EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Employment Agreement (the “Agreement”) is made and entered into effective as of
the first day of December, 2005, by and between DRUGMAX, INC., a Nevada
corporation (the “Company”), and XXXXXXX X. XXXXXXXXXX, an individual
(“Executive”).
WITNESSETH:
WHEREAS,
the Company provides a wide variety of prescription and non-prescription
healthcare-related diagnostic products used for the treatment of chronic
diseases through its specialty pharmacies and online, and distributes
pharmaceuticals, over-the-counter products, health and beauty aids, nutritional
supplements and other related products through its wholesale distribution
centers (such activities, together with all other activities of the Company
and
its subsidiaries, as conducted at or prior to the termination of this Agreement,
and any future activities reasonably related thereto which are contemplated
by
the Company and/or its subsidiaries at the termination of this Agreement
identified in writing by the Company to Executive at the date of such
termination, are hereinafter referred to as the “Business Activities”);
WHEREAS,
the Company desires to employ Executive upon the terms and subject to the
terms
and conditions set forth in this Agreement; and,
WHEREAS,
Executive desires to be employed by the Company upon the terms and subject
to
the conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises, the mutual promises, covenants
and
conditions herein contained and for other good and valuable considerations,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
intending to be legally bound hereby agree as follows:
Section
1. Employment.
The
Company hereby employs Executive, and Executive hereby accepts employment
with
the Company, all upon the terms and subject to the conditions set forth in
this
Agreement.
Section
2. Capacity
and Duties.
Executive is and shall be employed in the capacity of Chief Executive Officer
and Chairman of the Board of Directors of the Company and shall have such
duties, responsibilities and authorities as are assigned to him by the Board
of
Directors of the Company (the “Board”). Subject to the control and general
directions of, and the general policies and guidelines established, by the
Board
and except as otherwise herein provided, Executive shall devote such of his
business time, best efforts and attention as necessary to promote and advance
the business of the Company and its subsidiaries and to perform diligently
and
faithfully all the duties, responsibilities and obligations of Executive
to be
performed by him under this Agreement. Executive’s duties shall include ongoing
management and oversight of the general business operations of the Company
and
its subsidiaries. During the Employment Period (as hereinafter defined),
Executive may engage in other business activities; provided, however, that
such
activities do not unreasonably interfere with Executive’s performance of his
obligations hereunder or violate Section 15 or Section 18 hereof; and
provided,
further,
that
any such activity is fully disclosed to the Company.
Section
3. Term
of Employment.
The
initial term of employment of Executive by the Company pursuant to this
Agreement shall be for the period (the “Initial Term”) commencing on December 1,
2005 (the “Commencement Date”) and ending on November 30, 2008, or such earlier
date that Executive’s employment is terminated in accordance with the provisions
of this Agreement. The Initial Term automatically shall be extended for
successive additional one year periods (each, an “Extended Term”) unless written
notice is given by either party to the other party no later than 120 days
prior
to the expiration of the Initial Term or any Extended Term. (The Initial
Term,
together with each and any Extended Term, is sometimes hereinafter called
the
“Employment Period”).
Section
4. Place
of Employment.
Executive’s principal place of work shall be located at the principal offices of
the Company in Xxxxxxxxxx, Xxxxxxxxxxx.
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Section
5. Compensation.
During
the Employment Period, subject to all the terms and conditions of this Agreement
and as compensation for all services to be rendered by Executive under this
Agreement, the Company shall pay to or provide Executive with the following:
5.01
Base
Salary.
The
Company shall compensate Executive during the life of this agreement for
his
services hereunder no less than a base annual salary of Three Hundred Forty-Six
Thousand Four Hundred and Sixty-Six and 12/100 Dollars ($346,466.12), payable
at
such intervals (at least biweekly), net of applicable federal state and local
taxes of any kind required by law to be withheld with respect to such payment,
as salaries are paid generally to other executive officers of the Company.
