NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT (this "Agreement"), dated as of
January 2, 1999, among SYNETIC HEALTHCARE COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), SYNETIC, INC., a Delaware corporation ("Synetic"),
Avicenna Systems Corporation, a Massachusetts corporation ("Avicenna") and
wholly owned subsidiary of Synetic, and CERNER CORPORATION, a Delaware
corporation ("Cerner").
WHEREAS, the Company and Cerner have entered into a
Subscription Agreement, dated as of January 2, 1999 (the "Subscription
Agreement"), pursuant to which Cerner agreed to subscribe for and purchase from
the Company, and the Company agreed to issue and sell to Cerner, 248,439 shares
of the Company's common stock, par value $.01 per share, in exchange for Cerner
agreeing to enter into various agreements, including this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the consummation of the transactions
contemplated by the Subscription Agreement;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control
with, such specified Person.
"CareXchange" means the transaction environment, consisting of
the Company's host computer or computers and a network or networks set
up by the Company to enable physicians and their staff to perform
information activities and transactions by interfacing between their
computers, those of the Company, and those of healthcare payers,
laboratories and pharmacies.
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"Company Business" means the provision of "extra-enterprise"
prescription, laboratory and managed care transaction and messaging
services (the "Services") that connect physicians with Payers,
pharmacies and laboratories, which shall include, without limitation,
connection to and management of Services with all PBM systems;
connection to and management of Services with all Payer systems
(including third party payers and direct payers (e.g., employers));
connection to and management of Services with all physicians and other
provider systems; connection to and management of Services with
healthcare suppliers (e.g., pharmacies, laboratories); connection to
and management of Services with consumers; and connection to and
management of services with other data switches (e.g., clearing
houses); and any mutually agreed to extension or modification of the
foregoing.
"Distribution Partner" means a Person that provides software
to physicians and physician office desktops and has (i) the right to
integrate the Company's core software or services into its physician
desktops which provides or enables access to the CareXchange and/or
(ii) the ability to distribute such integrated software to physicians,
subject to restrictions and scope of use of such licensed technology.
"HMO" means a Health Maintenance Organization.
"HNV" means Health Network Ventures, Inc., a Delaware
corporation.
"IDN" or "Integrated Delivery Network" means a legally
structured alliance among one or more hospitals, physicians and other
healthcare providers (laboratories, imaging centers, etc.) that can
provide substantially all health care services to a defined geographic
population of patients in a coordinated fashion.
"Inter-Exchange Partner" means a Person that provides networks
to Payers, physicians or suppliers of health care products or services
and has the right to connect to the Company's network for the purpose
of exchanging reciprocal services between its network and the Company's
network of associated Payers, physicians and suppliers.
"Marketing Agent" means a Person that has the right to sell
services of the Company to certain Payers or suppliers of health care
products or services, at prices, terms and technical requirements
determined by the Company.
"Marketing Agreement" means the marketing agreement among the
Company and Cerner, dated as of the date hereof.
"Payer" means any HMO, PBM, indemnity or other healthcare
insurer, self-funded health plan (including employers), union sponsored
plan, workers compensation entity or other source responsible for the
payment of fees and expenses for health care services.
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"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as
well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"Restricted Period" means the shorter of:
(i) the longer of (v) the period from the date of
this Agreement until five years thereafter and (w) the period
from the date of this Agreement until expiration of one year
following the date from which Cerner is no longer the
beneficial owner of any Common Stock, and
(ii) the period from the date of this Agreement until
(x) the fourth anniversary of this Agreement in the event
Cerner transfers shares of Common Stock to Synetic in
accordance with Section 2.03(d) of the Stockholders Agreement
or (y) the third anniversary of this Agreement in the event
Cerner transfers shares of Common Stock to Synetic in
accordance with Section 2.03(e) of the Stockholders Agreement.
"Restricted Services" means the following "extra enterprise"
medical/healthcare transaction and messaging services to Payers,
medical laboratories, pharmacies and physicians, unless acting as a
Distribution Partner, Marketing Agent or Inter-Exchange Partner for the
Company:
(i) claims, claims status and remittance advice;
(ii) encounter submission;
(iii) eligibility, which may include benefit plan
detail;
(iv) referrals and authorizations;
(v) pre-certifications and authorizations;
(vi) prescription services; and
(vii) laboratory services (specifically, orders
and results linked to Payer rules).
"Synetic" means Synetic, Inc., a Delaware corporation.
"Stockholders Agreement" means the stockholders agreement
among Avicenna, Synetic, Cerner and the Company, dated as of the date
hereof.
