NONCOMPETITION AGREEMENT
EXHIBIT
99.3
This
Noncompetition Agreement (the “Agreement”)
is
made as of August 29, 2006, by and among (a) HemaCare Corporation, a
California corporation (“Buyer”),
(b) Teragenix Corporation, a Florida corporation (the “Company”),
and
(c) Xxxxxx Xxxxx, an individual resident of the state of Florida (the
“Seller”),
and
the holder of 27,306, or seventy-six and nine-tenths percent (76.9%), of the
outstanding shares of capital stock of the Company. Capitalized terms used
herein but not otherwise defined herein shall have the meanings set forth in
that certain Stock Purchase Agreement, dated as of August 29, 2006 (the
“Stock
Purchase Agreement”),
by
and among Buyer, the Seller and Xxxxxxxx Xxxx, an individual resident of the
state of Florida (the “Other
Seller”,
and
together with the Seller, the “Sellers”).
RECITALS
A. The
Seller owns 27,306 shares of the outstanding capital stock of the Company (the
“Shares”),
or
seventy-six and nine-tenths percent (76.9%) of all of the issued and outstanding
shares of capital stock of the Company.
B. Buyer
and
the Sellers have entered into the Stock Purchase Agreement, pursuant to which
the Seller has agreed to sell, and Buyer has agreed to purchase, all of the
Shares (the “Acquisition”),
and
as a result of which Buyer will acquire all of the outstanding capital stock
of
the Company and therefore the entire customer goodwill of the Company associated
with the Company’s ongoing business (including, without limitation, associated
with the Company’s trade names, trade marks, service marks and trade dress) in
the geographic areas in which the Company conducts its Business (as defined
below).
C. Concurrent
with the execution of this Agreement, the Company and the Seller have entered
into an Employment Agreement of even date herewith (the “Employment
Agreement”).
D. In
connection with the Acquisition, Buyer and the Company desire to obtain certain
covenants not to compete from the Seller. The execution and delivery of this
Agreement by the Seller is a condition precedent to the obligations of Buyer
to
consummate the Acquisition under the Stock Purchase Agreement. The Seller enters
into this Agreement in consideration of the execution and performance by Buyer
of the Stock Purchase Agreement, as permitted
by the laws of the State of Florida, including, without limitation, Florida
Statutes § 542.33, and by the laws of the State of California, including,
without limitation, California Business and Professions Code § 16601.
AGREEMENT
NOW,
THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as
follows:
1. Intention
of Parties.
It is
understood and expressly agreed by the Seller that the restrictive covenant
provisions of this Agreement have been accepted and agreed to by him in
connection with the transactions contemplated by the Stock Purchase Agreement,
and that the Seller is entering into this Agreement in his capacity as a selling
shareholder of the Company, and not in his capacity as a director, officer
or
employee of the Company or in connection with the Employment Agreement. It
is
therefore the specific intention of the parties that the provisions of this
Agreement shall be enforced as written and to the fullest extent possible.
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2. Business
Defined.
As used
herein, the term “Business”
means
the business carried on by the Company as of the date hereof, or any similar
business, including, without limitation, the business of providing products
and
services to the in vitro diagnostic and biopharmaceutical industries, including,
without limitation, the offer of clinical trial management services, biological
materials, quality control products, central laboratory testing and other
product development and research solutions with respect to, inter alia,
infectious diseases, oncology, rheumatology, endocrinology, cardiology and
genetic disorders and all related fields.
