EXHIBIT 10(P)
NONCOMPETITION AND RELEASE AGREEMENT
AGREEMENT made and entered into as of the 2nd day of November, 1995,
between Diagnostic Leasing Corp., a New York corporation ("Corporation") having
its principal place of business at 000 Xxxxxx Xxxxxxx, Xxxxxx Xxxxx, Xxx Xxxx
00000 and Xxxxxxxxx Xxxxx ("Executive") residing at 000 Xxxxxx Xxxxx, Xxxxxxx,
xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Agreement for Merger and Reorganization
dated as of the date hereof among MBM, Xxxxx, Xxxxxx (each as defined below) and
the Corporation (the "Merger Agreement") the Corporation is acquiring all of the
outstanding shares of capital stock of Stone Medical Supply Corporation
("Stone") owned by her husband, Xxxxxx X. Xxxxx ("Xxxxxx"); and
WHEREAS, Stone is engaged in the business of selling and distributing
health care related products directly to physicians and medical clinics (the
"Business"); and
WHEREAS, in order to induce the Corporation to enter into and consummate
such acquisition and in order to protect the goodwill associated with the
Business, Executive has agreed to enter into this Agreement with the Corporation
restricting her activities relating to the business being conducted by the
Corporation as set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the Corporation and Executive hereby agree as
follows:
19. COVENANTS NOT TO COMPETE.
(a) Except in the regular course of her duties as an employee of
Stone between the date hereof and the date of the Merger (as defined in the
Merger Agreement) or termination of the Merger Agreement, Executive will not
perform any or all of the following activities:
(i) engage, directly or indirectly, within the states of New
York, New Jersey or Connecticut in any business involving the sale and
distribution of health care related products directly or indirectly to
physicians, podiatrists, medical clinics, hospitals, veterinarians, home care
dealers and other health care providers, which is competitive with the business
now conducted by the Corporation, its parent or any subsidiary or affiliate of
the Corporation. The foregoing shall not preclude Executive
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from engaging in the business of Physicians Laboratory Management Co.
("PLM"), to the extent that it involves a transaction with Xx. Xxxxxxx Xxxxx
pursuant to a commission arrangement with Xxx Xxxxxx (with a right to
substitute the doctor on the same terms and conditions after notice to MBM).
Executive's participation in any other transactions requires the
Corporation's prior written consent following presentation of the proposed terms
of each such proposed transaction. The above transactions must provide, and the
terms of any additional proposed transactions must include, without limitation,
that PLM must purchase all supplies and equipment for such transaction(s), which
Micro Bio-Medics, Inc. ("MBM") sells or distributes, from or through MBM, with
such purchase to be on terms that provide MBM with a mutually agreeable profit
margin.
(ii) directly or indirectly solicit, induce (or attempt to
induce), or have any part in, the diversion of employees, or former employees
within six (6) months after the termination of their employment, of Stone or of
the Corporation, its parent or any subsidiary or affiliate of the Corporation or
suppliers from their relationships with Stone or the Corporation, its parent or
any subsidiary or affiliate of the Corporation;
(iii) engage, directly or indirectly, in solicitation from any
of the customers or any parent, subsidiary or affiliate thereof of any business
which is competitive with the Business now or then conducted by Stone or the
Corporation, its parent or any subsidiary or affiliate of the Corporation;
(iv) take any action which is intended, or would reasonably be
expected, to harm Stone or the Corporation or its parent or any subsidiary or
affiliate or any director, officer, employer or agent thereof or the reputation
of any of the foregoing or which would reasonably be expected to lead to
unwanted or unfavorable publicity to Stone or the Corporation or its parent or
any subsidiary or affiliate of the Corporation or materially adversely impact
their relationships with their employees, customers or suppliers; or
(v) engage in any business which uses as its name, in whole or
in part, Stone, MBM, Micro Bio-Medics, Xxxxx, Xxxxxxx or any other name used by
Stone or the Corporation, its parent or any subsidiary or affiliate of the
Corporation.
(b) For the purposes of this Paragraph 1, Executive will be deemed
directly or indirectly engaged in a business if she participates in such
business as proprietor, partner, joint venturer, stockholder, director, officer,
lender, manager, executive, consultant, advisor or agent or if she controls such
business. Executive shall not for purposes of this paragraph be deemed a
stockholder or lender if she holds less than two (2%) percent of the outstanding
equity or debt of any publicly owned corporation engaged in the same or similar
business to that of Stone or the Corporation, provided that she shall not be in
a control position with regard to such corporation or if she holds outstanding
equity of PLM. Nothing contained herein shall preclude Executive from
continuing in her employment by Stone from the date hereof
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through the date of the Merger (as defined in the Merger Agreement).
20. DISCLOSURE. Executive will not at any time, directly or indirectly,
disclose or furnish to any other person, firm or corporation:
(a) any information concerning the methods of conducting or obtaining
business, of manufacturing or advertising products, or of obtaining customers of
the Corporation or Stone, the parent or any subsidiary or affiliate of the
Corporation or Stone;
(b) any information acquired by her from the Corporation or Stone,
the parent or any subsidiary or affiliate of the Corporation or Stone,
including, without limiting the generality of the foregoing, the names of any
customers or prospective customers of, or any person or entity, who or which
have or shall have traded or dealt with the Corporation or Stone (whether such
customers have been obtained by Executive or otherwise);
(c) any information regarding the "mix" of products sold to customers
of the Corporation or Stone, the parent or any subsidiary and affiliate of the
Corporation or Stone, or the price at which Products are sold to customers of
the Corporation or Stone, the parent or any subsidiary and affiliate of the
Corporation or Stone; and/or
(d) any information relating to the products, designs, styles,
processes, discoveries, materials, ideas, creations, inventions or properties of
the Corporation or Stone, the parent or any subsidiary and affiliate of the
Corporation or Stone.
21. TERM AND INJUNCTIVE RELIEF. The covenants contained in Paragraphs 1
and 2 hereof will continue for a period of fifteen (15) years from and after the
date hereof. The Executive acknowledges and agrees that irreparable damage may
result to the Corporation and its Business and properties if she fails or
refuses to perform her obligations under this Agreement, that a violation of
this Agreement would be a proper subject of injunctive relief and would be
necessary to protect the Corporation's legitimate business interests and that
the remedy at law for any such failure or refusal will be inadequate.
Accordingly, it is understood that the Corporation shall be entitled to
provisional remedies (including, without limitation, injunctive relief) and
damages.
22. CONSIDERATION
(a) In consideration of Executive's covenants and agreements
contained herein, the Corporation hereby agrees:
(i) to pay to Executive, subject to adjustment as provided for
in Paragraph 4(b) hereof, an amount equal to Five Hundred Thousand ($500,000)
Dollars to be paid as follows: Eight Thousand Three Hundred Thirty Three and
33/100 ($8,333.33) Dollars on December 1, 1995 and on the first day of each of
the next
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succeeding fifty nine (59) months provided, however, that if in the absence
of any right of offset or indemnification in favor of the Corporation the
Corporation fails to make any payment within any applicable cure period then
the entire unpaid balance of the amount due hereunder shall become
immediately due and payable. If the due date of any such payment is not a
business day, the due date of such payment shall be the next succeeding
business day.
(ii) to maintain, from and after a date, no earlier than thirty
(30) days after the date hereof, that Executive takes the requisite insurance
examination and establishes that she is insurable at customary rates, an
insurance policy owned by the Corporation insuring Executive's life in a face
amount of Five Hundred Thousand ($500,000) Dollars and naming such person or
persons as Executive may, from time to time and in a manner acceptable to the
applicable insurance carrier, designate as beneficiary. The amount of such
insurance required to be maintained by Corporation shall decline on the date of
each payment provided for in subparagraph 4(a)(i) above by the amounts of each
such payment with no such insurance required to be maintained by the Corporation
from and after the earlier of (x) payment to Executive of all amounts hereunder
and (y) the fifth (5th) anniversary of the date of this Agreement.
(ii) in the event of Executive's death, the Corporation's
obligation to pay Executive any amounts due hereunder, other than the insurance
proceeds hereunder, shall immediately terminate.
(b) Notwithstanding the provisions of this Paragraph 4, the
Corporation shall have the right to set off against its obligations under this
Agreement, in direct order of maturity, any amounts which Xxxxxx has not paid in
discharge of his indemnification obligations pursuant to that certain
Noncompetition, Indemnification and Release Agreement, dated the date hereof,
between Xxxxxx and the Corporation.
(c) Notwithstanding anything to the contrary contained herein, if
Xxxxxx terminates his employment with the Corporation, its parent or any
subsidiary or affiliate of the Corporation, as the case may be, except if the
Corporation is in breach of the employment agreement between the Xxxxxx and the
Corporation, prior to the first anniversary of the date of the Merger, then the
Corporation will no longer have any obligation to pay the Executive the
consideration set forth in Paragraph 4(a) hereof, but the restrictive covenants
contained in Paragraph 1 hereof shall continue in full force and effect.
(d) In the event of any dispute between the parties concerning
Executive's performance of obligations to the Corporation, which gives, or may
give, rise to the Corporation's right of offset or indemnification under this
Agreement or the Merger Agreement, as a result of which the Corporation decides
to withhold payments hereunder, the Corporation shall, as a condition to
Executive's refraining from accelerating the remaining payments, make timely
deposit of such disputed payments with the Corporation's attorneys, Otterbourg,
Steindler, Houston & Xxxxx, P.C., who
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shall hold such payments, together with any interest earned thereon, as
escrow agent ("Escrow Agent") pending resolution of such dispute by mutual
agreement between the parties or by final determination by a court of
competent jurisdiction. In connection with any escrow of the disputed
payments with Otterbourg, Steindler, Houston & Xxxxx, P.C., as Escrow Agent,
the following shall prevail:
(i) The funds held by the Escrow Agent shall be invested at
interest in substantially the same manner as the Escrow Agent invests other
moneys in its attorney escrow account. Interest, if any, earned on any payment
shall be remitted to the party who is ultimately determined to be entitled to
such payment.
(ii) The Escrow Agent shall have the right to continue to
represent MBM, the Corporation and their respective affiliates and related
persons.
(iii) The Escrow Agent shall have the right to act in reliance
upon any document, instrument, or signature believed by it to be genuine and to
assume that any person purporting to give any notice or instructions in
accordance with provisions hereof has been duly authorized to do so.
(iv) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands from any of
the parties hereto or from third parties with respect to the funds held
hereunder, which, in its opinion, are in conflict with any provision hereof, it
shall be entitled to refrain from taking any action other than to keep safely
the escrow funds until it shall be directed otherwise in writing by all the
parties hereto and said third person, if any, or by a final order or judgment of
a court of competent jurisdiction.
(v) The Escrow Agent shall not be bound by any modification,
cancellation or recision hereof unless in writing and signed by the other
parties hereto. In no event, however, shall any modification hereof which shall
affect the rights or duties of the Escrow Agent be binding on the Escrow Agent
unless it shall have given its prior written consent.
(vi) The Escrow Agent shall not be liable for any action taken or
omitted hereunder except in the case of its willful misconduct.
(vii) The Escrow Agent may at any time resign by giving written
notice of its resignation to the other parties hereto and at least ten (10) days
prior to the date specified for such resignation to take effect and upon the
effective date of such resignation all funds then held by the Escrow Agent
hereunder shall be delivered by it to such person or persons as may be
designated in writing by all of the other parties hereto, whereupon all
obligations of the Escrow Agent hereunder shall cease and terminate. If no such
person or persons shall have been designated by such date, all obligations of
the Escrow Agent hereunder shall nonetheless cease and terminate. Its sole
responsibility thereafter shall be to keep safely all funds then held by it and
to deliver the same to a person designated by all parties hereto or in
accordance with the directions of the final order or judgment of a Court of
competent jurisdiction. The
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parties hereto agree that XxXxxxxxxx & Xxxxx, LLP is acceptable as
replacement Escrow Agent when and if Otterbourg, Steindler, Houston & Xxxxx,
P.C. resigns as Escrow Agent, provided that said substitute Escrow Agent
consents in writing, at the time of substituting, to accept the obligations
as Escrow Agent in accordance with the terms hereof.
(viii) No notice, demand, requests or other communication to
the Escrow Agent in connection herewith shall be binding on the Escrow Agent
unless it is in writing, refers specifically to this Agreement, is addressed to
it at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address as the
Escrow Agent may at any time or from time to time designate and is actually
received by the Escrow Agent at that address.
(ix) The Corporation shall provide Executive with notice of any
payment to the Escrow Agent. The Escrow Agent shall have no duty to notify any
party that a payment was or was not received.
(e) In consideration of the covenants and agreements of the
Corporation herein, Executive hereby releases and discharges Stone and its
successors and assigns from all actions, causes of action, suits, debts, sums of
money, accounts, claims and demands of any kind or nature whatsoever, in law or
in equity, other than those obligations of the Corporation expressly provided
for under this Agreement subject to the terms and conditions of this Agreement.
23. CONSENT TO JURISDICTION AND APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS. The parties hereto irrevocably consent and submit to the non-exclusive
jurisdiction of the Supreme Court of the State of New York in New York County
and the United States District Court for the Southern District of New York in
connection with any action, proceeding or claim arising out of or relating to
this Agreement. Executive hereby irrevocably appoints and designates the law
firm of Ruskin, Moscou, Xxxxx & Faltischek, P.C. (or its successor in business)
as her agent for service of process in New York and agrees to consider any legal
process or any demand or notice made or served on the said agent as being made
on her. Executive hereby agrees that separate confirmation by such agent of the
foregoing irrevocable appointment as agent for service of process is not
required.
24. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION OR PROCEEDING OF ANY KIND WITH RESPECT TO, IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT, ANY INSTRUMENT, DOCUMENT OR GUARANTY DELIVERED
PURSUANT HERETO, OR THE VALIDITY, PROTECTION, INTERPRETATION, ADMINISTRATION,
COLLECTION OR ENFORCEMENT HEREOF.
25. ABSENCE OF RESTRICTIONS. Executive represents and warrants that she
is not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon her entering into this Agreement.
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26. FURTHER INSTRUMENTS. Executive will execute and deliver all such
other further instruments and documents as may be necessary, in the opinion of
the Corporation, to carry out the purposes of this Agreement.
27. INVALIDITY AND SEVERABILITY. If any provisions of this Agreement are
held invalid or unenforceable, such invalidity or unenforceability shall not
affect the other provisions of this Agreement, and, to that extent, the
provisions of this Agreement are intended to be and shall be deemed severable.
In particular and without limiting the foregoing sentence, if any provision of
Paragraph 1 of this Agreement shall be held to be invalid or unenforceable by
reason of geographic or business scope or the duration thereof, such invalidity
or unenforceability shall attach only to such provision and shall not affect or
render invalid or unenforceable any other provision of this Agreement, and this
Agreement and any such provision shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly drawn so
as to be valid and enforceable.
28. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if delivered by hand or by
Federal Express or other nationally recognized overnight delivery services or if
sent by registered or certified mail, as follows:
As to Executive: Xxxxxxxxx Xxxxx
000 Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
As to the Corporation: Diagnostic Leasing Corp.
000 Xxxxxx Xxxxxxx
Xxxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, President
or to such other address as either party hereto may designate by notice given in
accordance with this Agreement.
29. ASSIGNMENT. A party hereto may not assign this Agreement or any
rights or obligations hereunder without the consent of the other party hereto;
PROVIDED, HOWEVER, that upon the sale or transfer of all or substantially all of
the assets of the Corporation, or upon the merger by the Corporation into, or
the combination with, another corporation, this Agreement will inure to the
benefit of and be binding upon the person or entity purchasing such assets, or
the corporation surviving such merger or consolidation, as the case may be. The
Corporation may also, at any time or from time to time, assign this Agreement to
any of its parent, subsidiaries or affiliates. The provisions of this Agreement
where applicable are binding upon Executive's heirs and legal representatives
and upon the successors and assigns of the parties hereto.
30. WAIVER OF BREACH. Waiver by either party of a breach of any provision
of this Agreement by the other shall not operate or be construed as a waiver of
any subsequent breach by such other party.
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31. ENTIRE AGREEMENT. This instrument contains the entire Agreement of
the parties as to the subject matter hereof. It may not be changed orally, but
only by an Agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension or discharge is sought.
32. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of New York.
33. NEGOTIATIONS. This Agreement is the product of full and complete
negotiations at arm's length by the parties hereto. In view of the negotiations
which have culminated in the execution of this Agreement, no prior drafts,
letters or memoranda prepared by either party hereto shall be used to construe
or interpret any provision hereof, nor shall either party hereto be considered
the "drafter" of this Agreement for the purpose of construing the terms,
conditions and obligations set forth herein.
34. ATTORNEYS' FEES AND EXPENSES.
(a) If the Corporation brings legal proceedings to enforce its rights
under this Agreement and is successful in doing so, it shall be entitled, in
addition to all other remedies, to reimbursement by the Executive for its costs
and expenses, including reasonable attorneys' fees. If the Corporation brings
such proceedings and is unsuccessful, the Corporation shall reimburse the
Executive for her costs and expenses, including reasonable attorneys fees.
(b) If the Executive brings legal proceedings to enforce her rights
under this Agreement and is successful in doing so, she shall be entitled, in
addition to all other remedies, to reimbursement by the Corporation for her
costs and expenses, including reasonable attorneys' fees. If the Executive
bring such proceedings and is unsuccessful, she shall reimburse the Corporation
for its costs and expenses, including reasonable attorneys' fees.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf and Executive has signed this Agreement as of the date
first above written.
DIAGNOSTIC LEASING CORP.
By:/s/ Xxxxx X. Xxxxx
-------------------
Title: President
/s/ Xxxxxxxx Xxxxx
----------------------
Xxxxxxxx Xxxxx
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The undersigned hereby guarantees payment by the Corporation of its obligations
under this Agreement.
MICRO BIO-MEDICS, INC.
By:/s/ Xxxxx X. Xxxxx
-------------------
Title: President
SUBSECTION 4(d) OF THE ABOVE
AGREEMENT IS HEREBY CONSENTED TO:
OTTERBOURG, STEINDLER, HOUSTON & XXXXX, P.C.
By:/s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
Member of the Firm
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