EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 15,
2004, between Orion HealthCorp, Inc., a Delaware corporation, with an executive
office located at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
(together with its successors and assigns permitted under this Agreement, the
"Company"), Medical Billing Services, Inc., a Texas corporation, with an
executive office located at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000 (together with its successors and assigns permitted under this Agreement,
"Newco"), and Xxx X. Xxxxx, who resides at the address set forth on Schedule I
hereto (the "Executive").
WITNESSETH:
WHEREAS, the Company, Newco and the Executive desire to enter into an
employment arrangement; and
WHEREAS, the Company and Newco have determined that it is in the best
interests of the Company, Newco and the stockholders of the Company to enter
into this Agreement setting forth the obligations and duties of each of the
Company, Newco and the Executive; and
WHEREAS, the Company and Newco wish to assure themselves of the services
of the Executive for the period hereinafter provided, and the Executive is
willing to be employed by Newco for said period, upon the terms and conditions
provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company, Newco and the Executive
(individually, a "Party" and together, the "Parties") agree as follows:
1. Employment. Newco hereby agrees to employ the Executive, and the
Executive hereby agrees to serve Newco, on the terms and conditions set forth
herein. The Executive acknowledges that this Agreement is the only employment
agreement to which he is a party as of the date hereof.
2. Term. Subject to the provisions for earlier termination as hereinafter
provided, the term of this Employment Agreement will begin on the date hereof
and will continue for five (5) years hereafter (the "Initial Term of
Employment"). This Agreement will be automatically renewed at the end of the
Initial Term of Employment and each successive renewal term thereafter for
successive two (2) year terms unless either party sends written notice of
termination to the other party not less than ninety (90) days prior to the
expiration of the then current Term of Employment (as hereinafter defined). The
Initial Term of Employment together with any renewal terms is referred to herein
as the "Term of Employment." The nonrenewal of the term of this Agreement by the
Company will not be a termination without Cause (as defined in Section 8(c)).
3. Position and Duties; Place of Performance.
(a) The Executive will serve as President and Chief Operating
Officer of Newco and will perform all duties customarily attendant to the
position of President and Chief Operating Officer and such other duties as
may reasonably be assigned from time-to-time by the Board of Directors of
the Company (the "Board") that are consistent with his position as
President and Chief Operating Officer.
(b) The Executive will devote his full business time and best
efforts to his employment and perform diligently such duties as are
consistent with his capacity as President and Chief Operating Officer of
Newco and such other duties as the Board reasonably determines that are
consistent with his position. The Executive will devote his entire working
time and attention to the performance of his responsibilities hereunder;
provided, the Executive may make personal investments, engage in outside
non-competitive business activities or engage in other activities for any
charitable or other non-profit institution, provided that such activities
do not interfere with the performance of the Executive's duties hereunder.
(c) In connection with the Executive's employment by Newco, the
Executive will be based at Newco's place of business which on the date
hereof is located in Houston, Texas, or such other location as may,
subject to Section 8(d), be designated from time to time by the Board.
4. Base Salary. The Executive will receive from Newco or the Company an
annual base salary of One Hundred Seventy-Five Thousand Dollars ($175,000) (as
from time to time adjusted, the "Base Salary"), payable in accordance with the
standard practice of Newco or the Company with respect to the payment of
salaries of its employees. The Board will review the Base Salary annually, and
may, in its reasonable discretion, adjust the Base Salary.
5. Annual Bonus. (a) General. The Executive may be paid a bonus annually
based upon the attainment of objectives determined by the Board after
consultation with the Executive. Within 90 days after the start of each fiscal
year, the Board will communicate to the Executive the objectives applicable to
such fiscal year and, unless the Board and the Executive shall mutually agree
otherwise, such objectives shall apply to such fiscal year. For the year ended
December 31, 2005, if the Executive is employed by Newco on December 31, 2005,
the Executive shall be entitled to receive a bonus payment equal to 12.5% of the
amount, if any, by which Newco EBITDA for the 2005 fiscal year (on a pro forma
combined basis, assuming that Newco had been formed on December 31, 2004)
exceeds $1,200,000, up to a maximum bonus payment of $175,000; provided,
however, the Executive may elect not to receive a bonus payment with respect to
any fiscal year by providing written notice of such election to the Company at
any time prior to such payment. For purposes of this Agreement, "Newco EBITDA"
shall mean, with respect to a fiscal year of Newco, the sum of (without
duplication) (a) Newco Net Income for such fiscal year and (b) to the extent
Newco Net Income has been reduced thereby, (i) all income taxes of Newco
recorded as a tax provision in accordance with GAAP for
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such period, (ii) Newco Interest Expense, (iii) Newco Non-Cash Charges and (iv)
all management fees required to be paid by Newco to the Company, all as
determined in accordance with GAAP. The components of Newco EBITDA will be
determined by the Company's independent auditor in accordance with GAAP, subject
to Section 5(c) below.
