NON-COMPETE AGREEMENT
NON-COMPETE AGREEMENT, dated as of March 6, 1996, by and among
GENDEX-DEL MEDICAL IMAGING CORP., a Delaware corporation with offices at 11550
West King Street, Franklin Park, Illinois 60131 ("GDM"), DEL GLOBAL TECHNOLOGIES
CORP., a New York corporation with offices at One Commerce Place, Valhalla, New
York 10595 ("Del") and DENTSPLY INTERNATIONAL INC., a Delaware corporation with
offices at 570 West College Avenue, York, Pennsylvania 17405-0872 ("Dentsply").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement (the "Asset
Purchase Agreement"), dated as of March 6, 1996, by and among GDM, Del and
Dentsply, GDM has acquired certain selected assets of the GENDEX MEDICAL
DIVISION OF DENTSPLY ("Gendex Division"); and
WHEREAS, the Gendex Division was a division of Dentsply and is engaged
in the business of designing, manufacturing, repairing, marketing, distributing
and/or selling medical imaging devices and related components, including
equipment for veterinary and chiropractic uses; and
WHEREAS, as an additional inducement to Del and GDM to consummate the
transactions contemplated by the Asset Purchase Agreement, Dentsply has agreed
to enter into this Non-Compete Agreement, on the terms and subject to the
conditions herein contained.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Covenant Not To Compete and Confidentiality Covenant.
1.1. Non-Compete. Dentsply hereby acknowledges that the Gendex
Division was a division of Dentsply. Dentsply further acknowledges that (i) the
principal business of the Gendex Division is the design, manufacture, repair,
marketing, distribution and/or sale of medical imaging devices and related
components, including equipment for veterinary and chiropractic uses under the
tradenames "Universal Imaging" and "Gendex" (the "Business"); (ii) Dentsply and
its affiliates have had access to the confidential affairs and proprietary
information of the Gendex Division and their affiliates not readily available to
the public; (iii) the agreements and covenants of Dentsply contained in this
Section 1 are essential to the business and goodwill of the Gendex Division; and
(iv) Del and GDM would not consummate the Asset Purchase Agreement without the
non-compete covenants contained herein. Accordingly, and except as expressly
provided pursuant to Section 1.2 hereof, Dentsply does hereby agree, that, it
will not, nor will its affiliates directly or indirectly, as a shareholder,
director, officer, partner, joint venturer, employee, consultant or agent, in
the Territory, as hereinafter defined, at any time during the Restricted Period,
as hereinafter defined:
(a) engage in the Business for its account or render any
services, which constitute engaging in the Business, in any capacity to any
person (other than Del, GDM or their affiliates); or become interested in any
person engaged in the Business (other than Del, GDM or their affiliates) as a
partner, shareholder (other than as a shareholder of Del), principal, agent,
employee, trustee, consultant or in any other relationship or capacity;
(b) solicit, directly or indirectly, on behalf of itself or
any third party, any client of Del, GDM or the Gendex Division and their
affiliates in connection with the sale of products of the Business; and
(c) have an interest as an owner, independent contractor,
co-venturer, partner, participant, associate or in any other capacity, render
services to or participate in the affairs of, any business which is competitive
with, or substantially similar to, the Business.
As used herein, the term "affiliates" shall mean all entities
directly or indirectly controlling, controlled by or under common control with
Dentsply and/or Del or GDM.
1.2. Acquisitions by Dentsply. In the event, pursuant to a single
transaction or series of transactions following the closing of the transactions
contemplated by the Asset Purchase Agreement, Dentsply shall have acquired a
business or businesses manufacturing or marketing medical imaging devices
including chiropractic and veterinary applications ("Acquired Business") that
shall cause Dentsply to have in the aggregate an amount of gross sales from such
Acquired Business equal to or in excess of $6,000,000 per annum (a
"Transaction") then Dentsply shall, not later than two (2) years following such
Transaction, discontinue or dispose of all or a portion of such Acquired
Business in excess of such amount. Notwithstanding anything to the contrary set
forth in this Section 1.2, Dentsply shall, within a reasonable period of time,
give Del and GDM written notice, describing such acquisition, including the
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business acquired. In the event, as a result of a Transaction and in accordance
with this Section 1.2, Dentsply is obligated or desires to dispose of all or a
portion of such Acquired Business acquired as a result of a Transaction,
Dentsply shall give Del and GDM written notice (the "Notice") of its desire or
intent to sell such business.
1.3. GDM, Del Non-Compete. GDM and Del hereby acknowledge that (i)
they have had access to confidential affairs and proprietary information of
Dentsply not readily available to the public, and (ii) Dentsply would not
consummate the Asset Purchase Agreement without the non-compete covenants
contained herein. Accordingly, and except as expressly provided pursuant to
Section 1.4 hereof, GDM and Del do hereby agree, that they will not, nor will
their affiliates, directly or indirectly, as a shareholder, director, officer,
partner, joint venturer, employee, consultant or agent, in the Territory, at any
time during the Restricted Period:
(a) engage in any business which is competitive with the
Dentsply business of manufacturing, design, repair, marketing, distribution
and/or sale of products for the dental industry or dental applications (the
"Dentsply Business"), for its account or render any services, which constitute
engaging in the Dentsply Business, in any capacity to any person (other than
Dentsply or its affiliates); or become interested in any person engaged in the
Dentsply Business (other than Dentsply or its affiliates) as a partner,
shareholder (other than as a shareholder of Del), principal, agent, employee,
trustee, consultant or in any other relationship or capacity;
(b) solicit, directly or indirectly, on behalf of itself or
any third party, any client of Dentsply or its affiliates in connection with the
sale of products of the Dentsply Business; and
(c) have an interest as an owner, independent contractor,
co-venturer, partner, participant, associate or in any other capacity, render
services to or participate in the affairs of, any business which is competitive
with, or substantially similar to the Dentsply Business.
