1
EXHIBIT 10-X (iv)
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
this 7th day of February, 1996 by and between Bindley Western Industries, Inc.,
an Indiana corporation ("BWI"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., a shareholder of
Infectious Disease of Indiana, P.S.C. (the "Shareholder").
WHEREAS, BWI, through its subsidiary, National Infusion Services,
Inc., is purchasing on the date hereof the Infusion Services Division of
Infectious Disease of Indiana, P.S.C. (the "Business") in exchange, in part,
for execution and delivery of this Agreement by the Shareholder;
WHEREAS, in connection with such purchase and the entering of this
Agreement, the Shareholder and BWI have reviewed and considered the laws set
forth at 42 U.S.C. Sections 1320a-7b(b) and 1877, and believe that the terms
and conditions of this Agreement are in compliance with these laws.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. COVENANT NOT TO COMPETE; NONDISCLOSURE.
(a) Except on behalf of one or more of the companies in
the BWI Group (as hereinafter defined), for a period beginning on the
day after the date hereof and ending five years thereafter (the
"Noncompetition Period"), the Shareholder hereby covenants and agrees
that he shall not, directly or indirectly solicit, hire or contract
with any healthcare-related employees of BWI or of any subsidiary,
division or affiliate of BWI (collectively, the "BWI Group"), or any
past healthcare-related employees of the BWI Group who were employed
by the BWI Group within twelve (12) months prior to the date of this
Agreement.
(b) Except on behalf of one or more of the companies in
the BWI Group, during the Noncompetition Period, the Shareholder shall
not, directly or indirectly, reveal or disclose to third parties any
Trade Secrets (as hereinafter defined) of the BWI Group or the
Business, which are not, at the time in question, in the public domain
without having become so in violation of this Agreement, except as
authorized by BWI. For purposes of this Agreement, the term "Trade
Secret" includes not only that confidential or proprietorial
information defined as a "Trade Secret" under the Indiana Trade
Secrets Act, I.C. Section 24-2-3-1 et seq. (the "Act"), but also that
information which possesses independent economic benefit to the BWI
Group or the Business from not being generally known by other persons
who can obtain economic benefit from its disclosure or use. The
Shareholder covenants that he will, at all times, conform his conduct
to the requirements of the Act and will not misappropriate (e.g., use
or disclose to any third party) any Trade Secret of the BWI Group or
the Business. The Shareholder recognizes that the damages
2
for a Trade Secret violation may include disgorgement of profits,
payment of royalties, compensatory damages, punitive damages and
attorneys' fees.
(c) Except on behalf of one or more of the companies in
the BWI Group, during the Noncompetition Period the Shareholder shall
not, without the written consent of BWI (which consent BWI may give or
withhold in its sole discretion), directly or indirectly (i) own any
interest in (except the ownership of less than five percent of the
capital interest in a publicly traded entity or indirect ownership of
less than five percent as a participant in an employee benefit plan)
or manage (whether as an owner, employee, consultant or other agent of
any type whatsoever) a business identical or substantially similar to
the Business in the State of Indiana, or (ii) except where the failure
to do so without first obtaining BWI's written consent would
constitute a health risk to the potential recipient, sell, offer or
provide to any person or entity which is a past or present supplier,
client, patient or customer of the Business a product or service
substantially similar to products or services offered by the Business;
provided, however, that the foregoing is not intended to prohibit or
restrict, and shall not be construed as prohibiting or restricting,
the Shareholder from engaging in the practice of medicine
substantially in the manner in which the Shareholder engaged in the
practice of medicine immediately prior to the commencement of the
Noncompetition Period or in any other manner that does not contravene
the foregoing restrictive covenants. By way of explanation and
amplification of the foregoing, the Shareholder is a physician who, in
the course of his medical practice, refers patients to, and manages
the care of patients who are receiving services from, various sources
that provide infusion services and other services identical or similar
to those provided by the Business. Nothing in this Noncompetition
Agreement is intended to prohibit the Shareholder, in his capacity as
a physician, from continuing to refer patients to and manage the care
of patients who are receiving services from other infusion centers or
other businesses that compete with the Business. It is understood
that the Shareholder may, in his capacity as a physician, be required
to become involved as a physician and health care provider in or
otherwise establish working relationships of various types with
managed care plans or other health care provider groups or networks
that are or may become providers of infusion services or other
services similar to those provided by the Business, and that if he is
required to be an employee (solely in the capacity as a physician) of
any such plan or group he may become a participant in one or more
employer-sponsored benefit plans that may own employer securities
(which would be a circumstance that the Shareholder could not
control). The establishment and maintenance of such relationships in
the course of the conduct of the medical practice of the Shareholder
is not intended to be prohibited by the foregoing restrictive
covenants. Rather, such restrictive covenants are intended to
prohibit the Shareholder from becoming financially interested as an
owner (or the economic equivalent) in, or from becoming involved in a
management position (as opposed to a position in which the Shareholder
is merely rendering medical care and advice) with, a business
identical or substantially similar to the Business in the State of
Indiana and from soliciting past or present suppliers, clients,
patients or customers of the Business for any competitor of the
Business.
