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SUCCESSION AGREEMENT
This Succession Agreement (the "Agreement") is made and entered into this 1st
day of July, 1998 by and among Xxxxx X. Xxxxxxxxxx, M.D. ("Xx. Xxxxxxxxxx"), and
the Advanced Magnetic Resonance Imaging, PC, a New York professional corporation
(the "Medical Group").
RECITALS
This Agreement is made with reference to the following facts:
A. The Medical Group is a professional medical corporation (a
"Professional Medical Corporation") within the meaning of the New York
Professional Corporation Act (the "Professional Corporation Act").
B. The Medical Group has authorized stock consisting of 1,000 shares.
The Medical Group currently has one hundred (100 shares issued and outstanding.
C. The legal and beneficial owners of all of the issued and outstanding
shares of the Medical Group (the "Shares") is Xxxxx X. Xxxxxxxxxx, M.D. (100
Shares).
D. The only member of the Board of Directors of the Medical Group is
Xxxxx X. Xxxxxxxxxx, M.D. (hereinafter referred to as the "Director").
E. The parties hereto desire to promote their mutual interests by
imposing certain restrictions on the sale, transfer or other disposition of the
shares of the Medical Group and provide for certain disposition of the shares in
the event of the death, permanent disability, permanent incapacity or the
termination of employment of Xx. Xxxxxxxxxx, thus insuring the continued
successful operation of the business of the Medical Group through continuous
harmonious management and share ownership. Further, the parties hereto desire to
set forth certain of their understandings with reference to other matters
pertaining to the Medical Group.
F. The Medical Group is entering into that certain management agreement
(the "Management Agreement") dated as of the date hereof, between the Medical
Group and Forest Hills Imaging Venture, a New York joint venture (hereinafter
the "Joint Venture" or "Raytel"). The parties hereto acknowledge that, but for
the execution of this Agreement, neither the Joint Venture nor Raytel would
enter into the Management Agreement.
G. Each of the parties has agreed to be bound by the covenants and
agreements set forth herein, all of which are for the mutual benefit of the
parties hereto, collectively and individually.
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NOW THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
1. GENERAL PURPOSE: CONSTRUCTIONS.
The purpose of this Agreement is to provide, in the event of the death
or permanent disability or permanent incapacity of Xx. Xxxxxxxxxx, or the
termination (for any reason whatsoever) of Xx. Xxxxxxxxxx, as an employee of
Raytel Medical Corporation (collectively, "Succession Events") for (i) the
orderly transfer of ownership of the stock of the Medical Group and (ii) the
directors of the Medical Group. In connection therewith, it is the intent of the
parties hereto that:
(a) The Medical Group maintain its continuous existence as a
Professional Medical Corporation.
(b) In the event of a Succession Event, the Medical Group
shall have at least one (1) shareholder.
(c) The Medical Group shall continue to honor the Management
Agreement.
2. EVENTS PRIOR TO SUCCESSION EVENTS.
2.1 Xx. Xxxxxxxxxx agrees to maintain at all times throughout the
Medical Group's existence a Board of Directors of one (1) member who is a person
licensed to practice medicine in New York and such licensed persons shall be
designated as a licensed physician in accordance with the New York Professional
Corporation Act. In addition, each member of the Board of Directors must not be
a "disqualified person" as defined in the Professional Corporation Act as being
legally disqualified (temporary or permanently) or not licensed to render
professional services in the medical industry. A licensed person who is legally
qualified is hereinafter referred to as a "Qualified Medical Professional". Xx.
Xxxxxxxxxx (or any other shareholder who becomes a party hereto (a "Successor
Shareholder"), will vote only for directors who are Qualified Medical
Professionals.
2.2 Xx. Xxxxxxxxxx agrees that he will vote the Shares to elect
at least one (1) member to the Board of Directors, who will be a Qualified
Medical Professional. Initially, Xx. Xxxxxxxxxx has voted his Shares to elect
himself to the Board of Directors of the Medical Group. If another person is
elected to succeed any him, such successor shall be a Qualified Medical
professional and qualified to serve on the Board of Directors.
2.3 During the term of this Agreement, Xx. Xxxxxxxxxx shall not
sell, transfer, pledge or otherwise hypothecate the Shares. The Shares will be
marked with a restrictive legend with respect thereto.
