EXHIBIT 10.31
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into effective
as of December 4, 2002, between Radiologix, Inc., a Delaware corporation
("Radiologix"), and Xxxx X. Xxxxx ("Xxxxx"), an individual residing in the State
of Texas.
RECITALS
Xxxxx has served as the Chairman of the Board and Chief Executive Officer
of Radiologix. Because Xxxxx'x employment with Radiologix has ended, Radiologix
wishes to engage Xxxxx to serve as a consultant to Radiologix, upon and subject
to the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. ENGAGEMENT. Radiologix hereby appoints and engages Xxxxx as
consultant effective as of the date of this Agreement with respect to the
matters specified herein, subject to the terms and conditions of, and for
the compensation provided in, this Agreement. Xxxxx accepts this
appointment and engagement effective as of the commencement of the Term
(defined below) as a consultant to Radiologix, subject to the terms and
conditions of this Agreement.
2. TASKS AND RESPONSIBILITIES OF PARTIES. During the Term (defined
below) of this Agreement, Xxxxx will be subject to the direction of the
Chairman of the Board of Radiologix. In addition, during the Term,
Radiologix promises to furnish to Xxxxx Confidential Information of
Radiologix, in order to permit Xxxxx to perform his obligations as set
forth in this Agreement and on Exhibit A attached hereto.
3. STANDARDS OF DUTY. During the Term, Xxxxx shall devote his best
efforts and skills to his duties under this Agreement, endeavoring to
utilize his full ability and knowledge of Radiologix's business and
projecting a positive and professional image on behalf of Radiologix.
4. NON-DISCLOSURE. Xxxxx acknowledges, understands and agrees that all
Confidential Information (defined below), whether developed by Radiologix
or others or whether developed by Xxxxx while carrying out the terms and
provisions of this Agreement (or previously while employed by Radiologix),
shall be the exclusive and confidential property of Radiologix and shall be
regarded, treated and protected as such. Xxxxx shall not use, copy or
transfer Confidential Information other than as is necessary in carrying
out his duties pursuant to this Agreement or in preserving, defending or
pursuing his rights or remedies under this Agreement or any other agreement
or relationship between Xxxxx and Radiologix or its Affiliates.
5. INVENTIONS AND DISCOVERIES. Any and all inventions, products,
discoveries, improvements, copyrightable work, trademarks, service marks,
ideas, processes, formulas, methods, designs, techniques or trade secrets
made, developed, conceived or resulting from work performed by Xxxxx during
the Term that may be directly or indirectly useful or related to the
business of Radiologix shall be deemed Confidential Information for
purposes of this Agreement and shall be Radiologix's exclusive property.
Xxxxx shall also make available to Radiologix any and all information of
which he had knowledge and that is relevant to the business of Radiologix
and its Affiliates and shall make all suggestions and recommendations that
he feels will benefit Radiologix.
6. PROHIBITED ACTIVITIES.
6.1. DESCRIPTION OF PROSCRIBED ACTIONS. In consideration for the
disclosure of Confidential Information described in Section 3
of this Agreement, during the Term of this Agreement, Xxxxx
shall not:
(a) directly or indirectly, engage or invest in, own, manage,
operate, control or participate in the ownership,
management, operation or control of, be employed by,
associated or in any manner connected with, or render
services or advice to, any Competing Business (defined
below); provided, however, that Xxxxx may invest in the
securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if
such securities are listed on any national or regional
securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934;
(b) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer,
employee, employer, advisor (whether paid or unpaid),
stockholder, partner or in any other individual or
representative capacity whatsoever, either for his own
benefit or for the benefit of any other Person (defined
below) or entity, divert or take away any customers or
clients of Radiologix, such activities are associated
with or related to the business referred to in (a)(i)
above; or
(c) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer,
employee, employer, advisor (whether paid or unpaid),
stockholder, partner or in any other individual or
representative capacity whatsoever, either for his own
benefit or for the benefit of any other Person or entity,
either (i) hire, attempt to hire, contact or solicit with
respect to hiring, any employee of Radiologix, (ii)
induce or otherwise counsel, advise or encourage any
employee of Radiologix to leave the employment of
Radiologix, or (iii) induce any representative or agent
of Radiologix to terminate or modify its relationship
with Radiologix.
