Document:

Exhibit
10.5

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of this 18th day of
August, 2006 (the “Effective Date”), is
by and between OnCURE Medical Corp., a Delaware Corporation (the “Corporation”) and William L. Pegler (the “Employee”).

 

RECITALS

 

A.             The Corporation owns, manages and intends to acquire
additional entities, which provide (1) radiation therapy, medical oncology
and related oncology services and (2) physician practice management
services for medical and radiation oncologists.

 

B.              The Employee is presently
serving as the Senior Vice President, Operations of the Corporation pursuant to
an employment agreement, dated as of June 1, 2004, by and between the
Corporation and the Employee (the “Prior
Employment Agreement”).

 

C.            The Corporation has engaged
in a transaction pursuant to the Agreement and Plan of Merger, dated as of July 5,
2006 (the “Merger Agreement”), by
and among the Corporation, OnCURE Acquisition Sub, Inc. and OnCURE
Holdings, Inc. (“Holdings”), pursuant
to which OnCURE Acquisition Sub, Inc. will be merged with and into the
Corporation on the Effective Date (as defined in the Merger Agreement) and the
Corporation will become a wholly-owned subsidiary of Holdings (the “Merger”).

 

D.            The obligation of Holdings and OnCURE Acquisition Sub, Inc.
to consummate the Merger is conditioned upon, among other items, the execution
and delivery of this Agreement.

 

E.             In connection with the
Merger, the Employee will also enter into an Agreement Not to Compete with Holdings
of even date herewith (the “Noncompete
Agreement”).

 

F.             The Corporation wishes to retain the services of the
Employee on the terms, and subject to the conditions, hereinafter set forth.

 

G. This Agreement shall supersede and replace the
Prior Agreement and all other agreements and amendments between the Employee
and the Corporation regarding the terms and conditions of the Employee’s
employment with the Corporation and/or any of its Affiliates.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, the
parties agree as follows:

 

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ARTICLE I

DEFINITIONS AND CONSTRUCTION

 

1.1                Definitions. For purposes of
this Agreement, unless the context otherwise requires, the following terms have
the respective meanings set out below.

 

a.                  “Affiliate” shall mean with
respect to any specified Person, any Person, whether present or future, that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.

 

b.                  “Agreement” shall have the
meaning ascribed thereto in the preamble of this Agreement.

 

c.                  “Board” shall mean the
members of the board of directors of Holdings.

 

d.                  “Cause” shall have the
meaning ascribed thereto in Section 4.2.

 

e.                  “Change of Control” shall mean and
include each of the following: (a) except in connection with a Qualified
Offering, the acquisition, in one or more simultaneous transactions or a series
of related transactions, of beneficial ownership (within the meaning of Rule 13d-3
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) by any Person or any group
of Persons who constitute a group (within the meaning of Section 13d-3 of
the Exchange Act), other than (i) a trustee or other fiduciary holding
securities under an employee benefit plan of Holdings or any Affiliate of
Holdings or (ii) a Person or group in which the Equity Investors control,
directly or indirectly, 50% or more of the voting power immediately following
the transaction, of any securities of Holdings or the Corporation such that, as
a result of such acquisition, such Person or group beneficially owns (within
the meaning of Rule 13d-3 of the Exchange Act), directly or indirectly,
fifty percent ore more of the outstanding voting securities of Holdings or the
Corporation, as applicable; (b) a change in the composition of the Board
such that a majority of the members are not Continuing Directors (except in the
case of a capital raising financing transaction by Holdings or the
Corporation); and (c) the sale of all or substantially all of the assets
of Holdings’ or the Corporation’s to an entity in which the Equity Investors do
not control, directly or indirectly, 50% or more of the voting power immediately
following the transaction. Notwithstanding the foregoing, neither the Merger
nor any other transactions contemplated by the Merger Agreement shall
constitute a Change of Control.

 

f.               “Common Stock” means the
Common Stock, $0.001 par value per share, of Holdings.

 

g.              “Compensation Committee” shall mean the
compensation committee of the Board.

 

h.              “Confidential
Information” shall mean non-public information concerning the
Corporation, including without limitation, financial data, statistical data,
strategic business plans, agreements or other material relating to the
business, services or

 

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activities
of the Corporation and its Affiliates and trade secrets, market reports,
patient files, customer lists, practices, processes, methods, information
relating to government relations and other similar information that is
propriety information of the Corporation or its Affiliates.

 

i.               “Continuing Director” shall mean, as
of any date of determination, any member of the Board who (a) was a member
of the Board on the Effective Date, or (b) was nominated for election or
elected to the Board with the affirmative vote of at least two-thirds (2/3) of
the Continuing Directors who were members of the Board at the time of such
nomination or election.

 

j.                The term “control” (including
the terms “controlling,” “controlled by”
and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.

 

k.              “Corporation” shall have the
meaning ascribed thereto in the preamble of this Agreement.

 

1.              “Disability” shall have the
meaning ascribed thereto in Section 4.4.

 

m.             “Employee” shall have the
meaning ascribed thereto in the preamble of this Agreement.

