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CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (the "Consulting Agreement") is made this 4th
day of April, 1996, by and between MLF CO. ("MLF") and OMNICARE, INC., a
Delaware corporation with its principal place of business in Cincinnati, Ohio
(the "Company").
WHEREAS, contemporaneous with the execution of this Consulting Agreement,
the Company has entered into an Employment Agreement with Mary Lou Fox ("Ms.
Fox"), who has an ownership interest in MLF (the "Employment Agreement"),
whereby Ms. Fox will be employed by Westhaven Services Co., a Delaware
corporation which is a subsidiary of the Company ("Westhaven").
WHEREAS, the Company now desires to retain MLF for the purpose of providing
consulting services in furtherance of Westhaven's and the Company's
institutional pharmacy business and such other businesses in which the Company
or its subsidiaries or affiliates may be engaged during the term of this
Consulting Agreement (collectively the "Business"), and MLF desires to provide
those services; and
WHEREAS, MLF shall have access to confidential financial information, trade
secrets and other confidential and proprietary information of the Company;
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
and agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1: CONSULTING SERVICES
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1.1 SERVICES. MLF shall provide advisory and consulting services to the
Company during the term of this Consulting Agreement as the Company may
reasonably direct. MLF agrees to devote its best efforts to providing advisory
and consulting services pursuant to this Consulting Agreement, and to provide
those services in an efficient, trustworthy and businesslike manner. MLF shall
not act in any manner directly or indirectly which may damage the business of
the Company or which would adversely affect the goodwill, reputation and
business relations of the Company with the public generally or with any of its
employees.
1.2 OTHER BUSINESS OF MLF. To the extent that MLF does not have consulting
services to perform for the Company, MLF may engage in consulting and other
projects, as long as MLF's engaging in those activities does not breach any term
of this Consulting Agreement, including but not limited to the restrictive
covenants contained in Section 5, and MLF does not appropriate any opportunities
of the Company. If MLF desires to engage in a non-competing project or activity
which arises out of or is related in any way to the health care industry, MLF
will first bring it to the attention of the Company and ascertain whether the
Company is interested in pursuing it. If, after a period of thirty (30) days,
the Company has no good faith interest in pursuing such project or activity, MLF
shall be free to pursue it, provided that it does not breach any term of this
Agreement. Any disputes arising between the parties under this Section shall be
resolved pursuant to procedure set forth in Section 6.8. The Company agrees,
subject to the restrictions set forth in Section 5, that MLF may engage in a
cruise ship pharmacy project and consulting to Medico, provided that such cruise
ship pharmacy project is not now and shall not henceforth be deemed to be
competitive pursuant to Section 5.3 even if, subsequent hereto, the Company
shall elect to engage in such business.
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SECTION 2: TERM
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2.1 TERM. This Consulting Agreement shall commence as of February 1, 1996
(the "Effective Date") and shall continue for a period of five years from the
Effective Date, unless such term shall be extended by mutual agreement between
the parties or this Consulting Agreement is terminated as provided for in
Sections 2.2 and 2.3 of this Consulting Agreement.
2.2 TERMINATION BY THE COMPANY FOR CAUSE. The Company shall have the right
to terminate this Consulting Agreement for the following causes (a "Company
Termination for Cause"):
(a) Conviction of any employee of MLF, its owners, and other
persons or entities over which MLF has control for, or
entry of a plea of guilty or nolo contendere by MLF with
respect to, any felony or any crime involving an act of
moral turpitude;
(b) Commission by any employee of MLF, its owners, and other
persons or entities over which MLF has control of any act
of fraud or dishonesty;
(c) Conduct by any employee of MLF, its owners, and other
persons or entities over which MLF has control which is
intentionally detrimental to the reputation, goodwill or
business operations of the Company;
(d) Negligent conduct by any employee of MLF, its owners, and
other persons or entities over which MLF has control which
is detrimental to the reputation, goodwill or business
operations of the Company;
(e) MLF's failure to provide satisfactory consulting or
advisory services reasonably requested by the Company;
(f) MLF's material breach or threatened breach of the
restrictive covenants set forth in Section 5 of this
Consulting Agreement;
(g) Termination of Ms. Fox' employment with Westhaven or with
the Company, or any affiliate or subsidiary of the
Company, or termination of Ms. Fox' active involvement
with or ownership of MLF for any reason;
(h) MLF is dissolved.
Upon any Company Termination for Cause, all payments to MLF under Section 3
of this Consulting Agreement shall cease immediately, with the exception of
reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any payments already earned or vested as of that date.
