TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT by and between US Diagnostic Inc., a
Delaware corporation having its principal office located at 000 X. Xxxxxxx
Xxxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (herein referred to as the
"Corporation") and Coyote Consulting & Financial Services LLC, having a
principal office located at 00 Xxxxxxxx Xxxx, Xxxx Xxxxx Xxxxxxx, Xxxxxxx
00000 (hereinafter referred to as "Coyote"), is made and entered into as of
the date of execution of the last of the parties so to execute.
W I T N E S S E T H:
WHEREAS, Corporation and Coyote entered into a Consulting Agreement
dated as of December 1, 1994, as amended to date (the "Consulting Agreement");
WHEREAS, the Corporation and Coyote desire to terminate the
Consulting Agreement;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. TERMINATION OF CONSULTING AGREEMENT
A. Subject to the terms and conditions herein set forth, the parties
hereby terminate the Consulting Agreement by the execution of this Termination
Agreement. Effective immediately, except for the obligations set forth herein,
all purported associations between the Corporation and Coyote and between the
Corporation and Xxxxx X. Xxxxxxxxx are terminated.
B. As partial consideration for such termination and for Coyote's
waiver of its rights contained in Sections 4, 5 and 9 of the Consulting
Agreement, the parties hereby covenant and agree that all unvested shares of
restricted stock in the Corporation and all unvested stock options for stock
in the Corporation held by Coyote shall fully vest as of the date of this
Agreement, except that the 50,000 unvested stock options for stock in the
Corporation granted June 1, 1996, and exercisable at $7.125 per share shall,
pursuant to the term of the original grant, vest only if the Corporation's
common stock trades at a price in excess of $15.00 per share prior to June 1,
1999. Simultaneous herewith, the Corporation shall deliver to Coyote a true
and correct certified copy of a resolution of the Board of Directors of the
Corporation approving this Termination Agreement and the provisions herein
contained with respect to stock options and rights. Within ten (10) days from
the date of this Termination Agreement, the Corporation shall deliver or cause
to be delivered to Coyote an opinion of legal counsel to the Corporation,
reasonably acceptable to Coyote, opining that this Termination Agreement has
been validly executed and is enforceable against the Corporation in accordance
with its terms, subject only to such usual and customary creditors' rights
exclusions as may be approved by counsel to Coyote. Simultaneous herewith,
Coyote shall deliver to the Corporation a true and correct certified copy of a
resolution of the Board of Managers, or of the Members, of Coyote, whichever
may be applicable, approving this Termination Agreement and the provisions
herein contained. Within ten (10) days from the date of this Termination
Agreement, Coyote shall deliver or cause to be delivered to the Corporation an
opinion of legal counsel to Coyote, reasonably acceptable to the Corporation,
opining that this Termination Agreement has been validly executed and is
enforceable against Coyote in accordance with its terms, subject only to such
usual and customary creditors' rights exclusions as may be approved by counsel
to the Corporation.
C. Notwithstanding the provisions of Section 7 of the Consulting
Agreement that contain certain restrictions on the activities of the
Consultant that purport to extend beyond the termination of the Consulting
Agreement, by the execution of this Termination Agreement the parties hereto
do hereby expressly terminate the effectiveness of the provisions of Section 7
of the Consulting Agreement as of the date hereof, and the restrictions
contained therein shall be of no further force or effect.
SECTION 2. FINDER'S FEES AND EXPENSES
A. Attached hereto as Schedule A is a true, correct and complete
listing of various and sundry businesses that Coyote has previously brought to
the Corporation as potential acquisitions by the Corporation, all of which are
presently in various stages of negotiation between the Corporation and those
businesses. Of the businesses listed on Schedule A, Medical Diagnostics, Inc.
and American Shared Hospital Services are presently the subject of binding
agreements for acquisition by the Corporation, or are expected to be subject
of binding agreements for such acquisition within a short period of time after
the date hereof.
B. The Corporation acknowledges and agrees that Coyote found, and
introduced the Corporation to, all of the businesses set forth on Schedule A,
and that Coyote has performed all services required to be performed by it with
respect to all of the businesses set forth on Schedule A such that if such
businesses, or any of them, are acquired by the Corporation at any time in the
future, Coyote will be entitled to a finder's fee from the Corporation as
otherwise set forth in the Consulting Agreement.
C. The Corporation acknowledges and agrees that notwithstanding the
termination of the Consulting Agreement by this Termination Agreement, the
Corporation shall pay Coyote a finder's fee in cash of two percent (2%) of the
Aggregate Purchase Price (as defined herein) of any business listed on
Schedule A attached hereto which is subsequently acquired by the Corporation
or by any subsidiary of the Corporation, payable in full at the closing of
each acquisition. For purposes of this Termination Agreement, the Aggregate
Purchase Price on which the finder's fee due Coyote shall be computed shall be
the aggregate sum of all cash and securities (debt, equity or hybrid) issued
by the Corporation or any of its Affiliates to the seller(s) of such
businesses, together with all indebtedness incurred and/or assumed by the
Corporation or any of its Affiliates in connection with such acquisitions.