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2.4 Xx. Xxxxxxxxxx agrees to, and shall cause all directors of
the Medical Group to, take all steps necessary to ensure that the Medical Group
complies with all provisions of the Professional Corporation Act and remains in
good standing as a Professional Corporation in the State of New York.
3. EVENT OF DEATH.
3.1 Shareholder Issues. If Xx. Xxxxxxxxxx is the remaining sole
shareholder of the Medical Group, then in the event of death of the last
survivor, if legal counsel for the Medical Group determines that ownership of
the Shares by the representative or successor-in-interest to the survivor is not
permitted or legal under the Professional Corporation Act, then such Shares
shall be sold and transferred to the Medical Group in accordance with Article
III of the Bylaws of the Medical Group. In such event, the Medical Group shall,
in order to have one (1) shareholder, do one of the following:
(a) The Medical Group shall sell one hundred (100) newly
issued shares to Xxxxxx X. Xxxxxxx, M.D., or his designee,
who shall be designated the "Successor Shareholder"
hereunder, and shall agree to purchase such shares;
provided that such sale shall be consummated only if Xx.
Xxxxxxx or his designee is a Qualified Medical
Professional on the Board of Directors of Raytel Medical
Corporation; or
(b) If Xx. Xxxxxxx or his designee is not a member of the
Board of Directors of Raytel Medical Corporation , then
the Medical Group shall sell one hundred (100) newly
issued shares to a Qualified Medical Professional who is a
member of the Board of Directors of Raytel Medical
Corporation. The Successor Shareholder shall be selected
in the manner set forth in sub-paragraph (d) herein. Such
Successor Shareholder shall become a party to this
Agreement and agree to be bound by the terms hereof.
(c) All purchases of shares hereunder shall be at a price of
Ten Dollars ($10.00) per share.
(d) Each Successor Shareholder shall be a Qualified Medical
Professional, and each Successor Shareholder (other than
the Personal Representative of the Estate of Xx.
Xxxxxxxxxx) shall also be a member of the Board of
Directors of Raytel Medical Corporation. Each Successor
Shareholder shall be designated as being eligible to be a
shareholder and director of the Medical Group by the Board
of Directors of Raytel Medical Corporation.
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3.2 Director Issues.
(a) Xx. Xxxxxxx, or his designee, shall agree that when he
becomes the Successor Shareholder and a party to this
Agreement in accordance with the provisions of paragraph
3.1(d), herein above, that in the event of the death of
Xx. Xxxxxxxxxx, he shall fill the vacancy on the Board of
Directors of the Medical Group by electing the Successor
Shareholder, selected pursuant to paragraph 3.1(b), above
to the Board.
(b) In the event that Xx. Xxxxxxx predeceases Xx. Xxxxxxxxxx
or becomes disqualified from becoming the Successor
Shareholder in accordance with the terms set forth in this
Agreement, then in such event, Xx. Xxxxxxxxxx (if he is
still the sole stockholder) will appoint either one (1) or
more Qualified Medical Professionals to the Board of
Directors of the Medical Group as the replacement for Xx.
Xxxxxxx, hereunder, pursuant to the requirements of
paragraph 3.1(d).
(c) Each Successor Shareholder shall exert good faith best
efforts to vote his or her shares hereunder to elect all
Successor Shareholders to the Board of Directors of the
Medical Group; provided, however, no Successor Shareholder
shall be obligated to elect any such person if he or she
believes it is not in the best interest of the Medical
Group. In such event, the Successor Shareholder shall
select a person from among the qualified and licensed
professionals in the medical industry in New York who is
reasonably acceptable to the Board of Directors of Raytel
Medical Corporation.
4. PERMANENT DISABILITY AND PERMANENT INCAPACITY.
4.1 Shareholder Issues. In the event of the permanent disability
or permanent incapacity of Xx. Xxxxxxxxxx as determined by a recognized medical
authority, then the Shares shall be sold and transferred to the Medical Group in
accordance with Article III of the Bylaws of the Medical Group. In such event,
the Medical Group shall sell newly issued shares to a Successor Shareholder in
the manner set forth in paragraph 3.1 herein.
