[LETTERHEAD OF THE WELLCARE MANAGEMENT GROUP, INC.]
CONSULTING AGREEMENT
CONSULTING AGREEMENT made as of this 15th day of January, 1999, by and
between THE WELLCARE MANAGEMENT GROUP, INC., a New York corporation, with
offices at Park West/Xxxxxx Avenue Extension, Kingston, New York 12401 (the
"Company") and X. XXXX & ASSOCIATES, a sole proprietorship doing business at 00
Xxxxxx Xxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Company is desirous of retaining Consultant as a consultant
and Consultant is desirous of being so retained;
NOW, THEREFORE, the Company and Consultant hereby agree as follows:
1. Engagement.
(a) The Company hereby retains Consultant as an independent consultant
to perform such consulting duties as the Board of Directors may from time to
direct, provided such duties relate to (i) the initiation, negotiation or
consummation of one or more Transactions (as defined below); or (ii) the
transition of responsibilities from Xxxxxx X. Xxxx ("Papa"), as the Chief
Executive Officer of the Company and its subsidiaries, to the new Chief
Executive Officer and other members of the senior management of the Company and
its subsidiaries. A "Transaction" shall mean any agreement that the Company or
any subsidiary enters into with any third party that results in any of the
following: (i) management of administrative services of the Company or any
subsidiary, (ii) sale or option to sell the Company or any subsidiary, (iii) the
acquisition of any capital for the Company or any subsidiary, or (iv) any
transactions relating to the sale of Primergy, but only to the extent that they
relate to the Company or any subsidiary.
(b) Consultant hereby accepts said retention. In rendering the
services contemplated by this Agreement, Consultant shall provide the personal
services of Papa, provided Papa shall be required to devote no more than ten
business days per month to Consultant's duties hereunder. Subject to the
foregoing limitation on Papa's time commitment, Consultant shall cause Papa to
devote such energy and skill as shall be necessary and required to fulfill
Consultant's duties and responsibilities, and to perform and discharge such
duties and responsibilities faithfully, diligently and to the best of Papa's
ability.
(c) The Company acknowledges and agrees that (i) Consultant is being
retained solely to perform the consulting services described in this consulting
agreement and Consultant is not being retained to advise the Company on, or
express any opinion as to, the wisdom, desirability or prudence of consummating
a Transaction, and (ii) Consultant is not and shall not be construed as a
fiduciary of the Company and shall have no duties or liabilities to the equity
holders or creditors of the Company or any other person by virtue of this
consulting agreement and the retention of Consultant hereunder, all of which are
hereby expressly waived. The Company also agrees that Consultant shall not have
any liability (including without limitation, liability for losses, claims,
damages, obligations, penalties, judgments, awards, liabilities, costs, expenses
or disbursements resulting from any negligent act or omission of
Consultant)(including without limitation equity holders and creditors of the
Company) claiming through the Company for or in connection with the engagement
of Consultant hereunder or any Transaction.
2. Compensation.
As compensation for all services to be rendered by Consultant
hereunder, the Company shall pay to Consultant a monthly consulting fee of
$24,000 payable in advance on the 15th day of the month, commencing on the date
hereof.
3. Term.
This consulting agreement and the fees and services hereunder shall be
for a term of six months commencing on January 15, 1999 and continuing until
July 15, 1999, subject to the Company's right to terminate this consulting
agreement sooner on not less than 90 days notice.
4. Non-Compete; Non-Disclosure and Non-Enticement of Employees.
(a) Consultant hereby agrees that during the performance of its
consulting duties hereunder, Consultant will not, without the express prior
written consent of the Company, directly or indirectly, (i) own, alone or as a
member of a partnership, greater than a 1% equity or ownership interest in, or
(ii) operate, manage, join or control, be employed by, engage in the ownership,
management, operation or control of, or (iii) be involved with, whether as an
officer, director, agent, employee or otherwise, any health maintenance
organization within the service areas in which the Company's subsidiaries,
WellCare of New York, Inc. and WellCare of Connecticut, Inc. are authorized at
any time during the term of this consulting agreement to act as a health
maintenance organization.
