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EXHIBIT 10.106
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of August 20, 2001, by and between drkoop LifeCare, Inc., a Delaware
corporation (the "Company"), and G. Xxxxx Xxxxxx, Jr. ("Employee").
RECITALS
WHEREAS, the Company desires to obtain the services of Employee as
its President in the manner hereinafter specified, and also to make provisions
for the payment of compensation to Employee for such services; and
WHEREAS, Employee is willing to be employed by the Company as its
President and to perform the duties incident to such employment upon the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Start Date. The "Term of Employment" (as defined herein) shall
commence as of the date hereof, which date shall be referred to herein as the
"Start Date."
2. Position and Duties.
(a) The Company hereby employs Employee as the President of the
Company commencing as of the Start Date for the Term of Employment. In this
capacity, Employee shall devote his best efforts to the performance of the
services customarily incident to such office and position and to such other
services of as may be requested by the Chief Executive Officer of the Company
which may include services for xxxxxx.xxx, Inc., a Delaware corporation
("Parent") or one or more other subsidiaries of Parent (provided that Employee's
duties for Parent or any such subsidiary remain consistent with Employee's
duties under this Agreement). Employee, in his capacity as an employee of the
Company, shall be responsible to and obey the reasonable and lawful directives
of the Chief Executive Officer of the Company. Employee shall report to the
Chief Executive Officer or any other person designated by the Chief Executive
Officer, and Employee shall have such authority and duties as are customary in
such position.
(b) Employee shall devote all of his business time and attention
to such duties, except for sick leave, reasonable vacations, and excused leaves
of absence as more particularly provided herein. Notwithstanding the foregoing,
to the extent that the time so spent does not conflict with the Company's
business, Employee may devote time to personal and
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family investments. The existence of such a conflict shall be determined in good
faith by the Board of Directors of Parent (the "Board"). Employee shall use his
best efforts during the Term of Employment to protect, encourage, and promote
the interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay to Employee during the
Term of Employment a base salary at the rate of Three Hundred Thousand Dollars
($300,000) per calendar year. Such salary shall be payable at least semi-monthly
in accordance with the Company's normal payroll procedures. (Employee's annual
salary, as set forth above or as it may be increased from time to time in the
Board's sole discretion, shall be referred to hereinafter as the "Base Salary."
The Company will review Employee's salary annually.)
(b) Performance Bonus. In addition to the compensation otherwise
payable to Employee pursuant to this Agreement, Employee shall be eligible to
receive additional annual bonuses to the extent, if any, approved by the Board
in its sole discretion.
4. Benefits. During the Term of Employment:
(a) Employee shall be eligible to participate in any life,
health and long-term disability insurance programs, pension and retirement
programs, stock option and other incentive compensation programs, and other
fringe benefit programs made available to executive employees of the Company
from time to time, and Employee shall be entitled to receive such other fringe
benefits as may be granted to him from time to time by the Board. Nothing
herein, however, is intended or shall be construed to require the Company to
institute or continue all, or any particular, plan or benefits.
(b) Employee shall be allowed four (4) weeks vacation with pay,
and leaves of absence with pay in accordance with the Company's policies in
effect from time to time.
(c) The Company shall reimburse Employee in accordance with the
policies of the Company, as adopted and amended from time to time, for
reasonable and necessary business expenses incurred in performing Employee's
duties and promoting the business of the Company, including, cellular telephone,
travel and lodging expenses; provided Employee shall, as a condition of such
reimbursement, submit verification of the nature and amount of such expenses in
accordance with the business expense reimbursement policies from time to time
adopted by the Company.
5. Term; Termination of Employment. As used herein, the phrase "Term
of Employment" shall mean the period commencing on the Start Date and ending one
(1) year from the Start Date; provided that as of the expiration date of such
initial one (1) year Term of Employment and (ii) if applicable, any Renewal
Period (as defined below), the Term of Employment shall automatically be
extended for one (1) year periods (each a "Renewal Period") unless either the
Company or Employee provides two (2) months notice to the contrary prior to
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the end of the Term of Employment or applicable Renewal Period. Notwithstanding
the foregoing, the Term of Employment shall expire on the first to occur of the
following:
(a) Termination by the Company Without Cause. Notwithstanding
anything to the contrary in this Agreement, whether express or implied, the
Company may, at any time, terminate Employee's employment for any reason other
than Cause (as defined below) by giving Employee at least thirty (30) days prior
written notice of the effective date of termination. In the event Employee's
employment hereunder is terminated by the Company other than for Cause, Employee
shall be entitled to receive his Base Salary as he would have received such
amounts during the period commencing on the effective date of such termination
and ending six (6) months after such date of termination, whether during the
initial Term of Employment, a Renewal Period or otherwise (such period
hereinafter referred to as the "Salary Continuation Period"), as if Employee
were still employed hereunder during the Salary Continuation Period; provided
that the Company's election not to extend the Term of Employment for any Renewal
Period shall be treated as a termination by the Company without Cause.
