MUTUAL NON-COMPETITION AGREEMENT
This Mutual Non-Competition Agreement (this "Agreement") is entered into as
of the close of business December 31, 2000 (the "Effective Date"), between Prime
Medical Services, Inc., a Delaware corporation ("PMSI"), Prostatherapies, Inc.,
a Delaware corporation ("Prostatherapies"), Innovative Medical Technologies,
Inc., an exempted company incorporated in the Cayman Islands with limited
liability ("IMT"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D. ("▇▇▇▇▇▇▇▇").
Preliminary Statements
Concurrently with the execution and delivery of this Agreement, PMSI
and IMP are consummating that certain Stock Purchase Agreement (the "Purchase
Agreement"), dated effective as of the close of business December 31, 2000.
The parties to this Agreement (each, a "Party") acknowledge and agree
that this Agreement is ancillary to the Purchase Agreement and all other
Transaction Documents (as defined in the Purchase Agreement).
Each Party will receive material, valuable benefits as a result of the
consummation of the transactions contemplated by the Transaction Documents.
Each Party acknowledges and agrees that the other unaffiliated Parties
would not enter into, or consent to their applicable subsidiaries and affiliates
entering into, any of the Transaction Documents unless such Party entered into
this Agreement.
In order to induce each of the other Parties to consummate the
transactions contemplated by the Purchase Agreement, each Party has agreed to
certain restrictions on the activities of it and its Affiliates (as hereinafter
defined), which restrictions each Party deems reasonable and appropriate.
Statement of Agreement
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound hereby, agree as follows:
1. Non-Competition Agreement of PMSI. As a material inducement to
Prostatherapies, IMT and ▇▇▇▇▇▇▇▇ agreeing to enter into the Transaction
Documents, PMSI hereby agrees that, until the expiration of five (5) years after
the Effective Date, PMSI will not directly or indirectly, either through any
kind of ownership (other than ownership of securities of a publicly held entity
of which it owns less than five percent (5%) of any class of outstanding
securities), or as a principal, shareholder, agent, employer, advisor,
consultant, co-partner or in any individual or representative capacity whatever,
either for its own benefit or for the benefit of any other person, corporation
or other entity, without the prior written consent of ▇▇▇▇▇▇▇▇, commit any of
the following acts, which acts shall be considered violations of this covenant
not to compete:
(a) Directly or indirectly, anywhere within the United States
of America, engage in or provide, any services related to (i) the
operating of centers or facilities that provide minimally invasive
thermotherapy treatment of benign prostatic hyperplasia through thermal
ablation ("Prostatherapy"), or (ii) providing any management services,
training or consulting services related to any of the activities
described in (i);
(b) Directly or indirectly provide, anywhere within the United
States of America, (i) facilities, equipment and non-physician
personnel for the performance by physicians of Prostatherapy, (ii) the
marketing, scheduling and management of Prostatherapy procedures, (iii)
the credentialing and scheduling of physicians to perform Prostatherapy
procedures and (iv) the billing, collecting or accounting for the use
of any such facilities, equipment or non-physician personnel;
(c) Directly or indirectly request or advise any person, firm,
physician, corporation or other entity having a business relationship
with Prostatherapies, IMT, ▇▇▇▇▇▇▇▇, or any affiliate, subsidiary or
related entity of any of the foregoing, to withdraw, curtail, or cancel
its business with such person or entity; or
(d) Directly or indirectly hire any employee of
Prostatherapies, IMT, ▇▇▇▇▇▇▇▇, or any affiliate, subsidiary or related
entity of any of the foregoing, or induce or attempt to influence any
employee of Prostatherapies, IMT, ▇▇▇▇▇▇▇▇, or any such affiliate,
subsidiary or related entity to terminate its employment with such
person or entity.
Furthermore, to the extent legally permissible, PMSI agrees that,
during the term of this Agreement, PMSI will (a) refer requests for
Prostatherapy procedures only to Prostatherapies for performance at the
facilities of, and using the equipment of, Prostatherapies; and (b) refer
inquiries from those interested in the development of and/or participation in
Prostatherapy services to Prostatherapies.
2. Non-Competition Agreement of Prostatherapies, IMT and ▇▇▇▇▇▇▇▇. As a
material inducement to PMSI agreeing to enter into the Transaction Documents,
each of Prostatherapies, IMT and Sorensen hereby agrees that, until the
expiration of five (5) years after the Effective Date, such Party will not
directly or indirectly, either through any kind of ownership (other than
ownership of securities of a publicly held entity of which it owns less than
five percent (5%) of any class of outstanding securities), or as a principal,
shareholder, agent, employer, advisor, consultant, co-partner or in any
individual or representative capacity whatever, either for its own benefit or
for the benefit of any other person, corporation or other entity, without the
prior written consent of PMSI, commit any of the following acts, which acts
shall be considered violations of this covenant not to compete:
(a) Directly or indirectly, anywhere within the United States
of America, engage in or provide, any services related to (i) the
operating of centers or facilities that provide treatments for urinary
tract stones ("Lithotripsy"), (ii) the manufacture, maintenance,
refurbishing, repair, sale, or leasing of any equipment related to or
necessary for the operating of centers or facilities that provide
Lithotripsy, or (iii) providing any management services, training or
consulting services related to any of the activities described in (i)
or (ii);
(b) Directly or indirectly provide, anywhere within the United
States of America, (i) facilities, equipment and non-physician
personnel for the performance by physicians of Lithotripsy, (ii) the
marketing, scheduling and management of Lithotripsy procedures, (iii)
the credentialing and scheduling of physicians to perform Lithotripsy
procedures and (iv) the billing, collecting or accounting for the use
of any such facilities, equipment or non-physician personnel;
(c) Directly or indirectly request or advise any person, firm,
physician, corporation or other entity having a business relationship
with PMSI, or any affiliate, subsidiary or related entity of PMSI, to
withdraw, curtail, or cancel its business with such person or entity;
or
(d) Directly or indirectly hire any employee of PMSI, or any
affiliate, subsidiary or related entity of PMSI, or induce or attempt
to influence any employee of PMSI, or any such affiliate, subsidiary or
related entity to terminate its employment with such person or entity.
