Exhibit 10.6
NONCOMPETITION AGREEMENT
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THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered
into as of July 1, 1998, by and among NATIONAL MEDICAL FINANCIAL SERVICES
CORPORATION, a Nevada corporation ("NMFS"); ADVANCED PHYSICIAN BILLING INC., a
Florida corporation ("Seller"); and XXXXX XXXXX, SR., a resident of the State of
Florida ("Shareholder"),
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of
the even date hereof (the "Asset Purchase Agreement") among NMFS, Shareholder,
and Seller, NMFS proposes to acquire substantially all of the assets of the
Seller;
WHEREAS, Shareholder owns 50% of the issued and outstanding common
stock of Seller;
WHEREAS, to induce NMFS to perform under the Asset Purchase Agreement,
Shareholder has agreed not to engage in certain businesses within a certain time
period and within certain specified geographic areas, and subject to certain
conditions, all as more particularly set forth herein;
WHEREAS, in conjunction with this Agreement and to induce NMFS to
perform under the Asset Purchase Agreement,;Shareholder has agreed to execute an
employment agreement of even ate herewith (the "Employment Agreement") by which
Shareholder will be employed by NMFS;
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and adequacy of which are acknowledged by the parties
hereto, the parties hereto hereby agree as follows:
Section 1. Noncompetition.
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(a) Shareholder agrees that for a period ending on the later
of (i) the fifth anniversary of the date of this Agreement or (ii) the second
anniversary of the date that Shareholder is no longer employed under the
Employment Agreement for any reason, Shareholder will not, directly or
indirectly (either alone or as a partner, officer, director, employee,
independent contractor, consultant, investor, partner, lender or stockholder of
any company or business organization):
(1) recruit, solicit, or otherwise seek to induce
employees or customers of NMFS to terminate their
employment or customer relationship with NMFS or to
violate any agreement with NMFS; or
(2) own, lease, manage or operate any medical billing
business in the "Territory" (as hereinafter defined);
or
(3) engage in any business activity in the "Territory"
which is directly or indirectly in competition with
any medical billing business of NMFS;
(4) otherwise provide any medical billing services within
the "Territory";
provided, however, that:
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(A) the record or beneficial ownership by Shareholder of
1% or less of the outstanding publicly traded capital
stock of any company providing services described in
clauses (2), (3), and (4) above shall not be deemed
to be in violation of clause (2), (3), or (4) above
so long as Shareholder is not an officer, consultant,
director, independent contractor or employee of such
company; and
(B) services provided by Shareholder to NMFS under the
Employment Agreement shall not be deemed in violation
of this Section 1.
(b) Shareholder will not, without the prior written consent of
NMFS, disclose, other than in connection with the Employment Agreement, any
"Confidential Information" of Seller or NMFS to any person not authorized by
NMFS to receive such information. This covenant shall not apply to any
Confidential Information now or hereafter voluntarily disseminated by NMFS to
the public, or which otherwise has become part of the public domain through
lawful means. "Confidential Information", for purposes of this Agreement, shall
mean information that is (i) proprietary to NMFS whether or not such information
is deemed to be a trade secret of NMFS, or (ii) proprietary to others and
entrusted to NMFS, or (iii) proprietary to Seller and acquired by NMFS pursuant
to the Asset Purchase Agreement, and which is a trade secret under applicable
law.
(c) Shareholder acknowledges and agrees (i) that Shareholder
has received pursuant to the Asset Purchase Agreement adequate consideration for
the covenants and obligations of Shareholder contained in this Agreement, and
(ii) that the nature and the periods of restriction imposed in this Section 1
are fair, reasonable and necessary to protect and preserve for NMFS the benefits
of this Agreement and that such restrictions shall not prevent Shareholder from
earning a livelihood.
(d) The term "Territory" as used herein shall mean the
geographical area within the boundaries of the Counties of Dade, Broward,
Monroe, Xxxxxxx and Palm Beach in the State of Florida.
