Exhibit 10.1

 

TRANSITION AGREEMENT

 

THIS TRANSITION AGREEMENT (this “Agreement”) is entered into as of January 23,
2009, by and among, Virtual Radiological Corporation, a Delaware corporation
(the “Company”), Sean O. Casey, M.D. (the “Executive”), and, solely for purposes
of Section 1(f) hereof, Virtual Radiologic Professionals, LLC, a Delaware
limited liability company and an affiliated medical practice of the Company
(“VRP”).

 

Recitals

 

A.                                   THE EXECUTIVE IS CURRENTLY EMPLOYED BY THE
COMPANY AS ITS CHIEF EXECUTIVE OFFICER, AND SERVES AS A DIRECTOR AND CHAIRMAN OF
THE COMPANY.

 

B.                                     THE COMPANY AND THE EXECUTIVE ARE PARTIES
TO AN EMPLOYMENT AGREEMENT, DATED EFFECTIVE AS OF OCTOBER 1, 2007 (THE
“EMPLOYMENT AGREEMENT”), PURSUANT TO WHICH THE EXECUTIVE IS EMPLOYED BY THE
COMPANY AS ITS CHIEF EXECUTIVE OFFICER.

 

C.                                     THE COMPANY AND THE EXECUTIVE DESIRE TO
PROVIDE FOR A TRANSITION FOLLOWING THE EXECUTIVE’S RESIGNATION AS CHIEF
EXECUTIVE OFFICER OF THE COMPANY, EFFECTIVE UPON THE DATE AND SUBJECT TO THE
TERMS AND CONDITIONS AS PROVIDED FOR IN THIS AGREEMENT.

 

D.                                    THE PARTIES DESIRE TO RESOLVE ALL PRESENT
AND POTENTIAL ISSUES BETWEEN THEM RELATING TO THE EXECUTIVE’S EMPLOYMENT AND THE
TERMINATION OF HIS EMPLOYMENT WITH THE COMPANY, AND HAVE AGREED TO THE FULL
RESOLUTION OF ANY SUCH ISSUES AS PROVIDED FOR IN THIS AGREEMENT.

 

Agreements

 

In consideration of the mutual promises and provisions contained in this
Agreement, the parties, intending to be legally bound, agree as follows:

 

1.                                      TERMINATION OF EMPLOYMENT.

 

(A)                                       RESIGNATION.  THE EXECUTIVE HEREBY
RESIGNS AS CHIEF EXECUTIVE OFFICER OF THE COMPANY, AND AS AN OFFICER AND
DIRECTOR OF ANY SUBSIDIARIES OF THE COMPANY, EFFECTIVE AS OF JANUARY 26, 2009
(THE “RESIGNATION DATE”).  THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY AND ANY
SUBSIDIARIES SHALL TERMINATE EFFECTIVE AS OF THE RESIGNATION DATE.

 

(B)                                       TERMINATION OF EMPLOYMENT AGREEMENT. 
THE EMPLOYMENT AGREEMENT IS HEREBY TERMINATED EFFECTIVE AS OF THE RESIGNATION
DATE, AND NEITHER THE COMPANY NOR THE EXECUTIVE SHALL HAVE ANY RIGHTS OR
OBLIGATIONS THEREUNDER, EXCEPT AS FOLLOWS:

 

(1)                                  RESTRICTIVE COVENANTS.  SECTION 10 OF THE
EMPLOYMENT AGREEMENT SHALL REMAIN IN EFFECT AFTER THE RESIGNATION DATE IN
ACCORDANCE WITH ITS TERMS, EXCEPT THAT THE RESTRICTIONS SET FORTH IN SECTIONS
10(B) AND (C) SHALL BE AMENDED AND REPLACED WITH THE FOLLOWING:

 

(A)                               Non-solicitation.  During Executive’s service
as Chairman of the Board and for a period of two (2) years thereafter, Executive
shall

 

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not, directly or indirectly, individually or on behalf of any other person,
firm, corporation or other entity, knowingly solicit, aid or induce (i) any
employee of or consultant to the Company or any of its subsidiaries or
affiliates to leave such employment or engagement in order to accept employment
with or render services to or with any other person, firm, corporation or other
entity unaffiliated with the Company or knowingly take any action to materially
assist or aid any other person, firm, corporation or other entity in identifying
or hiring any such employee or (ii) any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person, firm,
corporation or other entity or assist or aid any other persons or entity in
identifying or soliciting any such customer.

 

(B)                                 Noncompetition.  Executive acknowledges that
he performs services of a unique nature for the Company that are irreplaceable,
and that his performance of such services to a competing business will result in
irreparable harm to the Company.  Accordingly, during Executive’s service as
Chairman of the Board and for a period of one (1) year thereafter (but subject
to extension, as provided below) Executive shall not, directly or indirectly,
own, manage, operate, control, be employed by (whether as an employee,
consultant, independent contractor or otherwise, and whether or not for
compensation) or render services to any person, firm, corporation or other
entity, in whatever form, engaged in any business of the same type as any
business in which the Company or any of its subsidiaries or affiliates is
engaged on the date of termination of his service as Chairman of the Board or in
which they have proposed, on or prior to such date, to be engaged in on or after
such date, in any locale of any country in which the Company or its subsidiaries
conducts business.  The foregoing shall not prevent Executive from owning not
more than one percent of the total shares of all classes of stock outstanding of
any publicly held entity engaged in such business, nor will it restrict
Executive from rendering services to charitable organizations, as such term is
defined in Section 501(c) of the Internal Revenue Code of 1986, as amended. 
Notwithstanding the foregoing, the Company may, at its option, extend the
duration of this restrictive covenant for up to twelve (12) additional months
following termination of the Executive’s service as Chairman of the Board (for a
total of up to twenty-four (24) months) upon notice given to the Executive at
any time within ninety (90) days following such termination, and the Company’s
written agreement to pay Executive additional severance for the duration of the
extension at the rate provided in Section 4(f), below.

 

The Executive acknowledges the legitimate the Company interests which the
restrictive covenants set forth above are designed to protect.  The Executive
further agrees that the restrictive covenants set forth above are reasonable in
their scope and duration, and are supported by adequate

 

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consideration, including but not limited to the benefits originally provided
under the Employment Agreement and this Agreement.

 

(2)                                  INVENTION ASSIGNMENT AND DISCLOSURE.  THE
PARTIES ACKNOWLEDGE AND AGREE THAT SECTION 11 OF THE EMPLOYMENT AGREEMENT SHALL
CONTINUE TO APPLY TO ALL INVENTIONS (AS DEFINED IN THE EMPLOYMENT AGREEMENT)
MADE OR CONCEIVED BY THE EXECUTIVE PRIOR TO THE RESIGNATION DATE, INCLUDING, FOR
THE AVOIDANCE OF DOUBT, THE EXECUTIVE’S OBLIGATIONS UNDER SECTION 11(C) WITH
RESPECT TO ALL SUCH INVENTIONS.  TO FACILITATE THE PERFORMANCE OF THE
EXECUTIVE’S OBLIGATIONS UNDER SECTION 11(B) OF THE EMPLOYMENT AGREEMENT (AND
WITHOUT LIMITING ANY OF THE EXECUTIVE’S OBLIGATIONS THEREUNDER OR UNDER ANY
OTHER PART OF SECTION 11 OF THE EMPLOYMENT AGREEMENT), EXECUTIVE COVENANTS AND
AGREES TO WORK, IN GOOD FAITH, WITH DESIGNATED OFFICERS OF THE COMPANY
(INCLUDING, BUT NOT LIMITED TO, THE COMPANY’S CHIEF TECHNOLOGY OFFICER AND CHIEF
MEDICAL OFFICER) DURING THE SIXTY (60) DAY PERIOD FOLLOWING THE RESIGNATION
DATE, TO CONFIRM ADEQUATE DISCLOSURE AND DOCUMENTATION OF ALL SUCH INVENTIONS,
INCLUDING BY PREPARING AND SUBMITTING WRITTEN DISCLOSURES OF SUCH INVENTIONS IN
REASONABLE DETAIL TO THE COMPANY, AND ENGAGING IN MEETINGS AND DISCUSSIONS WITH
SUCH OFFICERS AS REQUESTED FROM TIME TO TIME.  THE EXECUTIVE REPRESENTS TO THE
COMPANY THAT, EXCEPT AS DISCLOSED PURSUANT TO THIS SECTION 1(B)(2) OR AS
PREVIOUSLY DISCLOSED AND ASSIGNED TO THE COMPANY, THE EXECUTIVE HAS NOT MADE OR
CONCEIVED ANY INVENTIONS.