As partial consideration for the covenants of PMSI set forth in this
Agreement, ▇▇▇▇▇▇▇▇ and/or IMT agrees to deliver to PMSI, concurrently with the
execution and delivery of this Agreement, a promissory note in the amount of
$150,000, in the form attached hereto as Exhibit A.
3. Agreement. Each Party has reviewed and carefully considered the
provisions of Sections 1 and 2 of this Agreement and, having done so, agrees
that the restrictions applicable to it as set forth therein (a) are fair and
reasonable with respect to time, geographic area and scope, (b) are not unduly
burdensome to it, and (c) are reasonably required for the protection of the
interests of the other Parties for whose benefit such restrictions were agreed
upon.
4. Remedies. Each Party agrees that a violation on its part of any
applicable covenant contained in Sections 1 or 2 of this Agreement will cause
the other Parties, for whose benefit such restrictions were agreed upon,
irreparable damage for which remedies at law may be insufficient, and for that
reason, it agrees that any of the other Parties shall be entitled as a matter of
right to equitable remedies, including specific performance and injunctive
relief, therefor. The right to specific performance and injunctive relief shall
be cumulative and in addition to whatever other remedies, at law or in equity,
that the other Parties may have, including, specifically, recovery of additional
damages.
5. Affiliates. For purposes of this Agreement, an "Affiliate" of a
Party means any person married to, or any minor child of, such Party and any
corporation, partnership or other entity that, at the date hereof or at any time
during the term hereof, is controlled by, or under common control with, such
Party. "Control" (and its derivatives), in this context, means the possession
of, directly or indirectly, the power to direct or cause the direction of the
management of the applicable corporation, partnership or other entity either
through the ownership of voting securities (or other equity interests), by
contract, or by ownership of a membership of a nonstock corporation or other
entity enabling a Party to elect one or more members of the governing board of
that nonstock corporation or other entity.
6. Control of Affiliates' Actions. Each Party will timely exercise all of
its rights and powers to cause each of its Affiliates to comply with the terms
of this Agreement.
7. Indemnity. Each Party agrees to indemnify, defend and hold each other
Party harmless from and against any and all loss, damage, cost and expense
(including attorneys' fees) that may result from any breach or threatened breach
of this Agreement by it or any of its Affiliates.
8. Miscellaneous.
(a) Amendments. This Agreement may be modified or amended only by an
instrument in writing executed by all Parties.
(b) Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(c) Governing Law. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Texas, and not the conflicts
of law provisions thereof.
(d) Parties Bound. This Agreement shall be binding upon and be
enforceable against each Party and each Party's Affiliates, and their
respective successors and representatives. This Agreement shall inure
to the benefit of each Party and such Party's respective successors,
representatives and assigns.
(e) Invalid Provisions. If any provision of this Agreement
(including, without limitation, any provision relating to the
activities covered by, or time period of, the covenants contained in
Section 1 or Section 2 of this Agreement) is held to be illegal,
invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part hereof; and the
remaining provisions shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically
as a part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
(f) Construction. This Agreement shall be construed without
regard to the identity of the person who drafted the various provisions
of this Agreement. Each and every provision of this Agreement shall be
construed as though all of the Parties participated equally in the
drafting of this Agreement. Consequently, each Party acknowledges and
agrees that any rule of construction that a document is to be construed
against the drafting party shall not be applicable to this Agreement.
(g) Other Agreements. Each Party agrees that any material
breach by it of any of the terms and provisions of the Purchase
Agreement, or any other Transaction Document to which it is a party,
shall also be deemed to have been a material breach by it of this
Agreement, for all purposes.
(h) Defined Terms. Any capitalized terms not otherwise defined in this
Agreement shall have the same meaning as set forth in the Purchase Agreement.
[Signature page follows]
S-1
SIGNATURE PAGE TO
MUTUAL NON-COMPETITION AGREEMENT
EXECUTED to be effective as of the date first above written.
PMSI: Prime Medical Services, Inc.
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President and
Chief Financial Officer
Prostatherapies: Prostatherapies, Inc.
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., President
IMT: Innovative Medical Technologies, Inc.
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., President
▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
A-1
EXHIBIT A
FORM OF PROMISSORY NOTE