Document:

exv10w15

	 	 	 
	

	 	InSight Health Corp. 

26250 Enterprise Court 

Suite 100

Lake Forest, CA 92630-8405

Telephone -
949.282.6000

Facsimile - 949.452.0253

November 18, 2009

PERSONAL AND CONFIDENTIAL

Steven M. King

2327 Casa Hermosa Ct.

Encinitas, California 92024

     Re: Separation Agreement

Dear Steven:

     This Letter Agreement (“Agreement”) sets forth the terms and conditions of your separation
from InSight Health Services Holdings Corp. (“InSight” or “Company”) and InSight Health Services
Corp. (“IHSC”), in each case effective December 6, 2009 (“Effective Date”). InSight will pay your
earned wages and any unused accrued vacation through December 6, 2009, regardless of whether you
sign this Agreement, and the other amounts and benefits set forth below upon the terms and under
the conditions set forth in this Agreement.

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

     Termination. On the Effective Date your employment, and any and all positions you
held with InSight and any of its subsidiary or affiliated entities (collectively “InSight
Companies”) is terminated, and as of that date you relinquish any and all of your authorities with
each of those companies. You and the Company agree that the Executive Employment Agreement dated
as of October 27, 2008 between you and IHSC (“Employment Agreement”) is hereby terminated in its
entirety and you shall not be entitled to any monetary compensation, including any salary in lieu
of notice, or any fringe benefits, perquisites or other employment benefits from the InSight
Companies, except as provided in this Agreement, which supersedes the Employment Agreement in all
respects.

     Separation Payments. In addition to your final paycheck and payment for any unused
accrued vacation through and including the Effective Date, in accordance with the “Consideration
Period” and “Revocation Period” (defined below), and in consideration
for your signing this Agreement, InSight agrees to pay you a gross amount equal to $255,000,
which is an

 

 

Steven M. King

November 18, 2009

Page 2

amount equal to your annual salary rate, less applicable taxes and withholdings required by law,
pursuant to the following schedule: (i) one payment in the gross amount of $127,500, less
applicable taxes and withholdings required by law, on June 7, 2010 (the period between the
Effective Date and the first payment date is referred to herein as the “Delay Period”), and (ii)
thirteen (13) payments in the gross amount of $9,808, less applicable taxes and withholdings
required by law, on a regular payroll basis beginning on June 18, 2010 (the payments pursuant to
clauses (i) and (ii) are referred to herein collectively as the “Separation Payments). The
Separation Payments will be sent to your home address as set forth above. 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 benefits or Separation Payments following the date of
such breach.

     FY 2010 Incentive Compensation. Because of your separation from the Company you will
not be eligible for any compensation under the Company’s Three-Year Executive Compensation Plan (or
any other Company compensation plan) for fiscal 2010 or any later periods pursuant to the terms and
conditions of such Plan.

     Benefits. As additional consideration for this Agreement, the Company agrees to
continue the employee benefits specified in this paragraph until the first of the following occurs:
(a) expiration of the three hundred sixty-five (365) day period following the Effective Date; or
(b) until you are eligible for employment benefits as the result of full-time employment with
another employer (regardless as to the amount or types of benefits provided by such other
employer). The benefits you will receive during the applicable period are life insurance, medical,
health and accident, and disability plans or programs covering you and any dependents under the
same terms and conditions as if you had not been terminated, including the payment by you of
required premiums and co-payments that are to be made by you. Subject to the last sentence of this
paragraph, 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 (a) above, 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
payment of the amount of any required deductibles and co-payments as you were responsible for
under the plans immediately prior to the Effective Date. 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 would
have received if you had remained employed with the Company for the applicable period or its
remainder as the Company may obtain for the same costs it would have paid if you had remained
employed by the Company. You agree and acknowledge that certain of the Company’s benefit plans
will change in connection with the calendar year 2010, and will be different from the benefits that
the

 

 

Steven M. King

November 18, 2009

Page 3

Company offered during calendar year 2009. Notwithstanding anything to the contrary, you shall pay
the cost of such benefits during the Delay Period, and the Company shall reimburse you, to the
extent that such costs would otherwise have been paid by the Company or to the extent that such
benefits would otherwise have been provided by the Company at no cost to you, the Company’s share
of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall
be reimbursed or provided by the Company in accordance with the payment schedule set forth above
for Separation Payments.

     Stock Options. All of the stock options granted to you under the Company’s 2008
Employee Stock Option Plan are hereby forfeited and cancelled and you shall have no rights to
exercise such stock options or receive any consideration in respect of such stock options under any
circumstances.