(b) Consultant hereby covenants and agrees that he will not (i) at any
time during, or following termination of its consulting arrangement with the
Company, reveal, divulge, or make known to any person, firm or corporation, or
use for his or another's benefit, any confidential information whatsoever in
connection with the Company or its business or anything connected therewith,
unless such information has become public knowledge, or (ii) for a period of one
year following termination of his consulting arrangement with the Company, (x)
solicit any employee from the Company's employment or otherwise interfere with
the Company's relationship with any employee of the Company, or (y) solicit any
"member" of the Company's subsidiaries for any health insurance coverage
provided by the Company's subsidiaries. For purposes hereof, the term "member"
shall mean any person or entity for whom any of the Company's subsidiaries
provided health insurance coverage during the six-month period preceding the
termination of this consulting arrangement.
5. Indemnification.
The Company agrees to indemnify Consultant in accordance with the
indemnification provisions attached to this agreement, which indemnification
provisions are incorporated herein and made a part hereof and which shall
survive the termination or expiration of this agreement.
6. Termination of Employment Agreement.
By executing this agreement, Papa and the Company hereby terminate the
Employment Agreement dated September 1, 1996, between the Company and Papa and
neither party shall have any further obligations thereunder with the following
exceptions: Sections 7, 8, 11 and 13.9 of the Employment Agreement shall survive
its termination. All other sections of the Employment Agreement (including
without limitation Sections 5 and 6 thereof) shall not survive termination of
the Employment Agreement.
7. Entire Agreement.
This Agreement contains the entire understanding between the parties
and may not be modified, altered or terminated except by an instrument in
writing signed by the parties.
8. Binding Agreement.
This Agreement shall be binding upon the parties hereto and their
successors.
9. Enforceability.
In the event any provision in this Agreement is determined to be
invalid or unenforceable by a court of competent jurisdiction due to its
geographic scope, period of duration or any other provision, such provision
shall be deemed deleted, amended or modified, as necessary, in order to render
same valid and enforceable to the fullest extent permissible. The invalidity,
unenforceability, deletion, amendment or modification of any such provision
shall not impair the enforceability of the remainder of this Agreement.
10. Construction.
This Agreement shall be construed in accordance with the laws of the
State of New York.
11. Headings.
The paragraph headings contained in this Agreement are for convenience
of reference only and are not intended to define, limit or describe the scope or
intent of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
this _____ of January 1999.
THE WELLCARE MANAGEMENT GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx, Chairman
X. XXXX & ASSOCIATES
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx, President
The undersigned agrees to bound personally by the provisions of Sections 4
and 6 of the foregoing consulting agreement to the same extent as the Consultant
named therein.
AGREED AND ACCEPTED as To Sections 4 and 6 above:
/s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx
INDEMNIFICATION PROVISIONS
The Company (as such term is defined in the Agreement, as defined below)
agrees to indemnify and hold harmless Consultant, to the fullest extent
permitted by law, from and against any and all losses, claims, damages,
liabilities, obligations, penalties, judgments, awards, costs, expenses and
disbursements (and any and all actions, suits, proceedings and investigations in
respect thereof and any and all legal and other costs, expenses and
disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise), including, without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing or defending
any such action, suit, proceeding or investigation (whether or not in connection
with litigation in which Consultant is a party), directly or indirectly, caused
by, relating to, based upon, arising out of or in connection with (a)
Consultant's acting for the Company or any subsidiary thereof, including,
without limitation, any act or omission by Consultant in connection with its
acceptance of or the performance or non-performance of its obligations under the
consulting agreement dated January 15, 1999, between The WellCare Management
Group, Inc. and X. Xxxx & Associates, as it may be amended from time to time
(the "Agreement"), or (b) any Transaction (as such term is defined in the
Agreement) or (b) any Transaction; provided, however, such indemnity agreement
shall not apply to any portion of any such loss, claim, damage, obligation,
penalty, judgment, award, liability, cost, expense or disbursement to the extent
it is found in a final judgment by a court of competent jurisdiction (not
subject to final appeal) to have resulted primarily and directly from the gross
negligence or willful misconduct of Consultant.
These Indemnification Provisions shall be in addition to any liability
which the Company may otherwise have to Consultant or the persons indemnified
below in this sentence and shall extend to the following: Xxxxxx X. Xxxx &
Associates and its affiliated entities, directors, officers, employees, legal
counsel, agents and controlling persons (within the meaning of the federal
securities laws). All references to the Consultant in these Indemnified
Provisions and in Section 1(c) of the Agreement shall be understood to include
any and all of the foregoing.