3. Noncompetition.
(a) During
the period commencing on the date hereof and terminating on the last to occur
of
(i) August 29, 2009 and (ii) the termination of the Employment
Agreement (the “Noncompetition
Period”),
the
Seller shall not, and the Seller shall cause his Affiliates (as defined below)
to not, directly or indirectly, carry on a business that is competitive to
the
Business or own, enter into, engage in, operate, manage, control, participate
in, advise, assist, contribute or give or lend funds to or otherwise finance,
be
employed by or render services to or consult with, or have a financial or other
interest in, any business (including without limitation any division, group
or
franchise of a larger organization) which competes with the Business (or any
part thereof), in each case within any state of the United States of America
(the “Territory”),
and
in each case whether for or by himself or as an employee, independent
contractor, agent, shareholder, partner or joint venturer or in any capacity
for
any other person, individual, corporation, limited liability company,
partnership, joint venture or other entity or business organization (a
“Person”);
provided,
however,
that
the record or beneficial ownership by the Seller of 5% or less of the
outstanding publicly-traded capital stock of such a Person shall not be deemed
to be a violation of this Agreement if the Seller is not a partner, member,
principal, officer, director, employee, independent contractor, investor,
lender, advisor or agent of or to such Person; provided,
however,
that
if, and for so long as, Buyer is in material breach of any obligation under
the
Employment Agreement or the Stock Purchase Agreement, the Seller shall send
Buyer a written notice of such breach, and from the date such notice is given
to
Buyer until such date as Buyer has cured such breach, the provisions of this
Section 3(a) shall not apply to the Seller. For purposes of this Agreement,
an “Affiliate”
of
a
Person means any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, and the term
“control”
(including, with correlative meaning, the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. The Seller agrees that the foregoing
covenant is reasonable with respect to its duration, geographical area, and
scope.
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(b) The
Seller warrants and represents that he does not have any financial or other
interest in any Person that carries on any activity from which the Seller is
prohibited under Section 3(a). If, after the date hereof, the Seller has
any financial or other interest or engages directly or indirectly in a line
of
business that competes with the Business within the Territory or otherwise
carries on any activity in which the Seller is prohibited to engage under
Section 3(a), then the Seller shall divest all of his interest in such
Person within thirty (30) days after such Person enters such line of
business. The requirement to divest as set forth above shall apply only during
the Noncompetition Period and not thereafter.
4. Nondisparagement;
Referrals.
During
the Noncompetition Period, the Seller agrees that he shall not, and shall cause
his Affiliates to not, either directly or indirectly, solicit, induce, attempt
to influence, or take any action that may have the effect of discouraging any
past or present lessor, licensor, customer, supplier, licensee, business
prospect or other business associate of the Company from entering into or
maintaining, or causing it to terminate or cease, the same relationships with
the Company after the Closing Date as it maintained with the Company prior
to
the Closing Date, and during the Noncompetition Period shall refer, and shall
cause his Affiliates to refer, all customer inquiries relating to the Business
to the Company as soon as possible after receiving such inquiries. The Seller
will not, at any time during or after the Noncompetition Period, directly or
indirectly disparage Buyer or the Company, or any of their respective
shareholders, directors, officers, employees or agents.
5. Nonsolicitation.
(a) During
the Noncompetition Period, the Seller will not, directly or indirectly, either
for himself or any other Person, (i) solicit or attempt to induce any
employee of the Company to leave the employ of the Company, (ii) in any way
interfere with the relationship between the Company and any employee of the
Company or (iii) induce or attempt to induce any customer, supplier,
licensee, or business relation of the Company to cease doing business with
the
Company, or in any way interfere with the relationship between any customer,
supplier, licensee or business relation of the Company.
(b) The
Seller will not, directly or indirectly, either for himself or any other Person,
solicit the business of any Person known to the Seller to be a customer of
the
Company, whether or not the Seller had personal contact with such Person, with
respect to products, services or activities which compete in whole or in part
with the products, services or activities of the Company.
6. Extension
of Noncompetition Period.
In the
event of a breach by the Seller of any covenant set forth in this Agreement
limited by the term of the Noncompetition Period, the term of the Noncompetition
Period as applied to such breached covenant shall be extended by the period
of
the duration of such breach. If Buyer or the Company obtains actual knowledge
of
such breach by the Seller, Buyer or the Company shall provide notice to the
Seller of such breach as promptly as reasonably possible; provided,
that
Buyer’s or the Company’s failure to provide the Seller with such notice shall
not serve as a waiver of any of Buyer’s or the Company’s rights
hereunder.
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7. Notices.
All
notices, consents, waivers, and other communications under this Agreement must
be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers
as a
party may designate by notice to the other parties):
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Teragenix
Corporation
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0000
XX 00xx Xxxxxx, Xxxxx 000
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Xx.