4.2 Director Issues. Within thirty (30) days from the sale of
shares pursuant to this section 4, a special meeting of the shareholder shall be
called in accordance with Article IV, Section 2 of the Bylaws of the Medical
Group to elect new directors to the Board.
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5. TERMINATION OF XX. XXXXXXXXXX AS AN OFFICER AND RESIGNATION AS
DIRECTOR OF MEDICAL GROUP.
5.1 Shareholder Issues. In the event of:
(a) voluntary resignation by Xx. Xxxxxxxxxx as an officer and
director of the Medical Group;
(b) mutual agreement of termination by Xx. Xxxxxxxxxx and
Raytel Medical Corporation resulting in his resignation as
an officer of Raytel Medical Corporation;
(c) termination by Heart Institute of Port St. Lucie, Inc. of
the employment agreement between Xx. Xxxxxxxxxx and Heart
Institute of Port St. Lucie, Inc., dated January 1, 1996,
as the same may be amended and/or renewed from time to
time;
the Corporation shall sell one hundred (100) newly issued shares to Xxxxxx X.
Xxxxxxx, M.D., or his designee, who shall then become the Successor Shareholder
in the manner set forth in paragraph 3.1(b) at a price of Ten Dollars ($10.00)
per share.
5.2 Director Issues. Within thirty (30) days from the sale of
shares pursuant to this section 5, a special meeting of the shareholder shall be
called in accordance with Article IV, Section 2 of the Bylaws of the Medical
Group to elect directors.
6. EVENTS AFFECTING SUCCESSOR SHAREHOLDERS. Anytime there is only one
(1) shareholder in the Medical Group, in the event of death, permanent
disability, permanent incapacity of such Successor Shareholder, the
disqualification of such Shareholder as a Qualified Medical Professional or the
removal of such Successor Shareholder who is a director from the Medical Group's
Board of Directors in accordance with the provisions of the Medical Group's
Bylaws, all shares held by such Successor Shareholder shall be sold and
transferred to the Medical Group in accordance with Article III of the Medical
Group's Bylaws, and the Medical Group shall sell shares to a new Successor
Shareholder in the manner set forth in paragraph 3.1(b). Within thirty (30) days
from the sale of shares to a Successor Shareholder pursuant to this paragraph 6,
a special meeting of the shareholder shall be called in accordance with Article
IV, Section 2 of the Bylaws of the Medical Group to elect directors.
7. TERM AND AMENDMENT TO BYLAWS. This Agreement shall be in full force
and effect for so long as the Management Agreement is in full force and effect.
This Agreement shall terminate upon the earlier termination of the Management
Agreement (whether it be the Initial Term or any Renewal Term as defined
therein). Xx. Xxxxxxxxxx and each Successor Shareholder agree that they will not
amend the Bylaws of the Medical Group in
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a manner adverse to the purposes set forth and specified in paragraphs 1, 4.1,
5.2 or 6 hereof so long as this Agreement is in effect.
8. COMMUNITY PROPERTY INTEREST. It is intended by this Agreement
that the parties hereto shall subject their entire interest in the shares owned
by them to the terms of this Agreement, irrespective of any community property
interest of any spouse.
9. DELIVERY OF SHARES, STOCK ASSIGNMENTS. Upon the purchase of any
shares hereunder, the Medical Group or the person selling the shares shall
deliver to the Medical Group and/or the purchasing shareholder, as the case may
be, the stock certificate or certificate evidencing the shares purchased,
together with all necessary or appropriate stock assignments separate from
certificate.
10. FURTHER AGREEMENTS.
10.1 Party to Agreement. Any Successor Shareholder shall become a
party to this Agreement and agree to be bound by the term hereof.
10.2 Transfer of Shares. During the term of this Agreement, a
Successor Shareholder shall not sell, transfer, pledge or otherwise
hypothecate his/her shares. The shares will be marked with a restrictive
legend with respect thereto.
10.3 Compliance. Any Successive Shareholder agrees to, and shall
cause all directors of the Medical Group to, take all steps necessary to
ensure that the Medical Group complies with all provisions of the
Professional Corporation Act and remains in good standing as a
Professional Medical Corporation in the State of New York.
