Exhibit 10.10
RESTRICTIVE COVENANTS AGREEMENT
AND AGREEMENT NOT TO COMPETE
This AGREEMENT (the "Agreement") is made this 19/th/ day of October, 2001,
and is effective as of the date indicated on the signature page hereof, by and
between Discount Rx, Inc., ("Employer") and Xxxxxxx Xxxxxxx Xxxxx, ("Employee"),
the employee of Employer identified on the signature page hereof, and the entity
formerly known as Xxxxxx & Xxxxxx, Inc., by and through its President, Xxxxxxx
Xxxxxxx Xxxxx ("P&W").
RECITALS
Employer is engaged in the business of wholesale distribution of
pharmaceuticals including sales and distribution in the territory described
elsewhere in this Agreement. Employee is employed by Employer, pursuant to an
Employment Agreement executed by Employer and Employee contemporaneously
herewith.
Employer has entered into that certain Agreement for Purchase and Sale of
Assets of Xxxxxx & Xxxxxx, Inc., and had closed the transactions contemplated
therein contemporaneously herewith. As such, Employer has acquired the Operating
Assets of P&W, including, but not limited to the name "Xxxxxx & Xxxxxx, Inc.,"
business records, the goodwill associated with P&W's business, and all
proprietary information or property relating to P&W's business or business
prospects.
Employer has developed, and continues to develop, certain proprietary
information regarding its business operations and customers (the "Proprietary
Company Information") that is very valuable to Employer and the continued
confidentiality of which is essential to Employer's continued success. In the
course of his employment, Employee will or has gained knowledge of the
Employer's Proprietary Company Information including but not limited to the
business, affairs, clients and methods of Employer. In the course of his
employment, Employee will have or has access to lists of Employer's clients, and
their needs and will or has become personally known to and acquainted with
clients serviced by Employer, establishing a personal relationship with such
clients for the benefit of Employer. In the course of his employment, Employee
will have or has access to lists of Employer's employees and employee candidates
recruited, hired and placed through Employer and will or has become personally
known to and acquainted with such employees thereby establishing a personal
relationship with such employees for the benefit of Employer. Employee will be
or has been trained at the expense of Employer in the sale of Employer's
services through the use of techniques, systems, forms and methods used and
devised by Employer.
Employee and P&W acknowledge that Employer would suffer irreparable harm if
Employee were to use such knowledge, relationships and information (including
Proprietary Company Information) for any purpose other than the benefit of
Employer.
Employer and Employee acknowledge that Employee has executed
contemporaneously herewith an Employment Agreement and that Employee has been
granted certain rights to an Option, as defined therein, as well as 25,000
shares of Common Stock of DrugMax, Inc. ("Common Stock"), all of which is more
completely set forth therein. Employee acknowledges that the covenants,
agreements, and obligations he makes herein are made in partial consideration of
the grant by Discount Rx, Inc. of the Option and the Common Stock.
EMPLOYER, EMPLOYEE, AND P&W AGREE AS FOLLOWS:
1. Proprietary Company Information. Employee and P&W acknowledge and agree
that Proprietary Company Information means the information described above
and any and all data and information relating to the business of Employer
(i) of which the Employee becomes aware as a consequence of his employment
by Employer, (ii) which has actual or potential economic value to Employer
from not being generally known to other persons who could obtain economic
value from its disclosure or use, and (iii) which is the subject of
reasonable efforts by Employer to maintain its secrecy or confidentiality.
Proprietary information may include, but is not limited to, client lists,
sales and marketing information, identity and location of Employer's
clients and suppliers, fee schedules, pricing information, client account
records, training and operations material and memoranda, personnel records,
employee lists, code books, pricing information, details of client or
supplier contracts, operational methods, product or service development
techniques or plans, new personnel acquisition plans, financial information
concerning or relating to the business, accounts, clients, employees and
affairs of Employer, and all physical embodiments of the foregoing, if such
information is given to, developed by or acquired by Employee during
Employee's employment with Employer. Employee acknowledges that the
relationships Employee establishes with Employer's clients are a result of
the employment relationship and any beneficial interest derived from such
relationship is proprietary to Employer.
Employee and P&W acknowledge and agree that all Proprietary Company
Information, and all physical embodiments thereof, are confidential to, and
shall be and remain the sole and exclusive property of, Employer. Upon
request by Employer, and in any event upon termination of his employment
with Employer for any reason, as a prior condition to receiving any final
wage or salary check, Employee shall promptly deliver to Employer all
property belonging to Employer including, without limitation, all
Proprietary Company Information (and embodiments thereof) then in
Employee's custody, control or possession.