(b) Definitions. "Newco Interest Expense" shall mean, with respect to a
fiscal year of Newco, the sum of (without duplication) (a) the aggregate of the
interest expense of Newco for such fiscal year determined in accordance with
GAAP and (b) the interest component of capitalized lease obligations accrued by
Newco during such period as determined in accordance with GAAP, less (c) the
amount of any interest income received by Newco during such fiscal period.
"Newco Net Income" shall mean, with respect to a fiscal year of Newco, the
aggregate net income (or loss) of Newco for such fiscal year, determined in
accordance with GAAP.
"Newco Non-Cash Charges" shall mean, with respect to a fiscal year of
Newco, the aggregate depreciation and amortization of Newco reducing Newco Net
Income for such fiscal year (including any depreciation or amortization of the
Company or any of its Subsidiaries other than Newco that was allocated to Newco,
if applicable).
"GAAP" shall mean United States generally accepted accounting principles
as set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in other such
statements by such other entity as have been approved by a significant segment
of the accounting profession, as in effect for the relevant time period.
(c) Disputes. The determination of Newco EBITDA for the year ended
December 31, 2005, and any disputes in respect thereof, shall be handled in the
manner specified in Sections 2.07(a) and (b) of the Amended and Restated
Agreement and Plan of Merger dated as of July 16, 2004 among the Company,
DCPS/MBS Acquisition, Inc., Xxxxxx Xxxx Physician Solutions, Ltd., Medical
Billing Services, Inc. and the sellers party thereto, as amended (the "Merger
Agreement").
6. Other Benefits.
(a) During the Term of Employment, the Executive will be provided
with such medical, hospitalization, insurance, pension plan, equity
incentive, profit sharing and employee benefits, cell phone and such other
similar employment privileges and benefits ("Benefits") as are afforded
generally from time to time to executive employees of the Company, and
four (4) weeks paid vacation each year.
(b) During the term of this Agreement, the Executive shall receive
Two Thousand Eighty-Three Dollars and Thirty-Three Cents ($2,083.33) per
month (pre-tax) as a personal expense allowance.
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7. Expense Reimbursement. During the Term of Employment, the Executive
will be entitled to prompt reimbursement by Newco or the Company for all
reasonable out-of-pocket expenses incurred by him in performing services under
this Agreement, upon submission of such accounts and records as may be required
under Company policy.
8. Termination of Employment. The Executive's employment may be terminated
under the following circumstances:
(a) Death. The Executive's employment is terminated upon his death.
(b) Disability. The Executive's employment may be terminated by the
Company due to illness or other physical or mental disability of the
Executive, resulting in his inability to perform substantially his duties
under this Agreement for a period of ninety (90) or more consecutive days
or for one hundred eighty (180) days in the aggregate during any
consecutive twelve (12) month period ("Disability").
(c) Cause. The Executive's employment may be terminated by the
Company for Cause. For purposes of this Agreement, the Company will have
"Cause" to terminate the Executive's employment upon:
(i) the Executive's indictment for any crime involving monies
or other property or any felony, crime or any offense of moral
turpitude, or his commission of fraud, embezzlement, theft,
dishonesty, willful misconduct or deliberate injury to the Company
or its subsidiaries;
(ii) the Executive's intentional or grossly negligent refusal
or failure to perform his duties or carry out written directions of
the Company's chief executive officer or Board, which refusal or
failure remains uncured or continues more than thirty (30) days
after written notice from the Company specifying in reasonable
detail the nature of the breach, or recurs within such period;
(iii) the Executive's breach of any of his fiduciary duties to
Newco or the Company or making of a willful misrepresentation or
omission, which breach or misrepresentation or omission might
reasonably be expected to have a material adverse effect on Newco's
or the Company's business and which remains uncured or continues
more than thirty (30) days after written notice from the Company
specifying in reasonable detail the nature of the breach or
misrepresentation or omission, or recurs within such period;
(iv) the Executive's breach of any material provision of this
Agreement, which breach, if curable, remains uncured or continues
more than thirty (30) days after written notice from the Company
specifying in reasonable detail the nature of the breach, or recurs
within such period; or
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(v) any misappropriation by the Executive of funds or property
of the Company or any affiliate of the Company.