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ARTICLE II
NON-COMPETITION
SECTION 2.01. Non-Competition of Cerner. (a) During the
Restricted Period, Cerner and its Affiliates (other than HNV) shall not,
directly or indirectly, provide any Restricted Services or, other than pursuant
to, or permitted by, the Marketing Agreement, act as a Marketing Agent or
Distribution Partner for any Restricted Services within the United States;
provided, however, that, the foregoing shall not prohibit Cerner or any of its
Affiliates from (i) providing intra-enterprise transaction and messaging
services (including HNV products and services) to IDNs and their owned Payers or
owned, affiliated or contracted medical laboratories, pharmacies and physicians
or (ii) contracting to license or otherwise provide technology, intellectual
property or services to any person or entity for intra-enterprise use, even
though the organization or entity may include a medical laboratory, Payer or
pharmaceutical company as part of its business (either as a division or
subsidiary).
(b) During the Restricted Period, without the prior written
consent of the Company, neither Cerner nor any of its Affiliates (other than
HNV) will, directly or indirectly, maintain an investment in any organization
(with the exception of HNV) which provides services which compete with the
Restricted Services as a primary component of its business. Nothing herein shall
prevent Cerner from maintaining an investment in a management services
organization.
(c) Cerner reserves the right to be an Inter-Exchange Partner
for the Kansas City metropolitan area, including to a Payer, IDN, employer,
laboratory, physician, insurance company or other entity involved in health care
or financing health care and any health care technology solution so long as any
extra-enterprise solution is capable of being connected to the CareXchange;
provided, however, that Cerner's right hereunder shall not extend to "extra-
enterprise" prescription services and laboratory services (specifically, orders
and results linked to Payer rules), which services shall be exclusively marketed
by the Company through Cerner.
(d) Nothing in Section 2.01(a), (b), (c) or (e) shall prohibit
Cerner or its Affiliates from performing the following functions or supporting
roles:
(i) allowing IDNs using Cerner software to connect to the
Company's competitor's national networks; provided, however, Cerner
will not actively market and distribute services as part of its desktop
product offering which compete with the Restricted Services;
(ii) providing Cerner software to physicians that allows such
physicians to connect to competitors of the Company's national
networks; provided, however, Cerner
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will not actively market and distribute services as part of its desktop
offering which compete with the Restricted Services;
(iii) providing services or technology to IDNs, who wish to
set up their own network of Payers and providers within their service
marketplace so long as such IDNs will be capable of being an
Inter-Exchange Partner to the Company; and
(iv) performing all services and providing all technology
reasonably necessary or desirable to fulfill Cerner's outstanding
proposal to Emphisource if the proposal is accepted in substantially
its current form as regards eligibility. In connection with such
proposal, Cerner shall not provide "extra-enterprise" prescription
services or laboratory services (specifically, orders and results
linked to payer rules) and with respect to other Restricted Services,
Cerner shall only provide such Restricted Services (whether on its own
or in conjunction with a third party), other than eligibility, if such
services cannot be provided by the Company on terms and pricing
comparable to those otherwise available to Cerner. In the event Cerner
is asked by Emphisource to respond to a new "request for information"
or a "request for proposal" after the date hereof, Cerner and the
Company shall cooperate and make such response jointly and such
response shall provide that, to the extent practicable, all Restricted
Services, other than eligibility, will be provided by the Company.
(e) Cerner agrees that:
(i) it will not market HNV's services to non-IDN Payers, but
Cerner maintains the right to sell HNV to IDNs;
(ii) with the exception of Open Engine technology and the
common "web-top", it will not transfer the Cerner technology relating
to the Company Business (either developed independently or jointly) to
HNV;
(iii) it will not share development and implementation staff
that are working directly on the Company's project with HNV;
(iv) it will ensure that the Company's confidential
information is not shared by Cerner with HNV; provided, however, that
this obligation shall not extend to any confidential information which
is lawfully in the possession of HNV from a third party; and
(v) will not license or otherwise provide technology to any
entity that will enable such entity to be a competitor of the Company
Business.
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(f) At no time shall Cerner take any action to enable its
desktop technology that would have the effect of forcing physicians that are
using Restricted Services to switch via a new release or an interim release of a
Cerner physician desktop office product or otherwise to an exchange or service
that is in competition with the Company, or that would impede or prevent access
to CareXchange.
SECTION 2.02. Non-Competition of the Company. (a) During the
Restricted Period, neither the Company nor any of its Affiliates will, directly
or indirectly, engage in the business of providing intra-enterprise process
automation software products or services, whether on a locally installed or
remotely provided basis, provided, however, that the foregoing shall not
prohibit the Company from providing task automation tools and services to
physicians and offices of physicians and pharmacies not owned by IDNs, that
facilitate the utilization of the Company's products or services (e.g.,
schedules, day lists, registrations, rosters, etc.).
(b) The Company agrees that, during the Restricted Period, the
Company will not provide any Restricted Services, other than "extra-enterprise"
prescription services or laboratory services (specifically, orders and results
linked to Payer rules), within the greater Kansas City metropolitan area (which
services shall be exclusively marketed by the Company through Cerner in such
territory) without the prior written consent of Cerner; provided, however, that
this Section 2.02(b) shall not apply to contracts of the Company with Payers
with geographically diverse operations headquartered outside Kansas City.
