Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) dated as of
April 23, 2004 (the “Closing Date”), is made and entered into between
CURATIVE HEALTH SERVICES, INC., a Minnesota corporation (the “Company”),
and Paul McConnell, an individual resident of the Commonwealth of Massachusetts
(“Executive”).

 

WHEREAS,
the Company has agreed to purchase all of the issued and outstanding shares of
capital stock of Critical Care Systems, Inc. (“CCS”) (the “Acquisition”)
pursuant to an agreement made and entered into between the Company, CCS,
Executive and all of the other shareholders of CCS listed on Schedule 1 to
the Stock Purchase Agreement dated as of February 24, 2004 (the “Purchase
Agreement”); and

 

WHEREAS,
according to the terms of the Purchase Agreement and by virtue of Executive’s
current relationship with CCS, consummation of the Acquisition will result in
significant economic benefit to Executive;

 

WHEREAS,
Executive has acquired and possesses substantial and valuable knowledge about
the industry in which CCS operates, which knowledge will result in a
significant economic benefit to the Company;

 

WHEREAS,
because of the importance of the employment, noncompetition, nonsolicitation,
confidentiality, and invention assignment provisions of this Agreement, the
Company has conditioned its obligation to consummate the transactions
contemplated by the Purchase Agreement, in part, on the execution and delivery
of this Agreement by Executive;

 

WHEREAS,
all parties agree that, if the Acquisition is not consummated by the parties,
this Agreement shall be null and void; and

 

WHEREAS,
the Company desires to employ Executive subsequent to the consummation of the
Acquisition, and Executive desires to be employed by the Company, subject to
the terms of the employment, noncompetition, nonsolicitation, confidentiality,
and invention assignment provisions of this Agreement and the provisions of the
Acquisition Agreement.

 

NOW
THEREFORE, in consideration of the mutual obligations
incurred and benefits obtained hereunder, the sufficiency of which is admitted,
as an inducement to consummate the Acquisition, and contingent upon the
consummation of the Acquisition, the Company and Executive agree as follows:

 

1.             Employment

 

1.1           Employment
and Duties.  The Company hereby
agrees to employ Executive for the Term (as hereinafter defined) as President
and Chief Operating Officer, subject to the direction of the Chief Executive
Officer, and in connection therewith, to perform such duties as

 

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he shall reasonably be directed by the Chief Executive Officer to
perform.  Executive hereby accepts such
employment and agrees to render such services. 
Executive shall perform his duties and carry out his responsibilities hereunder
in a diligent manner, shall devote his exclusive and full working time,
attention and effort to the affairs of the Company, shall use his best efforts
to promote the interests of the Company and shall be just and faithful in the
performance of his duties and in carrying out his responsibilities.  Subject to good performance by Executive and
approval by the Company’s Board of Directors, in its sole discretion, Executive
will be offered the position of Chief Executive Officer within eighteen (18)
months of the Closing Date.

 

1.2           Location.  The principal location for performance of
Executive’s services hereunder shall be at the Company’s office located in
Nashua, New Hampshire, subject to reasonable travel requirements during the
course of such performance.

 

2.             Employment
Term

 

The term of Executive’s employment hereunder (the “Term”) shall
be deemed to commence on the Closing Date and shall end on the third
anniversary of the Closing Date, unless sooner terminated as hereinafter
provided; provided,  however, that the Term shall be automatically
renewed and extended for an additional period of one (1) year on each
anniversary thereafter unless either party gives a Notice of Termination (as
defined below) in accordance with Section 4.3 or Section 4.4.

 

3.             Compensation
and Benefits

 

3.1           Compensation.

 

(a)           Base Salary.  The Company shall pay Executive an annual
salary of $400,000 payable in bi-weekly installments, in arrears (the “Base
Salary”).  The Base Salary shall be
reviewed annually by the Company’s Board of Directors and may be increased, but
not decreased (unless mutually agreed upon by Executive and the Company).

 

(b)           Bonus Plan.  Executive shall be entitled to participate in the Company’s
Executive Bonus Compensation Program, in accordance with and subject to the
terms and provisions thereof. 
Notwithstanding any provision of the Executive Bonus Compensation
Program, the Company will pay and Executive will receive a guaranteed bonus of
100% with respect to his first year of employment with the Company, provided
that he remains employed by the Company continuously from the Closing Date
through the first anniversary of the Closing Date.

 

(c)           Restricted Stock Units.  The Company shall issue and Executive shall
receive a grant of Restricted Stock Units in the total amount of $2 million, to
be determined based upon the valuation of the Common Stock of the Company as of
the close of trading on the Closing Date. 
The terms and conditions of said Restricted Stock Units shall be set
forth in and governed entirely by the a Restricted Stock Unit Agreement in the
form attached hereto as Exhibit A hereto (the “Restricted Stock Unit
Agreement”),

 

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which Executive shall sign as a condition of receiving said Restricted Stock
Units, and nothing contained in this Agreement is intended to alter the
provisions of such Restricted Stock Unit Agreement.  Except as otherwise provided in the Restricted Stock Unit
Agreement, the Restricted Stock Units granted to Executive will vest in their
entirety on the third anniversary of the Closing Date, and not before, provided
that Executive remains employed by the Company continuously from the Closing
Date through the third anniversary of the Closing Date.

 

(d)           Stay Bonus:  The Company shall pay and Executive shall receive a cash payment
in the amount of $1.5 million on the third anniversary of the Closing Date,
provided that Executive remains employed by the Company continuously from the
Closing Date through the third anniversary of the Closing Date.

 

(e)           Usage of Corporate Flex Jet:  Executive shall be entitled to personal use
of the Company’s corporate aircraft available to the Company pursuant to its
agreement with Bombardier Aerospace Corporation, for up to the lesser of (a) 10
hours per year for personal use, and (b) the difference between (x) the amount
of time the Company is permitted to use the aircraft pursuant to the Flexjet
agreement and (y) the amount of time the respective aircraft is actually
utilized or needed to be utilized by the Company for business purposes, or is
reserved for other purposes previously approved by the Board of Directors of
the Company; provided that such personal use shall be treated by the Company as
compensation to Executive in the amount of variable costs incurred by the
Company solely in connection with such personal use.

