NONCOMPETITION AND NONSOLICITATION AGREEMENT
Exhibit 10.2
This
Noncompetition and Nonsolicitation Agreement (this “Agreement”)
is made and entered into as of December 29, 2010 (the “Agreement
Date”), by and among
PGxHealth, LLC, a Delaware limited liability company
(“Seller”), Clinical
Data, Inc., a Delaware
corporation (“Seller
Parent”), and Transgenomic,
Inc., a Delaware
corporation (“Buyer”). Capitalized terms
used and not otherwise defined in this Agreement shall have the meanings given
to them in the Purchase Agreement (as defined below).
RECITALS
Whereas, Seller, Seller Parent
and Buyer have entered into that certain Asset Purchase Agreement, dated as of
November 29, 2010, as amended by that certain Amendment to Asset Purchase
Agreement, dated December 29, 2010, by and among Seller, Seller Parent and
Buyer (together, the “Purchase
Agreement”);
Whereas, in connection with and
as a condition to Buyer’s obligation to consummate the acquisition of the Assets
from Seller and Seller Parent pursuant to the Purchase Agreement (the “Sale”),
and to enable Buyer to secure more fully the benefits of the Sale, Buyer has
required that Seller and Seller Parent enter into this Agreement;
and
Whereas, each of Seller and
Seller Parent believe that the restrictions set forth in this Agreement are just
and reasonable in light of the Sale and are entering into this Agreement in
order to induce Buyer to consummate the Sale and the other transactions
contemplated by the Transaction Documents.
Now,
Therefore, in consideration of the foregoing and the respective
covenants, agreements and representations and warranties set forth herein, the
parties to this Agreement, intending to be legally bound, hereby agree as
follows:
AGREEMENT
1. Definitions. As
used in this Agreement, the following terms shall have the following respective
meanings:
1.1 “Affiliate”
shall mean, with respect to any Person, a direct or indirect wholly-owned
subsidiary of such Person.
1.2 “Business”
shall mean the business of: (i) providing the proprietary FAMILION family
of genetic tests for inherited cardiac syndromes; and (ii) developing and
commercializing other proprietary genetic and related biomarker tests, other
than any proprietary genetic and related biomarker tests of or relating to the
Seller’s therapeutic development business, which, for the avoidance of doubt,
does not and will not include any proprietary genetic and related biomarker
tests included in the Assets.
1.3 “Competitive
Business” means any business, whether conducted within or outside of the
United States, that competes, either directly or indirectly, with the Business
or that otherwise interferes, either directly or indirectly, with the
Business.
1.4 “Noncompetition
Period” shall mean the period commencing on the Closing Date and ending
on the third (3rd) anniversary of the Closing Date; provided, however, that in the
event of any breach by either Seller or Seller Parent or any of their Affiliates
or Representatives of any provision of this Agreement, the Noncompetition Period
shall be automatically extended by a number of days equal to the total number of
days in the period from the date on which such breach shall have first occurred
through the date as of which such breach shall have been fully
cured.
1.5 “Representatives”
means the executive officers and employees.
1.6 “Seller
Employee” means any individual who is an employee of Seller or Seller
Parent on the Closing Date, other than Specified Employees.
1.7 “Specified
Employee” means any individual who: (i) is or was an employee of Seller
or Seller Parent that, on the Closing Date or during the one hundred eighty
(180) day period ending on the Closing Date, provided services to Seller or
Parent Seller in connection with the Business; or (ii) is an employee of
Buyer or its Affiliates at any time during the Noncompetition
Period.
2. Restriction
on Competition. Each of Seller and
Seller Parent agree that, during the Noncompetition Period, it shall not, and
shall not permit any of its Affiliates or Representatives to manage, control,
participate in or otherwise engage in, directly or indirectly, a Competitive
Business; provided, however, that Seller
and Seller Parent may, without violating the restrictions set forth in this
Section 2, own, as a passive investment, shares of capital stock of a publicly
held corporation that engages in a Competitive Business if (i) such shares are
actively traded on an Exchange, (ii) the number of shares of such
corporation’s capital stock that are owned beneficially (directly or indirectly)
by Seller and Seller Parent, and the number of shares of such corporation’s
capital stock that are owned beneficially (directly or indirectly) by Seller’s
and Seller Parent’s Affiliates and Representatives collectively represent less
than one percent (1%) of the total number of shares of such corporation’s
outstanding capital stock and (iii) neither Seller nor Seller Parent nor any of
their respective Affiliates or Representatives is otherwise associated directly
or indirectly with such corporation or with any Affiliate or Representative of
such corporation.