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2.3 TERMINATION BY MLF FOR CAUSE. MLF shall have the right to terminate
this Consulting Agreement for the following causes (a "MLF Termination for
Cause"):
(a) Termination of Ms. Fox' employment with Westhaven or with
the Company, or with any affiliate or subsidiary of the
Company, for any reason;
(b) Ms. Fox ceases her involvement with MLF or MLF is
dissolved;
(c) Material breach or threatened breach by the Company of its
obligations hereunder.
Upon any MLF Termination for Cause, all payments to MLF under Section 3 of
this Consulting Agreement shall cease immediately, with the exception of
reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any payments already earned or vested as of that date.
SECTION 3: PAYMENTS
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3.1 PAYMENTS. The Company shall pay to MLF during the term of this
Consulting Agreement, the sum of Twelve Thousand Five Hundred Dollars
($12,500.00), per month for its advisory and consulting services.
3.2 BENEFITS. The Company and Ms. Fox acknowledge that, MLF's employees are
not eligible for and shall not participate in any pension, health or other
fringe benefit plan of the Company during the term of this Consulting Agreement.
However, Ms. Fox is entitled to benefits as an employee of Westhaven pursuant to
paragraph 3.4 of the Employment Agreement.
3.3 REIMBURSEMENT OF BUSINESS EXPENSES. The Company will reimburse MLF for
all authorized, ordinary and necessary business expenses incurred by it in
connection with the Business. Reimbursement of such expenses shall be paid
monthly, upon submission by MLF to the Company of vouchers itemizing such
expenses in a form satisfactory to the Company, properly identifying the nature
and business purpose of any expenditures.
SECTION 4: ALL BUSINESS TO BE THE PROPERTY OF THE COMPANY; ASSIGNMENT
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4.1 BUSINESS TO BE PROPERTY OF THE COMPANY. MLF agrees that any and all
business and "confidential information" (as defined in Section 5.1 hereof) which
are part of or related to the Business and which are or have been developed by
it or by any employee or agent of the Company or any of its affiliates or
subsidiaries, or their respective successors, or MLF, including, without
limitation, contracts, fees, commissions, customer lists and any other incident
of any business developed by the Company, or carried on by MLF for the Company,
are and shall be the exclusive property of the Company for its sole use.
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SECTION 5: COVENANTS OF NONDISCLOSURE, NONSOLICITATION AND NONCOMPETITION
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5.1 NONDISCLOSURE. MLF, its owners, employees, and any other persons or
entities over which MLF has control shall not at any time during or after
termination of MLF's consulting relationship with the Company, directly or
indirectly, use any proprietary, "confidential information" of the Company or
any of its affiliates or subsidiaries, including, without limitation, Westhaven,
for any purpose not associated with Company activities, or disseminate or
disclose any such information to any person or entity not affiliated with the
Company. Such Company proprietary, "confidential information" includes, without
limitation, customer lists, computer technology, programs and data, whether
online or off-loaded on disk format, sales, marketing and prospecting
methodologies, plans and materials, and any other such plans, programs,
methodologies and materials used in managing, marketing or furthering the
Business. Upon termination of MLF's consulting relationship with the Company,
MLF will return, and cause to be returned, to the Company all documents,
records, notebooks, manuals, plans and materials, computer disks and similar
repositories of or containing Company proprietary, "confidential information",
including all copies thereof, then in MLF's possession or control, whether
prepared by MLF or otherwise. MLF will undertake all reasonably necessary and
appropriate steps to insure that the confidentiality of Company proprietary,
"confidential information" shall be maintained.
5.2 NONSOLICITATION. During its consulting relationship with the Company
and for a period of two (2) years after termination of the consulting
relationship, whether such termination was voluntary or involuntary, with or
without cause, MLF, its owners, employees, and any other persons or entities
over which MLF has control will not solicit, take away, hire, employ or endeavor
to employ any of the employees of the Company or any affiliate or subsidiary of
the Company, or their respective successors.
