EXHIBIT 6
NONCOMPETITION AND CONSULTING AGREEMENT
AGREEMENT, dated as of June 16, 1997, among GENESIS HEALTH
VENTURES, INC., a Pennsylvania corporation, ("G"), WALTZ CORP., a Delaware
("Parent"), WALTZ ACQUISITION CORP., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub") and Xxxxxx X. Xxxxxx (the "Consultant").
Parent, Merger Sub, G and THE MULTICARE COMPANIES, INC., a
Delaware corporation (the "Company"), have entered into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which
Merger Sub is merging with and into the Company and the Company will survive as
a wholly-owned subsidiary of Parent (the "Merger"). Capitalized terms used but
not otherwise defined herein shall have the respective meanings ascribed to them
in the Merger Agreement.
The Consultant is a co-founder of, and is employed as Co-Chief
Executive Officer by the Company, and has confidential knowledge of its business
and affairs and is considered by Parent to be a key employee of the Company.
Parent wishes to secure for itself and the Company following the Merger the
services of the Consultant, and to assure itself that the Consultant agrees to
certain restrictions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Engagement.
Parent hereby irrevocably appoints the Consultant, and the
Consultant hereby agrees to be a consultant, for a period of 12 months
commencing on the date of the Closing (as defined below) (the "Consulting
Term"), to perform such reasonable consulting services as the chief executive
officer of Parent shall request, subject to Section 3 below.
2. Effectiveness.
This Agreement shall become effective simultaneously with,
and subject to, the consummation of the Merger (the "Closing"). The parties
acknowledge that until this Agreement becomes effective, the Consultant may
remain an officer and director of the Company and will be under no obligation
under, and will not be subject to the restrictions of this Agreement. If the
Merger Agreement is terminated, this Agreement shall be simultaneously
terminated.
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3. Duties.
During the Consulting Term, the Consultant as an independent
contractor shall make himself available upon reasonable notice for such time
during regular business hours as shall be reasonably necessary for the business
of the Company. Such consulting services shall be rendered in Hackensack, New
Jersey.
4. Consideration.
(a) As compensation for the Consultant's services hereunder,
Parent hereby agrees to pay the Consultant, and the Consultant agrees to accept
as full compensation for his services, a consulting fee of $1.5 million per
annum payable in immediately available funds at the Closing. In addition, the
Consultant shall be reimbursed for all expenses actually incurred by the
Consultant in the performance of his duties upon presentation to Parent of
expense statements or vouchers or such other supporting information as Parent
requires for its senior executives.
(b) As consideration for the Consultant's agreement to the
restrictive covenants in Section 6 herein (the "Restrictive Covenants"), Parent
hereby agrees to pay the Consultant, and the Consultant agrees to accept as full
consideration for his agreement to the Restrictive Covenants, (i) the benefits
set forth in Section 5 hereof, and (ii) a cash payment in the amount of $1.5
million payable in immediately available funds at the Closing.
5. Benefits; Office Facilities.
Parent agrees that for a period of six months following the
Effective Time the Consultant may continue the exclusive use of his and his
secretary's office space and office equipment; provided, that the foregoing
obligation will be excused if and when the Company ceases to maintain office
facilities in Hackensack, New Jersey. Such office space shall include a separate
conference room to be shared with the other current Co-Chief Executive Officer
of the Company. Parent agrees that the equipment and office furnishings located
in the Consultant's office shall be the property of the Consultant.
