Document:

exv10w1

 

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

by and between

ODYSSEY HEALTHCARE, INC.

and

WOODRIN GROSSMAN

dated effective as of

January 16, 2006

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.

	 	Certain Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	Term of Employment; Non-Renewal of Term
	 	 	5	 
	 
	 	 	 	 	 	 
	3.

	 	Terms of Employment
	 	 	5	 
	 

	 	(a) Position and Duties
	 	 	5	 
	 

	 	(b) Compensation
	 	 	6	 
	 
	 	 	 	 	 	 
	4.

	 	Termination of Employment
	 	 	7	 
	 

	 	(a) Death
	 	 	7	 
	 

	 	(b) Disability
	 	 	8	 
	 

	 	(c) Cause
	 	 	8	 
	 

	 	(d) Resignation by Employee
	 	 	8	 
	 

	 	(e) Agreement Not to Terminate
	 	 	8	 
	 
	 	 	 	 	 	 
	5.

	 	Compensation Upon Termination Prior to a Change in Control of the Company and
After the Second Anniversary of such Change in Control
	 	 	8	 
	 

	 	(a) Death or Disability
	 	 	8	 
	 

	 	(b) For Cause; Resignation by Employee Without Good Reason; Non-Renewal Election by Employee
	 	 	9	 
	 

	 	(c) Without Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the Company
	 	 	9	 
	 
	 	 	 	 	 	 
	6.

	 	Compensation Upon Employment Termination Occurring On or Within Two Years
After a Change in Control of the Company
	 	 	11	 
	 

	 	(a) Compensation Upon Termination
	 	 	11	 
	 
	 	 	 	 	 	 
	7.

	 	Other Provisions Relating to Termination
	 	 	13	 
	 

	 	(a) Notice of Termination
	 	 	13	 
	 

	 	(b) Date of Termination
	 	 	13	 
	 

	 	(c) Good Reason
	 	 	13	 
	 

	 	(d) Cause
	 	 	14	 
	 

	 	(e) Full Settlement; Mitigation
	 	 	14	 
	 

	 	(f) Release and Other Agreements
	 	 	14	 
	 
	 	 	 	 	 	 
	8.

	 	Disclosure of, Access to and Entrustment of Confidential Information, Business
Opportunities and Business Goodwill
	 	 	15	 
	 
	 	 	 	 	 	 
	9.

	 	Confidential Information; Ownership of Property
	 	 	15	 
	 

	 	(a) Obligations to Maintain Confidentiality
	 	 	15	 
	 

	 	(b) Ownership of Work Product
	 	 	17	 
	 
	 	 	 	 	 	 
	10.

	 	Non-Competition; Non-Solicitation; Non-Disparagement
	 	 	17	 
	 
	 	 	 	 	 	 
	11.

	 	Successors; Binding Agreement
	 	 	19	 
	 
	 	 	 	 	 	 
	12.

	 	Effect of Agreement on Plans and Agreements Governing Awards
	 	 	20	 
	 
	 	 	 	 	 	 
	13.

	 	Miscellaneous
	 	 	20	 
	 

	 	(a) Construction
	 	 	20	 

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	 	 	 	 	Page
	 

	 	(b) Notices
	 	 	20	 
	 

	 	(c) Severability
	 	 	21	 
	 

	 	(d) Withholding
	 	 	21	 
	 

	 	(e) No Waiver
	 	 	21	 
	 

	 	(f) Equitable and Other Relief
	 	 	21	 
	 

	 	(g) Entire Agreement
	 	 	21	 
	 

	 	(h) Arbitration
	 	 	22	 
	 

	 	(i) Attorney Fees
	 	 	22	 
	 

	 	(j) Survival
	 	 	22	 
	 

	 	(k) Governing Law
	 	 	22	 
	 

	 	(l) Amendments
	 	 	22	 
	 

	 	(m) Employee Acknowledgement
	 	 	22	 
	 

	 	(n) Counterparts
	 	 	23	 

ii

 

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of
January 16, 2006 (the “Effective Date”), by and between Odyssey HealthCare, Inc., a
Delaware corporation (the “Company”), and Woodrin Grossman (“Employee”).

RECITALS:

     A. The Company is a national provider of hospice services and desires to employ Employee as
the Senior Vice President – Strategy and Development of the Company.

     B. The Company considers the establishment and maintenance of a sound and vital management
group to be essential to protecting and enhancing its best interests and the best interests of its
stockholders.

     C. In order to induce Employee to accept employment by the Company as an officer of the
Company and its Subsidiaries (as defined in Section 1(o) below), the Company is willing to
agree to provide certain severance benefits to Employee in the event that Employee’s employment is
terminated or changed under the circumstances described in this Agreement.

     D. Employee is desirous of committing himself to serve the Company and its Subsidiaries on the
terms herein provided.

AGREEMENTS:

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1. Certain Definitions. As used in this Agreement, the following terms have the meanings
set forth below:

          (a) “Acquiring Person” means any Person or group of related Persons (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than (i) Employee or any
Employee Affiliate, or (ii) the Company, any of the Company’s Subsidiaries, any employee benefit
plan of the Company or of a Subsidiary of the Company or of a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a Subsidiary of the Company or of a corporation owned
directly or indirectly by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.

          (b) “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with the Person in question. As
used in this definition of “Affiliate,” the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of Voting Securities, by contract, or otherwise.

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          (c) “Board” means the Board of Directors of the Company and any committee thereof.

          (d) “Cause” means Employee’s

          (i) continued failure to substantially perform Employee’s material obligations and duties
under Section 3(a) (other than as a result of physical or mental incapacity), as reasonably
determined by the Board, and which is not remedied within 30 days after receipt of written notice
from the Company specifically identifying the manner in which the Company believes that Employee
has not substantially performed Employee’s material obligations and duties under Section
3(a);

          (ii) commission of an act of fraud, embezzlement, misappropriation, willful misconduct, bad
faith, dishonesty, breach of trust, or breach of fiduciary duty against the Company;

          (iii) material breach of Sections 8, 9 or 10;

          (iv) conviction, plea of no contest or nolo contendere, deferred adjudication or unadjudicated
probation for any felony or any crime involving moral turpitude;

          (v) failure to carry out, or comply with, in any material respect, any lawful directive of the
Board or the Reporting Officer (as defined in Section 3(a))consistent with the terms of this
Agreement, which is not remedied within 30 days after receipt of written notice from the Company
specifying such failure;

          (vi) violation of the Company’s substance abuse policy; or

          (vii) suspension or termination of Employee from participation in the Medicare or Medicaid
programs.

     (e) “Change in Control” means the occurrence of any of the following events:

          (i) any of the events described in clauses (ii), (iii) and (iv) of the definition of
“Change in Control” in the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan as in
effect on the date of this Agreement; or

          (ii) any Acquiring Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
or more of the combined voting power of the then outstanding Voting Securities of the Company.

          (f) “Competing Business” means a business that competes in any material respect with
the business engaged in by the Company or any of its Subsidiaries, (A) at the time in question in
respect of the Term of Non-Competition (as defined in Section 1(p)) occurring prior to the
Date of Termination and (B) as of the Date of Termination (as defined in Section 7(b)) in
respect of the Term of Non-Competition occurring on and after the Date of Termination.

2

 

          (g) “Competing Services” means services that, if provided to a business other than a
Competing Business, would constitute the conduct of a Competing Business.

          (h) “Disability” means Employee’s inability to perform, with or without reasonable
accommodations, the essential functions of Employee’s position hereunder for a period of 180
consecutive days due to mental or physical incapacity, as determined by mutual agreement of a
physician selected by the Company or its insurers and a physician selected by Employee; provided,
however, that if the opinion of the Company’s physician and Employee’s physician conflict, the
Company’s physician and Employee’s physician shall together agree upon a third physician, whose
opinion shall be binding. The foregoing definition of “Disability” is not intended to and shall
not affect the definition of “disability” or any similar term in any insurance policy the Company
or any of its Subsidiaries may provide.

          (i) “Employee Affiliate” means any Person directly or indirectly controlled by
Employee. For purposes of this Agreement, a Person shall be presumed to be controlled by Employee
if (i) Employee is a general partner of such Person (including any partnership in which Employee is
a general partner or any trust in which Employee is a trustee or beneficiary), (ii) Employee
directly or indirectly beneficially owns 10% or more of the outstanding Voting Securities of such
Person or (iii) such Person is controlled by any Person contemplated in clauses (i) or (ii) of this
definition.

          (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

          (k) “Geographic Area” means each city (including the 50-mile radius surrounding such
city) in which the Company or any of its Subsidiaries has a facility that engages in its respective
business or any line of its business (A) at the time in question in respect of the Term of
Non-Competition occurring prior to the Date of Termination and (B) as of the Date of Termination in
respect of the Term of Non-Competition occurring on and after the Date of Termination.

          (l) “Good Reason” means, subject to the terms and provisions of this Agreement
(including Sections 1(d) and 4(b)), the occurrence of one or more of the following
events:

          (i) any removal of Employee from the offices of Senior Vice President – Strategy and
Development of the Company; provided, however, that Good Reason may not be asserted by Employee
under this clause (i) after a Non-Renewal Notice has been given by either the Company or Employee;

          (ii) any termination or material reduction of a material benefit under any Investment Plan or
Welfare Plan in which Employee participates unless (A) there is substituted a comparable benefit
that is economically substantially equivalent to the terminated or reduced benefit prior to such
termination or reduction or (B) benefits under such Investment Plan or Welfare Plan are terminated
or reduced with respect to all employees previously granted benefits thereunder;

          (iii) any reduction in Employee’s Annual Base Salary;

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          (iv) any failure by the Company to comply with any of the provisions of Section
3(b), which failure is not contemplated previously within this definition;

          (v) any failure by the Company to comply with Section 11(c);

          (vi) the relocation or transfer of Employee’s principal office to a location more than 50
miles from Employee’s work address as of the Effective Date in the city of Dallas, Texas, without
Employee’s consent;

          (vii) a change in Employee’s reporting relationship described in Section 3(a) which results in
Employee reporting to an officer of the Company other than the Chief Executive Officer of the
Company; or

          (viii) without limiting the generality of the foregoing, any material breach by the Company or
any of its Subsidiaries or other Affiliates of (A) this Agreement or (B) any other agreement
between Employee and the Company or any such Subsidiary or other Affiliate,

excluding, in the case of clauses (i) through (viii), any isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by Employee.

          (m) “Person” means any individual, partnership, limited liability partnership, joint
venture, corporation, limited liability company, trust, association, or other entity or
organization.

          (n) “Pro Rata Bonus” means the amount equal to the product of (i) the amount of the
Annual Bonus (as defined in Section 3(b)(ii)), if any, to which Employee would have been
entitled for the calendar year in which Employee’s Date of Termination occurs if Employee’s
employment were not terminated during such calendar year, multiplied by (ii) a fraction,
the numerator of which is the number of days that have elapsed since the beginning of such calendar
year through (but not including) Employee’s Date of Termination, and the denominator of which is
the total number of days in such calendar year. The amount, if any, of the Annual Bonus to which
Employee would have been entitled for the calendar year in which the Date of Termination occurs
shall be determined by the Board in its sole good faith discretion; provided, however, that during
the period on or within two years after a Change in Control, for purposes of determining the amount
of the Pro Rata Bonus, Employee shall be deemed to have been entitled to an Annual Bonus of not
less than the amount of the last Annual Bonus awarded to Employee prior to such Change in Control,
and provided further however that any determination by the Board as to satisfaction of a
performance standard shall be made in the same manner as such determination is made for the other
executive officers of the Company.

          (o) “Subsidiary” means, with respect to any Person, any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by that Person.

          (p) “Term of Non-Competition” means the period of time beginning on the Effective Date
and continuing until 5:00 p.m., Dallas, Texas time, on the first anniversary of the Date of
Termination.

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           (q) “Voting Securities” means any securities that vote generally in the election of
directors, in the admission of general partners, or in the selection of any other similar governing
body.

          (r) “without Cause” means a termination by the Company of Employee’s employment during
the Term at the Company’s sole discretion for any reason other than a termination based upon Cause,
death or Disability; provided that, “without Cause” does not include termination of this Agreement
and Employee’s employment pursuant to Section 2.

