PARTIAL RELEASE OF NON-COMPETE PROVISIONS OF EMPLOYMENT AGREEMENT
BETWEEN XXXXXX X. XXXXX, M.D.
AND
COASTAL PHYSICIAN GROUP, INC.
This Partial Release of Non-Compete Provisions of Employment Agreement is
made and entered into this the 31st day of December, 1997, by and between Xxxxxx
X. Xxxxx. M.D. ("Xxxxx") and Coastal Physician Group, Inc. ("Coastal").
Xxxxx and Coastal are parties to an Employment Agreement dated April 1,
1991, ("Agreement") pursuant to which Xxxxx is employed by Coastal as its
President and Chief Executive Officer; and
The Agreement contains certain provisions restricting Xxxxx'x activities
that are in competition with Coastal or its subsidiaries; and
An affiliate of Xxxxx, and Coastal and certain of its subsidiaries, have
entered into an agreement dated the date hereof (the "Purchase Agreement")
pursuant to which such affiliate of Xxxxx known as Xxxxx Medical Partners, LLC
will purchase (i) the stock of three operating subsidiaries of Coastal,
Integrated Provider Networks, Inc., Provider Solutions, Inc. and Sunlife OB/GYN
Services of Broward County, Inc., and (ii) the operating assets of Ft.
Lauderdale Perinatal Associates with office locations in Plantation, Florida and
Ft. Lauderdale, Florida and the Physician Access Center in San Francisco,
California, all of which assets are owned by subsidiaries of Coastal (and all of
the foregoing, together with certain previous acquisitions by Xxxxx'x affiliate
involving clinical and physician practice operations in North Carolina and
Florida, are hereafter referred to as the "Clinic Acquisitions"); and
The parties are desirous of amending the Agreement in order that the
ownership, operation and potential expansion of the Clinic Acquisitions by Xxxxx
or any of his affiliates shall not be deemed to be a violation of the
non-competition or any other provisions of the Agreement.
NOW, THEREFORE, in consideration of the purchase of the stock and assets of
Coastal's subsidiaries referred to above as the Clinic Acquisitions, the parties
agree as follows:
1. Partial Release of Non-Compete Provisions. Notwithstanding the
non-compete or any other provisions of the Agreement, and notwithstanding any
provisions of any other agreement between Xxxxx or any of his affiliates other
than Coastal or its subsidiaries (collectively, the "Xxxxx Entities") and
Coastal or any of its subsidiaries (collectively, the "Coastal Entities"),
a. the Xxxxx Entities may hereafter enter into the business of owning,
managing, operating or otherwise providing physician practice management
services to physician and clinic practices, whether primary or specialty care
practices and whether free-standing or hospital-based (collectively, "Medical
Practices"), whether such Medical Practices are Clinic Acquisitions or
otherwise. The right of the Xxxxx Entities to engage in the foregoing with
respect
to Medical Practices shall include, without limitation, the ability to provide
management administrative, staffing, financial, billing, collecting, business
and other similar services to Medical Practices, and to recruit and hire
personnel necessary for the orderly and efficient operation of Medical Practices
and generally to do all things necessary or appropriate with respect to the
Medical Practices; and
b. the Xxxxx Entities shall be permitted to increase and expand their
ownership, management, operation or other physician management services to
Medical Practices, including without limitation creating start up locations or
acquiring additional Medical Practices in any geographic location; provided,
however, the Xxxxx Entities shall not engage in the foregoing with respect to
any Medical Practices (except for the Clinic Acquisitions and natural extensions
thereof) if such Medical Practices would reasonably be expected to directly
compete with a clinic or medical practice which currently is owned by a Coastal
Entity or currently is managed, operated or serviced by a Coastal Entity
pursuant to a contractual arrangement.
For so long as the Coastal Entities' non-compete agreement pursuant to
Section 6.12 of the Purchase Agreement remains in effect, the Xxxxx Entities
shall not be required to first offer the Coastal Entities any opportunities
which the Xxxxx Entities may have to increase or expand their ownership,
management or operation of, or other business relationships with, Medical
Practices. Upon expiration of the Coastal Entities' non-compete agreement in
accordance with Section 6.12 of the Purchase Agreement, if any opportunities to
own, operate, manage or otherwise provide physician management services to
Medical Practices (other than Medical Practices which, at such time, are owned,
managed, operated or otherwise serviced by any of the Xxxxx Entities) are made
available to Xxxxx or any of the other Xxxxx Entities by reason of Xxxxx'x
position as an officer, employee, director or shareholder of Coastal, then Xxxxx
shall first make reasonable efforts to determine whether Coastal desires to
avail itself of such opportunity. If Coastal informs Xxxxx that it intends to
avail itself of such opportunity, then Xxxxx and the other Xxxxx Entities shall
not pursue such opportunity or enter into any transaction with respect to such
opportunity unless and until Coastal shall advise Xxxxx that no Coastal Entity
has any further interest in pursuing such opportunity.
In the event that a Xxxxx Entity desires to make a proposal with respect to
any Medical Practice that is currently owned, operated, managed or otherwise
serviced by a Coastal Entity pursuant to a contractual arrangement to provide
billing or staffing services, then Xxxxx shall first obtain the written
acknowledgment from Coastal or other involved Coastal Entity that it no longer
desires to continue the relationship or does not intend to make a proposal for
such Medical Practice. In the event there shall be any conflict or question as
to the appropriateness of the senior management of Coastal or such other Coastal
Entity to make such a decision, then the decision shall be made by the
independent members of the Board of Directors of Coastal at a duly held meeting
of such Board.
2. Ratification of Remainder of Agreement. Except as specifically modified
herein, the remaining terms of the Agreement are hereby specifically ratified
and confirmed in all respects.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the day
and year first above written.
COASTAL PHYSICIAN GROUP, INC.
By:
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Title:
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Xxxxxx X. Xxxxx, M.D.
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