Except as provided in subsection D hereof, Coyote shall not be entitled to any
draw or advance against such finder's fees, and except for deduction by the
Corporation of the advance payment on account set forth in subsection D hereof
when the related acquisitions close, all finder's fee due to Coyote hereunder
shall be due and payable without offset of any kind whatsoever.
D. As further consideration for the execution of this Termination
Agreement, simultaneous with the execution of this Termination Agreement, the
Corporation shall pay to Coyote the sum of $620,000.00 in cash, on account of
and being one-half of the finder's fees that will be due Coyote upon closing
of the pending acquisitions of Medical Diagnostics, Inc. ($270,000.00) and
American Shared Hospital Services ($350,000.00). The remaining portion of the
finder's fees on such acquisitions shall be due and payable upon the closing
of the acquisitions. In the event that the Corporation's acquisition of either
or both of Medical Diagnostics, Inc. and American Shared Hospital Services do
not close, the payment on account of the finder's fees regarding such
businesses by the Corporation to Coyote hereunder shall thereupon be credited
against any other finder's fees due from the Corporation to Coyote by reason
of other acquisitions referred to in the preceding subsection, but shall not
otherwise be refundable to the Corporation by Coyote.
E. As to certain of the businesses set forth on Schedule A and
specifically designated by an asterisk thereon, one or more independent third
parties may be entitled to claim compensation in the nature of a portion of
any finder's fee payable in the event an acquisition of the business is
accomplished by the Corporation, and Coyote shall pay from its finder's fee
received hereunder with respect to each such acquisition the portion of the
finder's fee lawfully due to said independent third parties. As to the
finder's fees with respect to the designated transactions, Coyote covenants
and agrees to hold the Corporation harmless of and from any and all claims for
compensation in the nature of finder's or brokerage fees claimed by
independent third parties with whom Coyote dealt in bringing the proposed
transactions to the attention of the Corporation.
F. In addition to any finder's fees payable to Coyote hereunder, the
Corporation shall reimburse Coyote in cash in full for all out-of-pocket
travel and entertainment expenses incurred by Coyote and its employees and
agents in connection with a completed acquisition of any business set forth on
Schedule A by the Corporation incurred prior to the date hereof. With respect
to any expenses which are requested to be reimbursed to Coyote, Coyote agrees
to account to the Corporation in detail sufficient to entitle the Corporation
to claim an income tax deduction for such paid
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items if such item is deductible. Coyote shall submit a request for
reimbursement for such expenses to the Corporation and the Corporation shall
reimburse Coyote for such expenses simultaneous with the payment of the
finder's fees in subsection C hereinabove.
G. Until July 31, 1997, the Corporation shall have the exclusive
right to negotiate with the businesses set forth on Schedule A for acquisition
by the Corporation and Coyote will cooperate with the Corporation in that
regard and will not interfere with the Corporation's efforts in that regard.
SECTION 3. ENTIRE AGREEMENT
This instrument contains the entire agreement between the
Corporation and Coyote and may not be modified orally.
SECTION 4. NOTICES
Any notice or communication required or permitted thereunder shall
be given in writing and shall be considered to have been given on the date
such notice or communication has been delivered by hand to, mailed by
registered or certified mail, return receipt requested, postage prepaid,
directed to such party at the following address (or at such other address as
such party shall hereafter designate by written notice to the other):
US DIAGNOSTIC INC.
000 X. Xxxxxxx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chairman
COYOTE CONSULTING & FINANCIAL SERVICES LLC
c/o Xxxxx Xxxxxx Xxxxxxxxx
00 Xxxxxxx Xxxx
Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
SECTION 5. CONSTRUCTION, GOVERNING LAW
This Agreement shall be governed by the laws of the State of
Florida. In the event of any litigation to enforce, interpret, or arising out
of this Termination Agreement, the prevailing party in such litigation shall
be entitled to an award of its reasonable attorneys' fees and costs.
SECTION 6. HEADINGS AND COUNTERPARTS
Headings are inserted for reference purpose only and shall not
affect the interpretation or meaning of this Agreement. This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original, but all of which, together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto executed this Agreement
on the dates respectively indicated.
Witnesses: US DIAGNOSTIC INC.
(2 as to each party)
By: /s/Xxxxxxx Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Chairman
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Witness signature
Print name:
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By: /s/ Xxxxxx Xxxx
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Xxxxxx X. Xxxx, President
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Witness signature
Print name:
Date:
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COYOTE CONSULTING & FINANCIAL SERVICE LLC
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Witness signature By: /s/Xxxxx Xxxxxx Xxxxxxxxx
Print name: -----------------------------
Xxxxx Xxxxxx Xxxxxxxxx
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Witness signature
Print name:
Date:
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JOINDER
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The undersigned hereby joins in the execution of the foregoing
Termination Agreement as of the date indicated below.
/s/ Xxxxx Xxxxxxxxx
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-------------------------------- Xxxxx X. Xxxxxxxxx
Witness signature
Print name:
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Witness signature
Print name:
Date:
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