For
fiscal years beginning 2007 and thereafter, the Board shall examine and modify
Executive’s base salary with reference to prevailing competitive standards for
comparable positions in organizations similar to the Company, as determined
by
an independent consultant approved by the Board and Executive.
5.02
Cash
Bonus.
The
Company shall pay to Executive an annual bonus as specified in a plan adopted
each year by the Board. For fiscal year 2006, Executive’s incentive at target
performance levels shall be no less than 100% of base pay.
5.03
Other
Benefits.
The
Company shall provide Executive with the other benefits specified on Exhibit
5.03 attached hereto, which benefits shall not be deemed to be lieu of any
other
benefits or compensation to which Executive is entitled hereunder or otherwise.
5.04 Stock
Options and Restricted Stock.
At the
end of the first year of the Initial Term, the Company shall issue to Executive
stock options and restricted stock at fair market value and comparable in
amounts to those issued to a chief executive officer and chairman of the
board
of directors of a comparable publicly-traded corporation.
Section
6. Adherence
to Standards.
Executive shall comply with the written policies, standards, rules and
regulations of the Company from time to time established for all executive
officers of the Company.
Section
7. Review
of Performance.
The
Board shall periodically review and evaluate the performance of Executive
under
this Agreement with Executive.
Section
8. Expenses.
The
Company shall reimburse Executive for all reasonable, ordinary and necessary
expenses (including, but not limited to, automobile and other business travel
and customer entertainment expenses) incurred by him in connection with his
employment hereunder in accordance with Company policy; provided, however,
Executive shall render to the Company a complete and accurate accounting
of all
such expenses in accordance with the substantiation requirements of Section
274
of the Internal Revenue Code of 1986, as amended (the “Code”), as a condition
precedent to such reimbursement.
Section
9. Termination
with Cause by the Company.
This
Agreement may be terminated with Cause (as hereinafter defined) by the Company
provided that the Company shall (i) give Executive the Notice of Termination
(as
hereinafter defined), and (ii) pay Executive his annual base salary through
the
Termination Date (as hereinafter defined) at the rate in effect at the time
the
Notice of Termination is given, plus any bonus or incentive compensation
which
has been earned or has become payable pursuant to the terms of any compensation
or benefit plan as of the Termination Date. Notwithstanding the foregoing,
if
Executive is terminated with Cause pursuant to Section 11.02(ii) and,
subsequently, charges are dropped, Executive is found not guilty or otherwise
cleared of wrongdoing, before or after trial or following appeal, then in
such
event, the Company shall promptly thereupon pay Executive (or to his estate
in
the event of Executive’s death) two year’s severance equal to the amount of the
compensation and other benefits described in Section 5 of this Agreement
to
which Executive was entitled as of the Termination Date, with such payments
being made in equal installments over the 24 months following the Termination
Date, and such other amount as may be necessary to make Executive whole for
any
incremental taxes due as a result of such severance payments. In addition,
all
stock options issued to Executive shall immediately be vested as of the
Termination Date.
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Section
10. Termination
without Cause by the Company or for Good Reason by Executive;
Non-Renewal.
