INDEPENDENT CONSULTING AGREEMENT
THIS AGREEMENT is made as of the 1st day of January, 1998, by and
between COMPSCRIPT, INC., which, together with its subsidiaries, legal
successors and assigns, is herein referred to as "COMPANY", and XXXXXX X.
XXXXXXX, who with his heirs, successors and assigns is herein called "XXXXXXX",
and XXXXXX X. XXXXX, who with his heirs, successors and assigns is herein called
"XXXXX", and COMPREHENSIVE FORMULARY MANAGEMENT, INC. or another corporate
assignee through which the services of XXXXXXX and XXXXX are rendered, which
together with its legal successors and assigns is herein called "CONSULTANT" (in
the event there is no such corporate assignee, XXXXXXX and XXXXX collectively,
shall be defined as CONSULTANT). COMPANY, XXXXXXX, XXXXX and CONSULTANT are
herein collectively referred to as the "Parties". XXXXXXX XXXXXXXX ("Christie")
is also executing this Agreement for the limited purposes referred to in
Sections 6 through 13(a).
WITNESSETH:
WHEREAS, CONSULTANT desires to procure new business for the COMPANY;
WHEREAS, COMPANY further desires to generally utilize certain of the
services of XXXXXXX and XXXXX, and XXXXXXX and XXXXX are desirous of offering
this services, as delineated under Section 11, to COMPANY on an preferred basis.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises made in this Agreement, and for other valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the Parties hereby agree as follows:
1. SERVICES. CONSULTANT agrees to perform for COMPANY the Consulting
Services specified in Exhibit A.
2. COMPENSATION. As consideration for CONSULTANT'S agreements
hereunder, COMPANY shall issue to CONSULTANT 115,000 shares of the COMPANY's
restricted Common Stock (the "Shares") and pay CONSULTANT the commissions
specified in Exhibit A. CONSULTANT shall bear any and all expenses attributable
to the rendition of services under this Agreement. Promptly upon execution of
this Agreement, the COMPANY shall instruct its transfer agent to issue the
Shares, effective January 1, 1998, registered in the name of Comprehensive
Formulary Management, Inc. The Shares will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), and the
certificate(s) evidencing the Shares shall contain a legend restricting further
transfer absent registration under the Securities Act, or the availability of an
exemption from such registration requirements. CONSULTANT agrees that the Shares
may not be sold, hypothecated, pledged, transferred or otherwise disposed of
without the consent of the COMPANY for a period of one (1) year from the date
hereof. In the event the COMPANY becomes a party to a sale, merger, or
consummates a business
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combination (a "Transaction"), and, upon consummation thereof, shares of the
acquiring corporation are issued in exchange for the outstanding shares of the
COMPANY, then (i) the Shares owned by CONSULTANT shall be treated in the same
manner as the shares of the COMPANY owned by other non-affiliated shareholders,
and (ii) the one-year restriction contained in Section 2(a) of this Agreement
shall terminate on the closing date of any such Transaction. It is the COMPANY's
expectation that shares of an acquiring company issued in the event of
consummation of a Transaction will be shares that have been registered under the
Securities Act.
3. CONSULTANT STATUS. It is understood and agreed that CONSULTANT (and
any persons employed by CONSULTANT) shall perform the Consulting Services as an
independent contractor and not as an employee of COMPANY. COMPANY will make no
deductions from any of the payments due to CONSULTANT hereunder for state or
federal tax purposes, including, but not limited to, social security, income tax
withholding, disability and other payroll ta. requirements. CONSULTANT agrees
that CONSULTANT shall be personally responsible for any and all taxes and other
payments due on payments received by CONSULTANT from COMPANY hereunder. This
Agreement shall not be construed as authority from either Party to act for the
other Party in any agreement or other capacity or to make commitments of any
kind of the account of or on behalf of the other except to the extent and the
purposes expressly provided for herein.
4. TERM. Except as specifically noted otherwise, this Agreement will
continue for a term of five (5) years from the date hereof.