6.2. JUDICIAL MODIFICATION. Xxxxx agrees that if a court of
competent jurisdiction determines that the length of time or
any other restriction, or portion thereof, set forth in this
Section 6 is overly restrictive and unenforceable, the court
may reduce or modify such restrictions to those which it
deems reasonable and enforceable under the circumstances, and
as so reduced or modified, the parties hereto agree that the
restrictions of this Section 6 shall remain in full force and
effect. Xxxxx further agrees that if a court of competent
jurisdiction determines that any provision of this Section 6
is invalid or against public policy, the remaining provisions
of this Section 6 and the remainder of this Agreement shall
not be affected thereby, and shall remain in full force and
effect.
6.3. SURVIVAL OF COVENANTS. The covenants and agreements of Xxxxx
set forth in this Section 6 are of a continuing nature and
shall survive the expiration, termination or cancellation of
this Agreement regardless of the reason therefor.
7. TERMINATION UPON DEATH. Notwithstanding any other provision of this
Agreement, at any time during the Term, Xxxxx'x engagement hereunder shall
terminate upon his death; provided, however, that if Xxxxx shall die during the
Term, his heirs or estate (as the case may be) shall be entitled to retain all
payments previously made hereunder and no further payments shall be made
hereunder.
8. INJUNCTIVE RELIEF. Because of the unique nature of the Confidential
Information, Xxxxx acknowledges, understands and agrees that Radiologix will
suffer immediate and irreparable harm if Xxxxx fails to comply with any of his
obligations under Sections 4, 5 and 6 of this Agreement, and that monetary
damages will be inadequate to compensate Radiologix for such breach.
Accordingly, Xxxxx agrees that Radiologix shall, in addition to any other
remedies available to it at law or in equity, be entitled to temporary,
preliminary, and permanent injunctive relief to enforce the terms of Sections 4,
5 and 6 without the necessity of proving inadequacy of legal remedies or
irreparable harm.
9. COMPENSATION. Subject to the terms and conditions hereof, in
consideration of the consulting services to be rendered by Xxxxx to Radiologix
hereunder, and in consideration of the covenants of Xxxxx set forth in Sections
4, 5 and 6 herein, Radiologix hereby agrees to pay Xxxxx $18,416.67 per month
payable on the last day of each month
10. TERM. This Agreement shall be for a term commencing on the earlier of
May 31, 2003 or the first date of employment of Radiologix's new Chief Executive
Officer (the "Separation Date") and ending on the earlier of six months after
the Separation Date or August 31, 2003 (the "Term"). If Xxxxx resigns his
positions with Radiologix prior to the Separation Date, accepts a full-time
position with another Person or entity prior to the Separation Date, or
otherwise breaches the Separation Agreement and Release dated December 4, 2002
between Xxxxx and Radiologix, this Agreement shall be null and void.
11. REIMBURSEMENT OF EXPENSES. In the event Xxxxx is requested by
Radiologix to provide services which require travel, Radiologix will reimburse
Xxxxx for all such business expenses actually and reasonably incurred in
connection with the performance of the specific request. Radiologix will not be
required to reimburse Xxxxx for any expense which is not directly related to a
specific project which Radiologix has requested Xxxxx'x assistance.
12. INDEPENDENT CONTRACTOR. While serving as consultant, Xxxxx shall at all
times be an independent contractor rather than a co-venturer, agent, employee or
representative of Radiologix. Xxxxx is responsible for scheduling his own hours;
for determining where, when and how services are to be provided; and for
providing any and all equipment necessary to perform his duties within this
Agreement. Xxxxx acknowledges and agrees that he shall be obligated to report to
the Internal Revenue Service and all other taxing authorities all compensation
received by him under this Agreement. Xxxxx further acknowledges that he is
responsible for making any and all payments for withholding for federal and
state unemployment taxes, social security and Medicare taxes, and any other
withholding payment required by the Internal Revenue Service or other taxing
authority.
13. DEFINITIONS. The following terms shall have the meanings ascribed
to them below, the following definitions to be equally applicable to both
the singular and plural form of the terms:
13.1. "Affiliate" shall mean when used with reference to a
specified Person: (i) any Person that directly or indirectly
through one or more intermediaries controls or is controlled
by or is under common control with the specified Person; and
(ii) any Person that is an officer of, partner in, or serves
in a similar capacity to, the specified Person or of which
the specified Person serves in a similar capacity; and (iii)
any Person owning or controlling ten percent (10%) or more
of the outstanding voting securities of such other entity;
and (iv) any member of the immediate family of the specified
Person or any legal representative or trustee for the
benefit of such member.
