EXHIBIT 99.2
NON-COMPETITION AND MARKETING ASSISTANCE AGREEMENT
THIS NON-COMPETITION AND MARKETING ASSISTANCE AGREEMENT (this
"Agreement") is made as of April 30, 1996, by and among American Medserve
Corporation, a Delaware corporation ("AMC"), Good Samaritan Supply Services,
Inc., a South Dakota corporation (the "Company"), The Evangelical Lutheran
Good Samaritan Foundation, a Minnesota non-profit corporation (the
"Foundation") and The Evangelical Lutheran Good Samaritan Society, a North
Dakota non-profit corporation (the "Society").
PRELIMINARY STATEMENT:
A. The Society is the sole member of the Foundation, and the
Foundation is the sole shareholder of the Company.
B. The Company and AMC concurrently herewith have entered into a Share
Purchase Agreement, bearing even date herewith (the "Share Purchase
Agreement"), providing for the Company's sale and issuance of 666.667
newly-issued shares of the Company ("Common Shares") to AMC.
C. The Company, AMC and the Foundation concurrently herewith have
entered into a Shareholders Agreement, bearing even date herewith (the
"Shareholders Agreement"), providing for the respective rights of the parties
in connection with the governance of the Company, transfers of Common Shares,
and other matters.
D. The Society and the Foundation will benefit from AMC's investment in
the Company pursuant to the Share Purchase Agreement and from AMC's covenants
pursuant to the Shareholders Agreement as a consequence of, among other
things, the expansion of the Company's business which will be made possible
(including expansion of the number of Society long-term care facilities whose
residents will be offered the Company's goods and services) and the
anticipated enhancement in the value of the Foundation's investment in the
Company.
E. AMC will benefit from the covenants of the Society, the Foundation
and the Company contained herein and in the Share Purchase Agreement as a
consequence of, among other things, the issuance of the 666.667 Common Shares
to be issued to AMC.
F. In order for the parties to induce one another to enter into or
approve the transactions contemplated by the Share Purchase Agreement and the
Shareholders Agreement, and so as to support and enhance the growth and value
of the Company in a
manner which will benefit all of the parties hereto, the parties wish to
enter into the agreements set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, in the Share Purchase Agreement and the Shareholders
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY. The parties
hereto agree that, unless and until either (i) neither AMC nor any of its
Affiliates (as defined in Section 1(h) below) hold any Common Shares, or (ii)
neither the Foundation nor any of its Affiliates hold any Common Shares, and,
in each such case, for a period of five (5) years thereafter,
(a) AMC shall not:
(1) except to the extent permitted by Sections 1(d) or 1(e)
below, engage, directly or indirectly, whether as a shareholder, partner,
owner, consultant, management company, or otherwise, in the complete or
partial ownership, operation, management or conduct of any institutional
long-term care pharmacy which is located in or derives more than five percent
(5%) of its revenues from sales in the states of Arizona, Colorado, Idaho,
Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, South
Dakota, and Wyoming;
(2) except to the extent permitted by Sections 1(d) or 1(f)
below, engage, directly or indirectly, whether as a shareholder, partner,
owner, consultant, management company or otherwise, in the complete or
partial ownership, operation, management or conduct of any business or
enterprise that provides home medical equipment or supplies (such as
wheelchairs, walkers, beds, canes, bandages or sutures, but excluding drugs)
to customers in the United States of America;
(3) except with the consent of the President/Chief Executive
Officer of the Company, hire any employee of the Company for a position with
AMC or any Affiliate thereof;
(4) intentionally cause or encourage, by word or deed, any
person, firm, corporation or other entity having a business relationship with
the Company to sever such relationship with, or commit any act inimical to,
the Company; or
(5) except to the extent permitted by Section 1(g) below, use,
divulge or transfer to any person, firm, corporation or other entity any
trade secrets, customer lists or other confidential or proprietary
information with respect to the Company.
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(b) The Company shall not:
(1) except to the extent permitted by Sections 1(d) or 1(e)
below, engage, directly or indirectly, whether as a shareholder, partner,
owner, consultant, management company or otherwise, in the complete or
partial ownership, operation, management or conduct of any institutional
long-term care pharmacy which is located outside of or derives more than five
percent (5%) of its revenues from sales outside the states of Arizona,
Colorado, Florida, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, New
Mexico, North Dakota, South Dakota, and Wyoming; nor shall the Company
engage, directly or indirectly, in any such manner in any such institutional
long-term care pharmacy which is located in the State of Florida, other than
such pharmacies which serve primarily assisted living facilities or
congregate care facilities;
(2) hire any employee of AMC for a position with the Company or
any Affiliate thereof;
(3) intentionally cause or encourage, by word or deed, any
person, firm, corporation or other entity having a business relationship with
AMC to sever such relationship with, or commit any act inimical to, AMC; or
(4) except to the extent permitted by Section 1(g) below, use,
divulge or transfer to any person, firm, corporation or other entity any
trade secrets, customer lists or other confidential or proprietary
information with respect to AMC.