 

3.2           Participation
in Benefit Plans.  Executive shall
be entitled to participate in all employee benefit plans or programs of the
Company (including, to the extent applicable, any retirement plan or plans) to
the extent that his position, title, tenure, salary, active employment status
and other qualifications make him eligible to participate.  The Company does not guarantee the
continuance of any particular employee benefit plan or program during the Term,
and Executive’s participation in any such plan or program shall be subject to
all terms, provisions, rules and regulations applicable thereto.  Executive will be entitled to twenty (20)
days of vacation per year, to be used in accordance with the Company’s vacation
policy for senior executives as it may change from time to time.  For the Benefit Period, if any, (as
hereinafter defined), the Company will arrange to provide Executive with
welfare benefits (including life and health insurance benefits) of
substantially similar design and cost to Executive as the welfare benefits and
other employee benefits available to Executive prior to Executive’s or the
Company’s, as the case may be, receipt of a Notice of Termination (as
hereinafter defined).  In the event that
Executive shall obtain full-time employment providing any welfare benefit or
benefits during the Benefit Period, such benefit(s) as otherwise receivable
hereunder by Executive shall be discontinued.

 

3.3           Expenses.  The Company will pay or reimburse Executive
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this

 

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Agreement, including the cost of first class air travel.  Executive shall keep detailed and accurate
records of expenses incurred in connection with the performance of his duties
hereunder and reimbursement therefore shall be in accordance with policies and
procedures to be established from time to time by the Board.

 

3.4           Automobile
Expenses.  During the Term and in
accordance with the Company’s Executive Automobile Policy, Executive shall be
repaid by the Company for the monthly lease expense for an automobile leased in
the name of the Executive and for all normal automobile operating expenses
incurred by the Executive in the performance of his duties under this
Agreement.

 

3.5           Stock
Purchase and Restrictions: 
Executive agrees to purchase on the open market, subject to
availability, with his own personal funds and within 30 days following the
Closing Date, shares of the Common Stock of the Company having a total purchase
price of $2 million  (the “Designated
Shares”) provided that such 30-day period will be suspended for any
portion thereof during which Executive may not purchase Designated Shares in
compliance with applicable federal and/or state laws and regulations (“Laws”)
and/or Company policies governing trading in Company securities by Company
executives (“Company Trading Policies”).  Executive agrees that the Designated Shares will be subject to
the following lockup agreement: 
Executive will be prohibited from selling, transferring or otherwise
disposing of half of the Designated Shares until the date that is 30 days after
the first anniversary of the Closing Date, and he will be prohibited from
selling, transferring or otherwise disposing of the other half of the
Designated Shares until the date that is 30 days after the second anniversary
of the Closing Date (each such period, as applicable, the “Lockup Period”).  Notwithstanding the foregoing, Executive may
sell or otherwise transfer the Designated Shares, in whole or in part, during
the Lock-up Period (a) to the Executive’s Immediate Family (as defined below)
or to any trust or other entity for the direct or indirect benefit of the
Executive and/or his Immediate Family, provided that in all such cases,
the transferee agrees in writing that the transferee is receiving and will hold
the transferred Designated Shares subject to the lockup provisions of this Section 3.5
and there will be no further transfer of such Designated Shares except in
accordance with such provisions and/or (b) upon the occurrence of a Change of
Control (as defined below) and/or (c) upon the Company terminating this
Agreement without Cause (as defined below) and/or (d) upon Executive
terminating this Agreement for Good Reason (as defined below).  For purposes hereof, “Immediate Family”
means any relationship by blood, marriage or adoption not more remote than
first cousin.  Executive’s purchase of
Designated Shares as required herein shall be in compliance with all Company
Trading Policies and in compliance with all Laws.

 

4.             Termination of Employment

 

4.1           Definitions

 

(a)           “Benefit
Period” shall mean (i) the twelve (12) month period commencing on the Date
of Termination which occurs in connection with a termination of employment
described in the first sentence of Section 4.5(a), or (ii) the twenty-four
(24) month period commencing on the Date of Termination which occurs in
connection with a termination of employment described in the first sentence of
Section 4.5(b).

 

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(b)           “Cause”
shall mean any of the following:

 

(i)            any
act or failure to act (or series or combination thereof) by Executive done with
the intent to harm in any material respect the interests of the Company;

 

(ii)           the
commission by Executive of a felony;

 

(iii)          the
perpetration by Executive of a dishonest act or common law fraud against the
Company or any subsidiary thereof;

 

(iv)          a
grossly negligent act or failure to act (or series or combination thereof) by
Executive detrimental in any material respect to the interests of the Company;

 

(v)           the
material breach by Executive of his agreements or obligations under this
Agreement; or

 

(vi)          the
continued refusal to follow the directives of the Chief Executive Officer or
Board of Directors that are consistent with Executive’s duties and
responsibilities identified in Section 1.1 hereof.

 

(c)           A
“Change of Control” shall mean any of the following:

 

(i)            a
sale of all or substantially all of the assets of the Company;

 

(ii)           the
acquisition of more than fifty percent (50%) of the Common Stock of the Company
(with all classes or series thereof treated as a single class) by any person or
group of persons, except a Permitted Shareholder (as hereinafter defined),
acting in concert.  A “Permitted
Shareholder” means a holder, as of the Closing Date, of Common Stock;

 

(iii)          a
reorganization of the Company wherein the holders of Common Stock of the Company
receive stock in another company, a merger of the Company with another company
wherein there is a fifty percent (50%) or greater change in the ownership of
the Common Stock of the Company as a result of such merger, or any other
transaction in which the Company (other than as the parent corporation) is
consolidated for federal income tax purposes or is eligible to be consolidated
for federal income tax purposes with another corporation;

 

(iv)          in
the event that the Common Stock is traded on an established securities market,
a public announcement that any person has acquired or has the right to acquire
beneficial ownership of more than fifty percent (50%) of the then-outstanding
Common Stock and for this purpose the terms “person” and “beneficial ownership”
shall have the meanings provided in Section 13(d) of the Securities and
Exchange Act of 1934 or related rules promulgated by the Securities and
Exchange Commission, or the commencement of or public announcement of an
intention to make a tender offer or exchange offer for more than fifty percent
(50%) of the then outstanding Common Stock;

 

(v)           a
majority of the Board of Directors is not comprised of Continuing
Directors.  A “Continuing Director”
means a director recommended by the Board of Directors of the Company for
election as a director of the Company by the stockholders; or

 

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(vi)          the
Board of Directors of the Company, in its sole and absolute discretion,
determines that there has been a sufficient change in the share ownership of
the Company to constitute a change of effective ownership or control of the
Company.

