EXHIBIT 10.1
SEPARATION AGREEMENT AND RELEASE
THIS SEPARATION AGREEMENT AND RELEASE (this "Agreement") is
made and dated as of July 29, 1999, by and among ELDERTRUST, a Maryland real
estate investment trust (the "Company"), ELDERTRUST OPERATING LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Operating Partnership") and
XXXXXX X. XXXXXXX, XX. ("Romanov").
WHEREAS, the Company, the Operating Partnership and Romanov
desire to set forth the terms and conditions of their joint agreements regarding
the resignation of Romanov and the termination of his employment and service
with the Company and its subsidiaries; and
WHEREAS, the Company is the general partner of the Operating
Partnership, the Company's only material assets consist of interests in the
Operating Partnership, and under the terms of the Second Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, as amended (the
"Operating Partnership Agreement"), the Operating Partnership is required to
pay, or reimburse the General Partner for the payment of, all expenses of the
General Partner incurred in connection with its acting as the general partner of
the Operating Partnership.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the Operating
Partnership and Romanov hereby agree as follows:
1. Resignation From and Termination of Employment and as
Trustee. The last day of Romanov's employment by the Company shall be July 28,
1999 (the "Effective Date"). Romanov hereby resigns, effective as of July 29,
1999, from all of his offices and positions with the Company, the Operating
Partnership, and each of their subsidiaries, including, without limitation, his
position as President, Chief Executive Officer and Assistant Secretary of the
Company and as a member of its Board of Trustees. Romanov shall take no action
in the name or on behalf of the Company, the Operating Partnership or any of
their subsidiaries nor shall he have any authority to bind the Company, the
Operating Partnership or any of their subsidiaries from and after the Effective
Date. Romanov shall execute and deliver to the Company, the Operating
Partnership and their subsidiaries such documents concerning such resignation
and termination of all of his positions with the Company and its subsidiaries as
may be reasonably requested by the Company, the Operating Partnership or any of
its subsidiaries from time to time. (As used in this document, the term
"subsidiary" of the Company and the Operating Partnership does not in any event
include ET Capital Corp.) The Company shall pay Romanov any unpaid salary (less
applicable withholding and standard deductions) for work performed by him
through the Effective Date in accordance with the Company's normal pay
practices.
2. Further Assistance. Romanov shall make himself reasonably available
to the Company and the Operating Partnership (taking into account in determining
such reasonable availability other personal and professional obligations he may
have) with respect to all matters relating to the business of the Company, the
Operating Partnership and their subsidiaries that occurred on or prior to the
Effective Date, including, but not limited to, assisting the Company and the
Operating Partnership and acting as a witness in connection with any pending or
threatened litigation or other legal proceeding with respect to which the
Company or the Operating Partnership reasonably determines his participation to
be necessary or useful and responding to questions and inquiries with respect to
such matters. Such assistance will be without additional compensation to
Romanov; provided, however, that he will be reimbursed by the Operating
Partnership for any reasonable out-of-pocket expenses he incurs in providing
such assistance upon providing proper documentation to the Operating Partnership
of such expenses. The Company and the Operating Partnership agree to respond to
any reasonable informational requests from Summit Bank or other lenders and
otherwise to reasonably cooperate with Romanov in connection with any
modification, extension or refinancing by Romanov of his existing obligations
with Summit Bank at the same level of security interest and rights as existing
under the current Summit Bank loan documents; provided, however, that neither
the Company nor the Operating Partnership shall be required to modify the
Amended and Restated Note, to modify any existing agreements with Romanov or to
take any action which would adversely alter, impair or hinder the Company's or
the Operating Partnership's right or ability as they exist on the date hereof to
receive payments under the Amended and Restated Note. Romanov agrees to
reimburse the Company and the Operating Partnership promptly for any reasonable
expenses incurred as a result of any cooperation so extended.
3. Amended and Restated Promissory Note. (a) In view of
Romanov's present inability to pay in full the matured and outstanding
obligations of that certain Promissory Note executed and delivered by Romanov,
dated January 30, 1998, to the order of the Company in the principal amount of
$3,600,000 (the "Original Note"), which Original Note the Company contributed to
the capital of the Operating Partnership, the Operating Partnership has agreed
to amend and restate the Original Note to reflect a new principal amount of
$1,000,000, which amended and restated note shall be in the form attached as
Exhibit A hereto (the "Amended and Restated Note"). The Operating Partnership
hereby acknowledges receipt from Romanov of the executed original of said
Amended and Restated Note, and Romanov hereby acknowledges receipt of the
canceled Original Note, concurrently with the execution and delivery by the
Company, the Operating Partnership and Romanov of this Agreement.
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(b) Notwithstanding Section 3(a) above and the amendment and
restatement of the Original Note in accordance therewith, (i) on August 18, 1999
or on the fifth business day after the quarterly dividend payment is made for
the quarter ended June 30, 1999, whichever is later, Romanov shall make an
interest payment on the Original Note to the Operating Partnership in an amount
equal to $62,827, which represents accrued interest on the Original Note for the
quarter ended June 30, 1999 and (ii) on the fifth business day after the payment
of the quarterly dividend payment on ElderTrust common shares for the quarter
ending September 30, 1999, Romanov shall make an additional interest payment on
the Original Note to the Operating Partnership in an amount equal to $19,332,
which represents accrued interest on the Original Note from July 1, 1999 through
the Effective Date. Any failure by Romanov to make either such interest payment
to the Operating Partnership shall constitute an "Event of Default" (as such
term is defined in the Amended and Restated Note) and shall entitle the
Operating Partnership to exercise all of its rights and remedies under the
Amended and Restated Note, the "Documents" (as such term is defined in the
Amended and Restated Note) or at law.