(b) Termination for Cause. The Company shall have the right to
terminate Employee's employment at any time for Cause (as defined below) by
giving Employee written notice of the effective date of termination (which
effective date may, except as otherwise provided below, be the date of such
notice). If the Company terminates Employee's employment for Cause, Employee
shall be paid his unpaid Base Salary through the date of termination, and the
Company shall have no further obligation hereunder from and after the effective
date of termination and shall have all other rights and remedies available under
this or any other agreement and at law or in equity.
For purposes of this Agreement, "Cause" shall mean:
(i) theft, forgery, fraud, misappropriation, embezzlement,
moral turpitude or other act of material misconduct against the
Company or any of its affiliates;
(ii) fraudulent or willful and material misrepresentations
or concealments on any written reports submitted to the Company or
any of its affiliates;
(iii) Employee's violation of the Company's substance abuse
policy;
(iv) gross negligence or material misconduct in the
performance of the duties of Employee required hereunder or his
habitual neglect thereof;
(v) a material failure by Employee to follow or comply with
the lawful directives of the Board;
(vi) a material breach by Employee of the provisions of this
Agreement or other agreements with the Company;
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(vii) willful and knowing violation of any rules or
regulations of any governmental or regulatory body, which is or is
reasonably expected to be materially injurious to the financial
condition of the Company;
(viii) Employee's conviction of, or plea of nolo contendere
to, any felony or to any crime or offense causing substantial harm
to the Company or any of its affiliates (whether or not for personal
gain) or involving acts of theft, forgery, fraud, misappropriation,
embezzlement, moral turpitude or similar conduct;
(ix) Employee shall become associated with any company in
the tobacco industry;
(xi) a material violation of any fiduciary duty owed to the
Company; or
(xii) engagement in any act (including, but not limited to,
unlawful discriminatory conduct) that results in substantial injury
to the reputation, business or business relationships of the Company
or that, in each case, has subjected, or if generally known would
subject, the Company to public ridicule or embarrassment.
provided, however, that in the case of the foregoing clauses (iv),
(v) and (vi) Employee shall have been informed, in writing, of such material
failure referred to in the foregoing clauses (iv), (v) and (vi) and provided
with a reasonable opportunity to cure such material failure, if such failure is
subject to cure (if such failure is subject to cure, "reasonable opportunity to
cure" shall mean a period of thirty (30) days).
(c) Resignation for Good Reason. Employee may terminate his
employment for Good Reason (as defined below) by giving the Company at least
thirty (30) days prior written notice of the effective date of termination. In
the event Employee's employment hereunder is terminated by Employee for Good
Reason, Employee shall be entitled to receive his Base Salary as he would have
received such amounts during the Salary Continuation Period, whether during the
initial Term of Employment, a Renewal Period or otherwise, as if Employee were
still employed hereunder during the Salary Continuation Period.
For purposes of this Agreement, "Good Reason" shall mean:
(i) (a) the assignment of Employee without his consent to a
position, responsibilities or duties of a materially lesser status
or degree of responsibility than his position, responsibilities or
duties at the Start Date which remains uncured for at least 30 days
after receipt of notice thereof given by Employee; or
(ii) any material breach by the Company in performing its
obligations hereunder which remains uncured for at least 30 days
after receipt of notice thereof given by Employee.
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(d) Termination on Account of Death. In the event of Employee's
death while in the employ of the Company, his employment hereunder shall
terminate on the date of his death and Employee shall be paid his unpaid Base
Salary through the date of termination. In addition, any other benefits payable
on behalf of Employee shall be determined under the Company's insurance and
other compensation and benefit plans and programs then in effect in accordance
with the terms of such programs.
