Exhibit 10.17
COVENANT NOT TO COMPETE
BIODELIVERY SCIENCES INTERNATIONAL, INC.
This Covenant Not to Compete is made and entered into by and between
BioDelivery Sciences International, Inc., an Indiana corporation (hereinafter
referred to as the "Company"), and Xxxxxxx X. X'Xxxxxxx, MD (hereinafter
referred to as the "Second Party").
R E C I T A L S :
WHEREAS, the Company is engaged in the business of developing and
commercializing proprietary and patented cochleate delivery technology (the
Business");
WHEREAS, Second Party has executed an Employment Agreement with the
Company;
WHEREAS, Second Party acknowledges that the Company's Business
activities extend throughout the United States;
WHEREAS, Second Party acknowledges that through such employment he has
and/or may acquire a special knowledge of the Company's Business; and the
clients, accounts, business lists, prospects, records, corporate policies,
operational methods and techniques and other useful information and trade
secrets of the Company (hereinafter all collectively referred to and defined as
"Confidential Information");
WHEREAS, Second Party acknowledges that the Company's legitimate
business interests include the Confidential Information and the Company's
customer goodwill (hereinafter referred to and defined as the "Company's
Legitimate Business Interests") and that the Company's Legitimate Business
Interests would be harmed if Second Party engaged in competitive activities with
the Company anywhere in the world; and
WHEREAS, the Company and Second Party, pursuant to the provisions of
this Agreement, wish to enter into an agreement as embodied herein whereby
Second Party will refrain from owning, managing, or in any manner or capacity
working for a business developing and commercializing proprietary and patented
cochleate delivery systems and from soliciting customers of the Company and
employees of the Company for competitive purposes as defined herein during
Second Party's employment with the Company and during the period of five years
after Second Party's cessation of employment with the Company in the
geographical location of anywhere in the world.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and for additional
good and valuable consideration the receipt and sufficiency of which is
acknowledged by the parties, including, but not limited to, the Second Party's
employment with the Company and the continuation of the Second Party's
employment with the Company, the parties mutually agree as follows:
1. CONFIRMATION OF RECITALS - The foregoing recitals are true and
correct and are hereby ratified and confirmed by the parties and made an
integral part of this Agreement; as such,
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the recitals shall be used in any construction of this Agreement, especially as
it relates to the intent of the parties.
2. DEFINITION OF COMPETITION - For purposes of this Agreement
"Competitive Activity" shall mean the development, manufacturing or sale of any
cochleate based delivery system.
3. NON-COMPETE - The Second Party will not do, or intend to do, any of
the following, either directly or indirectly, during Second Party's employment
with the Company and during the period of two (2) years after Second Party's
cessation of employment with the Company, anywhere in the world:
a. Own, manage, operate, control, consult for, be an officer
or director of, work for, or be employed in any capacity by any company or any
other business, entity, agency or organization which conducts a mail order
specialty pharmacy business; or
b. Solicit prior or current customers of the Company for any
purpose in competition (as defined herein) with the Company; or
c. Solicit any then current employees employed by the Company
without the Company's consent.
The Second Party and Company agree that the phrase
"Second Party's cessation of employment with the Company" as used in this
Agreement, refers to any separation of Second Party from his employment at the
Company either voluntarily or involuntarily, either with cause or without cause,
or whether the separation is at the behest of the Company or the Second Party
(hereinafter referred to and defined as "Second Party's Cessation of
Employment").
The Employment Agreement between Second Party and the
Company expressly authorizes and permits Second Party to continue in or enter
into employment and ownership relationships with other entities. Entering into
and carrying out such employment and ownership relationships permitted by the
Employment Agreement between the Company and Second Party shall not be deemed to
be a violation of this Covenant Not to Compete provided that such entities are
not engaged in the business of developing and commercializing proprietary and
patented cochleate delivery technology. Furthermore, such companies, by virtue
of an employment or ownership relationship with Second Party, shall not be
deemed to have participated in any violation or breach of this Agreement.
4. INJUNCTION AND DAMAGES - Second Party agrees that this Agreement is
important, material, confidential, and gravely effects the effective and
successful conduct of the business of the Company, and it effects its reputation
and good will and is necessary to protect the Company's Legitimate Business
Interests. Second Party recognizes and agrees that the Company will suffer
irreparable injury in the event of Second Party's breach of any covenant or
agreement contained herein and cannot be compensated by monetary damages alone,
and Second Party therefore agrees that the Company, in addition to and without
limiting any other remedies or rights that it may have, either under this
Agreement or otherwise, shall have the right to obtain injunctive relief, both
temporary and permanent, against the Second Party from any court of competent
jurisdiction. Second Party further agrees that in the event of Second Party's
breach of any covenant or agreement
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contained herein, the Company, in addition to its right to obtain injunctive
relief, shall further be entitled to seek damages, including, but not limited
to, compensatory, incidental, consequential, exemplary, and lost profits
damages. Second Party agrees to pay the Company's reasonable attorney's fees and
costs for enforcement of this Agreement, if the Second Party breaches this
Agreement.
5. MISCELLANEOUS - Wherever used in this Agreement, the phrase
"directly or indirectly" includes, but is not limited to Second Party acting
through Second Party's wife, children, parents, brothers, sisters, or any other
relatives, friends, trustees, agents, associates or entities with which Second
Party is affiliated with in any capacity. The Company may waive a provision of
this Agreement only in a writing signed by a representative of the Board of
Directors of the Company and specifically stating what is waived. The rights of
the Company under this Agreement may be assigned; however, the covenants,
warranties, and obligations of the Second Party cannot be assigned without the
prior written approval of the Company. The title of this Agreement and the
paragraph headings of this Agreement are not substantive parts of this Agreement
and shall not limit or restrict this Agreement in any way. This Agreement
survives after the Second Party's Cessation of Employment. No change, addition,
deletion, or amendment of this Agreement shall be valid or binding upon Second
Party or the Company unless in writing and signed by Second Party and the
Company. In the event a court of competent jurisdiction determines any covenant
set forth herein to be too broad to be enforceable or determines this Agreement
to be unreasonable, then said court may reduce the geographical area and/or the
length of time provisions herein, in order to make this Agreement enforceable
and reasonable. This Agreement shall be governed by Missouri law. The parties
agree that venue for any action brought under this Agreement shall be in the
state of New York. In construing this Agreement, neither of the parties hereto
shall have any term or provision construed against such party solely by reason
of such party having drafted same as each provision of this Agreement is deemed
by the parties to have been jointly drafted by the Company and Second Party.
6. SUPERSEDES PRIOR AGREEMENT - This Covenant Not to Compete shall
commence upon the date hereof. This Agreement shall, upon its commencement,
supersede any prior Covenants Not to Compete between Second Party and the
Company.
7. SECOND PARTY ACKNOWLEDGMENT - The Second Party, acknowledges that he
has voluntarily and knowingly entered into this Agreement and that this
Agreement encompasses the full and complete agreement between the parties with
respect to the matters set forth herein.
Executed on this 1 day of April 2002.
BIODELIVERY SCIENCES INTERNATIONAL, INC. SECOND PARTY
By: /s/ Xxxxx X. XxXxxxx /s/ Xxxxxxx X. X'Xxxxxxx
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Xxxxx X. XxXxxxx Its CFO Xxxxxxx X. X'Xxxxxxx