11. COPY OF AGREEMENT. The Medical Group shall keep a copy of this
Agreement on file in the principal business office of the Medical Group.
12. NOTICE.Any and all notices or other matters required or permitted by
this Agreement to be served on, given to or delivered to a party shall in
writing and shall be deemed duly served, given or delivered when personally
delivered to such party, or in lieu of such personal service, when deposited in
the United States mail, certified, postage prepaid, or by facsimile transmission
followed by mail delivery, addressed to such person as follows:
To:"Raytel" or Forest Hills Imaging Venture" To: "Medical Group" or "Xx. Xxxxxxxxxx"
Xxxxxx Xxx, Senior Vice President Xxxxx X. Xxxxxxxxxx, M.D., President
Forest Hills Imaging Venture Advanced Magnetic Resonance Imaging, PC
7 Waterside Crossing 0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxx Xxxxx, XX 00000
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Any party hereto may change its address for the purpose of receiving
notices, demands and other communications as herein provided by a written notice
given in the manner aforesaid to the other parties hereto.
13. ATTORNEYS' FEES. Should any parties hereto institute any action
or proceeding at law or in equity or in connection with an arbitration, to
enforce any provision of this Agreement, including an action for declaratory
relief, or for damages by reason of an alleged breach of any provision of this
Agreement, or otherwise in connection with this Agreement, or any provision
thereof, the prevailing party shall be entitled to recover from the losing party
or parties reasonable attorneys' fees and costs for services rendered to the
prevailing party in such action or proceeding.
14. MISCELLANEOUS.
14.1 Applicable Law. This Agreement shall, in all respects, be
governed by the laws of the State of New York applicable to agreements executed
and to be performed in New York.
14.2 Severability. Nothing contained herein shall be construed so
as to require the commission of any act contrary to law, and wherever there is
any conflict between any provisions contained herein and any present or future
statute, law, ordinance or regulation, the latter shall prevail; but the
provision of this Agreement which is affected shall be curtailed and limited
only to the extent necessary to bring it in the requirements of the law.
14.3 Further Assurances. Each of the parties hereto shall execute
and deliver any and all additional papers, documents, and other assurance, and
shall do any and all acts and things reasonably necessary in connection with the
performance of his or her obligations hereunder to carry out the intent of the
parties hereto.
14.4 Modifications or Amendments. No amendment, change or
modification of this Agreement shall be valid, unless in writing and signed by
all of the parties hereto.
14.5 Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to its subject matter
and any and all prior agreements, understandings or representations with respect
to its subject matter are hereby terminated and canceled in their entirety and
are of no further force or effect.
14.6 Non-Waiver. No Waiver by any party hereto for a breach of
any provision of this Agreement shall constitute a waiver of any preceding or
succeeding breach of the same or any other provision hereof.
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14.7 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.
14.8 Number and Gender. In this Agreement, the masculine,
feminine or neuter gender, and the singular or plural number, shall each be
deemed to include the other, whenever the context so requires.
14.9 Captions. The Captions appearing at the commencement of the
sections hereof are descriptive only and for convenience in reference. Should
there be any conflict between any such caption and the section at the head of
which it appears, the section and not such caption shall control and govern in
the construction of this Agreement.
14.10 Continued Tenure. The parties hereto acknowledge that
nothing contained in this Agreement shall be deemed as a guarantee of continued
tenure on the Board of Directors of the Medical Group.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
"Medical Group"
Advanced Magnetic Resonance Imaging, PC Xxxxx X. Xxxxxxxxxx, M.D.
a New York professional corporation
By: /s/ Xxxxx X. Xxxxxxxxxx, M.D. By: /s/ Xxxxx X. Xxxxxxxxxx, M.D.
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Xxxxx X. Xxxxxxxxxx, M.D. Xxxxx X. Xxxxxxxxxx, M.D.
Its: President
Raytel Medical Corporation Forest Hills Imaging Venture
a New York joint venture
By: /s/ Xxxxxx Xxx By: /s/ Xxxxxx Xxx
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Xxxxxx Xxx Xxxxxx Xxx, Senior Vice President
on behalf of Raytel Imaging Holdings, Inc.
Its: Senior Vice President Its: General Partner
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