 

n.              “Effective Date” shall have the
meaning ascribed thereto in the preamble of the Agreement.

 

o.               “Equity Investors” means Genstar
Capital Partners IV, L.P. and the other Persons making an equity investment in
Holdings in connection with the Merger.

 

P.              “Initial Expiration
Date” shall have the meaning ascribed thereto in Section 4.1.

 

q.             “Person” shall mean any
individual, corporation, limited or general partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated organization or any other entity, union, or association, or
government or any agency or political subdivision thereof.

 

r.             “Qualified Offering” shall mean any
offer for sale of equity securities of the Corporation pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended.

 

s.             “Stock Options” shall have the
meaning ascribed thereto in Section 7.3.

 

t.              “Subsidiary” shall mean with
respect to any Person, any corporation, association or other business entity of
which securities representing 50% or more of the combined voting power of the
total voting stock (or in the case of an association or other

 

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business
entity which is not a corporation, 50% or more of the equity interest) is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof.

 

u.               “Term” shall have the
meaning ascribed thereto in Section 4.1.

 

1.2            “Construction

 

a.               Captions. The captions of
Articles, Sections and Subsections of this Agreement are inserted for
convenience only and shall not affect the meaning or construction of the contents
of this Agreement.

 

b.               Mandatory and Permissive Acts. As used in this
Agreement, the words “shall” and “will” refer to mandatory acts; the word “may”
shall refer to permissive acts.

 

c.               References. References in
this Agreement to Articles, Sections, and Subsections, unless specifically
stated otherwise, are to the Articles, Sections and Subsections of this
Agreement.

 

d.               Miscellaneous Terms. The tell              
I “or” shall not be exclusive. The terms “herein”, “hereof’, “hereto”, “hereunder”
and other terms similar to such terms shall refer to this Agreement as a whole
and not merely to the specific article, section paragraph, or clause where such
terms may appear. The term “including” shall mean “including but not limited to”.

 

ARTICLE II

EMPLOYMENT

 

The Corporation hereby employs the Employee and the
Employee hereby accepts employment with the Corporation, commencing as of the
Effective Date, for the Term, in the position and with the duties and
responsibilities set forth in Article III, and upon such other terms and
conditions set forth in this Agreement.

 

ARTICLE III

POSITION; DUTIES

 

3.1          Position
and Duties. The Employee shall serve as the Corporation’s Senior
Vice President, Operations subject to the control and direction of the
President and Chief Operating Officer of the Corporation with duties and
responsibilities that are customary for such office(s), including, but not
limited to, management and oversight of the Regional Vice Presidents of
Operations. The Employee shall have such other powers and duties as may be
assigned to him from time to time by the President and Chief Operating Officer
or the Board.

 

3.2            Good Faith Efforts. The Employee
will use his good faith efforts to perform his duties and discharge his
responsibilities pursuant to this Agreement competently, carefully and
faithfully. In detellnining whether or not the Employee has

 

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used
his good faith efforts hereunder the Corporation’s delegation of authority to
other employees and all surrounding circumstances shall be taken into account
and the Employee’s good faith efforts shall not be judged solely on the
Corporation’s earnings or other results of the Employee’s performance.

 

ARTICLE IV

TERM OF
EMPLOYMENT; TERMINATION

 

4.1         Term.
Employee’s employment shall commence on the Effective Date and shall
terminate on the two-year anniversary of the Effective Date (the “Initial Expiration Date”); provided, that
on the Initial Expiration Date and on the last day of any subsequent extension
to the term of this Agreement, the term of this Agreement automatically shall
be extended for an additional one (1) year term unless either party gives written
notice to the other not less than three (3) months prior to the end of the
then current term that it does not desire to extend the term of this Agreement.
Notwithstanding the foregoing, Employee’s employment shall terminate upon the
termination of this Agreement for any reason. The “Term” of this Agreement means the period from the Effective
Date through the Initial Expiration Date, and includes any renewal term,
subject in each case to the earlier termination of this Agreement for any
reason.

 

4.2         Termination
by the Corporation. The Corporation may terminate this Agreement
at any time and for any reason or no reason at all. In the event of a
termination of this Agreement by the Corporation without Cause, subject to the
provisions of Section 4.7, the Corporation shall pay to the Employee the
severance pay set forth in Section 4.6. For purposes of this Agreement, “Cause” means any of the following: (a) the
Employee enters a plea of guilty or nolo
contendere to, or is convicted of, a felony or any other criminal
act involving moral turpitude, dishonesty, or theft; (b) the Employee has
committed gross negligence, willful misconduct or a breach of his fiduciary
duties in carrying out his duties hereunder; (c) the Employee materially
breaches this Agreement or the Noncompete Agreement and fails to cure such
breach (in the event that such breach is capable of being cured) within 30 days
following receipt of notice from the Corporation setting forth in reasonable
detail the nature of such breach; (d) the Employee habitually uses drugs
or alcohol and such use constitutes an abuse thereof; (e) the Employee
engages in willful misconduct in the performance of his duties hereunder that (i) has
a material adverse effect on the Corporation or (ii) constitutes a material
violation of a policy adopted by the Board; or (f) the Employee engages in
material dishonesty or fraud in the performance of his duties hereunder. Upon
any termination of this Agreement by the Corporation for Cause, the Employee
shall have no right to compensation or bonus payments under Sections 7.1 or 7.2
or to participate in any employee benefit programs (other than amounts
previously earned but not yet paid and such programs as the Corporation is, by
law, required to allow his participation).