4. Section 108(a) of the Internal Revenue Code of 1986, as
Amended. After consultation with and based upon the advice of his tax advisors,
Romanov represents and warrants to the Company and the Operating Partnership
that he satisfies the requirements of Section 108(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code"), the regulations thereunder and
the applicable administrative and judicial interpretations thereof so that,
based upon Section 108(a)(1)(B) of the Code, his calendar year 1999 gross income
shall not include any amount of income attributable to the cancellation of
$2,600,000 of indebtedness by the Operating Partnership occurring pursuant to
Section 3 of this Agreement. The Company and the Operating Partnership hereby
acknowledge that Romanov has provided a copy of his current financial statements
(the "Romanov Financial Statements") to the Company and the Operating
Partnership. Romanov represents and warrants to the Company and the Operating
Partnership that such financial statements are true, correct and complete in all
material respects, reflect all of his assets (whether or not exempt from the
claims of creditors under state law) and otherwise have been prepared in a
manner consistent with the requirements for the foregoing exclusion of the
cancellation of indebtedness from gross income. Romanov further covenants and
agrees that (i) he will exclude from his 1999 gross income in his final federal
Form 1040 for calendar year 1999 any income attributable to the cancellation of
$2,600,000 of indebtedness by the Operating Partnership occurring pursuant to
Section 3 of this Agreement and (ii) such exclusion will be in compliance with
Section 108(a)(1)(B) of the Code, the regulations thereunder and the applicable
administrative and judicial interpretations thereof so that Romanov's calendar
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year 1999 gross income does not include any income attributable to such
cancellation of indebtedness. Romanov acknowledges that the Operating
Partnership has relied and is relying upon the foregoing representations,
warranties, covenants and agreements of Romanov in agreeing to cancel such
indebtedness. Without limiting the foregoing, Romanov agrees to pay all federal,
state, and local income and employee's share of employment taxes that may be
owed by reason of inclusion of all or any portion of the $2,600,000 in gross
income by reason of his failure to qualify for the insolvency exception as
contemplated hereby, and to indemnify and hold the Company and the Operating
Partnership harmless with respect thereto and with respect to any interest,
penalties or other costs that either the Company or the Operating Partnership
may incur by reason of it not withholding any income and employee's share of
employment taxes with respect to the cancellation of the $2,600,000 in reliance
upon the representations, warranties, covenants and agreements of Romanov set
forth in this Section 4 and the financial statements provided by Romanov
pursuant hereto. In reliance upon the representations, warranties, covenants and
agreements of Romanov set forth in this Section 4 and the financial statements
provided by Romanov pursuant hereto, the Company and the Operating Partnership
confirm that they do not intend to report the foregoing cancellation of
indebtedness on any information return to be issued to Romanov, unless they are
required to do so by federal, state or local taxing authorities.
5. Effect on Employment Agreement. The Employment Agreement
between the Company and Romanov made as of January 30, 1998 (the "Employment
Agreement") and all rights, benefits, obligations and liabilities of the parties
thereunder are hereby terminated and canceled and shall be of no further force
or effect as of the Effective Date, except for the provisions of Section 5.1
thereof relating to employee discoveries (a copy of which is attached as Exhibit
B hereto).
6. Effect on Option Agreement. The Non-Incentive Share Option
Agreement between the Company and Romanov made as of January 30, 1998 and all
rights, benefits, obligations and liabilities of the parties thereunder
(including, without limitation, all share options granted therein) are hereby
terminated and canceled and shall be of no further force or effect as of the
Effective Date.
7. Effect on Distribution Equivalent Rights Agreement. The
Distribution Equivalent Rights Agreement between the Company and Romanov made as
of January 30, 1998 and all rights, benefits, obligations and liabilities of the
parties thereunder (including, without limitation, all distribution equivalent
rights granted therein and his distribution equivalent rights account balance
maintained by the Company thereunder) are hereby terminated and canceled and
shall be of no further force or effect as of the Effective Date.
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8. Effect on Other Agreements. The following agreements
between the Company and Romanov shall remain in full force and effect in
accordance with their respective terms:
(a) Indemnification Agreement by and between the Company and
Romanov dated effective as of January 30, 1998 (the "Indemnification
Agreement");
(b) Registration Rights Agreement by and between the Company
and the holders of Units listed on Schedule A thereto made and entered into as
of January 30, 1998 (the "Registration Rights Agreement");
(c) Subscription Agreement by and between the Company and
Romanov dated as of October 8, 1997 (the "Subscription Agreement"); and
(d) Letter Agreement by and between the Company and Romanov
dated January 30, 1998 regarding "related tenant" relationships (the "Letter
Agreement"), which Letter Agreement shall be deemed to be modified by the
provisions of Section 13 of this Agreement.