(c) The Foundation and the Society shall not:
(1) engage, directly or indirectly, whether as a shareholder,
partner, owner, consultant, management company or otherwise, in the complete
or partial ownership, operation, management or conduct of any institutional
long-term care pharmacy, except through ownership of an interest in either
the Company or AMC;
(2) engage, directly or indirectly, whether as a shareholder,
partner, owner, consultant, management company or otherwise, in the complete
or partial ownership, operation, management or conduct of any business or
enterprise that provides home medical equipment or supplies (such as
wheelchairs, walkers, beds, canes, bandages or sutures, but excluding drugs)
to customers in the United States of America, except through ownership of an
interest in either the Company, AMC, or any Affiliate of AMC;
(3) hire any employee of AMC for a position with the Society,
the Foundation or any Affiliate thereof, or directly or indirectly solicit
any employee of the Company for a position with the Society, the Foundation
or any Affiliate thereof;
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(4) intentionally cause or encourage, by word or deed, any
person, firm, corporation or other entity having a business relationship with
AMC to sever such relationship with, or commit any act inimical to, AMC; or
(5) except to the extent permitted by Section 1(g) below, use,
divulge or transfer to any person, firm, corporation or other entity any
trade secrets, customer lists or other confidential or proprietary
information with respect to AMC.
(d) Notwithstanding any provision in Sections 1(a)(1), 1(a)(2),
1(b)(1), 1(c)(1) or 1(c)(2) to the contrary, in no event shall any party
hereto be prohibited from directly or indirectly owning less than three
percent (3%) of any publicly-held company whose shares are listed and traded
on the New York or American Stock Exchanges, on the NASDAQ stock market or on
any automated interdealer quotation system.
(e) (1) Notwithstanding Section 1(a)(1) hereof, should AMC at any
time after the date hereof desire to acquire directly or indirectly an
institutional long-term care pharmacy which derives more than five percent
(5%) but less than thirty-five percent (35%) of its revenues (as measured
during the most recent 12-month period) from sales in the states of Arizona,
Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico,
North Dakota, South Dakota, and Wyoming, but which is located outside of such
states, then AMC may directly or indirectly make such acquisition provided
that it uses its reasonable efforts to cause the portion of such
institutional long-term care pharmacy's business which is derived from sales
in such states to be transferred to an institutional long-term care pharmacy
of the Company at such time as the Company has such a pharmacy reasonably
capable of servicing such business, on terms and conditions mutually
satisfactory to the Company and AMC, acting reasonably.
(2) Notwithstanding Section 1(b)(1) hereof, should the Company
at any time after the date hereof desire to acquire directly or indirectly an
institutional long-term care pharmacy which derives more than five percent
(5%) but less than thirty-five percent (35%) of its revenues (as measured
during the most recent 12-month period) from sales outside of the states of
Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, New
Mexico, North Dakota, South Dakota, and Wyoming, but which is located in one
of such states, then the Company may directly or indirectly make such
acquisition provided that it uses its reasonable efforts to cause the portion
of such institutional long-term care pharmacy's business which is derived
from sales outside of such states to be transferred to an institutional
long-term care pharmacy of AMC or any of AMC's direct or indirect
subsidiaries at such time as AMC or any of such subsidiaries has such a
pharmacy reasonably capable of servicing such business, on terms and
conditions mutually satisfactory to the Company and AMC, acting reasonably.
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(f) (1) Notwithstanding Section 1(a)(2) hereof, the existing
direct and indirect subsidiaries of AMC shall be permitted to continue to
operate the existing home medical equipment and home medical supply
businesses operated by such direct and indirect subsidiaries, provided that
AMC uses its reasonable efforts to cause such direct and indirect
subsidiaries to transfer or combine such lines of business described by
Section 1(a)(2) to or with the Company's business activities of this type, on
terms and conditions mutually satisfactory to the Company, AMC and such
subsidiaries.