 

4.3         Constructive
Termination. In the event that (a) with or without a change
in his title or formal corporate action, there shall be a material diminution
in the nature or scope of the authorities, powers, functions, duties or
responsibilities of the Employee set forth in Article III of this
Agreement; (b) the Employee is not appointed to, or is removed

 

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from,
the offices or positions provided for in Section 3.1 of this Agreement; (c) the
Employee’s annual base salary is decreased by the Corporation; (d) the
Corporation changes its headquarters greater than 30 miles from its existing
location without the Employee’s consent as described in Section 7.8; (e) the
Corporation fails to pay the Employee’s compensation or provide the Employee
benefits when due; (f) the Corporation materially breaches this Agreement
or the performance of its duties and obligations hereunder (including any
failure to adopt an annual bonus plan in accordance with the provisions of Section 7.2),
the Employee, by written notice delivered to the Corporation within 30 days of
the event or occurrence constituting a constructive termination hereunder, may
elect to deem his employment hereunder to have been terminated by the
Corporation without Cause, provided that
the Corporation shall have the right to cure any such constructive termination
within 30 days of its receipt of such notice.

 

4.4           Death or Disability. Except for the
Corporation’s obligations contained in this Section 4.4, this Agreement
and the obligations of the Corporation hereunder will terminate upon the
Employee’s death or Disability. For purposes of this Agreement, “Disability” shall mean that for a period
of (6) six months in any twelve (12) month period, the Employee is
incapable of substantially fulfilling his employment responsibilities and
duties because of physical, mental or psychological incapacity resulting from
injury, sickness or disease. Upon termination of this Agreement by reason of
the Employee’s death or Disability, subject to the provisions of Section 4.7,
the Corporation will pay in a lump sum payment to the Employee or his legal
representative, as the case may be, an amount equal to one-half (1/2) of the
Employee’s annual base salary, plus one-half (1/2) of any bonuses payable to
the Employee with respect to the twelve (12) month period immediately prior to
the date of the Employee’s death or Disability.

 

4.5          Termination
by the Employee. The Employee may terminate this Agreement and
his employment with the Corporation at any time for any reason or no reason at
all by giving the Corporation at least thirty (30) days’ prior written notice.
The Corporation may relieve Employee of any or all of his duties and
responsibilities at any time following the giving of any such notice and such
action will in no event constitute a constructive termination under Section 4.3
or termination by Employee without Cause (provided,
that Employee shall be entitled to continue to be compensated in
accordance with this Agreement through the date of termination). Upon any
termination of this Agreement by the Employee pursuant to this Section 4.5,
the Employee shall have no right to compensation or bonus payments under
Sections 7.1 or 7.2 or to participate in any employee benefit programs (other
than amounts previously earned but not yet paid and such programs as the
Corporation is, by law, required to allow his participation).

 

4.6          Termination
by the Corporation Without Cause.

 

(a)           In
the event of a termination of this Agreement by the Corporation without Cause
(other than in connection with a Change of Control or within nine months
following a Change of Control), subject to the provisions of Section 4.7,
the Corporation shall pay to the Employee, as severance pay, an amount equal to
one-half (0.5) times the

 

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Employee’s
annual base salary, plus the Employee’s Target Bonus (as defined in Section 7.2)
payable for the year in which the termination occurs. Such severance pay shall
be paid by the Corporation to the Employee in equal installments in accordance
with the Corporation’s nonnal payroll practices.

 

(b)             In the event of a termination of this Agreement by the
Corporation without Cause in connection with a Change of Control or within nine
months following a Change of Control, subject to the provisions of Section 4.7,
the Corporation shall pay in a lump sum payment to the Employee, as severance
pay, an amount equal to one-half (0.5) times the sum of the Employee’s annual
base salary, plus an amount equal to the Employee’s Target Bonus payable for
the year in which termination occurs.

 

(c)             In the event that this Agreement is terminated by the
Corporation without Cause, the Employee shall have 90 days from the date of
termination to exercise any vested Stock Options. In the event that Employee
does not exercise all or a portion of his vested Stock Options, the Corporation
shall, in exchange for the cancellation of such unexercised Stock Options and
to the extent permissible under applicable law, issue to the Employee a number
of shares of Common Stock equal to fifty percent (50%) of (i) the product
of (1) the number of shares of Common Stock exercisable under such
unexercised Stock Options multiplied by (2) the difference between the
fair market value of one share of Common Stock on the date of issuance and the
exercise price per share of Common Stock under the Stock Options, divided by (ii) the
fair market value of one share of Common Stock on the date of issuance. For
purposes of the foregoing, the fair market value of one share of Common Stock
on the date of issuance shall be determined in good faith by the Board.