5.3 NONCOMPETITION. MLF agrees that during its consulting relationship with
the Company and for two years after termination of the consulting relationship,
whether such termination was voluntary or involuntary, with or without cause,
it, its owners, employees, and any other persons or entities over which MLF has
control will not, directly or indirectly, engage or be interested in any
business competing with the Business of the Company, its subsidiaries,
affiliated companies, or their respective successors, or, directly or
indirectly, have any interest in, own, manage, operate, control, be connected
with as a stockholder (other than as a stockholder of less than five percent
(5%) of the issued and outstanding stock of a publicly held corporation), joint
venturer, partner or consultant, or otherwise engage or invest or participate
in, any business which shall compete with the Company or any Business conducted
by the Company, its subsidiaries or affiliated companies, or their respective
successors, throughout the United States of America. For purposes of this
Section 5, the term "Business" shall mean the institutional pharmacy business,
all other businesses in which the Company or its affiliates or subsidiaries are
engaged on the Effective Date, and any other business in which the Company or
its affiliates or subsidiaries are engaged during the Company's fiscal year
immediately preceding the date on which the consulting relationship is
terminated, the sales of which business account for four percent (4%) or more of
the total consolidated sales of the Company and its affiliates or subsidiaries
during such fiscal year. Further, nothing herein shall limit or waive any rights
of the Company under any other agreement between the parties regarding
noncompetition.
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5.4 APPLICABILITY. The provisions of Sections 5.1, 5.2, and 5.3 immediately
preceding shall remain in effect in accordance with their respective terms
notwithstanding any termination of MLF's consulting relationship with the
Company regardless of the cause or circumstances thereof and whether such
termination was voluntary or involuntary. Further, MLF's covenants of
nondisclosure, noncompetition and nonsolicitation along with the Company's
remedies for the breach or threatened breach of those covenants shall remain in
effect in accordance with their respective terms following any termination of
this Consulting Agreement.
5.5 REMEDIES. In view of the services which MLF will perform for the
Company, which are special, unique, extraordinary and intellectual in character,
which place it in a position of confidence and trust with the customers and
employees of the Company and which provide it with access to confidential
financial information, trade secrets, "know-how" and other confidential and
proprietary information of the Company, in view of the geographic scope and
nature of the business in which the Company is engaged, and recognizing the
value of this Consulting Agreement to it, MLF expressly acknowledges that the
restrictive covenants set forth in this Consulting Agreement, including, without
limitation, the geographic scope of such covenants, are necessary in order to
protect and maintain the proprietary interests and other legitimate business
interests of the Company. MLF further acknowledges that the remedy at law for
any breach or threatened breach of this Consulting Agreement will be inadequate
and, accordingly, that the Company shall, in addition to all other available
remedies (including, without limitation, seeking such damages as it can show it
has sustained by reason of such breach), be entitled to injunctive or any other
appropriate form of equitable relief. Without limitation upon any other remedies
available to the Company, in the event MLF breaches or threatens to breach these
restrictive covenants, it shall not receive any further payments from the
Company pursuant to this Consulting Agreement, following the operation of the
thirty (30) day cure period provided for in Section 6.12 hereof, but only if
such breach or threatened breach has not been cured. Non-payment by the Company
does not waive any right or remedy of MLF that it may assert or have the right
to assert hereunder.
5.6 As an express condition of this Consulting Agreement and to the
Company's performance of its obligations hereunder, MLF shall obtain from its
owners, employees, significant independent contractors and any other persons or
entities over which MLF has control, as soon as possible in each case,
agreements in form and substance satisfactory to the Company, which reflect the
provisions and restrictions of Sections 5.1, 5.2 and 5.3 respectively as to each
such person or entity. Such agreements shall be entered into for the benefit of
the Company and copies thereof shall be furnished to the Company promptly. In
the case of Ms. Nancy Bucci (who, to the extent she is involved in the
activities and business of MLF, shall be a full time employee of MLF), such
agreement shall be entered into and delivered to the Company upon the earlier of
the execution and delivery of this Consulting Agreement, or the date on which
she commences employment with MLF.
SECTION 6: MISCELLANEOUS PROVISIONS
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6.1 CONFIDENTIALITY. MLF, and any person or entity within its control, and
the Company shall keep the terms of this Consulting Agreement and the Employment
Agreement absolutely confidential and will not disclose them to any person or
entity, except by the Company to the extent necessary or desirable for it to
comply with applicable laws and regulations.
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6.2 INDEMNIFICATION. The Company shall save and hold harmless MLF from and
against any claim of liability or loss (including reasonable attorneys' fees)
arising as a result of MLF's proper performance of its obligations under this
Consulting Agreement. Notwithstanding the foregoing, the Company shall not be
required to indemnify MLF for any unlawful or unauthorized action or actions
beyond the scope of this Consulting Agreement.
