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NON-COMPETITION AGREEMENT

NonCompetition Agreement

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This NonCompetition Agreement involves

OF TEXAS, LP

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Title: NON-COMPETITION AGREEMENT
Governing Law: Texas     Date: 2/13/2006

NON-COMPETITION AGREEMENT, Parties: of texas  lp
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EXHIBIT 10.10

 

 

NON-COMPETITION AGREEMENT

 

THIS NON-COMPETITION AGREEMENT (this “ Agreement ”) is made and entered into as of 12/13/05, by and among Basic Health Care Networks of Texas, L.P., a Texas limited partnership (“ Purchaser ”) and Kenny Myers (“ Obligor ”). The Closing Date (as defined in the Master Transaction Agreement (as defined below)) shall be the “ Effective Date ” of this Agreement. Capitalized terms used and not defined herein shall have the same meanings assigned to such terms in the Master Transaction Agreement.

 

RECITALS

 

A.   This Agreement is being entered into pursuant to a certain MASTER TRANSACTION AGREEMENT (“ Master Transaction Agreement ”), dated and effective as of 12/13/05, by and among Purchaser on the one hand, and 303 MEDICAL CLINIC, P.A. , a Texas professional association, BRUCE WARDLE’, D.O., P.A., a Texas professional association, IBERIA MEDICAL CLINIC, P.A., a Texas professional association, KINGSLEY MEDICAL CLINIC, P.A., a Texas professional association, LAKE JUNE MEDICAL CENTER, P.A., a Texas professional association, NORTHSIDE MEDICAL CLINIC, P.A., a Texas professional association, O’CONNOR MEDICAL CENTER, P.A., a Texas professional association, and RED BIRD URGENT CARE CLINIC, P.A., a Texas professional association, (collectively, the “ Clinics ”) and Bruce E. Wardlay, D.O.

 

B.   The undersigned Obligor is an employee, director, officer and sole member of the Clinics

 

C.   This Non-Competition Agreement is being entered into between the Purchaser and Obligor as a condition of closing pursuant to the Master Transaction Agreement, pursuant to which the Purchaser shall acquire certain assets (“ Acquired Assets ”) of the Clinics (the “ Acquisition ”) under a series of separate acquisition agreements. The Master Transaction Agreement, together with each of the exhibits attached thereto, including each of the Asset Purchase Agreements (and documents to be executed in connection therewith), are hereinafter collectively referred to as the “ Transaction Documents .”

 

D.   In connection with the Acquisition, one or more newly formed Texas professional associations (“ New PA ”) shall be formed by Texas-licensed physician(s) who shall conduct the medical practices formerly conducted by the Clinics, and such New PA will hire certain physicians and staff of the former Clinics.

 

E.   Purchaser will pay the Obligor significant cash consideration in the Acquisition.

 

F.   The Obligor has valuable knowledge, relationships, experience and expertise in the management and operation of clinics for the delivery of physical therapy, rehabilitation, family and general medical services, and as a condition to closing of the Acquisition, the Purchaser shall concurrently enter into a consulting agreement with the Obligor pursuant to which Obligor will provide consulting services to the Purchaser (the “ Consulting Agreement ”).

 

 

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G.   The Purchaser intends to develop, establish, operate and manage additional medical clinics (the “ New Clinics ”) at one or more locations to be determined by the Purchaser.

 

H.   As a condition and mutual inducement to the Acquisition, the Transaction Documents contemplate, among other things, that the Obligor shall enter into this Non-Competition Agreement effective on the Effective Date.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises made herein, Purchaser and the Obligor hereby agree as follows:

 

1.   Covenant Not to Compete or Solicit . Obligor and the Purchaser acknowledge and agree that, as a result of Obligor’s consulting relationship with the Purchaser, (a) the Purchaser will provide to Obligor and Obligor will become informed of, and have access to, the Proprietary Information (defined below), including without limitation monthly financial statements, pricing terms under managed care agreements and other contracts and pricing terms under vendor agreements, the unauthorized use or disclosure of which would cause irreparable injury to Purchaser, and (b) the Purchaser may integrate Obligor into its established practice, including the introduction of Obligor to referring doctors, to the Purchaser’s existing patients, and to the Purchaser’s existing hospital relations. Further, Obligor acknowledges that Obligor will be provided with special training in the Purchaser’s methods of practice. Separately, Obligor recognizes that entering into a competitive practice with the Purchaser would deprive the Purchaser of some or all of its practice sources to the substantial detriment of the Purchaser’s ongoing practice and Obligor acknowledges that the Purchaser has a substantial interest in protecting itself from unfair competition, including the improper use of Proprietary Information. In consideration for being provided with, and having access to, the Proprietary Information, the special training provided to Obligor by the Purchaser, the integration into the Purchaser’s practice, the substantial compensation paid to Obligor by the Purchaser, and the other benefits received by Obligor hereunder, Obligor agrees with the Purchaser that the following restrictive covenants are reasonably designed to protect the legitimate interests of the Purchaser:

 

1.1   Covenant Not to Compete . Obligor agrees that during the term of this Agreement and for a period of three (3) years following termination of the Obligor’s consulting relationship with Purchaser (“ Restricted Period ”), with or without cause, Obligor shall not, directly or indirectly, as an employee, employer, contractor, consultant, agent, principal, shareholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any business or practice within the Practice Territory (as defined herein) that is in competition in any manner whatsoever with the practice of the Purchaser, the New PA, and the New Clinics. The parties mutually acknowledge and agree as follows:

 

(a)   If Obligor should set up an office and practice medicine within the Practice Territory in competition with the practice of the Purchaser, it would cause economic harm and loss of goodwill to the Purchaser resulting in immediate and irreparable loss, injuries, and damage to the Purchaser.

 

 

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(b)   Notwithstanding anything to the contrary in this Section 1.1, physician is not prohibited from owning less than five percent (5%) of the equity of any publicly-traded entity.

 

(c)   Neither the public in general nor any patients will be adversely affected by the enforcement of the non-competition covenant, in that other similar providers of professional medical services are readily available within the restricted area.

 

1.2   Practice Territory . The Purchaser is actively engaged in the practice of general family and urgent care and ancillary medical services such as rehabilitation and physical medicine in the clinics with locations specified in the Master Lease Agreement (defined in the Master Transaction Agreement) and it is therefore agreed that the term of “ Practice Territory ” shall mean: a ten (10) mile radius of any of such practice sites. In the event that the provisions of this Section 1.2 are deemed by a court of competent jurisdiction to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable laws. Notwithstanding the foregoing, Obligor may engage in such practice within the Practice Territory as necessary to provide continuing care and treatment to a specific patient or patients of the Obligor (with whom the Obligor treated prior to the Acquisition) during the course of an acute illness of said patient or patients.

 

1.3   Remedies . Without limiting other possible remedies to Purchaser for breach of this covenant, Obligor agrees that injunctive or other equitable relief will be available to enforce the covenants of this provision, such relief to be without the necessity of pos


 
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