9. Release by Romanov.
(a) Romanov, on behalf of himself and his affiliates, heirs,
executors, administrators, successors and assigns, hereby irrevocably,
unconditionally and forever releases and discharges the Company, the Operating
Partnership and their subsidiaries, and the Company's, the Operating
Partnership's and their subsidiaries' respective trustees, directors, officers,
partners, members, employees, agents, accountants, counsel and other
representatives, and their respective successors and assigns, from and against
any and all complaints, claims, demands, damages, lawsuits, actions, causes of
action, obligations and liabilities whatsoever, whether known or unknown,
absolute or contingent, accrued or unaccrued, including, but not limited to, all
claims arising from or in any way connected with Romanov's employment by the
Company and the termination of Romanov's employment with the Company, but
excluding any (i) obligations under this Agreement or any of the agreements
listed in Section 8 hereof or (ii) any claims, damages or liabilities resulting
from any breach by the Company or the Operating Partnership of the terms of this
Agreement or any of the Agreements listed in Schedule 8 hereof. This release
includes, but is not limited to, rights or claims arising under any applicable
federal, state or local statutes or common-law rights of action prohibiting
employment discrimination based on age, sex, race, color, national origin,
religion, handicap or veteran status or otherwise concerning Romanov's
employment. Romanov shall not xxx or otherwise institute or cause to be
instituted or in any way voluntarily participate in the prosecution of any
complaints against any person or entity released in this Section 9(a) in any
federal, state, District of Columbia or other court, administrative agency or
other forum concerning any claims released in this Section 9(a). Romanov
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irrevocably and unconditionally waives any and all rights to recover any relief
and damages concerning any claims that are released in this Section 9(a).
Romanov represents and warrants that he has not previously filed or joined in
any such claims or lawsuits against the Company, the Operating Partnership or
any of the other persons or entities released in this Section 9(a), and that he
has not given or sold any portion of any claims released in this Section 9(a) to
anyone else, and that he will indemnify and hold harmless the persons and
entities released in this Section 9(a) from all liabilities, claims, demands,
costs, expenses and/or attorneys' fees incurred as a result of any such
assignment or transfer.
(b) Romanov acknowledges that he has been given the
opportunity to and has in fact consulted with legal counsel of his own choosing
in connection with this Agreement and that he has carefully read this Agreement
which includes the release set forth in Section 9(a) and fully understands all
of its terms. Romanov is signing this Agreement voluntarily, without coercion
and with the advice of his own counsel and full knowledge of its significance,
and acknowledges that he has not relied upon any representation or statement,
written or oral, not set forth in this Agreement.
10. Release by the Company. The Company and the Operating
Partnership, on behalf of themselves and their successors and assigns, hereby
irrevocably, unconditionally and forever release and discharge Romanov and his
affiliates, heirs, executors, administrators, counsel, successors and assigns
from and against any and all complaints, claims, demands, damages, lawsuits,
actions, causes of action, obligations and liabilities whatsoever, whether
absolute or contingent, which the Company or the Operating Partnership has or
may have against Romanov for acts taken by him within the scope of his
employment as an officer and employee of the Company; provided, however, that it
is expressly agreed and understood that the release provided by the Company and
the Operating Partnership in this Section 10 shall only release any such
complaints, claims, demands, damages, lawsuits, actions, causes of action and
liabilities of which one or more members of the Company's Board of Trustees
(excluding Romanov) and/or the Company's Chief Financial Officer has or have
knowledge, or, which, through the exercise of reasonable care, should have had
knowledge, on the date of this Agreement and shall not waive or release any
other complaints, claims, demands, damages, lawsuits, actions, causes of action
and liabilities or that result from any breach by Romanov of the terms of this
Agreement (including, but not limited to, any representation, warranty, covenant
or agreement made by him in this Agreement) or any breach by Romanov of the
agreements listed in Section 8 hereof. The Company and the Operating Partnership
shall not xxx or otherwise institute or cause to be instituted or in any way
voluntarily participate in the prosecution of any complaints against Romanov
released in this Section 10 in any federal, state, District of Columbia or other
court, administrative agency or other forum concerning any claims released in
this Section 10, except as required by law. The Company and the Operating
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Partnership irrevocably and unconditionally waive any and all rights to recover
any relief and damages concerning any claims that are released in this Section
10. The Company and the Operating Partnership represent and warrant that they
have not previously filed or joined in any such claims or lawsuits against
Romanov or any of the other persons or entities released in this Section 10, and
that the Company and the Operating Partnership have not given or sold any
portion of any claims released in this Section 10 to anyone else, and that the
Company and the Operating Partnership will indemnify and hold harmless the
persons and entities released in this Section 10 from all liabilities, claims,
demands, costs, expenses and/or attorneys' fees incurred as a result of any such
assignment or transfer.