2
3
(d) The covenants contained in this Section 1 shall be
construed as a series of separate and severable covenants which are
identical in terms except for geographic coverage. The Shareholder
and BWI agree that if in any proceeding, the tribunal shall refuse to
enforce fully any covenants contained herein because such covenants
cover too extensive a geographic area or too long a period of time or
for any other reason whatsoever, any such covenant shall be deemed
amended to the extent (but only to the extent) required by law. Each
party shall have the right to injunctive relief, in addition to all of
its other rights and remedies at law or in equity, to enforce the
provisions of this Agreement.
(e) BWI acknowledges that all of the other shareholders
(other than the Shareholder and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.) of Infectious
Disease of Indiana, P.S.C. ("IDI") (each an "Other Shareholder" and
collectively the "Other Shareholders") are entering into agreements
with BWI substantially identical to this Agreement (the "Other
Shareholder Agreements") on or about the date hereof, and acknowledges
that the Shareholder and some or all of the Other Shareholders may
continue to be shareholders, officers and employees of IDI or may from
time to time otherwise be associated with one another in one or more
entities or business relationships for the purpose of conducting a
medical practice or practices. Notwithstanding anything herein to the
contrary, no acts or actions committed or taken by any of the Other
Shareholders, including any such acts or actions that may constitute a
breach or violation by any such Other Shareholder of any of the Other
Shareholder Agreements, shall constitute a direct or indirect breach
or violation (including a "Continuing Violation" under Section 3) by
the Shareholder of any of the Shareholder's covenants hereunder unless
the Shareholder either (i) has authorized the acts or actions being
committed or taken by such Other Shareholders, or (ii) is sharing in
or otherwise receiving a direct economic benefit from the acts or
actions of the Other Shareholders.
2. CONSIDERATION.
In consideration for the noncompetition obligations of the
Shareholder, BWI shall pay to the Shareholder on the date hereof, by certified
or bank cashiers check, the sum of $258,256.88.
3. LIQUIDATED DAMAGES
(a) This Section 3 sets forth certain non-exclusive
remedies available to BWI (in addition to other legal and equitable
remedies available to BWI) with respect to violations (or alleged
violations) by the Shareholder of one or more of the Shareholder's
covenants under Section 1 of this Agreement (each such covenant being
referred to herein as a "Section 1 Covenant" and said covenants being
collectively referred to herein as the "Section 1 Covenants").
3
4
(b) For purposes of this Section 3:
(i) "Liquidated Damages" means the damage
recovery that BWI may be entitled to seek for violation of a
Section 1 Covenant under the provisions of this Section 3.
(ii) "Liquidated Damages Notice" means a written
notification given by BWI to the Shareholder, and signed by an
executive officer of BWI, asserting that the Shareholder has
violated and/or is violating a Section 1 Covenant, stating
with reasonable specificity the particular Section 1 Covenant
being violated and the factual basis supporting BWI's
assertion.