6.3 ASSIGNMENT AND PERFORMANCE. The Company may assign its rights and
obligations under this Consulting Agreement to any corporation or other entity
which is controlled by or is under common control with the Company, or which
succeeds to all or substantially all of the assets of the Company without MLF's
consent. This Consulting Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company. The Company may perform any or
all of its obligations under this Consulting Agreement directly, or through any
of its subsidiaries or affiliates, including but not limited to Westhaven. MLF's
obligation to provide services hereunder may not be assigned to or assumed by
any other person or entity.
6.4 NOTICES. All notices, requests, demands, or other communications under
this Consulting Agreement shall be in writing and shall only be deemed to be
duly given if made in writing and sent by first class mail, overnight courier or
telecopy to the following address:
Cheryl D. Hodges, Senior Vice President
and Secretary
Omnicare, Inc.
2800 Chemed Center
255 E. Fifth Street
Cincinnati, Ohio 45202
and
MLF Co.
c/o Ms. Mary Lou Fox
30171 Waterford Drive West
Perrysburg, Ohio 43551-3493
6.5 SEVERABILITY. If any provision or portion of this Consulting Agreement
shall be or become illegal, invalid or unenforceable in whole or in part for any
reason, such provision shall be ineffective only to the extent of such
illegality or invalidity without invalidating the remainder of such provision or
the remaining provisions of this Consulting Agreement. If any court should deem
any covenant herein to be invalid, illegal or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable.
6.6 AMENDMENT AND WAIVER. This Consulting Agreement constitutes the entire
agreement between the parties hereto and may be modified, amended or waived only
by a written instrument signed by the parties hereto.
6.7 GOVERNING LAW. This Consulting Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of Ohio
applicable to contracts executed and wholly performed within such State and, in
enforcing such governing laws, any court of competent jurisdiction shall afford
all relief which an Ohio court would afford under similar circumstances.
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6.8 DISPUTE RESOLUTION. Any matter subject to arbitration under Section 1.2
hereof, and any other matter which the parties, in the future, may agree to
submit to arbitration shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. Such arbitration proceedings shall be held in
Cincinnati, Ohio, U.S.A.
6.9 COUNTERPARTS. This Consulting Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
6.10 INTERPRETATION. The headings contained in this Consulting Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Consulting Agreement. The language in all parts of this
Consulting Agreement shall in all cases be construed according to its fair
meaning, and not strictly for or against any party hereto. In this Consulting
Agreement, unless the context otherwise requires, the masculine, feminine and
neuter genders and the singular and the plural include one another.
6.11 NON-WAIVER OF RIGHTS AND BREACHES. No failure or delay of any party
herein in the exercise of any right given to such party hereunder shall
constitute a waiver thereof unless the time specified herein for the exercise of
such right has expired, nor shall any single or partial exercise of any right
preclude other or further exercise thereof or of any other right. The waiver of
a party hereto of any default of any other party shall not be deemed to be a
waiver of any subsequent default or other default by such party. The parties
acknowledge that this Consulting Agreement has been developed and drafted
jointly and with the assistance of counsel.
6.12 RIGHT TO CURE. In the event that either party in good faith believes
that the other has violated (whether by breach, threatened breach or otherwise)
any of the terms of this Consulting Agreement, then that party shall give notice
in writing to the other party as provided in Section 6.4 of this Agreement of
the alleged violation, and that party shall have thirty (30) days following
receipt of said notice to cure any such alleged violation.
6.13 BOARD APPROVAL. Notwithstanding any provision hereof to the contrary,
this Agreement, including, though without limitation, the provisions of Section
3.1, and the rights and responsibilities of the parties hereunder, are subject
to approval of the Board of Directors of the Company, which approval will be
recommended by Joel Gemunder.
SECTION 7: RIGHT OF FIRST REFUSAL
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7.1 The Company shall have a right of first refusal in respect of the sale
or transfer of all or substantially all of the shares or assets of MLF (a
"Sale"). In the event of any proposed Sale, MLF shall notify the Company of the
material terms and conditions thereof and the identity of the proposed purchaser
or transferee, certifying that same is ready, willing and able to consummate the
proposed purchase or transfer. The Company shall have a period of sixty (60)
days from its receipt of such notice and certification in which to notify MLF of
its intention to exercise said right upon the same terms and conditions. Unless
otherwise agreed, the parties shall complete such sale and purchase or transfer
within thirty (30) days of MLF's receipt of such notice.
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first written above.
OMNICARE, INC.
By:/s/Joel F. Gemunder
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Its:President
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MLF CO.
By: /s/Mary Lou Fox
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Its:President
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