EXHIBIT 10.16
NONCOMPETITION AGREEMENT
------------------------
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made and entered into
this 21st day of July, 1998 (the "Execution Date"), by and among ENDEAVOR
TECHNOLOGIES, INC., a Georgia corporation ("Endeavor"), XXXXX XXXXXXX, a Georgia
resident ("Whitney"), and MATRIA HEALTHCARE, INC., a Delaware corporation
("Matria"), as the sole intended Third Party Beneficiary.
BACKGROUND:
----------
A. Contemporaneously with the execution of this Agreement, Matria is
acquiring substantially all of the assets of Quality Diagnostic Services, Inc.
("QDS") and Telemedics, Inc. ("Telemedics") pursuant to the terms of that
certain Asset Purchase Agreement (the "Purchase Agreement"), dated as of July
20, 1998 and effective as of July 1, 1998, among Matria, Endeavor, QDS and
Telemedics. Terms used and not otherwise defined herein shall have the same
meanings ascribed to them in the Purchase Agreement.
B. As a material inducement for Matria to enter into the Purchase
Agreement, Endeavor has agreed to require Whitney to enter into this Agreement
with Endeavor in consideration of Whitney's right to employment with Endeavor.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises, covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
-----------
shall have the following respective meanings:
(a) "Competing Business" shall mean a business that, wholly or partly,
------------------
directly or indirectly, is engaged in providing, selling or marketing
cardiac event monitoring services; or designing, developing, manufacturing,
testing, selling, marketing or distributing products and equipment relating
thereto; provided, however, that the Endeavor Business shall not be
-------- -------
considered a Competing Business.
(b) "Competitive Position" shall mean: (i) Whitney's direct or
--------------------
indirect equity ownership (excluding ownership of less than one percent
(1%) of the outstanding common stock of any publicly held corporation) or
control of any portion of any Competing Business; (ii) Whitney serving as a
director, officer, consultant, lender, joint venturer, partner, agent,
advisor or independent contractor of or to any Competing Business; or (iii)
any employment arrangement between Whitney and any Competing Business
whereby Whitney is required to perform services for the Competing Business
substantially similar to those that Whitney performed for Endeavor, QDS and
Telemedics.
(c) "Confidential Information" shall mean all valuable, proprietary
------------------------
and confidential business information belonging to QDS or Telemedics that
does not constitute a Trade Secret and that is not generally known by or
available to the competitors of QDS or Telemedics but is generally known
only to Endeavor, QDS, Telemedics and those of its employees, independent
contractors, clients or agents to whom such information must be confided
for internal business purposes.
(d) "Covenant Period" shall mean the period of time commencing with
---------------
the date of this Agreement and continuing for a period of eighteen (18)
months hereafter.
(e) "Endeavor Business" shall mean the development, marketing, sales
-----------------
and provision of Internet based information and communications services,
including, without limitation, Endeavor's WebMD service offering, so long
as such services do not include cardiac or maternity monitoring services.
(f) "Restricted Territory" shall mean the United States of America.
--------------------
(g) "Trade Secrets" shall mean all trade secrets of QDS and
-------------
Telemedics as defined under applicable law.
2. CONFIDENTIALITY. Whitney hereby acknowledges and agrees that the
---------------
Trade Secrets and Confidential Information represent a substantial investment of
QDS and Telemedics, respectively, and that any unauthorized disclosure or use of
any of the Trade Secrets or Confidential Information or any other violation of
the confidentiality provisions of this Section 2, would be wrongful and could
cause immediate and irreparable injury to Matria. Accordingly, Whitney hereby
agrees that he will not, without the express prior written consent of Endeavor
and Matria, distribute, sell, market, publish, disclose, transfer, assign,
disseminate or otherwise communicate to any other person or entity, or use, copy
or appropriate for or on behalf of himself or any other person or entity: (a)
any Confidential Information during the Covenant Period; or (b) any Trade Secret
at any time during which such information constitutes a trade secret under
applicable law. Whitney agrees that he will adhere to all reasonable
confidentiality requirements that Matria may establish from time to time, with
respect to the Confidential Information and Trade Secrets, and immediately
notify Endeavor and Matria of any unauthorized disclosure or use of any Trade
Secret or Confidential Information by him. Whitney also agrees to assist
Matria, at Matria's expense and to the extent necessary, in the procurement or
any protection of Matria's rights in or to any Trade Secrets or Confidential
Information. Notwithstanding anything herein to the contrary, the restrictions
set forth in Section 2 will not be applicable to information which otherwise
constitutes Trade Secrets or Confidential Information but is solely to be used
in the furtherance of the Endeavor Business.
3. NONCOMPETITION. During the Covenant Period, Whitney agrees that he
--------------
will not, without the prior written consent of Endeavor and Matria, either
directly or indirectly, alone or in conjunction with any other person or entity,
accept, enter into or take any action in furtherance of a Competitive Position
in the Restricted Territory. Notwithstanding anything herein to the
-2-
contrary, the restrictions set forth in this Section 3 will not be applicable to
any action taken in furtherance of the Endeavor Business
4. NONSOLICITATION OF CUSTOMERS, SUPPLIERS AND DISTRIBUTORS. During the
--------------------------------------------------------
Covenant Period, Whitney agrees that he will not, without the prior written
consent of Endeavor and Matria, either directly or indirectly, alone or in
conjunction with any other person or entity, solicit, entice or induce any
customer, supplier or distributor of Matria or any of its subsidiaries (or any
actively sought prospective customer, supplier or distributor of Matria or any
of its subsidiaries) for or on behalf of any Competing Business.