(c) The Shareholder and BWI acknowledge that it would be
impracticable and difficult to ascertain the actual damages that BWI
would suffer if the Shareholder commits a Continuing Violation
(defined below) of any of his Section 1 Covenants. The Shareholder
and BWI have considered carefully the damages, general and special,
which the Shareholder and BWI realize and recognize that BWI would
sustain but which BWI cannot at this time calculate with absolute
certainty in the event of such a Continuing Violation. Based on all
those considerations, the Shareholder and BWI have agreed that for
purposes of this Section 3 the damages to BWI on account of a
Continuing Violation should be fixed and liquidated by the mutual
agreement of the parties as follows:
Earliest Period of Time During Which Maximum Amount of
Continuing Violation Occurs Liquidated Damages Recoverable
On or prior to February 7, 1997 $522,970.18
February 8, 1997 through February 7, 1998 $319,592.89
February 8, 1998 through February 7, 1999 $116,215.60
February 8, 1999 through February 7, 2000 $58,107.80
February 8, 2000 through February 7, 2001 $29,053.90
(d) BWI shall be entitled to recover Liquidated Damages
from the Shareholder, in the amount determined under Section 3(c)
above, only on account of a Continuing Violation of a Section 1
Covenant. For purposes of this Agreement, a "Continuing Violation"
means that:
(i) a violation of a Section 1 Covenant by the
Shareholder in fact occurred; and
4
5
(ii) after receipt of a Liquidated Damages Notice, the Shareholder
either:
(A) repeats a solicitation of
prospective employment or contracting with respect to
a person in violation of Section 1(a) after receiving
a Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(a) for soliciting such person, or fails to
terminate an employment or contract relationship with
a person in violation of Section 1(a) within thirty
(30) days following the date on which the Shareholder
receives a Liquidated Damages Notice from BWI
asserting that such employment or contract
relationship with such person is a violation of the
Shareholder's covenants under Section 1(a); or
(B) continues the improper use of, or
makes any further prohibited disclosure of, a Trade
Secret in violation of Section 1(b) after receiving a
Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(b) for using or disclosing such Trade
Secret; or
(C) sells, offers or provides a particular
product or service in violation of his covenant not
to do so under Section 1(c)(ii) after receiving a
Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(c)(ii) for selling, offering or providing
that same product or service; or
(D) continues to own a prohibited ownership
interest in a specifically identified business
identical or substantially similar to the Business in
the State of Indiana in violation of his covenant
under Section 1(c)(i) for more than thirty (30) days
following the date on which the Shareholder receives
a Liquidated Damages Notice from BWI asserting that
such ownership in that specifically identified
business is a violation of the Shareholder's
covenants under Section 1(c)(i); provided, however,
that if the nature of the Shareholder's prohibited
ownership interest is such that it can be terminated
by the Shareholder but cannot be reasonably
terminated within the 30 day period provided above,
and if the Shareholder commences efforts to terminate
such ownership interest within such 30 day period and
thereafter diligently proceeds to take such actions
as may be reasonably required to effect such
termination, the 30 day "cure" period provided above
shall be extended for a period ending the earlier of
(1) 90 days after the expiration of such 30 day cure
period provided above, or (2) the date as of which
the Shareholder shall cease the diligent pursuit of
such actions as may be reasonably required to
terminate such ownership interest; or
5
6
(E) continues to hold a prohibited
management position in a specifically identified
business identical or substantially similar to the
Business in the State of Indiana in violation of his
covenant under Section 1(c)(i) for more than twenty
(20) days following the date on which the Shareholder
receives a Liquidated Damages Notice from BWI
asserting that occupying such position in that
specifically identified business is a violation of
the Shareholder's covenants under Section 1(c)(i).
(e) Under no circumstances shall BWI be entitled to
recover Liquidated Damages more than once or for more than one
violation of the Section 1 Covenants or for violations occurring in or
for more than one period of time as reflected in Section 3(c),
regardless of the number of violations that may have occurred or the
number of separate periods of time in which violations occurred. The
amounts reflected as potentially recoverable Liquidated Damages in
Section 3(c) are not recoverable amounts on a "per violation" or on a
"per period" basis, but represent the maximum recovery of Liquidated
Damages that BWI can potentially obtain from the Shareholder for all
violations by the Shareholder of Section 1 Covenants in all relevant
periods of time (in other words, the recovery of such amount reflected
for a particular period of time precludes recovery of the amounts
reflected for subsequent periods of time).
(f) A recovery of Liquidated Damages by BWI hereunder
shall automatically result in the cancellation of this Agreement
effective immediately upon (but not until) payment in full of such
recovery of Liquidated Damages to BWI. Upon such cancellation all
obligations of the parties to one another hereunder shall be void, of
no force and effect and held for naught and any pending litigation,
arbitration or other proceedings involving claims asserted by the
parties hereto and arising hereunder shall be dismissed or withdrawn,
all injunctions or other orders for legal and/or equitable relief with
respect to claims arising hereunder shall be dissolved, dismissed or
otherwise cancelled by mutual agreement, and all liability of the
parties hereto arising hereunder, and all claims, causes of action and
rights of BWI and the Shareholder arising hereunder, with respect to
matters arising or occurring prior to such cancellation shall be fully
and completely released and discharged.
