EXHIBIT 10.5
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made and entered into
as of the 20th day of September, 2000, by and among Veterinary Centers of
America, Inc., a Delaware corporation ("VCA"), Vicar Operating, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company, ("VCA Sub"), and
Xxxxxx X. Xxxxx ("Covenantor").
RECITALS
Prior to the execution of this Agreement, the Company, Vicar Recap, Inc., a
Delaware corporation and VCA Sub have entered into the Agreement and Plan of
Merger dated as of March 30, 2000 (the "Merger Agreement"). Capitalized terms
used and not defined herein shall have the meanings ascribed to them in the
Merger Agreement.
AGREEMENT
NOW, THEREFORE, in reliance on the foregoing facts and in consideration of
the mutual covenants and agreements contained herein, the parties hereto agree
as follows:
1. NON-COMPETITION. During the term hereof, Covenantor agrees that, within
seven miles of any animal hospital or veterinary laboratory owned or operated by
VCA or any affiliate of VCA (the "Radius"), he shall not, without the prior
written consent of VCA, directly or indirectly, own, operate, manage, control,
or participate in the ownership, management, operation or control of, or be
connected as an officer, director, employee, owner, partner, member, manager or
joint venturer or otherwise permit his name to be used by or in connection with
any veterinary medical or laboratory practice. In connection with and in
addition to the foregoing, Covenantor agrees during the term hereof not to: (i)
hire or offer employment to any employee of VCA or any of their respective
affiliates unless VCA first terminates the employment of such employee; or (ii)
solicit, divert, or take away from VCA and its affiliates the business of any
individual, corporation, trust, estate, partnership, joint venture, association,
limited liability company, governmental bureau or other entity of whatsoever
kind or nature ("Person") who or which at the time of the Closing or at any time
within one (1) year prior to such time or at any time thereafter during the term
hereof, was a customer of VCA. Notwithstanding anything to the contrary
contained herein, Covenantor is expressly permitted prior to, during and after
the term of this Agreement to own, operate, manage, control or participate in
the ownership, management, operation or control of, and/or be connected as an
officer, director, employee, owner, partner, member, manager or joint venturer
and/or permit his name to be used by or in connection with any business whose
primarily purpose is the development and/or operation of a commerce, content
and/or community web site focused on veterinary and other pet related products,
services and interests.
2. CONFIDENTIAL INFORMATION. Covenantor agrees that he will not, during the
term of this Agreement, use or disclose to any Person other than VCA or its
affiliates or their respective employees acting on behalf of VCA or its
affiliates, any customer list, potential customer list, records, techniques,
business secrets, trade secrets or any other information with respect to the
business of VCA not available generally in the veterinary field and not known to
competitors of VCA or its affiliates or other third parties unaffiliated with
VCA or its affiliates ("Confidential Information").
3. CONSIDERATION. As consideration for the covenants and agreements of
Covenantor contained herein, VCA has paid to Covenantor on the Closing
$6,225,300.
4. TERM AND TERMINATION. The term of this Agreement shall commence on the
date hereof and shall terminate on that date which is three (3) years following
the date hereof. Notwithstanding the foregoing, if Covenantor's employment is
terminated without "cause" as defined in that certain Employment Agreement of
even date herewith between Covenantor and VCA, then this Agreement immediately
shall terminate and be of no further force or effect.
5. INJUNCTIVE RELIEF AND OTHER REMEDIES UPON BREACH BY COVENANTOR.
Covenantor acknowledges and agrees that (i) the provisions of this Agreement are
reasonable and necessary to protect the legitimate interests of VCA, and (ii) in
the event of any breach by Covenantor of any of Covenantor's covenants and
agreements contained herein, VCA would encounter extreme difficulty in
attempting to prove the actual amount of damages suffered by it as a result of
such breach, VCA would not have an adequate remedy at law in such event and,
therefore, in addition to any other remedy it may have at law or in equity in
the event of any such breach, VCA shall be entitled to seek and receive specific
performance and temporary, preliminary and permanent injunctive relief from
violation of any of the provisions of this Agreement from any court of competent
jurisdiction without the necessity of proving the amount of any actual damages
to it resulting from such breach.