11. Transfer of General Partner and Managing Member Interests.
Romanov confirms that, in accordance with Section 9.4 of the Agreement of
Limited Partnership of ET Sub-Meridian Limited Partnership, L.L.P., he has on
the date of this Agreement caused to be transferred to D. Xxx XxXxxxxx, Xx.,
free and clear of all liens, claims or other encumbrances, the 1% general
partner interest in ET Sub-Meridian Limited Partnership, L.L.P. held by ET
Meridian, L.L.C., of which Romanov is the sole member. Romanov also confirms the
receipt on the date of this Agreement from Xx. XxXxxxxx of the full $25,000
payment for such interest. Romanov further confirms that he has caused Xxxxxx
XXX, L.L.C., Cabot ALF, L.L.C. and Cleveland ALF, L.L.C., of which Romanov is
the sole member, to grant Xx. XxXxxxxx on the date of this Agreement powers of
attorney to effect the transfer of the 1% managing member interests held by
those entities in ET Sub-Xxxxxx Court, L.L.C., ET Sub-Cabot Park, L.L.C. and ET
Sub-Cleveland Circle, L.L.C., respectively, in each case in accordance with the
terms of Section 9.04 of the related Operating Agreement of those entities and
subject only to receipt of any required consents to such transfers from the
Massachusetts Housing Finance Authority and the receipt by Xxxxxx XXX, L.L.C.,
Cabot ALF, L.L.C. and Cleveland ALF, L.L.C. of the consideration for the
transfer of such interests, which equals $3,500, $3,500 and $3,000,
respectively. Romanov shall cooperate fully with the Operating Partnership and
Xx. XxXxxxxx in accomplishing the transfers of such interests in accordance with
Section 9.04 of the related Operating Agreements; it being understood and agreed
that all expenses incurred in obtaining the required consents to such transfers
from the Massachusetts Housing Finance Authority shall be borne by the Operating
Partnership or Xx. XxXxxxxx. Without limiting the foregoing, Romanov hereby
agrees to take or cause to be taken such further actions, to execute, deliver
and file or cause to be executed, delivered and filed such further documents and
instruments, as may be necessary or as may be reasonably requested by the
Operating Partnership or Xx. XxXxxxxx in order to fully effectuate the purposes,
terms and conditions of the transfer of such interests as contemplated by this
Section 11. Romanov hereby agrees and confirms that the subject matter of this
Section 11 is unique. Accordingly, in addition to any other remedies which the
Operating Partnership may have at law or in equity, Romanov, on behalf of
himself and Xxxxxx XXX, L.L.C., Cabot ALF, L.L.C. and Cleveland ALF, L.L.C.,
hereby agrees that the Operating Partnership, in addition to any other remedies
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which the Operating Partnership may have at law or in equity, shall have the
right to have all obligations, undertakings, agreements, covenants and other
provisions of this Section 11 specifically performed by Romanov and such
entities. Following the transfer of the interests contemplated by this Section
11, the Operating Partnership agrees to assist Romanov by causing to be prepared
at the Operating Partnership's expense all necessary documents to terminate and
dissolve ET Meridian, L.L.C., Xxxxxx XXX, L.L.C., Cabot ALF, L.L.C. and
Cleveland ALF, L.L.C., including the preparation of final tax returns for those
entities; provided, however, that Romanov shall be solely responsible for the
filing of all such documents and tax returns and for any taxes owed by such
entities.
12. Ownership of Common Shares and Units. Romanov represents
and warrants that, after giving effect to Sections 6, 7 and 11 of this
Agreement, Romanov beneficially owns only the following securities of the
Company and the Operating Partnership and their subsidiaries and no other
securities of the Company, the Operating Partnership or any of their
subsidiaries: (a) 370,600 common shares of beneficial interest, par value $.01
per share, of the Company (the "Romanov Common Shares") and (b) 118,750 units of
limited partnership interest (the "Romanov Units") of the Operating Partnership.
Romanov also represents and warrants that he owns all of the Romanov Common
Shares and the Romanov Units, free and clear of all liens, claims and other
encumbrances except as listed on Schedule 12 attached hereto. Romanov further
represents and warrants that (a) except for the Romanov Common Shares and the
Romanov Units, he does not Beneficially Own or Constructively Own (as each such
term is defined in the Company's Amended and Restated Declaration of Trust) any
Common Shares, any Preferred Shares, or any Operating Partnership Units and (b)
no other Person is or would be either a Beneficial Owner or a Constructive Owner
of either Common Shares, Preferred Shares, or Operating Partnership Units as a
result of the Beneficial Ownership or Constructive Ownership of either Common
Shares, Preferred Shares or Operating Partnership Units by Romanov or whose
ownership would cause Romanov to be a Beneficial Owner or Constructive Owner of
such Shares or Units, in each case as such capitalized terms are defined in
Section 7.1 of the Company's Amended and Restated Declaration of Trust.
13. Limitation on Ownership. Romanov, on behalf of himself,
his affiliates and any person or entity who would qualify as an Excluded Holder
(as such term is defined in Section 7.1 of the Company's Amended and Restated
Declaration of Trust), covenants and agrees that neither he nor they shall
acquire, directly or indirectly, individually or in the aggregate, the
Beneficial Ownership (as defined in the Company's Amended and Restated
Declaration of Trust but which, for purposes of this Section 13, shall also
include "beneficial ownership" within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) or
Constructive Ownership of any additional Common Shares or Preferred Shares (in
each case as such capitalized terms are defined in Section 7.1 of the Company's
Amended and Restated Declaration of Trust) or any other securities of the
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Company, or any partnership interests or other securities of the Operating
Partnership, without the prior written approval of the Board of Trustees of the
Company. This limitation shall also cover any agreement, arrangement or
understanding to acquire shares or securities but shall not preclude Romanov
from redeeming his Units in accordance with the terms and conditions of the
Operating Partnership Agreement and Section 16 of this Agreement. For purposes
of this limitation, Romanov, on behalf of himself and his affiliates, covenants
and agrees that neither he nor they are or will become a member of any group or
otherwise act in concert with any other person for the purpose of acquiring,
holding, voting or disposing of the Common or Preferred Shares or any other
securities of the Company or of the partnership interests or any other
securities of the Operating Partnership.
