EXHIBIT 10.28
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
September 21, 1999, by and between Chemdex Corporation., a Delaware corporation
("Chemdex") and Xxxxxxx Xxxxxxxxxx ("Individual"), an employee of Xxxxxxxx.xxx,
Inc. ("Xxxxxxxx.xxx").
RECITALS
A. Xxxxxxxx.xxx is engaged in the business of operating an online
exchange for buyers and suppliers of specialty medical products.
B. Individual is a stockholder and an employee of Xxxxxxxx.xxx and has
confidential and proprietary information relating to the business and operation
of Xxxxxxxx.xxx.
C. Individual's covenant not to compete with Chemdex, as reflected in
this Agreement, is an essential part of the transactions described in that
certain Agreement and Plan of Merger dated as of September 21, 1999 (the "Merger
Agreement"), among Chemdex, Popcorn Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Chemdex ("Sub"), and Xxxxxxxx.xxx, whereby Sub
will be merged with and into Xxxxxxxx.xxx (the transactions contemplated by the
Merger Agreement are referred to hereinafter as the "Merger").
D. As a condition to its willingness to enter into the Merger Agreement,
Chemdex has required that Individual agree, and Individual has agreed, to the
noncompetition and nonsolicitation covenants and the confidentiality agreements
provided in this Agreement.
E. References to Chemdex hereinafter shall include all subsidiaries of
Chemdex and shall include Xxxxxxxx.xxx which is the surviving corporation in the
Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and to induce Chemdex to
consummate the transactions contemplated by the Merger Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Individual hereby covenants and agrees as follows:
1. Noncompetition.
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(a) Individual and Chemdex agree that due to the nature of
Individual's employment with Xxxxxxxx.xxx, Individual has confidential and
proprietary information relating to the business and operations of Xxxxxxxx.xxx.
Individual acknowledges that such information is of importance to the "Business"
(as defined below) and will continue to be so after the Merger and that
disclosure of such confidential information to others or the unauthorized use of
such
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information by others would cause substantial loss and harm to Xxxxxxxx.xxx and,
following the Merger, Chemdex.
(b) During the period which shall commence at the Effective Time and
shall terminate on the first anniversary of the termination of Individual's
employment with the Company (such period, the "Restricted Period"), Individual
shall not directly or indirectly (including without limitation, through any
Affiliate (as defined below) of Individual), own, manage, operate, control or
otherwise engage or participate in, or be connected as an owner, partner,
principal, creditor, salesman, guarantor, advisor, member of the board of
directors of, employee of or consultant in any entity or business where such
entity or business (i) devotes 20% or more of its resources to a division,
group, or other subset of such entity or business, that is engaging in or is
developing a business competitive with the Business or (ii) generates 20% or
more of its gross revenues or earnings from a business competitive with the
Business.
(c) Notwithstanding the foregoing provisions of Section 1(b) and the
restrictions set forth therein, Individual may own securities in any publicly
held corporation that is covered by the restrictions set forth in Section 1(b),
but only to the extent that Individual does not own, of record or beneficially,
more than 1% of the outstanding beneficial ownership of such corporation.
(d) The restrictions set forth in Section 1(b) shall apply to the
United States (the "Business Area").
(e) "Affiliate" as used herein, means, with respect to any person or
entity, any person or entity directly or indirectly controlling, controlled by
or under direct or indirect common control with such other person or entity.
(f) "Business" as used herein means the operation of a business
primarily engaged in health care e-commerce.
2. Nonsolicitation of Chemdex Employees. During the Restricted Period,
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Individual shall not, without the prior written consent of Chemdex, directly or
indirectly (including without limitation, through any Affiliate of Individual),
solicit, request, cause or induce any person who is at the time, or 12 months
prior thereto had been, an employee of or a consultant of Chemdex to leave the
employ of or terminate such person's relationship with Chemdex.
3. Nonsolicitation of Customers. During the Restricted Period, Individual
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shall not, directly or indirectly (including without limitation, through any
Affiliate of Individual) (i) solicit, induce or attempt to induce any customer
of Chemdex, including but not limited to any customer of Xxxxxxxx.xxx that was a
customer of Chemdex or Xxxxxxxx.xxx while the Individual was an employee of
Chemdex or Xxxxxxxx.xxx, as the case may be, or during the Restricted Period, to
cease doing business in whole or in part with Chemdex with respect to the
Business; (ii) attempt to limit or interfere with any business agreement or
relationship existing between Chemdex and/or its Affiliates with any third
party; or (iii) make materially false statements, or take intentional actions,
which are intended to disparage the business reputation of Chemdex (or its
management team) or take any intentional actions which are intended to result in
material harm
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to Chemdex's goodwill with its customers, content providers, bandwidth or other
network infrastructure providers, vendors, employees, the media or the public.
4. Confidentiality. Prior to the Effective Time, Individual will execute
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Chemdex's standard employee proprietary information and invention assignment
agreement.
