Exhibit 10.2
NON-COMPETITION
AGREEMENT
THIS NON-COMPETITION AGREEMENT (this
“ Agreement ”) is entered into as of
July 6, 2008, by and between Fresenius SE, a societas
europaea organized under the laws of Germany (the “
Company ”), and Dr. Patrick Soon-Shiong (“
Shareholder ”), a shareholder of APP Pharmaceuticals,
Inc., a Delaware corporation (“ APP
”).
RECITALS
A. APP is engaged in the business of
developing, in-licensing, manufacturing, selling, marketing and
distributing APP Generic Pharmaceutical Products (as defined below)
(such business, the “ Business ”).
B. Shareholder is a significant
stockholder and chairman of APP, and until recently, Shareholder
was an executive officer of APP as well. Accordingly, Shareholder
has acquired confidential and proprietary information relating to
the Business and operations of APP.
C. Shareholder’s covenant not
to compete, as reflected in this Agreement, is an essential
inducement to the Company to enter into the transactions described
in the Agreement and Plan of Merger dated as of July 6, 2008
(the “ Merger Agreement ”), among the Company,
Fresenius Kabi Pharmaceuticals Holding, LLC, a Delaware limited
liability company and an indirect, wholly-owned subsidiary of the
Company (“ Holdco ”), Fresenius Kabi
Pharmaceuticals, LLC, a Delaware limited liability company and a
direct, wholly-owned subsidiary of Holdco, and APP (the
transactions contemplated by the Merger Agreement are referred to
hereinafter as the “ Merger ”). Capitalized
terms not defined herein shall have the definition ascribed to such
term in the Merger Agreement.
D. It is anticipated that
Shareholder will continue his association with APP and the Company
following the consummation of the Merger as a consultant and
advisor to the Company.
E. Shareholder, directly or
indirectly, holds a substantial number of the issued and
outstanding shares of stock of APP for which he will receive
valuable consideration as part of the Merger, and therefore has a
material economic interest in the consummation of the
Merger.
F. In order to protect the goodwill
related to the Business, the Shareholder has agreed to the
restrictive covenants set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and to induce the Company to consummate the
transactions contemplated by the Merger Agreement and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Shareholder hereby covenants and
agrees as follows:
1. Effective Date . This
Agreement shall be effective as of the Closing. This Agreement
shall be void and have no force or effect if the Merger Agreement
is terminated prior to the Effective Time or the Merger is
otherwise not consummated.
2. Non-Competition
.
(a) Shareholder and the Company
agree that due to the nature of Shareholder’s past and
continuing association with APP, Shareholder has received and is
knowledgeable about, and will continue to receive, confidential and
proprietary information relating to the business and operations and
the relationships with employees, customers and suppliers of APP
and its Affiliates. Shareholder acknowledges that such information
is of extreme importance to the business of APP and the Company,
and will be of extreme importance to APP and the Company after the
Merger.
(b) Shareholder and the Company
further agree that the market for APP Generic Pharmaceutical
Products is intensely competitive and that APP engages in the
Business throughout the United States and Canada.
(c) During the period which shall
commence at the time of the Closing and shall terminate four
(4) years from the Effective Date (the “ Restricted
Period ”), Shareholder shall not, without prior written
consent of the Company, with such permission to be given in the
Company’s sole and absolute discretion, directly or
indirectly (including without limitation, through any Affiliate (as
defined below) of Shareholder), own, manage, operate, control or
otherwise engage or participate in, or be connected to, as an
owner, partner, principal, creditor, salesperson, advisor, member
of the board of directors of, employee of, or consultant to, any
company, business, venture or any division, group or other subset
of a company, business or venture that engages in any substantive
part of the Business in which APP is engaged at the time of the
Merger (each a “ Competitor ”) within the
Restricted Area (as defined below) (such activities, the “
Restricted Activities ”); provided ,
however , that the following shall not constitute
“Restricted Activities” and this section shall not
prohibit Shareholder from directly or indirectly (including without
limitation, through any Affiliate (as defined below) of
Shareholder) (i) owning, managing, operating, controlling or
otherwise engaging in, participating in or being connected to
developing, in-licensing, manufacturing, selling, marketing and/or
distributing biosimilar, follow-on biologics, generic biologic
products or oxaliplatin or enoxaparin or dalteparin, provided that
Shareholder may only conduct such activities with respect to
oxaliplatin in the manner currently being conducted by Shareholder
in connection with the acquisition of Shimoda Biotech (Pty) Ltd.
and its subsidiary, (ii) contract manufacturing (and the
related activities necessary to perform contract manufacturing) of
APP Generic Pharmaceutical Products by Abraxis BioScience, Inc. in
the manner currently being conducted in the Abraxis BioScience,
Inc. facility in Phoenix, Arizona, (iii) contract
manufacturing (and the related activities necessary to perform
contract manufacturing) by Abraxis BioScience, Inc. or one or more
of its Subsidiaries of APP Generic Pharmaceutical Products upon the
consent of the Company, such consent not to be unreasonably
withheld, (iv) developing (and related in-licensing and
manufacturing) APP Generic Pharmaceutical Products upon the consent
of the Company, such consent not to be unreasonably withheld, so
long as such products are not sold, marketed and/or distributed
within the Restricted Area during the Restricted Period and
(v) serving as a director, consultant or advisor of APP or the
Company or any Affiliate of the Company.
(d) Notwithstanding the foregoing
provisions of Section 2(c) and the restrictions set forth
therein, Shareholder or his Affiliates may: (i) own
(A) securities in any Competitor that is a publicly held
corporation, but only to the extent that Shareholder does not own,
of record or beneficially, more than 3% of the outstanding
beneficial ownership of any such Competitor and (B) securities
in any Competitor, provided that the Shareholder acquired such
securities as the result of a sale or other distribution of Abraxis
BioScience, Inc. to any Person and provided further that the
Shareholder does not own, of record or beneficially, more than 15%
of the outstanding beneficial ownership of any such Competitor and
(ii) acquire and hold control of any Person or business (or an
interest in any Person or business) that at all times when held by
the Shareholder or his Affiliates (based on the then-preceding
fiscal year) derives less than 15% of its revenues from the
Restricted Activities.
2
(e) “ APP Generic
Pharmaceutical Product ” means the products listed on
Schedule 2(e) hereto, in any dosage and in the form (intravenous
and nonintravenous) as marketed, developed or planned to be
developed by APP at the time of the Merger; for the avoidance of
doubt, with respect to oral generic products, APP Generic
Pharmaceutical Products shall only include those oral generic
products listed on Schedule 2(e) in their current
formulation.
(f) “ Affiliate ”
as used herein, means, with respect to any Person or entity, any
Person or entity directly or indirectly controlling, controlled by
or under common control with such other Person or entity, and in
respect of any individual, members of his or her immediate family,
any trust for the benefit of such individual and/or members of his
or her immediate family and any other entity in which such
individual or any members of his or her immediate family separately
or collectively hold (directly or indirectly) a majority of the
outstanding equity interests or of which they are
trustees.
(g) “ Immediate Family
” as used herein, means an individual’s spouse,
children, parents and anyone else who shares the individual’s
home.
(h) “ Restricted Area
” as used herein, means each county or similar political
subdivision of each State of the United States of America and each
province of Canada.
3. Non-solicitation of Company
Employees. During the Restricted Period, Shareholder shall not,
directly or indirectly (including without limitation, through any
Affiliate of Shareholder), and without the prior written consent of
the Company, solicit or attempt to solicit, any person who is at
the time of such solicitation or attempted solicitation an employee
of APP or any controlled Affiliate of APP to leave the employ of
APP or an