6. Restrictive Covenants.
6.1 Noncompetition and Consulting Agreement. The
Consultant shall not, for a period of one year after the date hereof, in any
capacity (including, but not limited to, owner, partner, shareholder,
consultant, agent, employee, officer, director or otherwise), directly or
indirectly, for his own account or for the benefit of any person, establish,
engage in or be connected with any Competitive Business. As used herein, the
term "Competitive Business" means any Restricted Business conducted in the
Restricted Zone. Restricted Business means institutional pharmacy,
rehabilitation services, long-term care services, skilled nursing
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facilities or assisted living facilities but does not include providing any
other goods or services to skilled nursing facilities, assisted living
facilities and other health care facilities. The Restricted Zone means any town
in Connecticut or Rhode Island in which the Company operates a long term care
facility and an area of fifteen miles surrounding such facility; any county in
Illinois, New Jersey, Ohio, West Virginia or Wisconsin in which the Company
operates a long term care facility and an area of fifteen miles surrounding such
facility; all portions of Massachusetts east of Worcester; all portions of
Pennsylvania east of Harrisburg and an area of fifteen miles around any facility
located in Virginia or Vermont; but in no event includes any portion of any
state other than Connecticut, Rhode Island, Illinois, New Jersey, Ohio, West
Virginia, Wisconsin, Massachusetts, Pennsylvania, Virginia, or Wisconsin. In no
event shall this Section 6.1 restrict the Consultant from owning interests in,
or developing, real estate so long as the Consultant is not operating any
Restricted Business. In addition, the Consultant shall not pursue any of the
development projects listed on Schedule 6.1 hereto.
6.2 Confidentiality. For a period of three years commencing
on the Closing Date, the Consultant shall not, except with the express prior
written consent of Parent, directly or indirectly, disclose, communicate or
divulge to any Person, or use for the benefit of any Person, any secret,
confidential or proprietary knowledge or information with respect to the conduct
or details of the Company or the business engaged in by the Company including,
but not limited to, technical know-how, processes, customers, prospects, costs,
designs, marketing methods and strategies, finances and suppliers. The provision
of this Section 6.1 shall not apply to any information which at the time of
disclosure (i) is generally available to or known to the public (other than as a
result of unauthorized disclosure directly or indirectly by the Consultant) or
(ii) the Consultant discloses, at the direction and authorization of Parent, or,
subject to the remainder of this Section 6.2 as required by law. If the
Consultant is required in a judicial, administrative or governmental proceeding
to disclose any information which is the subject of the restrictions contained
in this Section 6.2, then the Consultant will notify Parent as soon as possible
so that Parent may either seek an appropriate protective order or relief, or
waive the provisions of this Section 6.2. If, in the absence of such an order,
relief or waiver, the Consultant is required, in the written opinion of counsel,
to disclose such information to any court, administrative agency or governmental
authority, then the Consultant may disclose such information without liability
under this Agreement.
6.3 Nonsolicitation of Employees. The Consultant shall not
for a period of two years after the date hereof, except with the express written
consent of Parent (which shall not be unreasonably withheld or delayed in the
case of an employee of the Company or the Surviving Corporation who has received
a notice of termination from the Company or the Surviving Corporation, as the
case may be) or as is otherwise contemplated by the Merger Agreement, directly
or indirectly, whether as an employee, owner, partner, agent, director, officer,
shareholder or in any other capacity, for his own account or for the benefit of
any Person; (i) solicit,
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divert or induce any of (1) the Company's employees or (2) the Surviving
Corporation's employees to leave or to work for him or any Person with which he
is connected; or (ii) hire any of the Company's or the Surviving Corporation's
employees and other than the other Co-Chief Executive Officer, the Chief
Operating Officer and the Consultant's personal secretary and the other persons
who shall be acceptable to Parent and identified on a schedule to be agreed upon
prior to the purchase of shares in the Offer.
6.4 Remedies. (a) The parties to this Agreement agree that
any breach by the Consultant of the covenants and agreements contained in
Sections 6.1 and 6.2 will result in irreparable injury to Merger Sub for which
money damages could not adequately compensate Merger Sub. Therefore, in the
event of any breach of such Sections, Merger Sub shall be entitled (in addition
to any other rights and remedies which it may have at law or in equity) to have
an injunction issued by any competent court of equity enjoining and restraining
the Consultant and/or any other Person involved therein from continuing such
breach. In any action to enforce the provisions of Sections 6.1 or 6.2, the
Consultant and/or any other Person involved therein shall expressly waive the
defense that any remedy at law is adequate.