(2) If, after the date hereof, AMC desires to acquire directly
or indirectly a business or enterprise that provides home medical equipment
or supplies in the United States of America but which derives less than
thirty-five percent (35%) of its revenues (as measured during the most recent
12-month period) from such lines of business, then AMC may directly or
indirectly make such acquisition provided that it uses its reasonable efforts
to cause such lines of business to be transferred to or combined with the
Company's business activities of this type as soon as practicable after the
acquisition of such business or enterprise by AMC, on terms and conditions
mutually satisfactory to the Company and AMC, acting reasonably.
(3) If, after the date hereof, AMC desires to acquire directly
or indirectly a business or enterprise that provides home medical equipment
or supplies in the United States of America and which derives thirty-five
percent (35%) or more of its revenues (as measured during the most recent
12-month period) from such lines of business, then AMC may directly or
indirectly acquire such business notwithstanding Section 1(a)(2) if and only
if it shall have entered into an agreement with the Company to cause such
lines of business described by Section 1(a)(2) to be transferred to or
combined with the Company's business activities of this type, on terms and
conditions mutually satisfactory to the Company and AMC. The Company may
decline to enter into any such agreement in its sole and absolute discretion,
in which event the provisions of Section 1(a)(2) shall operate to prevent AMC
from directly or indirectly making such acquisition.
(g) Sections 1(a)(5), 1(b)(4) and 1(c)(5) shall not be deemed to
restrict any party from using, divulging or transferring any information
whatsoever which is, as of the time of such use, disclosure or transfer, (i)
generally available to the public other than as a result of a disclosure by
such party or its Affiliates, or (ii) available to such party on a
non-confidential basis from a source other than the Company (with respect to
confidential or proprietary information of the Company) or AMC (with respect
to confidential or proprietary information of AMC). Further, if any party is
required by law to disclose any information which it would otherwise be
prohibited from disclosing by virtue of Section 1(a)(5), 1(b)(4) or 1(c)(5),
then such party shall give the Company (with respect to confidential or
proprietary information of the Company) or AMC (with respect to
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confidential or proprietary information of AMC) prompt written notice of such
requirement and shall cooperate with the Company or AMC, as the case may be,
in seeking a protective order or other appropriate means of preventing or
limiting the disclosure of such information; and if, in the opinion of
counsel to the party which seeks to make such disclosure, the disclosure of
such information is required by law, such party may make such disclosure, but
only to the extent legally required in the opinion of its counsel and in
accordance with any protective order or other such means of limiting such
disclosure as may have been obtained.
(h) For purposes of this Agreement, "Affiliate" shall mean, with
respect to any person or entity, any (i) person or entity which wholly or
partially owns, is owned by, or is under common ownership with such person or
entity or any Affiliate of such person or entity, and (ii) any person or
entity which directly or indirectly controls, is controlled by, or is under
common control with such person or entity or any Affiliate of such person or
entity. A person or entity shall be deemed to control another person or
entity if such person or entity possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of the
"controlled" person or entity, whether through ownership of voting
securities, by contract, or otherwise. Notwithstanding the foregoing, in no
event shall AMC be deemed an Affiliate of either the Foundation or the
Society, and neither the Foundation nor the Society shall be deemed an
Affiliate of AMC.
2. MARKETING ASSISTANCE. AMC shall assist the Company in the Company's
marketing of home medical equipment and supplies to current and future
customers of AMC's institutional pharmacies.
3. GOOD SAMARITAN NAME. If, at any time and for any reason in its sole
discretion, the Society shall determine that it desires that the Company no
longer use the name "Good Samaritan", it may deliver written notice to the
Company, the Foundation and AMC requiring such parties to take the actions
described in the next sentence. Within six (6) months after their receipt of
such notice, the Company, AMC and the Foundation shall take such actions as
may be necessary to change the corporate name of the Company to a name which
does not include "Good Samaritan", or any derivations thereof, and which does
not convey an impression that the Company is associated with the Society (a
"Permitted Name"). From and after the end of such 6-month period, the
Company shall not, directly or indirectly, operate under any corporate or
trade name, trade or service xxxx or other name or identifying words other
than a Permitted Name, nor shall it transfer (whether by assignment, merger
or otherwise) any portion of its assets or business to any entity operating
under other than a Permitted Name. The parties agree that the following
shall be deemed Permitted Names for purposes of this Agreement: (i) "GS
Supply Services"; (ii) "GS Pharmacy"; and (iii) "GSP" (whether used in
conjunction with the Company's current logo or not).
