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EXHIBIT 99.9
NON-COMPETE AGREEMENT
This NON-COMPETE AGREEMENT("Agreement") is executed and delivered as of
the 3rd day of August, 1998, by UNIVERSAL STANDARD HEALTHCARE, INC., a Michigan
corporation, and all of its subsidiaries and affiliated companies: (present and
future), (collectively "Seller" or "Universal"), for the benefit of LABORATORY
CORPORATION OF AMERICA HOLDINGS, a Delaware corporation ("Purchaser" or
"LabCorp").
This Agreement is delivered to Purchaser pursuant to an asset purchase
agreement dated July 16, 1998, (the "Purchase Agreement") between Seller and
Purchaser. Seller acknowledges that Purchaser would not enter into, or
consummate, the Purchase Agreement and the transactions contemplated thereby
without Seller's execution of this Agreement. Capitalized terms not defined
herein shall have the meanings ascribed to them in the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, for the purpose of inducing Purchaser to enter
into the Purchase Agreement and intending to be legally bound hereby, the
undersigned covenants and agrees as follows:
I. RESTRICTED PERIOD. This Agreement shall remain in effect for a period of
five (5) years from and after the Closing Date (the "Restricted Period").
II. NON-COMPETITION. During the Restricted Period, except in furtherance of
Purchaser's business, or otherwise on behalf of Purchaser, or with the
prior written consent of Purchaser, Seller shall not engage directly or
indirectly on its own behalf or on behalf of, or in conjunction with any
person, firm, partnership, or corporation, in the business of providing
commercial laboratory services through the use of automated or manual
testing procedures, including such services provided under the personal
supervision of any physician in the same group practice in competition
with Purchaser or any subsidiary or affiliate of Purchaser, within any
area in the United States of America (the "Restricted Area").
III. NON-SOLICITATION. During the Restricted Period, except in furtherance of
Purchaser's business, or otherwise on behalf of Purchaser, or with the
prior written consent of Purchaser, Seller shall not influence or attempt
to influence any:
A. customer listed on the Customer Lists, as defined in the Purchase
Agreement, either directly or indirectly, to divert his or its
purchases of commercial laboratory services provided through the use
of automated or manual testing procedures to be conducted in the
Restricted Area (the "Business") to any person, firm, corporation,
institution, or other entity then in competition with the Business
of Purchaser or any subsidiary or affiliate of Purchaser's;
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B. employee (i) of Seller to whom Purchaser intends to offer employment
as provided for in the Purchase Agreement or (ii) of the Business
after the transactions contemplated by the Purchase Agreement have
been consummated, either directly or indirectly, to terminate his or
her employment with Purchaser.
IV. The following activities by Seller or any of its subsidiaries or
affiliates shall be excluded from and shall not be deemed to violate this
Non-Compete Agreement, including the restrictions and limitations on
Non-Competition and Non-Solicitation set forth in Sections II and III
hereof:
A. Operation of a managed care business which offers, provides or
arranges for the provision of clinical laboratory services,
including those provided using automated or manual testing
procedures, home medical services or diagnostic imaging services.
Notwithstanding anything above to the contrary, operation of a
managed care business shall not include the performance by Seller or
its subsidiaries of commercial laboratory services as described in
Section II above;
B. Operation of a third-party administrator or administrative services
organization business which processes claims or provides management
services for managed care programs, employer groups, employer health
plans or others notwithstanding that the services for which the
claims are being filed are or include clinical laboratory services,
home medical services or diagnostic imaging services;
C. Establishment of a clinical laboratory program, including drawing
stations, to fulfill the requirements of any managed care contract
to which Seller or any subsidiary or affiliate is a party if (i) no
other clinical laboratory which meets the qualifications established
by Seller for its provider network is available or is willing to
accept Seller's payment rates, and (ii) LabCorp has chosen not to be
a provider of Seller pursuant to Sections 2 and 6 of the Laboratory
Services Agreement (as defined in the Purchase Agreement); or
D. The performance of laboratory services under Seller's existing
agreements with Seller's customers who would not assign such
agreements to Purchaser, or under agreements which Purchaser elects
not to assume, to the extent that services under such agreements
must be performed by Seller under the terms of such agreements,
during the termination notice period, which shall consist of the
period of time commencing with the notice of termination of such
agreements and ending with the termination of the agreements
pursuant to the termination provisions thereunder.
V. SPECIFIC ENFORCEMENT; EXTENSION OF PERIOD. Seller acknowledges that the
restrictions contained in Sections II and III hereof are reasonable and
necessary to protect the legitimate interests of Purchaser and that
Purchaser would not have entered into the
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Purchase Agreement in the absence of such restrictions. Seller also
acknowledges that any breach by it of Sections II or III hereof will cause
continuing and irreparable injury to Purchaser for which monetary damages
would not be an adequate remedy. Seller agrees that it shall not, in any
action or proceeding to enforce any of the provisions of this Agreement,
assert the claim or defense that an adequate remedy at law exists. In the
event of such breach by Seller, Purchaser shall have the right to enforce
the provisions of Sections II and III of this Agreement by seeking
injunctive or other relief in any court, without a requirement that a bond
be posted, and this Agreement shall not in any way limit remedies of law
or in equity otherwise available to Purchaser.
If any of the provisions of this Agreement are held to be in any respect
an unreasonable restriction upon Seller, then they shall be deemed to
extend only over the maximum period of time, geographic area, or range of
activities as to which they may be enforceable. In the event that Seller
shall be in violation of the restrictive covenants in this Agreement, then
the Restricted Period shall be extended for a period of time equal to the
period of time during which such breach shall occur, and, in the event
that Purchaser should be required to seek relief from such breach in any
court, board of arbitration or other tribunal, then the Restricted Period
shall be extended for the period of time required for the pendency of such
proceedings, including all appeals.
VI. MISCELLANEOUS.
A. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
Purchaser and its successors and assigns.
B. WAIVER. The waiver by Purchaser of the breach of any term or
provision of this Agreement shall not operate as or be construed to
be a waiver of any other or subsequent breach of this Agreement.
C. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
construed and enforced in accordance with the substantive laws of
the State of Michigan, without regard to the principles of conflicts
of laws of any jurisdiction.
D. INVALIDITY. If any provision of this Agreement shall be determined
to be void, invalid, unenforceable or illegal for any reason, the
validity and enforceability of all of the remaining provisions
hereof shall not be affected thereby. If any particular provision of
this Agreement shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such
amendment to apply only to the operation of such provision in the
particular jurisdiction in which such adjudication is made; provided
that, if any provision contained in this Agreement shall be
adjudicated to be invalid or unenforceable because such provision is
held to be excessively broad as to duration, geographic scope,
activity or subject, such
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provision shall be deemed amended by limiting and reducing it so as
to be valid and enforceable to the maximum extent compatible with
the applicable laws of such jurisdiction, such amendment only to
apply with respect to the operation of such provision in the
applicable jurisdiction in which the adjudication is made.
E. SECTION HEADINGS. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not
affect interpretation.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day first above written.
UNIVERSAL STANDARD HEALTHCARE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
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