(g) BWI recognizes that the Shareholder may wish to
obtain a determination as promptly as is reasonably practicable with
respect to an alleged violation of a Section 1 Covenant that is
disputed by the Shareholder. Accordingly, BWI agrees that it will, if
so elected by the Shareholder, submit such matter to binding
arbitration under the rules and procedures of the American Arbitration
Association. The parties further agree that in any arbitration,
litigation or other proceeding wherein a determination is being sought
as to whether an alleged violation of a Section 1 Covenant is, in
fact, a violation thereof, they will not, and will instruct their
respective counsel that such counsel should not on their behalf, take
any actions that are primarily intended to delay such determination
other than delays that in good faith are reasonably necessary for
preparation by counsel.
6
7
1. MISCELLANEOUS.
(a) Additional Actions and Documents. Each of the
parties hereto hereby agrees to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this
Agreement.
(b) Assignment. The parties shall not assign their
respective rights and obligations under this Agreement, in whole or in
part, whether by operation of law or otherwise, without the prior
written consent of the other party, and any such assignment contrary
to the terms hereof shall be null and void and of no force and effect.
Notwithstanding the foregoing, all of the rights of BWI under this
Agreement may be assigned to any member of the BWI Group without the
consent of the Shareholder.
(c) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement among the parties hereto with respect
to the transactions contemplated herein, and it supersedes all prior
oral or written agreements, commitments or understandings with respect
to the matters provided for herein. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth
in writing and duly executed and delivered by the party against whom
enforcement of the amendment, modification, or discharge is sought.
(d) Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this
Agreement or under any other documents furnished in connection with or
pursuant to this Agreement shall impair any such right, power or
privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power
or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent
expressly specified therein.
(e) Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the
laws of the State of Indiana (excluding the choice of law rules
thereof).
(f) Notices. All notices, demands, requests, or other
communications that may be or are required to be given, served, or
sent by any party to any other party pursuant to this Agreement shall
be in writing and shall be hand delivered, sent by overnight courier
or mailed by first-class, registered or certified mail, return receipt
7
8
requested, postage prepaid, or transmitted by telegram, telecopy or
telex, addressed as follows:
(i) If to BWI:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President and
General Counsel
Bindley Western Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Shareholder:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so
given, served or sent. Each notice, demand, request, or communication
that shall be hand delivered, sent, mailed, telecopied or telexed in
the manner described above, or that shall be delivered to a telegraph
corporation, shall be deemed sufficiently given, served, sent,
received or delivered for all purposes at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed
conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
(g) Headings. Article and Section headings contained in
this Agreement are inserted for convenience of reference only, shall
not be deemed to be a part of this Agreement for any purpose, and
shall not in any way define or affect the meaning, construction or
scope of any of the provisions hereof.
(h) Execution in Counterparts. To facilitate execution,
this Agreement may be executed in as many counterparts as may be
required. It shall not be necessary that the signatures of, or on
behalf of, each party, or that the signatures of all persons required
to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that
the signatures of the persons required to bind any party, appear on
one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making
proof of this Agreement to produce or account for more than a number
of counterparts containing the respective signatures of, or on behalf
of, all of the parties hereto.
8
9
(i) Limitation on Benefits. The covenants, undertakings
and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto and
their respective successors, heirs, executors, administrators, legal
representatives and permitted assigns.
(j) Binding Effect. Subject to any provisions hereof
restricting assignment, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors, heirs, executors, administrators, legal representatives
and assigns.
(k) Attorneys' Fees, Etc. The prevailing party shall be
entitled to be reimbursed by the losing party for all of the
prevailing party's attorneys' fees and other expenses incurred in
connection with any proceedings to interpret or enforce its rights
under this Agreement or in resisting an unsuccessful interpretation or
enforcement attempt by the other party.
IN WITNESS WHEREOF, each of the parties hereto has executed this
NONCOMPETITION AGREEMENT, or has caused this NONCOMPETITION AGREEMENT to be
duly executed and delivered in its name on its behalf, all as of the day and
year first above written.
BINDLEY WESTERN INDUSTRIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Executive Vice
President and General Counsel
SHAREHOLDER
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
9