2. Term of Employment; Non-Renewal of Term. Subject to the terms and provisions of this
Agreement, the Company hereby agrees to employ Employee, and Employee hereby agrees to be employed
by the Company, for the period (the “Term”) commencing on the Effective Date and, unless
Employee’s employment hereunder is sooner terminated in accordance with the terms hereof, expiring
at 5:00 p.m., Dallas Texas time, on January 15, 2009; provided, however, that commencing on January
15, 2009 (the Employment Expiration Date”), and on each January 15th occurring thereafter,
the Term shall automatically (without any action by either party) be extended for one additional
year unless, at least 90 days prior to the expiration of the Term, the Company or Employee shall
have given written notice (a “Non-Renewal Notice”) that it or Employee, as applicable, does
not wish to extend this Agreement (a “Non-Renewal”). Either party may elect not to renew
this Agreement. The term “Term,” as utilized in this Agreement, shall refer to the Term as so
automatically extended. The Term shall expire as a result of any Non-Renewal at 5:00 p.m., Dallas,
Texas time, on the January 15th of the extension period during which a Non-Renewal Notice is given,
and Employee’s employment shall terminate at the expiration of the Term.

3. Terms of Employment.

     (a) Position and Duties.

          (i) During the Term, Employee shall serve as Senior Vice President – Strategy and Development
of the Company. In so doing, Employee shall have such powers and duties (including holding officer
positions with one or more Subsidiaries of the Company) as may be assigned from time to time by the
Board, so long as such powers and duties are reasonable and customary for senior vice presidents –
Strategy and Development of an enterprise comparable to the Company. Employee shall report to the
Chief Executive Officer of the Company (the “Reporting Officer”).

          (ii) During the Term, and excluding any periods of vacation and sick leave to which Employee
is entitled, Employee agrees to devote all of Employee’s business time to the business and affairs
of the Company and, to the extent necessary to discharge the responsibilities assigned to Employee
hereunder, to (a) use Employee’s best efforts to perform diligently, faithfully, effectively and
efficiently such responsibilities, (b) use Employee’s best efforts to promote the interests of the
Company; (c) use Employee’s reasonable best efforts to maintain Employer’s status as a
participating provider under the Medicare and Medicaid programs; and (d) perform such other duties
appropriate for Employee’s position as the Board or the Reporting Officer may from time to time
reasonably direct.

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           (iii) Employee shall not engage, directly or indirectly, in any other business, investment, or
activity that interferes with the performance of Employee’s duties under this Agreement, is
contrary to the interests of the Company or requires any portion of Employee’s business time;
provided, however, that during the Term, it shall not be a violation of this Agreement for Employee
to (1) serve on the board of directors (or similar governing body) of one or more other companies
that do not engage in a Competing Business if the Board has provided prior approval (which shall
not be unreasonably withheld) for such service, (2) serve on corporate, civic, charitable or
industry sector association boards or committees, (3) deliver lectures or fulfill speaking
engagements and (4) manage personal investments, so long as such activities do not materially
interfere with the performance of Employee’s responsibilities as an employee of the Company in
accordance with this Agreement. Company hereby acknowledges and approves that Employee currently
serves on the board of directors of Kinetic Concepts, Inc. Notwithstanding the provisions of this
Sections 3(a)(ii) and (iii), Employee may continue to fulfill his obligations as a
consultant to Advanced Homecare Management, Inc., provided such obligations do not (A) interfere
with the performance of Employee’s responsibilities as an Employee of the Company in accordance
with this Agreement and (B) violate Employee’s covenants and obligations under this Agreement,
including Sections 8, 9 and 10.

     (b) Compensation.

          (i) Annual Base Salary. During the Term, Employee shall receive an annual base salary
(“Annual Base Salary”), which shall be paid bi-weekly in accordance with the customary
payroll practices for executive officers of the Company, in an amount at least equal to $308,227.50
per year. At least annually (by no later than January 31 of each year) during the Term, the Board
shall review the Annual Base Salary of Employee and may increase (but not decrease) the Annual Base
Salary by such amount as the Board shall deem appropriate. The term “Annual Base Salary”
as used in this Agreement shall refer to the Annual Base Salary as it may be so increased.

          (ii) Annual Bonus. During the Term, Employee shall be eligible to receive, in
addition to the Annual Base Salary, an annual bonus in an amount not less than 70% of the Annual
Base Salary (each, an “Annual Bonus”), subject to achieving the performance goals
established by the Board as described below. Annually (by no later than March 15 of each calendar
year during the Term), the Board shall determine the amount (or amount range) of the Annual Bonus
that Employee shall be eligible to receive for the calendar year and the performance goals that
must be achieved for Employee to become entitled to receive the Annual Bonus for such calendar
year. For each calendar year (or partial calendar year) during the Term, the Board shall determine
in its sole good faith discretion whether the performance goals established for Employee for such
calendar year have been achieved, such determination to be made by no later than the date on which
the Company publicly announces its earnings for such calendar year in a press release in the
immediately following calendar year. Subject to the terms hereof, any Annual Bonus that Employee
becomes entitled to receive shall be payable to Employee within fifteen days after such
determination by the Board.

          (iii) Stock Options. On the Effective Date, the Company shall grant Employee an
option to purchase an aggregate of 250,000 shares of the Company’s common stock, which grant shall
be subject to the terms and provisions of the Odyssey HealthCare, Inc. 2001 Equity-

6

 

Based Compensation Plan Management Stock Option Agreement, dated October 11, 2005, attached
hereto as Exhibit A and the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan
dated as of November 5, 2001, as amended by that certain First Amendment to the Odyssey HealthCare,
Inc. 2001 Equity-Based Compensation Plan dated as of May 5, 2005 and by that certain Second
Amendment to the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan dated as of May 5,
2005.

          (iv) Incentive, Savings, Stock Option and Retirement Plans. During the Term, Employee
shall be entitled to participate in all incentive, savings, stock option, equity-based, profit
sharing and retirement plans, practices, policies and programs applicable generally to other
executive officers of the Company (“Investment Plans”), subject to all of the terms and
conditions of such Investment Plans.

          (v) Welfare Benefit Plans. During the Term, Employee and/or Employee’s family, as the
case may be, shall be eligible for participation in and shall receive all benefits under the
welfare benefit plans, practices, policies and programs (“Welfare Plans”) provided by the
Company (including, without limitation, medical, prescription, dental, short-term and long-term
disability, salary continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other executives of the
Company, subject to all of the terms and conditions of such Welfare Plans.

          (vi) Perquisites. During the Term, Employee shall be entitled to receive (in addition
to the benefits described above) such perquisites and fringe benefits appertaining to Employee’s
position in accordance with any policies, practices, and procedures established by the Board. In
addition to the forgoing, Employee shall be entitled to receive a health club dues allowance of not
more than $100.00 per month, as determined by the Board.

          (vii) Expenses. During the Term, Employee shall be entitled to receive prompt
reimbursement for all reasonable business-related expenses incurred by Employee in the performance
of Employee’s duties in accordance with the Company’s policies, practices and procedures.

          (viii) Vacation and Holidays. During the Term, Employee shall be entitled to paid
vacation, in accordance with the plans, policies, programs and practices of the Company for its
executive officers. In addition, Employee shall be entitled to sick leave and paid holidays, in
accordance with the plans, policies, programs and practices of the Company for its executive
officers.

          (ix) Proration. Any payments or benefits payable to Employee hereunder in respect of
any calendar year during which Employee is employed by the Company for less than the entire year,
unless otherwise provided in the applicable plan or arrangement, shall be prorated in accordance
with the number of days in such calendar year during which Employee is so employed.

4. Termination of Employment.

     (a) Death. Employee’s employment hereunder shall terminate automatically upon Employee’s
death during the Term.

7

 

     (b) Disability. If the Disability of Employee has occurred during the Term, the Company
may give to Employee a written Notice of Termination (as defined in Section 7(a)) in
accordance with Section 7(a) of its intention to terminate Employee’s employment hereunder.
In such event, Employee’s employment shall terminate effective on the 30th day after receipt of
such notice by Employee (the “Disability Effective Date”); provided that, within 30 days
after receipt of the Notice of Termination, Employee shall not have returned to perform, with or
without reasonable accommodations, the essential functions of Employee’s position on a full-time
basis. During any period of Employee’s Disability, the Company may assign Employee’s duties to any
other Employee of the Company or may engage or hire a third party to perform such duties and any
such action shall not be deemed “Good Reason” for Employee to terminate this Agreement pursuant to
Section 4(d)(i) so long as Employee continues to receive the compensation and benefits
under Section 3 during such period.

     (c) Cause. Subject to Section 7(d), the Company may terminate Employee’s
employment at any time during the Term for Cause or without Cause.

     (d) Resignation by Employee. At Employee’s option, Employee may terminate Employee’s
employment hereunder (i) subject to Section 7(c), for Good Reason or (ii) without Good
Reason.

     (e) Agreement Not to Terminate. Notwithstanding any provision to the contrary contained in
this Agreement, the Company agrees that it shall not have the right to terminate Employee’s
employment, other than for Cause, for a period of time commencing on the Effective Date and ending
at 5:00 p.m., Dallas, Texas time, on the 180th day following the Effective Date.

5. Compensation Upon Termination Prior to a Change in Control of the Company and After the
Second Anniversary of such Change in Control. Prior to the occurrence of a Change in Control
of the Company and after the second anniversary of such Change in Control of the Company,
conditioned on the execution and delivery of a Release (as defined in Section 7(f)) signed
by Employee or Employee’s legal representative pursuant to Section 7(f), Employee shall be
entitled to the following compensation from the Company upon the termination of Employee’s
employment during the Term, which shall be in lieu of any other severance pay or employment
benefits to which Employee might otherwise be entitled (whether contractual or under a severance
plan, the WARN Act, any other applicable law, or otherwise):

     (a) Death or Disability. If Employee’s employment is terminated by reason of Employee’s
death or Disability, the Company shall pay to Employee or Employee’s legal representatives (i)
within 30 days after the later to occur of the Date of Termination or the effective date of the
Release, a lump sum in cash equal to the sum of Employee’s Annual Base Salary through the Date of
Termination to the extent not previously paid and any compensation previously deferred by Employee
(together with any accrued interest or earnings thereon) (the “Accrued Obligations”); (ii)
the amount of any Annual Bonus to which Employee was entitled for the calendar year ending prior to
the Date of Termination to the extent not previously paid, which amount shall be paid at such time
as the Company pays other executives of the Company annual bonuses for the prior calendar year (but
in no event later than the fifteenth business day after the Company publicly announces its earnings
for such calendar year in a press release); (iii) without duplication of any amount payable
pursuant to clause (ii) above, the amount of any Pro

8

 

Rata Bonus, which shall be paid at such time as the Company pays the other executives of the
Company annual bonuses for the calendar year in which Employee’s Date of Termination occurs (but in
no event later than the fifteenth business day after the Company publicly announces its earnings
for such calendar year in a press release); (iv) any amounts arising from Employee’s participation
in, or benefits under, any Investment Plan (the “Accrued Investments”), which amounts shall
be paid in accordance with the terms and conditions of such Investment Plan; and (v) any amounts to
which Employee or Employee’s spouse, beneficiaries or estate are entitled from Employee’s
participation in, or benefits under, any Welfare Plan (“Accrued Welfare Benefits”), which
amounts shall be paid in accordance with the terms and conditions of such Welfare Plan. Except as
described in this Section 5(a), in the event of Employee’s termination by reason of
Employee’s death or Disability, Employee and Employee’s legal representatives, as applicable, shall
forfeit all rights to any other compensation.

     (b) For Cause; Resignation by Employee Without Good Reason; Non-Renewal Election by
Employee. If the Company shall terminate Employee’s employment for Cause or Employee resigns
without Good Reason or Employee’s employment is terminated due to a Non-Renewal election by
Employee, the Company shall have no further obligations to Employee other than the obligation for
payment of:

          (i) the Accrued Obligations, which shall be payable within 30 days after the later to occur of
the Date of Termination or the effective date of the Release;

          (ii) the amount of any Annual Bonus to which Employee was entitled for the calendar year
ending prior to the Date of Termination to the extent not previously paid, which amount shall be
payable at such time as the Company pays other executive of the Company annual bonuses for the
prior calendar year (but in no event later than the fifteenth business day after the Company
publicly announces its earnings for such calendar year in a press release);

          (iii) the Accrued Investments, which amounts shall be paid in accordance with the terms and
conditions of the Investment Plans;

          (iv) the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms
and conditions of the Welfare Plans; and

          (v) without duplication of any amount payable pursuant to clause (ii) above, solely in the
case of a Non-Renewal by Employee or the Company, the amount of any Pro Rata Bonus, which shall be
paid at such time as the Company pays the other executives of the Company annual bonuses for the
calendar year in which Employee’s Date of Termination occurs (but in no event later than the
fifteenth business day after the Company publicly announces its earnings for such calendar year in
a press release).