 

(d)           The
Corporation agrees that if this Agreement is terminated by the Corporation or
in the event of the death or Disability of the Employee, (i) the Employee
will immediately receive additional compensation consisting of any and all
accrued and unpaid vacation pay, back wages accrued and accrued sick pay; (ii) except
in the event of a termination for Cause, the Employee shall be entitled keep
possession of any Corporation provided laptop computer (and all accessories)
provided that all Confidential Information shall be deleted from such computer
immediately following any such termination (and the Corporation shall have the
right to possession and operate such computer as shall be reasonably sufficient
to confirm the deletion of such Confidential Information); (iii) except in the
event of a termination for Cause, the Corporation will pay for the Employee’s
health benefits under COBRA until employee becomes eligible for another
employer’s health insurance or for six (6) months, whichever occurs first;
and (iv) the Corporation will provide to the Employee outplacement services,
with a film of the Employee’s discretion, at a cost not to exceed $15,000.

 

4.7           Release of the Corporation. As a
condition to receiving the severance payments and benefits described herein, (1) Employee
or, in the event of Employee’s death or Disability, Employee’s legal
representative shall be required to execute and deliver to the Corporation a
general release of all claims, including, but not limited to, claims for
wrongful termination, for employment discrimination under Title VII of the
Civil Rights Act of 1964, as amended, and claims under the Americans with
Disabilities

 

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Act
of 1990, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of
1967, the Older Workers Benefit Protection Act of 1990, the Civil Rights Act of
1866, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1991,
the Employee Retirement Income Security Act of 1974 and any equivalent state,
local and municipal laws, rules and regulations, he or his estate or legal
representatives may have against the Corporation and its Subsidiaries and
Affiliates, and the officers, directors, shareholders and agents of each of
them, in each case in such form as may be reasonably requested by the
Corporation and (2) Employee shall comply with any provisions of this
Agreement or the Noncompete Agreement that survive such termination. The
provisions of this Section 4.7 shall survive any termination of this
Agreement.

 

ARTICLE V

DEVOTION OF THE EMPLOYEE’S TIME TO DUTIES

 

The parties agree that Employee will devote
substantially full time during normal business hours (exclusive of periods of
sickness and Disability and of such normal holiday and vacation periods as have
been established by the Corporation) to the affairs of the Corporation;
provided, however, that the Employee will be permitted to devote a limited
amount of time, without payment therefore of salary and wages, to charitable or
similar organizations and to such other businesses and/or investment activities
as are not barred by the provisions of Article IX or the Noncompete
Agreement and which do not interfere with the provision of services hereunder.

 

ARTICLE VI

OTHER COVENANTS OF EMPLOYEE

 

Business Opportunities. The Employee
agrees to promptly present to the Corporation all potential opportunities for
acquisitions, joint ventures and similar transactions in the cancer care
radiation therapy sector, which are presented to the Employee during the Term
as long as this Agreement is in effect.

 

ARTICLE VII

COMPENSATION AND EXPENSES

 

7.1         Salary.
From the Effective Date through September 30, 2006, the
Corporation shall pay the Employee an annual base salary in the amount of
Employee’s base salary as of the Effective Date. Effective October 1,
2006, the Corporation shall pay the Employee an annual base salary of One
Hundred Eighty-Five Thousand ($185,000) , which thereafter shall be reviewed by
the Board or the Compensation Committee at the end of each fiscal year
commencing with the fiscal year ending December 31, 2007. The Employee’s
salary may also be increased from time to time in the discretion of the Board.
The Corporation will pay the Employee his annual salary in equal installments
no less frequently than semi-monthly.

 

7.2          Bonus. The Employee shall be eligible
to earn an annual bonus as determined by the Compensation Committee or Board.
The bonus will be based upon achievement of certain financial performance of
the Corporation and other objectives

 

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established
by the Compensation Committee or Board. The 2006 annual Bonus objectives are reflected
on Exhibit A of this
Agreement; provided, however, that when determining whether the EBITDA
thresholds set forth on Exhibit A have
been satisfied for 2006, EBITDA thresholds will be reasonably adjusted as
determined by the Compensation Committee or Board to account for any
acquisitions made by the Corporation after the date hereof. The Employee’s
bonus for 2006 will be determined under the bonus program in place prior to the
execution of this Agreement. For each year of the Term after 2006, the Corporation
shall adopt an annual bonus program affording Employee an opportunity to earn
bonuses equal to at least 50% of his annual base salary; provided, however, that the annual bonus
plan for fiscal years subsequent to 2006 may contain additional or different
performance criteria established by the Board or the Compensation Committee.
For purposes of this Agreement, the Employee’s “Target Bonus” for any year means the maximum annual bonus
payable to the Employee assuming 100% achievement of all performance criteria
for such year, as set forth in Exhibit A
for 2006 and as adopted by the Corporation pursuant to the
immediately preceding sentence for subsequent years.