     Release. In consideration of this Agreement, you hereby 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, 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 Worker 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, the California Family Rights Act, the California Civil Code, and the
California Labor Code and/or any similar state anti-discrimination 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, arising out of or related to Executive’s Claims, from any or all
Company Releasees of any kind whatsoever including, without limitation, reinstatement, back pay,
front pay, attorney’s
fees and any form of injunctive relief. Notwithstanding the foregoing, this Agreement shall
not affect any of your rights or

 

 

Steven M. King

November 18, 2009

Page 4

obligations under (a) the InSight Health Services Corp. 401(k) Savings Plan (“InSight 401(k)
Plan”), (b) the Indemnification Agreement executed by you and the Company and IHSC dated October
27, 2008 (“Indemnification Agreement”), (c) the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), (d) workers’ compensation or unemployment insurance benefits claims, or (e) the terms of
this Agreement.

     You hereby waive and relinquish all rights and benefits afforded by California Civil Code
Section 1542. You 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 or her favor at the time
of executing the release, which if known by him or her must have
materially affected his or her 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 (without revocation) 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. 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 against any of the Company Releasees.

     Continuing Obligations to Company. You understand and agree that you have continuing
obligations to the Company as set for in Exhibit A attached hereto, which are incorporated herein
by reference and made a part hereof, from the date hereof and continuing as set forth therein.
Should you have a legitimate question as to whether a particular prospective employment would be in
breach of your obligations under Exhibit A 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 A, it will so advise you and/or your prospective employer in writing.

     Cooperation. During the period from the Effective Date to your receipt of the final
Separation Payment, but not to exceed five (5) hours per month, you may be asked questions by

 

 

Steven M. King

November 18, 2009

Page 5

the Company, its employees, outside 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. You and the Company acknowledge and agree that you may have future
employment and other obligations that may limit the amount of your time available to cooperate with
the Company under this paragraph and thus your reasonable cooperation will take into account any
such limitations. The Company agrees to reimburse you for all your reasonably incurred
out-of-pocket expenses incurred in satisfying your obligations under this paragraph.

     Return of InSight Property; Expenses. As set forth in Exhibit A, you agree to
immediately return, not later than the earlier to occur of your ceasing to provide services
hereunder and the Effective Date, all Company property and equipment in your possession or under
your control, including, but not limited to, credit cards, keys, building access cards, manuals,
notebooks, financial statements, Blackberry, cell phone, reports and any other Company property.
You should in a timely manner submit to InSight all outstanding business expenses incurred by you
through the Effective Date, for reconciliation and payment in accordance with the Company’s
policies.

     Legal Representation. You 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
InSight has signed this Agreement shall be considered as admission of any liability whatsoever by
InSight. 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 or permit 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
any of the Company Releasees, 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. You agree that InSight has no confidentiality
obligations with respect to this Agreement.

 

 

Steven M. King

November 18, 2009

Page 6

     Assistance/Cooperation Regarding Current or Future Litigation or Investigation. In
connection with InSight’s participation in 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 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
paragraph does not prohibit you from testifying truthfully pursuant to a subpoena or lawful court
order. In consideration of your agreement 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 agrees to reimburse you for all your
reasonably incurred out-of-pocket expenses incurred in assisting the Company. You and the Company
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 paragraph, and thus your
reasonable cooperation will take into account any such limitations.

     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 and IHSC agree that they will not make any negative or disparaging comments about you.

     Other Agreements. Except for (i) Exhibit A, (ii) the InSight 401(k) 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, 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, IHSC and you and upon the
Company’s, IHSC’s and your respective successors, assigns, heirs, executors, administrators and
legal representatives.

     No Strict Construction. The language 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 among you, InSight and IHSC with respect to the subject matter 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

 

 

Steven M. King

November 18, 2009

Page 7

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

     Governing Law. This Agreement is made and entered into in 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.

     Resolution of Disputes. Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, will be submitted to final and binding arbitration in Orange
County, California, before a mutually agreed upon arbitrator from Judicial Arbitration and
Mediation Services (JAMS), as the exclusive remedy for such controversy or dispute. Judgment upon
any award rendered by the arbitrator may be entered in the Superior Court of the County of Orange,
State of California, which will have exclusive jurisdiction thereof. The prevailing party in any
proceeding brought to enforce the terms of this Agreement will be entitled to recover from the
other party all damages, costs and expenses, including without limitation, reasonable attorneys’
and arbitrators’ fees , incurred as a result of such action. In agreeing to this arbitration, you
understand and agree that you are waiving the right to a
jury trial as to any issue(s) subject to this Agreement. The decision of the
arbitrator will be bound by generally accepted legal principles, including but not limited to all
rules of law and legal principles concerning potential liability, burdens of proof, and measure of
damages found in all applicable California statutes and administrative rules and codes, and all
California case law. The parties agree that this provision does not limit his/its/their right to
seek injunctive relief in the threat of imminent and irreparable harm as a result of breach of this
Agreement.

