Exhibit 10.10

 

Execution Version

 

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InSight Health Corp.
26250 Enterprise Court
Suite 100
Lake Forest, CA 92630-8405

Telephone -    949.282.6000

Facsimile -      949.462.3703

 

 

October 26, 2007

 

 

PERSONAL AND CONFIDENTIAL

 

Bret W. Jorgensen

7891 Muirfield Way

PO Box 675926

Rancho Santa Fe, CA  92067

 

Re:          Resignation Agreement

 

Dear Bret:

 

This Letter Agreement (“Agreement”) sets forth the terms and conditions of your
appointment as a consultant to InSight Health Services Holdings Corp. (“InSight”
or “Company”) effective November 16, 2007, and your resignations from the
Company and from InSight Health Services Corp. (“IHSC”), in each case effective
as of November 15, 2007.

 

In consideration of the mutual covenants and promises made in this Agreement,
you and InSight agree as follows:

 

Consulting Services. Effective as of November 16, 2007 (the “Effective Date”),
the Company will engage you as an independent contractor, and not as an
employee, to render consulting services to the Company as hereinafter provided,
and you hereby accept such engagement, commencing as of November 16, 2007. The
engagement as a consultant shall be through May 16, 2008 (the “Consulting
Period”). You shall not have any authority to bind or act on behalf of the
Company in your capacity as a consultant. During the Consulting Period, you
shall render such consulting services to the Company in connection with the
Company’s business as may be reasonably requested by the Board of Directors to
ensure a smooth transition for the Company following your resignation. A press
release in the form of Exhibit A, which has been agreed upon by the Parties,
will be issued by the Company.

 

Consulting Payment/Consideration. In consideration for your signing this
Agreement and agreeing to the terms and conditions hereof, including those
attached as Exhibits A and B, InSight agrees that for a six month period
beginning on December 16, 2007 and continuing until May 16, 2008, it will pay
you on a monthly basis in arrears, an amount equal to $34,083.33 each month,
without withholding or deduction (such payments are referred to herein as the
“Consulting Payments” and such period of time is referred to herein as the
Consulting Period), for total payments of $204,499.98. The Consulting Payments
will be sent to your home address

 

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as set forth above on this Agreement. Notwithstanding the foregoing, in the
event that you breach any of the terms and conditions of this Agreement, you
shall no longer be entitled to receive any Consulting Payments following the
date of such breach until such time as you have cured such breach, if it is
capable of being cured. The amounts payable pursuant to this paragraph shall not
be reduced by the amount of any other compensation or income you may receive
from other full-time employment or any other source during the Consulting
Period. The Company shall reimburse you for all reasonable expenses incurred by
you directly as a result of and in the course of performing services under this
Agreement, and which are consistent with the Company’s policies in effect from
time to time with respect to travel, entertainment and other business expenses,
subject to the Company’s requirements with respect to reporting and
documentation of such expenses.

 

Resignation. You acknowledge and agree that, effective November 15, 2007, you
will voluntarily resign from your employment, and any and all positions you hold
with InSight, IHSC and any of their respective subsidiary or affiliated entities
(collectively the “InSight Companies”), including your positions as a member of
the Board of Directors of InSight, IHSC and each of the other InSight Companies,
and as of that date you relinquish any and all of your authorities with each of
the InSight Companies. You and the Company agree that such resignation shall be
considered a voluntary resignation by mutual agreement of the parties, that the
Executive Employment Agreement dated as of July 1, 2005, between you and IHSC
(the “Executive Employment Agreement”), will terminate effective November 15,
2007, and that you shall not be entitled to any monetary compensation, including
any salary in lieu of notice or, any fringe benefits, perquisites or other
employee benefits from the InSight Companies after November 15, 2007 except as
provided in this Resignation Agreement, which supercedes your Executive
Employment Agreement. You understand and agree that you shall not be entitled to
any bonus for any period after June 30, 2007, and shall not be entitled to any
grant of equity securities or equity-like securities as contemplated during the
Company’s bankruptcy process or as provided under the Joint Prepackaged Plan of
Reorganization of the Company and IHSC, as amended. You also acknowledge and
agree that on and after the date hereof and thereafter you will not have
authority to bind the InSight Companies without the specific and express
authority of the Board of Directors of the Company.

 

Benefits. As additional consideration for this Agreement, the Company agrees to
continue the employee benefits specified in this provision (a) until either
November 15, 2008, (b) until you are eligible for comparable employment benefits
as the result of full-time employment with another employer; or (c) until your
employment by a competitor of the Company. The benefits you will receive during
the applicable period are the existing medical, disability, dental and health
insurance benefits, plans and programs covering you and any dependents under the
same terms and conditions as if you had not resigned including the payment by
you of any required premiums and co-payments that are to be made by you. In the
event that the Company is not able to keep you on the existing Company plans for
health insurance, during the period specified in the first sentence of this
provision, the Company will pay both the Company and employee portion of all
health insurance premiums for continuation coverage under COBRA (as defined
below), for you and any currently insured dependents, and you shall be
responsible for the

 

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payment of the amount of any required deductibles and co-payments as you were
responsible for under the plans immediately prior to your resignation. The
Company’s agreement to provide these benefits during the applicable period is
contingent upon your participation being permissible under the general terms and
provisions of such plans and programs and contingent upon the Company’s right to
amend or terminate any employee benefit plans which are applicable generally to
the Company’s employees. In the event of either of these contingencies, you will
cease to receive these benefits effective the date of the occurrence of the
contingency. However, in such an event, the Company agrees to arrange to provide
you with benefits and costs substantially similar to those you were receiving at
the time of your resignation for the applicable period or its remainder as the
Company may obtain for the same costs it was paying for your benefits
immediately prior to your resignation.