5. Stay of Time. In the event that either party shall request a court of
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competent jurisdiction (collectively a "Court") or other entity or person
mutually selected by the parties to determine whether the Individual has
violated the provisions of this Agreement, the running of the time period of
such provisions so violated shall be automatically suspended as of the date of
such violation and shall resume on the date of the final order or remedy that
the Court or other entity or person rules or determines that such violation
occurred.
6. Injunctive Relief. The remedy at law for any breach of this Agreement
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is and will be inadequate, and in the event of a breach or threatened breach by
Individual of the provisions of Sections 1, 2 or 3 of this Agreement,
Xxxxxxxx.xxx and Chemdex shall be entitled to seek an injunction restraining
Individual from the conduct which would constitute a breach of this Agreement.
Nothing herein contained shall be construed as prohibiting Xxxxxxxx.xxx or
Chemdex from pursuing any other remedies available to it or them for such breach
or threatened breach, including, without limitation, the recovery of damages
from Individual.
7. Separate Covenants. This Agreement shall be deemed to consist of a
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series of separate covenants, one for each line of business carried on by the
Business and each county, state, country or other region included within the
Business Area. The parties expressly agree that the character, duration and
geographical scope of this Agreement are reasonable in light of the
circumstances as they exist on the date upon which this Agreement has been
executed. However, should a determination nonetheless be made by a court of
competent jurisdiction at a later date that the character, duration or
geographical scope of this Agreement is unreasonable in light of the
circumstances as they then exist, then it is the intention and the agreement of
Individual that this Agreement shall be construed by the court in such a manner
as to impose only those restrictions on the conduct of Individual that are
reasonable in light of the circumstances as they then exist and as are necessary
to assure Xxxxxxxx.xxx. and Chemdex of the intended benefit of this Agreement.
If, in any judicial proceeding, a court shall refuse to enforce all of the
separate covenants deemed included herein because, taken together, they are more
extensive than necessary to assure Chemdex of the intended benefit of this
Agreement, it is expressly understood and agreed among the parties hereto that
those of such covenants that, if eliminated, would permit the remaining separate
covenants to be enforced in such proceeding shall, for the purpose of such
proceeding, be deemed eliminated from the provisions hereof.
8. Severability. If any of the provisions of this Agreement shall
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otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state, country or jurisdiction are concerned, as not containing the
provision or
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provisions contravening or invalid under the laws of that state or jurisdiction,
and the rights and obligations created hereby shall be construed and enforced
accordingly.
9. Construction. This Agreement shall be construed and enforced in
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accordance with and governed by the laws of the State of Utah, without regard to
principles of conflicts or choice of laws; provided, however, that with respect
to activities occurring in a particular jurisdiction, the law of such
jurisdiction shall apply solely to the extent it results in the greatest
enforcement of the terms of this Agreement.
10. Amendments and Waivers. This Agreement may be modified only by a
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written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No
waiver of any right hereunder shall operate as a waiver of any other right or of
the same or a similar right on another occasion.
11. Entire Agreement. This Agreement, together with the Merger Agreement,
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the offer letter to which this is attached and Chemdex's employee
confidentiality and investors agreement, and the ancillary documents executed in
connection therewith, contains the entire understanding of the parties relating
to the subject matter hereof, supersedes all prior and contemporaneous
agreements and understandings relating to the subject matter hereof and shall
not be amended except by a written instrument signed by each of the parties
hereto.
12. Counterparts. This Agreement may be executed by the parties in
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separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.
13. Section Headings. The headings of each Section, subsection or other
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subdivision of this Agreement are for reference only and shall not limit or
control the meaning thereof.
14. Assignment. Neither this Agreement nor any right, remedy, obligation
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or liability arising hereunder or by reason hereof nor any of the documents
executed in connection herewith may be assigned by any party without the consent
of the other parties; provided, however, that Chemdex and Xxxxxxxx.xxx may
assign their rights hereunder, without the consent of Individual, to any entity
that acquires or succeeds to the Business.
15. Further Assurances. From time to time, at Chemdex's request and
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without further consideration, Individual shall execute and deliver such
additional documents and take all such further action as reasonably requested by
Xxxxxxxx.xxx or Chemdex to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of this Agreement.
16. Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed given if delivered personally or two business days
after being mailed by registered or certified mail (return receipt requested) to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
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(a) if to Chemdex:
Chemdex Corporation
0000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
(b) if to Individual:
to the address set forth below the name of Individual on the
signature page hereof.
17. Effectiveness. Notwithstanding any other provision of this Agreement,
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this Agreement shall become effective only upon the Effective Time, and if such
Effective Time shall not occur prior to the termination of the Merger Agreement
this Agreement shall be deemed void ab initio and have no further force or
effect upon such termination of the Merger Agreement.
19. Defined Terms. Capitalized terms not otherwise defined herein shall
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have the meanings given to them in the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Noncompetition
Agreement as of the date first above written.
CHEMDEX CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
INDIVIDUAL:
/s/ Xxxxxxx Xxxxxxxxxx
______________________
Address c/o Promedix, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX
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