(e) Termination on Account of Disability. To the extent not
prohibited by The Americans With Disabilities Act of 1990, if, as a result of
Employee's incapacity due to physical or mental illness (as determined in good
faith by a physician acceptable to the Company and Employee), Employee is unable
to substantially render to the Company the services required under this
Agreement for more than ninety (90) days out of any consecutive one hundred and
eighty (180) day period or if a physician acceptable to the Company advises the
Company that it is likely that Employee will be unable to return to the
performance of his duties for more than ninety (90) days out of any consecutive
one hundred and eighty (180) day period his employment may be terminated for
"Disability." During any period that Employee fails to perform his duties with
the Company as a result of incapacity due to physical or mental illness, he
shall continue to receive his Base Salary and other benefits provided hereunder,
together with all compensation payable to him under the Company's disability
plan or program or other similar plan during such period, until Employee's
employment hereunder is terminated pursuant to this subparagraph (e).
Thereafter, Employee's benefits shall be determined under the Company's
retirement, insurance, and other compensation and benefit plans and programs
then in effect, in accordance with the terms of such programs, and the Company
shall cease to be obligated to pay Employee a Base Salary (other than any
amounts owed to Employee at the time of such termination).
6. Confidential Information, Non-Solicitation and Non-Competition.
(a) During the Term of Employment and thereafter, Employee shall
not, except as may be required to perform his duties hereunder or as required by
applicable law, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding Parent or any subsidiary thereof (including
the Company). "Confidential Information" shall mean information about Parent,
its subsidiaries and affiliates, and their respective clients and customers that
is not available to the general public and that was learned by Employee in the
course of his employment by the Company, including, but not limited to, any
proprietary knowledge, trade secrets, data, formulae, information, and client
and customer lists and all papers, resumes, records (including computer records)
and the documents containing such Confidential Information. Employee
acknowledges that such Confidential Information is specialized, unique in nature
and of great value to Parent and its subsidiaries, and that such information
gives Parent and its subsidiaries a competitive advantage. This confidentiality
covenant has no temporal, geographic or territorial restriction. Upon the
termination of his employment for any reason whatsoever, Employee shall promptly
deliver to the Company all documents, computer tapes and disks (and all copies
thereof) containing any Confidential Information, and any other tangible
property of Parent or its subsidiaries which has been produced by, received by
or otherwise submitted to Employee during or prior to the Term of Employment.
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(b) By and in consideration of Employee's employment hereunder
and the payments to be made and benefits to be provided by the Company hereunder
and further in consideration of Employee's exposure to the proprietary
information of Parent and its subsidiaries (including the Company), Employee
agrees that, provided that there has not been any material breach by the Company
in performing its obligations hereunder which remains uncured for at least 30
days after receipt of written notice thereof given by Employee, during the Term
of Employment and the Salary Continuation Period, if any, or for a period of 12
months following the termination of Employee's employment if Employee's
employment is terminated for Cause or without Good Reason, Employee shall not,
directly or indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder, employee, member of
any association or otherwise) engage in, work for, consult, provide advice or
assistance or otherwise participate in any activity which is competitive with
the Business of Parent or any subsidiary thereof in the metropolitan areas in
which Parent or any of its subsidiaries operate (it being understood that this
Section 6(b) shall not prohibit Employee from working for, consulting, providing
advice or other assistance to or otherwise participating in a business (an
"Other Company") that engages in the Business but whose principal line of
business is not the Business so long as Employee does not work for, consult,
provide advice or other assistance to (including, without limitation, by way of
promotion or endorsement) or otherwise participate in any aspect of the Business
conducted or proposed to be conducted by the Other Company). For purposes of
this Agreement, the "Business" shall mean any specific business activity
conducted by Parent or any successor thereto or any of Parent's subsidiaries or
proposed to be conducted thereby at the time of Employee's termination pursuant
to this Agreement. Employee further agrees that during such period he will not
assist or encourage any other person in carrying out any activity that would be
prohibited by the foregoing provisions of this Section 6 if such activity were
carried out by Employee and, in particular, Employee agrees that he will not
induce any employee of Parent or any subsidiary thereof to carry out any such
activity; provided, however, that the "beneficial ownership" by Employee, either
individually or as a member of a "group," as such terms are used in Rule 13d of
the General Rules and Regulations under the Exchange Act, of not more than one
percent (1%) of the voting stock of any publicly held corporation shall not be a
violation of this Agreement. It is further expressly agreed that Parent or any
subsidiary thereof will or would suffer irreparable injury if Employee were to
compete with Parent or any subsidiary or affiliate of Parent in violation of
this Agreement and that Parent would by reason of such competition be entitled
to injunctive relief in a court of appropriate jurisdiction, and Employee
further consents and stipulates to the entry of such injunctive relief in such a
court prohibiting Employee from competing with Parent or any subsidiary or
affiliate of Parent in violation of this Agreement. Employee agrees that the
terms of this paragraph shall not prevent Parent and/or its subsidiaries from
pursuing any other available remedies for any breach or threatened breach
thereof, including but not limited to the recovery of damages from Employee.