3. No
Hiring or Solicitation of Employees.
3.1 Each
of Seller and Seller Parent agree that, during the Noncompetition Period, it
shall not, and shall not permit any of its Affiliates or Representatives to:
(i) hire any Specified Employee; or (ii) directly or indirectly encourage,
induce, attempt to induce, solicit or attempt to solicit (on its own behalf or
on behalf of any other Person) any Specified Employee to leave his or her
employment with Buyer or any of its Affiliates or Representatives, as
applicable; provided, however, that this
paragraph will not restrict Seller and Seller Parent from hiring any Specified
Employee who applies for employment with Seller or Seller Parent in response to
an advertisement in a publication or medium of general circulation that is not
targeted to such Specified Employee.
3.2 Buyer
agrees that, during the Noncompetition Period, it shall not, and shall not
permit any of its Affiliates or Representatives to: (i) hire any
Seller Employee; or (ii) directly or indirectly encourage, induce, attempt
to induce, solicit or attempt to solicit (on its own behalf or on behalf of any
other Person) any Seller Employee to leave his or her employment with Seller or
any of its Affiliates or Representatives as applicable; provided, however, that this
paragraph will not restrict Buyer from hiring any Seller Employee who applies
for employment with Buyer in response to an advertisement in a publication or
medium of general circulation that is not targeted to such Seller
Employee.
4. Nondisparagement. Each of Seller and
Seller Parent agree that, during the Noncompetition Period, it shall not make
any written or oral statements or disclosures, or cause or encourage any of its
Affiliates, Representatives or directors to make any written or oral statements
or disclosures, that defame, disparage or in any way criticize the Business or
the reputation, practices or conduct of Buyer or any of its Affiliates,
Representatives or directors. Buyer agrees that, during the
Noncompetition Period, it shall not make any written or oral statements or
disclosures, or cause or encourage any of its Affiliates, Representatives or
directors to make any written or oral statements or disclosures, that defame,
disparage or in any way criticize Seller or Seller Parent or the reputation,
practices or conduct of Seller or Seller Parent or any of its Affiliates,
Representatives or directors.
5. Reasonableness
of Covenants. The
parties hereto expressly acknowledge and agree that the character, duration and
geographical scope of the restrictive covenants set forth in this Agreement are
reasonable in light of the circumstances as they exist on the date hereof,
including, without limitation, Seller’s and Seller Parent’s substantial economic
interest in the transactions contemplated by the Transaction
Documents. Without limiting the generality of the foregoing, if any
court determines that any of the restrictive covenants contained herein, or any
part thereof, is unenforceable because of the character, duration or geographic
scope of such covenant, the parties agree that it would serve the mutual intent
of such parties if such court would modify the duration or scope of such
provision so that such provision, in its modified form, shall then be
enforceable to the maximum extent permitted by applicable law.
|
6.
|
Miscellaneous.
|
6.1 Attorneys’ Fees. If
any action or proceeding relating to this Agreement or the enforcement of any
provision of this Agreement is brought against any party hereto, the prevailing
party shall be entitled to recover reasonable attorneys’ fees, costs and
disbursements in addition to any other relief to which the prevailing party may
be entitled.
6.2 Notices. All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified; (ii) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day; (iii) five (5) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or
(iv) one (1) business day after deposit with a nationally recognized
overnight courier, specifying next-day delivery, with written verification of
receipt. All communications shall be sent to the respective parties at the
following addresses (or at such other addresses as shall be specified by notice
given in accordance with this Section 6.2):
If to
Seller or Seller Parent:
Clinical
Data, Inc.
Xxx
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxx, EVP and Chief Legal Officer
Fax:
000-000-0000
With a
copy to (which shall not constitute notice):
Xxxxxx
LLP
000
Xxxxxxxx Xxxxxx, 00 Xxxxx
Xxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxx
Fax:
000-000-0000
If to
Buyer:
Transgenomic,
Inc.
00000
Xxxxx Xxxxxx
Xxxxx, XX
00000
Attn:
Xxxxx X. Xxxxxx, President and Chief Executive Officer
Fax:
000-000-0000
With a
copy to (which shall not constitute notice):
Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP
0000
Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx
Xxxxx, XX 00000
Attn:
Xxxx X. Xxxxxxx, Esq.