5. TERMINATION. Either CONSULTANT or the COMPANY may terminate this
Agreement upon thirty (30) day's written notice. Upon termination, as aforesaid,
or upon expiration of the term described in Section 4, any and all rights of
CONSULTANT to compensation hereunder shall terminate, except that (i) CONSULTANT
shall remain entitled to the Shares, (ii) the provision of Sections 6-12 hereof
shall continue to apply to CONSULTANT and (iii) CONSULTANT shall be entitled to
commissions under Exhibit A earned up through the date of termination or
expiration. This Agreement, except for the provisions of Sections 6 through 12
hereof, shall also terminate, including all rights of CONSULTANT to commissions
under Exhibit A that are not then earned, in the event the COMPANY shall sell,
dispose of, transfer, discontinue or otherwise no longer engage in the mail
order pharmacy business.
6. PROTECTION OF TRADE SECRETS. CONSULTANT hereby acknowledges that
certain "Confidential Information" are valuable trade secrets of COMPANY and
CONSULTANT hereby agrees to maintain and to protect them in the strictest
confidence. For purposes of this Agreement, "Confidential Information" as
described hereinafter includes trade secrets, methodology, schematics, models,
business descriptions, private or secret processes, methods and ideas, as they
exist from time to time, customer lists and information concerning the COMPANY's
products, services, business records and plans associated with the COMPANY's
operations, product design information, price structure and pricing, discounts,
costs, computer programs and listings, copyright, trademark, proprietary
information, formulae, protocols, forms,
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procedures, training methods, technical information, know-how, show-how, new
product and service development, past, present and future marketing, activities
and procedures, method for operating the COMPANY's business, credit and
financial data concerning the COMPANY, sales strategies, sales presentations,
research information, practices and plans and information which is embodied in
written or otherwise recorded form, and other information of a confidential
nature not known publicly (the "Confidential Information"). Confidential
Information shall not only include information which is embodied in written or
otherwise recorded form, but it shall also include information which is mental,
not physical. Notwithstanding anything herein to the contrary, CONSULTANT shall
not be under any restriction in connection with the use of Confidential
Information in connection with the performance of services hereunder for the
benefit of the COMPANY.
7. NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION. CONSULTANT
acknowledges that it has no rights, title or interest in the Confidential
Information. CONSULTANT further agrees during the term of this Agreement and
thereafter (a) to receive and hold in trust the Confidential Information
obtained directly or constructively from the COMPANY, (b) not to use such
Confidential Information for any purpose without the prior consent of the
COMPANY, and (c) not to disclose such Confidential Information to anyone without
the COMPANY's prior consent.
The foregoing obligations not to use or disclose the Confidential
Information shall not apply to (a) information which is o becomes generally
available to the public, except by breach of this Agreement, (b) information
which CONSULTANT can establish by written records was in CONSULTANT's possession
at the time of disclosure and was not previously acquired directly or indirectly
from the COMPANY, and (c) information was evidenced by CONSULTANT's written
records which CONSULTANT received from a third party not obligated to the
COMPANY. The foregoing exceptions shall apply only from and after the date that
the information becomes available to the public or is disclosed to CONSULTANT by
a third party, respectively. Specific Confidential Information shall no be
considered to be within the foregoing exceptions merely because it is embraced
by more general information in the public domain. Additionally, any combination
of features shall not be considered to be within the foregoing exceptions merely
because individual features are in the public domain. If CONSULTANT intends to
avail itself of any of the foregoing exceptions, CONSULTANT shall notify the
COMPANY in writing of its intention to do so and the basis for claiming the
exception.
8. COVENANT NOT TO EMPLOY. Without the written consent of COMPANY,
until CONSULTANT no longer receives compensation under this Agreement, and for a
period of one year thereafter, at any time or in any manner, CONSULTANT agrees
that CONSULTANT will not, either on CONSULTANT's own behalf of, or any behalf of
any person, firm, corporation, association, affiliate, entity or organization
(collectively "Organization") employ, solicit, divert or otherwise encourage or
attempt to solicit, divert or otherwise encourage the employment of any COMPANY
employee or agent employed by COMPANY at any time during such period. Christie
agrees to the terms and conditions of Sections 6 through 12 hereof, namely,
agreeing to
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protect trade secrets, keep information confidential and not compete as provided
in such Sections.
9. NON-SOLICITATION OF CUSTOMERS OR CLIENTS. Except as permitted under
Section 11 or in performing services under this Agreement, CONSULTANT shall not,
until CONSULTANT no longer receives any compensation, including commissions as
set forth on Exhibit A under this Agreement and for a one year period of time
thereafter, at any time or in any manner, either directly or indirectly, for the
CONSULTANT's own behalf or on behalf of any Organization, directly or indirectly
solicit or attempt to solicit any Business (defined below) from any customers or
clients of the COMPANY identified in Exhibit B annexed hereto.