 

Release. In consideration of this Agreement, you hereby irrevocably and
unconditionally release, waive and forever discharge the Company, its direct and
indirect, subsidiaries and affiliates, affiliated persons, partnerships and
corporations, successors and assigns, and all of their past and present
directors, members, partners, contractors, distributors, officers, stockholders,
consultants, agents, representatives, attorneys, employees, employee benefit
plans and plan fiduciaries (collectively, the “Company Releasees”), individually
and collectively, from any and all actions, causes of action, claims, demands,
damages, rights, remedies and liabilities of whatsoever kind or character, in
law or equity, suspected or unsuspected, known or unknown, past or present, that
you have ever had, may now have, or may later assert against any of the Company
Releasees, concerning, arising out of or related to your employment by or the
performance of any services to or on behalf of any of the InSight Companies or
the termination of that employment, those services and your positions with the
InSight Companies,  arising out of or related to the termination of your
employment agreement with the InSight Companies, or arising out of any other
agreement you may have or may have had with the InSight Companies, in all cases
from the beginning of time to the Effective Date (hereinafter referred to as
“Executive’s Claims”), including without limitation:  (i) any claims arising out
of or related to any federal, state and/or local labor or civil rights laws, as
amended, including, without limitation, the federal Civil Rights Acts of 1866,
1871, 1964 and 1991 (including but not limited to Title VII), the Age
Discrimination in Employment Act of 1967, the National Labor Relations Act, the
Workers’ Adjustment and Retraining Notification Act, the Employee Retirement
Income Security Act of 1974, the Family and Medical Leave Act of 1993, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act of 1938,
the Older Workers Benefit Protection Act, the California Fair Employment and
Housing Act,  the California Industrial Welfare Commission Wage Orders, and the
California Labor Code and/or any similar state antidiscrimination and employment
statutes, and (ii) any and all other of Executive’s Claims arising out of or
related to any contract or employment agreement, any and all other federal,
state or local constitutions, statutes, rules or regulations, or under the laws
of any country or political subdivision, or under any common law right of any
kind whatsoever. You also agree to waive all rights to sue or obtain equitable,
remedial or punitive relief from any or all Company Releasees of any kind
whatsoever, including, without limitation, reinstatement, back pay, front pay,
attorneys’ fees and any form of injunctive relief. Through the Effective Date of
this Agreement, notwithstanding the foregoing, this Agreement shall not affect
any of your rights or

 

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obligations under (a) the IHSC 401k Savings Plan (the “401k Plan”), (b) the
Indemnification Agreement executed by you and the Company effective August 1,
2007 (“Indemnification Agreement, (c) your right to statutory indemnification
pursuant to California Labor Code Section 2802, (d) the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”), (e) workers compensation or unemployment
insurance benefit claims, or (f) the terms of this Agreement.

 

You and the Company hereby waive and relinquish all rights and benefits afforded
by California Civil Code Section 1542. You and the Company understand and
acknowledge the significance and consequences of this specific waiver of
Section 1542. California Civil Code section 1542 states as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

To the fullest extent permitted by law, you represent, warrant and agree not to
lodge or assist anyone else in lodging any formal or informal complaint in
court, with any federal, state or local agency or any other forum, in any
jurisdiction, arising out of or related to Executive’s Claims. You hereby
represent and warrant that you have not brought any complaint, claim, charge,
action or proceeding against any of the Company Releasees in any jurisdiction or
forum, nor assisted or encouraged any other person or persons in doing so. You
further represent and warrant that you have not in the past and will not in the
future assign any of Executive’s Claims to any person, corporation or other
entity.

 

Your execution of this Agreement operates as a complete bar and defense against
any and all of Executive’s Claims against the Company and each of the other
Company Releasees to the maximum extent permitted by law. If you should
hereafter make any of Executive’s Claims in any charge, complaint, action, claim
or proceeding against the Company or any of the other Company Releasees, this
Agreement may be raised as, and shall constitute a complete bar to, any such
charge, complaint, action, claim or proceeding and you agree to disclaim and
waive any right to share or participate in any monetary award resulting from the
prosecution of any administrative investigation or proceeding.

 

Release by the Company. In consideration of this Agreement, the Company on
behalf of itself, its parent and subsidiary corporations (“Company Releasors”)
hereby irrevocably and unconditionally releases, waives and forever discharges
you, your spouse, family members, and heirs, (the “Jorgensen Releasees”)
individually and collectively, from any and all actions, causes of action,
claims, demands, damages, rights, remedies and liabilities of whatsoever kind or
character, in law or equity, suspected or unsuspected, known or unknown, past or
present, that they have ever had, may now have, or may later assert against the
Jorgensen Releasees, whether or not arising out of or related to your employment
by or the performance of any services to or on behalf of the Company or the
termination of that employment and those services, from the beginning of time to
the Effective Date (hereinafter referred to as “Company’s Claims”), including
without limitation, any and all other of Company’s Claims arising out of or
related to

 

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any contract, any and all federal, state or local constitutions, statutes, rules
or regulations, or under the laws of any country or political subdivision, or
under any common law right of any kind whatsoever, including, without
limitation, any of Company’s Claims for any kind of tortious conduct, promissory
or equitable estoppel, breach of the Company’s policies, rules, regulations,
handbooks or manuals, breach of express or implied contract or covenants of good
faith, breach of duty of loyalty or fiduciary duty. Notwithstanding the
foregoing, this Agreement shall not affect any of the Company’s rights or
obligations under (a) the 401k Plan, (b) the Indemnification Agreement, (c)
California Labor Code Section 2802, (d) workers compensation or unemployment
insurance benefit claims, (e) COBRA, or (f) the terms of this Agreement.