1.4. Exception to Del Non-Compete. Notwithstanding the provisions
of Section 1.3 hereof, the term "Dentsply Business" as used herein shall not
include the manufacture and sale by Del or affiliates of portable intra-oral
dental systems. It is acknowledged by Dentsply that such intra-oral dental
systems are currently manufactured and sold by an affiliate of Del and such
affiliate will continue to sell such systems, as such systems may be upgraded,
modified, or replaced, in the sole discretion of Del and/or its affiliates.
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1.5. Unenforceability. If any of the restrictions contained in
this Section 1 shall be deemed to be unenforceable by reason of the extent,
duration or geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Section shall
then be enforceable in the manner contemplated hereby.
1.6. Restricted Period. The term "Restricted Period" as used in
this Section 1, shall mean the period commencing on the date hereof and ending
on the date ten (10) years from the date hereof.
1.7. Territory Defined. The term "Territory" as used herein shall
mean the entire world.
Section 2. Injunctive Relief. The parties acknowledge that any breach
or threatened breach by it of Section 1 of this Agreement shall entitle the
other party and their affiliates, in addition to any other legal remedies
available to them, (i) to apply to any court of competent jurisdiction to enjoin
such breach or threatened breach without the requirement of posting a bond or
other security or a showing of special damages and (ii) the right and remedy to
require the breaching party and its affiliates to account for and pay over to
the other party, in their sole discretion, all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by them as the result of any transactions constituting a breach of the
restrictive covenants of Section 1 hereof, and the breaching party and its
affiliates shall account for and pay over such Benefits to the other party. The
parties understand and intend that each restriction agreed to hereinabove shall
be construed as separable and divisible from every other restriction, that the
unenforceability of any one restriction shall not limit the enforceability, in
whole or in part, of any other restriction, and that one or more or all of such
restrictions may be enforced in whole or in part as the circumstances warrant.
In the event that any restriction in this Agreement is more restrictive than
permitted by the laws of the jurisdiction in which enforcement thereof is
sought, such restriction shall be limited to the extent permitted by law.
Section 3. Consideration for Non-Compete Covenants. As an additional
inducement to each party to consummate the transactions contemplated by the
Asset Purchase Agreement, Dentsply and Del and GDM have agreed to enter into
this Non-Compete Agreement, on the terms and subject to the conditions herein
contained.
Section 4. Miscellaneous.
4.1. Entire Agreement. This Agreement constitutes and embodies the
full and complete understanding and agreement of the parties with respect to the
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matters covered hereby, supersedes all prior understandings and agreements, if
any, whether oral or written among Del, GDM and Dentsply with respect to such
matters and shall not be amended, modified or changed except by an instrument in
writing executed by the party to be charged. The invalidity or partial
invalidity of one or more provisions of this Agreement shall not invalidate any
other provision of this Agreement. No waiver by either party of any provision or
condition to be performed shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or any prior or subsequent time.
4.2. Binding Effect. This Agreement shall inure to the benefit of,
be binding upon and enforceable against, the parties hereto and their respective
successors. No assignment of any party's rights or obligations shall be
effective without the prior written consent of the other party hereto.
4.3. Captions. The captions contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
4.4. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered or sent by
confirmed telefax, certified mail, postage prepaid, or special overnight
delivery, to the party at the address set forth above or to such other address
as either party may thereafter give notice of in accordance with the provisions
hereof.
4.5. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
4.6. Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of Delaware applicable to contracts made
and to be performed therein without giving effect to the principles of conflict
of laws thereof. Except in respect of any action commenced by a third party in
another jurisdiction, the parties hereto agree that any legal suit, action, or
proceeding against them arising out of or relating to this Agreement shall be
brought exclusively in the United States Federal Courts in the State of Delaware
or the Courts of Chancery, in the State of Delaware. The parties hereto hereby
accept the jurisdictions of such courts for the purpose of any such action or
proceeding, and agree that venue for any action or proceeding brought in the
State of Delaware shall lie in the United States Federal Courts or the Courts of
Chancery located in New Castle County, Delaware as the case many be. Each of the
parties hereto hereby irrevocably consents to the service of process in any
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action or proceeding in such courts by the mailing thereof by United States
registered or certified mail postage prepaid at its address set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
GENDEX-DEL MEDICAL IMAGING CORP.
By: /s/David Engel
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David Engel
Executive Vice President and
Chief Financial Officer
DEL GLOBAL TECHNOLOGIES CORP.
By: /s/David Engel
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David Engel
Executive Vice President and
Chief Financial Officer
DENTSPLY INTERNATIONAL INC.
By: /s/Edward Yates
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Edward Yates
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