14. Special Meetings, Shareholder Proposals and Related
Matters. Until July 29, 2005, Romanov, on behalf of himself, his affiliates and
any person or entity who would qualify as an Excluded Holder (as such term is
defined in Section 7.1 of the Company's Amended and Restated Declaration of
Trust), covenants and agrees that neither he nor they shall (a) call, or
participate in any manner in calling, a special meeting of shareholders of the
Company or of the partners of the Operating Partnership, (b) submit any proposal
for voting upon at any annual or special meeting of shareholders of the Company
or for a vote or consent of the partners of the Operating Partnership, (c)
propose any nominee for election as a trustee of the Company, or (d) institute,
encourage or participate in any proxy solicitation with respect to any matter
submitted to a vote of the Company's shareholders or the partners of the
Operating Partnership or seek to advise or influence any person or entity with
respect to the voting of Common or Preferred Shares or any other securities of
the Company or the voting of partnership interests or any other securities of
the Operating Partnership.
15. Voting of Romanov Common Shares and Units. At all meetings
of shareholders of the Company held on or prior to July 29, 2005, Romanov shall
vote or direct the voting of the Romanov Common Shares (which for purposes of
this Section 15 shall include any Common Shares of the Company acquired by
Romanov upon redemption of any of the Romanov Units) for, against or abstain on
each matter voted on by shareholders of the Company in the same proportion as
the Common Shares of the Company owned by all other shareholders are voted or
abstained from voting with respect to each matter. In each vote or consent of
partners of the Operating Partnership held on or prior to July 29, 2005, Romanov
shall vote or direct the voting of the Romanov Units for, against or abstain on
each matter voted on by partners of the Operating Partnership in the same
proportion as the partnership interests of the Operating Partnership owned by
all other partners of the Operating Partnership (including the Company) are
voted, except for matters requiring the Consent of the Outside Limited Partners
(as such term is defined in the Operating Partnership Agreement) as to which
Romanov shall vote or direct the voting of the Romanov Units in the same
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proportion as the partnership interests held by all other partners of the
Operating Partnership (excluding the Company) are voted. Romanov hereby
irrevocably appoints the Company and its successors and assigns his true and
lawful agent and attorney-in-fact, with full power and authority in its name,
place and stead, to vote the Romanov Units in accordance with the provisions of
this Section 15. The foregoing power is a power coupled with an interest. At all
times on or prior to July 29, 2005, Romanov further agrees that (a) he will have
all of the Romanov Common Shares and the Romanov Units represented in person or
by proxy at all meetings of stockholders of the Company and partners of the
Operating Partnership, as the case may be, held during such period, unless he
shall previously have sold such Common Shares and Units, and (b) he will not
deposit any of the Romanov Common Shares or the Romanov Units in a voting trust
or otherwise subject, except as contemplated herein, any such shares and units
to any agreement or arrangement with respect to the voting of such shares or
units. The provisions of this Section 15 shall be of no further force and effect
as to any Romanov Common Shares and/or Romanov Units for which Romanov ceases to
be the beneficial owner as a result of any open market sale of Common Shares or
other transaction not entered into for the purpose of evading the provisions of
this Section 15.
16. Redemption of Romanov Units. If Romanov elects, in
accordance with the terms and conditions of the Operating Partnership Agreement,
at any time on or prior to January 29, 2001 to redeem all or any portion of his
Romanov Units, the Company shall redeem such Romanov Units by paying to Romanov
the Shares Amount (as defined in the Operating Partnership Agreement) and the
Company shall not elect to pay him the Cash Amount (as defined in the Operating
Partnership Agreement).
17. Attorney's Fees. The Operating Partnership shall reimburse
Romanov $10,000 for the attorney's fees and expenses incurred by Romanov in
connection with the negotiation and execution of this Agreement. Romanov
acknowledges receipt of such payment concurrently with the execution and
delivery by the Company, the Operating Partnership and Romanov of this
Agreement.
18. Medical and Dental Insurance. The Company shall cooperate
with Romanov to continue his eligibility for medical and dental insurance at his
expense for a maximum of 18 months following the date of this Agreement in
accordance with the terms of the medical and dental insurance plans of the
Company.
19. Unemployment Xxxxxxxxxxxx.Xx the extent consistent with
applicable legal requirements, the Company shall not contest Romanov's
eligibility for unemployment compensation; provided, however, that nothing
herein shall prohibit the Company from responding accurately to governmental
inquiries in accordance with applicable law.