 

Further, notwithstanding the foregoing, the Company’s Claims which are being
released herein shall not include any claims or causes of action that the
Company Releasors have or may have against you as of the Effective Date, which
may arise from or be related to (i) any acts or omissions undertaken by you, or
undertaken at your express direction, which constitute fraud, theft or
embezzlement against the Company, or any act that constitutes a felony under the
laws of the United States or any state; or (ii) any voluntary act undertaken by
you, which at the time it was taken by you, was intentionally taken by you in
knowing violation of a specific written Company directive or policy that was
known to you and which causes or caused the Company material harm or subjects or
subjected it to liability. The Company is not currently aware of any claim that
it may have for any matter covered under this subsection (ii).

 

To the fullest extent permitted by law, the Company agrees not to lodge or
assist anyone else in lodging any formal or informal complaint in court, with
any federal, state or local agency or any other forum, in any jurisdiction,
against you or any of the other Jorgensen Releasees arising out of or related to
Company’s Claims. The Company hereby represents and warrants that it has not
brought any complaint, claim, charge, action or proceeding against you or any of
the other Jorgensen Releasees in any jurisdiction or forum, nor assisted or
encouraged any other person or persons in doing so. The Company further
represents and warrants that it has not in the past and will not in the future
assign any of Company’s Claims to any person, corporation or other entity.

 

Execution of this Agreement by the Company operates as a complete bar and
defense against any and all of Company’s Claims against you or any of the other
Jorgensen Releasees to the maximum extent permitted by law. If the Company
should hereafter make any of Company’s Claims in any charge, complaint, action,
claim or proceeding against you or any of the other Jorgensen Releasees except
as expressly provided for in this Agreement, or arising out of the breach by you
of this Agreement, this Agreement may be raised as and shall constitute a
complete bar to any such charge, complaint, action, claim or proceeding and you
and/or the other Jorgensen Releasees shall be entitled to and shall recover from
the Company all costs incurred, including reasonable attorneys’ fees, in
defending against any such charge, complaint, action, claim or proceeding.

 

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Continuing Obligations to Company. You understand and agree that you have
continuing obligations to the Company as set forth in Exhibit B attached hereto.
Should you have a legitimate question as to whether a particular prospective
employment would be in breach of your obligations under Exhibit B, you may make
an inquiry to the Company prior to accepting such a position and if the Company
determines that such potential employment will not be a breach of Exhibit B, it
will so advise you and/or your prospective employer in writing.

 

Cooperation. Between the date hereof and November 15, 2007, you agree to provide
reasonable cooperation with the Board of Directors of the Company, and any
persons they may designate, to ensure an orderly transition of your duties to
such person or persons that the Board of Directors of the Company may designate
as your replacement. After your resignation, you may be asked questions by the
Company, its accountants, financial advisors or attorneys relating to your
former duties, to which you agree to respond in a reasonably timely and
responsible manner by providing such information as may be within your
knowledge. The Parties acknowledge and agree that you may have future employment
or other obligations that may limit the amount of your time available to
cooperate with the Company under this provision, and thus your reasonable
cooperation will take into account any such limitations.

 

Return of InSight Property; Expenses. As set forth in Exhibit B, you agree to
immediately return all Company property and equipment in your possession or
under your control, including, but not limited to, credit cards, keys, building
access cards, cell phone, TREO, laptop computer, manuals, notebooks, financial
statements, reports, and any other Company property. By December 15, 2007, you
should submit to InSight all outstanding business expenses incurred by you
through November 15, 2007, along with supporting receipts for reimbursement in
accordance with the Company’s policies.

 

Legal Representation. You and InSight each acknowledge that you have had the
opportunity to receive the advice of independent legal counsel prior to the
execution of this Agreement and the opportunity to receive an explanation from
legal counsel of the legal nature and effect of this Agreement, and you have
fully exercised that opportunity to the extent desired and you understand the
terms and provisions of this Agreement and its nature and effect. You further
represent that you are entering into this Agreement freely and voluntarily.

 

No Admission of Liability. Nothing contained in this Agreement or the fact that
you or InSight has signed this Agreement shall be considered as admission of any
liability whatsoever either party. This Agreement may not be introduced in any
action or proceeding by anyone for any purpose except to evidence or to enforce
its terms.

 

Confidentiality. As a material inducement to InSight to enter into this
Agreement and as an indivisible part of the consideration to be received for
entering into this Agreement and for the performance of obligations under this
Agreement by each party to this Agreement, you agree that you will not disclose,
disseminate, and/or publicize or cause to be disclosed, disseminated, and/or
publicized, any of the specific terms of this Agreement, any claims or
allegations or the basis for any claims or allegations, which were or could have
been made against InSight and its divisions, affiliates, subsidiaries,
predecessor and successor corporations, and the past and present directors,
officers, management committees, stockholders, agents, servants, employees,
representatives, administrators, partners, general partners, managing partners,
limited partners,

 

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benefit plan fiduciaries and administrators, assigns, heirs, successors or
predecessors in interest, adjustors, insurers, and attorneys, which concern and
are within the scope of this Agreement, directly or indirectly, specifically or
generally, to any person, corporation, association, governmental agency, or
other entity except: (a) to the extent necessary to report income to appropriate
taxing authorities; (b) in response to an order of a court of competent
jurisdiction or a subpoena issued under authority thereof; (c) in response to
any subpoena issued by a state or federal governmental agency; or (d) as
otherwise required by law. Notwithstanding the foregoing, InSight may file this
Agreement with the Securities and Exchange Commission in accordance with the
Securities Exchange Act of 1934.

 

Assistance/Cooperation Regarding Current or Future Litigation or Investigation.
In connection with InSight’s participation in any current or future litigation
or investigation relating to events which occurred during your employment with
the Company and/or about which you have personal knowledge or information, you
agree to cooperate to the fullest extent possible in the preparation,
prosecution, or defense of the Company’s case or investigation, including, but
not limited to, meeting with the Company’s counsel, the execution of truthful
declarations, being a deponent and/or witness, or providing information and/or
documents requested by the Company or any governmental agency. You further agree
not to voluntarily assist any party, any current or former employee of the
Company, and/or attorney in any claim, dispute, charge, or litigation adverse to
the Company. This does not prohibit you from testifying truthfully pursuant to a
subpoena or lawful court order. In consideration of this agreement by you to
cooperate, in the event that the Company requests your cooperation about any
matter that does not specifically relate to you or to an action taken by you
during your employment with the Company, the Company shall agree to reimburse
you for all of your reasonably incurred out-of-pocket expenses incurred in
assisting the Company. The Parties acknowledge and agree that you may have
future employment or other obligations that may limit the amount of your time
available to cooperate with the Company under this provision, and thus your
reasonable cooperation will take into account any such limitations.

 

No Future Employment. You agree not to apply for a position as an employee,
consultant, vendor, or other position with the Company or with any of the other
Company Releasees.

 

Non Disparagement. As a material inducement to InSight to enter into this
Agreement, you agree that you will not make any negative or disparaging comments
about InSight or IHSC. InSight also agrees that it will not make any negative or
disparaging comments about you.

 

Tax Returns. You shall file all tax returns and reports required to be filed by
you on the basis that while serving as a consultant from November 16, 2007
through May 16, 2008, you are an independent contractor, rather than an
employee, as defined in Treasury Regulation §31.3121(d)-1(c)(2), and you shall
indemnify the Company for the amount of any employment taxes paid by the Company
as the result of you not withholding employment taxes from the Consulting
Payments. You shall be solely responsible for all taxes, including federal,
state and local income taxes, FICA, FUTA or similar taxes that may result from
you performing services to the Company pursuant to this Agreement.

 

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Other Agreements. Except for (i) Exhibit B, (ii) the InSight 401k Plan, and
(iii) the Indemnification Agreement, the terms of this Agreement supercede any
and all other agreements, understandings, negotiations, or discussions, either
oral or in writing, express or implied, among you and the Company and IHSC, and
this Agreement shall operate to terminate all such other agreements between you
and the InSight Companies.

 

Successors.  This Agreement is binding upon the Company and you and upon the
Company’s and your respective successors, assigns, heirs, executors,
administrators and legal representatives.

 

No Strict Construction. The language used in this Agreement shall be deemed to
be the language mutually chosen by the parties to reflect their mutual intent
and no doctrine of strict construction shall apply against any party.

 

Entire Agreement. This Agreement constitutes the full, complete, and exclusive
agreement between you and InSight with respect to the subject matter discussed
herein. This Agreement cannot be changed unless in writing, signed by you,
InSight, and IHSC.

 

Waiver. No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar. No
waiver shall constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party charged with the waiver.

 

Severability. In the event any provision of this Agreement shall be determined
to be unlawful, such provision shall be deemed to be severed from this Agreement
and every other provision of this Agreement shall remain in full force and
effect.

 

Headings. The headings of the paragraphs in this Agreement are for purposes of
convenience only, and shall not be deemed to amend, modify, expand, limit or in
any way affect the meaning of any of the provisions hereof.

 

Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard to any conflicts of law principles thereof that would
call for the application of the laws of any other jurisdiction. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against either of the parties in the
courts of the State of California, or if it or he has or can acquire
jurisdiction, in the United States District Court for the Southern District of
California, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world, whether within or without the State of California.

 

Consideration Period. You have twenty-one (21) days from receipt of this
Agreement to consider this Agreement. InSight advises you to consult with an
attorney before signing this Agreement.

 

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Revocation Period. For a period of seven (7) days following the signing of this
Agreement, you may revoke this Agreement. This Agreement does not become
effective or enforceable until the revocation period has expired without you
exercising your option to revoke (“Effective Date”).

 

Counterparts. This Agreement may be executed in separate counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

Please acknowledge your understanding and acceptance of this Agreement by
signing this Agreement below and returning it to me no later than 5:00 p.m. on
October 26, 2007, or on the twenty-first (21st) day from the day you receive
this Agreement. An extra copy of this Agreement has been signed by me and is
enclosed for your records.

 

Sincerely,

 

 

 

 

 

/s/ Mitch C. Hill

 

 

Mitch C. Hill

 

Executive Vice President and Chief Financial Officer

 

InSight Health Services Corp. and InSight Health Services Holdings Corp.

 

 

 

 

 

Enclosures

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

Dated:  October 26, 2007

/s/ Bret W. Jorgensen

 

 

Bret W. Jorgensen

 

 

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EXHIBIT A

 

Form of News Release

 

INSIGHT HEALTH SERVICES HOLDINGS CORP.

ANNOUNCES CHANGE IN ROLE OF CHIEF EXECUTIVE OFFICER

 

LAKE FOREST, Calif. October 26, 2007   InSight Health Services Holdings Corp.
(“InSight”) (OTCBB:ISGT), today announced that Bret W. Jorgensen is leaving
InSight as President and Chief Executive Officer, effective November 15, 2007,
to pursue other interests; however, he will remain as a consultant to the
Company for a six-month period to assist the Company during the transition. Mr.
Jorgensen has served as InSight’s President and Chief Executive Officer for the
past two years.

 

Wayne B. Lowell, the Company’s Chairman of the Board, stated, “Bret has led the
Company through a very challenging time for itself and the industry. Shortly
after he joined the Company in 2005, he assisted the Company in raising $300
million of senior secured floating rate notes used to repay other indebtedness.
Over the past year, Bret led the Company through a restructuring, which included
a prepackaged plan of reorganization involving a debt for equity exchange.”

 

Mr. Jorgensen stated, “We have spent the past two years improving the Company’s
financial foundation so that it could be better positioned for the challenges
ahead in the imaging industry. I’m proud that the Company completed its plan of
reorganization so quickly and that the impact on the Company’s business was
minimal. We made the best of a very difficult situation. At this point, it is
time for the Company to have a renewed focus on continuing to serve our
customers and grow the business.”

 

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Mr. Lowell added, “We would like to thank Bret for his leadership over the past
two years and are pleased he has agreed to assist us during the transition
period.”

 

Until the Company completes the search process for a new Chief Executive
Officer, Richard Nevins, a current director, will be appointed as Interim Chief
Executive Officer and Kip Hallman, InSight’s Executive Vice President and Chief
Strategy Officer, will act as Interim Chief Operating Officer.

 

About InSight

 

InSight, headquartered in Lake Forest, California, is a nationwide provider of
diagnostic imaging services. It serves managed care entities, hospitals and
other contractual customers in over 30 states, including the following targeted
regional markets:  California, Arizona, New England, the Carolinas, Florida and
the Mid-Atlantic states. As of June 30, 2007, InSight’s network consists of 101
fixed-site centers and 112 mobile facilities.

 

For more information, please visit www.insighthealth.com.

 

# #

 

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EXHIBIT B

 

I.              COVENANTS AGAINST UNFAIR COMPETITION.

 

A.            ACKNOWLEDGMENTS. EXECUTIVE ACKNOWLEDGES THAT, AS OF THE DATE
HEREOF (I) THE PRINCIPAL BUSINESS OF COMPANY AND ITS AFFILIATES IS THE PROVISION
OF DIAGNOSTIC IMAGING, TREATMENT AND RELATED MANAGEMENT SERVICES THROUGH A
NETWORK OF MOBILE MAGNETIC RESONANCE IMAGING (“MRI”) AND POSITRON EMISSION
TOMOGRAPHY (“PET”) FACILITIES, FIXED-SITE MRI AND PET FACILITIES AND
MULTI-MODALITY CENTERS, AT TIMES, TOGETHER WITH OTHER HEALTHCARE PROVIDERS,
UTILIZING THE RELATED EQUIPMENT AND COMPUTER PROGRAMS AND “SOFTWARE” AND VARIOUS
CORPORATE INVESTMENT STRUCTURES (“COMPANY BUSINESS”); (II) COMPANY BUSINESS IS
PRIMARILY NATIONAL IN SCOPE; (III) THE INDUSTRY IS HIGHLY COMPETITIVE; AND
(IV) EXECUTIVE’S DUTIES HEREUNDER WILL CAUSE EXECUTIVE TO HAVE ACCESS TO AND BE
ENTRUSTED WITH VARIOUS TRADE SECRETS NOT READILY AVAILABLE TO THE PUBLIC OR
COMPETITORS, CONSISTING OF BUSINESS ACCOUNTS, LISTS OF CUSTOMERS AND OTHER
BUSINESS CONTACTS, INFORMATION CONCERNING COMPANY’S RELATIONSHIPS WITH ACTUAL OR
POTENTIAL CLIENTS OR CUSTOMERS AND THE NEEDS OR REQUIREMENTS OF SUCH CLIENTS OR
CUSTOMERS, BUDGETS, BUSINESS AND FINANCIAL PLANS, EMPLOYEE LISTS, FINANCIAL
INFORMATION, ARTWORK, DESIGNS, GRAPHICS, MARKETING PLANS AND TECHNIQUES,
BUSINESS STRATEGY AND DEVELOPMENT, KNOW-HOW OR OTHER MATTERS CONNECTED WITH
COMPANY BUSINESS, COMPUTER SOFTWARE PROGRAMS AND SPECIFICATIONS (SOME OF WHICH
MAY BE DEVELOPED IN PART BY EXECUTIVE UNDER THIS AGREEMENT), WHICH ITEMS ARE
OWNED EXCLUSIVELY BY COMPANY AND USED IN THE OPERATION OF COMPANY BUSINESS
(“TRADE SECRETS”). NOTWITHSTANDING THE FOREGOING, THE PARTIES AGREE THAT THE
TERM “TRADE SECRETS” SHALL NOT INCLUDE INFORMATION WHICH (I) IS OR BECOMES
GENERALLY AVAILABLE TO THE PUBLIC, WITHOUT VIOLATION OF ANY OBLIGATION OF
CONFIDENTIALITY BY EXECUTIVE, (II) IS OR BECOMES AVAILABLE FROM A THIRD PARTY ON
A NONCONFIDENTIAL BASIS, PROVIDED THAT SUCH THIRD PARTY IS NOT BOUND BY A
CONFIDENTIALITY AGREEMENT CONCERNING THE TRADE SECRETS AND (III) IS OR HAS BEEN
INDEPENDENTLY ACQUIRED OR DEVELOPED BY EXECUTIVE WITHOUT VIOLATING THE
PROVISIONS OF THIS SECTION.

 

Executive further acknowledges that the Trade Secrets will be disclosed to
Executive or obtained by Executive and received in confidence and trust for the
sole purpose of using the same for the sole benefit of Company Business.
Executive also acknowledges that such Trade Secrets are valuable to Company, of
a unique and special nature, and important to Company in competing in the
marketplace.

 

During and after the term of this Agreement (otherwise than in the performance
of this Agreement), without Company’s prior written consent, Executive shall not
divulge or use all or any of the Trade Secrets to or for any person or entity
except (i) for the benefit of Company and as necessary to perform Executive’s
services under this Agreement; and (ii) when required by law, and then only
after consultation with Company or unless such information is in the public
domain. In the event that Executive becomes or is legally compelled (whether by
deposition, interrogatories, request for documents, subpoena, civil
investigative demand or similar process) to disclose any Trade Secrets,
Executive shall provide Company with prompt, prior written notice of such
requirement so that Company may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Section. Executive
agrees that his obligations under this Section shall be absolute and
unconditional.

 

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B.            BREACH. EXECUTIVE UNDERSTANDS AND AGREES THAT EXECUTIVE’S
EMPLOYMENT WITH COMPANY MAY BE TERMINATED IF EXECUTIVE BREACHES THIS AGREEMENT
OR IN ANY WAY DIVULGES SUCH TRADE SECRETS. EXECUTIVE FURTHER UNDERSTANDS AND
AGREES THAT COMPANY MAY BE IRREPARABLY HARMED BY ANY VIOLATION OR THREATENED
VIOLATION OF THIS AGREEMENT AND, THEREFORE, COMPANY MAY BE ENTITLED TO
INJUNCTIVE RELIEF TO ENFORCE ANY OF THE PROVISIONS CONTAINED HEREIN.

 

C.            NON-COMPETE. DURING THE PERIOD OF EXECUTIVE’S EMPLOYMENT,
EXECUTIVE WILL NOT DIRECTLY OR INDIRECTLY EITHER AS AN EMPLOYEE, EMPLOYER,
CONSULTANT, AGENT, PRINCIPAL, PARTNER, STOCKHOLDER, CORPORATE OFFICER, DIRECTOR,
OR IN ANY OTHER INDIVIDUAL OR REPRESENTATIVE CAPACITY, ENGAGE OR PARTICIPATE IN
ANY ACTIVITY OR BUSINESS WHICH COMPANY SHALL DETERMINE IN GOOD FAITH TO BE IN
COMPETITION IN ANY SUBSTANTIAL WAY WITH COMPANY BUSINESS WITHIN ANY METROPOLITAN
AREA IN THE UNITED STATES OR ELSEWHERE IN WHICH COMPANY IS THEN ENGAGED IN
COMPANY BUSINESS. THE PARTIES ACKNOWLEDGE THAT IN CALIFORNIA AND SOME STATES
POST-EMPLOYMENT NON-COMPETE CLAUSES MAY BE GENERALLY UNENFORCEABLE, BUT THAT
OTHER STATES AND JURISDICTIONS PERMIT SUCH AGREEMENTS. EXECUTIVE HEREBY AGREES
THAT EXECUTIVE WILL NOT DIRECTLY OR INDIRECTLY, EITHER AS AN EMPLOYEE, EMPLOYER,
CONSULTANT, AGENT, PRINCIPAL, PARTNER, STOCKHOLDER, CORPORATE OFFICER, DIRECTOR,
OR IN ANY OTHER INDIVIDUAL OR REPRESENTATIVE CAPACITY, ENGAGE OR PARTICIPATE IN
ANY ACTIVITY OR BUSINESS WHICH COMPANY SHALL DETERMINE IN GOOD FAITH TO BE IN
COMPETITION IN ANY SUBSTANTIAL WAY WITH COMPANY BUSINESS AS CONDUCTED AT THE
EFFECTIVE DATE OF TERMINATION OF EXECUTIVE’S EMPLOYMENT BY COMPANY FOR OR A
PERIOD OF TWELVE (12) MONTHS AFTER THE TERMINATION OF EXECUTIVE’S EMPLOYMENT AND
THAT THIS SECTION WILL BE ENFORCEABLE TO THE GREATEST EXTENT OF THE LAW.

 

D.            NO SOLICITATION OF EMPLOYEES. DURING EXECUTIVE’S EMPLOYMENT AND
FOR A PERIOD OF TWELVE (12) AFTER THE TERMINATION OF EXECUTIVE’S EMPLOYMENT,
EXECUTIVE WILL NOT, EITHER DIRECTLY OR INDIRECTLY, EITHER ALONE OR IN CONCERT
WITH OTHERS, SOLICIT OR ENTICE OR PARTICIPATE IN THE SOLICITATION OR ATTEMPT TO
SOLICIT OR IN ANY MANNER ENCOURAGE EMPLOYEES OF COMPANY TO LEAVE COMPANY OR WORK
FOR ANYONE THAT IS IN COMPETITION IN ANY SUBSTANTIAL WAY WITH COMPANY BUSINESS
(WHICH IN THE CASE OF THE PERIOD FOLLOWING EXECUTIVE’S TERMINATION, SHALL MEAN
COMPANY BUSINESS AS CONDUCTED AS OF THE EFFECTIVE DATE OF TERMINATION OF
EXECUTIVE’S EMPLOYMENT WITH COMPANY); PROVIDED, HOWEVER, THAT THE PUBLIC
LISTING, ADVERTISING OR POSTING OF AN AVAILABLE POSITION SHALL NOT CONSTITUTE
SOLICITATION OR AN ATTEMPT TO SOLICIT HEREUNDER AND THIS SUBSECTION SHALL NOT
PRECLUDE EXECUTIVE FROM HIRING AN INDIVIDUAL PURSUANT THERETO.

 

E.             NO SOLICITATION OF CUSTOMERS. EXECUTIVE WILL NOT DURING THE
COURSE OF EXECUTIVE’S EMPLOYMENT, OR FOR TWELVE (12) MONTHS THEREAFTER, EITHER
DIRECTLY OR INDIRECTLY CALL ON, SOLICIT, OR TAKE AWAY, OR ATTEMPT TO CALL ON,
SOLICIT OR TAKE AWAY ANY OF COMPANY’S CUSTOMERS ON BEHALF OF ANY BUSINESS THAT
IS IN COMPETITION IN ANY SUBSTANTIAL WAY WITH COMPANY. EXECUTIVE PROMISES AND
AGREES NOT TO ENGAGE IN ANY UNFAIR COMPETITION WITH COMPANY. DURING EXECUTIVE’S
EMPLOYMENT, EXECUTIVE AGREES NOT TO PLAN OR OTHERWISE TAKE ANY PRELIMINARY
STEPS, EITHER ALONE OR IN CONCERT WITH OTHERS, TO SET UP OR ENGAGE IN ANY
BUSINESS ENTERPRISE THAT WOULD BE IN COMPETITION WITH COMPANY BUSINESS. IN THE
EVENT OF THE TERMINATION OF EXECUTIVE’S EMPLOYMENT AND FOR A PERIOD OF TWELVE
(12) MONTHS THEREAFTER, EXECUTIVE WILL NOT ACCEPT ANY EMPLOYMENT OR ENGAGE IN
ANY ACTIVITIES WHICH COMPANY SHALL DETERMINE IN GOOD FAITH TO BE COMPETITIVE
WITH COMPANY, IF THE FULFILLMENT OF THE DUTIES OF THE COMPETITIVE EMPLOYMENT OR
ACTIVITIES WOULD INHERENTLY REQUIRE EXECUTIVE TO REVEAL TRADE SECRETS TO WHICH
EXECUTIVE HAS ACCESS OR LEARNED DURING EXECUTIVE’S EMPLOYMENT ON BEHALF OF ANY
BUSINESS THAT IS IN COMPETITION IN ANY SUBSTANTIAL WAY WITH COMPANY.

 

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F.             RETURN OF COMPANY PROPERTY. IN THE EVENT OF THE TERMINATION OF
EXECUTIVE’S EMPLOYMENT, EXECUTIVE WILL DELIVER TO COMPANY ALL DEVICES, RECORDS,
SKETCHES, REPORTS, PROPOSALS, FILES, CUSTOMER LISTS, MAILING OR CONTACT LISTS,
CORRESPONDENCE, COMPUTER TAPES, DISCS AND DESIGN AND OTHER DOCUMENT AND DATA
STORAGE AND RETRIEVAL MATERIALS (AND ALL COPIES, COMPILATIONS AND SUMMARIES
THEREOF), EQUIPMENT, DOCUMENTS, DUPLICATES, NOTES, DRAWINGS, SPECIFICATIONS,
RESEARCH TAPE OR OTHER ELECTRONIC RECORDINGS, PROGRAMS, DATA AND OTHER MATERIALS
OR PROPERTY OF ANY NATURE BELONGING TO COMPANY OR RELATING TO COMPANY BUSINESS,
AND EXECUTIVE WILL NOT TAKE WITH EXECUTIVE OR ALLOW A THIRD PARTY TO TAKE, ANY
OF THE FOREGOING OR ANY REPRODUCTION OF ANY OF THE FOREGOING. COMPANY PROPERTY
INCLUDES PERSONAL PROPERTY, MADE OR COMPILED BY EXECUTIVE, IN WHOLE OR IN PART
AND ALONE OR WITH OTHERS, OR IN ANY WAY COMING INTO EXECUTIVE’S POSSESSION
CONCERNING COMPANY BUSINESS OR OTHER AFFAIRS OF COMPANY OR ANY OF ITS
AFFILIATES.

 

G.            DISCLOSURE AND ASSIGNMENT OF RIGHTS.

 

1.             (I)  EXECUTIVE SHALL PROMPTLY DISCLOSE AND ASSIGN TO COMPANY AND
ITS AFFILIATES OR ITS NOMINEE(S), TO THE MAXIMUM EXTENT PERMITTED BY
SECTION 2870 OF THE CALIFORNIA LABOR CODE, AS IT MAY BE HEREAFTER AMENDED FROM
TIME TO TIME, ALL RIGHT, TITLE AND INTEREST OF EXECUTIVE IN AND TO ANY AND ALL
IDEAS, INVENTIONS, DISCOVERIES, SECRET PROCESSES AND METHODS AND IMPROVEMENTS,
TOGETHER WITH ANY AND ALL PATENTS THAT MAY BE ISSUED THEREON IN THE UNITED
STATES AND IN ALL FOREIGN COUNTRIES, WHICH EXECUTIVE MAY INVENT, DEVELOP OR
IMPROVE, OR CAUSE TO BE INVENTED, DEVELOPED OR IMPROVED, DURING THE TERM OF THIS
AGREEMENT OR WHICH ARE (I) CONCEIVED AND DEVELOPED DURING NORMAL WORKING HOURS,
AND (II) RELATED TO THE SCOPE OF COMPANY BUSINESS. AS USED IN THIS AGREEMENT,
THE TERM “INVENT” INCLUDES “MAKE”, “DISCOVER”, “DEVELOP”, “MANUFACTURE” OR
“PRODUCE”, OR ANY OF THEM; “INVENTION” INCLUDES THE PHRASE “ANY NEW OR USEFUL
ORIGINAL ART, MACHINE, METHODS OF MANUFACTURE, PROCESS, COMPOSITION OF MATTER,
DESIGN, OR CONFIGURATION OF ANY KIND”; “IMPROVEMENT” INCLUDES “DISCOVERY” OR
“PRODUCTION”; AND “PATENT” INCLUDES “LETTERS PATENT” AND “ALL THE EXTENSIONS,
RENEWALS, MODIFICATIONS, IMPROVEMENTS AND REISSUES OF SUCH PATENTS”.

 

2.             EXECUTIVE SHALL DISCLOSE IMMEDIATELY TO DULY AUTHORIZED
REPRESENTATIVES OF COMPANY ANY IDEAS, INVENTIONS, DISCOVERIES, SECRET PROCESSES
AND METHODS AND IMPROVEMENTS COVERED BY THE PROVISIONS OF PARAGRAPH (I) ABOVE,
AND EXECUTE ALL DOCUMENTS REASONABLY REQUIRED IN CONNECTION WITH THE APPLICATION
FOR AN ISSUANCE OF LETTERS PATENT IN THE UNITED STATES AND IN ANY FOREIGN
COUNTRY AND THE ASSIGNMENT THEREOF TO COMPANY AND ITS AFFILIATES OR ITS
NOMINEE(S).

 

II.            RIGHTS AND REMEDIES UPON BREACH. IF EXECUTIVE BREACHES, OR
THREATENS TO BREACH, IN ANY MATERIAL RESPECT ANY OF THE PROVISIONS OF EXHIBIT B
(“RESTRICTIVE COVENANTS”), COMPANY SHALL, IN ADDITION TO ALL ITS OTHER RIGHTS
HEREUNDER AND UNDER APPLICABLE LAW AND IN EQUITY, HAVE THE RIGHT TO SEEK
SPECIFIC ENFORCEMENT OF THE RESTRICTIVE COVENANTS BY ANY COURT HAVING
JURISDICTION, INCLUDING, WITHOUT LIMITATION, THE GRANTING OF A PRELIMINARY
INJUNCTION WHICH MAY BE GRANTED WITHOUT THE NECESSITY OF PROVING DAMAGES OR THE
POSTING OF A BOND OR OTHER SECURITY, IT BEING ACKNOWLEDGED THAT ANY SUCH BREACH
OR THREATENED BREACH MAY CAUSE IRREPARABLE INJURY TO COMPANY AND THAT MONEY
DAMAGES MAY NOT PROVIDE AN ADEQUATE REMEDY TO COMPANY.

 

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III.           Severability and Modification of Covenants.  Company and
Executive agree and acknowledge that the duration, scope and geographic area of
the Restrictive Covenants described in this Section are fair, reasonable and
necessary in order to protect the good will and other legitimate interests of
Company, that adequate consideration has been received by Executive for such
obligations, and that these obligations do not prevent Executive from earning a
livelihood. If any court of competent jurisdiction determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect, without regard to the invalid portions. If any court of
competent jurisdiction construes any of the Restrictive Covenants, or any part
thereof, to be unenforceable because of the duration or geographic scope of such
provision or otherwise, such provision shall be deemed amended to the minimum
extent required to make it enforceable and, in its reduced form, such provision
shall then be enforceable and enforced.

 

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