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EXHIBIT 10.7
NON COMPETITION AND CONFIDENTIALITY AGREEMENT
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT, dated as of March , 1998,
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among ("Employee"), EDUCATIONAL MEDICAL, INC. , a
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Delaware corporation ("EMI") and NEW HAMPSHIRE ACQUISITION CORP., a Delaware
corporation ("Acquisition").
PRELIMINARY STATEMENTS
Employee is an employee of ▇▇▇▇▇▇, Inc. (the "Corporation"). The Corporation
is the owner of a postsecondary educational institution located in New
Hampshire which operates four postsecondary schools (the "Schools"). EMI is a
publicly traded corporation engaged in the operation of postsecondary
educational institutions. Acquisition is a wholly owned subsidiary of EMI.
Pursuant to the provisions of that certain Stock Purchase Agreement of even
date herewith, Acquisition will purchase the stock of the Corporation (the
"Purchase").
CONFIDENTIALITY
1. Confidentiality. Employee acknowledges that, as a result of her employment
by the Corporation, she has had access to and knowledge of confidential or
proprietary information developed by the Corporation with respect to the
Schools and their operation, which knowledge is of a special and unique nature
and value to EMI and Acquisition including, but not limited to, the methods and
systems used in connection with the Schools' operations, the names and
addresses of its students and sources of referral, tuition charged and paid by
with respect to the Schools or their customers, curricula, related memoranda,
research reports, designs, records, student files, services, and operating
procedures, and other information, data, and documents now existing or later
acquired by the Corporation in connection with the Schools' operations,
regardless of whether any such information, data, or documents, qualify as a
"trade secret" under applicable Federal or state law (collectively
"Confidential Information"). Confidential Information does not include
information that (i) becomes generally available to the public other than as a
result of disclosures by Employee in violation of the terms of this Agreement,
or (ii) becomes available to Employee on a non-confidential basis from a source
that is not bound by a confidentiality agreement with EMI or Acquisition or
each of their respective directors, officers, employees, agents or
representatives. As a material inducement to EMI and Acquisition to enter into
the Stock Purchase Agreement, Employee covenants and agrees not at any time
following the Purchase directly or indirectly, to divulge or disclose for any
purpose whatsoever, any Confidential Information which is in the possession of
Employee as a result of her employment by the Schools, or otherwise as a result
of the relationship between Employee and the Schools' operations. In accordance
with the foregoing, Employee agrees at no time to remove from the School
Facilities (as defined in the Stock Purchase) records of any kind or
description whatsoever for any purpose whatsoever unless authorized in writing
by EMI and Acquisition. Notwithstanding the foregoing
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provisions of this Section, Employee may disclose Confidential Information (i)
to any of the Schools' employees, counsel, accountants and agents on a
need-to-know basis (provided that any such person shall be informed of the
confidential nature of such information and directed not to disclose or make
public such Confidential Information), (ii) to the extent required by
applicable law, rules and regulation, and (iii) in any action, suit or
proceeding between the parties, provided that in connection with disclosures
permitted by clauses (ii) and (iii) above, Employee shall provide EMI and
Acquisition with at least three (3) days written notice of such intent so that
an appropriate protective order may be sought by EMI and Acquisition if
desired.
NON-COMPETITION
2. Non-Competition.
A. Employee acknowledges that the services rendered to the Schools prior to
the purchase and the knowledge obtained as a result of such services and such
employment were of a special and unusual character and have a unique value to
the Schools. In view of the unique value of the services, and as a material
inducement to EMI and Acquisition to enter into this Agreement and to pay to
her the consideration referred to below, Employee covenants and agrees that she
will not, after the effective date of the Purchase (i) directly or indirectly
engage in any business anywhere within 50 miles of the boundaries of the state
of New Hampshire (the "Area") if such business teaches courses similar to those
taught by EMI or Acquisition or any affiliate or subsidiary of EMI
("Affiliate") in the state of New Hampshire ("Prohibited Activities"); (ii)
become associated as manager, supervisor, employee, consultant, advisor, or
stockholder owning more than 5% of the outstanding stock of a company or
participate in the management or direction of a company or otherwise with any
person, corporation or entity engaging in Prohibited Activities anywhere within
the Area; (iii) call upon any of Acquisition's, EMI's or any of EMI's
subsidiary schools' students, teachers or referral sources for the promotion of
any Prohibited Activities for any person, corporation, or other entity within
the Area, or (iv) divert, solicit or take away any student or referral source
of Acquisition's, EMI's or any of EMI's subsidiary schools located in the Area.