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20. Non-Disclosure. From and after the date of this Agreement,
Romanov shall not, directly or indirectly, provide to any person or entity any
information that concerns or relates to the negotiation of or circumstances
leading to the execution of this Agreement or to the terms and conditions
hereof, except (i) to the extent that such disclosure is consistent with public
statements made by the Company, is specifically required by law or legal process
or as authorized in writing by the Company; (ii) to his tax advisors as may be
necessary for the preparation of tax returns or other reports required by law;
(iii) to his attorneys as may be necessary to secure advice concerning this
Agreement; (iv) to his lenders as may be necessary to secure new financing or
renewal of existing financing owed by him; or (v) to members of his immediate
family. Prior to disclosing such information under parts (ii), (iii), (iv) or
(v) of this Section 20, Romanov shall inform the recipients of his obligations
under this Section 20 and obtain their agreement to be bound by the terms of
this Section 20. Any subsequent disclosure of such information by any such
recipient shall be deemed to be a disclosure by Romanov in breach of this
Agreement. The Company and the Operating Partnership shall not provide to any
third party (which for purposes hereof shall not include officers, employees,
trustees, independent public accountants or other professional advisors of the
Company or the Operating Partnership) any information that concerns or relates
to the negotiation of or circumstances leading to the execution of this
Agreement or a copy of the Romanov Financial Statements, unless the Company or
the Operating Partnership, as applicable, determines in good faith that it is
required to do so by law, legal process or other valid business reasons. The
Company and the Operating Partnership shall be responsible for any unauthorized
disclosures to third parties of the Romanov Financial Statements by their
officers, employees, trustees, independent public accountants or other
professional advisors. Without limiting the generality of the foregoing, Romanov
acknowledges that (a) the Company intends promptly following the execution and
delivery of this Agreement by the parties hereto to issue a press release
announcing Romanov's resignation and describing this Agreement, (b) the Company
intends to file a copy of this Agreement as an exhibit to a Form 8-K to be filed
by the Company with the Securities and Exchange Commission (the "SEC") promptly
following the execution and delivery of this Agreement by the parties hereto and
(c) this Agreement will need to be referred to and described in Company proxy
statements and periodic reports filed with the SEC under the Exchange Act and
registration statements filed by the Company under the Securities Act of 1933,
as amended.
21. No Disparagement; Employment References. Romanov shall not
make any disparaging statements, whether oral or written, regarding the Company,
the Operating Partnership, any of their subsidiaries or any of their businesses,
officers, trustees, directors, partners, members, employees, agents or other
representatives. The Company shall instruct each of its employees not to make
any disparaging statements, whether oral or written, regarding Romanov. Romanov
agrees to direct all requests for employment references, which shall be made in
writing, to Xx. XxXxxxxx or his successor as President and Chief Executive
Officer of the Company. The Company agrees that Xx. XxXxxxxx or his successor
will respond by issuing a letter in the form attached as Exhibit C hereto.
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22. Confidentiality. Except as authorized or directed by the
Company in writing, Romanov shall not, at any time during or subsequent to the
term of this Agreement, directly or indirectly publish or disclose any
confidential information of the Company, the Operating Partnership or of any of
their subsidiaries or confidential information of others that has come into the
possession of the Company, the Operating Partnership or of any of their
subsidiaries or into his possession in the course of his employment or service
as a trustee with the Company to any person or entity, and Romanov shall not use
any such confidential information for his own personal use or advantage or make
it available to others for use. All information, whether written or oral,
regarding the business or affairs of the Company, the Operating Partnership or
of their subsidiaries, including, without limitation, any trade secrets,
confidential or proprietary knowledge or information, no matter when or how
acquired, concerning the conduct and details of the business of the Company and
the Operating Partnership, including without limitation names of customers and
suppliers, marketing methods, unique financing methods, trade secrets, policies,
prospects and financial condition, shall be deemed confidential information,
except to the extent the same shall have been lawfully and without breach of
confidential obligation made available to the general public without
restriction. The Company and the Operating Partnership shall be under no
obligation to specifically identify any information as to which the protection
of this Section 22 extends by any notice or other action.
23. Non-Compete. Until July 29, 2001, Romanov shall not,
except with the Company's prior written consent, directly or indirectly, in any
capacity, for the benefit of any person or entity (a) communicate with or
solicit any person or entity who is or during such period becomes a customer,
supplier, employee, salesman, agent or representative of the Company or the
Operating Partnership or any of their subsidiaries, in any manner which
interferes or might interfere with such person's or entity's relationship with
the Company, the Operating Partnership, and their subsidiaries, or in an effort
to obtain such person or entity as customer, supplier, employee, salesman,
agent, or representative of any business in competition with the Company, the
Operating Partnership or any of their subsidiaries within 100 miles of any
office or facility owned, leased or operated by the Company, the Operating
Partnership or any of their subsidiaries, or (b) establish, engage, own, manage,
operate, join or control, or participate in the establishment, ownership (other
than as the owner of less than 1% of the stock of a corporation whose shares are
publicly traded), management, operation or control of, or be a director,
trustee, officer, employee, salesman, agent or representative of, or be a
consultant to, any person or entity in any business in competition with the
Company, the Operating Partnership or any of their subsidiaries, at any location
within 100 miles of any office or facility owned, leased or operated by the
Company, the Operating Partnership or any of their subsidiaries, or act or
conduct himself in any manner which would reasonably be expected to be inimical
or contrary to the best interests of the Company, the Operating Partnership or
any of their subsidiaries. Nothing in this Section 23 shall limit or preclude
Romanov from hiring Xxxx Xxxxxx.