     Consideration Period. You have until 5:00 p.m. on December 9, 2009, or twenty-one
(21) days from receipt of this Agreement to consider it. InSight hereby advises you to consult
with an attorney before signing this Agreement.

     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.

 

 

Steven M. King

November 18, 2009

Page 8

     Please acknowledge your understanding and acceptance of this Agreement by executing two copies
of this Agreement below and returning both copies to me no later than 5:00 p.m. on December 9,
2009, or on the twenty-first (21st) day from the day you receive this Agreement.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Louis E. Hallman, III
 	 
	 	Louis E. Hallman, III 	 
	 	President and Chief Executive Officer

InSight Health Services Corp. and

InSight Health Services Holdings Corp. 	 
	 

Enclosures

ACKNOWLEDGED AND AGREED:

	 	 	 	 	 
	Dated: 11/18/09 	 	 
	 	/s/ Steven M. King
 	 
	 	Steven M. King 	 
	 	 	 
	 

 

 

EXHIBIT A

	V.	 	CERTAIN COVENANTS OF EXECUTIVE

SECTION 5.01 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 Employment 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 the Employment Agreement (otherwise than in the performance of
the Employment 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 the Employment 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 5.01 shall be absolute and unconditional.

     (b) Breach. Executive understands and agrees that Executive’s employment with Company
may be terminated if Executive breaches the Employment 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 the Employment 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) months 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 (d) 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.

     (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. (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 the Employment
Agreement or which are (1) conceived and developed during normal working hours, and (2) related to
the scope of Company Business. As used herein, 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”.

          (ii) 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).

SECTION 5.02 Rights and Remedies Upon Breach. If Executive breaches, or threatens to
breach, in any material respect any of the provisions of Section 5.01 hereof (“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. In
addition to and not in lieu of any other remedy that Company may have pursuant to the attached
Agreement or otherwise, in the event of any breach of any provision of Section 5.01 during the
period which Executive is entitled to receive payments and benefits pursuant to the attached
Agreement, such period shall terminate as of the date of such breach and Executive shall not
thereafter be entitled to receive any salary or other payments or benefits under the attached
Agreement.

SECTION 5.03 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 5.01 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.

SECTION 6.01 (a) Customers, Suppliers. Executive does not have, and at any time during
the term of the Employment Agreement shall not have, any employment with or any direct or indirect
interest in (as owner, partner, shareholder, employee, director, officer, agent, consultant or
otherwise) any customer of or supplier to Company.

     (b) Certain Activities. Executive during the term of the Employment Agreement shall
not (i) give or agree to give, any gift or similar benefit of more than nominal value to any
customer, supplier, or governmental employee or official or any other person who is or may be in a
position to assist or hinder Company in connection with any proposed transaction, which gift or
similar benefit, if not given or continued in

 

 

the future, might adversely affect the business or prospects of Company, (ii) use any corporate or
other funds for unlawful contributions, payments, gifts or entertainment, (iii) make any unlawful
expenditures relating to political activity to government officials or others, (iv) establish or
maintain any unlawful or unrecorded funds in violation of Section 30A of the Securities Exchange
Act of 1934, as amended, and (v) accept or receive any unlawful contributions, payments, gifts, or
expenditures.exv10w1

Exhibit 10.1

PROFESSIONAL SERVICES AGREEMENT

THIS PROFESSIONAL SERVICES AGREEMENT, dated as of December 1st 2009, is
between Blue Kiwi Group Ltd (“BLUE KIWI”), with principal offices at Suite 2683 ,
24B Moorefield Rd, Johnsonville, Wellington 6037, New Zealand, and Cistera Networks, Inc.
(“Cistera”) 6509 Windcrest Drive, Suite 160, Plano TX 75024.

	1.0	 	Services

Client agrees to retain BLUE KIWI to perform certain general consulting and other management
services (“Services”), as outlined below. BLUE KIWI agrees to furnish the Services to Client on the
terms and subject to the conditions set forth in this Agreement.