13.2. "Competing Business" shall mean any individual, business,
firm, company, partnership, joint venture, organization, or
other entity that is involved in the acquisition or
management of radiology physician practices or that directly
provides management services in the area of radiology.
13.3. "Confidential Information" shall have the meaning given it
in the Confidentiality, Proprietary Information and
Inventions Agreement Xxxxx executed in connection with
Xxxxx'x Employment Agreement entered into between Xxxxx and
American Physician Partners, Inc. (now known as Radiologix)
on May 28, 1998, as amended on January 1, 1999, July 1,
2000, and February 11, 2002.
13.4. "Person" shall mean an individual, partnership, corporation,
trust or other entity.
14. GOVERNING LAW. This Agreement shall be deemed performable by all
parties in, and venue shall be in the state or federal courts located in,
Dallas County, Texas and the construction and enforcement of this Agreement
shall be governed by Texas law without regard to its conflicts of law
rules.
15. ENTIRE AGREEMENT. This Agreement, which incorporates all prior
understandings relating to its subject matter, contains the entire
agreement of the parties with respect to its subject matter and shall not
be modified except by written instrument executed by each party.
16. SEVERABILITY. If any of the terms and conditions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be
invalid under, the laws of any political body having jurisdiction over this
subject matter, that contravention or invalidity shall not invalidate the
entire Agreement. Instead, this Agreement shall be construed as it if did
not contain the particular provision or provisions held to be invalid, the
rights and obligations of the parties shall be construed and enforced
accordingly, and this Agreement shall remain in full force and effect.
17. CONSTRUCTION. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement
or any other provisions hereof. Whenever the context requires, the gender
of all words used in this Agreement shall include the masculine, feminine,
and neuter, and the number of all words shall include the singular and the
plural. In the event of a conflict among this Agreement and any Exhibit,
this Agreement shall control.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all the parties had signed the same
document. All counterparts shall be construed together and shall constitute
one and the same instrument.
19. SUCCESSORS AND ASSIGNS. Except as otherwise provided, this
Agreement shall apply to, and shall be binding upon, the parties hereto,
their respective successors and assigns, and all Persons claiming by,
through or under any of these Persons. This Agreement is personal to Xxxxx
and cannot be assigned or delegated by Xxxxx.
20. NO THIRD PARTY BENEFICIARY. Any agreement to pay an amount or any
assumption of liability herein contained, express or implied, shall be only
for the benefit of the undersigned parties and their permitted successors
and assigns, and such agreements and assumption shall not inure to the
benefit of the obligees of any other party whomsoever, it being the
intention of the undersigned that, except as otherwise expressly
contemplated herein, no one shall be deemed to be a third party beneficiary
of this Agreement.
* * * * *
EXECUTED as of December 4, 2002.
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
RADIOLOGIX, INC.
By: /s/ Xxxx X. Xxxxx
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Title: Exec. VP, General Counsel and
Secretary
EXHIBIT A
CONSULTING RESPONSIBILITIES
Xxxxx shall use his best efforts to maintain Radiologix's business and
goodwill and reputation with the customers of Radiologix and Radiologix's
employees, suppliers, distributors, creditors and any others having business
relations with Radiologix and in the business community generally, during the
transition period. During the Term hereof, Xxxxx will be subject to the general
direction of Radiologix and will perform the consulting services requested by
Radiologix, at times and places as are mutually agreed upon by Xxxxx and
Radiologix; provided, however, that Xxxxx, subject to his other responsibilities
and long-standing commitments, shall be available for assignments, meetings, and
other projects during reasonable business hours with reasonable advance notice
from Radiologix. Xxxxx'x duties shall include, but not be limited to, assisting
Radiologix in recruiting, screening, evaluating and recommending radiology
practices and imaging centers for affiliation with or acquisition by Radiologix.
In addition, Xxxxx shall assist Radiologix in its efforts to develop and expand
its (i) networks through the addition of hospitals and/or managed care
organizations, (ii) strategic alliances with other healthcare providers and
payors, (iii) relationships with equipment and supply vendors and (iv) plan for
outsourcing imaging services from hospitals.
Xxxxx agrees to cooperate with Radiologix in any litigation or
administrative proceedings involving any matters which Xxxxx was involved during
his employment with Radiologix and the term of this Agreement. Radiologix shall
reimburse Xxxxx for travel expenses approved by Radiologix incurred in providing
such assistance.