 

(d)           “Good
Reason” shall mean, at any time the Company’s requiring Executive to be
based at a location in excess of fifty (50) miles from Executive’s current
principal residence in Boston, Massachusetts, or within the twelve (12) month
period immediately following a Change of Control, the occurrence of any one or
more of the following events:

 

(i)            the
assignment to Executive of any duties inconsistent in any respect with
Executive’s position (including status, offices, title, and reporting
requirements), authority, duties or other responsibilities as in effect
immediately prior to the Change of Control or any other action of the Company
that results in a diminishment in such position, authority, duties or
responsibilities, other than an insubstantial and inadvertent action that is
remedied by the Company promptly after receipt of notice thereof given by
Executive;

 

(ii)           a
reduction by the Company in Executive’s Base Salary as in effect on the date
hereof and as the same shall be increased from time to time hereafter;

 

(iii)          the
Company’s requiring Executive to be based at a location in excess of fifty (50)
miles from the Executive’s current principal residence in Boston,
Massachusetts;

 

(iv)          the
failure by the Company to (a) continue in effect any material compensation or
benefit plan, program, policy or practice in which Executive was participating
at the time of the Change of Control or (b) provide Executive with compensation
and benefits at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each employee benefit plan, program,
policy and practice as in effect immediately prior to the Change of Control (or
as in effect following the Change of Control, if greater);

 

(v)           the
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and agree to perform this Agreement; and

 

(vi)          any
purported termination by the Company of Executive’s employment that is not
effected pursuant to a Notice of Termination (as defined below).

 

(e)           “Date
of Termination” shall mean the date specified in the Notice of Termination
(as hereinafter defined) (except in the case of Executive’s death, in which
case Date of Termination shall be the date of death); provided, however,
that if Executive’s employment is terminated by the Company other than for
Cause, the date specified in the Notice of Termination shall be at least thirty
(30) days from the date the Notice of Termination is given to Executive and if
Executive’s employment is terminated by Executive for Good Reason, the date
specified in the Notice of Termination shall not be more than sixty (60) days
from the date the Notice of Termination is given to the Company.

 

(f)            “Notice
of Termination” shall mean a written notice either from the Company to
Executive, or Executive to the Company, that indicates Section 2 or the
specific provision of Section 4 of this Agreement relied upon as the
reason for such termination or

 

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nonrenewal, the Date of Termination, and, in reasonable detail, the
facts and circumstances claimed to provide a basis for termination or
nonrenewal pursuant to Section 2 or this Section 4 of this Agreement.

 

4.2           Termination
Upon Death or Disability.  This
Agreement, and Executive’s employment hereunder, shall terminate automatically
and without the necessity of any action on the part of the Company upon the
death of Executive.  In addition, if at
any time during the Term Executive shall become physically or mentally
disabled, whether totally or partially, so that he is unable substantially to
perform his duties and services hereunder for (i) a period of six (6)
consecutive months, or (ii) for shorter periods aggregating six (6) months
during any twelve (12) month period, the Company may at any time after the last
day of the sixth consecutive month of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six (6)
months, by written notice to Executive (but before Executive has recovered from
such disability), terminate this Agreement and Executive’s employment
hereunder.

 

4.3           Company’s
and Executive’s Right to Terminate-Prior to Change of Control.  Prior to a Change of Control, this Agreement
and Executive’s employment hereunder may be terminated at any time by the
Company, with or without Cause, upon thirty (30) days prior written notice to
Executive, and by Executive, at any time with or without Good Reason, upon
thirty (30) days prior written notice to the Company.  Any termination of Executive’s employment by the Company without
Cause prior to a Change of Control that occurs at the request or insistence of
any person (other than the Company) relating to such Change of Control shall be
deemed to have occurred after the Change of Control for the purposes of this
Agreement. Executive’s right to terminate his employment pursuant to this
Section 4.3 shall not be affected by incapacity due to physical or mental
illness.

 

4.4           Company’s
and Executive’s Right to Terminate-Following a Change of Control.  Following a Change of Control, this
Agreement and Executive’s employment hereunder may be terminated at any time
(i) by the Company, with or without Cause, upon thirty (30) days prior written
notice to Executive, and (ii) by Executive with or without Good Reason upon
thirty (30) days prior written notice to the Company.  Executive’s right to terminate his employment pursuant to this
Section 4.4 shall not be affected by incapacity due to physical or mental
illness.  Executive’s continued
employment following a Change of Control shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason
hereunder.