-12-
24. Injunctive Relief. Romanov acknowledges and agrees that
the benefits and other entitlements provided to him under this Agreement are
adequate consideration for Sections 21, 22 and 23. Romanov acknowledges and
warrants that he will be fully able to earn an adequate livelihood for himself
and his dependents if Sections 21, 22 and 23 should be specifically enforced
against him. Romanov also acknowledges that the restrictions contained in
Sections 21, 22 and 23 are reasonable and necessary to protect the business and
interests of the Company, the Operating Partnership and their subsidiaries, the
Company and the Operating Partnership have relied and are relying upon the
enforceability of such restrictions in entering into this Agreement and any
violation of these restrictions will cause substantial irreparable injury to the
Company and the Operating Partnership. Therefore, Romanov agrees that the
Company and the Operating Partnership are entitled, in addition to other
remedies, to preliminary and permanent injunctive relief to secure specific
performance, and to prevent a breach or contemplated breach, of Sections 21, 22
and 23 without proof of actual loss or damages. Romanov further agrees that the
Company and the Operating Partnership are entitled, in addition to other
remedies, to preliminary and permanent injunctive relief to secure specific
performance, and to prevent a breach or contemplated breach, by him or his
affiliates of any other provisions of this Agreement without proof of actual
loss or damages. The restrictions set forth in Sections 21, 22 and 23 shall be
construed as independent covenants, and the existence of any claim or cause of
action against the Company or the Operating Partnership or any of their
subsidiaries, whether predicated upon this Agreement, or otherwise, shall not
constitute a defense to the enforcement by the Company or the Operating
Partnership of any of the restrictions contained in Sections 21, 22 and 23.
Romanov hereby consents to the jurisdiction over his person of any courts within
the Commonwealth of Pennsylvania with respect to any proceedings in law or in
equity arising out of this Agreement. In the event of a judicial determination
that any restriction contained in Section 23 of this Agreement is unreasonable,
the Company, the Operating Partnership and Romanov agree that the court may
modify the restriction to make it reasonable prior to granting injunctive
relief.
25. Return of Information, Furniture and Personal Items.
Romanov shall cooperate fully with the Company and the Operating Partnership in
providing information relating to the business of the Company, the Operating
Partnership, and their subsidiaries and in returning to the Company or the
Operating Partnership, as applicable, the originals and all copies of all files,
materials, documents or other property relating to the business of the Company,
the Operating Partnership and their subsidiaries. The Company has provided
Romanov reasonable access to the Company's offices during a mutually agreeable
time to permit him to remove his furniture and personal items at his expense.
26. No Admission. Nothing contained in this Agreement shall
constitute or be treated as an admission of liability or wrongdoing by the
Company, the Operating Partnership or Romanov.
-13-
27. Assignment. The Company and the Operating Partnership may
freely assign or delegate any of their rights or obligations hereunder. Romanov
shall not assign or delegate any of his rights or obligations hereunder without
first obtaining the written consent of the Company and the Operating
Partnership.
28. Amendment; Modification; Waiver. No amendments or
additions to this Agreement shall be binding unless in writing and signed by the
party sought to be bound thereby. No delay or failure at any time on the part of
the Company or the Operating Partnership in exercising any right, power or
privilege under this Agreement, or in enforcing any provision of this Agreement,
shall impair any such right, power, or privilege, or be construed as a waiver of
any default or as any acquiescence therein, or shall affect the right of the
Company and the Operating Partnership thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
29. Section Headings. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
30. Definitions. As used in this Agreement, the terms "proxy"
and "solicitation" shall have the meanings ascribed to such terms in Rule 14a-1
under the Exchange Act, the term "beneficial ownership" shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange Act, the term "affiliate"
shall have the meaning ascribed to such term in Rule 12b-2 under the Exchange
Act and the term "subsidiary" shall mean any entity of which a controlling
interest is held directly, or indirectly, by the Company or the Operating
Partnership and the successors and assigns of such corporations and entities and
shall also include, for purposes of Sections 9 and 12 of this Agreement, ET
Sub-Meridian Limited Partnership, L.L.P., ET Sub-Xxxxxx Court, L.L.C., ET
Sub-Cabot Park, L.L.C. and ET Sub-Cleveland Circle, L.L.C. (but shall not
include ET Capital Corp.).
31. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of any other provisions hereof;
provided, however, that if any portion of Section 9 is found by a court of
competent jurisdiction to be unenforceable and Romanov recovers any amounts from
the Company or the Operating Partnership as a result, he shall immediately pay
over all such amounts to the Operating Partnership up to an aggregate amount
equal to $3,000,000.
-14-
32. Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
33. Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered, sent by overnight
courier, or mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by telegram, telecopy or telex,
addressed as follows:
-15-
If to the Company or the Operating Partnership:
ElderTrust
ElderTrust Operating Limited Partnership
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: President and Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxxxxx, Esquire
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
If to Romanov:
Xxxxxx X. Xxxxxxx, Xx.
Centennial Barn
00 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
with a copy (which shall not constitute notice) to:
Xxxx X. Xxxxxxx, Esquire
Xxxxxx Xxxxxxx
The Bellevue, 0xx Xxxxx
Xxxxx Xxxxxx xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
34. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior oral or written
agreements, commitments or understandings, with respect to the matters provided
for herein, except for the provisions of Section 5.1 of the Employment
Agreement, the Indemnification Agreement, the Registration Rights Agreement, the
Subscription Agreement and the Letter Agreement.
35. Further Assurance. Romanov shall at any time, and from
time to time, execute and deliver such further documents as the Company and the
Operating Partnership may reasonably request to effect fully the purposes of
this Agreement.