 

7.3           Options.
On or as soon as reasonably practicable following the Effective Date,
and as approved by the Compensation Committee or Board, the Employee will
receive an option to purchase 193,394 shares of Common Stock, at an exercise
price per share equal to the fair market value of one share of Common Stock at
the date of grant, which shall not be higher than the price of $3.50 per share
(the “Initial Common Stock Price”), pursuant
to the terms of Holdings’ Equity Incentive Plan (the “Stock Options”). Two-thirds of the Stock Options shall vest
over four (4) years at the rate of 1/48 per month and one-third of the
Stock Options (the “Performance Vesting
Options”) shall vest as follows: 100% of the Performance Vesting
Options shall vest upon the completion of a Change of Control (a) completed
after the Effective Date and prior to the two-year anniversary of the Effective
Date in which the consideration for each share of Common Stock is at least
equal to 200% of the Initial Common Stock Price, (b) completed on or after the
two-year anniversary of the Effective Date and prior to the three-year anniversary
of the Effective Date in which the consideration for each share of Common Stock
is at least equal to 225% of the Initial Common Stock Price, (c) completed on
or after the three-year anniversary of the Effective Date and prior to the
four-year anniversary of the Effective Date in which the consideration for each
share of Common Stock is at least equal to 250% of the Initial Common Stock
Price, or (d) completed on or after the four-year anniversary of the Effective
Date in which the consideration for each share of Common Stock is at least
equal to 300% of the Initial Common Stock Price. The Stock Options shall expire
one hundred and twenty (120) months from the date of grant.

 

7.4           Expenses. It is understood and agreed
that the services required of the Employee by the Corporation will require the
Employee to incur entertainment, travel and other expenses on behalf of the
Corporation. The Corporation will reimburse or advance funds to the Employee
for all reasonable travel, entertainment and miscellaneous expenses incurred in
connection with the performance of his duties under this Agreement, provided
that the Employee properly accounts for such expenses to the Corporation in
accordance with the Corporation’s practices. Such reimbursement or advances
will be

 

9

 

made
in accordance with policies and procedures of the Corporation in effect from
time to time relating to reimbursement of our advances to executive officers.

 

7.5          Vacation. For each twelve (12) month period
during the Term, the Employee will be entitled to four (4) weeks of
vacation without loss of compensation or other benefits to which he is entitled
under this Agreement (pro-rated as necessary for partial calendar years during
the Term), to be taken at such times as the Employee may select and the affairs
of the Corporation may permit.

 

7.6         Employee
Benefit Programs. Without any reduction in the compensation to
which the Employee is entitled under the provisions of Sections 7.1 and 7.2
(other than voluntary payment of Employee’s share of premiums or plan
contributions), during the Term the Employee will be entitled to participate in
any health insurance, disability, sick leave, pension insurance or other
employee benefit plan that is maintained at that time by the Corporation for
its executive officers including programs of life and medical insurance for his
family and reimbursement of membership fees in industry related professional
organizations. During the Term, the Corporation shall maintain a policy of
directors and officers’ liability insurance with policy limits and terms
appropriate for the Corporation’s size and business activities, and shall
ensure that the Employee is covered by such policy.

 

7.7         Automobile & Life Insurance. The Corporation shall
provide the Employee with an after-tax automobile and life insurance allowance
of $750 per month.

 

7.8         Relocation
Costs. The Employee shall be provided with the appropriate
office space, secretarial and clerical support located at the Corporation’s headquarters
in Orange County, California, and at the Corporation’s cost. The Corporation
agrees that any change in the Corporation’s headquarters greater than 30 miles
from its existing location as of the Effective Date, and without the Employee’s
consent, constitutes an immediate constructive termination and entitles the
employee to severance under Section 4.6. Otherwise, with respect to any
relocation approved of by the Employee, the Corporation and Employee
acknowledge and agree that if the Employee is being required to relocate, the
Corporation agrees to pay all reasonable relocation expenses of the Employee.
The Corporation agrees that upon presentation of documentation of such
reasonable relocation expenses, that the Employee will be reimbursed in full within
fifteen (15) days. For purposes of this section, reasonable relocation expenses
shall include: (a) airfare for his entire immediate family for one trip
from the existing home location to the relocated home location; (b) all
reasonable closing costs related to the sale of the Employee’s residence,
including broker commissions, title costs, tax stamps, document fees; and (c) reasonable
moving and shipping costs for furniture and autos.

 

7.9         Continuing
Education. The Employee shall be entitled to continuing
education seminars at the Corporation’s expense. The Corporation will reimburse
the Employee for pre-approved and properly-documented continuing education
seminars expenses to a maximum of $5,000 per year.