 

4.5           Compensation
Upon Termination.

 

(a)           Termination
Prior to Change of Control.  In the
event the Company terminates (or elects not to renew) this Agreement without
Cause, and such termination (or nonrenewal) without Cause occurs prior to any
Change of Control, Executive shall be entitled to receive his Base Salary
through the Date of Termination, the welfare benefits described in
Section 3.2 for the Benefit Period, and not later than thirty (30) days
after the Date of Termination, a lump sum severance payment equal to the sum of
Executive’s then Current Base Salary plus the arithmetic average of the bonus
payments made to Executive pursuant to the Company’s Executive Bonus
Compensation Program with respect to the three (3) fiscal years immediately preceding
the fiscal year in which the Date of Termination  occurs, provided; however,
that (i) if the Executive’s Date of Termination is prior to the  first
anniversary of the

 

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Closing Date,  the bonus payment to Executive shall be
Four Hundred Thousand Dollars ($400,000), or (ii) if the Executive’s Date of
Termination is after the first anniversary of the Closing Date but prior to the
third anniversary of the Closing Date, the bonus payment to Executive shall be
the arithmetic average of the annual bonus payments made to Executive for the
fiscal year(s) in which Executive was employed as President and Chief Operating
Officer by the Company.  In addition, to
the extent not otherwise required under the Company’s Stock Option Plan or any
award agreement with Executive, any unvested Restricted Stock Units and/or
stock option awards theretofore awarded to Executive which would otherwise vest
and become exercisable during the twelve (12) month period commencing on the
Date of Termination shall vest and become exercisable on the Date of
Termination.  In the event this
Agreement is terminated (or not renewed) for any reason other than by the
Company without Cause, and such termination (or nonrenewal) occurs prior to a Change
of Control, Executive shall not be entitled to the continuation of any
compensation, bonuses or benefits provided hereunder, or any other payments
following the Date of Termination, other than Base Salary earned through such
Date of Termination.

 

(b)           Termination
Following Change of Control.  If
this Agreement is terminated (or not renewed) (i) by the Company without Cause,
or (ii) by Executive for Good Reason during the twelve (12) month period
immediately following a Change of Control, and such termination (or nonrenewal)
occurs following a Change of Control, Executive shall be entitled to receive
his full Base Salary through the Date of Termination, the welfare benefits
described in Section 3.2 for the Benefit Period and, not later than thirty
(30) days after the Date of Termination, the Stay Bonus specified in
Section 3.1(d) above and a lump sum severance payment equal to the product
of two (2) times the sum of Executive’s then current Base Salary plus the
arithmetic average of payments made to Executive pursuant to the Company’s
Executive Bonus Compensation Program with respect to the three (3) fiscal years
immediately preceding the fiscal year in which the Date of Termination occurs,
provided; however, that (i) if the Executive’s Date of Termination
is prior to the  first anniversary of the Closing Date,  the bonus payment to
Executive in connection with the severance payment shall be Four Hundred
Thousand Dollars ($400,000), or (ii) if the Executive’s Date of Termination is
after the first anniversary of the Closing Date but prior to the third
anniversary of the Closing Date, the bonus payment to Executive in connection
with the severance payment shall be the arithmetic average of the annual bonus
payments made to Executive for the fiscal year(s) in which Executive was
employed as President and Chief Operating Officer by the Company.  In addition, to the extent not otherwise
required under the Company’s Stock Option Plan or any award agreement with
Executive, any unvested stock Restricted Stock Units and/or option awards
theretofore awarded to Executive shall vest and become immediately exercisable
in full.  In the event this Agreement is
terminated (or not renewed) for any reason other than (i) by the Company without
Cause, or (ii) by Executive for Good Reason, and such termination (or
nonrenewal) occurs following a Change of Control, Executive shall not be
entitled to the continuation of any compensation, bonuses or benefits provided
hereunder, or any other payments following the Date of Termination, other than
Base Salary earned through the Date of Termination.

 

(c)           At
Executive’s option to be exercised by written notice to the Company, the
severance benefits payable under this Section 4.5 shall be paid in
accordance with the Company’s normal payroll procedures over the twelve (12) or
twenty-four (24) month period, as the case may be, corresponding to the amount
of the payments instead of in a lump sum.

 

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(d)           Anything
to the contrary contained herein notwithstanding, as a condition to Executive
receiving severance benefits to be paid pursuant to this Section 4.5,
Executive shall execute and deliver to the Company a general release in form
and substance reasonably satisfactory to the Company releasing the Company and
its officers, directors, employees and agents from all liabilities, claims and
obligations of any nature whatsoever, excepting only the Company’s obligations
under this Agreement, under the Restricted Stock Unit Agreement and any Stock
Option Award Agreements, and under any other employee benefit plans or programs
in which Executive participates under Section 3.2 hereof, subject to all
terms and conditions of such plans or programs and this Agreement.

 

(e)           Anything
to the contrary contained herein notwithstanding, in the event that any payment
or benefit received or to be received by Executive in connection with a Change
in Control of the Company or termination of Executive’s employment (whether
payable pursuant to the terms of this Agreement or any other plan, contract,
agreement or arrangement with the Company, with any person whose actions result
in a Change in Control of the Company or with any person constituting a member
of an “affiliated group” as defined in Section 280G(d)(5) of the Internal
Revenue Code of 1986, as amended (the “Code”), with the Company or with any
person whose actions result in a Change in Control of the Company
(collectively, the “Total Payments”) would not be deductible (in whole or in
part) by the Company or such other person making such payment or providing such
benefit solely as a result of Section 280G of the Code, the amount payable
to Executive pursuant to this Section 4.5 shall be reduced until no
portion of the Total Payments is not deductible solely as a result of
Section 280G of the Code or such amount payable to Executive pursuant to
Section 4.5 is reduced to zero. 
For purposes of this limitation, (a) no portion of the Total Payments
the receipt or enjoyment of which Executive shall have effectively waived in
writing prior to the date of payment of the amount pursuant to Section 4.5
shall be taken into account; (b) no portion of the Total Payments shall be
taken into account which in the opinion of tax counsel selected by the Company
and reasonably acceptable to Executive does not constitute a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code; (c) the
payment pursuant to Section 4.5 shall be reduced only to the extent
necessary so that the Total Payments (other than those referred to in the
immediately preceding clause (b)) in their entirety constitute reasonable
compensation within the meaning of Section 280G(b)(4)(B) of the Code, in
the opinion of the tax counsel referred to in the immediately preceding clause
(b); and (d) the value of any other noncash benefit or of any deferred cash
payment included in the Total Payments shall be determined by the Company’s
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

 

5.             Employment
Covenants

 

