EXHIBIT 10.46
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT(this “Agreement”), is made and enteredinto as of this 30th day of April, 2007, by and between ProxyMed, Inc. d/b/a MedAvantHealthcare Solutions, a corporation duly organized and validly existing under the laws of theState of Florida (“Seller”), and SureScripts, LLC, a limited liability company duly organized andvalidly existing under the laws of the Commonwealth of Virginia (“Buyer”).
WHEREAS,Seller and Buyer have entered into that certain Purchase Agreement, datedas of April 30, 2007 (the “Purchase Agreement”) whereby Buyer has agreed to purchase thePharmacy Processing Business of Seller, all as set forth in such Purchase Agreement;
WHEREAS,as a material part of the benefit of the bargain and as an inducement toBuyer, without which Buyer would not enter into the Purchase Agreement, Seller has promisedand agreed to abide by the covenants and promises set forth in this Agreement; and
WHEREAS,Buyer would not enter into the Purchase Agreement or pay to Seller any ofthe proposed purchase price pursuant to the Purchase Agreement without Seller agreeing to abideby the restrictions set forth in this Agreement.
NOW, THEREFORE,in consideration of the foregoing, the mutual promiseshereinafter set forth, and other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereto promise and agree as follows:
1.Incorporation of Recitals; Definitions; Acknowledgments.
(a)The foregoing recitals are restated and incorporated herein by reference and madea part hereof. All capitalized terms used herein but not otherwise defined herein shall have themeaning ascribed to them in the Purchase Agreement.
(b)Seller acknowledges that: (i) the Restricted Activity (as defined below) isintensely competitive; (ii) Seller has knowledge of Seller Confidential Information (definedbelow) associated with the sale of the Pharmacy Processing Business; (iii) the disclosure bySeller of any such Seller Confidential Information to competitors of Buyer may place Buyer at acompetitive disadvantage and may do damage, monetary or otherwise, to Buyer; (iv) theengagement by Seller, or by any party at any time during the Restricted Period controlling,controlled by, or under common control with Seller (each a “Seller Party”) in any of theactivities prohibited by Sections 2 or 7 hereof would constitute a bre ach of this Agreement andmay constitute improper appropriation and/or use of such Seller Confidential Information; (v)Seller has been advised by counsel in connection with its entering into this Agreement; and (vi)the noncompetition and other restrictive covenants and agreements set forth in this Agreementare reasonable.
(c)As used herein, “Seller Confidential Information” shall mean non-publicinformation of Seller owned and/or known by Seller related to the Pharmacy ProcessingBusiness being purchased by Buyer pursuant to the Purchase Agreement. “Seller ConfidentialInformation” shall not include any information (i) that is generally known or becomes known to
the public other than as a result of disclosure by Seller in breach of this Agreement; (ii) was orbecomes available to others on a non-confidential basis from a source other than Seller; or (iii) isdisclosed with the prior written approval of Buyer.
2.Noncompetition and Nonsolicitation. Except as otherwise specificallypermitted in this Agreement and the Purchase Agreement, from the date hereof until April 30,2012 (the “Restricted Period”), Seller and each and every Seller Party shall not, directly orindirectly, in the United States or any territory of the United States:
(a)(i) own, (ii) operate, (iii) manage, (iv) lease, (v) control, and/or (vi) renderservices (including consulting services) (the restriction related to services shall be limited toservices related to Electronic Prescribing Transactions) to, be an investor in, or be a lender to,any person, entity, or business that owns, operates, manages, leases, or controls:
an electronic network that establishes, facilitates, and/or maintains connectivitybetween and among providers, pharmacies, and/or pharmacy benefit managementcompanies for the purpose of processing, routing, delivering, and/or exchangingElectronic Prescribing Transactions (as defined below) (all of subsection (a) to bereferred to herein as the “Restricted Activity”);
(b)intentionally interfere with, disrupt, or attempt to disrupt any current contractualrelationship between Buyer and any customer, supplier, or employee of Buyer; or
(c)employ, hire, or solicit for employment, or attempt to employ, hire, or solicit foremployment, any person employed by Buyer as of the date hereof or during the RestrictedPeriod, or induce or attempt to induce, directly or indirectly, any person employed by Buyer asof the date hereof or during the Restricted Period, to terminate his or her employment withBuyer.
For purposes of this Agreement, Electronic Prescribing Transactions is defined aselectronic prescribing messages (including, but not limited to, new prescriptions, refill requests,refill responses, stop orders), formulary and/or eligibility messages related to prescription claims,and patient identifiable medication history as derived from electronic prescribing messages,formulary and/or eligibility messages, and/or the dispensed history data bases of pharmacies,whether through true electronic data interchange or facsimile.