10. CONSULTANT. CONSULTANT shall take appropriate measures to ensure
that any of CONSULTANT's employees who assist CONSULTANT in the performance of
Consulting Services are competent to do so and that they agree that they will
not disclose or inappropriately use Confidential Information per the terms of
this Agreement.
11. NON-COMPETITION AGREEMENT. Until CONSULTANT no longer receives
compensation pursuant to this Agreement, including, but not limited to Exhibit A
and for a one-year period thereafter, with regard to the sale of (i) mail order
prescription drug programs, (ii) home IV therapy, (iii) pharmaceutical serves to
long-term institutional care facilities, (iv) pharmacy benefit management
services (as defined below), (v) any product or service of any other
pharmaceutical business which product or service contributes revenues equal to
5% or more of COMPANY's gross revenues, in each of such cases (i) through (v) as
conducted at the date hereof by any of the COMPANY, Campo Medical Pharmacy,
Inc., Medical Services Consortium, Inc., and Hytree, Inc. (cases (i) through (v)
herein called the "Business"). CONSULTANT shall not solicit, or directly or
intentionally impair, disrupt or interfere with any past, present or prospective
contractual relationship, with regard to business between COMPANY and a customer
of COMPANY identified on Exhibit B annexed hereto. For purposes of this
Agreement, pharmaceutical benefits management services shall mean (i) electronic
claims adjudication; (ii) mail service; (iii) management of and a provision of
national retail network drug card program; (iv) contracting with manufacturers
to provide rebate formulary management; and (v) clinical programs.
12. REMEDIES.
(a) The CONSULTANT acknowledges and agrees that the COMPANY's remedy at
law for a breach of any of the provisions of Section 7 (Trade Secrets;
Confidentiality), Section 11 (Non-Compete), Section 9 (Non-solicitation of
Customers or Clients), Section 8 (Non-solicitation of Employees) would be
inadequate and a breach thereof will cause irreparable harm to the COMPANY. In
recognition of this fact, in the event of a breach by the CONSULTANT of any of
the provisions of the above-referenced Sections, the CONSULTANT agrees that, in
addition to any remedy at law available to the COMPANY, including but not
limited to monetary damages, the COMPANY, without posting any bond, shall be
entitled to request equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent
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injunction or any other equitable remedy which may then be available to the
COMPANY.
(b) The CONSULTANT acknowledges that the granting of a temporary
injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Sections 6 through 11 and consequently
agrees, upon proof of any such breach, to the granting of injunctive relief
prohibiting any form of competition with the COMPANY. Nothing herein contained
shall be construed as prohibiting the COMPANY from pursuing any other remedies
available to it for such breach or threatened breach.
13. JURISDICTION AND VENUE. This Agreement is signed, executed and
consummated in the City of Boca Raton, State of Florida, and Florida's laws
shall govern all disputes, controversies and litigation arising hereunder. Venue
with respect to any litigation shall be Palm Beach County, Florida.
14. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between the Parties
and Christie, and all prior written or oral negotiations, representations,
arrangements and/or agreements between any or all of the Parties or Christie
herein are merged into and superseded by this Agreement. The Parties and
Christie release each other from any claims, known or unknown, arising prior to
the date of this Agreement, including, but not limited to, any and all claims
arising out of the Employment Agreement, except as otherwise contemplated by
this Agreement.
(b) All provisions of this Agreement are severable and no provision
hereof shall be affected by the invalidity of any other such provision.
(c) No action by one of the Parties and no refusal or neglect of one of
the Parties to exercise any right hereunder or to enforce compliance with the
terms of this Agreement shall constitute a waiver of any provision herein with
respect to any violations, actions or omissions hereunder, unless such waiver is
expressed in writing by the waiving party.
(d) COMPANY and CONSULTANT shall at reasonable times, upon written
request, provide reasonable access to each other during normal business hours
for inspection of the books and records relating to the performance of this
Agreement as they specifically relate to the compensation addressed in Exhibit
A. Such access shall be subject to Section 7.
(e) For purposes of this Agreement, the singular includes the plural
and VICE-VERSA and the feminine, masculine and neuter include each other.