5.1           Trade
Secrets and Confidential Information. 
Executive agrees that he shall, during the course of his employment and
thereafter, hold inviolate and keep secret all documents, materials, knowledge
or other confidential business or technical information of any nature
whatsoever disclosed to or developed by him or to which he had access as a
result of his employment (hereinafter referred to as “Confidential
Information”).  Such Confidential
Information shall include technical and business information, including, but
not limited to, inventions, research and development, engineering, products,
designs, manufacture, methods, systems, improvements, trade secrets, formulas,
processes, marketing, merchandising, selling,

 

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licensing, servicing, customer lists, records or financial information,
manuals or Company strategy concerning its business, strategy or policies.  Executive agrees that all Confidential
Information shall remain the sole and absolute property of the Company.  During the course of his employment,
Executive shall not use, disclose, disseminate, publish, reproduce or otherwise
make available such Confidential Information to any person, firm, corporation
or other entity, except for the purpose of conducting business on behalf of the
Company.  Following the Term, Executive
shall not use, disclose, disseminate, publish, reproduce or otherwise make
available such Confidential Information to any person, firm, corporation or
other entity.  Upon termination of his
employment with the Company, Executive will leave with or deliver to the
Company all records and any compositions, articles, devices, equipment and
other items which disclose or embody Confidential Information including all
copies or specimens thereof, whether prepared by him or by others.  The foregoing restrictions on disclosure of
Confidential Information shall apply so long as the information has not
properly come into the public domain through no action of Executive.

 

5.2           Transfer
of Inventions.  Executive, for
himself and his heirs and representatives, will promptly communicate and
disclose to the Company, and upon request will, without additional
compensation, execute all papers reasonably necessary to assign to the Company
or the Company’s nominees, free of encumbrance or restrictions, all inventions,
discoveries, improvements, whether patentable or not, conceived or originated
by Executive solely or jointly with others, at the Company’s expense or at the
Company’s facilities, or at the Company’s request, or in the course of his
employment, or based on knowledge or information obtained during the Term.  All such assignments shall include the
patent rights in the United States and all foreign countries.  Notwithstanding the foregoing, this
Section 5.2 shall not apply to any invention for which no equipment,
supplies, facilities or trade secret information of the Company was used and
which was developed entirely on Executive’s own time and (a) that does not
relate (1) directly to the business of the Company or (2) to the Company’s
actual or demonstrably anticipated research or development, or (b) that does
not result from any work performed by Executive for the Company.

 

5.3           Exclusivity
of Employment.  During the Term,
Executive shall not directly or indirectly engage in any activity competitive
with or adverse to the Company’s business or welfare or render a material level
of services of a business, professional or commercial nature to any other
person or firm, whether for compensation or otherwise.

 

5.4           Covenant
Not to Compete.  Executive agrees to
be bound and abide by the following covenant not to compete:

 

(a)           Term
and Scope.  During his employment
with the Company and for a period of two (2) years after the Term, Executive
will not render to any Conflicting Organization (as hereinafter defined),
services, directly or indirectly, anywhere in the world in connection with any
Conflicting Product, except that Executive may accept employment with a large
Conflicting Organization whose business is diversified (and which has separate
and distinct divisions) if Executive first certifies to the Board of Directors
in writing that he has provided a copy of Section 5 of this Agreement to
such prospective employer, that such prospective employer is a separate and distinct
division of the Conflicting Organization and that Executive will not render
services directly or indirectly in respect of any Conflicting Product (as
hereinafter defined).

 

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Such two-year time period shall be tolled during any period that
Executive is engaged in activity in violation of this covenant.

 

(b)           Judicial
Action.  Executive and the Company
agree that, if the period of time or the scope of the restrictive covenant not
to compete contained in this Section 5.4 shall be adjudged unreasonable in
any court proceeding, then the period of time and/or scope shall be reduced
accordingly, so that this covenant may be enforced in such scope and during
such period of time as is judged by the court to be reasonable.  In the event of a breach or violation of
this Section 5.4 by Executive, the parties agree than in addition to all
other remedies, the Company shall be entitled to equitable relief for specific
performance, and Executive hereby agrees and acknowledges that the Company has
no adequate remedy at law for the breach of the covenants contained herein.

 

(c)           Definitions.  For purposes of this Agreement, the
following terms shall have the following meanings:

 

“Conflicting Product” means any product, method or process,
system or service of any person or organization other than the Company, in
existence or under development at the time Executive’s employment with the
Company terminates, that is the same as or similar to or competes with a
product, method or process, system or service of or provided by the Company or
any of its affiliates or about which Executive acquires Confidential
Information (including without limitation, with respect to disease management,
specialty pharmaceutical or specialty infusion services).

 

“Conflicting Organization” means any person or organization
which is engaged in or about to become engaged in, research on or development,
production, marketing, licensing, selling or servicing of a Conflicting
Product.

 

5.5           Disclosure
to Prospective Employers.  Executive
will disclose to any prospective employer, prior to accepting employment, the
existence of Section 5 of this Agreement. 
The obligation imposed by this Section 5.5 shall terminate two (2)
years after termination of Executive’s employment with the Company; provided,
however, the running of such two-year period shall be tolled to the extent the
covenant not to compete contained in Section 5.4(a) hereof is tolled.

 

5.6           Nonsolicitation.  For one (1) year after termination of employment
with the Company for any reason, the Executive shall not directly or indirectly
solicit or hire, or assist any other person in soliciting or hiring, any
employee of the Company (as of the date of termination) or any person who, as
of the date of termination, was in the process of being recruited by the
Company or induce any such employee to terminate his or her employment with the
Company.

 

6.             Miscellaneous

 

6.1           Notices.  Any notice required or permitted to be
delivered hereunder shall be in writing and shall be deemed to be delivered on
the earlier of (i) the date received, or (ii) the date of delivery, refusal or
nondelivery indicated on the return receipt, if deposited in a United States
Postal Service depository, postage prepaid, sent registered or certified mail,
return receipt

 

11

 

requested, addressed to the party to receive the same at the address of
such party set forth below, or at such other address as may be designated in a
notice delivered or mailed as herein provided.

