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EXHIBIT 10.25
NON-COMPETITION AGREEMENT
(Xxxx X. Xxxx)
NON-COMPETITION AGREEMENT dated this 1st day of July, 1997 by and
between Monarch Dental Corporation, a Delaware corporation (the "Company"), and
Xxxx X. Xxxx ("Xx. Xxxx").
WITNESSETH
WHEREAS, the Company and Xx. Xxxx have entered into that certain
Employment Agreement dated as of July 1, 1997 (the "Employment Agreement"); and
WHEREAS, the execution and delivery by Xx. Xxxx of this Agreement is a
condition to the Company's willingness to execute and deliver the Employment
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
Section 1. Non-Competition. In view of the fact that any activity of
Xx. Xxxx in violation of the terms hereof would deprive the Company and its
subsidiaries (as defined below) of the benefit of the Company's bargain under
the Employment Agreement, as a material inducement to and a condition precedent
of the Company's execution and delivery of the Employment Agreement, and in
consideration of the other covenants set forth herein, Xx. Xxxx hereby agrees
to the following restrictions on his activities:
(a) Non-Competition Agreement. Xx. Xxxx hereby agrees
that during the period commencing on the date hereof and ending on the date
that is the later of: (i) five (5) years after the date hereof or (ii) the
date on which Xx. Xxxx receives his final severance payment pursuant to the
Employment Agreement (provided that if the Company elects to pay Xx. Xxxx'x
xxxxxxxxx payment in a lump sum, then Xx. Xxxx shall be deemed to receive his
final severance payment on the same date that he would have received his final
payment on a non-lump sum payout), he will not, without the express written
consent of the Company, directly or indirectly, anywhere in the geographic area
set forth in Section 1(c) below, engage, participate or invest in any activity
which is, or provide or facilitate the provision of financing to, or assist
(whether as owner, part-owner, shareholder, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity), any
business, organization or person other than the Company (or any affiliate of
the Company), and including particularly any such business, organization or
person involving, or which is, a family member of Xx. Xxxx, whose business,
activities, products or services are competitive with any of the business,
activities, products or services conducted or offered by the Company and its
subsidiaries (including for purposes of this Agreement any associated
professional corporation and the employees and independent contractors thereof
which or who provide dental services in connection with the business of the
Company and its subsidiaries (herein, "Dental Providers")), which business,
activities, products and services shall include in
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any event the provision of dental health care services (including, without
limitation, the acquisition, ownership and/or operation of one or more dental
health care practices including group practices). Without implied limitation,
the forgoing covenant shall include hiring or engaging or attempting to hire or
engage for or on behalf of himself or any such competitor any officer or
employee of, or any Dental Provider who provides services in connection with
the business of the Company or any of its direct and/or indirect subsidiaries,
encouraging for or on behalf of himself or any such competitor, any such
officer, employee or Dental Provider to terminate his, her or its relationship
or employment with the Company or any of its direct or indirect subsidiaries
(including Dental Providers), soliciting for or on behalf of himself or any
such competitor any client of the Company or any of its direct or indirect
subsidiaries (including Dental Providers) and diverting to any person (as
hereinafter defined) any client or business opportunity of the Company or of
any of its direct or indirect subsidiaries (including Dental Providers).
Notwithstanding anything herein to the contrary, Xx. Xxxx may make
passive investments in any enterprise competitive with the Company, the shares
of which are publicly traded, if such investment constitutes less than five
percent (5%) of the equity of such enterprise.
Neither Xx. Xxxx nor any business entity controlled by him is a party
to any contract, commitment, arrangement or agreement which could, following
the date hereof, restrain or restrict the Company or any subsidiary or
affiliate of the Company from carrying on its business or restrain or restrict
Xx. Xxxx from performing his obligations under his Employment Agreement with
the Company, and as of the date of this Agreement Xx. Xxxx has no business
interests in the health care industry whatsoever other than his interest in the
Company, other than interests in public companies of less than five percent
(5%).
For purposes of this Agreement, any reference to the subsidiaries of
the Company shall be deemed to include all entities directly or indirectly
controlled by it through an ownership of more than fifty percent (50%) of the
voting interests, as well as any Dental Provider, and the term "person" shall
mean an individual, a corporation, an association, a partnership, an estate, a
trust, and any other entity or organization.
(b) Non-Competition Consideration. In consideration of
the execution and delivery by Xx. Xxxx of this Agreement, on the date hereof
the Company shall enter into, execute and deliver to Xx. Xxxx the Employment
Agreement.
