EXHIBIT 10.3
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (the "Agreement") is entered into this
11th day of September, 1996, by and between QV, Inc., a non-profit Illinois
corporation ("QV"), and CryoLife, Inc., a Florida corporation ("CryoLife").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement (the
"Purchase Agreement") dated as of September 11, 1996, by and among CryoLife and
United Cryopreservation Foundation, Inc. ("UCFI"), CryoLife has agreed to
purchase and UCFI has agreed to sell, substantially all of the assets of UCFI;
WHEREAS, United Transplant Foundation, Inc. ("UTF") and QV are the sole
members of UCFI;
WHEREAS, in order to induce CryoLife to enter into and consummate the
Purchase Agreement, UCFI, UTF, and QV have each agreed to accept certain
restrictions as set forth herein and in those certain Non-Competition Agreements
of even date herewith between CryoLife and UTF and between CryoLife and UCFI.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. The following definitions shall apply to this
Agreement:
(a) "Company Business" means the business of processing,
preserving, and/or distributing cryopreserved heart valves, saphenous veins, or
femoral veins for implantation in humans. Company Business shall not include any
other business activities, including, without limitation, the processing,
procuring and/or distributing of bone or any tissue or organ other than
cryopreserved heart valves, saphenous veins, or femoral veins for implantation
in humans.
(b) "Competing Business" means any person, concern, or entity that
is engaged in or conducts a business substantially the same as the Company
Business.
(c) "Territory" means Arizona, Arkansas, California, Colorado,
Illinois, Indiana, Kentucky, Louisiana, Missouri, New York, North Carolina,
Pennsylvania, Tennessee, Texas, and Virginia, which the parties hereby
acknowledge to be the geographic area in which UCFI conducts the Company
Business on the date of this Agreement.
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(d) "Trade Secrets" means information including, but not limited
to, technical and nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans, pricing information, marketing information, and lists of
actual or potential customers or suppliers which (1) derives economic value,
actual or potential, from not being generally known to or readily ascertainable
by proper means by other persons who can obtain economic value from its
disclosure or use; and (2) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
2. COVENANTS OF THE SELLER. QV acknowledges that, by virtue of the
special knowledge of the affairs, business, customers, suppliers and vendors and
the operations of the Company Business that QV has, CryoLife would suffer
substantial damage if QV breaches or violates any of the covenants and
agreements set forth in this Section 2. Therefore, QV has agreed to the
following covenants and agreements:
(a) QV covenants that it shall not, for a period of five years from
and after the date hereof (the "Noncompetition Period"), directly or indirectly,
in the Territory, for its own account or as an owner, partner, member,
stockholder, joint venturer, investor, lender, or in any other capacity, own,
engage in, conduct, manage, operate or participate in any Competing Business.
(b) During the Noncompetition Period, QV covenants and agrees that
it will not, directly or indirectly, on its own behalf or in the service or on
behalf of others, solicit, divert or appropriate to a Competing Business, or
attempt to solicit, divert or appropriate to or for any Competing Business, any
persons and/or entities who were customers of UCFI in the Territory on the date
immediately preceding the date of this Agreement, or any person and/or entity in
the Territory to whom UCFI has sold or provided any products or services during
the 12 month period immediately preceding the date of this Agreement.
(c) During the Noncompetition Period, QV covenants and agrees that
it will not, directly or indirectly, on its own behalf or in the service or on
behalf of others, hire or attempt to hire any employee of CryoLife, or to cause
any such employee to leave his or her employment, in order to perform services
in the Territory for a Competing Business.
3. SEVERABILITY. Each provision of this Agreement is severable, and if
any one of such provisions shall be reformed or declared unenforceable, such
reformation or declaration shall not affect the enforceability or validity of
any other provision thereof. Each provision thereof shall be enforceable by
CryoLife or any successor thereof against QV notwithstanding any claim or cause
of action asserted by QV against CryoLife or any successor thereof. The
existence of any claim, demand, action, or cause of action of QV against
CryoLife shall not constitute a defense to the enforcement by CryoLife of any of
the covenants contained herein.
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4. REFORMATION BY COURT. In the event any court of competent
jurisdiction should determine that any of the terms of this Agreement are
unreasonable or unenforceable in scope, QV and CryoLife consent to the exercise
by such court of its equitable jurisdiction to reform such terms in accordance
with applicable law.