     Except as described in this Section 5(b), in the event of Employee’s termination by
the Company for Cause or by Employee without Good Reason or due to a Non-Renewal election by
Employee, Employee shall forfeit all rights to any other compensation.

     (c) Without Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
Company. If the Company shall terminate Employee’s employment without Cause (other than by
reason of Employee’s death or Disability or a Non-Renewal) or Employee resigns for

9

 

Good Reason or Employee’s employment is terminated due to a Non-Renewal election by the Company,
then the Company shall pay or provide Employee:

          (i) within 30 days after the later to occur of the Date of Termination or the effective date
of the Release, a lump sum in cash equal to the aggregate of the following amounts: (A) the Accrued
Obligations and (B) the amount of any Annual Bonus to which Employee was entitled for the calendar
year ending prior to the Date of Termination to the extent not previously paid;

          (ii) without duplication of any amount payable pursuant to clause (i)(B) above, the amount of
any Pro Rata Bonus, which shall be paid at such time as the Company pays the other executives of
the Company annual bonuses for the calendar year in which Employee’s Date of Termination occurs
(but in no event later than the fifteenth business day after the Company publicly announces its
earnings for such calendar year in a press release);

          (iii) the Accrued Investments, which amounts shall be paid in accordance with the terms and
conditions of the Investment Plans;

          (iv) the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms
and conditions of the Welfare Plans;

          (v) the amount of Employee’s Annual Base Salary as of the Date of Termination, which amount
shall be paid in bi-weekly payments, in accordance with the customary payroll practices of the
Company, for the period from the Date of Termination through the first anniversary of the Date of
Termination (such period, the “Severance Period”) in accordance with the customary payroll
practices for executive officers of the Company; provided, however, that Employee shall be entitled
to receive the amount payable pursuant to this Section 5(c)(v) only so long as Employee has
not breached the provisions of Section 8, 9 or 10, at which time the
Company’s payment obligations pursuant to this Section 5(c)(v) shall immediately cease;

          (vi) if Employee is entitled on the Date of Termination to coverage under the medical,
prescription, and dental portions of the Welfare Plans, continuation of such coverage for Employee
and Employee’s dependents for a period ending on the later to occur of (A) the first anniversary of
the Date of Termination or (B) the Employment Expiration Date, at the active employee cost payable
by Employee with respect to those costs paid by Employee prior to the Date of Termination and
whereby the balance of applicable premiums, as determined by the Company, shall be paid by the
Company, with income applicable to such premiums imputed to Employee; provided, however, that this
coverage will count towards the depletion of any continued health care coverage rights that
Employee and Employee’s dependents may have pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”); provided, further, however, that
Employee’s or Employee’s dependents’ rights to continued health care coverage pursuant to this
Section 5(c)(vi) shall terminate at the time Employee or Employee’s dependents become
covered, as described in COBRA, under another group health plan, and shall also terminate as of the
date the Company ceases to provide coverage to its senior executives generally under any such
Welfare Plan; and

10

 

           (vii) notwithstanding the terms or conditions of any Award (as defined in the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan), Employee shall be entitled to exercise
Employee’s Awards that are vested as of the Date of Termination until the first anniversary of the
Date of Termination provided, however, that if the terms of the plan or agreement governing such
Award (other than the meaning of “Cause” and “Disability”) are more favorable to Employee as to
exercisability than the terms of this Section 5(c)(vii), then the more favorable term(s) of
such Award agreement or plan shall govern the exercisability of such Award upon Employee’s
termination.

     Except as described in this Section 5(c), in the event of Employee’s termination by
the Company without Cause or by Employee for Good Reason or due to a Non-Renewal election by the
Company, Employee shall forfeit all rights to any other compensation.

6. Compensation Upon Employment Termination Occurring On or Within Two Years After a Change in
Control of the Company.

     (a) Compensation Upon Termination. After the occurrence of a Change in Control of the
Company and on or before the second anniversary of such Change in Control, conditioned on the
execution and delivery of a Release signed by Employee or Employee’s legal representative pursuant
to Section 7(f), Employee shall be entitled to the following compensation from the Company
upon the termination of Employee’s employment during the Term, which shall be in lieu of any other
severance pay or employment benefits to which Employee might otherwise be entitled (whether
contractual or under a severance plan, the WARN Act, any other applicable law, or otherwise):

          (i) Death or Disability. If Employee’s employment is terminated by reason of
Employee’s death or Disability, then Employee or Employee’s legal representatives shall be entitled
to the same compensation benefits from the Company as set forth in Section 5(a) to which
Employee would have been entitled if the termination of Employee’s employment had occurred prior to
the occurrence of a Change in Control or after the second anniversary of such Change in Control.
Except as described in this Section 6(a)(i), Employee’s death or Disability, Employee and
Employee’s legal representatives, as applicable, shall forfeit all rights to any other
compensation.

          (ii) For Cause; Resignation by Employee Without Good Reason; Non-Renewal Election by
Employee. If the Company shall terminate Employee’s employment for Cause or Employee resigns
without Good Reason or Employee’s employment is terminated due to a Non-Renewal election by
Employee, then Employee or Employee’s legal representatives shall be entitled to the same
compensation benefits from the Company as set forth in Section 5(b) to which Employee would
have been entitled if the termination of Employee’s employment had occurred prior to the occurrence
of a Change in Control or after the second anniversary of such Change in Control. Except as
described in this Section 6(a)(ii), in the event of Employee’s termination by the Company
for Cause or by Employee without Good Reason or due to a Non-Renewal election by Employee, Employee
shall forfeit all rights to any other compensation.

          (iii) Without Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
Company. If the Company shall terminate Employee’s employment without

11

 

Cause (other than by reason of Employee’s death or Disability) or Employee resigns for Good
Reason or Employee’s employment is terminated due to a Non-Renewal election by the Company, then
the Company shall pay or provide Employee:

               (A) within 30 days after the later to occur of the Date of Termination or the effective date
of the Release, a lump sum in cash equal to the aggregate of the following amounts: (1) the Accrued
Obligations and (2) the amount of any Annual Bonus to which Employee was entitled for the calendar
year ending prior to the Date of Termination to the extent not previously paid;

               (B) the amount of any Pro Rata Bonus, which shall be paid at such time as the Company pays the
other executives of the Company annual bonuses for the calendar year in which Employee’s Date of
Termination occurs (but in no event later than the fifteenth business day after the Company
publicly announces its earnings for such calendar year in a press release);

               (C) the Accrued Investments, which amounts shall be paid in accordance with the terms and
conditions of the Investment Plans;

               (D) the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms and
conditions of the Welfare Plans;

               (E) bi-weekly payments each of which are equal to 1/26th of the highest Annual Base Salary to
which Employee was entitled during the 24-month period ending on the Date of Termination, payable
in accordance with the customary payroll practices of the Company, which payments shall continue
from the Date of Termination through the later to occur of (1) the first anniversary of the Date of
Termination or (2) the second anniversary of the date on which the Change of Control was
consummated (such period, the “Change of Control Severance Period”); provided, however, that
Employee shall be entitled to receive the amount payable pursuant to this Section
6(a)(iii)(E) only so long as Employee has not breached the provisions of Section 8,
9 or 10, at which time the Company’s payment obligations pursuant to this
Section 6(a)(iii)(E) shall immediately cease; and

               (F) if Employee is entitled on the Date of Termination to coverage under the medical,
prescription, and dental portions of the Welfare Plans, continuation of such coverage for Employee
and Employee’s dependents for a period ending on the later to occur of (1) the first anniversary of
the Date of Termination or (2) the Employment Expiration Date, at the active employee cost payable
by Employee with respect to those costs paid by Employee prior to the Date of Termination and
whereby the balance of applicable premiums, as determined by the Company, shall be paid by the
Company, with income applicable to such premiums imputed to Employee; provided, however, that this
coverage will count towards the depletion of any continued health care coverage rights that
Employee and Employee’s dependents may have pursuant to COBRA; provided further, however, that
Employee’s or Employee’s dependents’ rights to continued health care coverage pursuant to this
Section 6(a)(iii)(F) shall terminate at the time Employee or Employee’s dependents become
covered, as described in COBRA, under another group health plan, and shall also terminate as of the
date the Company ceases to provide coverage to its senior executives generally under any such
Welfare Plan; and

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               (G) notwithstanding the terms or conditions of any Award (as defined in the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan), Employee shall be entitled to exercise
Employee’s Awards that are vested as of the Date of Termination until the first anniversary of the
Date of Termination provided, however, that if the terms of the plan or agreement governing such
Award (other than the meaning of “Cause” and “Disability”) are more favorable to Employee as to
exercisability than the terms of this Section 6(a)(iii)(G), then the more favorable term(s)
of such Award agreement or plan shall govern the exercisability of such Award upon Employee’s
termination.

     Except as described in this Section 6(a)(iii), in the event of Employee’s termination
by the Company without Cause or by Employee for Good Reason or due to a Non-Renewal election by the
Company, Employee shall forfeit all rights to any other compensation.

7. Other Provisions Relating to Termination.

     (a) Notice of Termination. Any termination by the Company for Cause or without Cause or by
reason of Employee’s Disability, or by Employee’s resignation for Good Reason or without Good
Reason, shall be communicated by Notice of Termination to the other party hereto given in
accordance with Section 13(b). For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon and (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Employee’s employment under
the provision so indicated. The failure by the Company or Employee to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall
not waive any right of the Company or Employee hereunder or preclude the Company or Employee from
asserting such fact or circumstance in enforcing the Company’s or Employee’s rights hereunder.

     (b) Date of Termination. “Date of Termination” means (i) if Employee’s employment
is terminated by reason of Employee’s death, the date of Employee’s death; (ii) if Employee’s
employment is terminated by reason of Employee’s Disability, the Disability Effective Date
(provided that Employee shall not have returned to perform, with or without reasonable
accommodation, the essential functions of Employee’s position on a full-time basis during such
30-day period); (iii) if Employee’s employment is terminated by the Company without Cause or by
Employee for Good Reason or without Good Reason, then, subject to Section 7(c), the date
specified in the Notice of Termination (which date shall be a date between the date that the Notice
of Termination is given and 30 days thereafter (inclusive)); (iv) if Employee’s employment is
terminated by the Company for Cause then, subject to Section 7(d), the date on which the
Notice of Termination is given; and (v) if Employee’s employment is terminated due to a Non-Renewal
election by Employee or the Company, the date on which the Term expires.

     (c) Good Reason. Upon Employee’s learning of the occurrence of any event described in the
definition of Good Reason in Section 1(l), Employee may terminate Employee’s employment
hereunder for Good Reason within 60 days thereafter by giving a Notice of Termination to the
Company to that effect, describing in reasonable detail the facts or circumstances giving rise to
Employee’s right to terminate Employee’s employment for Good Reason (and, if applicable, the action
required to cure same). If the effect of the occurrence of the event described in Section 

13

 

1(l) may be cured, the Company shall have the opportunity to cure any such effect for a
period of 60 days following receipt of Employee’s Notice of Termination. If within 60 days
following the Company’s receipt of a Notice of Termination for Good Reason the Company has not
cured the facts or circumstances giving rise to Employee’s right to terminate Employee’s employment
for Good Reason, then the termination by Employee for Good Reason shall be effective as of the date
specified in Employee’s Notice of Termination. If Employee does not give a Notice of Termination to
the Company within 60 days after learning of the occurrence of an event giving rise to Good Reason,
then this Agreement shall remain in effect; provided, however, that the failure of Employee to
terminate this Agreement for Good Reason shall not be deemed a waiver of Employee’s right to
terminate Employee’s employment for Good Reason upon the occurrence of a subsequent event described
in Section 1(l) in accordance with the terms of this Agreement. Notwithstanding the
foregoing, the right of Employee to terminate Employee’s employment for Good Reason under
Section 4(d)(i) shall not limit the Company’s right to terminate Employee’s employment for
Cause under Section 4(c) if Cause is determined to exist prior to the time Good Reason is
determined to exist.