(f) This Agreement may be amended, altered or changed only through a
written document signed by the Parties.
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(g) Each of the corporate parties to this Agreement have received all
necessary corporate approval.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date set forth above.
COMPANY:
COMPSCRIPT, INC.
By: /s/ XXXXX X. XXXXX
-----------------------
Title: CEO
--------------------
XXXXXXX:
/s/ XXXXXX X. XXXXXXX
---------------------------
Xxxxxx X. Xxxxxxx
XXXXX:
/s/ XXXXXX X. XXXXX
---------------------------
Xxxxxx X. Xxxxx
CONSULTANT:
COMPREHENSIVE FORMULARY
MANAGEMENT, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------
Title: Chairman
--------------------
CHRISTIE:
/s/ XXXXXXX XXXXXXXX
---------------------------
Xxxxxxx Xxxxxxxx
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EXHIBIT A
SCOPE OF SERVICES
1. CONSULTING SERVICES. CONSULTANT will solicit and develop new
business for COMPANY. CONSULTANT will provide the COMPANY reasonably detailed
monthly reports of CONSULTANT's activities including the status of all new
business. CONSULTANT shall devote such time as is reasonably necessary to
perform the services hereunder including maintaining and developing the present
and future PGI Business.
2. COMPENSATION.
(a) CONSULTANT shall receive commissions only for new business on those
sales made by the COMPANY on or after January 1, 1998, which directly and
substantially result from services hereunder by the CONSULTANT under contracts
approved by the COMPANY in writing.
(b) CONSULTANT shall receive a commission (within 30 days of receipt by
COMPANY) on gross revenue (less returns, allowances, or like adjustments allowed
as credits per the underlying customer contract) earned by COMPANY each and
every year from a customer contract referred to in this Exhibit through the term
of such customer contract (including renewals) except as otherwise provided in
this Agreement as follows:
(i) mail order prescription drug programs--1%, as long as
mail order fees are equal to or higher than "AWP" -
18 + $1.50, on PGI business through December 31,
2002. Provided, however, that direct and indirect
rebates on such contracts received (and retained) by
CONSULTANT will be a credit against such compensation
and CONSULTANT will timely notify COMPANY of such
retained rebates;
(ii) home IV therapy--the COMPANY's standard commission
agreement rate unless otherwise negotiated by the
Parties;
(iii) pharmaceutical services to long-term institutional
care facilities--the COMPANY's standard commission
agreement rate unless otherwise negotiated by the
Parties; and
(iv) other services as may be mutually agreed.
3. TERMINATION OF COMPENSATION. The payment of commissions to
CONSULTANT under this Exhibit shall end upon termination of this Agreement,
whether due to expiration of the term described in Section 4, or otherwise;
provided, however, that the COMPANY shall be obligated to pay to CONSULTANT, all
amounts earned by CONSULTANT up through the date of termination. Notwithstanding
the foregoing, all obligations of the COMPANY to pay compensation to CONSULTANT
shall terminate in the event of CONSULTANT's breach of the Section 11
non-compete covenants except as otherwise provided in the Agreement.
COMPANY:
COMPSCRIPT, INC.
/s/ XXXXXX X. XXXXXXX By: /s/ XXXXX X. XXXXX
-------------------------- -------------------------------
Xxxxxx X. Xxxxxxx Title: CEO
----------------------------
CONSULTANT:
COMPREHENSIVE FORMULARY
MANAGEMENT, INC.
/s/ XXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
-------------------------- -------------------------------
Xxxxxx X. Xxxxx Title: Chairman
----------------------------
EXHIBIT B
CUSTOMERS OR CLIENTS OR COMPANY
CONSULTANT agrees that as of the date set forth above, and in accordance with
Sections 9 and 11 of the Agreement, CONSULTANT shall not directly or indirectly
solicit or attempt to solicit any Business from any of the following customers
or clients of the COMPANY:
Blue Cross Blue Shield of Minnesota
Blue Cross Blue Shield of Oklahoma
Blue Cross Blue Shield of Nebraska
Securx Clients
Blue Cross Blue Shield of Wyoming
Blue Cross Blue Shield of Florida
Blue Cross Blue Shield of North Dakota