 

(C)                                       HEALTH BENEFITS.  TO THE EXTENT THAT
THE EXECUTIVE ELECTS COBRA CONTINUATION COVERAGE UNDER THE COMPANY’S GROUP
MEDICAL AND/OR DENTAL PLANS, THEN FOR A PERIOD OF TWELVE MONTHS AFTER THE
RESIGNATION DATE, THE COMPANY WILL PAY OR REIMBURSE THE EXECUTIVE FOR THAT
PORTION OF THE COST OF CONTINUATION COVERAGE THAT IS GREATER THAN THE PORTION
FOR WHICH THE EXECUTIVE WOULD HAVE BEEN RESPONSIBLE HAD THE EXECUTIVE’S
TERMINATION OF EMPLOYMENT NOT OCCURRED.

 

(D)                                       BONUS.  THE COMPANY SHALL PAY THE
EXECUTIVE A BONUS OF $20,000, SUBJECT TO APPLICABLE WITHHOLDING FOR INCOME AND
EMPLOYMENT RELATED TAXES, WITH THE FIRST REGULAR PAYROLL FOLLOWING EXPIRATION OF
ALL RESCISSION PERIODS SET FORTH IN THE RELEASE (AS DEFINED BELOW) IN LIEU OF
ANY OTHER BONUS TO WHICH THE EXECUTIVE MAY HAVE BEEN ENTITLED FOR 2008 OR 2009
UNDER ANY EXECUTIVE INCENTIVE BONUS PLAN OR THE EMPLOYMENT AGREEMENT.

 

(E)                                       RETURN OF COMPANY PROPERTY.  THE
EXECUTIVE SHALL PROMPTLY RETURN ALL OF THE COMPANY’S PROPERTY AND INFORMATION TO
THE COMPANY, INCLUDING BUT NOT LIMITED TO ANY LAPTOP, CELL PHONE, KEYS, ACCESS
CARDS, PHONE CARDS AND CREDIT CARDS, AND WILL PROMPTLY DELETE FROM ANY
ELECTRONIC MEDIA IN HIS POSSESSION, CUSTODY, OR CONTROL (SUCH AS PERSONAL
COMPUTERS, CELL PHONES, HAND-HELD DEVICES, BACK-UP DEVICES, ZIP DRIVES, PDAS,
ETC.) OR TO WHICH HE HAS OR HAS HAD ACCESS (SUCH AS REMOTE E-MAIL EXCHANGE
SERVERS, BACK-UP SERVERS, OFF-SITE STORAGE, ETC.), ALL DOCUMENTS OR
ELECTRONICALLY STORED IMAGES OF THE COMPANY, INCLUDING WRITINGS, DRAWINGS,
GRAPHS, CHARTS, SOUND RECORDINGS, IMAGES, AND OTHER DATA OR DATA COMPILATIONS
STORED IN ANY MEDIUM FROM WHICH SUCH INFORMATION CAN BE OBTAINED;.  THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE EXECUTIVE IS IN POSSESSION OF CERTAIN PHYSICAL
ARCHIVES AND ASSETS AND THAT “PROMPT” RETURN OF SUCH ITEMS SHALL MEAN RETURN
WITHIN A REASONABLE PERIOD OF TIME, AND THAT THE COMPANY WILL PROVIDE REASONABLE

 

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ASSISTANCE AND COOPERATION IN CONNECTION WITH THE RETURN OF SUCH ITEMS.  THE
EXECUTIVE WILL CERTIFY IN WRITING, TO THE COMPANY’S PRESIDENT THAT HE HAS TO HIS
KNOWLEDGE AND BELIEF RETURNED OR MADE AVAILABLE TO THE COMPANY FOR THE COMPANY
TO RECLAIM ALL PROPERTY AND INFORMATION COVERED BY THIS SUBSECTION (E).  FOR THE
AVOIDANCE OF DOUBT, THE EXECUTIVE SHALL BE ENTITLED TO ELECTRONIC COPIES OF HIS
PERSONAL FILES ON THE COMPANY LAPTOP IN HIS POSSESSION, AND THE PARTIES WILL
COOPERATE WITH ONE ANOTHER IN IDENTIFYING SUCH PERSONAL FILES AND PROVIDING
ELECTRONIC COPIES OF SUCH PERSONAL FILES TO THE EXECUTIVE.

 

(F)                                         TERMINATION OF VRP AGREEMENT.  VRP
AND THE EXECUTIVE ACKNOWLEDGE AND AGREE THAT THE AMENDED AND RESTATED
INDEPENDENT PHYSICIAN AGREEMENT, DATED SEPTEMBER 13, 2007 (THE “VRP AGREEMENT”),
WILL TERMINATE AS OF THE RESIGNATION DATE IN ACCORDANCE WITH
SECTION 6.2(D) THEREOF, AND THAT NEITHER VRP NOR THE EXECUTIVE SHALL HAVE ANY
RIGHTS OR OBLIGATIONS THEREUNDER.  VRP AND THE EXECUTIVE SHALL NOT HAVE ANY
OBLIGATION TO NEGOTIATE ANY NEW AGREEMENT AS CONTEMPLATED BY THE LAST SENTENCE
OF SECTION 6.2(D) OF THE VRP AGREEMENT.

 

(G)                                      RELEASE.  SIMULTANEOUSLY WITH THE
EXECUTION OF THIS AGREEMENT, THE EXECUTIVE WILL EXECUTE A RELEASE IN THE FORM
ATTACHED TO THIS AGREEMENT AS EXHIBIT A (THE “RELEASE”).  THIS AGREEMENT WILL
NOT BE INTERPRETED OR CONSTRUED TO LIMIT THE RELEASE IN ANY MANNER AND THE
EXISTENCE OF ANY DISPUTE RESPECTING THE INTERPRETATION OR ALLEGED BREACH OF THIS
AGREEMENT WILL NOT NULLIFY OR OTHERWISE AFFECT THE VALIDITY OR ENFORCEABILITY OF
THIS RELEASE.

 

2.                                      BOARD OF DIRECTORS AND CHAIR.

 

(A)                                       CONTINUED SERVICE.  THE EXECUTIVE
SHALL CONTINUE TO SERVE ON THE COMPANY’S BOARD OF DIRECTORS (THE “BOARD”) IN
ACCORDANCE WITH THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE COMPANY. 
SUBJECT TO TERMINATION AS PROVIDED IN SECTION 2(C), BELOW, THE EXECUTIVE SHALL
SERVE AS NON-EXECUTIVE CHAIRMAN OF THE BOARD FOR AN INITIAL TERM OF ONE (1) YEAR
AFTER THE RESIGNATION DATE (THE “INITIAL TERM”), WHICH TERM MAY BE RENEWED FOR
SUCCESSIVE TERMS OF ONE (1) YEAR UPON THE MUTUAL AGREEMENT OF THE COMPANY AND
THE EXECUTIVE.