     (d) Cause. Upon the Company learning of the occurrence of any event described in
Section 1(d), the Company may at any time terminate Employee’s employment hereunder for
Cause within 60 days thereafter by giving Employee a Notice of Termination to that effect,
describing in reasonable detail the facts or circumstances giving rise to the Company’s right to
terminate Employee’s employment for Cause (and, if applicable, the action required to cure same).
If the Company does not give a Notice of Termination to Employee within 60 days after learning of
the occurrence of an event giving rise to Cause, then this Agreement shall remain in effect;
provided, however, that the failure of the Company to terminate this Agreement for Cause shall not
be deemed a waiver of the Company’s right to terminate Employee’s employment for Cause upon the
occurrence of a subsequent event described in Section 1(d) in accordance with the terms of
this Agreement. Notwithstanding the foregoing, the right of the Company to terminate Employee’s
employment for Cause under Section 4(c) shall not limit Employee’s right to resign for Good
Reason under Section 4(d)(i) if Good Reason is determined to exist prior to the time Cause
is determined to exist.

     (e) Full Settlement; Mitigation. In no event shall Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to Employee under
any of the provisions of this Agreement, and such amounts shall not be reduced whether or not
Employee obtains other employment. The Company shall not be liable to Employee for any damages for
breach of this Agreement in addition to the amounts payable under Section 5 or 6
arising out of the termination of Employee’s employment prior to the end of the Term. The Company
shall be entitled to seek damages from Employee for any breach of Section 8, 9 or
10 by Employee or for Employee’s criminal misconduct.

     (f) Release and Other Agreements. Notwithstanding any other provision in this Agreement to
the contrary, in consideration for receiving the severance benefits described in (i) Sections
5(c)(v), 5(c)(vi) and 5(c)(vii) or (ii) Sections 6(a)(iii)(E),
6(a)(iii)(F) and 6(a)(iii)(G), as the case may be, Employee hereby agrees to
execute (and not revoke) a release in substantially the form attached hereto as Exhibit B
(the “Release”). If Employee fails to properly execute and deliver the Release (or revokes
the Release), Employee agrees that Employee shall not be entitled to receive such severance
benefits. Without limiting the foregoing, in consideration for

14

 

receiving such severance benefits, upon any termination of Employee’s employment (other than by
reason of death), whether Employee’s employment is terminated by Employee or by the Company,
Employee hereby agrees to resign in writing, in form and substance reasonably acceptable to the
Company, from all officer and/or director positions with the Company or any Subsidiary or Affiliate
thereof, effective on the Date of Termination. For purposes of this Agreement, the Release and the
resignation shall be considered to have been executed by Employee if it is signed by Employee’s
legal representative in the case of Employee’s legal incompetence or on behalf of Employee’s estate
in the case of Employee’s death. Upon Employee’s execution and delivery of the Release, the
Company shall also promptly execute and deliver the Release.

8. Disclosure of, Access to and Entrustment of Confidential Information, Business Opportunities
and Business Goodwill. During the course of Employee’s employment with the Company (including
during the 180-day period following the Effective Date), the Company shall disclose to Employee, or
place Employee in a position to have access to or develop, Confidential Information (as defined in
Section 9(a)(i)), and/or shall entrust Employee with business opportunities of the Company,
and/or shall place Employee in a position to develop business goodwill on behalf of the Company.
There is a need and desire on the part of the Company and Employee to specify the parties’ rights
and obligations with respect to the ownership and protection of such Confidential Information,
business opportunities and goodwill. Accordingly, as a material inducement to the Company to enter
into this Agreement; in consideration for the compensation and other benefits payable hereunder to
Employee; to protect the Company’s Confidential Information that has been and will be in the future
disclosed or entrusted to Employee (the disclosure of which by Employee in violation of this
Agreement would adversely affect the business goodwill of the Company), the business goodwill of
the Company that has been and will in the future be developed in Employee and the business
opportunities that have been and will in the future be disclosed or entrusted to Employee by the
Company; and for other good and valuable consideration, Employee agrees to comply with, and be
bound by, Sections 9 and 10. As used in this Section 8, “Company” shall
include the Company and any of its Subsidiaries.

9. Confidential Information; Ownership of Property.

     (a) Obligations to Maintain Confidentiality.

          (i) Employee acknowledges that the Company has trade, business and financial secrets and other
confidential and proprietary information regarding the Company and its business, in whatever form,
tangible or intangible (collectively, the “Confidential Information”), and that, during the
course of Employee’s employment with the Company (including during the 180-day period following the
Effective Date), Employee has received, shall receive or be placed in a position to have access to
or develop Confidential Information. Employee further acknowledges and agrees that Employee’s use
of Confidential Information in the conduct of business on behalf of a competitor of the Company
would constitute unfair competition with the Company and would adversely affect the business
goodwill of the Company. Confidential Information includes sales materials, technical information,
processes and compilations of information, records, specifications and information concerning
customers, prospective customers, customer and prospective customer lists, and information
regarding

15

 

methods of doing business. As defined herein, Confidential Information shall not include
information that is (i) obtained by Employee from a source other than the Company or its
Affiliates, which source is not under a duty of non-disclosure in regard to such information or
(ii) becomes generally available to the public other than through disclosure by Employee in
violation of the provisions of this Agreement.

          (ii) Employee is aware of those policies implemented by the Company to keep its Confidential
Information secret, including those policies limiting the disclosure of information on a
need-to-know basis and requiring the keeping of information in secure areas. Employee acknowledges
that the Confidential Information has been developed or acquired by the Company through the
expenditure of substantial time, effort and money and provides the Company with an advantage over
competitors who do not know or use such Confidential Information.

          (iii) During and following Employee’s employment by the Company, Employee shall hold in
confidence and not directly or indirectly disclose, use (for Employee’s commercial advantage or
otherwise), copy, make lists of, or make available to others any Confidential Information except in
Employee’s good faith performance of Employee’s duties to the Company as an executive of the
Company or to the extent authorized in writing by the Board or required by law or compelled by
legal process. Employee agrees to use reasonable efforts to give the Company notice of any and all
attempts to compel disclosure of any Confidential Information, in such a manner so as to provide
the Company with written notice at least five days before disclosure or within three business days
after Employee is informed that such disclosure is being or shall be compelled, whichever is
earlier. Such written notice shall include a description of the information to be disclosed, the
court, government agency, or other forum through which the disclosure is sought, and the date by
which the information is to be disclosed, and shall contain a copy of the subpoena, order or other
process used to compel disclosure.

          (iv) Employee further agrees not to use any Confidential Information for the benefit of any
person or entity other than the Company.

          (v) Employee agrees that all Confidential Information and other files, documents, materials,
records, notebooks, customer lists, business proposals, contracts, agreements and other
repositories containing information concerning the Company or the business of the Company, in
whatever form, tangible or intangible (including all copies thereof), that Employee shall prepare,
or use, or be provided with as a result of Employee’s employment with the Company, shall be and
remain the sole property of the Company. Upon termination of Employee’s employment hereunder,
Employee agrees that all Confidential Information and other files, documents, materials, records,
notebooks, customer lists, business proposals, contracts, agreements and other repositories
containing information concerning the Company or the business of the Company (including all copies
thereof) in Employee’s possession, custody or control, whether prepared by Employee or others,
shall remain with or be returned to the Company promptly (within 48 hours) after the Date of
Termination. The materials required to be returned pursuant to this Section 9(a)(v) shall
not include personal correspondence or other personal property of Employee that does not relate to
the Company or the business of the Company.

16

 

          (vi) Notwithstanding anything herein to the contrary, Employee may disclose to any and all
persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of
the transactions contemplated in this Agreement and all materials of any kind (including opinions
and other tax analyses) that are provided to Employee relating to such tax treatment and tax
structure. For this purpose, “tax structure” is limited to facts relevant to the U.S. federal
income tax treatment of the transactions contemplated in this Agreement and does not include
information relating to the identity of the parties hereto.

     (b) Ownership of Work Product.

          Employee acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, processes, programs, designs, analyses, drawings, reports,
patent applications, copyrightable work and mask work (whether or not including any confidential
information) and all registrations or applications related thereto, all other proprietary
information and all similar or related information (whether or not patentable) that relate to the
Company’s or its Affiliates’ actual or anticipated business, research and development, or existing
or future products or services and that are conceived, developed, contributed to, made, or reduced
to practice by Employee (either solely or jointly with others) while employed by the Company
(including any of the foregoing that constitutes any proprietary information or records) (“Work
Product”) belong to the Company or its Affiliates, as applicable, and Employee hereby assigns,
and agrees to assign, all of the above Work Product to the Company or its Affiliates, as
applicable. Any copyrightable work prepared in whole or in part by Employee in the course of
Employee’s work for any of the foregoing entities shall be deemed a “work made for hire” under the
copyright laws, and the Company or its Affiliates, as applicable, shall own all rights therein. To
the extent that any such copyrightable work is not a “work made for hire,” Employee hereby assigns
and agrees to assign to the Company all right, title, and interest, including without limitation,
copyright in and to such copyrightable work. Employee shall promptly disclose such Work Product
and copyrightable work to the Board and perform all actions reasonably requested by the Board
(whether during or after the Term) to establish and confirm the Company’s or its Affiliates’, as
applicable, ownership (including, without limitation, assignments, consents, powers of attorney,
and other instruments).

          (c) As used in this Section 9 “Company” shall include the Company and any of its
Subsidiaries.

10. Non-Competition; Non-Solicitation; Non-Disparagement.

          (a) For the reasons and consideration specified in Section 8, Employee hereby
covenants and agrees that, during the Term of Non-Competition, Employee shall not, directly or
indirectly, individually or as an officer, director, manager, employee, stockholder, consultant,
contractor, partner, member, joint venturer, agent, equity owner or in any capacity whatsoever:

          (i) own, engage in, manage, operate, join, control, be employed by, provide Competing Services
to, or participate in the ownership, management, operation or control of or provision of Competing
Services to, a Competing Business operating in the Geographic Area;

17

 

          (ii) knowingly recruit, hire, assist in hiring, attempt to hire, or contact or solicit with
respect to hiring any Person who, at any time during the 12 month period ending on the Date of
Termination, was an employee of the Company; provided, that Employee may hire any Person that
served as an administrative assistant or clerical employee at the time Employee’s employment with
the Company terminates;

          (iii) induce or attempt to induce any employee of the Company to terminate, or in any way
interfere with, the relationship between the Company and any employee thereof; or

          (iv) induce or attempt to induce any customer, client, patient, supplier, service provider, or
other business relation of the Company in the Geographic Area to cease doing business with the
Company, or in any way interfere with the relationship between the Company and any such Person.

          Notwithstanding the foregoing, the Company agrees that Employee may own less than one percent
of the outstanding voting securities of any publicly traded company that is a Competing Business so
long as Employee does not otherwise participate in such competing business in any way prohibited by
this Section 10. This Section 10(a) shall not apply in the event Company breaches
any of its obligations under Section 5 or 6.

          (b) Employee shall not make any negative or disparaging comments regarding the Company, its
Subsidiaries or Affiliates or any of their respective officers, directors, shareholders, partners,
members, managers, agents or employees (collectively, the “Representatives”), including
regarding the performance of the Company, its Subsidiaries or Affiliates, or otherwise take any
action that could reasonably be expected to adversely affect the Company, its Subsidiaries or
Affiliates or the personal or professional reputation of any of their respective Representatives.
Information required to be disclosed by Employee pursuant to any applicable law, court order,
subpoena, process or governmental decree shall not constitute a violation or breach of this
Section 10(b); provided, that Employee delivers written notice of such required disclosure
to the Company promptly before making such disclosure if such notice is not prohibited by
applicable law, court order, subpoena, process or governmental decree.