This
Agreement may be terminated by (i) the Company by reason of the death or
Disability (as hereinafter defined) of Executive or for no reason at all,
or
(ii) Executive for Good Reason (as hereinafter defined); provided that if
this
Agreement is terminated or not renewed pursuant to either of subsections
(i) or
(ii) of this Section 10 prior to November 30, 2009, or if the Company fails
to
renew this Agreement (as permitted by Section 3) through November 30, 2009,
the
Company shall pay to Executive (or to his estate in the event of termination
due
to Executive’s death) two year’s severance equal to the amount of the
compensation and other benefits described in Section 5 of this Agreement
to
which Executive was entitled as of the Termination Date, with such payments
being made in equal installments over the 24 months following the Termination
Date, and such other amount as may be necessary to make Executive whole for
any
incremental taxes due because such payments are deemed to be an excess parachute
payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (whether such payments are paid in cash or stock,
pursuant to Executive’s election described below). The remaining balance of any
payments or other sums due Executive hereunder (or under Section 9) shall
be
immediately due and payable in a lump sum upon a Sale of the Company (as
hereinafter defined). A Sale shall mean a sale of all or substantially all
of
the assets of the Company, a change of more than fifty percent of the voting
power of the Company, a merger or consolidation of the Company with or into
another entity, or if persons who at the Termination Date constituted the
Board
of Directors cease for any reason to constitute at least a majority of the
Board
of Directors. In addition, all stock options and restricted stock issued
to
Executive shall immediately be vested as of the Termination Date. If the
Executive should fail to renew this Agreement at any time other than for
Good
Reason or if the Company should fail to renew the Agreement after November
30,
2009, the Company shall not be required to pay any compensation to Executive
other than his annual base salary through the last day of the then current
term
of the Employment Period, plus any bonus or incentive compensation which
has
been earned or has become payable pursuant to the terms of any compensation
or
benefit plan as of such date but which has not yet been paid.
Executive’s
right to terminate his employment for Good Reason shall not be affected by
his
incapacity due to physical or mental illness. In the event of termination
by
reason of Executive’s death or Disability, medical, hospitalization or
disability benefits coverage comparable to those provided by the Company
during
Executive’s lifetime shall be provided to his spouse and dependents for the
remaining term of this Agreement and thereafter will provide Executive’s spouse
and dependents with the option of purchasing such benefits coverage through
the
Company. The benefits provided under this Section 10 shall not be less favorable
to Executive and his spouse and dependents in terms of amounts, deductibles
and
costs, if any, than such benefits provided by the Company to Executive, his
spouse and dependents as of the Termination Date. This Section 10 shall not
be
interpreted so as to limit any benefits to which Executive, as a terminated
employee of the Company, or his family may be entitled under the Company’s life
insurance, medical, hospitalization or disability plans following his
Termination Date or under applicable law.
At
Executive’s election, in his sole discretion, any sums payable to Executive
pursuant to this Section 10 may be paid to Executive either in cash or shares
of
common stock of the Company. Any portion of such sums that are paid in cash
shall be paid to Executive at such intervals (at least biweekly), net of
applicable federal state and local taxes of any kind required by law to be
withheld with respect to such payment, at the same time as salaries are paid
generally to other executive officers of the Company, unless there is a Sale
as
provided above in which event, all sums due Executive shall immediately be
due
and payable. All sums payable hereunder shall constitute severance payments
(and
not salary continuation payments, whether in cash or stock, at Executive’s
election) and shall not be subject to offset for any reason or repayment
in the
event Executive becomes employed elsewhere. Upon the breach by Executive
of
Section 18 of this Agreement, the Company shall be entitled to cease making
the
remainder of any such cash payments then owed to Executive.
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If
Executive elects to receive any portion of any sums payable to Executive
pursuant to this Section 10 in common stock, the number of shares due to
Executive shall be determined by dividing such sum by the average closing
price
per share of the common stock during the ten trading days immediately preceding
the termination or expiration, as applicable, of this Agreement. One-third
of
such shares shall be paid within thirty days of termination or non-renewal,
as
applicable, and two-thirds of such shares shall be paid on the last day of
the
non-competition period contemplated by Section 18 of this Agreement; provided,
however, that if the non-competition period extends for more than one year
after
such termination or expiration, as applicable, one-third of such shares shall
be
paid within thirty days of termination or non-renewal, as applicable, one-third
of the shares shall be paid on the first anniversary of such termination
or
expiration, as applicable, and the remaining shares shall be paid on the
last
day of the non-competition period contemplated by Section 18 of this Agreement;
provided, further, that should Executive breach Section 18 of this Agreement,
any shares that have not yet been paid shall be canceled and returned to
the
Company. For each tranche of shares of common stock issued to Executive
hereunder, the Company shall deliver registered shares or as promptly as
commercially reasonable thereafter, but in any event within 60 days, the
Company
shall register the resale of such shares and keep the registration statement
in
effect for not less than three (3) years.