Employee and the Company further agree that the provisions of the covenants
contained in this Agreement are reasonable and necessary to protect the
businesses of Parent and its subsidiaries because of Employee's access to
Confidential Information and his material participation in the operation of such
businesses.
(c) During the period that Employee is receiving payments under
this Agreement or for a period of 12 months following the termination of
Employee's employment if
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Employee's employment is terminated for Cause or without Good Reason, Employee
shall not, directly or indirectly, influence or attempt to influence suppliers
of Parent or any of its subsidiaries or affiliates, to divert their business to
any competitor of Parent or its subsidiaries.
(d) Employee recognizes that he will possess confidential
information or trade secrets about other employees of Parent or any subsidiary
thereof relating to their education, experience, skills, abilities, compensation
and benefits, and interpersonal relationships with customers of Parent or any
subsidiary thereof (the "Employee Information"). Employee recognizes that the
Employee Information he will possess is not generally known, is of substantial
value to Parent or any subsidiary thereof in developing its business and in
securing and retaining customers, and will be acquired by him because of his
business position with the Company. Employee agrees that, during the period that
Employee is receiving payments under this Agreement or for a period of 12 months
following the termination of Employee's employment if Employee's employment is
terminated for Cause or without Good Reason, Employee will not, directly or
indirectly, solicit or recruit any employee of Parent or any subsidiary thereof
for the purpose of being employed by Employee or by any competitor of Parent or
any subsidiary thereof on whose behalf he is acting as an agent, representative
or employee and that he will not convey any Employee Information to any other
person.
(e) If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 6 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
7. Designated Beneficiary. In the event of the death of Employee
while in the employ of the Company, or at any time thereafter during which
amounts remain payable to Employee under Section 5, such payments (other than
the right to continuation of welfare benefits) shall thereafter be made to such
person or persons as Employee may specifically designate (successively or
contingently) to receive payments under this Agreement following Employee's
death by filing a written beneficiary designation with the Company during
Employee's lifetime. Such beneficiary designation shall be in such form as may
be prescribed by the Company and may be amended from time to time or may be
revoked by Employee pursuant to written instruments filed with the Company
during his lifetime. Beneficiaries designated by Employee may be any natural or
legal person or persons, including a fiduciary, such as a trustee or a trust or
the legal representative of an estate. Unless otherwise provided by the
beneficiary designation filed by Employee, if all of the persons so designated
die before Employee on the occurrence of a contingency not contemplated in such
beneficiary designation, then the amounts payable under this Agreement shall be
paid to Employee's estate.
8. Taxes. All payments to be made to Employee under this Agreement
will be subject to any applicable withholding of federal, state and local income
and employment taxes.
9. Resolution of Disputes. Notwithstanding anything herein to the
contrary, in the event that there shall be a dispute among the parties arising
out of or relating to this
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Agreement or the breach thereof, other than, at the option of the Company,
Section 6, the parties agree that such dispute shall be resolved by final and
binding arbitration in New York, New York in accordance Commercial Arbitration
Rules then in effect of JAMS/ENDISPUTE. Depositions may be taken and other
discovery may be obtained during such arbitration proceedings to the same extent
as authorized in civil judicial proceedings. Any award issued as a result of
such arbitration shall be final and binding between the parties thereto, and
shall be enforceable by any court having jurisdiction over the party against
whom enforcement is sought. The fees and expenses of such arbitration
(including, but not limited to, reasonable attorneys' fees) or any action to
enforce an arbitration award shall be paid by the party that does not prevail in
such arbitration.
10. Attorneys' Fees. Should either party hereto or their successors
retain counsel for the purpose of enforcing, or preventing the breach of, any
provision hereof, including, but not limited to, by instituting any action or
proceeding in arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a declaration of such
party's rights or obligations under the Agreement, or for any other remedy,
whether in arbitration or in a court of law, then each party shall bear their
own costs and expenses incurred thereby, including, but not limited to,
reasonable fees and expenses of attorneys and expert witnesses, including costs
of appeal.