          (c) Employee acknowledges that the geographic boundaries, scope of prohibited activities, and
time duration of the preceding paragraphs in this Section 10 (including the defined terms
for “Competing Business,” “Geographic Area,” and “Term of Non-Competition” set forth in Section
1) are reasonable in nature and are no broader than are necessary to maintain the goodwill of
the Company and the confidentiality of its Confidential Information and to protect the goodwill and
other legitimate business interests of the Company, and also that the enforcement of such covenants
would not cause Employee any undue hardship or unreasonably interfere with Employee’s ability to
earn a livelihood. If Employee violates the covenants and restrictions in this Section 10
and the Company brings legal action for injunctive or other equitable relief, Employee agrees that
the Company shall not be deprived of the benefit of the full period of the restrictive covenant, as
a result of the time involved in obtaining such relief. Accordingly, Employee agrees that the
provisions in Section 10(a) shall have a duration determined pursuant to Section
10(a), computed from the date the legal or equitable relief is granted.

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          (d) If any court in any jurisdiction determines that any portion of this Section 10
(including the defined terms for “Competing Business,” “Geographic Area,” and “Term of
Non-Competition” set forth in Section 1) is invalid or unenforceable within such
jurisdiction under circumstances then existing, the remainder of this Section 10 (including
the defined terms for “Competing Business,” “Geographic Area,” and “Term of Non-Competition” set
forth in Section 1) shall not thereby be affected and shall be given full effect without
regard to the invalid or unenforceable provisions. If any court in any jurisdiction construes any
of the provisions of this Section 10 (including the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in Section 1) to be invalid or
unenforceable within such jurisdiction under circumstances then existing, because of the duration,
scope or geographical area of such provision, such court shall be required to substitute the
maximum duration, scope or geographical area reasonable under such circumstances within such
jurisdiction for the stated period, scope or area with respect to such jurisdiction and such court
shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope
and area permitted by law, and to enforce such provision as so revised.

          (e) As used in this Section 10 (and the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in Section 1), “Company” shall
include the Company and any of its Subsidiaries.

11. Successors; Binding Agreement.

          (a) This Agreement is personal to Employee and shall not be assignable by Employee otherwise
than by will or the by laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by Employee’s personal and legal representatives, executors, administrators,
heirs, distributes, devisees and legatees.

          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

          (c) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, sale of assets or otherwise) to all or substantially all of the business and/or
assets of the Company, by a written agreement in form and substance reasonably satisfactory to
Employee, to assume expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in
the same amount and on the same terms as Employee would be entitled to pursuant to Section
6 if Employee terminated Employee’s employment for Good Reason after, but before the second
anniversary of, the occurrence of a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement and after any such succession, “Company” shall mean the
Company as hereinbefore defined and any successor and/or assigns as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

19

 

12. Effect of Agreement on Plans and Agreements Governing Awards. Notwithstanding anything
to the contrary contained in any plan or agreement governing an Award granted to Employee prior to,
on or after the date of this Agreement, the respective meanings of “Cause” and “disability” as used
in any such plans or agreements shall have the meaning ascribed to such terms by this Agreement for
purposes of giving effect to such Awards on and after the date of this Agreement.

13. Miscellaneous.

     (a) Construction. This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any presumption or
principle that the language is to be construed against any party shall not apply. The headings in
this Agreement are only for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections, subsections or clauses are
to those parts of this Agreement, unless the context clearly indicates to the contrary. Also,
unless the context clearly indicates to the contrary, (i) the plural includes the singular and the
singular includes the plural; (ii) “and” and “or” are each used both conjunctively and
disjunctively; (iii) “any,” “all,” “each,” or “every” means “any and all”, and “each and every”;
(iv) “includes” and “including” are each “without limitation”; (v) “herein,” “hereof,” “hereunder”
and other similar compounds of the word “here” refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (vi) all pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the entities or persons referred to may require.

     (b) Notices. All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

	 	 	 	 	 
	 

	 	if to Employee:
	 	if to the Company:
	 
	 	 	 	 
	 

	 	Woodrin Grossman
	 	Odyssey HealthCare, Inc.
	 

	 	4900 Riverbend Drive
	 	717 North Harwood, Suite 1500
	 

	 	Fort Worth, Texas 76109
	 	Dallas, Texas 75201
	 

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	P. Gregory Hidalgo
	 

	 	 	 	Vinson & Elkins L.L.P.
	 

	 	 	 	3700 Trammell Crow Center
	 

	 	 	 	2001 Ross Avenue
	 

	 	 	 	Dallas, Texas 75201

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

20

 

     (c) Severability. Except as otherwise provided in Section 10(d), if any provision
of this Agreement is held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, except as otherwise
provided in Section 10(d), in lieu of such illegal, invalid or unenforceable provision
there shall be added automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.

     (d) Withholding. The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable
law or regulation.

     (e) No Waiver. Except as expressly set forth in this Agreement, no waiver by either party
at any time of any breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at any time.

     (f) Equitable and Other Relief. Employee acknowledges that money damages would be both
incalculable and an insufficient remedy for a breach of Sections 8, 9 or 10
by Employee and that any such breach would cause the Company irreparable harm. Accordingly, the
Company, in addition to any other remedies at law or in equity it may have, shall be entitled,
without the requirement of posting of bond or other security, to equitable relief, including
injunctive relief and specific performance, in connection with a breach of Sections 8,
9 or 10 by Employee. The parties agree that the only circumstances in which
disputes between them will not be subject exclusively to arbitration pursuant to the provisions in
Section 13(h) are in connection with a breach of Sections 8, 9 or
10 by Employee. If the Company files a pleading with a court seeking immediate injunctive
relief and this pleading is challenged by Employee and injunctive relief sought is not awarded, the
Company shall pay all of Employee’s costs and attorneys’ fees. The parties consent to venue in
Dallas County, Texas and to the exclusive jurisdiction of competent state courts or federal courts
in the state or district in Dallas County, Texas for all litigation which may be brought, subject
to the requirement for arbitration in Section 13(h), with respect to the terms of, and the
transactions and relationships contemplated by, this Agreement. The parties further consent to the
non-exclusive jurisdiction of any state court located within a district which encompasses assets of
a party against which a judgment has been rendered for the enforcement of such judgment or award
against the assets of such party.

     (g) Entire Agreement. The provisions of this Agreement constitute the entire and complete
understanding and agreement between the parties with respect to the subject matter hereof, and
supersede all prior and contemporaneous oral and written agreements, representations and
understandings of the parties, which are hereby terminated. Employee and the Company acknowledge
and represent that there are no other promises, terms, conditions or representations (or written)
regarding any matter relevant hereto.

21

 

     (h) Arbitration. Except as otherwise provided in Section 13(f), in the event any
claim, demand, cause of action, dispute, controversy or other matter in question (“Claim”)
arises out of this Agreement (or its termination) or Employee’s employment (or termination of
employment) by the Company or its Subsidiaries, then, upon the written request of Employee or the
Company, such dispute or controversy will be submitted to binding arbitration. Any arbitration
will be conducted in accordance with the Federal Arbitration Act (“FAA”) and, to the extent
an issue is not addressed by the FAA or the FAA does not apply, with the then-current National
Rules for the Resolution of Employment Disputes of the American Arbitration Association
(“AAA”) or other rules of the AAA as applicable to the claims asserted. The results of
arbitration will be binding and conclusive on the parties hereto. All parties agree that venue for
arbitration will be in Dallas County, Texas. If Employee is the prevailing party, then Employee
will be entitled to reimbursement by the Company for reasonable attorneys fees, reasonable costs
and other reasonable expenses pertaining to the arbitration. All proceedings conducted pursuant to
this Section 13(h) will be kept confidential by all parties. THE ARBITRATORS SHALL HAVE NO
AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES,
TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OF DAMAGES). REGARDLESS OF WHETHER SUCH
DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, EMPLOYEE AND THE COMPANY EACH HEREBY WAIVE THE RIGHT, IF
ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY CLAIMS. EMPLOYEE AND THE COMPANY
ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT EMPLOYEE AND THE COMPANY ARE WAIVING ANY RIGHT THAT
EMPLOYEE OR THE COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLY PROVIDED BY
SECTION 13(f), A TRIAL BEFORE A JUDGE IN CONNECTION WITH, OR RELATING TO, A CLAIM.

     (i) Attorney Fees. The prevailing party in any dispute or controversy under or in
connection with this Agreement shall be entitled to reimbursement from the non-prevailing party for
all costs and reasonable legal fees incurred by such prevailing party.

     (j) Survival. Sections 1 and 4 through 13 of this Agreement shall
survive the termination of this Agreement.

     (k) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF TEXAS OR ANY
OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.

     (l) Amendments. This Agreement may not be amended or modified at any time except by a
written instrument approved by the Board and executed by the Company and Employee.

     (m) Employee Acknowledgement. Employee acknowledges that Employee has read and understands
this Agreement, is fully aware of its legal effect, has not acted in reliance upon any
representatives or promises made by the Company other than those contained in writing herein, and
has entered into this Agreement freely based on Employee’s own judgment.

22

 

     (n) Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and the same instrument.
Any counterpart of this Agreement that has attached to it separate signature pages which together
contain the signature of all parties hereto shall for all purposes be deemed a fully executed
original. Facsimile signatures shall constitute original signatures.

[SIGNATURE PAGE FOLLOWS]

23

 

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year
first above written.

	 	 	 	 	 
	 	COMPANY:

ODYSSEY HEALTHCARE, INC.

a Delaware corporation

 	 
	 	By:  	/s/ Robert A. Lefton
 	 
	 	 	Robert A. Lefton, President and Chief 	 
	 	 	Executive Officer 	 
	 
	 	EMPLOYEE:

 	 
	 	/s/ Woodrin Grossman
 	 
	 	Woodrin Grossman 	 
	 	 	 
	 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]exv10w1

 

Exhibit 10.1

 

CONTAINER PURCHASE AGREEMENT

Dated as of January 19, 2006

By and among

CRONOS CAPITAL CORP., a California corporation,

IEA INCOME FUND XI, L.P., a California limited partnership,

ACCESS SHIPPING CORPORATION, a California corporation,

ACCESS SHIPPING II CORPORATION, a California corporation,

and

ACCESS SHIPPING LIMITED PARTNERSHIP, a Connecticut limited partnership

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 

	 	 	 	Page        

	 
	 	 	 	 	 	 
	1.

	 	DEFINITIONS.

	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	SALE AND PURCHASE OF THE CONTAINERS.
	 	 	2	 
	 
	 	 	 	 	 	 
	3.

	 	CONSIDERATION FOR THE SALE; ADJUSTMENTS TO PURCHASE PRICE; REVENUE ALLOCATIONS.

	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	3.01   Consideration.

3.02   Purchase Price Adjustment.

3.03   Allocation of Revenues.

	 	 	2

2

3	 
	 
	 	 	 	 	 	 
	4.

	 	CLOSING.

	 	 	3	 
	 
	 	 	 	 	 	 
	5.

	 	REPRESENTATIONS AND WARRANTIES OF SELLER.

	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	5.01   Existence, Power and Authority.

5.02   Authorization.

5.03   No Conflict.

5.04   Consents.

5.05   Legal Proceedings.

5.06   Prior Management Agreements.

5.07   Title.

5.08   Compliance with Laws and Regulations.

5.09   Revenue Distributions.

5.10   Remarketing Arrangements; Bargain-Purchase Options.

5.11   Notices.

	 	 	3

3

4

4

4

4

4

4

4

5

5	 
	 
	 	 	 	 	 	 
	6.

	 	REPRESENTATIONS AND WARRANTIES OF BUYER.

	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	6.01   Corporate Existence, Power and Authority.

6.02   Authorization.

6.03   No Conflict.

6.04   Consents.

6.05   Legal Proceedings.

6.06   Compliance with Laws and Regulations.

	 	 	5

5

5

6

6

6	 
	 
	 	 	 	 	 	 
	7.

	 	COVENANTS.

	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	7.01   Closing.

7.02   Sales Tax.

	 	 	6

6	 
	 
	 	 	 	 	 	 
	8.

	 	CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE.

	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	8.01   Representations, Warranties and Covenants.

8.02   No Change in Applicable Law.

8.03   Delivery of Documents.

8.04   Consents.

8.05   Satisfaction of Statutory and Regulatory Requirements.

8.06   No Litigation.
	 	 	6

6

7

7

7

7	 

i

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 

	 	 	 	Page        

	 
	 	 	 	 	 	 
	9.

	 	CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE.
	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	9.01   Representations, Warranties and Covenants.