Section
11. Definitions.
In
addition to the words and terms elsewhere defined in this Agreement, certain
capitalized words and terms used in this Agreement shall have the meanings
given
to them by the definitions and descriptions in this Section 11 unless the
context or use indicates another or different meaning or intent, and such
definition shall be equally applicable to both the singular and plural forms
of
any of the capitalized words and terms herein defined. The following words
and
terms are defined terms under this Agreement:
11.01
“Disability” shall mean a physical or mental illness which, in the judgment of
the Company after consultation with the licensed physician attending Executive,
impairs Executive’s ability to substantially perform his duties under this
Agreement as an employee and as a result of which he shall have been absent
from
his duties with the Company on a full-time basis for six consecutive months.
11.02
A
termination with “Cause” shall mean a termination of this Agreement by reason of
(i) Executive’s conviction of a felony or a crime involving moral turpitude or
any other crime involving dishonesty, disloyalty or fraud with respect to
the
Company; or (ii) Executive’s arrest or indictment of any lesser crime or offense
committed in connection with the performance of Executive’s duties hereunder; or
(iii) if Executive willfully impedes or endeavors to influence, obstruct
or
impede or fails to materially cooperate with an investigation authorized
by the
Board of Directors of the Company, a self-regulatory organization or a
governmental department or agency.
11.03
“Good Reason” shall mean the occurrence of any of the following events without
Executive’s prior express written consent: (i) any material change in his
status, title, authorities or responsibilities (including reporting
responsibilities) under this Agreement which represents a demotion from such
status, title, position or responsibilities (including reporting
responsibilities); the assignment to him of any duties or work responsibilities
which are materially inconsistent with his status, title, position or work
responsibilities set forth in this Agreement or which are materially
inconsistent with the status, title, position or work responsibilities of
a
chief executive officer and chairman of the board of directors of a
publicly-traded corporation; or any removal of Executive from, or failure
to
appoint, elect, reappoint or reelect Executive to, any of such positions,
except
in connection with the termination of his employment with Cause, or as a
result
of his death or Disability; provided,
however,
that no
change in title, authorities or responsibilities customarily attributable
solely
to the Company ceasing to be a publicly traded corporation shall constitute
Good
Reason hereunder; (ii) the relocation of the principal office of the Company
or
the reassignment of Executive to a location more than thirty (30) miles from
Farmington, Connecticut; (iii) the failure by the Company to continue in
effect
any incentive, bonus or other compensation plan in which Executive participates,
unless an equitable arrangement (embodied in an ongoing substitute or
4
alternative
plan) has been made with respect to the failure to continue such plan, or
the
failure by the Company to continue Executive’s participation therein, or any
action by the Company which would directly or indirectly materially reduce
his
participation therein or reward opportunities thereunder; provided, however,
that Executive continues to meet all eligibility requirements thereof; (iv)
the
failure by the Company to continue in effect any Executive benefit plan
(including any medical, hospitalization, life insurance or disability benefit
plan in which Executive participates), or any material fringe benefit or
prerequisite enjoyed by him unless an equitable arrangement (embodied in
an
ongoing substitute or alternative plan) has been made with respect to the
failure to continue such plan, or the failure by the Company to continue
Executive’s participation therein, or any action by the Company which would
directly or indirectly materially reduce his participation therein or reward
opportunities thereunder, or the failure by the Company to provide him with
the
benefits to which he is entitled under this Agreement; provided, however,
that
Executive continues to meet all eligibility requirements thereof; (v) any
other
material breach by the Company of any provision of this Agreement; (vi) the
failure of the Company to obtain a satisfactory agreement from any successor
or
assign of the Company to assume and agree to perform this Agreement, as
contemplated in Section 21 hereof; (vii) any purported termination of
Executive’s employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of this Agreement; and for purposes of this
Agreement, no such purported termination shall be effective; or (viii) if
during
any twelve month period, persons who at the beginning of such period constitute
the Board of Directors cease for any reason to constitute at least a majority
of
the Board of Directors.