6. MISCELLANEOUS.
6.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. No party may assign any of its rights, or delegate any of its duties or
obligation, under this Agreement without the prior written consent of the other
parties, and any such purported assignment or delegation shall be void AB
INITIO. Notwithstanding the foregoing, VCA, its affiliates, and its successors
and assigns, may assign its rights and delegate its duties to any successor
entity resulting from any liquidation, merger, consolidation, reorganization, or
transfer of all or substantially all of the assets or stock of VCA Sub or of
VCA.
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6.2 NOTICES. All notices, demands and other communications (collectively,
"Notices") given or made pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given if sent by registered or certified mail,
return receipt requested, postage and fees prepaid, by overnight service with a
nationally recognized "next day" delivery company such as Federal Express or
United Parcel Service, by facsimile transmission, or otherwise actually
delivered to the following addresses:
(a) if to VCA:
Veterinary Centers of America, Inc.,
a Delaware corporation
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: President
Facsimile No.: 310.584.6701
(b) if to Covenantor:
Xxxxxx X. Xxxxx
c/o Veterinary Centers of America, Inc.
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.:
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed to
have been duly given two (2) business days from the date of deposit in the
United States mails, unless sooner received. Any of the parties to this
Agreement may from time to time change its address for receiving notices by
giving written notice thereof in the manner set forth above.
6.3 AMENDMENT; WAIVER. No provision of this Agreement may be waived unless
in writing signed by all of the parties to this Agreement, and the waiver of any
one provision of this Agreement shall not be deemed to be a waiver of any other
provision. This Agreement may be amended only by a written agreement executed by
all of the parties to this Agreement.
6.4 DISPUTE RESOLUTION. Any dispute or claim arising hereunder shall be
settled by arbitration. Any party may commence arbitration by sending a written
notice of arbitration to the other party. The notice will state the dispute with
particularity. The arbitration hearing
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shall be commenced thirty (30) days following the date of delivery of notice of
arbitration by one party to the other, by a single arbitrator. The arbitration
shall be conducted in Los Angeles, California in accordance with the commercial
arbitration rules promulgated by the American Arbitration Association, and each
party shall retain the right to cross-examine the opposing party's witnesses,
either through legal counsel, expert witnesses or both. The decision of the
arbitrator shall be final, binding and conclusive on all parties (without any
right of appeal therefrom) and shall not be subject to judicial review. As part
of its decision, the arbitration panel may allocate the cost of arbitration,
including fees of attorneys and experts, as it deems fair and equitable in light
of all relevant circumstances. Judgment on the award rendered by the arbitration
panel may be entered in any court of competent jurisdiction.
6.5 GOVERNING LAW. This Agreement shall be governed by and construed both
as to validity and performance and enforced in accordance with the laws of the
State of California without giving effect to the choice of law principles
thereof.
6.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
6.7 REMEDIES CUMULATIVE. Each of the various rights, powers and remedies
shall be deemed to be cumulative with, and in addition to, all the rights,
powers and remedies which each party may have hereunder or under applicable law
relating hereto or to the subject matter hereof, and the exercise or partial
exercise of any such right, power or remedy shall constitute neither an
exclusive election thereof nor a waiver of any other such right, power or
remedy.
6.8 HEADINGS. The section and subsection headings contained in this
Agreement are included for convenience only and form no part of the agreement
between the parties.
6.9 SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be or become prohibited or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
6.10 EXPENSES. Each party shall pay its own costs and expenses, including,
without limitation, the fees and expenses of their respective counsel and
financial advisors.
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6.11 ENTIRE AGREEMENT. This Agreement, including the other agreements and
schedules to be entered into in connection with the transactions contemplated by
the Purchase Agreement, constitutes and embodies the entire understanding and
agreement of the parties hereto relating to the subject matter hereof and there
are no other agreements or understandings, written or oral, in effect between
the parties relating to such subject matter except as expressly referred to
herein.
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Non-Competition
Agreement as of the day and year first set forth above.
COVENANTOR
/S/ XXXXXX X. XXXXX
--------------------------------------------
Xxxxxx X. Xxxxx
VICAR OPERATING, INC.,
a Delaware corporation
/S/ XXXXXX X. XXXXX
--------------------------------------------
By: Xxxxxx X. Xxxxx
Its:
VETERINARY CENTERS OF AMERICA, INC.,
a Delaware corporation
/S/ XXXXXX X. XXXXX
--------------------------------------------
By: Xxxxxx X. Xxxxx
Its:
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