2. Restrictions on Disclosure of Proprietary Company Information. In
consideration of Employee's employment and/or continued employment,
Employee covenants and agrees that Employee shall not at any time, whether
or not employed by the Employer (i) divulge to any person (other than
Employer) any Proprietary Company Information but shall keep secret and
retain in strictest confidence any and all such Proprietary Company
Information, (ii) use any such Proprietary Company Information for his own
benefit or for the benefit of any other person (other than Employer) or
(iii) permit any person (other than Employer) to examine any documents or
records which contain or are derived from or in any way disclose any such
information or data; provided, however, that Employee
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shall be free to disclose any such information or data to the extent, but
only to the extent, such information or data has intentionally and
explicitly been made public by Employer or is or becomes otherwise
generally available to the public other than as a result of an unauthorized
disclosure by anyone, or Employee is required by applicable law or the
order of any court to disclose such information or data. Further P&W
covenants and agrees that P&W shall not at any time (i) divulge to any
person (other than Employer) any Proprietary Company Information but shall
keep secret and retain in strictest confidence any and all such Proprietary
Company Information, (ii) use any such Proprietary Company Information for
its own benefit or for the benefit of any other person (other than
Employer) or (iii) permit any person (other than Employer) to examine any
documents or records which contain or are derived from or in any way
disclose any such information or data; provided, however, that P&W shall be
free to disclose any such information or data to the extent, but only to
the extent, such information or data has intentionally and explicitly been
made public by Employer or is or becomes otherwise generally available to
the public other than as a result of an unauthorized disclosure by anyone,
or Employee is required by applicable law or the order of any court to
disclose such information or data.
3. Territory. Employer, Employee, and P&W agree that the Territory subject to
the covenants of this Agreement shall extend to each and every parish or
county specified on the attached Schedule A because Employer, Employee and
P&W agree and acknowledge that Employer currently conducts its business of
wholesale distribution of pharmaceuticals in each and every parish or
county listed on Schedule A.
Employer and Employee agree that upon termination of the employment
relationship, Schedule A shall be considered and treated as expanded to
include any additional counties or parishes where Employee may after
execution of this Agreement provide or have provided services for Employer,
even if Employer and Employee do not actually update Schedule A to reflect
such expansion.
4. Non-Solicitation of Employer's Clients. In consideration of Employee's
employment and/or continued employment, and Employer's providing Employee
with Proprietary Company Information and training, Employee covenants and
agrees that for a period of one (1) year following termination of
employment for any reason, Employee will not solicit, contact, or
communicate with, directly or by assisting others, for his own competing
business or the competing business of another, for the wholesale
distribution of pharmaceuticals to clients of Employer's business. The
restrictions in this Paragraph are valid only in the Territory specifically
described in Paragraph 3.
5. Non-Recruitment of Employer's Employees. In consideration of Employee's
employment and/or continued employment and training, and Employer's
providing Employee with Proprietary Company Information, Employee covenants
and agrees that for a period of one (1) year following termination of
employment for any reason, Employee will not recruit or hire, or attempt to
recruit or hire, directly or by assisting others, any other employee of
Employer who works or worked within such Territory specifically described
in Paragraph 3 prior to Employee's termination from employment.
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6. Non-Compete Covenant. Employee covenants and agrees that for a period of
one (1) year following Employee's termination, for any reason, from
Employer, Employee shall not carry on or engage in the business of
wholesale distribution of pharmaceuticals to its clients, either as a
partner, principal, stockholder, or otherwise, in the area or Territory
described in Paragraph 3. Employee further agrees that for a period of one
(1) year following termination for any reason from Employer, Employee will
refrain from employment involving work, duties, or responsibilities that
would violate the covenants set out in Xxxxxxxxxx 0, 0, xxx 0. Xxxxxxx, X&X
covenants and agrees that for a period of one (1) year from the Effective
Date of this Agreement, it shall not carry on or engage in the business of
wholesale distribution of pharmaceuticals to Employer's clients, in the
area or Territory described in Paragraph 3.
7. Covenant Not to Accept Employment with Customers or Suppliers. In further
consideration of Employee's continued employment and in recognition of the
substantial cost of training Employee, Employee will refrain from seeking
or accepting employment with any current or former customer or supplier of
the Employer without written consent by the Employer so long Employee is
employed by the Employer and for a period of six months following
termination of employment from the Employer.
8. Remedies. Employer, Employee, and P&W agree that because the rights of
Employer hereunder are unique, any failure of Employee or P&W to perform
and comply with Employee's or P&W's respective obligations under this
Agreement may cause irreparable harm and injury to Employer for which any
remedies at law may be inadequate. Accordingly, Employee, Employer and P&W
agree that Employee's or P&W's actual, threatened or attempted breach of
Employee's or P&W's respective obligations or covenants set forth in this
Agreement, shall entitle Employer to recover damages for any loss sustained
and the profit of which Employer has been deprived. Additionally, upon such
breach, Employer is entitled, without bond, to temporary and permanent
injunctions enjoining and restraining such breach, without Employer being
required to show actual damages or irreparable injury.