11.04
Notice
of Termination.
“Notice
of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for
termination of Executive’s employment under the provision so indicated;
provided, however, no such purported termination shall be effective without
such
Notice of Termination; provided further, however, any purported termination
by
the Company or by Executive shall be communicated by a Notice of Termination
to
the other party hereto in accordance with Section 13 of this Agreement.
11.05
Termination
Date.
“Termination Date” shall mean the date specified in the Notice of Termination
(which, in the case of a termination pursuant to Section 9 of this Agreement
shall not be less than 60 days, and in the case of a termination pursuant
to
Section 10 of this Agreement shall not be more than 60 days, from the date
such
Notice of Termination is given); provided, however, that if within 30 days
after
any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Termination Date shall be the date finally determined by
either
mutual written agreement of the parties or by the final judgment, order or
decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been taken).
Section
12. Fees
and Expenses.
The
Company shall pay all legal fees and related expenses (including the costs
of
experts, evidence and counsel) incurred by Executive as a result of a contest
or
dispute over Executive’s termination of employment if such contest or dispute is
resolved in Executive’s favor.
Section
13. Notices.
For the
purposes of this Agreement, notices and all other communications provided
for in
the Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, or by expedited (overnight) courier with established national
reputation, shipping prepaid or billed to sender, in either case addressed
to
the respective addresses last given by each party to the other (provided
that
all notices to the Company shall be directed to the attention of the Board
with
a copy to the Secretary of the Company) or to such other address as either
party
may have furnished to the other in writing in accordance herewith. All notices
and communication shall be deemed to have been received on the date of delivery
thereof, on the third business day after the mailing thereof, or on the second
day after deposit thereof with an expedited courier service, except that
notice
of change of address shall be effective only upon receipt.
5
Section
14. Life
Insurance.
The
Company may, at any time after the execution of this Agreement, apply for
and
procure as owner and for its own benefit, life insurance on Executive, in
such
amounts and in such form or forms as the Company may determine. Executive
shall,
at the request of the Company, submit to such medical examinations, supply
such
information, and execute such documents as may be required by the insurance
company or companies to whom the Company has applied for such insurance.
Executive hereby represents that to his knowledge he is in excellent physical
and mental condition and is not under the influence of alcohol, drugs or
similar
substance.
Section
15. Proprietary
Information and Inventions.
Executive understands and acknowledges that:
15.01
Trust.
Executive’s employment creates a relationship of confidence and trust between
Executive and the Company with respect to certain information applicable
to the
business of the Company and its subsidiaries (collectively, the “Group”) or
applicable to the business of any vendor or customer of any of the Group,
which
may be made known to Executive by the Group or by any vendor or customer
of any
of the Group or learned by Executive during the Employment Period.
15.02
Proprietary
Information.
