EXHIBIT
10.8
NON-COMPETITION
AGREEMENT
THIS NON-COMPETITION AGREEMENT (this “
Agreement ”) is made and entered into as of December
12, 2005, by and among Basic Health Care Networks of Texas, L.P., a
Texas limited partnership (“ Purchaser ”) and
Bruce Wardlay (“ 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
December 12, 2005, 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
”).
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.
(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 posting a bond,
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