Any termination for "Cause" will not be in limitation of any other right
or remedy the Company or Newco may have under this Agreement or otherwise.
(d) Good Reason. The Executive may terminate his employment under
this Agreement for Good Reason. For purposes of this Agreement, the
Executive will have "Good Reason" to terminate the Executive's employment
upon the occurrence of any of the following circumstances, without the
Executive's express written consent: (i) a material diminution in the
Executive's position or authority (except during periods when the
Executive is unable to perform all or substantially all of the Executive's
duties and/or responsibilities as a result of the Executive's illness
(either physical or mental) or other incapacity); (ii) a requirement by
the Company that the Executive change the Executive's principal place of
business to a place more than thirty (30) miles from its location on the
date of this Agreement; (iii) a termination of employment by the Executive
within ninety (90) days following a Change in Control (as defined below),
provided, that Good Reason will not exist if the Executive has accepted or
agreed to continue employment following the Change of Control with the
surviving or successor entity and such surviving or successor entity has
agreed to continue or assume this Agreement, provided, further, in the
event of a Change of Control, the Executive is under no obligation to
continue or accept employment with the surviving or successor entity and
may instead elect to terminate his employment for Good Reason upon such
Change of Control; (iv) a breach of this Agreement by Newco or the Company
which is not cured within thirty (30) days of written notice by the
Executive; (v) any reduction in the Executive's Base Salary or any change
adverse to the Executive in the bonus objectives applicable to a fiscal
year after the communication of such objectives to the Executive pursuant
to Section 5(a); or (vi) a failure by the Company (a "Payment Default") to
pay any amounts due to an MBS Seller (as defined in the Merger Agreement)
pursuant to (A) Section 2.07(c) of the Merger Agreement or (B) the MBS
Notes (as defined in the Merger Agreement), in either case within 180 days
of such payment becoming due. The Executive's right to terminate
employment pursuant to this subsection 8(d) will not be affected by the
Executive's Disability. The Executive's continued employment will not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason; provided, however, that the
Executive will be deemed to have waived his rights pursuant to
circumstances constituting Good Reason if he has not provided to the
Company a Notice of Termination (as defined below) within ninety (90) days
following his knowledge of the circumstances constituting Good Reason. A
waiver with respect to the circumstances constituting Good Reason will not
act as a waiver with respect to other future circumstances constituting
Good Reason.
Any termination of the Executive's employment by the Executive must
be communicated by written Notice of Termination to the Company in
accordance with Section 19. For purposes of this Agreement, a "Notice of
Termination" means a notice
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which indicates the specific termination provision in this Agreement
relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
For purposes of this Agreement, a "Change in Control" will occur:
(i) upon the sale or other disposition of 50% or more of the consolidated
assets of the Company taken as a whole; (ii) if shares representing a
majority of the voting power of the Company are acquired by a person or
group (as such term is used in Rule 13d-5 promulgated under the Securities
Exchange Act of 1934, as amended) of persons other than the holders of the
capital stock of the Company as of the date of this Agreement; (iii) upon
a merger or consolidation pursuant to which the holders of the equity
securities of the Company before the merger or consolidation do not own
equity securities representing a majority of the voting power of the
surviving entity after the merger or consolidation; or (iv) upon approval
by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
9. Compensation Upon Termination.
(a) If the Executive's employment is terminated as a result of the
Executive's death or Disability, he, or his estate, will be entitled to:
(i) any Base Salary earned but not yet paid;
(ii) any bonus awarded pursuant to Section 5 of this Agreement
but not yet paid, payable as soon as administratively feasible
following termination of employment;
(iii) a prorated bonus for the year in which his employment
terminates, prorated based on the number of days worked, minus any
bonus payments made pursuant to Section 5 of this Agreement in
respect of the year containing the date of termination, payable as
soon as administratively feasible following the end of the then
current fiscal year of the Company;
(iv) reimbursement in accordance with this Agreement of any
business expense incurred by the Executive but not yet paid, payable
as soon as administratively feasible following termination of
employment; and
(v) other benefits accrued and earned by the Executive through
the date of his death or Disability in accordance with applicable
plans and programs of the Company.