The
Group possesses and will continue to possess information that has been created,
discovered, or developed by, or otherwise become known to, the Group (including,
without limitation, information created, discovered, developed or made known
to
Executive during the period of or arising out of his employment by the Company)
or in which property rights have been or may be assigned or otherwise conveyed
to the Group, which information has commercial value in the business in which
the Group is engaged and is treated by the Group as confidential. Except
as
otherwise herein provided, all such information is hereinafter called
“Proprietary Information,” which term, as used herein, shall also include, but
shall not be limited to, data, functional specifications, computer programs,
know-how, research, technology, improvements, developments, designs, marketing
plans, strategies, forecasts, new products, unpublished financial statements,
budgets, projections, licenses, franchises, prices, costs, and customer,
supplier and potential acquisition candidates lists. Notwithstanding anything
contained in this Agreement to the contrary, the term “Proprietary Information”
shall not include (i) information which is in the public domain, (ii)
information which is published or otherwise becomes part of the public domain
through no fault of Executive, (iii) information which Executive can demonstrate
was in Executive’s possession at the time of disclosure and was not acquired by
Executive directly or indirectly from any of the Group on a confidential
basis,
(iv) information which becomes available to Executive on a non-confidential
basis from a source other than any of the Group and which source, to the
best of
Executive’s knowledge, did not acquire the information on a confidential basis,
or (v) information required to be disclosed by any federal or state law,
rule or
regulation or by any applicable judgment, order or decree or any court or
governmental body or agency having jurisdiction in the premises.
All
Proprietary Information shall be the sole property of the Group and their
respective assigns. Executive assigns to the Company any rights Executive
may
have or acquire in such Proprietary Information. At all times, both during
Executive’s employment by the Company and after its termination, Executive shall
keep in strictest confidence and trust all Proprietary Information, and
Executive shall not use or disclose any Proprietary Information without the
written consent of the Group, except as may be necessary in the ordinary
course
of performing Executive’s duties as an Executive of the Company.
Section
16. Surrender
of Documents; No Disparagement.
Executive shall, at the request of the Company, promptly surrender to the
Company or its nominee any Proprietary Information or document, memorandum,
record, letter or other paper in his possession or under his control relating
to
the operation, business or affairs of the Group. Executive further agrees
that
he shall not, either during the Employment Period or at any time thereafter,
in
any way disparage the Company.
6
Section
17. Other
Agreements.
Executive represents and warrants that Executive’s performance of all the terms
of this Agreement and as an Executive of the Company does not, and will not,
breach any agreement to keep in confidence proprietary information acquired
by
Executive in confidence or in trust prior to Executive’s employment by the
Company. Executive has not entered into, and shall not enter into, any
agreement, either written or oral, which is in conflict with this Agreement
or
which would be violated by Executive entering into, or carrying out his
obligations under, this Agreement.
Section
18. Restrictive
Covenant.
Executive acknowledges and recognizes Executive’s possession of Proprietary
Information and the highly competitive nature of the business of the Group
and,
accordingly, agrees that in consideration of the premises contained herein
Executive will not, during the period of Executive’s employment by the Company
and for the period ending on the later of November 30, 2009, or the first
anniversary of the Termination Date, (i) directly or indirectly engage in
any
Business Activities in the United States, whether such engagement shall be
as an
employer, officer, director, owner, employee, consultant, stockholder, partner
or other participant in any Business Activities, (ii) assist others in engaging
in any Business Activities in the manner described in the foregoing clause
(i),
or (iii) induce employees of the Company to terminate their employment with
the
Company or engage in any Business Activities in the United States; provided,
however, that the ownership of no more than two percent of the outstanding
capital stock of a corporation whose shares are traded on a national securities
exchange or on the over-the-counter market shall not be deemed engaging in
any
Business Activities. Notwithstanding the foregoing, if the Company fails
to make
any payment required by Section 10 of this Agreement within five days of
notice
of non-payment by Executive to the Company or if there is a Sale, then the
covenants in this Section 18 immediately shall terminate.
Section
19. Remedies.
Executive acknowledges and agrees that the Company’s remedy at law for a breach
or a threatened breach of the provisions herein would be inadequate, and
in
recognition of this fact, in the event of a breach or threatened breach by
Executive of any of Sections 15, 16, 17 or 18 of this Agreement, it is agreed
that the Company shall be entitled to equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available, without posting
bond
or other security. Executive acknowledges that the granting of a temporary
injunction, a temporary restraining order or other permanent injunction merely
prohibiting Executive from engaging in any Business Activities would not
be an
adequate remedy upon breach or threatened breach of this Agreement, and
consequently agrees upon any such breach or threatened breach to the granting
of
injunctive relief prohibiting Executive from engaging in any activities
prohibited by this Agreement. No remedy herein conferred is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to any other remedy given hereunder now
or
hereinafter existing at law or in equity or by statute or otherwise.