 

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ARTICLE VIII

COVENANT OF CONFIDENTIALITY

 

The Employee acknowledges that during his employment
he will learn and will have access to Confidential Information regarding the
Corporation and its Affiliates. All records, files, materials and Confidential
Information (excluding personal items obtained by the Employee in the course of
his employment with the Corporation and that do not contain Confidential
Information) are confidential and proprietary and shall remain the exclusive
property of the Corporation or its Affiliates, as the case may be. The Employee
will not, except in connection with and as required by his performance of his
duties under this Agreement, for any reason use for his own benefit or the
benefit of any Person or entity with which he may be associated or disclose any
such Confidential Information to any Person for any reason or purpose
whatsoever without the prior written consent of the Board unless such
Confidential Information previously shall have become public knowledge through
no action by or omission of the Employee.

 

ARTICLE IX

COVENANT NOT TO COMPETE

 

9.1         Covenant.
Without limitation to any fiduciary or other legal responsibilities
that Employee may have to the Corporation, the Employee agrees that he will
not, for as long as he is an Employee of the Corporation directly or indirectly
carry on, be engaged in, own, operate, control or participate in the ownership,
management, operation or control of or have any financial interest in or
otherwise be connected with, any Person, or business (whether as an employee,
officer, director, agent, security holder, creditor, consultant, or otherwise)
that is or may be engaged in any business activity that is the same as, similar
to, or competitive (directly or indirectly) with any radiation oncology
business engaged in by the Corporation and/or its Affiliates. Notwithstanding
the foregoing, nothing herein shall be deemed or construed to, or shall bar or
preclude the Employee from acquiring directly or indirectly not more than five
percent (5%) of the securities, by value or voting power, in any
publicly-traded company that engages in any activity competitive with any
activity engaged in by the Corporation and/or any of its Affiliates.

 

9.2         Non-Solicitation.
The Employee hereby agrees that during the term of his employment with
the Corporation and for a period of twelve (12) months following the
termination of his employment, without the prior written consent of the
Corporation, he shall not, on his own behalf or on behalf of any Person,
directly or indirectly, hire or solicit the employment of any employee who has
been employed by the Corporation and/or any of its Affiliates at any time
during the six (6) months immediately preceding such date of hiring or
solicitation.

 

9.3         Severability.
The parties hereto agree that the covenants of non-competition
contained herein are reasonable covenants under the circumstances. The parties
intend that the covenant contained in Section 9.1 be construed as a series
of separate covenants, one for each city, county, state, territory, possession
or federal district of the United Sates covered by the covenant. Except for
geographic coverage, each

 

11

 

separate
covenant will be considered identical in terms to the covenant contained in Section 9.1.
If, in any judicial proceeding, a court refuses to enforce any of the separate
covenants described in this Section 9.3, the unenforceable covenant will
be considered eliminated from these provisions for the purpose of those proceedings
to the extent necessary to permit the remaining separate covenants to be
enforced. The Employee agrees that any breach of the covenants contained in
this Article IX would irreparably injure the Corporation. Accordingly, the
Employee agrees that the Corporation, in addition to pursuing any other
remedies it may have at law or in equity, shall be entitled to obtain an
injunction against him from any court having jurisdiction over the matter,
restraining any further violation of this Article IX and/or withhold any
further payments due to the Employee.

 

9.4          Conflict
with Noncompete Agreement. In the event of any conflict
between the provisions of this Article IX and the provisions of the
Noncompete Agreement, the provisions of the Noncompete Agreement shall control.

 

ARTICLE X

ASSIGNABILITY

 

The rights and obligations of the Corporation under
this Agreement shall inure to the benefit of and be binding upon the successors
or assigns of the Corporation. The Employee’s obligations hereunder may not be
assigned or alienated and any attempt to do so by him will be void.

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

11.1        Severance of Provision. If any
provision of this Agreement otherwise is deemed to be invalid or unenforceable
or is prohibited by the laws of the state or jurisdiction where it is to be
performed, this Agreement shall be considered divisible as to such provision
and such provision shall be inoperative in such state or jurisdiction and shall
not be part of the consideration moving from either of the parties to the
other. The remaining provisions of this Agreement shall be valid and binding
and of like effect as though such provisions were not included.

 

11.2        Notice and Address. All notices, offers,
acceptance and any other acts under this Agreement (except payment) shall be in
writing, and shall be sufficiently given if delivered to the addresses in
person, by Federal Express or similar receipted delivery, if mailed, postage
prepaid, by certified mail return receipt requested (and in each case notice
shall be deemed delivered and effective upon receipt thereof by the recipient),
as follows:

 

	
  To the Employee:

  	
  William L. Pegler

  
	
   

  	
  14313 Breezeway Place

  
	
   

  	
  San Diego, CA 92128

  

 

12

 

	
  To the Corporation:

  	
  General Counsel

  
	
   

  	
  OnCURE Medical Corp

  
	
   

  	
  610 Newport Center Drive, Suite 350

  Newport, California 92660

  

 

Or
any current address if different from above, or to such other address as either
of them, by notice to the other may designate from time to time.

 

11.3        Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument. The
execution of this Agreement may be by actual or facsimile signature.