(b) If the Executive's employment is terminated by the Company for
Cause, or by the Executive other than for Good Reason, or as a result of
notice of nonrenewal provided by the Company or the Executive under
Section 2, he will be entitled to:
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(i) any Base Salary earned but not yet paid;
(ii) reimbursement in accordance with this Agreement of any
business expense incurred by the Executive but not yet paid, payable
as soon as administratively feasible following termination of
employment;
(iii) other benefits accrued and earned by the Executive
through the date of his termination in accordance with applicable
plans and programs of the Company;
(iv) if the Executive's employment is terminated as a result
of notice of nonrenewal provided by the Executive under Section 2,
he will be entitled to a prorated bonus for the year in which his
employment terminates, prorated based on the number of days worked,
minus any bonus payments made pursuant to Section 5 of this
Agreement in respect of the year containing the date of termination,
payable as soon as administratively feasible following the end of
the then current fiscal year of the Company; and
(v) if the Executive's employment is terminated as a result of
notice of nonrenewal provided by the Company under Section 2, he
will be entitled to full vesting of any unvested equity incentives,
including without limitation stock options, restricted stock and
deferred restricted stock units.
(c) If the Executive's employment is terminated by the Company
without Cause, or by the Executive for Good Reason, he will be entitled
to:
(i) any Base Salary earned but not yet paid;
(ii) any bonus awarded pursuant to Section 5 of this Agreement
but not yet paid, payable as soon as administratively feasible
following termination of employment;
(iii) continuation of his Base Salary, at the rate in effect
on the date of his termination of employment (which, in the case of
a termination of the Executive for Good Reason pursuant to Section
8(d)(v), shall be deemed to be the rate in effect prior to giving
any effect to the reduction in Base Salary giving rise to such Good
Reason), until the expiration of the Non-Competition Period (as
defined below);
(iv) the greater of: (A) a prorated bonus for the year in
which employment terminates, prorated based on the number of days
worked, or (B) an amount equal to fifty percent (50%) of the average
of the bonus payments made pursuant to Section 5 of this Agreement
during the two (2) calendar years preceding such termination, if
any, minus any bonus payments made pursuant to Section 5 of this
Agreement in respect of the year containing the date of termination,
payable in
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either event as soon as administratively feasible following the end
of the then fiscal year of the Company; provided, however, that this
clause (iv) shall not be applicable in the event that the
Executive's employment is terminated upon notice of nonrenewal
provided by the Company under Section 2;
(v) until the expiration of the Non-Competition Period,
subject to any employee contribution applicable to the Executive on
the date of termination, continued participation in all of the
Company's group medical and dental insurance plans in which he was
participating on the date of his termination of employment, provided
that the Executive is entitled to continue such participation under
applicable law and plan terms;
(vi) reimbursement in accordance with this Agreement of any
business expenses incurred by the Executive but not yet paid to him
on the date of his termination of employment, payable as soon as
administratively feasible following termination of employment; and
(vii) full vesting of any unvested equity incentives,
including without limitation stock options, restricted stock and
deferred restricted stock units.
In the event that, under the terms of any employee benefit plan
referred to in subsection 9(c)(v) above, the Executive may not continue
his participation, he will be provided with the after-tax economic
equivalent of the benefits provided under any plan in which he was
previously eligible to participate for the period specified in subsection
9(c)(v) above. The economic equivalent of any benefit foregone will be
deemed to be the cost that would be incurred by the Executive in obtaining
such benefit on the lowest available individual basis.
(d) Any amounts due under this Section 9 are in the nature of
severance payments or liquidated damages or both, and, to the extent
received by the Executive, will fully compensate the Executive and his
dependents or beneficiaries, as the case may be, for any and all direct
damages and consequential damages that any of them may suffer as a result
of termination of the Executive's employment, and they are not in the
nature of a penalty.
(e) Notwithstanding anything contained herein, any obligation of the
Company or Newco to the Executive under Sections 9(c)(iii), (iv), (v) and
(vii) is conditioned upon (i) the Executive signing a release of claims in
the form attached hereto as Exhibit A (the "Employee Release") within
twenty-one days (or such greater period as the Company may specify)
following the later of the date on which the Executive (or, in the case of
termination by the Executive for Good Reason, the Company) receives notice
of termination of employment or the date the Executive receives a copy of
the Employee Release and upon the Executive not revoking the Employee
Release in a timely manner thereafter and (ii) the Executive's continuing
compliance with the provisions of Section 10. If the Executive breaches
any provision of Section 10, upon written notice of such
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breach and request for repayment from the Company, the Executive shall
promptly pay to the Company an amount equal to the sum of any cash
payments previously paid to the Executive pursuant to Sections 9(c)(iii),
(iv), (v) and (vii). Any such repayment shall not be the exclusive remedy
for any such breach and the Company and Newco shall retain all rights to
pursue other available remedies (whether at law or equity) for any such
breach.