B. Employee covenants and agrees that, if she shall violate any of the
covenants or agreements contained in this Section 2, EMI and/or Acquisition
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration, or benefits which she directly or indirectly has
realized and/or may realize as a result of, growing out of, or in connection
with any such violation; such remedy shall be in addition to and not in
limitation of any injunctive relief or other rights or remedies to which EMI
and/or Acquisition may be entitled at law or in equity or under this Agreement.
C. Employee has carefully read and considered the provisions of this Section
and Section 1, and having done so, agrees that the restrictions set forth
(including but not limited to the time period of restriction and the areas of
restriction) are fair and
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reasonable and are reasonably required for the protection of the interests
of EMI, Acquisition, its officers, directors, and other employees.
D. In the event that, notwithstanding the foregoing, any of the provisions
of this Section or Section 1 shall be held to be invalid or unenforceable, the
remaining provisions thereof shall nevertheless continue to be valid and
enforceable as though invalid or unenforceable parts had not been included
therein. In the event that any provision of this Section relating to time
period and/or areas of restriction shall be declared by a panel of arbitrators
or a court of competent jurisdiction if such court refuses to refer such matter
to arbitration, to exceed the maximum time period or areas such panel or court
deems reasonable and enforceable, said time period and/or areas of restriction
shall be deemed to become, and thereafter be, the maximum time period and/or
area which such panel or court deems reasonable and enforceable.
E. With respect to the provisions of this Section, Employee agrees that
damages, by themselves, are an inadequate remedy at law, that a material breach
of the provisions of this Section would cause irreparable injury to the
aggrieved party, and that the provisions of this Section 2 may be specifically
enforced by injunction or similar remedy in any court of competent jurisdiction
without affecting any claim for damages, provided that any such injunction
shall either be preliminary in nature, enjoining such activity pending the
outcome of arbitration as provided for in Section 4 of this Agreement, or be in
assistance of the final determination of the arbitrators as provided for in
such Section. Employee agrees that such injunction may be issued without the
necessity of bond.
CONSIDERATION
3. Consideration. Upon the consummation of the Purchase and execution of
this Agreement, EMI and Acquisition will pay to Employee the sum of
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Thousand Dollars ($ ) and shall continue to pay to Employee such sum
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on each anniversary of this Agreement for the remainder of Employee's life (the
"Consideration") in consideration for her execution, delivery and performance
of this Agreement. Upon Employee's death, this Agreement shall terminate and
her estate shall not be entitled to any Consideration under this Agreement.
GENERAL PROVISIONS
4. Governing Law; Arbitration. This Agreement shall be governed by, and
construed in accordance with the laws of the State of New Hampshire, without
regard to choice-of-law principles, as if made and to be performed solely in
New Hampshire. Any disputes between any of the parties to it with respect to
the agreements contained in it, or as modified in the future, are to be settled
by binding arbitration conducted pursuant to the commercial arbitration rules
of the American Arbitration Association. In any such arbitration the scope and
timing of any discovery shall be determined by the arbitrators. Such
arbitration is to be the sole remedy for the settlement of such disputes. All
of the parties agree that money damages are inadequate to compensate for a
breach of the
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confidentiality and non-competition provisions of this Agreement and contained
in this Agreement. Employee agrees that upon application by EMI and/or
Acquisition, any court of competent jurisdiction, upon a showing sufficient to
justify the entry of a temporary injunction, may enjoin any activity allegedly
in breach of such agreement pending the outcome of binding arbitration or enter
a similar order of like force and effect, or may enforce the final
determination of such arbitrators by the issuance of such an injunction or
similar order.
5. Entire Agreement. This Agreement and the agreements referred to in it
contain the entire agreement between the parties hereto with respect to the
transactions contemplated herein and supersedes all previously written or oral
negotiations, commitments, representations, and agreements.
6. Counterparts. This Agreement may be executed in one or more counterparts by
facsimile, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
7. Amendments. This Agreement, or any provisions hereof, may not be amended,
changed or modified without the prior written consent of each of the parties
hereto.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by the individual or officer duly authorized to do so, all as of the
day and year first above written.
EMPLOYEE NEW HAMPSHIRE ACQUISITION CORP.
By:
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Authorized Signatory
EDUCATIONAL MEDICAL, INC.
By:
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Authorized Signatory
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