 

11.4        Arbitration of Disputes. In the event of
any controversy or claim, whether based on contract, tort, statute, or other
legal or equitable theory (including but not limited to any claim of fraud,
misrepresentation, or fraudulent inducement) arising out of or related to this
agreement, or any subsequent agreement between the parties (“dispute”) and if the dispute cannot be
resolved by negotiation, the parties agree to submit the dispute to arbitration
pursuant to this section and the then-current rules and supervision of the
American Arbitration Association. The arbitration shall be held in Orange
County, California at the office of the American Arbitration Association.
Notwithstanding anything to the contrary herein, any party may seek injunctive
relief for any breach or threatened breach of this Agreement or any provision
of this Agreement from any court of competent jurisdiction.

 

11.5        Attorney’s Fees. In the event that there is
any controversy or claim arising out of or relating to this Agreement, or to
the interpretation, breach or enforcement thereof and any action or proceeding
including that in arbitration as provided for in Section 11.4 of this
Agreement, is commenced to enforce the provisions of this Agreement, the
prevailing party shall be entitled to an award by the court or arbitrator, as
appropriate, of reasonable attorney’s fees, costs and expenses.

 

11.6        No Violations. The Employee hereby
represents and warrants to the Corporation that the execution, delivery and
performance of this Agreement does not violate or conflict with the terms of
any other agreement to which the Employee is a party.

 

11.7        Withholdings. All payments to the Employee
under this Agreement shall be reduced by all applicable withholding required by
federal, state or local law.

 

11.8        Governing Law. This Agreement and any
dispute, disagreement, or issue of construction or interpretation arising
hereunder whether relating to its execution, its validity, the obligations
provided therein or performance shall be governed or interpreted according to
the internal laws of the State of California without regard to choice of law
considerations.

 

13

 

11.9        Entire Agreement. This Agreement constitutes
the entire Agreement between the parties and supersedes all prior oral and
written agreements between the parties hereto with respect to the subject
matter hereof. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, except by a statement in writing signed
by the party or parties against which enforcement or the change, waiver,
discharge or termination is sought.

 

11.10      Code Section 280G. The foregoing
notwithstanding, to the extent that the total amounts payable to Employee under
this Agreement or any other plan or agreement would constitute an “excess
parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”) (as determined in good faith by
the Corporation’s public accountants) then amounts payable under Section 4.6
shall be reduced to the extent necessary to avoid any such amounts constituting
an excess parachute payment.

 

11.11      Code Section 409A. In the event that the Common
Stock of the Corporation or Holdings becomes publicly-traded and in the event
that any payments to Employee under Section 4.6 constitute non-qualified
deferred compensation subject to Code Section 409A, then the Corporation
may delay payment of such amounts until the date that is 6 months and one day
after the Employee’s termination of employment, to the extent required to
comply with Code Section 409A.

 

(Signature Page Follows)

 

14

 

IN WITNESS WHEREOF, the Employee
and the Corporation have executed this Agreement as of this IgT” day of August, 2006.

 

	
   

  	
  THE CORPORATION 

  
	
   

  	
   

  
	
   

  	
  OnCURE Medical Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard N. Zehner

  
	
   

  	
  Richard N. Zehner

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: William L. Pegler

  

 

[Signature
Page to Employment Agreement — William L. Pegler]

 

 

IN WITNESS WHEREOF, the Employee and the
Corporation have executed this Agreement as of 18th day of
August, 2006.

 

	
   

  	
  THE CORPORATION 

  
	
   

  	
   

  
	
   

  	
  OnCURE Medical Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Richard N. Zehner

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  

  

 

[Signature Page to
Employment Agreement — William L. Pegler]

 

 

EXHIBIT A

 

(SEE ATTACHED)Exhibit
10.6

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

This
first amendment (the “Amendment”) to
the Employment Agreement by and between Oncure Medical Corp. (the “Corporation”) and William L. Pegler (the “Employee”), dated as of December 17, 2008, is hereby
made and entered into effective as of December 17, 2008, by and between
the Corporation and the Employee.

 

WHEREAS, the Corporation and the Employee entered into the
Employment Agreement dated as of August 18, 2006 (the “Agreement”); and

 

WHEREAS, the Corporation and the Employee desire to amend
the Agreement to conform the Agreement to the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations
and Internal Revenue Service guidance thereunder.

 

NOW, THEREFORE, in consideration of the mutual covenants
and agreements of the parties set forth in this Amendment, and other good and
valuable consideration, the parties hereto, intending to be legally bound,
agree as follows:

 

1.             Section 11.11
of the Agreement is hereby amended in its entirety to read as follows:

 

11.11.             Compliance with
Section 409A of the Internal Revenue Code.

 

(a)   All payments of “nonqualified deferred
compensation” (within the meaning of Section 409A of the Code (together
with Department of Treasury regulations and other official guidance issued
thereunder, “Section 409A”)) are intended
to comply with the requirements of Section 409A, and shall be interpreted
in accordance therewith.  No party
individually or in combination with any other may accelerate any such deferred
payment, except in compliance with Section 409A, and no amount shall be
paid prior to the earliest date on which it is permitted to be paid under Section 409A.