5. REMEDIES. QV agrees that if it breaches any provision of this
Agreement, the damage to CryoLife would be difficult to ascertain, and money
damages would not afford CryoLife an adequate remedy. Therefore, if QV is in
breach of this Agreement, the parties hereto agree that CryoLife is entitled, in
addition to any and all rights and remedies as would be provided by law, to
specific performance, injunctive, and other equitable relief to prevent or
restrain a breach of this Agreement. In addition, the parties agree that this
Agreement constitutes an Asset Purchase Transaction Document as such term is
defined in the Purchase Agreement. The rights of CryoLife under this Agreement
shall survive the expiration of the Noncompetition Period and are in addition
to, and not in lieu of, any and all rights CryoLife may have at law or in equity
to protect its business interests. QV agrees to be liable for any and all costs
and expenses, including attorneys fees, resulting from the breach by QV of any
provision of this Agreement.
6. CONFIDENTIAL INFORMATION. QV covenants and agrees that all
confidential and proprietary information developed, utilized, or received by QV
relating to the operation of the Company Business by UCFI prior to the Closing
of the Purchase Agreement, including, without limitation, all Trade Secrets and
all information which has been disclosed to UCFI by a third party and which UCFI
has treated as confidential (collectively, "Confidential Information"), and all
physical embodiments thereof, has been transferred to CryoLife pursuant to the
Purchase Agreement. QV will hold such Confidential Information in trust and
strictest confidence, and will not use, reproduce, distribute, disclose or
otherwise disseminate the Confidential Information. The confidentiality
requirements and use restrictions contained in this Section 6 shall survive any
termination of this Agreement but shall not apply (i) to any Confidential
Information that falls into the public domain through no fault of QV or (ii) to
any Confidential Information which is not a Trade Secret when a period of five
years has expired following the execution of this Agreement.
All records, notes, files, memoranda, reports, marketing information,
price lists, supplier lists and information, documents, and all copies and like
items relating to the Trade Secrets which shall be disclosed to or which shall
come into the possession of QV during or prior to the Noncompetition Period
shall be the sole and exclusive property of CryoLife. QV agrees that, at any
time upon request, it will promptly deliver to CryoLife the originals and all
copies of any of the foregoing that are in its possession, custody or control.
7. AMENDMENTS. No amendment or modification of this Agreement shall be
valid or binding upon CryoLife unless made in writing and signed by a duly
authorized officer of CryoLife, or upon QV, unless made in writing and signed by
QV.
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8. ASSIGNMENT. This Agreement may not be assigned by any party without
the prior written consent of the other party hereto, provided that CryoLife may
assign this Agreement in whole or in part to one or more affiliates thereof
without the consent of QV.
9. NOTICES.
(a) Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when (i) personally
delivered or sent by a recognized overnight delivery service which guarantees
next day delivery ("Overnight Delivery"), (ii) transmitted by facsimile
transmission (with a copy sent first class registered or certified mail, return
receipt requested and postage prepaid or by Overnight Delivery), or (iii) mailed
by first class registered or certified mail, return receipt requested, postage
prepaid, transmitted or addressed to the parties at the addresses set forth
below:
If to QV: QV, Inc.
322 South Green Street
Suite 500
Chicago, Illinois 60607
Attention: President
Telefax: (312) 697-8477
with a copy to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
Attention: Mr. Steven R. Olsen
Telefax: (312) 902-1061
If to CryoLife: Mr. Steven G. Anderson
Chairman of the Board, Chief Executive
Officer and President
CryoLife, Inc.
2211 New Market Parkway, Suite 142
Marietta, Georgia 30067
Telefax: (770) 850-0762
with a copy to: Arnall Golden & Gregory
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3400
Attention: Ms. M. Nan King
Telefax: (404) 873-8775
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(b) All notices shall be deemed received (i) if personally
delivered or transmitted by facsimile, on the business day when so delivered or
transmitted or if not transmitted at a time which concludes during the business
day of the recipient, on the next succeeding business day, (ii) if sent by
Overnight Delivery, one business day after it is sent and (iii) if mailed, 48
hours after deposit in the United States mail, as first class registered or
certified mail, return receipt requested, postage pre-paid. Either party may
change its address for the purposes of this Section by giving not less than ten
days prior written notice of such change to the other party in the manner
provided in this Section.
10. COUNTERPARTS. This Agreement may be executed 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.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed and delivered this Agreement as of the date set forth above.
QV:
QV, INC.
By: /s/ Daniel Woods
--------------------
Title: President
CRYOLIFE, INC.
By:/s/ Steven G. Anderson
-------------------------
Steven G. Anderson
Chairman of the Board
Chief Executive Officer and President
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