall not apply to
information after it is clearly disclosed to the public by United Defense in

(b) Drawings, sketches and any other tangible material made or obtained by
Director from or for United Defense shall be turned over to United Defense in a
timely manner and shall not be removed from United Defense's premises without
the written permission of United Defense. If written permission is given to
remove any such material, the material shall be promptly returned to United
Defense upon completion of the work for United Defense or at any earlier time
requested by United Defense.

5. Work for Others

While engaged by the Company hereunder, Director shall not act as a consultant
for others regarding any matter in which any such other's interest is legally or
financially adverse to that of United Defense. Director represents and warrants
that Director has disclosed in writing to United Defense all other clients and
any work which may represent a conflict of interest with respect to the work to
be performed for United Defense under this Agreement. Director shall, during the
term hereof, advise United Defense prior to entering into any agreement with any
other entity or performing any other work which may result in such a conflict of
interest, and further shall during the term hereof, not enter into any such
agreement or perform any other such work without the prior written approval of
United Defense.

6. Term and Termination

Unless earlier terminated in accordance with this Section 6, this Agreement
shall expire in 52 weeks following the date first above written. Additionally,
the term of this Agreement may be extended for one or more successive one year
periods by written agreement of the parties. Whether during the original term or
any extension thereof, this Agreement may be terminated by either party at any
time (i) without cause, by giving not less than one (1) week's prior written
notice to the other, or (ii) upon breach by the other party, by the aggrieved
party's giving not less than ten (10) days' prior written notice, stating the
nature of such breach.


7. Information Provided

Director represents and warrants as to any information in any form which
Director may provide to United Defense that (i) Director has the lawful right to
provide such information to United Defense without breach of any law,
regulation, contract obligation or duty of employment and that United Defense
may receive and use such information without incurring any liability or
obligation to any other person or entity, and (ii) that any information provided
to United Defense which may have been obtained directly by Director or from any
other person or entity was obtained without violation of any law, regulation,
contract obligation, proprietary right or duty of employment. Director shall
indemnify, defend and hold harmless United Defense (including its employees,
officers and directors) from any damages and claims arising out of or related to
any breach by Director of such representations and warrants.

8. Compliance with Laws

(a) Director represents and warrants that (i) Director is and shall remain
familiar with all applicable laws and regulations relating to gratuities,
bribery, kickbacks, conflicts of interest, classified information and political
activity, (ii) no principal or relative of any principal of Director is a U.S.
Government official other than as expressly disclosed in writing by Director
prior to the date of this Agreement as first set forth above; and (iii) no U.S.
Government official has any beneficial interest in Director nor in any
compensation payable to Director by United Defense. Director shall report to
United Defense all contacts with U.S. Government employees and officials during
which United Defense matters are discussed. Director shall strictly comply with
all applicable statutes and regulations in the conduct of Director's work for
United Defense (including the law described in subparagraph (b) below) and shall
indemnify, defend and hold United Defense (including its employees, officers and
directors) harmless from any failure of the Director to do so.

(b) Director represents and warrants that, throughout the term of this
Agreement, Director (i) shall remain familiar with federal law regarding
procurement integrity (41 U.S.C. Paragraph 423) and regulations issued
thereunder, hereafter collectively referred to as the 'Law'), (ii) will comply
with the Law in all respects, and (iii) shall not be a 'procurement official' on
any procurement for which United Defense is a 'competing contractor' (as such
terms are defined in the Law). Director shall promptly execute the
procurement integrity certification attached hereto, shall re-execute such
certification annually or as otherwise requested by United Defense, and shall
provide to United Defense such other cooperation as United Defense may require
to comply with the Law, insofar as United Defense's compliance is affected by
Director's performance under or acts in relation to this Agreement.

9. Standards of Conduct

Director acknowledges receipt of a copy of the Business Conduct Guidelines and
Code of Ethics and shall comply with the standards of conduct set forth for
United Defense employees therein, and shall promptly complete and return to
United Defense the Letter of Certification appended to the Business Conduct

10. Report of Violations

Director shall report to the appropriate United Defense manager or to United
Defense's Ethics Hot Line number at (888) 912-2112, any request by any United
Defense employee to obtain any information or perform any other act under this
Agreement in a manner which would violate any applicable law, regulation,
contract obligation, duty of employment or United Defense standard of conduct.
Director is requested similarly to report any observed violation of law or
regulation by any United Defense personnel. All such reports will be handled on
a confidential basis and may be made anonymously, if appropriate.


11. Miscellaneous

(a) This Agreement contains the entire agreement of the parties with respect to
the subject matter hereof and supersedes any prior or contemporaneous
representation, warrants, understanding or agreement, written or oral, regarding
such subject matter. This Agreement shall not be deemed to create any
partnership, joint venture or enterprise or employment relationship between the
parties and Director shall have no authority to act in the name of or to
obligate United Defense in any way to third parties. Director shall diligently
make and perform all appropriate tax reports and filings as an independent
contractor and shall make all payments in such capacity required to federal,
state and local tax authorities, including but not limited to, income and social
security taxes; and Director shall indemnify and hold United Defense harmless
from and against any claim for taxes, interest and/or penalties, however
denominated, made by taxing authorities in respect to Director's activities
under or related to this Agreement.

(b) This Agreement shall be construed in accordance with and governed by the
laws of the State of Virginia and the United States of America.

(c) In the event any term or provision hereof is held to be invalid or
unenforceable by final judgment of any court of competent jurisdiction, such
term or provision shall thereupon be severed from this Agreement and the
remainder of the terms and provisions hereof shall remain in full force and

    In Witness Whereof, the parties hereto have executed this Agreement.

                 J.H. Binford Peay III
             (Typed or printed name and title of signer)

             /s/ J.H. Binford Peay III
             (Signature)          1 Dec 1997

             Tax Identification No. (SSN): 227-46-1317

United Defense, L.P.:

             /s/ Thomas W. Rabaut

             Thomas W. Rabaut, President & CEO
             (Typed or printed name and title of signer)

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