SECTION 2.03. Non-Competition of Synetic. All of the Company's
Business conducted by Synetic, Avicenna and their respective Affiliates shall be
conducted solely through the Company; provided, however, that in the event
Synetic, Avicenna or any Affiliate thereof shall acquire a business that
conducts the Company's Business, Synetic, Avicenna or such Affiliate shall have
a reasonable period of time to transfer such operations to the Company.
SECTION 2.04. Non-Solicitation of All Parties. As a separate
and independent covenant, each party agrees with the other parties that, during
the Restricted Period, each party will not in any way, directly or indirectly,
employ, hire, enter into an independent contracting arrangement or agency
relationship with or solicit in respect of the foregoing any officers or
employees of the other parties or any of their Affiliates; provided, however,
that the Company shall be permitted to employ, hire, enter into an independent
contracting arrangement or agency relationship with or solicit in respect of the
foregoing any officers or employees of Synetic.
SECTION 2.05. Exclusions. Nothing in this Article II shall
limit the right of either Synetic, Cerner or their respective Affiliates to
build and deploy disease management programs.
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SECTION 2.06. Acknowledgment. The parties acknowledge that the
covenants of each party set forth in this Article II are an essential element of
this Agreement and the Subscription Agreement and that, but for the agreement of
each of the parties to comply with these covenants, each party would not have
entered into this Agreement and the Company and Cerner would not have entered
into the Subscription Agreement. The parties have independently consulted with
their respective counsel and after such consultation agree that the covenants
set forth in this Agreement are reasonable and proper.
SECTION 2.07. Unenforceability. The parties acknowledge and
agree that the Restricted Period, scope, geographical area and other provisions
of this Agreement have been specifically negotiated by sophisticated commercial
parties and that all such provisions are reasonable under the circumstances of
the transactions contemplated by the parties. In the event that the agreements
contained in this Agreement shall be deemed by any court of competent
jurisdiction to be unenforceable by reason of their extending for too great a
time or over too great a geographical area or by reason of their being too
extensive in any other respect, they shall be interpreted to extend only over
the maximum period of time for which they may be enforceable and/or over the
maximum geographical area as to which they may be enforceable and/or to the
maximum extent in all other respects as to which they may be enforceable, all as
determined by such court in such action.
ARTICLE III
TERM AND TERMINATION.
SECTION 3.01. Term. Unless terminated earlier pursuant to
Section 3.02, this Agreement shall terminate on the expiration of Restricted
Period (the "Term").
SECTION 3.02. Termination. Notwithstanding Section 3.01, this
Agreement may be terminated:
(a) by the Company, at any time, not less than 60 days after
delivery of notice to Cerner, in the event that Cerner shall have
defaulted on or breached any material term of this Agreement and shall
not have cured such breach within 30 days after receiving such notice
from the Company specifying the nature of such default or breach; or
(b) by Cerner, at any time, not less than 60 days after
delivery of notice to the Company in the event that the Company shall
have defaulted on or breached any material term of this Agreement and
shall not have cured such breach within 30 days after receiving notice
from Cerner specifying the nature of such default or breach; or
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(c) by any party, immediately upon delivery of notice to the
relevant party, in the event that such other party (i) requires a
composition or other similar arrangement with creditors, files for
bankruptcy or is declared bankrupt or (ii) shall have assigned or
transferred to any third party any of its rights or obligations
hereunder except in accordance with Section 4.04.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 4.02. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 4.03. Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
with respect to the subject matter hereof.
SECTION 4.04. Assignment. This Agreement shall not be assigned
without the express written consent of the parties (which consent may be granted
or withheld in the sole discretion of any party) except that any party hereto
may assign its rights hereunder to an Affiliate of such party; provided,
however, that any such assignment shall not relieve the assigning party of its
obligations hereunder.; provided, further, however, that any party may, without
the written consent of the other parties, assign and delegate this Agreement and
its rights and obligations hereunder in connection with a merger, consolidation
or sale of all or substantially all of its assets (which sale shall include the
assignment and assumption of all rights and obligations under the Ancillary
Agreements (as defined in the Stockholders Agreement) and the Stockholders
Agreement).
SECTION 4.05. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and successors and nothing herein, express or implied,
is intended to or shall confer upon any other
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person or entity any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
SECTION 4.06. Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each of
the parties.
SECTION 4.07. Governing Law. This Agreement shall be governed
by the laws of the State of New York.
SECTION 4.09. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 4.10. Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or the transactions contemplated hereby
and for any counterclaim therein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized signatories
thereunto duly authorized as of the day and year first above written.
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By
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Name:
Title:
SYNETIC, INC.
By
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Name:
Title:
AVICENNA SYSTEMS CORPORATION
By
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Name:
Title:
CERNER CORPORATION
By
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Name:
Title:
