Exhibit 10.23
NON-COMPETE AGREEMENT
This Non-Compete Agreement is dated as of January 20, 1997, by and between
Unilab Corporation, a Delaware corporation with its executive office located at
00000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Unilab" or the "Company") and
Xxxxxx X. Xxxxx, an individual residing at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxx
Xxxxx, Xxx Xxxxxx 00000 ("Xxxxx").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Letter Agreement, dated January 20, 1997
(the "Letter Agreement"), by and between Unilab and Xxxxx and that certain
Consulting Agreement dated as of January 20, 1997 (the "Consulting Agreement")
between Unilab and Xxxxxxx Ltd., a company controlled by Xxxxx, Xxxxx has agreed
to step down as Chairman, President and Chief Executive Officer of Unilab and to
continue, through Xxxxxxx Ltd. ("Xxxxxxx"), as a consultant to the Company for a
three-year period;
WHEREAS, Xxxxx is obligated pursuant to Page 3, Paragraph 10 of the Letter
Agreement to enter into this Agreement and to not compete with Unilab under any
of the circumstances described herein;
WHEREAS, Xxxxx recognizes that the consummation of the matters
contemplated by the Letter Agreement and Consulting Agreement will inure to the
benefit of Xxxxx, Xxxxxxx and Unilab and such matters would not have been
consummated without Xxxxx'x agreement to enter into this Agreement;
WHEREAS, Unilab wishes to be assured that Xxxxx will not compete with
Unilab and will not solicit Unilab's clients for the purposes of clinical
laboratory testing for the periods and upon and subject to the terms herein
provided.
NOW, THEREFORE, in consideration of the mutual covenants and the
agreements hereinafter set forth, and in consideration of Unilab consummating
the transactions contemplated by the Letter Agreement and Consulting Agreement,
the parties hereto covenant and agree as follows:
1. Covenant Against Competition.
Xxxxx acknowledges that (i) the principal business of Unilab is the
operation of an independent clinical laboratory testing company (such business
being referred to as the "Unilab Business"); (ii) Xxxxx is one of the limited
number of persons who has developed such business and has been a key employee of
Unilab; (iii) the Unilab Business is primarily conducted within the State of
California; (iv) Xxxxx'x work for Unilab has brought him into close contact with
many confidential affairs not readily available to the public; and (v) Unilab
would not have entered into the Letter Agreement and the Consulting Agreement
unless Xxxxx entered into this Agreement. Accordingly, Xxxxx covenants and
agrees, that:
(a) Until the third anniversary date hereof (the "Restricted Period")
Xxxxx shall not, within the State of California, without the prior written
consent of Unilab, compete directly or indirectly, or participate, directly or
indirectly, as agent, employee, consultant, representative or otherwise, or as a
stockholder, partner or joint venturer, or have any direct or indirect financial
interest, including, without limitation, the interest of a creditor, in any
enterprise (other than Unilab) engaging within the State of California in any
Unilab Business; provided however, Xxxxx may own, directly or indirectly, solely
as an investment, securities of any entity which is traded on any national
securities exchange or national automated quotation system if Xxxxx, (A) is not
a controlling person of or a member of a group which controls such entity and
(B) does not, directly or indirectly, own 5% or more of any class of securities
of such entity.
(b) During the Restricted Period, Xxxxx shall not, directly or
indirectly, (i) solicit or encourage to leave the employment or service of
Unilab or its affiliates, any employee or consultant of Unilab or any of its
affiliates, for the purpose of engaging in the clinical laboratory testing
business in the State of California or (ii) hire or retain any employee or
consultant who is employed or retained by, or who, within one year of any
particular time, has left the employment or service of, Unilab or any of its
affiliates to engage in any Unilab Business or any business substantially
similar to the Unilab Business in the State of California.
(c) Notwithstanding anything in Section 1(a) and 1(b) to the contrary,
nothing herein shall be deemed to preclude, prohibit, limit or restrict Xxxxx'x
rights to engage in the preferred provider organization business conducted by
Medical Diagnostic Management, Inc. ("MDM"), so long as MDM does not own or
operate a clinical laboratory testing facility.
(d) In consideration for Xxxxx'x execution of this Agreement Unilab is
providing to Xxxxx concurrently with the execution by Xxxxx of this Agreement a
portion of the consideration provided to Xxxxx under the Letter Agreement (the
"Non-Compete Consideration"). Such Non-Compete Consideration is not conditioned
upon or related to the performance of any current or future services by Xxxxx.
2. Rights and Remedies Upon Breach of the Restrictive Covenants.
(a) Xxxxx recognizes that Unilab does not have an adequate remedy at
law to protect its rights hereunder. Xxxxx agrees that Unilab shall have the
right to an injunction without bond in any court of competent jurisdiction
permanently enjoining Xxxxx from a violation of Section 1 hereof during the term
thereof (the "Restrictive Covenants").
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(b) Xxxxx recognizes and agrees that in the event of a violation of any
of the Restrictive Covenants, the period during which he shall not compete shall
be suspended during the period he engaged in conduct constituting such violation
and shall resume after such violation has been remedied.
(c) The remedies set forth in subsection 2(a) above shall not limit,
eliminate, prohibit or restrict any other rights that Unilab may have under law
for violation by Xxxxx of this Agreement and shall not be mutually exclusive and
any one or all may be pursued without the pursuit of one impairing or precluding
the pursuit of another.
3. Severability of Restrictive Covenants.
It is understood and agreed by the parties hereto that the provisions
of each of the preceding sections of this Agreement are independent of and
severable from each other and the invalidity of any section or any portion
thereof shall not affect the validity or hinder the enforceability of the
remaining provisions of this Agreement. The parties expressly agree and declare
that the time limitation and geographic scope set forth in Section 1 hereof are
reasonable, are properly required for the adequate protection of the business of
Unilab and that in the event such time limitation and/or geographic scope is
deemed to be unreasonable by the final decision of a court of competent
jurisdiction, Unilab and Xxxxx agree to submit to such revision or modification
thereof as said court shall deem reasonable.
4. Notices.
Any notice or other communication hereunder shall be given in writing
or by facsimile or other means of instantaneous communication and such notice
shall be deemed to have been given, if by mail, three days after it has been
mailed by certified mail, return receipt requested, postage prepaid, and if by
instantaneous communication, upon certification of receipt of transmission, as
follows: (a) if to Xxxxx at the address shown at the beginning of this Agreement
or the fax number shown on the signature page hereof or to such other person(s)
or address(es) as Xxxxx shall have furnished to Unilab in writing, (b) if to
Unilab at the address shown at the beginning of this Agreement, attention of
Corporate Secretary, or the fax number shown on the signature page hereof, with
copies to Unilab Corporation, 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000, Attention Xxxx X. Xxxx, Esq., General Counsel, or to such other
person(s) or address(es) as Unilab shall have furnished to Xxxxx in writing.
5. Assignability.
This Agreement shall be binding upon and inure to the benefit of
Unilab, its assigns and successors (by purchase of substantially all of its
assets, by merger, reorganization or spin-off or otherwise). This Agreement
shall not be assignable by Xxxxx.
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6. Entire Agreement.
This Agreement contains the entire agreement between Xxxxx and Unilab
with respect to the subject matter hereof.
7. Waivers, Amendments and Further Agreements.
Neither this Agreement nor any term or condition hereof, including
without limitation the terms and conditions of this Section 7, may be waived,
modified or amended in whole or in part as against Unilab or Xxxxx except by
written instrument executed by each of the parties expressly stating that it is
intended to operate as a waiver, modification or amendment of this Agreement or
the applicable term or condition hereof.
8. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement as of the date first above written.
UNILAB CORPORATION
By: _____________________________
Name:
Title:
Fax No.:(000)000-0000
XXXXXX X. XXXXX
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Fax No.:
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