 

	
  To Company:

  	
   

  	
  Curative Health Services, Inc.

  
	
   

  	
   

  	
  150 Motor Parkway, 4th Floor

  
	
   

  	
   

  	
  Hauppauge, NY  11788

  
	
   

  	
   

  	
  Attention:  Joseph L. Feshbach

  
	
   

  	
   

  	
  Title:  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  With Copy to:

  	
   

  	
  Curative Health Services, Inc.

  
	
   

  	
   

  	
  150 Motor Parkway, 4th Floor

  
	
   

  	
   

  	
  Hauppauge, NY  11788

  
	
   

  	
   

  	
  Attention:  Nancy F. Lanis

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, General Counsel

  
	
   

  	
   

  	
   

  	
  and Secretary

  
	
   

  	
   

  	
   

  
	
  Executive:

  	
   

  	
  Paul McConnell

  
	
   

  	
   

  	
  110 Marlborough Street

  
	
   

  	
   

  	
  Boston, MA  02116

  

 

6.2                                 Headings.  The headings of the articles and sections of
this Agreement are inserted for convenience only and shall not be deemed a part
of or affect the construction or interpretation of any provision hereof.

 

6.3           Modifications;
Waiver.  No modification of any
provision of this Agreement or waiver of any right or remedy herein provided
shall be effective for any purpose unless specifically set forth in a writing
signed by the party to be bound thereby. 
No waiver of any right or remedy in respect of any occurrence or event
on one occasion shall be deemed a waiver of such right or remedy in respect of
such occurrence or event on any other occasion.

 

6.4           Entire
Agreement.  This Agreement contains
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all other agreements, oral or written, heretofore made with
respect thereto.

 

6.5           Severability.  Any provision of this Agreement prohibited
by or unlawful or unenforceable under any applicable law of any jurisdiction
shall as to such jurisdiction be ineffective without affecting any other
provision hereof.  To the full extent,
however, that the provisions of such applicable law may be waived, they are
hereby waived, to the end that this Employment Agreement be deemed to be a
valid and binding agreement enforceable in accordance with its terms.

 

6.6           Controlling
Law.  This Agreement has been
entered into by the parties in the State of New York and shall be construed and
enforced in accordance with the laws of that State (excluding the conflicts of
laws provisions thereof).

 

6.7           Assignments.  The Company shall have the right to assign
this Agreement and to delegate all rights, duties and obligations hereunder to
any entity that controls the Company, that the Company controls or that may be
the result of the merger, consolidation, acquisition or

 

12

 

reorganization of the Company and another entity.  Executive agrees that this Agreement is
personal to him and his rights and interest hereunder may not be assigned, nor
may his obligations and duties hereunder be delegated (except as to delegation
in the normal course of operation of the Company), and any attempted assignment
or delegation in violation of this provision shall be void.

 

6.8           Attorney
Fees.  In the event of litigation
between the parties, to enforce their respective rights under this Agreement,
the prevailing party shall be entitled to receive from the nonprevailing party
reimbursement of the prevailing party’s reasonable attorney’s fees and costs at
all levels of trial and appeal.

 

13

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of
April 23, 2004.

 

 

	
   

  	
  CURATIVE HEALTH SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph L. Feshbach

  
	
   

  	
   

  	
    Name:  Joseph L.
  Feshbach

  
	
   

  	
   

  	
    Title:  Chairman and Chief

  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Paul McConnell

  
	
   

  	
  Executive:  Paul McConnell

  

 

 

[Signature
Page to Employment Agreement]

 

14

 

EXHIBIT
A

Restricted Stock Unit 

Award Agreement

 

15Exhibit 10.2

 

[EXECUTION COPY]

 

NONCOMPETITION AGREEMENT

 

THIS NONCOMPETITION AGREEMENT (this “Agreement”) dated as of
April 23_, 2004, between Paul McConnell, a resident of the Commonwealth of
Massachusetts (“Seller”), and Curative Health Services, Inc., a Minnesota
corporation (“Buyer”).

 

WHEREAS, Seller is a shareholder of Critical Care Systems, Inc., a Delaware
corporation (the “Company”); and

 

WHEREAS, Buyer has entered into an agreement with Seller and certain other
persons, dated February 24, 2004 (the “Purchase Agreement”), pursuant to
which Buyer will acquire all of the issued and outstanding shares of capital
stock of the Company (the “Shares”) from Seller and the other shareholders of
the Company listed on Schedule 1 to the Purchase Agreement ; and

 

WHEREAS, the Buyer is unwilling to proceed with the purchase of the Shares
unless Seller agrees to refrain from engaging in any activities that are in
competition with the activities being carried on by the Buyer, and it is a
condition to the consummation of the transactions contemplated by the Purchase
Agreement that the Buyer receive this Agreement from Seller.

 

NOW, THEREFORE, in consideration of the premises, the agreement of the Buyer to
consummate the purchase of all Shares owned by Seller, the mutual agreements
herein set forth and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

 

1.             Noncompetition
Commitment.

 

