Exhibit 10.5
NON-COMPETITION AGREEMENT
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This Agreement (the "Agreement") is entered into this ___ day of
__________, 19__, by Xxxxxxx X. Xxxxx, Ph.D. ("Stockholder") in favor of Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation (the "Company"). For purposes of
this Agreement, all references to the Company shall include each of its
Affiliates. As used in this Agreement, a corporation, partnership, limited
liability company or other business entity shall be deemed to be an "Affiliate"
of the Company if (i) the Company directly or indirectly owns in excess of fifty
percent (50%) of the voting securities or interests of such entity, or (ii) such
entity directly or indirectly owns in excess of fifty percent (50%) of the
voting securities or interests of the Company.
WHEREAS, the Company, Jazz Merger Corp., a Delaware corporation ("Xxxxxx
Sub") and TheraTech, Inc., a Delaware corporation ("TheraTech"), are parties to
an Agreement and Plan of Merger dated as of October 21, 1998 (the "Merger
Agreement"), pursuant to which TheraTech will merge with and into Xxxxxx Sub
(the "Merger"), with TheraTech surviving the Merger; and
WHEREAS, as a condition to the willingness of the Company to enter into the
Merger Agreement, the Company has required that Stockholder agree, and in order
to induce the Company to enter into the Merger Agreement, Stockholder has agreed
to enter into this Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing, the consummation of the
Merger by the Company and for other good and valuable consideration, the receipt
and sufficiency of which Stockholder hereby acknowledges, Stockholder agrees as
follows:
1. Non-Solicitation Covenants. Stockholder covenants that he will not, for
a period of three (3) years after the date hereof, directly or indirectly, on
his own behalf or on behalf of any other person or entity, without the express
written permission of the Company: (a) solicit, hire or attempt to hire or
employ any employee of the Company or its Affiliates on behalf of an individual
or other entity which provides the same or similar services, processes or
products as the Company or its Affiliates; (b) induce or attempt to induce any
employee of the Company or its Affiliates to leave his or her employ with the
Company or its Affiliates; (c) induce or attempt to induce any customer,
supplier, vendor, joint venture partner or any other person to curtail or cease
doing business with the Company or its Affiliates; or (d) solicit or attempt to
solicit any customer of the Company on behalf of an individual or other entity
which provides the same or similar services, processes or products as the
Company or its Affiliates.
2. Non-Competition. Stockholder further agrees as follows
a. Except as otherwise provided herein, or for and on behalf of the
Company, Stockholder agrees that for a period of two (2) years from the date
hereof, he will not, without the express written consent of the Company, either
directly or indirectly, own, manage, operate, control, be employed or retained
by, or in any way engage in or be connected with any Business Enterprise (as
defined below), in any capacity whatsoever, including, but not limited to, as a
partner, owner, creditor, director, officer, employee, agent or independent
contractor, in the geographic territories served by TheraTech. For purposes of
this Agreement, the term Business Enterprise shall mean (i) any entity primarily
engaged in the the sale, distribution, manufacture, and/or development of
alternative drug delivery products; or (ii) any business segment of any entity
engaged in the sale, distribution, manufacture, and/or development of
alternative drug delivery products or any other business in which TheraTech is
currently engaged, but, in the case of subsection (ii) the definition of
Business Enterprise shall not include the portion of any business entity not
engaged in any of the foregoing activities.
b. Stockholder's ownership of less than one percent of the
outstanding equity securities of a firm which is listed on a national or
regional securities exchange market shall not, in itself, constitute a violation
of this Section 2.
3. General Terms.
a. Stockholder acknowledges that any breach of any obligation
contained in this Agreement is not adequately compensable by monetary damages,
and Stockholder agrees that any such breach shall cause the Company irreparable
harm for which the Company shall be entitled to a temporary restraining order
and preliminary injunction without prior notice to Stockholder. Any and all
attorneys' fees, costs and expenses incurred by the Company in enforcing the
terms of this Agreement shall be reimbursed to the Company by Stockholder.
b. In the event that any body of competent jurisdiction shall
determine that any of the restrictive covenants in this Agreement are
inequitably broad, it is the intention and agreement of the parties that the
decision-maker shall equitably adjust the obligations of Stockholder under this
Agreement to include the maximum reasonable restriction allowed by law rather
than entirely eliminate any such obligations. In the event that the decision-
maker shall equitably adjust or eliminate any of the restrictive covenants in
this Agreement all other aspects of this Agreement shall remain in full force
and effect.
c. In the event that any provision of this Agreement is determined by
any body of competent jurisdiction to be unenforceable, illegal or contrary to
public policy, that body shall modify such provision to conform to public
policy, or to interpret it in such a way as to render it enforceable and legal,
in accordance with the intent of the parties as expressed herein. In the event
that a body of competent jurisdiction decides that any provision of this
Agreement is unenforceable, illegal or contrary to public policy and cannot be
reformed, only such provision shall be affected and all other provisions of this
Agreement shall remain in full force and effect.
d. This Agreement shall be binding upon Stockholder and inure to the
benefit of the Company and its successors and assigns.
e. This instrument contains the entire agreement of the Company and
Stockholder with respect to the subject matter hereof and supersedes all prior
understandings and agreements of the Company and Stockholder with respect to the
subject matter hereof.
f. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts made and to be
performed therein.
g. The rights and remedies enumerated herein, are in addition to any
rights or remedies the Company may have under any other agreement, and shall not
be construed as a release, waiver or modification of any of the terms,
conditions, representations, warranties, covenants, rights or remedies set forth
in any other agreement, including without limitation, any rights or remedies the
Company has under the employment agreement dated May 1, 1998, as amended,
between TheraTech and Stockholder.
IN WITNESS WHEREOF, Stockholder has caused this Agreement to be duly
executed as of the day and year first above written.
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Xxxxxxx X. Xxxxx, Ph.D.