 

(B)                                       RESPONSIBILITIES.  IN HIS CAPACITY AS
CHAIRMAN OF THE BOARD, THE EXECUTIVE SHALL REPORT TO THE BOARD AND PERFORM SUCH
DUTIES CUSTOMARY FOR A NON-EXECUTIVE CHAIRMAN AS THE BOARD MAY REASONABLY
REQUEST FROM TIME TO TIME, INCLUDING: (I) SETTING BOARD MEETING AGENDAS IN
COLLABORATION WITH THE CHIEF EXECUTIVE OFFICER; (II) PRESIDING AT BOARD
MEETINGS, EXECUTIVE SESSIONS AND THE ANNUAL STOCKHOLDER MEETING; (III) ASSIGNING
TASKS TO THE APPROPRIATE COMMITTEES; (IV) ENSURING THAT INFORMATION FLOWS OPENLY
BETWEEN THE MANAGEMENT AND THE BOARD; (V) ORGANIZING THE CHIEF EXECUTIVE OFFICER
EVALUATION AND PROVIDE CONTINUOUS ONGOING FEEDBACK; (VI) LEADING THE BOARD IN
ANTICIPATING AND RESPONDING TO CRISES; AND (VII) ASSISTING WITH THE TRANSITION
AND MENTORING THE NEW CHIEF EXECUTIVE OFFICER.

 

(C)                                       TERMINATION.  THE COMPANY AND THE
EXECUTIVE AGREE THAT NOTHING STATED IN THIS AGREEMENT SHALL REQUIRE (I) THE
EXECUTIVE TO CONTINUE TO SERVE AS CHAIRMAN OR AS A MEMBER OF THE BOARD, OR
(II) THE BOARD TO CONTINUE TO RETAIN THE EXECUTIVE AS ITS

 

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CHAIRMAN.  THE BOARD SHALL HAVE THE RIGHT TO TERMINATE THE EXECUTIVE AS CHAIRMAN
OF THE BOARD, WITH OR WITHOUT CAUSE, UPON WRITTEN NOTICE TO THE EXECUTIVE, AND
THE EXECUTIVE’S SERVICE AS CHAIRMAN WILL AUTOMATICALLY TERMINATE UPON HIS DEATH,
RESIGNATION, REMOVAL OR EXPIRATION OF HIS TERM AS A DIRECTOR WITHOUT BEING
RE-ELECTED BY THE STOCKHOLDERS.  FOR PURPOSES OF THIS AGREEMENT, CAUSE SHALL
MEAN:

 

(1)                                  EXECUTIVE SHALL HAVE BEEN INDICTED FOR A
FELONY;

 

(2)                                  EXECUTIVE SHALL HAVE BEEN CONVICTED OF (OR
PLEAD “GUILTY” OR “NOLO CONTENDERE” TO OR BEEN FOUND GUILTY AND NOT CONVICTED
OF) ANY MISDEMEANOR OR SUMMARY OFFENSE INVOLVING FRAUD, THEFT, MISREPRESENTATION
OR MORAL TURPITUDE OR ANY OTHER MISDEMEANOR OR SUMMARY OFFENSE THAT WILL, IN THE
OPINION OF THE BOARD, DETERMINED IN GOOD FAITH, ADVERSELY AFFECT IN ANY MATERIAL
RESPECT THE COMPANY’S PROSPECTS OR REPUTATION OR EXECUTIVE’S ABILITY TO PERFORM
HIS OBLIGATIONS OR DUTIES TO THE COMPANY OR ANY OF ITS SUBSIDIARIES UNDER THIS
AGREEMENT; OR

 

(3)                                  THE TERMINATION IS EVIDENCED BY A
RESOLUTION ADOPTED IN GOOD FAITH BY THE BOARD CONCLUDING THAT EXECUTIVE:

 

(A)                               intentionally and continually failed
substantially to perform his reasonably assigned duties as Chairman with the
Company pursuant to this Agreement (other than a failure resulting from
Executive’s incapacity due to physical or mental illness), which failure has
continued for a period of at least 30 days after a written notice of demand for
substantial performance, signed by a duly authorized member of the Board, has
been delivered to Executive;

 

(B)                                 intentionally engaged in conduct which is
demonstrably and materially injurious to the Company; provided, however, that no
termination of Executive as Chairman of the Board shall be for Cause as set
forth in this subsection (B) until (1) there shall have been delivered to
Executive a copy of a written notice, signed by a duly authorized member of the
Board, stating that the Board has determined that Executive has engaged in the
conduct set forth in this subsection (B), and (2) Executive shall have been
provided an opportunity to be heard by the Board;

 

(C)                                 willfully or repeatedly engaged in
misconduct or gross negligence in the performance of his duties to as Chairman
under this Agreement that has a material detrimental effect on the Company; or

 

(D)                                committed an act of fraud, theft or
dishonesty against the Company or any of its subsidiaries or any act or omission
intended to result in the personal enrichment of Executive or his spouse,
parents, siblings, or descendants (whether by blood or adoption and including
stepchildren) or the spouses of such individuals in violation of law or of his
duty of loyalty to the Company or its subsidiaries at the expense, directly or
indirectly, of the Company or any of its subsidiaries.

 

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NOTWITHSTANDING ANYTHING IN THE FOREGOING TO THE CONTRARY, IF EXECUTIVE HAS BEEN
TERMINATED OSTENSIBLY FOR CAUSE BECAUSE HE HAS BEEN INDICTED FOR A FELONY, AND
HE IS NOT CONVICTED OF, OR DOES NOT PLEAD GUILTY OR NOLO CONTENDERE TO, SUCH
FELONY OR A LESSER OFFENSE (BASED ON THE SAME OPERATIVE FACTS), SUCH TERMINATION
SHALL BE DEEMED TO BE A TERMINATION WITHOUT CAUSE AS OF THE DATE OF THE
TERMINATION; PROVIDED, HOWEVER, THAT, ANY PAYMENTS DUE HEREUNDER SHALL BE ONLY
PAID AFTER A FINAL DETERMINATION IN SUCH PROCEEDING IS REACHED.

 

3.                                      TRANSITION MATTERS.

 

(A)                                       TRANSITION OF AFFILIATED MEDICAL
PRACTICES.  SUBJECT TO THE TRANSITION OF SUCH ROLES AS CONTEMPLATED BELOW, THE
EXECUTIVE AGREES TO REMAIN IN HIS CURRENT POSITIONS AS A SHAREHOLDER, MEMBER,
PRESIDENT, DIRECTOR AND MANAGING MEMBER, AS APPLICABLE, OF VIRTUAL RADIOLOGIC
PROFESSIONALS OF CALIFORNIA, P.A., VIRTUAL RADIOLOGIC PROFESSIONALS OF ILLINOIS,
S.C., VIRTUAL RADIOLOGIC PROFESSIONALS OF MICHIGAN, P.C., VIRTUAL RADIOLOGIC
PROFESSIONALS OF MINNESOTA, P.A., VIRTUAL RADIOLOGIC PROFESSIONALS OF NEW YORK,
P.A. AND VIRTUAL RADIOLOGIC PROFESSIONALS OF TEXAS, P.A. (COLLECTIVELY, THE
“PROFESSIONAL CORPORATIONS”), SHALL DEVOTE HIS REASONABLE EFFORTS TO THE
PERFORMANCE OF SERVICES TO VRP AND THE PROFESSIONAL CORPORATIONS IN THE MANNER
HE PROVIDED PRIOR TO THE DATE HEREOF (EXCLUDING, HOWEVER PROVIDING ANY
PROFESSIONAL INTERPRETATION AND CONSULTATION SERVICES, INCLUDING PRELIMINARY
AND/OR OFFICIAL INTERPRETATIONS), SHALL PERFORM SUCH SERVICES IN GOOD FAITH AND
NOT TAKE ANY ACTION THAT WOULD REASONABLY BE EXPECTED TO DISRUPT THE COMPANY’S
BUSINESS OR CAUSE VRP OR THE PROFESSIONAL CORPORATIONS TO BREACH THEIR
OBLIGATIONS TO THE COMPANY, TO PATIENTS OR TO OTHER PARTIES TO WHOM VRP OR THE
PROFESSIONAL CORPORATIONS HAVE CONTRACTUAL OR PROFESSIONAL OBLIGATIONS, SUBJECT
TO THE PROVISIONS IN THE LAST SENTENCE IN THIS PARAGRAPH.  AT THE COMPANY’S
REQUEST AND EXPENSE, THE EXECUTIVE SHALL TAKE ALL ACTION NECESSARY TO
(A) TRANSFER TO THE COMPANY OR THE COMPANY’S DESIGNEE ALL OF THE EXECUTIVE’S
EQUITY INTERESTS IN VRP AND THE PROFESSIONAL CORPORATIONS (INCLUDING, IN
CONNECTION THEREWITH, TO ELECT CORPORATE TAXATION OF ANY SUCH ENTITY);
(B) RESIGN FROM ANY POSITIONS THAT THE EXECUTIVE HOLDS IN VRP AND THE
PROFESSIONAL CORPORATIONS; AND (C) IN EITHER SUCH CASE, EXECUTE ALL
DOCUMENTATION REQUESTED BY THE COMPANY IN CONNECTION THEREWITH.  TO THE EXTENT
THAT DR. EDUARD MICHEL AS THE COMPANY’S DESIGNEE IS QUALIFIED TO BE THE HOLDER
OF THE EQUITY INTERESTS IN VRP OR ANY PROFESSIONAL CORPORATION, SUCH EQUITY
INTERESTS WILL BE TRANSFERRED TO DR. MICHEL WITHIN THIRTY DAYS OF THE DATE
HEREOF, AND THE REMAINING TRANSFERS TO THE COMPANY OR THE COMPANY’S DESIGNEE
SHALL BE COMPLETED NO LATER THAN JUNE 30, 2009.  IN THE CASE OF VRP, THE
CONSIDERATION FOR THE EQUITY INTERESTS WILL BE THE AMOUNT PROVIDED IN
SECTION 12.17 OF THAT CERTAIN PROFESSIONAL AND MANAGEMENT SERVICES AGREEMENT AND
LICENSE BETWEEN THE COMPANY AND VRP, DATED JANUARY 1, 2006, AND IN THE CASE OF
THE PROFESSIONAL CORPORATIONS, THE CONSIDERATION FOR SUCH EQUITY INTERESTS WILL
BE EQUAL TO THE INITIAL SUBSCRIPTION PRICE PAID BY EXECUTIVE.  IN ADDITION,
DR. MICHEL WILL REPLACE THE EXECUTIVE AS (I) PRESIDENT AND MANAGING MEMBER OF
VRP, AND (II) SOLE DIRECTOR, PRESIDENT AND CEO, CFO AND MEDICAL DIRECTOR OF THE
PROFESSIONAL CORPORATIONS AT THE TIME THE RELATED EQUITY INTERESTS ARE
TRANSFERRED, TO THE EXTENT PERMITTED BY APPLICABLE LAW OR REGULATION, BUT IN NO
EVENT LATER THAN JUNE 30, 2009.  IN THE EVENT THE TRANSFERS OF THE EQUITY
INTERESTS IN VRP AND THE PROFESSIONAL CORPORATIONS AND THE REMOVAL OF EXECUTIVE
OF THE POSITIONS THAT HE HOLDS WITH VRP AND THE PROFESSIONAL CORPORATIONS HAVE
NOT BEEN COMPLETED BY JUNE 30, 2009 (OTHER THAN A FAILURE

 

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AS A RESULT OF A BREACH BY EXECUTIVE OF HIS OBLIGATIONS UNDER THIS
SECTION 3(A)), THEN THE AMOUNTS PAYABLE UNDER SECTION 4(F) SHALL BE COMMENCED
EARLY FOR EACH MONTH OR PARTIAL MONTH AFTER JUNE 30, 2009 THAT SUCH TRANSFERS
AND REMOVALS HAVE NOT BEEN COMPLETED, BUT SHALL AGAIN BE SUSPENDED UNTIL
TRIGGERED UNDER SECTION 4(F), ONCE SUCH TRANSFERS AND REMOVALS HAVE BEEN
COMPLETED.  UNTIL THE FOREGOING TRANSFERS HAVE BEEN COMPLETED, THE EXECUTIVE
SHALL HAVE RIGHTS TO INFORMATION AND TO REASONABLY DIRECT COMPLIANCE WITH
APPLICABLE LAWS AND PROFESSIONAL REQUIREMENTS BY THE VRP OR ANY PROFESSIONAL
CORPORATION IN WHICH HE CONTINUES TO HOLD AN EQUITY INTEREST OR OFFICER
POSITION.

 

(B)                                       SUPPORT.  AS PART OF THE TRANSITION,
THE COMPANY WILL PERFORM ALL ADMINISTRATIVE TASKS AND PAY ALL COSTS RELATING TO
THE MEDICAL LICENSES THAT THE EXECUTIVE HAS MAINTAINED IN CONNECTION WITH VRP
AND PROFESSIONAL CORPORATIONS AND THE TERMINATION OF SUCH LICENSES AT THEIR
STATED EXPIRATION DATE, INCLUDING HANDLING ALL REPORTING REQUIREMENTS AND PAYING
ANY FINES OR PENALTIES FOR NOT COMPLYING WITH THE REPORTING REQUIREMENTS. 
WITHIN THIRTY (30) DAYS AFTER SUCH LICENSING AND TERMINATIONS ARE COMPLETED, THE
COMPANY SHALL PROVED EXECUTIVE WITH A COMPLETE LIST AND DESCRIPTION OF THE
LICENSING AND CREDENTIAL HISTORY OF EXECUTIVE BASED ON THE RECORDS MAINTAINED BY
THE COMPANY.

 

(C)                                       MEDICAL MALPRACTICE INSURANCE.  DURING
THE TERM OF THIS AGREEMENT AND FOR A PERIOD OF AT LEAST SEVEN (7) YEARS AFTER
THE TERMINATION HEREOF, THE COMPANY AGREES TO MAINTAIN OR PURCHASE MEDICAL
MALPRACTICE COVERAGE (WITH THE SAME OR SIMILAR COVERAGE TERMS AND LIMITS TO THE
EXISTING COVERAGE TERMS AND LIMITS) INSURING AGAINST MALPRACTICE CLAIMS MADE
AGAINST THE EXECUTIVE RELATING TO PROFESSIONAL MEDICAL SERVICES PERFORMED BY THE
EXECUTIVE PRIOR TO THE RESIGNATION DATE AND IN THE SCOPE OF THE EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY AND VRP.  EXECUTIVE SHALL BE NAMED AS AN INSURED OR
ADDITIONAL INSURED UNDER SUCH COVERAGE AND SUCH COVERAGE SHALL NOT BE MODIFIED,
CANCELLED OR TERMINATED WITHOUT 30 DAYS PRIOR WRITTEN NOTICE FROM THE INSURER TO
EXECUTIVE.  UPON REQUEST OF EXECUTIVE, THE COMPANY SHALL PROVIDE EXECUTIVE WITH
A CERTIFICATE OF INSURANCE EVIDENCING ITS COMPLIANCE WITH THE REQUIREMENTS OF
THIS SECTION 3(C).

 

(D)                                       COOPERATION.  THE EXECUTIVE AGREES TO
COOPERATE WITH THE COMPANY IN ITS TRANSITION EFFORTS AS FOLLOWS: (1) TO BE
AVAILABLE, ON A REASONABLE BASIS, TO ANSWER QUESTIONS THAT MAY ARISE RELATING TO
THE EXECUTIVE’S EMPLOYMENT WITH OR DUTIES TO THE COMPANY; AND (2) TO BE
AVAILABLE UPON REASONABLE NOTICE FROM THE COMPANY, WITH OR WITHOUT A SUBPOENA,
TO BE INTERVIEWED, REVIEW DOCUMENTS OR THINGS, GIVE DEPOSITIONS, TESTIFY, OR
ENGAGE IN OTHER REASONABLE ACTIVITIES, WITH RESPECT TO MATTERS AND/OR DISPUTES
CONCERNING WHICH THE EXECUTIVE HAS OR MAY HAVE KNOWLEDGE AS A RESULT OF OR IN
CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY.  IN PERFORMING HIS OBLIGATIONS TO
TESTIFY OR OTHERWISE PROVIDE INFORMATION, THE EXECUTIVE WILL HONESTLY,
TRUTHFULLY, FORTHRIGHTLY, AND COMPLETELY PROVIDE THE INFORMATION REQUESTED.  THE
COMPANY WILL USE REASONABLE EFFORTS TO HAVE ITS OFFICERS OR EMPLOYEES PROVIDE
THE INFORMATION AND COOPERATION CONTEMPLATED BY THIS SECTION 3(D) BEFORE MAKING
A REQUEST OF THE EXECUTIVE UNDER THIS SECTION 3(D).

 

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(E)                                       PERFORMANCE.  THE EXECUTIVE SHALL
PERFORM HIS OBLIGATIONS UNDER THIS SECTION 3 PROMPTLY UPON THE COMPANY’S REQUEST
AND AT NO CHARGE TO THE COMPANY; PROVIDED THAT THE COMPANY SHALL PAY ANY TRAVEL
AND OTHER OUT OF POCKET COSTS INCURRED BY THE EXECUTIVE IN PROVIDING THE
COOPERATION REQUESTED BY THE COMPANY UNDER SECTION 3(D) ABOVE.

 

4.                                      COMPENSATION.

 

(A)                                       CASH COMPENSATION.  SOLELY DURING THE
TERM OF HIS SERVICE, AND SUBJECT TO THE EXECUTIVE’S COMPLIANCE WITH HIS
OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING HIS EXECUTION AND DELIVERY OF THE
RELEASE, WITHOUT RESCISSION THEREOF), THE COMPANY SHALL PAY THE EXECUTIVE
$210,000 PER YEAR, PAYABLE IN ARREARS IN MONTHLY INSTALLMENTS OF $17,500 ON OR
BEFORE THE LAST DAY OF EACH MONTH, FOR SERVING AS NON-EXECUTIVE CHAIRMAN OF THE
BOARD.  THE EXECUTIVE WILL NOT BE PAID ANY ADDITIONAL CASH COMPENSATION THAT MAY
BE PAID TO OTHER NON-EMPLOYEE DIRECTORS.

 

(B)                                       FUTURE OPTION GRANTS.  DURING THE TERM
OF HIS SERVICE AS A DIRECTOR, THE EXECUTIVE WILL BE ENTITLED TO GRANTS OF STOCK
OPTIONS MADE TO OTHER CONTINUING NON-EMPLOYEE DIRECTORS IN AMOUNTS AND ON THE
SAME TERMS AND CONDITIONS AS GRANTS TO SUCH OTHER NON-EMPLOYEE DIRECTORS.

 

(C)                                       EXISTING STOCK OPTIONS.  THE COMPANY
AND THE EXECUTIVE ACKNOWLEDGE AND AGREE THAT, AS OF THE RESIGNATION DATE, THE
EXECUTIVE HOLDS OPTIONS TO PURCHASE AN AGGREGATE OF 100,000 SHARES OF COMMON
STOCK OF THE COMPANY (THE “EXISTING OPTIONS”).  THE EXISTING OPTIONS ARE HEREBY
AMENDED TO PROVIDE THAT:

 

(1)                                  NOTWITHSTANDING THE EXECUTIVE’S TERMINATION
OF EMPLOYMENT, THE CONTINUED VESTING AND EXERCISABILITY OF SUCH OPTIONS SHALL BE
DETERMINED BY REFERENCE TO THE EXECUTIVE’S CONTINUED SERVICE AS A DIRECTOR OF
THE COMPANY; AND

 

(2)                                  SUCH OPTIONS SHALL VEST IN FULL AND REMAIN
EXERCISABLE FOR THE BALANCE OF THEIR STATED TERM, WITHOUT EARLIER EXPIRATION, IN
THE EVENT THAT (I) THE COMPANY FAILS TO NOMINATE THE EXECUTIVE FOR ELECTION AS A
DIRECTOR, OR (II) THE COMPANY TERMINATES THE EXECUTIVE AS CHAIRMAN OF THE BOARD
WITHOUT CAUSE.

 

THE EXECUTIVE ACKNOWLEDGES THAT TO THE EXTENT THAT THE EXISTING OPTIONS ARE NOT
EXERCISED WITHIN NINETY DAYS AFTER THE RESIGNATION DATE, SUCH OPTIONS WILL NO
LONGER QUALIFY AS “INCENTIVE STOCK OPTIONS” UNDER SECTION 422 OF THE INTERNAL
REVENUE CODE.

 

(D)                                       EXPENSES.  THE COMPANY SHALL REIMBURSE
THE EXECUTIVE FOR ALL REASONABLE AND NECESSARY OUT-OF-POCKET BUSINESS, TRAVEL
AND ENTERTAINMENT EXPENSES INCURRED BY THE EXECUTIVE IN THE PERFORMANCE OF HIS
DUTIES AS CHAIRMAN OF THE BOARD, SUBJECT TO ADVANCE THE COMPANY’S NORMAL
POLICIES AND PROCEDURES FOR EXPENSE VERIFICATION AND DOCUMENTATION APPLICABLE TO
NON-EMPLOYEE DIRECTORS.

 

(E)                                       LAPTOP AND E-MAIL.  AS LONG AS THE
EXECUTIVE IS SERVING AS CHAIRMAN OF THE BOARD, THE EXECUTIVE WILL BE PROVIDED
WITH A LAPTOP COMPUTER AND HIS CURRENT E-MAIL ACCOUNT FOR PURPOSES OF PERFORMING
SERVICES PURSUANT TO THIS AGREEMENT.

 

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(F)                                         SEVERANCE.  IF THE EXECUTIVE’S
SERVICE AS CHAIRMAN OF THE BOARD IS TERMINATED DUE TO (I) THE COMPANY’S FAILURE
TO NOMINATE THE CHAIRMAN FOR RE-ELECTION TO THE BOARD; (II) REMOVAL OF CHAIRMAN
TITLE BY BOARD WITHOUT CAUSE; OR (III) THE PARTIES FAILURE TO AGREE TO RENEW THE
TERM UNDER SECTION 2(A) AS OF THE END OF THE INITIAL TERM OR ANY RENEWAL TERM,
THE EXECUTIVE (OR HIS ESTATE IN THE EVENT OF HIS DEATH AFTER SUCH TERMINATION)
WILL BE ENTITLED TO A SEVERANCE PAYMENT OF $420,000, PAYABLE IN MONTHLY
INSTALLMENTS OVER A PERIOD OF TWELVE MONTHS THEREAFTER; PROVIDED, HOWEVER, THAT
THE AGGREGATE AMOUNT PAYABLE HEREUNDER AND THE NUMBER OF MONTHS OF PAYMENT SHALL
BE REDUCED TO THE EXTENT OF EARLY PAYMENTS, IF ANY, UNDER SECTION 3(A).

 

(G)                                      ADDITIONAL BENEFITS.  THE COMPANY WILL
PAY OR REIMBURSE THE EXECUTIVE FOR HIS REASONABLE LEGAL AND OTHER OUT-OF-POCKET
COSTS AND EXPENSES RELATED TO THE TRANSITION OF VRP AND THE PROFESSIONAL
CORPORATIONS CONTEMPLATED BY SECTION 3. IN ADDITION, THE COMPANY WILL PAY OR
REIMBURSE THE EXECUTIVE FOR HIS REASONABLE LEGAL EXPENSES RELATED TO THE
NEGOTIATION OF THIS AGREEMENT, UP TO A MAXIMUM OF $15,000.  THE COMPANY WILL
ASSIGN TO THE EXECUTIVE THE TWO TERM LIFE INSURANCE POLICIES THAT THE COMPANY
CURRENTLY OWNS ON THE LIFE OF THE EXECUTIVE, AT NO COST TO THE EXECUTIVE.

 

(H)                                      STATUS; AUTHORITY. THE PARTIES
ACKNOWLEDGE AND AGREE THAT DURING THE TERM OF HIS SERVICE AS CHAIRMAN, THE
EXECUTIVE SHALL NOT BE AN EMPLOYEE OF THE COMPANY AND THAT THE EXECUTIVE’S
STATUS HEREUNDER IS THAT OF AN INDEPENDENT CONTRACTOR PROVIDING SERVICES TO THE
COMPANY.  THE EXECUTIVE NEITHER EXPECTS NOR DESIRES THAT THE COMPANY:
(I) WITHHOLD FROM ANY FEES DUE AND PAYABLE TO HIM ANY TAXES (STATE, FEDERAL,
INCOME, SOCIAL SECURITY OR OTHERWISE); (II) PAY WITH RESPECT TO THE EXECUTIVE
ANY FEES OR TAXES FOR WORKERS’ COMPENSATION OR UNEMPLOYMENT COMPENSATION; OR
(III) PROVIDE THE EXECUTIVE WITH ANY OTHER BENEFITS CUSTOMARILY PROVIDED TO
EMPLOYEES.  THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT IT IS HIS RESPONSIBILITY
TO MAKE ALL ESTIMATED AND OTHER NECESSARY FEDERAL AND STATE TAX PAYMENTS ARISING
FROM COMPENSATION RECEIVED BY THE EXECUTIVE PURSUANT TO THIS SECTION 4.

 

5.                                      INDEMNIFICATION AND TAX MATTERS.

 

(A)                                       INDEMNIFICATION.  SUBJECT TO THE
EXECUTIVE’S CONTINUED PERFORMANCE OF ALL OF HIS OBLIGATIONS UNDER SECTION 3 OF
THIS AGREEMENT, THE COMPANY WILL INDEMNIFY, DEFEND, AND HOLD THE EXECUTIVE
HARMLESS FROM AND AGAINST ALL CLAIMS, JUDGMENTS, EXPENSES, AND LIABILITIES OF
ANY KIND (INCLUDING REASONABLE ATTORNEYS’ FEES) ARISING OUT OF OR RELATING TO
THE FOLLOWING:

 

(1)                                  ANY VALID ACTIONS OR INACTIONS PERFORMED IN
GOOD FAITH AS AN EQUITY OWNER, OFFICER, DIRECTOR, OR MANAGING MEMBER, AS
APPLICABLE, OF VRP OR THE PROFESSIONAL CORPORATIONS UNTIL THE TRANSFER OF THE
EXECUTIVE’S EQUITY INTERESTS IN SUCH ENTITIES IN ACCORDANCE WITH SECTION 3; AND

 

(2)                                  ANY TAX LIABILITY (INCLUDING, WITHOUT
LIMITATION, INCOME AND CAPITAL GAINS TAXES) AND PENALTIES AND INTEREST WITH
RESPECT THERETO, RESULTING FROM (I) THE TRANSFER OF THE EXECUTIVE’S EQUITY
INTERESTS IN VRP OR THE PROFESSIONAL CORPORATIONS TO THE COMPANY OR A DESIGNEE
OF THE COMPANY, (II) THE CONVERSION OF

 

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VRP OR THE PROFESSIONAL CORPORATIONS FROM A PASS-THROUGH TAX ENTITY TO A
CORPORATE ENTITY, (III) THE LIQUIDATION OR DISSOLUTION OF VRP OR THE
PROFESSIONAL CORPORATIONS, OR (IV) ANY AUDITS OR ADJUSTMENTS TO THE TAX RETURNS
PREVIOUSLY FILED BY OR WITH RESPECT TO VRP OR THE PROFESSIONAL CORPORATIONS.

 

(B)                                       TAX GROSS-UP.  TO THE EXTENT THE
EXECUTIVE INCURS A TAX LIABILITY (INCLUDING FEDERAL, STATE AND LOCAL TAXES) IN
CONNECTION WITH THE COMPANY’S PAYMENT OF AN INDEMNIFICATION OBLIGATION PURSUANT
TO THIS SECTION 5 THAT THE EXECUTIVE WOULD NOT HAVE INCURRED HAD THE COMPANY NOT
PAID SUCH INDEMNIFICATION OBLIGATION, THE COMPANY WILL MAKE AN ADDITIONAL
PAYMENT TO THE EXECUTIVE IN AN AMOUNT EQUAL TO SUCH TAX LIABILITY, LESS ANY TAX
BENEFIT REALIZED BY THE EXECUTIVE (INCLUDING WITH RESPECT TO FEDERAL, STATE OR
LOCAL TAXES) AS A RESULT OF THE PAYMENT OF SUCH INDEMNIFICATION OBLIGATION (THE
“TAX BENEFIT”), PLUS AN ADDITIONAL AMOUNT SUFFICIENT TO PERMIT EXECUTIVE TO
RETAIN A NET AMOUNT AFTER ALL TAXES EQUAL TO THE AMOUNT OF THE INDEMNIFICATION
CLAIM LESS THE TAX BENEFIT.

 

(C)                                       TAX RETURNS.  THE COMPANY WILL PAY OR
REIMBURSE THE EXECUTIVE FOR HIS REASONABLE ACCOUNTING AND OTHER OUT OF POCKET
COSTS AND EXPENSES RELATED TO THE PREPARING THE EXECUTIVE’S PERSONAL FEDERAL AND
STATE INCOME TAX RETURNS FOR CALENDAR YEARS 2008 AND 2009 AND ANY AUDIT OF THE
EXECUTIVE’S TAX RETURNS RELATING TO THE EXECUTIVE’S OWNERSHIP OF VRP OR THE
PROFESSIONAL CORPORATIONS.

 

6.                                      EXECUTIVE’S REPRESENTATIONS AND
WARRANTIES.  THE EXECUTIVE REPRESENTS AND WARRANTS TO THE COMPANY AND VRP AS
FOLLOWS:

 

(A)                                       GOOD FAITH.  AT ALL TIMES THAT HE WAS
AN EMPLOYEE, OFFICER, OR DIRECTOR OF THE COMPANY PRIOR TO THE DATE OF THIS
AGREEMENT, THE EXECUTIVE ACTED IN GOOD FAITH, HAD NO REASONABLE CAUSE TO BELIEVE
THAT HIS CONDUCT WAS UNLAWFUL, AND REASONABLY BELIEVED THAT HIS CONDUCT WAS IN
OR NOT OPPOSED TO THE BEST INTERESTS OF THE COMPANY.

 

(B)                                       CAPACITY; ENFORCEABILITY.  THE
EXECUTIVE HAS THE LEGAL CAPACITY TO EXECUTE AND DELIVER THIS AGREEMENT AND THE
RELEASE AND TO PERFORM HIS OBLIGATIONS HEREUNDER AND THEREUNDER.  THIS AGREEMENT
AND THE RELEASE ARE THE LEGAL, VALID AND BINDING OBLIGATIONS OF THE EXECUTIVE,
ENFORCEABLE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.

 

(C)                                       COMPANY STATEMENTS.  THE EXECUTIVE HAS
NOT RELIED UPON ANY STATEMENTS OR REPRESENTATIONS MADE BY THE COMPANY OR ITS
ATTORNEYS, WRITTEN OR ORAL, INCLUDING BUT NOT LIMITED TO STATEMENTS REGARDING
TAX OR LEGAL MATTERS, PERTAINING TO ACTIONS CONTEMPLATED BY THIS AGREEMENT,
OTHER THAN THE STATEMENTS SET FORTH IN THIS AGREEMENT AND THE RELEASE.

 

7.                                      COMPANY’S REPRESENTATIONS AND
WARRANTIES.  THE COMPANY AND VRP REPRESENT AND WARRANT TO THE EXECUTIVE AS
FOLLOWS:

 

(A)                                       CAPACITY; ENFORCEABILITY.  THE
EXECUTION AND DELIVERY OF THIS AGREEMENT ON BEHALF OF THE COMPANY AND VRP HAVE
BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION OF THE COMPANY AND VRP,
AS APPROPRIATE.  THIS AGREEMENT AND IS THE LEGAL, VALID AND BINDING OBLIGATION
OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.

 

10

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(B)                                       EXECUTIVE’S STATEMENTS.  THE COMPANY
AND VRP HAVE NOT RELIED UPON ANY STATEMENTS OR REPRESENTATIONS MADE BY THE
EXECUTIVE OR HIS ATTORNEYS, WRITTEN OR ORAL, PERTAINING TO ACTIONS CONTEMPLATED
BY THIS AGREEMENT, OTHER THAN THE STATEMENTS SET FORTH IN THIS AGREEMENT AND THE
RELEASE.

 

8.                                      FULL COMPENSATION.  THE EXECUTIVE
ACKNOWLEDGES AND UNDERSTANDS THAT THE PAYMENTS MADE AND OTHER CONSIDERATION
PROVIDED BY THE COMPANY UNDER THIS AGREEMENT WILL FULLY COMPENSATE THE EXECUTIVE
FOR AND EXTINGUISH ANY AND ALL OF THE POTENTIAL CLAIMS THE EXECUTIVE IS
RELEASING IN THE RELEASE, INCLUDING WITHOUT LIMITATION, ANY CLAIMS FOR
ATTORNEYS’ FEES AND COSTS AND ANY AND ALL CLAIMS FOR ANY TYPE OF LEGAL OR
EQUITABLE RELIEF.  THE EXECUTIVE AGREES THAT SUCH PAYMENTS ARE IN LIEU OF ANY
SEVERANCE PAYMENTS, BENEFITS OR ANY OTHER FORMS OF COMPENSATION TO WHICH HE MAY
BE ENTITLED UNDER ANY OTHER AGREEMENTS, PLANS, POLICIES OR ARRANGEMENTS OF THE
COMPANY, VRP, THE PROFESSIONAL CORPORATIONS, OR THEIR AFFILIATES, INCLUDING BUT
NOT LIMITED TO THE EMPLOYMENT AGREEMENT AND THE VRP AGREEMENT.

 

9.                                      LEGAL REPRESENTATION.  THE EXECUTIVE
ACKNOWLEDGES THAT HE HAS CONSULTED WITH HIS OWN ATTORNEY BEFORE EXECUTING THIS
AGREEMENT AND THE RELEASE, THAT HE HAS HAD A FULL OPPORTUNITY TO CONSIDER THIS
AGREEMENT AND THE RELEASE, AND THAT HE HAS HAD A FULL OPPORTUNITY TO ASK ANY
QUESTIONS THAT HE MAY HAVE CONCERNING THIS AGREEMENT AND THE RELEASE, AND THE
SETTLEMENT OF HIS POTENTIAL CLAIMS AGAINST THE COMPANY.

 

10.                               TAXES.  THE COMPANY WILL DEDUCT FROM ANY
PAYMENTS MADE TO THE EXECUTIVE UNDER THIS AGREEMENT ANY WITHHOLDING OR OTHER
TAXES THAT THE COMPANY IS REQUIRED TO DEDUCT, IF ANY, UNDER APPLICABLE LAW. 
EXCEPT TO THE EXTENT TAXES ARE WITHHELD BY THE COMPANY AND EXCEPT FOR THE
EXPRESS PROVISIONS HEREOF REGARDING TAX PAYMENTS AND INDEMNIFICATION, THE
EXECUTIVE SHALL BE SOLELY RESPONSIBLE FOR THE PAYMENT OF ALL TAXES DUE AND OWING
WITH RESPECT TO FESS, BENEFITS AND OTHER COMPENSATION PROVIDED TO HIM HEREUNDER.

 

11.                               ASSIGNMENT.  THE RIGHTS AND OBLIGATIONS OF THE
COMPANY UNDER THIS AGREEMENT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON
THE SUCCESSORS AND ASSIGNS OF THE COMPANY.  THE EXECUTIVE MAY NOT ASSIGN THIS
AGREEMENT OR ANY RIGHTS HEREUNDER, EXCEPT HIS RIGHTS HEREUNDER SHALL INURE TO
THE BENEFIT OF THIS ESTATE IN THE EVENT OF HIS DEATH.  ANY PURPORTED OR
ATTEMPTED ASSIGNMENT OR TRANSFER BY THE EXECUTIVE OF THIS AGREEMENT OR ANY OF
THE EXECUTIVE’S DUTIES, RESPONSIBILITIES, OR OBLIGATIONS HEREUNDER WILL BE VOID.

 

12.                               MISCELLANEOUS.

 

(A)                                       NOTICES.  NOTICES REQUIRED TO BE GIVEN
UNDER THIS AGREEMENT MUST BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN GIVEN
WHEN PERSONALLY SERVED, SENT BY COURIER OR MAILED BY UNITED STATES REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE LAST KNOWN
RESIDENCE ADDRESS OF THE EXECUTIVE OR, IN THE CASE OF THE COMPANY OR VRP, TO
THEIR PRINCIPAL OFFICES, AS APPROPRIATE, TO THE ATTENTION OF THE CHIEF EXECUTIVE
OFFICER OF THE COMPANY, OR TO SUCH OTHER ADDRESS AS ANY PARTY MAY HAVE FURNISHED
TO THE OTHER IN WRITING IN ACCORDANCE HEREWITH, EXCEPT THAT NOTICE OF CHANGE OF
ADDRESS WILL BE EFFECTIVE ONLY UPON RECEIPT BY THE OTHER PARTY.

 

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(B)                                       GOVERNING LAW.  THE VALIDITY,
INTERPRETATION, PERFORMANCE, AND ENFORCEMENT OF THIS AGREEMENT WILL BE GOVERNED
BY THE LAWS OF THE STATE OF MINNESOTA WITHOUT REGARD TO CONFLICTS-OF-LAWS
PROVISIONS THAT WOULD REQUIRE APPLICATION OF ANY OTHER LAW.

 

(C)                                       JURISDICTION AND VENUE.  THE
EXECUTIVE, THE COMPANY AND VRP CONSENT TO JURISDICTION OF THE HENNEPIN COUNTY,
MINNESOTA DISTRICT COURT AND/OR UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MINNESOTA, FOR THE PURPOSE OF RESOLVING ALL CLAIMS FOR ENFORCEMENT OR BREACH OF
THIS AGREEMENT.  ANY SUCH ACTIONS MUST BE BROUGHT IN SUCH COURTS.  EACH PARTY
CONSENTS TO PERSONAL JURISDICTION OVER SUCH PARTY IN THE STATE AND/OR FEDERAL
COURTS OF MINNESOTA AND HEREBY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION OR FORUM NON CONVENIENS.

 

(D)                                       SEVERABILITY.  IN THE EVENT ANY
PROVISION OF THIS AGREEMENT IS HELD ILLEGAL OR INVALID FOR ANY REASON, SUCH
ILLEGALITY OR INVALIDITY WILL NOT IN ANY WAY AFFECT THE LEGALITY OR VALIDITY OF
ANY OTHER PROVISION HEREOF AND SUCH ILLEGAL OR INVALID PROVISION WILL BE DEEMED
SEVERED FROM THIS AGREEMENT.

 

(E)                                       ENTIRE AGREEMENT.  EXCEPT FOR ANY AND
ALL AGREEMENTS OR UNDERSTANDINGS RELATED TO THE EXISTING OPTIONS (WHICH HAVE NOT
BEEN AFFECTED OR ALTERED BY THIS AGREEMENT EXCEPT AS PROVIDED IN SECTION 4(C)),
THIS AGREEMENT, THE RELEASE, AND THE SURVIVING PROVISIONS OF THE EMPLOYMENT
AGREEMENT AND THE VRP AGREEMENT SET FORTH THE ENTIRE UNDERSTANDING BETWEEN THE
COMPANY AND THE EXECUTIVE.  THIS AGREEMENT MAY NOT BE ALTERED OR AMENDED, EXCEPT
BY A WRITING EXECUTED BY THE PARTY AGAINST WHOM SUCH ALTERATION OR AMENDMENT IS
TO BE ENFORCED.

 

(F)                                         COUNTERPARTS.  THIS AGREEMENT MAY BE
SIMULTANEOUSLY EXECUTED IN ANY NUMBER OF COUNTERPARTS, AND SUCH COUNTERPARTS
EXECUTED AND DELIVERED, EACH AS AN ORIGINAL, WILL CONSTITUTE BUT ONE AND THE
SAME INSTRUMENT.

 

(G)                                      CAPTIONS AND HEADINGS.  THE CAPTIONS
AND SECTION HEADINGS USED IN THIS AGREEMENT ARE FOR CONVENIENCE OF REFERENCE
ONLY, AND WILL NOT AFFECT THE CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT
OR ANY OF THE PROVISIONS HEREOF.

 

(H)                                      WAIVERS.  NO FAILURE ON THE PART OF ANY
PARTY TO EXERCISE, AND NO DELAY IN EXERCISING, ANY RIGHT OR REMEDY HEREUNDER
WILL OPERATE AS A WAIVER THEREOF; NOR WILL ANY SINGLE OR PARTIAL EXERCISE OF ANY
RIGHT OR REMEDY HEREUNDER PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF, OR THE
EXERCISE OF ANY OTHER RIGHT OR REMEDY GRANTED HEREBY OR BY ANY RELATED DOCUMENT
OR BY LAW.  NO SINGLE OR PARTIAL WAIVER OF RIGHTS OR REMEDIES HEREUNDER, NOR ANY
COURSE OF CONDUCT OF THE PARTIES, WILL BE CONSTRUED AS A WAIVER OF RIGHTS OR
REMEDIES BY ANY PARTY (OTHER THAN AS EXPRESSLY AND SPECIFICALLY WAIVED).

 

(I)                                         RELIANCE BY THIRD PARTIES.  THIS
AGREEMENT IS INTENDED FOR THE EXCLUSIVE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS, PERSONAL REPRESENTATIVES,
SUCCESSORS, AND PERMITTED ASSIGNS, AND NO OTHER PERSON OR ENTITY HAS ANY RIGHT
TO RELY ON THIS AGREEMENT OR TO CLAIM OR DERIVE ANY BENEFIT THEREFROM, ABSENT
THE EXPRESS WRITTEN CONSENT OF THE PARTY TO BE CHARGED WITH SUCH RELIANCE OR
BENEFIT.

 

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(J)                                         ARBITRATION.  ANY DISPUTE OR
CONTROVERSY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE
SUBMITTED TO ARBITRATION IN ACCORDANCE WITH THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION THEN IN EFFECT IN MINNEAPOLIS, MINNESOTA BEFORE A SINGLE
ARBITRATOR WHO SHALL BE KNOWLEDGEABLE IN EXECUTIVE EMPLOYMENT LAW, WHO SHALL BE
INDEPENDENT OF, AND HAVE NO EX PARTE COMMUNICATIONS WITH, THE PARTIES OR THEIR
REPRESENTATIVES, AND WHO SHALL RENDER WRITTEN FINDINGS OF FACT, CONCLUSIONS OF
LAW AND ORDER.  IN ADDITION TO ANY OTHER INHERENT POWERS, ARBITRATORS SHALL HAVE
THE EXPRESS POWERS TO ORDER A PARTY TO COMPLY WITH OR DESIST FROM BREACHING ANY
OF THE TERMS OF THIS AGREEMENT.  THE DETERMINATION OF THE ARBITRATORS SHALL BE
FINAL AND BINDING UPON THE PARTIES AND MAY BE ENTERED A S A FINAL JUDGMENT IN
ANY COURT OF COMPETENT JURISDICTION.  THE PARTIES SHALL EQUALLY SHARE THE COSTS
OF ARBITRATION, UNLESS OTHERWISE ORDERED BY THE ARBITRATORS.  NOTHING HEREIN,
HOWEVER, SHALL DEPRIVE A PARTY OF THE RIGHT TO SEEK EQUITABLE RELIEF FROM THE
COURTS TO RESTRAIN OR ENJOIN THE OTHER FROM A BREACH OF THIS AGREEMENT PENDING
THE EMPANELLING OF THE ARBITRATORS OR THEIR FINAL DETERMINATION.

 

The parties have signed this Agreement as of the date first set forth above.

 

 

VIRTUAL RADIOLOGIC CORPORATION

 

SEAN O. CASEY, M.D.

 

 

 

By:

/s/ Robert C. Kill

 

/s/ Sean O. Casey, M.D.

Name:

 Robert C. Kill

 

 

Title:

President and Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

For purposes of Section 1(f) only:

 

 

 

 

 

VIRTUAL RADIOLOGIC PROFESSIONALS, LLC

 

 

 

 

 

By:

/s/ Eduard Michel, M.D.

 

 

Name:

 Eduard Michel, M.D.

 

 

Title:

Medical Director

 

 

 

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