9. Severability. Employer, Employee, and P&W desire that this Agreement be
enforced to the fullest extent permissible under the laws and public
policies of each state to which this Agreement is applicable. Accordingly,
if any provision of this Agreement or the application thereof to any person
or circumstance is invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
10. Waiver of Breach. The waiver by a party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach. Further, Employer will not be deemed as a consequence of
any act, delay, failure, omission, forbearance or other indulgence granted
by it from time to time or for any other reason: (i) to have waived, or to
be estopped from exercising, any of its rights or remedies under this
Agreement or (ii) to have modified, changed, amended, terminated,
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rescinded, or superseded any of the terms of this Agreement unless such
waiver, modification, amendment, change, termination, rescission, or
supercession is express, in writing and signed by Employer's authorized
officer. A waiver expressly made in writing on one occasion will be
effective only in that specific instance and only for the precise purpose
for which given, and will not be construed as a consent to or a waiver of
any right or remedy on any future occasion. No notice to or demand on
Employee will entitle Employee to any other or future notice or demand in
similar or other circumstances.
11. Trade Secrets. This Agreement does not limit rights which Employer has or
may have under any applicable law with respect to information which
constitutes a trade secret.
12. Entire Agreement. This Agreement constitutes the entire understanding
between Employer and Employee with respect to the matters provided for
herein, and supersedes all prior discussions, negotiations, commitments,
writings and undertakings related hereto.
13. Amendment. The parties may amend, modify, supplement or terminate this
Agreement in any manner as may be agreed upon in writing by the parties.
14. Counterparts. This Agreement may be executed by the parties in one (1) or
more counterparts, each of which shall be deemed an original and shall
constitute one and the same instrument.
15. Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws and not the choice of law
rules of the State of Louisiana.
16. Waiver of Jury Trial. Employer, Employee, and P&W, hereby knowingly,
voluntarily, and irrevocably waive their right to a trial by jury and agree
that in any legal proceeding arising out of or relating to this agreement
or the transactions contemplated hereby such dispute shall be decided
solely by a judge (without the use of a jury) sitting in a court of
competent jurisdiction. This jury trial waiver provision shall survive
termination of this Agreement.
17. Attorney Fees. If Employer brings a claim or action alleging a breach of
this Agreement, Employer shall be entitled to recover its reasonable
attorney fees in addition to any other damages or costs which are
recoverable.
18. Notices. Any notice or other communication required or permitted to be
given or made by any party to another in connection with this Agreement
shall be given in writing and served by depositing same in the United
States mail, postage prepaid and registered or certified with return
receipt requested, as follows: if to the Company, then to the following
address: Discount Rx, Inc., 00000 Xxxxxxx Xxxx, Xxxxx X, Xxxxx, Xxxxxxx
00000; if to the Employee, then to his or her address on record with the
Company.
19. Survival. The obligations of the parties shall survive termination of this
Agreement to the full extent necessary to protect the interests of the
party in whose favor they run.
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20. Headings. The headings used in this Agreement are used merely for the
convenience of the parties, and in no way are meant to limit the meaning or
intent of the language contained therein.
21. Assignment. The rights and obligations set forth in this Agreement shall
bind and inure to the benefit of any and all parents, subsidiaries,
divisions, affiliates of Employer, and/or to any successors or Employer,
and/or to any assignee of all or substantially all of Employer's business
or properties with respect to which Employee shall be employed. Employer
may assign this Agreement, in whole or in part, to any other party.
Employee may not assign this Agreement.
22. Acknowledgment. Employee hereby acknowledges that he has read, understands
and expressly agrees to the terms of this Agreement, including without
limitation the provisions governing the length of the agreements not to
solicit or recruit or compete in violation of this Agreement, the waiver of
the right to a trial by jury, and the choice of forum and governing law.
Further, P&W, by and through its President, Xxxxxxx X. Xxxxx, acknowledges
that it has read, understands and expressly agrees to the terms of this
Agreement, including without limitation the provisions governing the length
of the agreements not to solicit or recruit or compete in violation of this
Agreement, the waiver of the right to a trial by jury, and the choice of
forum and governing law.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the 19th day
of October, 2001.
Discount Rx, Inc., Employer
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
/s/ Xxxxxxx X. Xxxxx
----------------------------
Xxxxxxx X. Xxxxx, Employee
Xxxxxx & Xxxxxx, Inc.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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Schedule A
RESTRICTIVE COVENANTS TERRITORY
Louisiana Parishes
Jefferson St. Xxxxxxx Orleans