BLUE KIWI will provide Greg Royal to perform the Services required. Client will provide BLUE KIWI
with access to and use of its facilities and personnel to the extent reasonably determined by BLUE
KIWI (with the concurrence of Client) to be necessary to the performance of the Services. It is
expressly understood that BLUE KIWI is an independent contractor of Client and that BLUE KIWI will
use its professional judgment in determining the best means by which to perform the Services.

This Professional Services Agreement constitutes the “Agreement”.

	2.0	 	Scope of Services

Assist Client executive management in developing management tools and processes to support the
Company’s general performance improvement objectives and corporate governance development.

Assist Client management in determining the appropriate strategy for and managing an efficient
capital raise in amount determined sufficient to meet company’s current requirements.

Assist Client management in other tasks and projects as determined by management to be appropriate.

	3.0	 	Term

The term of this Agreement shall commence on the Effective Date, and, unless sooner terminated
pursuant to the terms of Section 8 of this Agreement, shall continue for an initial period of two
(2) years (the “Initial Period”). Subject to the provisions of Section 7, following the
completion of the Initial Period, this Agreement shall be “at will”.

	4.0	 	Compensation

In consideration of BLUE KIWI’s performance of the Services, Client agrees to pay to BLUE KIWI the
charges as set forth below according to the terms described below:

 

 

BLUE KIWI shall be compensated at the rate of $US12,500 per month.

BLUE KIWI shall bill Client on the 15th at the last day of each calendar month for services
performed for each period with payment due in 30 days.

BLUE KIWI shall bill Client for expenses incurred in performance of the activities outlined in this
agreement.

Incentive Compensation.

From time to time, Cistera may offer phantom stock, stock appreciation rights, stock options or
other equity interests in Cistera and its affiliates and/or other forms of long-term incentives to
BLUE KIWI, upon such terms and conditions as Cistera shall determine to be in its business
interests to do so.

	5.0	 	Ownership Of Materials Related To Services.

BLUE KIWI acknowledges that employees and affiliates will receive confidential information of
Client in the course of delivering the Services, that employees and affiliates are bound by the
terms of a confidentiality agreement previously executed with Client.

	6.0	 	Warranties; Limitations on Liability

BLUE KIWI warrants that:

It will perform the Services required in a competent and workmanlike manner in accordance with
applicable professional standards.

BLUE KIWI’s performance of the Services called for by this Agreement does not and will not violate:
(1) any applicable law, rule, or regulation; (2) any contracts with third parties; or (3) any
third—party rights in any patent, trademark, copyright, trade secret, or any other proprietary or
intellectual property right;

BLUE KIWI’s personnel performing the Services on Client‘s premises will comply with Client’s rules,
regulations, and policies to the extent communicated in advance to BLUE KIWI.

Except as set forth above in this Section 5, BLUE KIWI makes no other warranties, express or
implied, including without limitation any warranties as to merchantability or fitness for a
particular purpose or any warranties regarding any particular outcome of the Services. In no event
will either party be liable to the other party or any other person for any special, incidental,
consequential or exemplary damages, whether based on breach of contract, tort (excluding gross
negligence, intentional acts and infringement), statute or otherwise, regardless of whether the
breaching party has been advised of the possibility

 

 

of such damages. Each party expressly waives any right to seek to any such special, incidental,
consequential or exemplary damages.

In no event (including unenforceability of the limitations of liability herein, and independent of
any failure of essential purpose of the limited warranty and remedies provided hereunder), will
BLUE KIWI’s total liability in contract, tort or otherwise arising out of or in connection with the
provision of the Services, this Agreement or the Statement of Work exceed the aggregate service
fees paid to BLUE KIWI by Client pursuant to this Agreement.; provided, however, any liability for
fraud, breach of the Non- Disclosure Agreement or the indemnification obligations set forth in
Section 12 shall not be subject to this limitation on liability as well as liability which results
from gross negligence or intentional acts. This limit (subject to the. exclusions set forth in the
immediately preceding sentence) also applies to any subcontractors of the BLUE KIWI engaged in the
performance of the Services and is the maximum for which BLUE KIWI
or and its subcontractors are collectively responsible (subject to the exclusions set forth in the
immediately preceding sentence),

The parties acknowledge and agree that the foregoing limitations of liability are an essential
basis of the bargain set forth herein and are necessary in order to preserve the favorable terms
and conditions set forth in this agreement.