9.02   Delivery of Funds and Documents.

9.03   Satisfaction of Statutory and Regulatory Requirements.

9.04   No Litigation.

	 	 	8

8

8

8	 
	 
	 	 	 	 	 	 
	10.

	 	DISCLAIMER OF WARRANTIES BY SELLER.
	 	 	8	 
	 
	 	 	 	 	 	 
	11.

	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
	 	 	8	 
	 
	 	 	 	 	 	 
	12.

	 	FURTHER ASSURANCES.
	 	 	9	 
	 
	 	 	 	 	 	 
	13.

	 	EXPENSES.
	 	 	9	 
	 
	 	 	 	 	 	 
	14.

	 	BROKERS’ FEES.
	 	 	9	 
	 
	 	 	 	 	 	 
	15.

	 	NOTICES.
	 	 	9	 
	 
	 	 	 	 	 	 
	16.

	 	WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES; PRESERVATION OF REMEDIES.
	 	 	10	 
	 
	 	 	 	 	 	 
	17.

	 	GOVERNING LAW; DISPUTE RESOLUTION.
	 	 	10	 
	 
	 	 	 	 	 	 
	18.

	 	BINDING EFFECT; ASSIGNMENT.
	 	 	10	 
	 
	 	 	 	 	 	 
	19.

	 	COUNTERPARTS.
	 	 	11	 
	 
	 	 	 	 	 	 
	20.

	 	SEVERABILITY.
	 	 	11	 
	 
	 	 	 	 	 	 
	21.

	 	INDEMNITIES.
	 	 	11	 
	 
	 	 	 	 	 	 
	22.

	 	HEADINGS; TABLE OF CONTENTS.
	 	 	12	 

	 	 	 	 	 
	EXHIBITS

	 	 	 	 
	 
	 	 	 	 
	LIST OF CONTAINERS

	 	 	 	A
	 
	 	 	 	 
	FORM OF BILL OF SALE

	 	 	 	B

ii

 

CONTAINER PURCHASE AGREEMENT

          This CONTAINER PURCHASE AGREEMENT is entered into as of January 19, 2006, by and among CRONOS
CAPITAL CORP., a California corporation (“CCC”), IEA INCOME FUND XI, L.P., a California
limited partnership (“Seller”), ACCESS SHIPPING CORPORATION, a California corporation
(“Access Shipping”), ACCESS SHIPPING II CORPORATION (“Access Shipping II”) and
ACCESS SHIPPING LIMITED PARTNERSHIP, a Connecticut limited partnership (“Buyer”).

Recitals

     A.     Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, certain marine
cargo shipping containers owned by Seller as more particularly described on Exhibit A
attached hereto (the “Containers”), all upon and subject to the terms and conditions of
this Agreement.

     B.      CCC is the general partner of Seller.

     C.      Access Shipping and Access Shipping II are the general partners of Buyer.

     D.      The Containers are under lease by one or more third party container lessees under equipment
leases arranged on behalf of Seller by CCC or one of its affiliates.

     NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and
warranties herein contained, Seller, CCC, Access Shipping, Access Shipping II and Buyer agree as
follows:

     1.      Definitions. For all purposes of this Agreement, the following terms shall have
the following meanings:

          “Bill of Sale” means a bill of sale substantially in the form attached hereto as
Exhibit B.

          “Business Day” means any day except a Saturday, Sunday, or other day on which banks in
New York are authorized by law to close.

          “Closing” means the closing of the sale and purchase of the Containers contemplated by
this Agreement.

          “Closing Date” means the date on which the Closing shall occur as fixed pursuant to
Section 4.

          “Containers” means each of the cargo containers described on Exhibit A hereto,
together with any and all appliances, parts, instruments, appurtenances, accessories and other
equipment and components of whatever nature which may from time to time be incorporated or
installed in or attached to any thereof and which become the property of the owner thereof under
any applicable agreement or law.

1

 

          “CCL” means Cronos Containers Limited, an English company.

          “Effective Date” means January 1, 2006.

          “Net Revenues” means the revenues payable to the owner of the Containers periodically
in arrears based upon the utilization of such Containers, net of expenses of operation and
management fees allocated to such Containers, all such revenues and expenses to be determined on an
accrual basis and not a cash basis of accounting.

          “Prior Management Agreements” means any and all lease or management agreements between
Seller and CCC, CCL, or any affiliated person relating to the utilization of the Containers.

     2.      Sale and Purchase of the Containers. On the Closing Date, for the consideration
provided in Section 3 and subject to the terms and conditions set forth herein, (i) Seller shall
sell to Buyer the Containers, and shall assign, transfer and convey to Buyer all of its right,
title and interest relating thereto from and after the Closing Date; and (ii) Buyer shall purchase
the Containers from Seller. Effective as of Closing, the Prior Management Agreements shall cease
to be applicable as to future periods to the Containers acquired by Buyer, and Buyer shall neither
assume nor have any liability under the Prior Management Agreements.

     3.     Consideration for the Sale; Adjustments to Purchase Price; Revenue
Allocations.

          3.01      Consideration. In consideration for the sale of the Containers as contemplated
in Section 2, Buyer,

               (a)      delivered to Seller on January 5, 2006, a non-refundable sum of $10,000 (the
“Deposit”); and

               (b)      shall, at the Closing, deliver to Seller by wire transfer of immediately available funds
the sum of $1,030,579 (together with the Deposit, the “Purchase Price”).

          3.02      Purchase Price Adjustment. If the number of Containers sold by Seller to Buyer
is less than the number of Containers listed on Exhibit A hereto, then and in such event
Seller (or, if Seller is no longer in existence, CCC) shall refund the amount of any overpayment of
the Purchase Price to Buyer within five (5) business days after CCC or CCL becomes aware of the
shortfall. Upon the return of any overpayment as called for herein, Seller or CCC, as the case may
be, shall be entitled to all casualty payments and sale proceeds attributable to any casualty loss
or sale of a Container reported as part of a shortfall hereunder.

          3.03      Allocation of Revenues.

               (a)      The parties acknowledge that all Net Revenues accrued for all periods prior to the
Effective Date shall be for the account of and belong to Seller and that all Net Revenues accrued
for all periods commencing on and after the Effective Date shall be for the account of and belong
to Buyer.

2

 

               (b)     Except as otherwise provided in this Section 3.03, (i) if Seller shall at any time receive
any distribution, payment or other amount in respect of a Container acquired by Buyer which has
become, or which may become, due and payable with respect to any period of time commencing on or
after the Effective Date, or which may arise from any act, event or circumstance which occurred
after that date, then Seller agrees to hold such amount in trust for the benefit of the Buyer and
promptly to deliver said amount to Buyer at Closing, if received for periods after the Effective
Date and on or before the Closing, or promptly after receipt if received by Seller for periods
prior to the Effective Date after the Closing; and (ii) if Buyer shall receive any distribution,
payment or other amount which was due and payable with respect to any period of time prior to the
Effective Date, then Buyer agrees to hold such amount in trust for the benefit of Seller and
promptly to deliver said amount to Seller. If CCL determines in its final reconciliation for
periods ended on or prior to December 31, 2005, that Seller has received pursuant to the Prior
Management Agreements an excess distribution or otherwise owes CCL any amount for such periods (any
such excess or debt being referred to as a “Deficiency”), and CCL asserts against or
attempts to collect from Buyer any such Deficiency, through offset or otherwise, then Seller or if,
at such time, Seller has dissolved or liquidated, CCC shall, upon demand by Buyer, pay such
Deficiency to CCL or reimburse Buyer if and to the extent such Deficiency is paid by or assessed
against Buyer.

     4.      Closing. The Closing shall take place at the offices of Greene Radovsky Maloney &
Share LLP, Four Embarcadero Center, Suite 4000, San Francisco, California, on January 19, 2006, or
at such other dates, times and places as Seller and Buyer shall mutually agree. Immediately upon
the Closing, Seller shall be deemed to have delivered the Containers to Buyer and Buyer shall be
deemed to have accepted the Containers from Seller without any further action on the part of Buyer
or Seller.

     5.      Representations and Warranties of Seller. Each of CCC and Seller represents and
warrants to each of Buyer, Access Shipping and Access Shipping II as follows:

          5.01      Existence, Power and Authority. Seller is a limited partnership, duly organized
and validly existing under the laws of California, and has all requisite partnership authority to
enter into this Agreement, the Bill of Sale, and to consummate the transactions contemplated hereby
and thereby; and CCC is a corporation validly existing and in good standing under the laws of
California, and, as its general partner, has the full authority to bind Seller to this Agreement by
execution hereof on its behalf.

          5.02      Authorization. The execution and delivery of this Agreement and the Bill of Sale
by Seller, and the performance by Seller hereunder and thereunder, have been duly authorized by all
requisite partnership or corporate action and proceedings of Seller and CCC, and in accordance with
applicable provisions of their organizational documents or applicable law. This Agreement has been
duly executed and delivered by Seller, and this Agreement is, and the Bill of Sale when executed
and delivered will be, the legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws from time to time in effect which affect
creditors’ rights generally.

3

 

          5.03      No Conflict. Neither the execution and delivery of this Agreement and the Bill
of Sale by Seller, nor the performance by it hereunder or thereunder, will (i) violate, conflict
with or constitute a default under any provision of its limited partnership agreement or other
applicable charter documents, (ii) conflict with or result in a breach of any indenture or other
agreement to which Seller is a party or by which it or its properties are bound, (iii) violate any
judgment, order, injunction, decree or award of any court, administrative agency or governmental
body against, or binding upon, it or its properties, or (iv) constitute a violation by Seller of
any law or regulation applicable to it or its properties, except in any case where such violation
would not have a material adverse affect on the financial condition of Seller or its ability to
perform its obligations under this Agreement.

          5.04      Consents. The execution, delivery and performance by Seller of, and the
consummation of the transactions contemplated by this Agreement and the Bill of Sale do not require
(i) any approval or notice to or consent of any person, or any holder of any indebtedness or
obligation of any of Seller or any other party to any agreement binding on the Seller, or (ii) any
notice to or filing or recording with, or any consent or approval of, any governmental body.

          5.05      Legal Proceedings. There are no actions, suits or proceedings pending, or to the
knowledge of Seller or CCC, threatened, against Seller or the Containers before any court,
arbitrator, administrative or governmental body that, if adversely determined, would hinder or
prevent Seller’s ability to carry out the transactions contemplated by this Agreement or the Bill
of Sale or affect the right, title or interest of Seller in the Containers, and, to their
knowledge, there is no basis for any such suits or proceedings.

          5.06      Prior Management Agreements. Effective as of the Closing Date, there shall be no
Prior Management Agreements and no other agreements, letters, certificates or other documents of
any kind, relating to the Containers which will be binding on Buyer or which will create a lien,
charge, security interest or other encumbrance in or on the Containers or any part thereof after
the Closing. To Seller’s knowledge, there are no set-offs, defenses or counterclaims available
against amounts owed to Seller in respect of the operation of the Containers prior to the Effective
Date. No prepayment of rent or prepayment of casualty value under the Prior Management Agreements
has been made by CCL or any other party for any period subsequent to the Effective Date.

          5.07      Title. Seller is the lawful and rightful sole owner of the Containers and has
good right and title to sell the same to Buyer. Seller holds, and on the Closing Date will hold,
title to its Containers free and clear of all liens, charges, security interests, or other
encumbrances other than the use and possessory interests of CCL and lessees in the ordinary course
of business. Seller has not previously assigned any rights, title or interests of Seller in the
Containers to be conveyed to Buyer pursuant hereto.

          5.08      Compliance with Laws and Regulations. The sale of the Containers by Seller will
not violate any provision of any applicable laws, orders or regulations.

          5.09      Revenue Distributions. Seller shall be entitled to all Net Revenues earned (on
an accrual basis) as called for under the Prior Management Agreements for all periods prior to the
Effective Date. Seller has not directly or indirectly received any prepayment or

4

 

distribution of Net Revenues or other distributions (including casualty payments) for any
period on or after the Effective Date. As of the Effective Date, Seller has paid or satisfied all
prior operating deficit balances relating to periods of allocated expenses in excess of allocated
revenues, and there are no accrued deficits which could be offset against Net Revenues allocable to
Buyer hereunder.