10. Confidentiality and Non-Competition.
(a) The Executive acknowledges that he has had or will have
unlimited access to confidential information and business methods relating
to the Company's and Newco's business and operations and that the Company
and Newco would be irreparably injured and the goodwill of the Company and
Newco would be irreparably damaged if the Executive were to breach the
covenants set forth in this Section 10. The Executive further acknowledges
that the covenants set forth in this Section 10 are reasonable in scope
and duration and do not unreasonably restrict the Executive's association
with other business entities, either as an employee or otherwise as set
forth herein.
(b) During the Term of Employment and thereafter, except as may be
required by law or necessary in connection with any dealings with any
public agency or authority or in the ordinary course of business during
the Term of Employment pursuant to customary non-disclosure agreements,
the Executive will not disclose, disseminate, divulge, discuss, copy or
otherwise use or suffer to be used, including but not limited to in
competition with, or in a manner harmful to the interests of, the Company
or Newco, any confidential information (written or oral) respecting any
material aspect of the Company's or Newco's business, excepting only use
of such data or information as is (i) at the time disclosed, through no
act or failure to act on the part of the Executive, generally known or
available; (ii) furnished to the Executive by a third party as a matter of
right and without restriction on disclosure; or (iii) required to be
disclosed by court order. Upon termination of the Term of Employment, the
Executive will return to the Company any and all materials in tangible or
electronic form containing confidential information belonging to the
Company or Newco.
(c) During the Term of Employment and continuing until the earlier
of the termination of the Non-Competition Period or the date on which the
Executive terminates his employment with Newco for Good Reason upon a
Payment Default, the Executive will not in the states of California,
Florida, Georgia, Illinois, Iowa, New Jersey, Ohio or Texas, directly or
indirectly, whether as an individual on the Executive's own account, or as
a shareholder, partner, member, joint venturer, director, officer,
employee, consultant, creditor and/or agent, of any person, firm or
organization or otherwise:
(i) own, manage, control or participate in the ownership,
management or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
firm, association or other business entity or otherwise engage in
any business that is engaged in the business of the Company or any
of
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the Company's subsidiaries (collectively, "Subsidiaries"), as such
business is conducted on the applicable date during the Term of
Employment, or in the case of the Non-Competition Period, as of the
date the Executive ceases to be employed by Newco, in any capacity,
including as a consultant;
(ii) directly or indirectly solicit, encourage or induce any
person who is a present or future employee, officer, agent,
affiliate or customer of the Company or any Subsidiary to terminate
or materially alter such person's relationship with the Company or
such Subsidiary;
(iii) induce any supplier of the Company or any Subsidiary, to
refuse to do business with the Company or any Subsidiary, on as
favorable terms as previously done with the Company or any
Subsidiary, as the case may be; or
(iv) engage in disparagement (which will not include the
providing of accurate information without invidious intent) of the
Company or any Subsidiary by any means to any person.
For purposes of this Agreement, "Non-Competition Period" shall mean the
period during the Term of Employment and thereafter until the second
anniversary of the date of termination of the Executive's employment with
Newco; provided, however, that the Company may, by written notice to the
Executive (whether given before or after the date of termination of the
Executive's employment with Newco), shorten the portion of the
Non-Competition Period occurring following the date of termination of the
Executive's employment with Newco to any date specified in such notice
which occurs on or after the earlier of (x) the second anniversary of the
date of termination of the Executive's employment with Newco and (y) the
date of expiration of the then current Term of Employment. Notwithstanding
anything herein to the contrary, the Non-Competition Period shall
terminate if the Company and Newco fail to pay any amounts due to the
Executive under this Agreement within sixty (60) days of such payment
being due. Notwithstanding the foregoing, in the event that the Company or
the Executive provides notice of nonrenewal under Section 2, then: (1) the
Company shall have the option to continue to pay the Executive his Base
Salary, at the rate in effect on the date of his termination of
employment, until the expiration of the Non-Competition Period; (2) if the
Company exercises such option, it may discontinue the payment of Base
Salary at any time; (3) the Executive shall be subject to Section 10(c)(i)
only for so long as the Company continues to pay the Executive his Base
Salary; and (4) if the Company stops paying the Executive his Base Salary,
then the Executive shall no longer be subject to Section 10(c)(i), but
shall remain subject to the rest of this Section 10.