Section
20. Successive
Employment Notice.
Within
five business days after the Termination Date, Executive shall provide notice
to
the Company of Executive’s next intended employment. If such employment is not
known by Executive at such date, Executive shall notify the Company immediately
upon determination of such information. Executive shall continue to provide
the
Company with notice of Executive’s place and nature of employment and any change
in place or nature of employment during the period ending two years after
the
Termination Date. Failure of Executive to provide the Company with such
information in an accurate and timely fashion shall be deemed to be a breach
of
this Agreement and shall entitle the Company to all remedies provided for
in
this Agreement as a result of such breach.
Section
21. Successors.
This
Agreement shall be binding on the Company and any successor to any of its
businesses or assets. Without limiting the effect of the prior sentence,
the
Company shall use its best efforts to require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same
extent that the Company would be required to perform it if no such succession
or
assignment had taken place. As used in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
or
which is otherwise obligated under this Agreement by the first sentence of
this
Section 21, by operation of law or otherwise.
7
Section
22. Binding
Effect.
This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal and legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive should die while
any
amounts would still be payable to him hereunder if he had continued to live,
all
such amounts, unless otherwise provided herein, shall be paid in accordance
with
the terms of this Agreement to Executive’s estate.
Section
23. Modification
and Waiver.
No
provision of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer as may be specifically designated by the Board.
No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement
to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
Section
24. Headings.
Headings used in this Agreement are for convenience only and shall not be
used
to interpret or construe its provisions.
Section
25. Amendments.
No
amendments or variations of the terms and conditions of this Agreement shall
be
valid unless the same is in writing and signed by each of the parties hereto.
Section
26. Severability.
The
invalidity or unenforceability of any provision of this Agreement, whether
in
whole or in part, shall not in any way affect the validity or enforceability
of
any other provision herein contained. Any invalid or unenforceable provision
shall be deemed severable to the extent of any such invalidity or
unenforceability. It is expressly understood and agreed that, while the Company
and Executive consider the restrictions contained in this Agreement reasonable
for the purpose of preserving for the Company the goodwill, other proprietary
rights and intangible business value of the Company, if a final judicial
determination is made by a court having jurisdiction that the time or territory
or any other restriction contained in this Agreement is an unreasonable or
otherwise unenforceable restriction against Executive, the provisions of
such
clause shall not be rendered void but shall be deemed amended to apply as
to
maximum time and territory and to such other extent as such court may judicially
determine or indicate to be reasonable.
Section
27. Governing
Law; Venue.
This
Agreement shall be construed and enforced pursuant to the laws of the State
of
Connecticut, excluding its choice of law provisions. Both parties submit
to the
jurisdiction of the United States District Court, District of Connecticut
at
Hartford and the Superior Court in and for Hartford County, Connecticut,
as the
exclusive proper forum in which to adjudicate any case or controversy arising
hereunder. The prevailing party shall be entitled to an award of its reasonable
attorneys’ fees incurred in connection with any such judicial proceedings.
Section
28. Counterparts.
This
Agreement may be executed in more than one counterpart and each counterpart
shall be considered an original.
Section
29. Exhibits.
The
Exhibits attached hereto are incorporated herein by reference and are an
integral part of this Agreement.
IN
WITNESS WHEREOF, this Agreement has been duly executed by the Company and
Executive in four counterparts as of the date first above written.
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DRUGMAX,
INC.
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| |
|
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| By: | /s/ Xxxxx Xxxx | |
|
Xxxxx
Xxxx
Chairman,
Compensation Committee
|
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|
EXECUTIVE
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| |
|
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| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Xxxxxxx
X. Xxxxxxxxxx
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