Xxxxxxxxxx, XX 00000
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Attn:
Xxxxxx Xxxxx
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Facsimile
No.: (000) 000-0000
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Blank
Rome LLP
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Attn:
Xxxxx X. Xxxxxxx
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0000
X. Xxxxxxx Xxxxxxx, Xxxxx 000
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Facsimile
No.: (000) 000-0000
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Buyer:
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HemaCare
Corporation
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00000
Xxxxxx Xxxxxx
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Xxxxxxxx
Xxxxx, Xxxxxxxxxx 00000
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Attention:
Xxxx Xxxxxx
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Facsimile
No.: (000) 000-0000
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with
a copy to:
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Sheppard,
Mullin, Xxxxxxx & Hampton LLP
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000
Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
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Xxx
Xxxxxxx, Xxxxxxxxxx 00000
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Attention:
Xxxxxx X. Xxxxx, Esq.
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Facsimile
No.: (000) 000-0000
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8. Jurisdiction;
Service Of Process.
Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in
the
courts of the State of California, County of Los Angeles, or, if it has or
can
acquire jurisdiction, in the United States District Court for the Central
District of California, and each of the parties consents to the jurisdiction
of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
9. Further
Assurances.
The
parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement.
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10. Waiver.
The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement will operate as a waiver of
such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
To
the maximum extent permitted by applicable law, (a) no claim or right
arising out of this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of
any obligation of such party or of the right of the party giving such notice
or
demand to take further action without notice or demand as provided in this
Agreement.
11. Entire
Agreement And Modification.
This
Agreement, together with the provisions of the Stock Purchase Agreement relating
hereto, constitutes a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
12. Assignments,
Successors, And No Third Party Rights.
Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties; provided,
however,
that
Buyer may at any time freely assign any or all of its rights under this
Agreement, in whole or in part, to any Subsidiary of Buyer or to any Person
succeeding to or acquiring the business of the Buyer without obtaining the
consent or approval of the Seller or of any other Person. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed
to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions
are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
13. Enforceability,
Adjustment of Restrictions and Severability.
If any
provision contained in this Agreement is held by any court or arbitrator of
competent jurisdiction to be unenforceable because of the duration of such
provision, the geographic area covered thereby or otherwise, the court or
arbitrator making such determination shall have the power to, and is hereby
directed by the parties to, reduce the duration or geographic area of such
provision or otherwise modify such provision, and, in its reduced or modified
form, such provision shall be enforceable. If any provision of this Agreement
should be held invalid, illegal or unenforceable in any respect in any
jurisdiction, then, to the fullest extent permitted by law, (i) all other
provisions hereof shall remain in full force and effect in such jurisdiction
and
shall be construed in order to carry out the intentions of the parties hereto
as
nearly as may be possible, and (ii) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability
of
such provision in any other jurisdiction.
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14. Section
Headings; Construction.
The
headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this Agreement.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word “including” does not limit the preceding words or terms.
15. Time
of Essence.
With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.
16. Governing
Law.
This
Agreement will be governed by the Legal Requirements of the State of California
without regard to conflicts of laws principles.
17. Remedies.
The
Seller acknowledges that, in the event of any breach or anticipatory or
threatened breach by him of any of the provisions of this Agreement, the
remedies available to Buyer and the Company at law may be inadequate, and hereby
agree that, in addition to any other remedies that may be available to Buyer
and
the Company, Buyer and the Company shall be entitled to seek temporary or
permanent injunctive relief without the necessity of proving damages or posting
a bond. Such remedies shall be cumulative and nonexclusive and shall be in
addition to any other remedy to which the parties may be entitled (and shall
be
in addition to divestiture by the Seller pursuant to Section 3(b) hereof).
18. Counterparts;
Facsimile.
This
Agreement may be executed in one or more counterparts and via facsimile, each
of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, Buyer, the Company and the Seller have duly executed and
delivered this Noncompetition Agreement as of the date first above
written.
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SELLER:
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| /s/ Xxxxxx Xxxxxxxx Xxxxx | |
| XXXXXX XXXXX, an individual | |
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BUYER:
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HEMACARE
CORPORATION,
a
California corporation
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By:
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/s/
Xxxx Xxxxxx
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Name:
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Xxxx
Xxxxxx
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Title:
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President
& CEO
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COMPANY:
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TERAGENIX
CORPORATION,
a
Florida corporation
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By:
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/s/
Xxxx Xxxxxx
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Name:
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Xxxx
Xxxxxx
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Title:
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CEO
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