Fax:
000-000-0000
Notwithstanding
the foregoing, the parties expressly acknowledge and agree that, for purposes of
delivering any notice pursuant to this Agreement: (i) any such notice delivered
to either Seller or Seller Parent in accordance with this Section 6.2 shall
be deemed to have been delivered to both Seller and Seller Parent; and (ii) any
such notice given by either Seller or Seller Parent in accordance with this
Section 6.2 shall be deemed to have been given by both Seller and Seller
Parent.
6.3 Headings. The
bold-face headings contained in this Agreement are for convenience of reference
only, shall not be deemed to be a part of this Agreement and shall not be
referred to in connection with the construction or interpretation of this
Agreement.
6.4 Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, excluding any conflict of law rules that may direct the
application of the laws of another jurisdiction.
6.5 Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, if
any. Neither Seller nor Seller Parent shall assign its rights or
obligations under this Agreement to any Person without the consent of Buyer.
Buyer shall not assign its rights or obligations under this Agreement to any
Person without the consent of Seller Parent.
6.6 Termination. This Agreement
shall automatically terminate and be of no further force or effect upon a
merger, change of control, or sale of all or substantially all of the assets of
Seller Parent.
6.7 Remedies Cumulative; Specific
Performance. The rights and remedies of the parties hereto
shall be cumulative and not alternative. The parties agree that, in
the event of any breach or threatened breach by any party to this Agreement of
any covenant, obligation or other provision set forth in this Agreement for the
benefit of any other party to this Agreement, such other party shall be
entitled, in addition to any other remedy that may be available to it, to:
(i) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision; and
(ii) an injunction restraining such breach or threatened
breach. The parties further agree that no Person shall be required to
obtain, furnish or post any bond or similar instrument in connection with or as
a condition to obtaining any remedy referred to in this Section 6.6, and the
parties irrevocably waive any right they may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
6.8 Waiver. No failure
on the part of any Person to exercise any power, right, privilege or remedy
under this Agreement, and no delay on the part of any Person in exercising any
power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other
or further exercise thereof or of any other power, right, privilege or
remedy. No Person shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person, and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
6.9 Amendments. This
Agreement may not be amended, modified, altered or supplemented other than by
means of a written instrument duly executed and delivered on behalf of all of
the parties hereto.
6.10 Severability. Subject
to the provisions of Section 5, if one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement in writing for such
provision, then: (i) such provision shall be excluded from this Agreement; (ii)
the balance of the Agreement shall be interpreted as if such provision were so
excluded; and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.
6.11 Counterparts. This
Agreement may be executed in counterparts and by facsimile signatures, any one
of which need not contain the signatures of more than one Party and each of
which shall be an original, but all such counterparts taken together shall
constitute one and the same instrument. The exchange of copies of
this Agreement or amendments thereto and of signature pages by facsimile
transmission or by e-mail transmission in portable digital format (or similar
format) shall constitute effective execution and delivery of such instrument(s)
as to the Parties and may be used in lieu of the original Agreement or amendment
for all purposes. Signatures of the Parties transmitted by facsimile
or by e-mail transmission in portable digital format (or similar format) shall
be deemed to be their original signatures for all purposes.
6.12 Entire
Agreement. This Agreement, together with each of the other
Transaction Documents and the schedules and exhibits hereto and thereto, set
forth the entire understanding of the parties hereto relating to the subject
matter hereof and thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject matter hereof and
thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
In Witness
Whereof, the parties have duly executed this Noncompetition
and Nonsolicitation Agreement as of the date first set forth
above.
|
BUYER:
|
|||
|
Transgenomic,
Inc.
|
|||
|
By:
|
/s/ Xxxxx X. Xxxxxx
|
||
|
Xxxxx
X. Xxxxxx
|
|||
|
President
and Chief Executive Officer
|
|||
|
SELLER:
|
|||
|
PGxHealth,
LLC
|
|||
|
By:
|
PGxHealth
Holding, Inc.
|
||
|
Its:
|
Sole
Member
|
||
|
By:
|
/s/ Xxxxxx X. Xxxxxx
|
||
|
Xxxxxx
X. Xxxxxx
|
|||
|
Executive
Vice President and Chief Legal Officer
|
|||
|
SELLER
PARENT:
|
|||
|
Clinical
Data, Inc.
|
|||
|
By:
|
/s/ Xxxxxx X. Xxxxxx
|
||
|
Xxxxxx
X. Xxxxxx
|
|||
|
Executive
Vice President and Chief Legal
Officer
|
|||
[Signature
Page to Noncompetition and Nonsolicitation Agreement]