(b) In the event the Consultant is found by a nonappealable
judgment of a court of competent jurisdiction to have violated Section 6.3, in
addition to the reasonable fees and expenses of Parent's counsel incurred to
enforce such provision, the Consultant shall pay to Parent, as liquidated
damages, an amount equal to 200% of the applicable employee's annual
compensation (including, without limitation, salary, bonus and benefits) at the
time of the violation (the "Liquidated Damages"); provided, that in the event
the Consultant is found by such court to have not violated Section 6.3, Parent
shall pay to the Consultant the reasonable fees and expenses of counsel incurred
by the Consultant to defend such action and any actual damages resulting from
Parent's interference with the Consultant's commercial relationships.
6.5 Enforceability. If any portion of the covenants or
agreements contained herein, or the application thereof, is construed to be
invalid or unenforceable, then the other portions of such covenants(s) or
agreement(s) or the application thereof shall not be affected and shall be given
full force and effect without regard to the invalid or unenforceable portions.
If any covenant or agreement herein is held to be unenforceable because of the
area covered, the duration thereof, or the scope thereof, then the court making
such determination shall have, for purposes of enforcement in equity, the power
to reduce the area and/or duration and/or limit the scope thereof, and the
covenant or agreement shall then be enforceable in its reduced form.
6.6 Intent of Parties. Each of the parties hereto recognize
and agree that this Agreement is necessary and essential to enable Parent to
realize
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and derive substantial benefits, rights and expectations of the Merger
Agreement, that the area and duration of the covenants herein are in all things,
under the circumstances of the Merger Agreement, reasonable; and that good and
valuable consideration exists for the Consultant's agreeing to be bound by such
covenants.
6.7 Definition. As used herein, the term "Person" means any
individual, sole proprietorship, joint venture, partnership, corporation,
association, joint-stock company, unincorporated organization, cooperative,
trust, estate, government (or any branch, subdivision or agency thereof),
governmental, administrative or regulatory authority, or any other entity of any
kind or nature whatsoever.
7. Additional Agreement. The Consultant agrees to pay to the
Surviving Corporation, immediately following the Effective Time, the principal
amount of indebtedness, and accrued interest thereon, owed by the Consultant or
Health Resources of Cinnaminson, Inc., one of the Company's subsidiaries.
8. Other Provisions.
8.1 All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person
or by telecopier (with a confirmed receipt thereof), and on the next business
day when sent by overnight courier service, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(i) if to Parent or Merger Sub, to:
Waltz Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
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(ii) if to G, to:
Genesis Health Ventures, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Blank, Rome, Xxxxxxxx & XxXxxxxx
0000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
(iii) if to the Consultant, to
Xxxxxxx X. Xxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. 00000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
8.2 Entire Agreement. This Noncompetition and Consulting
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
8.3 Waivers and Amendments. This Noncompetition and
Consulting Agreement may be amended, superseded, canceled, renewed or extended,
and the terms hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any other or further exercise thereof
or the exercise of any other such right, power or privilege.
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8.4 Governing Law. This Noncompetition and Consulting
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey without regard to choice of law principles.
8.5 Successors and Assigns; Assignment. This Noncompetition
and Consulting Agreement is binding upon and shall inure to the benefit of the
parties hereto and their respective successors. This Noncompetition and
Consulting Agreement, and the Consultant's rights and obligations hereunder, may
not be assigned by the Consultant. Parent may assign this Noncompetition and
Consulting Agreement and its rights, together with its obligations, hereunder in
connection with any sale, transfer or other disposition of all or substantially
all of its assets or business, whether by merger, consolidation or otherwise.
8.6 No Third Party Beneficiaries. This Noncompetition and
Consulting Agreement is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
8.7 Counterparts. This Noncompetition and Consulting
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each
counterpart may consist of two copies hereof each signed by one of the parties
hereto.
8.8 Headings. The headings in this Noncompetition and
Consulting Agreement are for reference only and shall not affect the
interpretation of this Noncompetition and Consulting Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Noncompetition and Consulting Agreement as of the date first above written.
WALTZ CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: President and
Assistant Secretary
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WALTZ ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President,
Secretary and
Assistant Treasurer
GENESIS HEALTH VENTURES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and
Chief Executive
Officer
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