	7.0	 	Default Termination

Either party may terminate this Agreement, including the Services then remaining to be performed
under the Statement of Work, in the event the other party breaches a material term of this
Agreement and fails to cure such breach within thirty (30) days following receipt of written notice
to the other specifying in reasonable detail the nature of such breach. In the event any such
termination occurs after BLUE KIWI has performed a material portion of the Services and such
termination is not as a result of the breach by BLUE KIWI, Client shall pay to BLUE KIWI a pro rata
portion of the fees provided for in Section 3.1 based on the portion of the Services actually
delivered to Client prior to the effective date of termination. Client may also terminate this
Agreement immediately upon BLUE KIWI’s material breach of Section 12.

All accrued obligations and liabilities hereunder, and the provisions of Sections 4 through 12,
inclusive, shall survive the expiration or earlier termination of this Agreement by either party
for any reason.

	8.0	 	Independent Contractor

The parties agree that BLUE KIWI’s relationship with Client is that of an independent contractor
and nothing in this Agreement shall be construed as creating a partnership, joint venture or
employer—employee relationship or shall be deemed to constitute BLUE KIWI or Client the agent of
the other. Neither BLUE KIWI nor Client shall be or become liable or bound to any third party by
any representation, act or omission whatsoever of the other. Neither BLUE KIWI nor any of its
employees or other agents will be entitled

 

 

to any of the benefits which Client may make available to its employees, such as group insurance,
profit-sharing, or retirement benefits. BLUE KIWI will be solely responsible for complying with all
applicable local, state and federal laws with respect to its employees who are assigned to perform
the Services, including but not limited to obligations for the payment of federal, state and local
taxes, social security, disability and other contributions attributable to the rendition of
Services hereunder to Client.

BLUE KIWI will indemnify, hold harmless and defend Client from any and all claims, liabilities,
damages, taxes, fines or penalties sought or recovered by any governmental entity, including but
not limited to the Internal Revenue Service or any state taxing authority, arising out of BLUE
KIWI’s alleged failure to pay such taxes or make such contributions.

	9.0	 	Time for Performance; Force Majeure

Unless specifically guaranteed in the Statement of Work, all statements regarding the time required
to perform the Services and the dates by which those Services will be performed are estimates only.
While BLUE KIWI will endeavor to complete the Services on the schedule mutually established with
Client, BLUE KIWI makes no warranty that the Services will be completed by any given date.

	10.0	 	Miscellaneous

Notices. All notices permitted or required under this Agreement must be in writing and delivered by
personal delivery, facsimile transmission or certified or registered mail, return receipt
requested. Notices will be deemed given upon the earlier of actual receipt or (a) three business
(3) days after deposit with the courier service or (b) seven (7) business days after deposit with
the U.S. Postal Service. Notices must be sent to the addresses listed below, or to such other
address as either party may specify in writing:

lf to Client:

Attn: James Miller — President

Cistera Networks, Inc.

6509 Windcrest Drive, Suite 160

Plano, TX 75024

Fax: 214.722.1311

Phone: 972.381.4695

If to BLUE KIWI:

Blue Kiwi Group Ltd

Attn: Greg Royal

Suite 2683 ,

24B Moorefield Rd,

Johnsonville,

 

 

Wellington 6037,

New Zealand

Phone: +64-21-2991261

	11.0	 	Assignment.

Neither party may assign this Agreement or any of its obligations hereunder to any other person
without the other party’s express prior written consent, which consent will not be unreasonably
withheld.

	12.0	 	Severability.

In the event that any term or provision of this Agreement is held to be invalid, void or’
unenforceable, then the remainder of this Agreement shall not be affected, impaired or invalidated,
and each such term and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.

	13.0	 	Integration Interpretation and Amendments.

This Agreement constitutes the entire agreement of the parties hereto, and supersede all prior and
contemporaneous representations, proposals, discussions, and communications, whether oral or in
writing.

The Section headings contained in this Agreement are included for convenience only, and are not to
be considered in the interpretation hereof The obligations of either party under this Agreement
shall be deemed waived only by a waiver that is in writing and signed by an authorized officer of
the party to be charged.

	14.0	 	Governing Law; Jurisdiction and Venue.

This Agreement and the transactions contemplated hereby shall be governed by and construed in
accordance with the laws of the United States and the laws of the state of Texas.

IN WITNESS WHEREOF, the parties hereto have or caused this Agreement to be executed by their duly
authorized representatives, as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Blue Kiwi Group Ltd	 	 	 	Cistera Networks Inc	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By /s/ Gregory Royal
	 	 	 	By /s/ James Miller	 	 
	 
	Date:
	 	9th December 2009	 	 	 	Date:	 	9th December 2009

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]