5. NONSOLICITATION OF PERSONNEL. During the Covenant Period, Whitney
----------------------------
agrees that he will not, without the prior written consent of Endeavor and
Matria, either directly or indirectly, alone or in conjunction with any other
person or entity, solicit or attempt to solicit any "key or material" employee,
consultant, contractor or other personnel of Matria or any of its subsidiaries
to terminate, alter or lessen that party's affiliation with Matria or any of its
subsidiaries or to violate the terms of any agreement or understanding between
such employee, consultant, contractor or other person and Matria. For purposes
of this Section 5, "key or material" employees, consultants, contractors or
other personnel shall mean those such persons or entities who have direct access
to or have had substantial exposure to Confidential Information or Trade
Secrets.
6. ACKNOWLEDGMENTS. Whitney hereby acknowledges and agrees that the
---------------
Protective Covenants are reasonable as to time, scope and territory given
Matria's need to protect the Trade Secrets and Confidential Information. In the
event any covenant or agreement in this Agreement shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it shall be interpreted
to extend only over the maximum period of time for which it may be enforceable
and/or over the maximum geographical area as to which it may be enforceable
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action.
7. SPECIFIC PERFORMANCE. Whitney hereby acknowledges and agrees that any
--------------------
breach of a Protective Covenant by him will cause irreparable damage to Matria,
the exact amount of which will be difficult to ascertain, and that the remedies
at law for any such breach will be inadequate. Accordingly, Whitney agrees
that, in addition to any other remedy that may be available at law, in equity,
or hereunder, Endeavor and Matria shall be entitled to specific performance and
injunctive relief, without posting bond or other security to enforce or prevent
any violation of any of the Protective Covenants by him.
8. THIRD PARTY BENEFICIARY. The parties acknowledge and agree that
-----------------------
Matria is the sole intended third party beneficiary of all of Endeavor's rights
under this Agreement. In the event that Endeavor fails to exercise its rights
or remedies hereunder, Matria shall have the sole right to enforce any of
Endeavor's rights and remedies hereunder, in Endeavor's name or otherwise.
-3-
9. MISCELLANEOUS.
-------------
(a) This Agreement contains the entire agreement and understanding
concerning the subject matter hereof between the parties hereto. No
waiver, termination or discharge of this Agreement, or any of the terms or
provisions hereof, shall be binding upon any party hereto unless confirmed
in writing. This Agreement may not be modified or amended, except by a
writing executed by all parties hereto. No waiver by any party hereto of
any term or provision of this Agreement or of any default hereunder shall
affect such party's rights thereafter to enforce such term or provision or
to exercise any right or remedy in the event of any other default, whether
or not similar.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia without regard to the principles of
the conflicts of laws.
(c) This Agreement may not be assigned, in whole or in part, by
Whitney without the prior written consent of Endeavor and Matria, and any
attempted assignment not in accordance herewith shall be null and void and
of no force or effect; provided, however, that Matria may assign this
Agreement to any wholly-owned subsidiary operating the Business and to any
person who acquires the Business from Matria or such subsidiary.
(d) This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
(e) If any provision of this Agreement shall be held void, voidable,
invalid or inoperative, no other provision of this Agreement shall be
affected as a result thereof, and, accordingly, the remaining provisions of
this Agreement shall remain in full force and effect as though such void,
voidable, invalid or inoperative provision had not been contained herein.
(f) This Agreement shall not be construed more strongly against any
party hereto regardless of which party is responsible for its preparation.
(g) Upon the reasonable request of any party, each party hereto
agrees to take any and all actions, including, without limitation, the
execution of certificates, documents or instruments, necessary or
appropriate to give effect to the terms and conditions set forth in this
Agreement.
(h) All rights and remedies of each party hereto are cumulative of
each other and of every other right or remedy such party may otherwise have
at law or in equity, and the exercise of one or more rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
(i) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute the
-4-
same Agreement. Any signature page of any such counterpart, or any
electronic facsimile thereof, may be attached or appended to any other
counterpart to complete a fully executed counterpart of this Agreement, and
any telecopy or other facsimile transmission of any signature shall be
deemed an original and shall bind such party.
-5-
IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this Agreement as of the day and year
first above written.
"Endeavor"
ENDEAVOR TECHNOLOGIES, INC.
By: /s/ W. Xxxxxxx Xxxxxx
-------------------------
Title: Chief Operating Officer
-----------------------
[CORPORATE SEAL]
"Matria"
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Title: Executive Vice President and Chief
----------------------------------
Operating Officer
----------------------------------
[CORPORATE SEAL]
"Whitney"
/s/ Xxxxx Xxxxxxx
-----------------------------------------
XXXXX XXXXXXX
-6-