(a)           Agreement Not to
Compete.  Seller agrees that for a
period of four (4) years commencing on the date of this Agreement (the
“Restricted Period”), Seller shall not, directly or indirectly, through an
Affiliate or otherwise, either for Seller’s own benefit or for the benefit of
any other person, firm, corporation, governmental or private entity, or any
other entity of any kind, without the prior written consent of the Buyer, which
consent may be withheld by the Buyer in its sole discretion, compete in any
manner or capacity (e.g., through any form of ownership or as an advisor,
principal, agent, partner, officer, director, employee, employer, consultant,
member of any association or otherwise) with the business of the Company as
conducted prior to the date hereof, including without limitation (i) any
business directly or indirectly engaged in the provision of drugs and/or
biopharmaceuticals for delivery to or use in the home or physician offices, of
infusible or injectable therapy products and services, including without
limitation, anti-infectives, TPN (Total
Parenteral Nutrition) therapy, hemophilia clotting factor products, IVIG
(Immune Globulin) therapy,
Oncolytics/Chemotherapy medications, products and/or supplies or other disease
management programs relating thereto for the treatment of chronic and other
conditions, including, but not limited to, autoimmune and immune deficiency
conditions, hemophilia and blood diseases, hepatitis C, rheumatoid arthritis,
Cancer and HIV (collectively, “Specialty Pharmacy Operations”), and (ii)
clinical services, reimbursement services, delivery services and date supply
services in connection with Specialty Pharmacy Operations (collectively,
“Competitive Activities”). 
Notwithstanding the foregoing, the provision of services as an employee
of the Company, Buyer or their Affiliates shall not be considered a Competitive
Activity.  For the purpose of this
Agreement, “Affiliate” of a person or entity means any person or entity
controlled by, controlling or under common control with such

 

 

person or entity, or any member of the immediate
family, including parents, spouse, children or siblings, of a person, provided,
however, that Seller and the Company shall not be considered an
Affiliate of each other.

 

(b)           Geographic Extent of
Covenant.  The obligations of Seller
under Section 1(a) shall apply in any state in which the Company is
located, operates, provides or intents to provide products or services or does
business in on the date hereof.  Seller hereby acknowledges that the
geographic boundaries, scope of prohibited activities and the time duration of
the provisions of this Section 1 are reasonable and are no broader than
are necessary to protect the legitimate business interests of the Buyer
including, without limitation, the ability of the Buyer to realize the benefit
of its bargain and enjoy the goodwill of the Company.

 

(c)           Limitation on
Covenant.  Ownership by Seller, as a
passive investment, of less than 3% of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
on any nationally recognized over-the-counter market shall not constitute a
breach of this Section 1.

 

(d)           Indirect Competition.  Seller further agrees that during the term
of this Agreement Seller will not, directly or indirectly, assist or encourage
any other person in carrying out, directly or indirectly, any activity that
would be prohibited by the foregoing provisions of this Section 1 if such
activity were carried out by Seller, either directly or indirectly.  In particular, Seller agrees that Seller will
not, directly or indirectly, induce any employee of the Buyer, its Affiliates
or the Company to carry out, directly or indirectly, any such activity.

 

(e)           Noncompete Period
Under the Employment Agreement.  The
Buyer and Seller have entered into a certain Employment Agreement (the
“Employment Agreement”), dated April 23, 2004, which Employment Agreement
contains separate noncompete provisions. 
The parties hereto agree that, should the noncompete provisions of this
Agreement and of the Employment Agreement ever be simultaneously applicable to
Seller, the period during which Seller shall be restricted from competing with
the Buyer, its Affiliates and the Company shall be the later to expire of (i)
the Restricted Period or (ii) the period during which Seller is restricted from
competing under the Employment Agreement.

 

2.             Nonsolicitation.  During the Restricted Period, Seller shall
not, directly or indirectly, through an Affiliate or otherwise, either for
Seller’s own benefit or for the benefit of any other person, firm, corporation,
governmental or private entity, or any other entity of any kind, without the
prior written consent of the Buyer, which consent may be withheld by the Buyer
in its sole discretion, (i) solicit, or attempt to solicit any officer, director,
employee, consultant, contractor, agent, lessor, lessee, licensor, licensee,
supplier of the Buyer, its Affiliates or the Company, to terminate, alter or
lessen that party’s affiliation with the Buyer, its Affiliates or the Company,
or to violate the terms of any agreement or understanding between such
employee, consultant, contractor or other person and the Buyer, its Affiliates
or the Company, or (ii) employ any person who as of the date of this Agreement
is, or during the Restricted Period is or was (other than any person who shall
have responded to an advertisement or other general solicitation during the
Restricted Period), an employee of the Buyer, its Affiliates or the Company or
(iii) solicit, divert, appropriate or induce or attempt to solicit, divert,
appropriate or induce, directly or indirectly, any customer, supplier,
distributor, licensee or other business relation of the Buyer, its Affiliates
or the Company to cease doing business with the Buyer, its

 

2

 

Affiliates or the Company, or in any way interfere
with the relationship between any such customer, supplier, distributor,
licensee or business relation and the Buyer, its Affiliates or the Company.

 

3.             Nondisparagement.  For a period of four (4) years, from the
date of this Agreement, neither Seller nor any officers or directors of the
Buyer shall say, publish or cause to be published or do anything that casts any
other party hereto in an unfavorable light, or disparage or injure any other
party’s goodwill, business reputation or relationship with existing or
potential suppliers, vendors, customers, employees, contractors, investors or
the financial community in general, or the goodwill or business reputation of
such party, unless the furnishing of such information is required by law, in
which case each party may make such disclosure only to the extent necessary, in
the opinion of counsel for such party, to comply with such legal
requirement.  In the event that a party
is required by law to disclose any information pursuant to such legal
requirement, such party will, as promptly as possible and in any event prior to
the making of such disclosure, notify the other party of any such requirement
and will cooperate with such other party in seeking a protective order or other
means of protecting the confidentiality of any such information.  Nothing in this Section 3 shall be
deemed to prohibit the other party from pursuing claims for a breach of this
Agreement, the Purchase Agreement or any related document.

 

4.             Nondisclosure.  For the purpose of this Agreement, “Trade
Secrets” means information or data of or about the Buyer, its Affiliates or the
Company, including but not limited to technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, business forms,
techniques, drawings, processes, pricing information, financial data, financial
plans, products plans, or lists of actual or potential customers, clients,
distributees or licensees, referral sources, information of the Buyer, its
Affiliates or the Company concerning finances, services, staff, contemplated
acquisitions, marketing investigations and surveys that are not generally known
to, or are not readily ascertainable by proper means by, other persons.  For the purpose of this Agreement,
“Non-Public Information” means any confidential, proprietary business
information or data belonging to or pertaining to the Buyer, its Affiliates or
the Company that does not constitute a Trade Secret and that is not generally
known by or available through legal means to the public, including, but not
limited to, information regarding the Buyer’s, any of its Affiliate’s or the
Company’s customers or prospective customers, acquisition targets, suppliers,
manufacturers and distributors gained by Seller as a result of his or her
employment with the Buyer, its Affiliates or the Company.  Seller hereby agrees that with regard to
each item constituting all or any portion of the Trade Secrets and Non-Public
Information, at all times during which such item continues to constitute a
Trade Secret or Non-Public Information, respectively:

 

(a)           Seller shall hold in
confidence all Trade Secrets and all Non-Public Information and will not,
either directly or indirectly, use, sell, lend, lease, distribute, license,
give, transfer, assign, show, disclose, disseminate, reproduce, copy,
appropriate or otherwise communicate any Trade Secrets or Non-Public
Information, without the prior written consent of the Buyer, unless the
furnishing of such information is required by law, in which case Seller may
make such disclosure only to the extent necessary, in the opinion of counsel
for Seller, to comply with such legal requirement.  In the event that Seller is required by law to disclose any Trade
Secret or Non-Public Information, Seller will, as promptly as possible and in
any event prior to the making

 

3

 

of such disclosure, notify the Buyer of any such
requirement and will cooperate with the Buyer in seeking a protective order or
other means of protecting the confidentiality of any such Trade Secret or
Non-Public Information; and

 

(b)           Seller shall
immediately notify the Buyer of any unauthorized disclosure or use of any Trade
Secrets or Non-Public Information of which the Seller becomes aware.  Seller shall assist the Buyer, to the extent
necessary, in the procurement or any protection of the Buyer’s, any of its
Affiliate’s or the Company’s rights to or in any of the Trade Secrets or
Non-Public Information.

 

5.             Miscellaneous.

 

(a)           Severability and
Blue Pencil Doctrine.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law. However, if the duration or
geographical extent of, or business activities covered by, this Agreement are
in excess of what is valid and enforceable under applicable law, then such
provision shall be construed to cover only that duration, geographical extent
or activities that are valid and enforceable. 
Seller acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement is to be given the construction that
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.  Further, if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

(b)           Remedies.  Seller acknowledges that it would be
difficult to fully compensate the Buyer for damages resulting from any breach
by Seller of the provisions of this Agreement. 
Accordingly, in the event of any actual or threatened breach of such
provisions, the Buyer shall (in addition to any other remedies which it may
have) be entitled to temporary and permanent injunctive relief to enforce such
provisions, and such relief may be granted without the necessity of proving
actual damages or the posting of a bond in connection therewith.  Seller further acknowledges that this
Agreement constitutes a material inducement to the Buyer to complete the
purchase of the all of the Shares owned by Seller and the Buyer will be relying
on the enforceability of this Agreement in completing such acquisition.

 

(c)           Entire Agreement.  This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any prior understandings, agreements or representations,
written or oral, relating to the subject matter hereof.

 

(d)           Counterparts.  This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.

 

(e)           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives and, to the extent permitted by
subsection (f) of this Section 5, successors and assigns.

 

4

 

(f)            Assignment.  Seller may not assign this Agreement.  The rights of the Buyer under this Agreement
may be assigned to any Affiliate of the Buyer or to any third party that
purchases all of the outstanding equity of the Company or substantially all of
the assets of the Company from the Buyer.

 

(g)           Modification,
Amendment, Waiver or Termination. 
No provision of this Agreement may be modified, amended, waived or
terminated except by an instrument in writing signed by the parties to this
Agreement.  No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.  No delay on the part of the
Buyer in exercising any right hereunder shall operate as a waiver of such right.  No waiver, express or implied, by the Buyer
of any right of the Buyer, or of any breach by Seller, shall constitute a
waiver of any other right or the Buyer or of any other breach by Seller.

 

(h)           Notices.  All notices and other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given (a) when personally
delivered, (b) when receipt is acknowledged, if sent by facsimile, telecopy or
other electronic transmission device; provided, however, that if
receipt is acknowledged after normal business hours of the recipient, notice
shall be deemed to have been given on the next business day, (c) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery or (d) three days after being sent by registered or certified mail,
postage prepaid, return receipt requested. 
Notices, demands and communications to parties will, unless another
address is specified in writing, be sent to the address indicated:

 

if to the Buyer:

 

Curative Health Services,
Inc.

150 Motor Parkway

Hauppauge, New York 11788

Phone:    (631) 232-7016

Fax:         (631) 233-8107

Attention:  Nancy Lanis

Title:  Executive Vice President, General Counsel
& Secretary

 

if to the Seller:

 

Paul McConnell

110 Marlborough Street

Boston, Massachusetts
02116

 

(i)            Headings.  The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

(j)            Governing Law.  ALL
MATTERS RELATING TO THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT
OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF.

 

5

 

(k)           Third-Party Benefit.  Nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights, remedies,
obligations or liabilities of any nature whatsoever.

 

(l)            Jurisdiction and
Venue.  EACH PARTY (i) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF
ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK, OR ANY NEW YORK STATE COURT
LOCATED IN SUFFOLK COUNTY, IF ANY DISPUTE ARISES OUT OF THIS AGREEMENT, (ii)
AGREES THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY
MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT AND (iii) AGREES THAT IT
WILL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT IN ANY COURT OTHER THAN
SUCH A FEDERAL OR STATE COURT SITTING IN THE STATE OF NEW YORK OR IN SUFFOLK
COUNTY.

 

(m)          Waiver of Jury Trial.  EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY,
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(m).

 

[Remainder
of page intentionally left blank]

 

6

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as
of the date set forth in the first paragraph.

 

 

	
   

  	
  CURATIVE
  HEALTH SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph
  Feshbach

  	
   

  
	
   

  	
  Name: Joseph Feshbach

  
	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Paul McConnell

  	
   

  
	
   

  	
  Paul McConnell

  

 

 

[Signature
Page to Noncompetition Agreement]

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