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EXHIBIT 10.4
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into as of
December 23, 1998, among Xxxxxxx Medical Products, a Utah corporation (the
"Company"), Xxxxxxxx-Xxxxx Corporation, a Delaware corporation
("Xxxxxxxx-Xxxxx"), and Xxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Executive has acquired extensive knowledge of and
experience in the businesses conducted by the Company; and
WHEREAS, concurrently herewith, the Company, Xxxxxxxx-Xxxxx, and Jazz
Acquisition Corp., a Utah corporation and a wholly-owned subsidiary of
Xxxxxxxx-Xxxxx ("Merger Sub"), are entering into an Agreement and Plan of Merger
dated as of the date hereof (as amended or supplemented from time to time, the
"Merger Agreement"), pursuant to which Merger Sub will be merged with and into
the Company and the Company will become a wholly-owned subsidiary of
Xxxxxxxx-Xxxxx, subject to the terms and conditions thereof; and
WHEREAS, concurrently herewith, the Company, Xxxxxxxx-Xxxxx and the
Executive are entering into a Consulting Agreement (the "Consulting Agreement")
and a Severance Agreement and Release both of which are dated as of the date
hereof; and
WHEREAS, the parties to this Agreement acknowledge that Executive has
held a high-level or otherwise unique position at the Company, and has been and
will continue to be made privy to highly sensitive trade secrets and other
confidential information of the Company (and after the merger, of
Xxxxxxxx-Xxxxx), that the Executive in a unique and special manner has
contributed significantly to the good will of the Company, and that
nondisclosure of confidential information and a period of noncompetition are,
therefore, necessary to safeguard the Company's interests; and
WHEREAS, the Company, Xxxxxxxx-Xxxxx and the Executive desire to enter
into a noncompetition agreement upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and the consulting services to be provided to the Company by
Executive pursuant to the Consulting Agreement, and the compensation and
benefits incident thereto, the adequacy and sufficiency of which are hereby
acknowledged, the Company, Xxxxxxxx-Xxxxx and the Executive hereby agree as
follows:
1. Effective Date of the Agreement. This Agreement shall become
effective at the Effective Time of the Merger and shall terminate on the date
which is the fifth one-year anniversary of the Effective Time of the Merger;
provided, however, that this Agreement shall terminate automatically and shall
be of no further force or effect if the Merger Agreement shall be terminated and
the merger shall not become effective pursuant to the terms thereof.
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2. Noncompetition. (a) (i) The Executive shall not, during the term of
this Agreement, directly or indirectly, own, manage, operate, control or
participate in the ownership, management, operation or control of, or be
associated as an officer, employee, consultant, agent, partner or director with,
or provide capital or other funding to enable a third party to engage in, or
solicit customers or distributors of Xxxxxxxx-Xxxxx'x Professional Health Care
Sector or the Company with respect to any entity whose products compete directly
with products (including products in development) or professional services of
Xxxxxxxx-Xxxxx'x Professional Health Care Sector (including the Company) as of
the date of termination of the Consulting Agreement; provided, however, that
nothing herein shall be deemed to preclude the Executive from owning up to 1% of
the outstanding voting stock of any publicly traded corporation whose shares are
listed on a national stock exchange or listed on NASDAQ.
(ii) The Executive shall not, during the term of this Agreement,
solicit, directly or indirectly, any employee of Xxxxxxxx-Xxxxx'x Professional
Health Care Sector, the Company or of Xxxxxxxx-Xxxxx (including those employed
by any of their Affiliates (defined, with respect to any person, as any
subsidiary or any corporation or other entity in which a 40 percent or more
equity interest is owned, directly or indirectly, by such person)) to leave such
employment; provided, however that nothing herein shall be deemed to preclude
the Executive from hiring any such employees pursuant to an unsolicited response
to a general solicitation for employees.
(b) In the event any restriction against engaging in a competitive
activity contained in this Section 2 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, over the
maximum geographical area as to which it may be enforceable and to the maximum
extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.
(c) In the event that the Executive desires to determine if a business
comes within the restrictions set forth in paragraph (a)(i) above, the Executive
may request from the Company and the Company will promptly provide information
concerning the sale of its products in specific countries or territories.
3. Unauthorized Disclosure. (a) The Executive shall not, without the
prior written consent of the President-Professional Health Care Sector of
Xxxxxxxx-Xxxxx, use other than for Company purposes or disclose to any person
other than as required by law or court order or to a person to whom disclosure
is necessary or appropriate in connection with the performance by the Executive
of his duties as a consultant under the Consulting Agreement, any confidential
information obtained by him concerning the Company, Xxxxxxxx-Xxxxx or any
Affiliate thereof while in the employ of the Company, while a consultant
pursuant to the Consulting Agreement, or while a director or officer of the
Company, or any confidential information concerning any third party obtained by
him in his capacity as a director, officer, employee or consultant of the
Company, Xxxxxxxx-Xxxxx or any Affiliate, including such information with
respect to any products, improvements, formulae, designs or styles, processes,
services, customers, suppliers, marketing techniques, methods, future plans or
operating practices ("Confidential
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Information"); provided, however, that Confidential Information shall not
include any information known generally to the public or previously disclosed to
the public (other than as a result of unauthorized disclosure by the Executive)
or any information disclosed by the Company or Xxxxxxxx-Xxxxx to a third party
without restrictions on the disclosure of such information, or any information
disclosed to the Executive by a third party without violating a legal duty owed
to the Company or Xxxxxxxx-Xxxxx or their Affiliates.
(b) The Executive agrees that all documents, records, files, letters,
disks, memoranda, reports, data, sketches, drawings, laboratory notebooks,
program listings or other written, electronic, photographic or other tangible
material ("Tangible Property") containing Confidential Information, whether
created by the Executive or others, which have or shall come into his custody or
possession shall be and are the exclusive property of the Company and shall be
used by the Executive only in the performance of his duties. The Executive
agrees that upon the earlier of (i) a request by the Company or Xxxxxxxx-Xxxxx
or (ii) the termination or cessation of his consulting duties under the
Consulting Agreement for any reason, he shall promptly deliver to the Company
all Tangible Property in his possession or under his control which contains
Confidential Information. The Executive shall not retain or deliver to any third
person copies of such Tangible Property.
(c) The Executive agrees that his obligations not to disclose or use
Confidential Information or Tangible Property of the types set forth in Section
3(a) or 3(b) hereof also extend to such types of Confidential Information and
Tangible Property of customers or suppliers to the Company or its Affiliates or
other third parties who may have disclosed or entrusted the same to the Company
or its Affiliates or to the Executive in the course of the Company's business.
(d) The covenants set forth in this Section 3 shall lapse three (3)
years following termination of the Consulting Agreement.
4. Public Announcements. The Executive agrees that he shall not make or
cause to be made any public statement, public announcement or press release
which is intended, or would reasonably be expected, to disparage the Company,
the transactions contemplated by the Merger Agreement or the integration of the
Company's and its Affiliates' operations with those of Xxxxxxxx-Xxxxx and its
Affiliates.
5. Injunctive Relief. The Executive acknowledges that a breach of the
restrictions contained in Section 2, 3 or 4 hereof shall cause irreparable
damage to the Company and Xxxxxxxx-Xxxxx, the exact amount of which shall be
difficult to ascertain, and that the remedies at law for any such breach shall
be inadequate. Accordingly, the Executive agrees that if the Executive breaches
any of the restrictions contained in Section 2, 3 or 4 hereof, then the Company
and Xxxxxxxx-Xxxxx shall be entitled to injunctive relief, without posting bond
or other security, in addition to any other remedy or remedies available to
Company or Xxxxxxxx-Xxxxx at law or in equity.
6. Termination. This Agreement may be terminated by the Executive upon
ten (10) days' prior written notice to the Company and Xxxxxxxx-Xxxxx in the
event that the Company or Xxxxxxxx-Xxxxx shall breach any of their obligations
under Section 4 of the Consulting Agreement; provided, however, that the
Executive shall not be entitled
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to terminate this Agreement pursuant to this Section 6 in the event that the
Company or Xxxxxxxx-Xxxxx shall cure any such breach within such ten (10) day
period. In the event of such termination by the Executive, the Company shall pay
to the Executive all remaining payments due under the Consulting Agreement
within five (5) business days of such termination.
7. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Executive and by his personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees, and by the Company and Xxxxxxxx-Xxxxx and their respective successors
and assigns.
8. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered, when delivered by facsimile or electronic mail
or by courier or overnight express service or five days after having been sent
by certified or registered mail, postage prepaid, addressed: (a) if to the
Executive, to the Executive's address set forth in the records of the Company,
or if to the Company or Xxxxxxxx-Xxxxx, to Xxxxx X. Xxxxxx,
President-Professional Health Care Sector, Xxxxxxxx-Xxxxx Corporation, 0000
Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX 00000, Fax: (000) 000-0000, with a copy to O.
Xxxxxx Xxxxxxxx, Senior Vice President-Law and Government Affairs,
Xxxxxxxx-Xxxxx Corporation, 000 Xxxxxx Xxxxx, Xxxxxx, XX 00000, Fax: (972)
000-0000, or (b) to such other address as any party may have furnished to the
other parties in writing in accordance herewith, except that notices of change
of address shall be effective only upon receipt.
9. Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Utah without regard to
principles of conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which other provisions shall remain in
full force and effect.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
11. Miscellaneous. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and executed
by the Executive and by a duly authorized officer of the Company and of
Xxxxxxxx-Xxxxx. No waiver by any party hereto at any time of any breach by
another party hereto of, or failure to comply with, any condition or provision
of this Agreement to be performed or complied with by such other party shall be
deemed a waiver of any similar or dissimilar conditions or provisions at the
same or at any prior or subsequent time. Failure by the Executive, the Company
or Xxxxxxxx-Xxxxx to insist upon strict compliance with any provisions of this
Agreement or to assert any right which the Executive, the Company or
Xxxxxxxx-Xxxxx may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision of or right under this Agreement.
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IN WITNESS WHEREOF, each of the Company and Xxxxxxxx-Xxxxx has caused
this Agreement to be executed by its duly authorized officer, and the Executive
has executed this Agreement as of the day and year first above written.
XXXXXXX MEDICAL PRODUCTS
By: /s/ Xxxxxx X. Xxxxxxx
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Name Xxxxxx X. Xxxxxxx
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Title: Executive Vice President
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XXXXXXXX-XXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Title: Senior Vice President and Chief
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Financial Officer
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EXECUTIVE:
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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