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4. REMEDIES; RESOLUTION OF DISPUTES. AMC, the Foundation, the Society
and the Company acknowledge that they would be irreparably harmed by a breach
of this Agreement and that it would not be possible to estimate damages
resulting from such a breach and, consequently, AMC, the Foundation, the
Society, and the Company agree that equitable relief in the form of specific
performance or an injunction, in addition to any other remedy which may be
available at law or in equity, shall be the appropriate remedy for a breach
of this Agreement, and the recovery from the breaching party of reasonable
attorneys' fees and all costs and expenses incurred in connection with such
an action shall be available.
5. AMENDMENT; WAIVER. This Agreement may not be amended or modified
except by a writing signed by all parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provisions, whether or not similar, nor shall any waiver of any
other provision constitute a continuing waiver, nor shall any waiver by any
party constitute a waiver with respect to any other party. No waiver shall
be binding unless executed in writing by the party making the waiver.
6. ENTIRE AGREEMENT. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by the
parties with respect to the subject matter hereof. This Agreement
constitutes the entire agreement by and between the parties hereto with
respect to the subject matter hereof.
7. NOTICES. All notices, elections and other communications pursuant to
this Agreement shall be made in writing and be deemed to have been duly given
(i) when delivered, if personally delivered, (ii) one business day after
delivered to (and accepted by) an overnight courier service, if sent by
overnight courier service addressed to the applicable address set forth
below, (iii) one business day after sent by facsimile transmission, if sent
to the applicable facsimile number set forth below, and (iv) five days after
being sent by registered or certified mail, return receipt requested, postage
prepaid, to the applicable address set forth below:
IF TO THE COMPANY:
Xx. Xxxxxxx X. Xxxxxxx
President/Chief Executive Officer
Good Samaritan Supply Services, Inc.
0000 Xxxxxxxx Xxx.
Xx. Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
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Xxxxxx X. Xxx, Esq.
Xxxx Xxxxx Xxxx & XxXxxx
0000 X Xxxxxx, X.X.
Xxxxx 0000 -- Xxxx Xxxxx
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO AMC:
American Medserve Corporation, Inc.
Park Lake Center
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx and
Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO THE FOUNDATION:
The Evangelical Lutheran Good Samaritan Foundation
0000 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx, Chief Executive Officer
with a copy to:
Xxxx Xxxxx, Esq.
Xxxxxxx, Street & Deinard
Suite 2300
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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IF TO THE SOCIETY:
The Evangelical Lutheran Good Samaritan Society
0000 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx, Chief Executive Officer
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxxxxxx, Xxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx Xxx.
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8. ASSIGNMENT; SUCCESSORS; BENEFITS. This Agreement shall not be
assignable by the parties hereto without the prior written consent of the
other parties hereto. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
permitted assigns. Nothing herein, expressed or implied, is intended to or
shall confer on any person other than the parties hereto and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9. CONSTRUCTION; SEVERABILITY. (a) It is the agreement of AMC, the
Foundation, the Society and the Company that the maximum protection available
under the law shall be provided by this Agreement, to protect the parties'
interests under this Agreement and that, if the restrictions or obligations
hereby imposed are held by a court to be unreasonably broad in time,
territory or scope, this Agreement shall be construed to impose such
restrictions in this regard as are not unreasonable as to time, territory or
scope, as the case may be.
(b) In the event that any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein and, in lieu of each such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible to cause such illegal, invalid and
unenforceable provision to be legal, valid and enforceable.
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10. GOVERNING LAW. This Agreement shall in all respects be governed by
and construed in accordance with the internal substantive laws of the State
of Minnesota without giving effect to the principles of conflicts of law
thereof.
11. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
12. INTERPRETATION. The Section headings contained herein are for
convenience of reference only, are not part of this Agreement, and shall not
affect the meaning or interpretation of any provision hereof.
IN WITNESS WHEREOF, AMC, the Company, the Foundation and the Society have
executed this Non-Competition and Marketing Assistance Agreement as of the
day and year first above written.
AMERICAN MEDSERVE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Its: President/Chief Executive Officer
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THE EVANGELICAL LUTHERAN GOOD
SAMARITAN FOUNDATION
By: /s/ Xxxx X Xxxxxxx
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Its: President/Chief Executive Officer
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THE EVANGELICAL LUTHERAN GOOD
SAMARITAN SOCIETY
By: /s/ Xxxx X. Xxxxxxx
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Its: President/Chief Executive Officer
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GOOD SAMARITAN SUPPLY SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its President/Chief Executive Officer
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