(c) Geographic Area. The provisions of Section 1 of this
Agreement shall apply in the following geographic areas:
(i) The state of Texas; and
(ii) All other states in which the Company or any
of its subsidiaries (including acquired businesses) commence
conducting business activities during the period during which Xx. Xxxx
serves as an officer or employee of the Company or any of its
subsidiaries, or in which any company or business acquired or to be
acquired by the
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Company or any of its subsidiaries pursuant to an agreement entered
into during the period during which Xx. Xxxx serves as an officer or
employee of the Company or any of its subsidiaries conducts business,
provided that the Company shall notify Xx. Xxxx promptly upon
commencement of business activities in any new market, whether on a de
novo basis or through acquisition.
(d) Consulting. As additional consideration for the
covenants hereunder, the Company shall engage Xx. Xxxx as a consultant upon any
termination of his employment for any reason other than death or disability
prior to the fourth anniversary of the date hereof. Such engagement shall
continue until the fourth anniversary of the date hereof and Xx. Xxxx shall be
paid $500 per month during such period, subject to withholding (if applicable),
by the Company or a subsidiary of the Company for his consulting services. Xx.
Xxxx shall not be required to devote more than one (1) hour per week to the
performance of consulting services nor to travel from his principal location in
his performance of such services, and any consulting services performed shall
otherwise be mutually agreeable.
Section 2. Scope of Agreement. The parties acknowledge that the
time, scope, geographic area and other provisions of this Agreement have been
specifically negotiated by sophisticated commercial parties and agree that (a)
all such provisions are reasonable under the circumstances of the transactions
contemplated by the Employment Agreement, (b) are given as an integral and
essential part of the transactions contemplated by the Employment Agreement and
(c) but for the covenants of Xx. Xxxx contained in this Agreement, the Company
would not have entered into the Employment Agreement or consummated the
transactions contemplated thereby. Xx. Xxxx has independently consulted with
his counsel and has been advised in all respects concerning the reasonableness
and proprietary of the covenants contained herein, with specific regard to the
business to be conducted by Company and its subsidiaries.
Section 3. Certain Remedies; Severability. It is specifically
understood and agreed that any breach of the provisions of this Agreement by
Xx. Xxxx or any of his affiliates will result in irreparable injury to the
Company and its subsidiaries, that the remedy at law alone will be an
inadequate remedy for such breach and that, in addition to any other remedy it
may have, the Company and its subsidiaries shall be entitled to enforce the
specific performance of this Agreement by Xx. Xxxx through both temporary and
permanent injunctive relief without the necessity of proving actual damages,
but without limitation of their right to damages and any and all other remedies
available to them, it being understood that injunctive relief is in addition
to, and not in lieu of, such other remedies. In the event that any covenant
contained in this Agreement shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the maximum period of time for which it may be enforceable and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. The existence of any claim or cause
of action which Xx. Xxxx may have against the Company or any of its
subsidiaries or affiliates shall not constitute a defense or bar to the
enforcement of any of the provisions of this Agreement.
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Section 4. Jurisdiction. The parties hereby irrevocably submit
to the non-exclusive jurisdiction of the courts of the State of Texas to
construe and enforce the covenants contained in this Agreement. In the event
that the courts of any state shall hold such covenants unenforceable (in whole
or in part) by reason of the breadth of such scope or otherwise, it is the
intention of the parties hereto that such determination shall not bar or in any
way affect the right of the Company or any its subsidiaries to the relief
provided for herein in the courts of any other state within the geographic
scope of such covenants, as to breaches of such covenants in such other
respective states, the above covenants as they relate to each state being, for
this purpose, severable into diverse and independent covenants.
Section 5. Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if delivered,
telecopied or mailed by certified or registered mail:
To the Company: Monarch Dental Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President
With a copy to: Xxxxxx and Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
To Xx. Xxxx: Xxxx X. Xxxx
00000 Xxxxxxx Xxxx, #0000
Xxxxxx, XX 00000
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
Section 6. Miscellaneous. This Agreement shall be governed by
and construed under the laws of the State of Texas, and shall not be modified
or discharged in whole or in part except by an agreement in writing signed by
the Company and Xx. Xxxx. The prevailing party in any controversy hereunder
shall be entitled to reasonable attorneys' fees and expenses. The failure of
any of the parties to require the performance of a term or obligation or to
exercise any right under this Agreement or the waiver of any breach hereunder
shall not prevent subsequent enforcement of such term or obligation or exercise
of such right or the enforcement at any time of any other right hereunder or be
deemed a waiver of any subsequent breach of the provision so breached, or of
any other breach hereunder. This Agreement shall inure to the benefit of, and
be binding upon, successors of the Company by way of merger, consolidation or
transfer of substantially all the assets of the Company, and may not be
assigned by Xx. Xxxx. This Agreement supersedes all prior understandings and
agreements between the parties relating to the subject matter hereof (without
limitation of the Employment Agreement executed by Xx. Xxxx as of the date
hereof).
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* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first set forth above.
MONARCH DENTAL CORPORATION
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, D.D.S., President
/s/ XXXX X. XXXX
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Xxxx X. Xxxx
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