          5.10      Remarketing Arrangements; Bargain-Purchase Options. The Containers are not
subject to any remarketing, residual sharing or similar agreement which would be binding upon or
enforceable against Buyer or, following the sale of such Containers to Buyer hereunder, against the
Containers or against the proceeds of any sale, leasing or other disposition of the Containers. No
lessee of the Containers has an option to purchase the Containers.

          5.11      Notices. Seller will immediately provide to Buyer any notice received from CCL,
including without limitation notice that any of the Containers has sustained an event of loss, and
any notice received from CCL or any other party delivered under any Prior Management Agreement.

     6.      Representations and Warranties of Buyer. Each of Access Shipping, Access Shipping
II and Buyer represents and warrants to each of Seller and CCC, as of the date hereof, as follows:

          6.01      Corporate Existence, Power and Authority. Buyer is a limited partnership duly
formed and validly existing under the laws of Connecticut, and has the power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby and thereby; and each of
Access Shipping and Access Shipping II is a corporation duly organized and validly existing under
the laws of California, and, as general partner of Buyer, has the full authority to bind Buyer to
this Agreement by the execution hereof on its behalf.

          6.02      Authorization. The execution and delivery by Buyer of this Agreement, and the
performance by Buyer hereunder and thereunder, have been duly authorized by all requisite company
action and proceedings of Access Shipping, Access Shipping II and Buyer. This Agreement has been
duly executed and delivered by Buyer, and this Agreement is the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or similar laws from time to
time in effect which affect creditors’ rights generally. Buyer has, and as of the Closing Date
shall have, the requisite financial ability or third party financing commitment to enable it to pay
the Purchase Price hereunder.

          6.03      No Conflict. Neither the execution and delivery of this Agreement by Buyer, nor
the performance by Buyer hereunder, will (i) violate, conflict with or constitute a default under
any provision of Buyer’s certificate of limited partnership or limited partnership agreement, (ii)
conflict with or result in a breach of any indenture or other material agreement to which Buyer is
a party or by which Buyer or its properties are bound, (iii) violate any judgment, order,
injunction, decree or award of any court, administrative agency or governmental body against, or
binding upon, Buyer or its properties, or (iv) constitute a violation by Buyer of any law or
regulation applicable to Buyer or its properties.

5

 

          6.04      Consents. The execution, delivery and performance by Buyer of this Agreement do
not require (i) the approval or consent of or notice to any person, or any holder of any
indebtedness or obligation of Buyer or any other party to any agreement binding on the Buyer, or
(ii) any notice to or filing or recording with, or any consent or approval of, any governmental
body.

          6.05      Legal Proceedings. There are no actions, suits or proceedings pending, or to the
knowledge of Access Shipping, Access Shipping II or Buyer, threatened, against Buyer that, if
adversely determined, would materially hinder or prevent Buyer’s ability to carry out the
transactions contemplated by this Agreement, and, to their knowledge, there is no basis for any
such suits or proceedings.

          6.06      Compliance with Laws and Regulations. The purchase of the Containers by Buyer
will not violate any applicable laws, orders or regulations.

     7.      Covenants.

          7.01      Closing. Each of the parties shall use all reasonable efforts to fulfill or
obtain the fulfillment of conditions set forth herein as they relate to such party on or prior to
the Closing.

          7.02      Sales Tax. The parties acknowledge that the Containers are being transferred by
Seller to Buyer with the intention that they be concurrently or subsequently leased by Buyer to CCC
for sublease to third party container lessees under CCL’s management supervision and not used by
Buyer. Accordingly, it is the expectation of the parties that the transfer contemplated by this
Agreement shall be exempt from state and local sales, use, transfer or similar taxes. If, however,
any such sales, use, transfer or similar tax is imposed by any state or local authority on the
transfer of the Containers as contemplated herein, other than taxes based on income of Seller,
Buyer shall bear and be responsible for the payment of the amount of such tax; provided, that any
related interest and penalties payable with respect thereto shall be paid by Seller or by CCC if
Seller has been dissolved and liquidated. Upon receipt of notice of any such tax or imposition,
the party receiving the notice shall promptly provide a copy to all other parties. Any party may,
at its own cost and expense, commence and participate in a contest of the validity, applicability
or amount of any such tax or other imposition.

     8.      Conditions Precedent to the Obligation of Buyer to Close. The obligation of Buyer
to purchase the Containers pursuant to this Agreement is subject to the fulfillment on or prior to
the Closing of the following conditions, any one or more of which may be waived by it; provided,
however, that, to the extent that a condition waived would constitute a breach of a provision of
this Agreement, the waiver of such condition shall, in addition, constitute a waiver of the breach
of such provision:

          8.01      Representations, Warranties and Covenants. The representations and warranties of
each of CCC and Seller contained in this Agreement shall be true in all material respects on and as
of the Closing with the same force and effect as though made on and as of such Closing. Each of
CCC and Seller shall have performed and complied with all covenants and agreements required by this
Agreement and the Prior Management Agreements to be

6

 

performed or complied with by it on or prior to the Closing. At the Closing, CCC and Seller
shall deliver to Buyer a certificate, dated the Closing Date and signed by an officer of CCC, on
behalf of Seller, to the foregoing effect.

          8.02      No Change in Applicable Law. No change shall have occurred after the date of
execution and delivery of this Agreement in applicable law or regulations or interpretations
thereof by appropriate regulatory authorities which, in the opinion of Buyer or its counsel, would
make it illegal for Buyer to perform fully its obligations hereunder.

          8.03      Delivery of Documents. The following documents shall have been delivered to
Buyer:

               (a)      a Bill of Sale for the Containers being sold by Seller on the Closing Date (in the form of
Exhibit B attached hereto), executed by such Seller;

               (b)      (i) an Equipment Lease Agreement with Buyer executed by CCC, and (ii) an Agency and
Guaranty Agreement executed by and among Buyer, CCC and CCL, both in form acceptable to Buyer
governing the utilization of the Containers after the Closing Date, confirming the termination of
all Prior Management Agreements, and guaranteeing CCC’s performance of the Equipment Lease
Agreement;

               (c)      documents evidencing the release of any liens, encumbrances and security interests in the
Containers, in form and substance satisfactory to Buyer; and

               (d)      all other agreements, instruments, certificates and other documents reasonably requested
by Buyer prior to the Closing Date to effect the transactions contemplated by this Agreement.

          8.04      Consents. Any required consent or approval of CCL and any other third person to
the sale and transfer of the Containers to Buyer shall have been obtained, and Buyer shall have
received evidence satisfactory to it of the same, including the written consent of CCC to any
collateral assignment by Buyer of its rights under the Equipment Lease Agreement in substantially
the form of consent attached thereto.

          8.05      Satisfaction of Statutory and Regulatory Requirements. All statutory and other
legal requirements for the valid consummation of the transactions contemplated by this Agreement
shall have been fulfilled.

          8.06      No Litigation. No action or proceedings shall have been instituted nor shall any
action be threatened before any court or governmental agency, nor shall any order, judgment or
decree have been issued or proposed to be issued by any court or governmental agency, at the time
of the Closing questioning the validity or legality of this Agreement or the transactions
contemplated hereby or the ability of the parties hereto to consummate the transactions
contemplated hereby.

     9.      Conditions Precedent to the Obligation of Seller to Close. The obligation of
Seller to sell its Containers pursuant to this Agreement is subject to the fulfillment on or prior
to the Closing of the following conditions, any one or more of which may be waived by it;

7

 

provided, however, that, to the extent that a condition waived would constitute a breach of a
provision of this Agreement, the waiver of such condition shall, in addition, constitute a waiver
of the breach of such provision:

          9.01      Representations, Warranties and Covenants. The representations and warranties of
each of Access Shipping, Access Shipping II and Buyer contained in the Agreement shall be true in
all material respects on and as of the Closing with the same force and effect as though made on and
as of such Closing. Each of Access Shipping, Access Shipping II and Buyer shall have performed and
complied with all covenants and agreements required by this Agreement to be performed or complied
with by it on or prior to the Closing. At the Closing, Access Shipping and Access Shipping II, on
behalf of Buyer, shall deliver to CCC, on behalf of Seller, a certificate, dated the Closing Date
and signed by an officer of each of Access Shipping and Access Shipping II, to the foregoing
effect.

          9.02      Delivery of Funds and Documents. The Purchase Price required by Section 3.01
shall have been duly delivered to CCC for the account of Seller; and Buyer shall have duly executed
and delivered to CCC all other agreements, instruments, certificates and other documents reasonably
requested by Seller prior to the Closing Date to effect the transactions contemplated by this
Agreement.

          9.03      Satisfaction of Statutory and Regulatory Requirements. All statutory and other
legal requirements for the valid consummation of the transactions contemplated by the Agreement
shall have been fulfilled.

          9.04      No Litigation. No action or proceeding shall have been instituted nor shall any
governmental action be threatened before any court or governmental agency, nor shall any order,
judgment or decree have been issued or proposed to be issued by any court or governmental agency,
at the time of the Closing questioning the validity or legality of this Agreement or the
transactions contemplated hereby or the ability of the parties hereto to consummate the
transactions contemplated hereby.

     10.      Disclaimer of Warranties by Seller. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER
CCC NOR SELLER SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, NOW
OR HEREAFTER, AS TO THE CONDITION, DESIGN, OPERATION, MAINTENANCE, VALUE, MARKETABILITY,
MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE OF ANY OF THE CONTAINERS OR AS TO
THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF ANY OF THE CONTAINERS AND ANY IMPLIED WARRANTY
ARISING FROM COURSE OF PERFORMANCE, DEALING OR USAGE OF THE TRADE. Except as expressly set forth
herein, each of Seller and CCC disclaims any liability to Buyer with respect to the Containers’
condition, including, without limitation, any liability in tort or arising from negligence, strict
liability or for loss or interruption of use, profit or business or other consequential injury, and
Buyer waives, releases, renounces and disclaims expectation of or reliance upon any such warranty
or warranties.

     11.      Survival of Representations and Warranties. All representations and warranties
made herein, and the agreements set forth herein, shall survive the Closing.

8

 

     12.      Further Assurances. Each of CCC, Seller, Access Shipping, Access Shipping II and
Buyer agrees to execute, acknowledge, deliver, file and record, or cause to be executed,
acknowledged, delivered, filed and recorded, such further documents or other papers, and to do all
such things and acts, as the other parties may reasonably request in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated hereby. Seller shall
send Buyer, upon its receipt thereof, all payments, notices, communications and any other documents
with respect to the Containers which any of them receives subsequent to the Closing Date.

     13.      Expenses. Each party shall bear its expenses incurred in connection with the
preparation, execution and performance of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees and expenses of its agents, representatives, counsel and
accountants. Buyer shall bear all costs associated with its own inspection and appraisal of the
Containers prior to the Closing. Seller shall bear all costs associated with filing and recording
the termination statements, assignments, releases and terminations described in Section 8.03(c) of
this Agreement.

     14.      Brokers’ Fees. Except as disclosed by a party in writing to the other parties
prior to the Closing, each of CCC and Seller (jointly and severally), on the one hand, and each of
Access Shipping, Access Shipping II and Buyer, on the other, represents and warrants to the other
that neither it nor any of its affiliates have incurred any obligation or liability, directly or
indirectly, for brokerage or finders’ fees or agents’ commissions or like payment in connection
with this Agreement or the transactions contemplated hereby, and hereby indemnifies and each holds
the other harmless therefor.

     15.      Notices. Any notice, demand, or communication required or permitted to be given
by any provision of this Agreement shall be in writing or transmitted electronically and shall be
deemed to have been duly given when received, if personally delivered; upon confirmation of receipt
(by use of “confirmation to sender” or other means), if transmitted by telecopy or by electronic or
digital transmission method; or on the next business day after it is sent, if sent for overnight
delivery by a recognized overnight delivery service, charges prepaid, addressed as follows:

	 	 	 
	If to Access Shipping,

Access Shipping II, or

Buyer, to:

	 	Access Shipping Limited Partnership

c/o Access Shipping Corporation

220 Juana Avenue

San Leandro, California 94577

Attention: Charles R.F. Kremer

	 
	 	 
	If to CCC or Seller, to:

	 	Cronos Capital Corp.

One Front Street, Suite 925

San Francisco, California 94111

Attention: John Kallas, Chief Financial Officer

9

 

Any party by notice given in accordance with this Section to the other parties may designate
another address or person for receipt of notices hereunder.