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Section 2. Notices. Service of all notices given under this Agreement
will be sufficient if in writing, and if given personally, or if mailed to the
party involved at the address of such party set forth below (or at such other
address as such party shall have designated by written notice hereunder to the
others). Any mailed notice will be effective (a) 48 hours after deposited in the
United States mail, certified or registered, duly addressed and with postage
prepaid, or (b) when received, if sent by recognized overnight courier service
with signed confirmation of receipt. The parties hereto may, from time to time,
by written notice to the other parties, designate a different address which will
be substituted for the address previously specified.
Section 3. Successors. This Agreement and NMFS's rights and obligations
hereunder may be assigned or transferred by NMFS in whole or in pare at any time
without the consent of Shareholder.
Section 4. Governing Law; Attorneys' Fees. This Agreement is executed
in and is governed by the laws of the State of Florida, exclusive of the
principles of conflicts of laws. In the event that a suit, action, arbitration,
or other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to
federal bankruptcy law, any action seeking a declaration of rights or any action
for rescission, is instituted to interpret or enforce this Agreement or any
provision of this Agreement, the prevailing party shall be entitled to recover
from the losing party, prevailing party's reasonable attorneys', paralegals',
accountants', and other experts' professional fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any
appeal or review, in addition to all other amounts provided by law.
Section 5. Severability; Reformation. If any of the provisions, or
portions thereof, of this Agreement are held to be unenforceable or invalid by
any arbitrator or court, the validity and enforceability of the remaining
provisions, or portions thereof, will not be affected and shall continue in
force. If any arbitrator or court determines that the scope, duration or
geographical limit of any of the restrictions contained in this Agreement is
unenforceable, it is the intention of the parties that the restrictions and
covenants shall not thereby be terminated but rather shall be amended and
revised to the extent required to render them valid and enforceable.
Section 6. Separate Agreement. Shareholder agrees that the covenants
and agreements contained herein shall be construed as agreements independent of
any other agreements with NMFS and are independently supported by good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and further agrees that this Agreement shall be interpreted,
construed and enforced separate and apart from any other agreements between or
among the parties hereto. Shareholder further agrees that any claim or cause of
action of Shareholder against NMFS and any other party hereto arising out of any
other agreement or arising out of any set of facts shall not constitute a
defense to the enforcement by NMFS or its successors or assigns of the covenants
and agreements of Shareholder contained herein; provided however, that if
Article VI (Non-Competition) of the Employment Agreement is no longer
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effective pursuant to the Employment Agreement, then this Agreement shall
terminate; and provided further, that this Agreement is subject to that certain
Buy-Back Agreement dated as of the even date hereof between NMFS and Advanced
Physician Billing Inc., and this Agreement shall terminate in its entirety in
accordance with the terms of the Buy-Back Agreement.
Section 7. Injunctive Relief. The parties hereto recognize and hereby
acknowledge that it is impossible to measure in money the damages which would
result to NMFS or its successors or assigns by reason of a failure by
Shareholder to perform any of the obligations imposed upon him under this
Agreement. Therefore, NMFS and its successors or assigns shall be entitled to
injunctive and other equitable relief to enforce the terms of this Agreement,
without the necessity of showing irreparable harm. If NMFS or its successors or
assigns should institute an action or proceeding to enforce the provisions
hereof, Shareholder hereby waives the claim or defense that any such party has
an adequate remedy at law, and Shareholder agrees he shall not urge in any
action or proceeding the claim or defense that such a remedy at law exists. At
the discretion of the court or arbitrator before which an injunctive proceeding
is brought, the running of the covenants in Section 1(a) hereof may be tolled
and extended for a period of time equal to the time period Shareholder shall be
in violation of any such covenant.
Section 8. Arbitration. All disputes hereunder shall be resolved by
arbitration in the manner specified in the Asset Purchase Agreement.
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IN WITNESS WHEREOF, this Agreement is entered into and effective as of
the day and year first written above.
NMFS:
NATIONAL MEDICAL FINANCIAL
SERVICES CORPORATION, a Nevada
corporation.
By: /s/ Xxxxxxx X. Xxxxxxx, M.D.
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Title: CEO
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Address:
0000 Xxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
SELLER:
ADVANCED PHYSICIAN BILLING INC., a
Florida corporation
By: Xxxxx Xxxxx, Sr.
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Title: President
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SHAREHOLDER:
/s/ Xxxxx Xxxxx, Sr.
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XXXXX XXXXX, SR.
Address:
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
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