3.Exceptions.Notwithstanding the foregoing set forth in Section 2, nothing setforth in this Agreement shall prohibit any of the following:
(a)Seller’s ownership of a passive investment of no more than five percent (5%) inany publicly traded entity that engages in the Restricted Activity; provided, that Seller may ownmore than five percent (5%) of such company in the event it obtains such interest as a result of aChange of Control (as defined below) pursuant to an arm's length transactionnegotiated in good faith not for the purpose of circumventing the intentof this Agreement as it applies to Seller.
2
(b)Seller’s engagement in general employment solicitation activities to the public atlarge, including posting or advertising for positions and interviewing and hiring any employee ofBuyer that apply for positions as a result of such general postings and advertising.
(c)Seller hiring any employee of Buyer who (i) resigns voluntarily or (ii) isterminated by Buyer.
(d)Seller selling its proprietary technology applications to one or more third partiesand providing routine maintenance, upgrades, and/or enhancements to such technologyapplications (so long as such maintenance, upgrades, and/or enhancements are of generalapplicability, and do not specifically relate or apply to Electronic Prescribing Transactions only).
4.Extension of Term.In the event a court of competent jurisdiction determinesthat Seller or any Seller Party has breached any covenant set forth in Section 2, as limited bySection 3, the term of the covenant set forth in Section 2 so breached will be extended as toSeller and each and every Seller Party by the period of the duration of such breach with respectto Seller and each Seller Party.
5.Enforcement/Remedies.Seller acknowledges and agrees that the geographicarea, time periods, subject matter, and all other aspects of the restrictions set forth in Sections 2and 7 of this Agreement are reasonable and are appropriate for the protection of Buyer’slegitimate property and business interest. In the event that Seller or any Seller Party breachesany such restrictions, Buyer may suffer immediate and irreparable harm and injury for whichthere may not be an adequate remedy at law, and Buyer will be entitled, in addition to any otherremedies or damages available them for such breach, to seek and obtain temporary, preliminary,and permanent injunctive relief, consisten t with, and enforcing the terms of, this Agreement,without posting any bond with respect thereto.
6.Indemnification.In the event that Seller or any Seller Party breaches anyprovision of Section 2 or Section 7, Seller shall indemnify and hold harmless Buyer and theirrespective officers, directors, shareholders, members, and employees for, from and against anyand all liabilities, losses, damages, claims, causes of action, costs and expenses (includingreasonable attorneys’ fees) incurred by Buyer or Buyer as a result of such breach.
7.Confidentiality Agreement.During the Restricted Period, Seller and each SellerParty will treat and hold as confidential all of the Seller Confidential Information, and not use itfor any purpose. In the event that during the Restricted Period Seller or any Seller Party is calledupon to reveal Seller Confidential Information in order to comply with the requirements of lawor the lawful orders or process of a court or governmental agency, it shall so notify Buyer inwriting upon becoming aware of such request for compliance and, in any event, not less than five(5) days prior to the date for compliance and prior to disclosing of such information. In the eventBuyer seeks relief, by way of a protective order or otherwise, Seller or the applicable Seller Partyshall cooperate in good faith, but at the sole expense of Buyer, with respect to such effort toobtain relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Selleror the applicable Seller Party is, on the advice of counsel, compelled to disclose any SellerConfidential Information during the Restricted Period to any tribunal or else stand liable forcontempt, Seller or the applicable Seller Party may disclose the Seller Confidential Information
3
to the tribunal;provided,however, that the disclosing party shall use its reasonable efforts toobtain, at the reasonable request, and the sole expense, of Buyer, an order or other assurance thatconfidential treatment will be accorded to such portion of the Seller Confidential Informationrequired to be disclosed as Buyer shall designate. This Section shall not apply to any disclosurenecessary in connection with a potential acquisition of any of the equity interests issued by orany substantial portion of the assets of a party (including any acquisition structured as a merger,consolidation, or share exchange) hereto, provided, however, that the person receiving suchinformation is bound by confidenti ality restrictions no less restrictive than those set forth herein.
8.Severability.If any one or more of the provisions of this Agreement is ruled tobe wholly or partly invalid or unenforceable by a court or other government body of competentjurisdiction then:(a)the validity and enforceability of all provisions of this Agreement not ruledto be invalid or unenforceable shall be unaffected;(b)the effect of the ruling shall be limited tothe jurisdiction of the court or other government body making the ruling;(c)the provision(s)held wholly or partly invalid or unenforceable shall be deemed amended, and the court or othergovernment body is authorized to amend and to reform the provision(s) to the minimum extentnecessary to render it valid and enforceable in conformity with the parties’ intent as manifestedin this Agreement and a provision having a similar economic effect shall be substituted; and(d)if the ruling and/or the controlling principle of law or equity leading to the ruling is subsequentlyoverruled, modified, or amended by legislative, judicial, or administrative action, then theprovision(s) in question as originally set forth in this Agreement shall be deemed valid andenforceable to the maximum extent permitted by the new controlling principle of law or equity.
9.Waiver.Neither any course of dealing between or among the parties hereto norany delay, failure, or omission by any party hereto to exercise any right under this Agreementshall operate or be deemed to operate as a waiver of any such right. No party shall be deemed tohave waived any right hereunder unless such waiver is in writing duly executed by such party.Any waiver or consent given by a party hereunder on any one occasion or with respect to anyparticular circumstance shall be effective only with respect to such occasion or suchcircumstance and shall not be construed as a bar to or waiver of such right on any other occasionor with respect to any other circumstance.
10.Construction.This Agreement shall not be construed more strictly against anyparty hereto merely by virtue of the fact that the Agreement may have been drafted or preparedby such party or its counsel, it being recognized that the parties hereto have contributedsubstantially and materially to its preparation and that this Agreement has been the subject of andis the product of negotiations between the parties.
11.Headings.The headings, captions, and titles appearing in this Agreement areinserted only as a matter of convenience and in no way define, limit, construe, or describe thescope or intent of the Agreement or any paragraph or provision therein.
12.Cumulative Remedies.Any right, power, or remedy provided under thisAgreement to a party hereto shall be cumulative and in addition to any other right, power, orremedy provided under this Agreement now or hereafter existing at law or in equity, and may beexercised singularly or concurrently.
4
13.Binding Agreement.This Agreement shall be binding on and shall inure to thebenefit of the parties hereto, and their respective officers, employees and agents.
14,Change of Control. A “Change of Control” is defined as any transactionwhereby, any person or entity acquires all or substantially all of the assets or equity interests ofeither party (including any acquisition structured as a merger, consolidation, or share exchange).If there is a Change of Control of Seller, pursuant to an arm’s length transaction negotiated ingood faith not for the purpose of circumventing the intent of this Agreement as it applies toSeller, then Seller’s successor-in-interest shall not be subject to the terms of Section 2 of thisAgreement;provided, however, that the confidentiality provisions of Section 6 and all otherapplicable provisions of this Agreement shall survive such Change of Control and shall bebinding upon Seller’s successor-in-interest.
15.Applicable Law.The construction, interpretation, and enforcement of thisAgreement shall at all times and in all respects be governed by the laws of the Commonwealth ofVirginia, without reference to Virginia’s choice of law or conflict of law provisions.
16.Authority.The parties hereto respectively represent and warrant that the personsigning this Agreement on their behalf has the requisite authority to do so and to make thepromises and to undertake the obligations set forth herein on behalf of the persons and entitiesindicated and to legally bind those persons to the terms and provisions of this Agreement.
17.Counterparts.This Agreement may be executed in any number of counterpartsby each of the undersigned, and each counterpart shall be deemed to be an original, but all suchcounterparts shall together constitute one and the same Agreement.
18.Assignment.If Buyer enters into a transaction constituting a Change of Control,then Buyer shall be entitled to assign its respective rights pursuant to this Agreement to itssuccessor-in-interest.
19.Attorney’s Fees.In the event of any litigated dispute between the parties withrespect to this Agreement, each party shall bear it’s own costs, attorney’s fees and expenses.
20.Entire Agreement.This Agreement contains the entire agreement andunderstanding between the parties hereto with respect to the subject matter hereof, and norepresentations, promises, or agreement, oral or written, relating hereto not herein contained shallbe of any force or effect. No change or modification of this Agreement shall be valid or bindingupon the parties unless and until the same is in writing and signed by the party against whomenforcement of such change or modification is sought.
[Signature page follows]
5
IN WITNESS WHEREOF,the parties hereto have executed this Agreement effective asof the date first set forth above.
| SURESCRIPTS, LLC |
| |
| |
| By: | | /s/ Kevin Hutchinson |
| |
|
| | | Signature |
| |
| | | Kevin Hutchinson |
| |
|
| | | Print Name |
| |
| Its: | | President & CEO |
| |
|
| | | Title |
| |
| |
| |
| PROXYMED, INC., D/B/A |
| MEDAVANT HEALTHCARE SOLUTIONS |
| |
| |
| By: | | /s/ Peter Fleming |
| |
|
| | | Signature |
| |
| | | Peter Fleming |
| |
|
| | | Print Name |
| |
| Its: | | General Counsel |
| |
|
| | | Title |