(d) Notwithstanding anything herein to the contrary, the Executive
will be permitted to own shares of any class of capital stock of any
publicly held corporation so long as the aggregate holdings of the
Executive represent less than one percent (1%) of the outstanding shares
of such class of capital stock.
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11. Rights and Remedies Upon Breach.
(a) The Executive expressly agrees and understands that the remedy
at law for any breach by the Executive of Section 10 will be inadequate
and that the damages flowing from such breach are not readily susceptible
to being measured in monetary terms. Accordingly, it is acknowledged that
upon adequate proof of the Executive's violation of Section 10, the
Company and Newco will be entitled, among other remedies, to injunctive
relief and may obtain a temporary restraining order restraining any
threatened or further breach. Nothing in this Section 11(a) will be deemed
to limit the Company's or Newco's remedies at law or in equity for any
breach by the Executive of any of the provisions of this Agreement which
may be pursued or availed of by the Company or Newco.
(b) In the event any court of competent jurisdiction determines that
the specified time period or geographical area set forth in Section 10 is
unreasonable, arbitrary or against public policy, then a lesser time
period or geographical area that is determined by the court to be
reasonable, non-arbitrary and not against public policy may be enforced.
12. Withholding Taxes. All payments to the Executive or his beneficiary
will be subject to withholding on account of federal, state and local taxes as
required by law. If any payment hereunder is insufficient to provide the amount
of such taxes required to be withheld, the Company or Newco may withhold such
taxes from any other payment due the Executive or his beneficiary.
13. Assignability; Binding Nature. This Agreement will be binding upon and
inure to the benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and assigns. No rights or obligations of the Company
or Newco under this Agreement may be assigned or transferred by the Company or
Newco except that such rights or obligations may be assigned or transferred
pursuant to (i) a merger or consolidation in which the Company or Newco is not
the continuing entity or (ii) a sale or liquidation of all or substantially all
of the assets of the Company or Newco, provided that the assignee or transferee
is the successor to all or substantially all of the assets of the Company or
Newco, as applicable, and such assignee or transferee assumes the liabilities,
obligations and duties of the Company or Newco, as applicable, as contained in
this Agreement, either contractually or as a matter of law. Each of the Company
and Newco further agrees that, in the event of a sale of assets or liquidation
as described in the preceding sentence, it will use its best efforts to cause
such assignee or transferee to expressly assume the liabilities, obligations and
duties of the Company or Newco, as applicable, hereunder. No obligations of the
Executive under this Agreement may be assigned or transferred by the Executive.
Notwithstanding anything to the contrary contained in this Agreement, if the
Sellers exercise the ROFR (as defined in Section 6.11 of the Merger Agreement)
and purchase the capital stock or assets of Newco pursuant thereto, this
Agreement shall immediately terminate without further obligation on the part of
any party hereto; provided, however, that the Executive shall continue to be
bound by the provisions of Sections 10(a) and 10(b) with respect to confidential
information of the Company.
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14. Entire Agreement. Except to the extent otherwise provided herein, this
Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes any prior agreements,
whether written or oral, between the Parties concerning the subject matter
hereof.
15. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Executive
and an authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party will be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.
16. Severability. In the event that any provision or portion of this
Agreement is determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement will be unaffected
thereby and will remain in full force and effect to the fullest extent permitted
by law.
17. Survivorship. The respective rights and obligations of the Parties
hereunder will survive any termination of the Executive's employment with Newco
to the extent necessary to the intended preservation of such rights and
obligations as described in this Agreement.
18. Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the laws of the State of Texas, without reference
to principles of conflict of laws.
19. Notices. Any notice given to any Party must be in writing and will be
deemed to have been given when delivered personally or one (1) day after having
been sent by overnight courier service or three (3) days after having been sent
by certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice of:
If to the Company, Newco Orion HealthCorp, Inc.
or the Board: 00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxxx Partners
0000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx
12
and: Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
If to the Executive: Xxx X. Xxxxx
Address set forth on Schedule I hereto
20. Headings. The headings of the sections contained in this Agreement are
for convenience only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
13
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first above written.
ORION HEALTHCORP, INC.
By: /s/ Xxxxx XxXxxxx
----------------------------------------
Name: Xxxxx XxXxxxx
Title: President
MEDICAL BILLING SERVICES, INC.
By: /s/ Xxxxxx Xxxx
----------------------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
XXX X. XXXXX
By: /s/ Xxx X. Xxxxx
----------------------------------------