 

(b)   Unless otherwise expressly provided, any
payment of compensation by the Corporation to the Employee, whether pursuant to
this Agreement or otherwise, shall be made within two and one-half months (21⁄2
months) after the end of the later of the calendar year or the Corporation’s
fiscal year in which the Employee’s right to such payment vests (i.e., is not
subject to a substantial risk of forfeiture for purposes of Section 409A).  Such amounts shall not be aggregated with any
other payments and shall not be subject to the requirements of subsection (d) below
applicable to “nonqualified deferred compensation.”

 

(c)  Notwithstanding
anything in this Agreement to the contrary, to the extent that any payment or
benefit constitutes non-exempt “nonqualified deferred compensation” for
purposes of Section 409A, and such payment or benefit would otherwise be
payable or distributable hereunder by reason of the Employee’s termination of
employment, all references to the Employee’s termination of employment shall be
construed to mean a “separation from service,” as defined in Treasury Regulation
Section 1.409A-1(h) (a

 

1

 

“Separation from Service”), and the Employee shall not be
considered to have a termination of employment unless such termination
constitutes a Separation from Service with respect to the Employee.  If this Section 11.11(c) applies,
such payments or benefits that are subject to Section 409A shall be paid
(or, in the event of any installment payments, shall commence to be paid) on
the date that the Corporation determines within sixty (60) days following the
date of the Employee’s Separation from Service.

 

(d)   Notwithstanding anything in Section 11.11(c) to
the contrary, if the Employee is a “specified employee” on the date of the
Employee’s Separation from Service, any benefit or payment that constitutes
non-exempt “nonqualified deferred compensation” (within the meaning of Section 409A)
shall be delayed in order to avoid a prohibited payment under Section 409A(a)(2)(B)(i) of
the Code, and any such delayed payment shall be paid to the Employee in a lump
sum during the ten (10) day period commencing on the earlier of (i) the
expiration of the six-month period measured from the date of the Employee’s
Separation from Service, or (ii) the Employee’s death.  To the greatest extent permitted under Section 409A,
any separate payment or benefit under the Agreement will not be deemed to
constitute “nonqualified deferred compensation” subject to Section 409A
and the six-month delay requirement to the extent provided in the exceptions in
Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or
any other applicable exception or provision of Section 409A.

 

(e)   Section 11.11(d) above shall not
apply to that portion of any amounts payable upon a Separation from Service
which shall qualify as “involuntary severance” under Section 409A because
such amount does not exceed the lesser of (1) two hundred percent (200%)
of the Employee’s annualized compensation from the Corporation for the calendar
year immediately preceding the calendar year during which the Separation from
Service occurs, or (2) two hundred percent (200%) of the annual limitation
amount under Section 401(a)(17) of the Code for the calendar year during
which the Separation from Service occurs.

 

(f)    With respect to any continuation healthcare
coverage provided under the Agreement, if during the period of continuation
coverage, any plan pursuant to which such benefits are provided ceases to be
exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5),
then an amount equal to each such remaining premium shall thereafter be paid to
the Employee as currently taxable compensation in substantially equal monthly
installments over the remainder of the continuation coverage period.

 

(g)   With
respect to any reimbursements or in-kind benefits, such reimbursements or
benefits shall be provided in a manner that complies with Treasury Regulation Section 1.409A-3(i)(1)(iv),
including the following:  (i) in no
event shall such benefits or reimbursements be provided later than the last day
of the Employee’s taxable year following the taxable year in which the expense
was incurred or obligation arose, (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during the Employee’s taxable year
may not affect the expenses eligible for reimbursement, or in-kind benefits
provided, in any other taxable year of the Employee, and (iii) the right
to reimbursements or in-kind benefits is not subject to liquidation or exchange
for another benefit.

 

2

 

(h)   For
purposes of this Agreement any installment payments made on separate dates
shall be treated as a series of separate and distinct payments for purposes of Section 409A.

 

(i)    If the
parties hereto determine that any payments or benefits payable under this
Agreement intended to comply with Section 409A do not so comply, the
Employee and the Corporation agree to amend this Agreement, or take such other
actions as the Employee and the Corporation deem necessary or appropriate, to
comply with the requirements of Section 409A, while preserving benefits
that are, in the aggregate, no less favorable than the benefits as provided to
the Employee under this Agreement.  If
any provision of the Agreement would cause such payments or benefits to fail to
so comply, such provision shall not be effective and shall be null and void
with respect to such payments or benefits, and such provision shall otherwise
remain in full force and effect. 
Notwithstanding anything herein to the contrary, no amendment may be
made to this Agreement if it would cause the Agreement or any payment hereunder
not to be in compliance with Code Section 409A.

 

2.             The Agreement, as amended by this
Amendment, shall remain in full force and effect in accordance with the terms
and conditions thereof.  This Amendment
may be executed simultaneously in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Amendment on the date first written above.

 

	
   

  	
  Oncure Medical Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  William L. Pegler

  
	
   

  	
   

  
	
   

  	
  Name:
  William L. Pegler

  

 

3

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