     16.      Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies. This
Agreement may be amended, superseded, modified, supplemented or terminated, and the terms hereof
may be waived, only by written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof. No waiver on the part of any party of any
such right, power or privilege, nor any single or partial exercise of any such right, power or
privilege, shall preclude any further exercise thereof or the exercise of any other such right,
power or privilege. The rights and remedies herein provided are cumulative and are not exclusive
of any rights or remedies that any party may otherwise have at law or in equity.

     17.      Governing Law; Dispute Resolution. This Agreement will be governed by and
construed under the laws of the State of California. Should any dispute or controversy arising
from or relating to this Agreement arise between the parties that the parties are incapable of
resolving themselves through good faith negotiation, then such dispute or controversy shall be
submitted for resolution by JAMS in San Francisco, California, or at such other location as is
agreed upon by the parties. Any dispute shall first be submitted to JAMS for mediation pursuant to
the mediation services provided by JAMS. Should the dispute between the parties not be
successfully mediated by JAMS within sixty (60) days of its submission (subject to any extension
agreed to by the parties) then and in such event the dispute shall be submitted for binding
arbitration by JAMS pursuant to the rules and practices of JAMS. Unless agreed to by the parties,
the representative of JAMS who attempts to mediate any dispute between the parties shall not be the
representative of JAMS who arbitrates the dispute. Judgment upon any award by the arbitrator(s)
may be entered in the superior court in and for the County of San Francisco or the federal district
for the Northern District of California. It is agreed that the prevailing party in any such
arbitration or other action arising from or relating to this Agreement shall be entitled to
reimbursement of its reasonable costs and expenses, including its attorneys’ fees. Each party
consents to the exercise over it or personal jurisdiction by the arbitrator(s) selected by JAMS to
resolve any dispute hereunder, and by the superior court in and for the County of San Francisco and
the federal district court for the Northern District of California.

     18.      Binding Effect; Assignment. No party shall assign this Agreement to any other
person without the prior written consent of all other parties. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and permitted assigns.
No assignment of this Agreement or of any rights hereunder shall relieve the assigning party of
any of its obligations or liabilities hereunder. This Agreement, the Bill of Sale, and the
certificates, schedules, annexes and other documents executed and delivered at or before the
Closing in connection herewith are the complete agreement of the parties regarding the subject
matter hereof and thereof and supersede all prior understandings (written or oral), communications
and agreements.

10

 

     19.      Counterparts. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.

     20.      Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision will
be effective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement, and the remainder of
such provision and the remaining provisions of this Agreement shall be interpreted, to the maximum
extent possible, so as to conform to the original intent of this Agreement.

     21.      Indemnities.

               (a)      Access Shipping, Access Shipping II and Buyer jointly and severally will indemnify and
hold Seller and CCC harmless from any liability, loss, cost or expense (“Claim”), including
reasonable attorneys’ fees, which shall result from (i) the incorrectness of any representation or
breach of any warranty of Access Shipping, Access Shipping II or Buyer contained in this Agreement
or in any other agreement, instrument, certificate or other document delivered by Access Shipping,
Access Shipping II or Buyer pursuant hereto; or (ii) a breach by Access Shipping, Access Shipping
II or Buyer of any of its covenants or agreements contained in this Agreement, any other agreement,
instrument, certificate or other document delivered by Access Shipping, Access Shipping II or Buyer
in connection with the transactions contemplated by this Agreement. Upon payment of such
indemnity, Access Shipping, Access Shipping II or Buyer, as the case may be, shall be subrogated to
the indemnitee’s rights against any third parties respecting the Claims. Anything contained in
this Agreement to the contrary notwithstanding, neither Access Shipping, Access Shipping II or
Buyer shall be required to indemnify Seller if and to the extent Seller is indemnified and fully
compensated for its Claim by a third party.

               (b)      CCC and Seller jointly and severally will indemnify and hold Buyer, Access Shipping and
Access Shipping II harmless from any Claim, including reasonable attorneys’ fees, which shall
result from (i) the incorrectness of any representation or breach of any warranty of CCC or Seller
contained in this Agreement or in any certificate or other document delivered by CCC or Seller
pursuant hereto; (ii) a breach by CCC or Seller of any of its covenants or agreements contained in
this Agreement, any other agreement, instrument, certificate or other document delivered by CCC or
Seller in connection with the transactions contemplated by this Agreement; or (iii) any Claim or
legal proceedings with respect to any Containers (or any part thereof) arising or relating to any
period prior to and including the Closing Date, including Claims of limited partners in Seller or
other third parties based upon or arising out of Seller’s ownership, management, disposition or
sale of the Containers. Upon payment of such indemnity, CCC or Seller, as the case may be, shall
be subrogated to Buyer’s rights against any third parties respecting the Claims.

               (c)      A party seeking indemnification pursuant to Sections 21(a) or (b) above (an
“Indemnified Party”) shall give prompt notice to the party from whom such indemnification
is sought (the “Indemnifying Party”) of the assertion of any Claim, or the commencement of
any action, suit or proceeding, in respect of which indemnification may be

11

 

sought hereunder and will give the Indemnifying Party such information with respect thereto as
the Indemnifying Party may reasonably request; but no failure to give such notice shall relieve the
Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has
suffered actual prejudice thereby). The Indemnifying Party may, at its expense, participate in or
assume the defense of any such action, suit or proceeding involving a third party; provided,
however, that such defense is conducted with counsel mutually satisfactory to the Indemnified Party
and the Indemnifying Party. The Indemnified Party and the Indemnifying Party shall consult with
each other regarding the conduct of such defense. The Indemnified Party shall have the right (but
not the duty) to participate in the defense thereof, and to employ counsel, at its own expense
(except that the Indemnifying Party shall pay the fees and expenses of such counsel to the extent
the Indemnified Party reasonably concludes that there is a conflict of interest between the
Indemnified Party and the Indemnifying Party), separate from counsel employed by the Indemnifying
Party in any such action. The Indemnifying Party shall be liable for the fees and expenses of
counsel employed by the Indemnified Party if the Indemnifying Party has not assumed the defense
thereof. Whether or not the Indemnifying Party chooses to defend or prosecute any Claim involving
a third party, all the parties hereto shall cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, and attend at such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in connection therewith.
The Indemnifying Party shall not be liable under Sections 21(a) or 21(b) for any settlement
effected without its written consent (as contemplated above) for any Claim, litigation or
proceeding in respect of which indemnity may be sought hereunder. No Claim for indemnification,
except Claims based on (i) a breach of the representations contained in Section 5.07 hereof or (ii)
the assessment of taxes, interests or penalties contemplated in Section 7.02 hereof, may be first
initiated or asserted by any Indemnified Party against any Indemnifying Party (including CCC) after
the second anniversary of the Closing Date; notwithstanding the foregoing, no Claim for
indemnification may be initiated or asserted against Seller after the Closing Date.

               (d)      Each of the parties (i) acknowledges that under the Prior Management Agreements the owner
of the Containers may be indemnified and insured for various liabilities, casualties and losses,
and (ii) agrees that (as between Seller and Buyer) each party hereto shall be entitled to enforce
and collect such indemnities and insurance directly from the indemnitor or insurer to the extent
arising from a loss suffered by such party because of its interest, or prior interest, as owner of
the Containers.

     22.      Headings; Table of Contents. The headings and the Table of Contents contained in
this Agreement are for convenience of reference only, and shall not effect in any way the meaning
or interpretation of this Agreement.

12

 

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first above written.

	 	 	 
	Buyer:	 	Access Shipping II:
	 
	 	 
	ACCESS SHIPPING LIMITED PARTNERSHIP, a

Connecticut limited partnership

	 	ACCESS SHIPPING II CORPORATION, a

California corporation
	 
	 	 
	By: ACCESS SHIPPING CORPORATION,

its general partner
	 	 
	 
	 	 
	  By: /s/ Charles R. F. Kremer

	 	By: /s/ Charles R. F. Kremer
	 

	 	 
	Charles R. F. Kremer, President

	 	Charles R. F. Kremer, President
	 
	 	 
	 

	 	By: /s/ Andrew Loft
	 

	 	 
	 

	 	Andrew Loft, Secretary
	 
	 	 
	  By: /s/ Andrew Loft
	 	 
	 
	 	 
	Andrew Loft, Secretary

	 	Seller:
	 

	 	IEA INCOME FUND XI, L.P.
	 
	 	 
	By: ACCESS SHIPPING II CORPORATION,

its general partner

	 	By: CRONOS CAPITAL CORP., its
general partner
	 
	 	 
	  By: /s/ Charles R. F. Kremer

	 	  By: /s/ Dennis J. Tietz
	 

	 	 
	Charles R. F. Kremer, President

	 	Dennis J. Tietz, President
	 
	 	 
	  By: /s/ Andrew Loft

	 	  By: /s/ John Kallas
	 

	 	 
	Andrew Loft, Secretary

	 	John Kallas, Chief Financial Officer
	 
	 	 
	Access Shipping:
	 	 
	 
	 	 
	ACCESS SHIPPING CORPORATION, a California

	 	CCC:
	corporation
	 	 
	 
	 	 
	 

	 	CRONOS CAPITAL CORP.
	By: /s/ Charles R. F. Kremer

	 	By: /s/ Dennis J. Tietz
	 

	 	 
	Charles R. F. Kremer, President

	 	Dennis J. Tietz, President
	 
	 	 
	By: /s/ Andrew Loft

	 	By: /s/ John Kallas
	 

	 	 
	Andrew Loft, Secretary

	 	John Kallas, Chief Financial Officer

13

 

Exhibit A

List of Containers

[omitted pursuant to Item 601(b)(2) of Regulation S-K]

 

 

Exhibit B

Bill of Sale

 

 

Exhibit B

Form of Bill of Sale

     For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, IEA
INCOME FUND XI, L.P., a California limited partnership (“Seller”) does hereby sell, assign
and transfer unto ACCESS SHIPPING LIMITED PARTNERSHIP, a Connecticut limited partnership
(“Buyer”), and its successors and assigns, all right, title and interest of Seller in and
to the marine cargo containers and related equipment listed on Schedule 1 attached hereto
(the “Equipment”) to have and to hold the same unto Buyer, its successors and assigns,
forever.

     Seller hereby warrants that it has good and marketable title to the Equipment, and that
Seller’s title thereto is free and clear of all liens, charges, security interests, or other
encumbrances other than the use and possessory rights of third party lessees as contemplated under
Seller’s lease or management agreements with Cronos Containers Limited, an English company.

     This Bill of Sale is being delivered in connection with the Container Purchase Agreement
between Seller, Cronos Capital Corp., a California corporation, Access Shipping Corporation, a
California corporation, Access Shipping II Corporation, a California corporation and Buyer dated as
of January 19, 2006 (the “Purchase Agreement”). EXCEPT FOR THE WARRANTY OF TITLE SET FORTH
IN THIS BILL OF SALE AND THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THE PURCHASE
AGREEMENT, THE EQUIPMENT IS BEING SOLD TO BUYER BY SELLER “AS-IS” “WHERE-IS”, WITHOUT ANY OTHER
REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN, ORAL OR IMPLIED, AND SELLER SHALL NOT, BY VIRTUE
OF HAVING SOLD THE EQUIPMENT HEREWITH, BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR WARRANTY,
EXPRESS OR IMPLIED, NOW OR HEREAFTER, AS TO THE CONDITION, DESIGN, OPERATION, MAINTENANCE, VALUE,
MARKETABILITY, MERCHANTABILITY, OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE OF ANY OF THE
CONTAINERS OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF ANY OF THE CONTAINERS AND ANY
IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, DEALING OR USAGE OR THE TRADE.

[Signature page follows.]

1

 

     IN WITNESS WHEREOF, the undersigned has executed this Bill of Sale as of the ___ day of
January, 2006.

	 	 	 	 	 
	 	Seller:

IEA INCOME FUND XI, L.P.,

By: CRONOS CAPITAL CORP., its

      general partner

 	 
	 	By:  	 	 
	 	 	Dennis J. Tietz, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	And:  	
 	 
	 	 	John Kallas, Chief Financial Officer 	 
	 	 	 	 

2

 

	 	 	 	 	 

Schedule 1

to

Bill of Sale

List of Equipment

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]