11. Limitation of Liabilities. If Employee is awarded any damages as
compensation for any breach or action related to this Agreement, a breach of any
covenant contained in this Agreement (whether express or implied by either law
or fact), or any other cause of action based in whole or in part on any breach
of any provision of this Agreement, such damages shall be limited to contractual
damages and shall exclude (i) punitive damages, and (ii) consequential and/or
incidental damages (e.g., lost profits and other indirect or speculative
damages). The maximum amount of damages that Employee may recover for any reason
shall be the amount equal to all amounts owed (but not yet paid) to Employee
pursuant to this Agreement through its natural term or through any period for
which severance is due pursuant to Section 5 hereof.
12. Miscellaneous. This Agreement shall also be subject to the
following miscellaneous considerations:
(a) Representations and Warranties.
(i) Employee represents and warrants to the Company that he
has the authorization, power and right to deliver, execute and fully perform his
obligations under this Agreement in accordance with its terms. Employee further
represents and warrants that this Agreement does not require any authorization,
consent, approval, exemption or other action by any other party and does not (A)
conflict with or result in the breach of the terms, conditions or provisions of,
(B) constitute a default under, or (C) result in a violation of any agreement,
instrument, order, judgment or decree to which Employee is subject. Employee
will, to the fullest extent permitted by applicable law, as from time to time in
effect, indemnify the Company and hold the Company harmless for any breach of
the representations set forth in this subparagraph (i).
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(ii) The Company represents and warrants to Employee that it
has the authorization, power and right to deliver, execute and fully perform its
obligations under this Agreement in accordance with its terms. The Company
further represents and warrants that this Agreement does not require any
authorization, consent, approval, exemption or other action by any other party
and does not (A) conflict with or result in the breach of the terms, conditions
or provisions of, (B) constitute a default under, or (C) result in a violation
of any agreement, instrument, order, judgment or decree to which the Company is
subject. The Company will, to the fullest extent permitted by applicable law, as
from time to time in effect, indemnify Employee and hold Employee harmless for
any breach of its representations set forth in this subparagraph (ii).
(b) Divisibility of the Agreement. If any provision of this
Agreement or any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the remainder of such
provisions and all of the remaining provisions of this Agreement shall continue
in full force and effect.
(c) Choice of Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the
internal laws of the State of Michigan without reference to the choice of law
provisions of such State's law, except with respect to matters of law concerning
the internal corporate affairs of any corporate entity which is a party to or
the subject of this Agreement, and as to those matters of the law the
jurisdiction under which the respective entity derives its powers shall govern,
and to the extent governed by federal law.
(d) Assignment. The Company may assign this Agreement to any
direct or indirect subsidiary or parent of the Company or joint venture in which
the Company has an interest, or any successor (whether by merger, consolidation,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding upon and inure to
the benefit of such successors and assigns. The duties and covenants of Employee
under this Agreement, being personal, may not be delegated. Except as expressly
provided herein, Employee may not sell, transfer, assign, or pledge any of his
rights or interests pursuant to this Agreement.
(e) No Abrogation. Any rights of Employee hereunder shall be in
addition to any rights Employee may otherwise have under benefit plans,
agreements, or arrangements of the Company to which he is a party or in which he
is a participant, including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any way abrogate
Employee's rights under such other plans, agreements, or arrangements.
(f) Notice. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or one day
after delivery to an overnight air courier guaranteeing next day delivery,
addressed as follows:
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If to Employee: G. Xxxxx Xxxxxx, Jr.
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If to the Company: xxxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Board of Directors
With copies to: Xxxxxx & Xxxxxxx
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: W. Xxxx Xxxxxx, Esq.
or to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(g) Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(h) Waiver. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
(i) Employee's Acknowledgment. Employee acknowledges (i) that he
has consulted with or has had the opportunity to consult with independent
counsel of his own choice concerning this Agreement and has been advised to do
so by the Company, and (ii) that he has read and understands the Agreement, is
fully aware of its legal effect, and has entered into it freely based on his own
judgment.
(j) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(k) Entire Agreement; Amendment. This Agreement (i) contains a
complete statement of all the arrangements between the parties with respect to
Employee's employment by the Company, (ii) supersedes all prior and existing
negotiations and agreements between the parties concerning Employee's employment
and (iii) can only be changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.
(l) Expenses. Each party to this Agreement shall bear its
respective expenses incurred in connection with the preparation, negotiation,
execution and performance of
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this Agreement; provided that, the Company shall pay up to $10,000 of the
reasonable fees and expenses of counsel to Employee incurred with respect to
this Agreement.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
DRKOOP LIFECARE, INC.
By: /s/ XXXXXXX X. XXXXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
EMPLOYEE
/s/ G. XXXXX XXXXXX, Jr.
---------------------------------
G. Xxxxx Xxxxxx, Xx.
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