Exhibit 10.2
[EXECUTION COPY]
NONCOMPETITION
AGREEMENT
THIS NONCOMPETITION
AGREEMENT (this
“Agreement”) dated as of April 23_, 2004, between
Paul McConnell, a resident of the Commonwealth of Massachusetts
(“Seller”), and Curative Health Services, Inc., a
Minnesota corporation (“Buyer”).
WHEREAS , Seller is a shareholder of Critical Care
Systems, Inc., a Delaware corporation (the “Company”);
and
WHEREAS , Buyer has entered into an agreement with
Seller and certain other persons, dated February 24, 2004 (the
“Purchase Agreement”), pursuant to which Buyer will
acquire all of the issued and outstanding shares of capital stock
of the Company (the “Shares”) from Seller and the other
shareholders of the Company listed on Schedule 1 to the
Purchase Agreement ; and
WHEREAS , the Buyer is unwilling to proceed with the
purchase of the Shares unless Seller agrees to refrain from
engaging in any activities that are in competition with the
activities being carried on by the Buyer, and it is a condition to
the consummation of the transactions contemplated by the Purchase
Agreement that the Buyer receive this Agreement from
Seller.
NOW, THEREFORE
, in consideration of the premises,
the agreement of the Buyer to consummate the purchase of all Shares
owned by Seller, the mutual agreements herein set forth and other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1.
Noncompetition
Commitment .
(a)
Agreement Not
to Compete . Seller agrees that
for a period of four (4) years commencing on the date of this
Agreement (the “Restricted Period”), Seller shall not,
directly or indirectly, through an Affiliate or otherwise, either
for Seller’s own benefit or for the benefit of any other
person, firm, corporation, governmental or private entity, or any
other entity of any kind, without the prior written consent of the
Buyer, which consent may be withheld by the Buyer in its sole
discretion, compete in any manner or capacity (e.g., through any
form of ownership or as an advisor, principal, agent, partner,
officer, director, employee, employer, consultant, member of any
association or otherwise) with the business of the Company as
conducted prior to the date hereof, including without limitation
(i) any business directly or indirectly engaged in the provision of
drugs and/or biopharmaceuticals for delivery to or use in the home
or physician offices, of infusible or injectable therapy products
and services, including without limitation, anti-infectives, TPN
(Total Parenteral Nutrition) therapy, hemophilia clotting factor
products, IVIG (Immune Globulin) therapy, Oncolytics/Chemotherapy
medications, products and/or supplies or other disease management
programs relating thereto for the treatment of chronic and other
conditions, including, but not limited to, autoimmune and immune
deficiency conditions, hemophilia and blood diseases, hepatitis C,
rheumatoid arthritis, Cancer and HIV (collectively,
“Specialty Pharmacy Operations”), and (ii) clinical
services, reimbursement services, delivery services and date supply
services in connection with Specialty Pharmacy Operations
(collectively, “Competitive Activities”).
Notwithstanding the foregoing, the provision of services as an
employee of the Company, Buyer or their Affiliates shall not be
considered a Competitive Activity. For the purpose of this
Agreement, “Affiliate” of a person or entity means any
person or entity controlled by, controlling or under common control
with such
person or entity, or any
member of the immediate family, including parents, spouse, children
or siblings, of a person, provided , however , that
Seller and the Company shall not be considered an Affiliate of each
other.
(b)
Geographic
Extent of Covenant . The obligations of
Seller under Section 1(a) shall apply in any state in which
the Company is located, operates, provides or intents to provide
products or services or does business in on the date hereof.
Seller hereby acknowledges that the geographic boundaries, scope of
prohibited activities and the time duration of the provisions of
this Section 1 are reasonable and are no broader than are
necessary to protect the legitimate business interests of the Buyer
including, without limitation, the ability of the Buyer to realize
the benefit of its bargain and enjoy the goodwill of the
Company.
(c)
Limitation on
Covenant . Ownership by Seller,
as a passive investment, of less than 3% of the outstanding shares
of capital stock of any corporation listed on a national securities
exchange or publicly traded on any nationally recognized
over-the-counter market shall not constitute a breach of this
Section 1.
(d)
Indirect
Competition . Seller further agrees
that during the term of this Agreement Seller will not, directly or
indirectly, assist or encourage any other person in carrying out,
directly or indirectly, any activity that would be prohibited by
the foregoing provisions of this Section 1 if such activity
were carried out by Seller, either directly or indirectly. In
particular, Seller agrees that Seller will not, directly or
indirectly, induce any employee of the Buyer, its Affiliates or the
Company to carry out, directly or indirectly, any such
activity.
(e)
Noncompete
Period Under the Employment Agreement . The Buyer and Seller
have entered into a certain Employment Agreement (the
“Employment Agreement”), dated April 23, 2004,
which Employment Agreement contains separate noncompete
provisions. The parties hereto agree that, should the
noncompete provisions of this Agreement and of the Employment
Agreement ever be simultaneously applicable to Seller, the period
during which Seller shall be restricted from competing with the
Buyer, its Affiliates and the Company shall be the later to expire
of (i) the Restricted Period or (ii) the period during which Seller
is restricted from competing under the Employment
Agreement.
2.
Nonsolicitation
. During
the Restricted Period, Seller shall not, directly or indirectly,
through an Affiliate or otherwise, either for Seller’s own
benefit or for the benefit of any other person, firm, corporation,
governmental or private entity, or any other entity of any kind,
without the prior written consent of the Buyer, which consent may
be withheld by the Buyer in its sole discretion, (i) solicit, or
attempt to solicit any officer, director, employee, consultant,
contractor, agent, lessor, lessee, licensor, licensee, supplier of
the Buyer, its Affiliates or the Company, to terminate, alter or
lessen that party’s affiliation with the Buyer, its
Affiliates or the Company, or to violate the terms of any agreement
or understanding between such employee, consultant, contractor or
other person and the Buyer, its Affiliates or the Company, or (ii)
employ any person who as of the date of this Agreement is, or
during the Restricted Period is or was (other than any person who
shall have responded to an advertisement or other general
solicitation during the Restricted Period), an employee of the
Buyer, its Affiliates or the Company or (iii) solicit, divert,
appropriate or induce or attempt to solicit, divert, appropriate or
induce, directly or indirectly, any customer, supplier,
distributor, licensee or other business relation of the Buyer, its
Affiliates or the Company to cease doing business with the Buyer,
its
2
Affiliates or the Company,
or in any way interfere with the relationship between any such
customer, supplier, distributor, licensee or business relation and
the Buyer, its Affiliates or the Company.
3.
Nondisparagement
. For a
period of four (4) years, from the date of t
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