-16-
36. Interpretation. Each party hereto hereby acknowledges
that:
(a) it or he was represented by counsel and had an opportunity
to participate equally in the drafting and negotiations of this Agreement;
(b) such negotiations were extensive and have been conducted
on an arm's length basis;
(c) Romanov is sophisticated and has substantial experience in
business, financial and legal matters; and
(d) there are no circumstances surrounding the drafting or
negotiations of this Agreement and no other reason that would or should require
a court construing this Agreement to construe it more strictly or stringently
against one party than against the other party.
37. Governing Law. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania, excluding the choice of law rules
thereof.
38. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in their names and on their behalf as of the date
first above written.
ELDERTRUST
By: /s/ D. Xxx XxXxxxxx, Xx.
-------------------------------------
D. Xxx XxXxxxxx, Xx.
Chief Operating Officer
Date of Execution: July 29, 1999
ELDERTRUST OPERATING LIMITED PARTNERSHIP
By ElderTrust, its General Partner
By: /s/ D. Xxx XxXxxxxx, Xx.
-------------------------------------
D. Xxx XxXxxxxx, Xx.
Chief Operating Officer
Date of Execution: July 29, 1999
/s/ Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
XXXXXX X. XXXXXXX, XX.
Date of Execution: July 29, 1999
-18-
SCHEDULE 12 TO SEPARATION AGREEMENT AND RELEASE
1. Loan and Security Agreement and documentation supporting credit
facilities from Summit Bank regarding 456,250 Common Shares and
Units.
2. Typical margin account with Xxxx Xxxxx regarding 6,000 Common
Shares.
3. Typical margin account with American Investment Bankers regarding
27,000 Common Shares.
-19-
EXHIBIT A
AMENDED AND RESTATED PROMISSORY NOTE
------------------------------------
$1,000,000 July 29, 0000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx
WHEREAS, ElderTrust Operating Limited Partnership, a Delaware limited
partnership, with an office at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, XX 00000
(hereinafter, together with its successors in interest and assigns, "Holder") is
the holder, as the result of a contribution by ElderTrust, a Maryland real
estate investment trust, to Holder in exchange for a partnership interest in
Holder of that certain unsecured Promissory Note dated January 30, 1998 (the
"Original Note"), executed and delivered by Xxxxxx X. Xxxxxxx, Xx. (hereinafter,
together with his successors and assigns, "Maker") to ElderTrust; and
WHEREAS, the Original Note evidences a loan in the principal amount of
$3,600,000 (the "Loan") made by ElderTrust to the Maker; and
WHEREAS, the Maturity Date (as such term is defined in the Original
Note) of the Original Note has occurred as a result of Maker's resignation and
termination of employment with ElderTrust; and
WHEREAS, after consultation with and based upon the advice of his tax
advisors, Maker has represented and warranted to ElderTrust and Holder that
Maker satisfies the requirements of Section 108(a)(1)(B) of the Internal Revenue
Code of 1986, as amended (the "Code"), the regulations thereunder and the
applicable administrative and judicial interpretations thereof so that, based
upon Section 108(a)(1)(B) of the Code, Maker's calendar year 1999 gross income
shall not include any amount of income attributable to the cancellation of
$2,600,000 of indebtedness evidenced by the Original Note; and
WHEREAS, Maker has provided a copy of Maker's current financial
statements to ElderTrust and Holder, and has represented and warranted to
ElderTrust and Holder that such financial statements are true, correct and
complete in all material respects, reflect all of Maker's assets (whether or not
exempt from the claims of creditors under state law) and otherwise have been
prepared in a manner consistent with the requirements for the foregoing
exclusion of the cancellation of indebtedness from gross income. Maker further
has covenanted and agreed that (i) Maker will exclude from this 1999 gross
income in his final federal Form 1040 for calendar year 1999 any income
attributable to the cancellation of $2,600,000 of indebtedness evidenced by the
Original Note and (ii) such exclusion will be in compliance with Section
108(a)(1)(B) of the Code, the regulations thereunder and the applicable
administrative and judicial interpretations thereof so that Maker's calendar
year 1999 gross income does not include any income attributable to the
cancellation of $2,600,000 of indebtedness by Holder. Maker has acknowledged
that Holder has relied and is relying upon the foregoing representations,
warranties, covenants and agreements of Maker in agreeing to cancel such
$2,600,000 of indebtedness; and
WHEREAS, in light of these circumstances, Maker has requested and the
Holder has agreed to amend the Original Note to reflect a reduced principal
amount of the Loan in the amount of $1,000,000, and to make certain other
modifications to the terms of the Original Note; and
WHEREAS, Maker has agreed to execute and deliver this Amended and
Restated Promissory Note (the "Note") in exchange for the Original Note.
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Maker hereby covenants and agrees as follows:
THIS NOTE AMENDS AND RESTATES THE TERMS OF THE ORIGINAL NOTE.
FOR VALUE RECEIVED, the undersigned Maker promises to pay to the order
of Holder, at its offices at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, XX 00000,
the principal sum of One Million Dollars ($1,000,000), with interest on the
unpaid principal balance from time to time outstanding, at the rate set forth
below, with payment of principal and interest to be made in lawful money of the
United States, in immediately available funds, as follows:
1. Payment Terms.
--------------
(a) Interest shall be computed on the basis of a three hundred
sixty-five (365) day year, and for the actual number of days
outstanding, at a rate per annum equal to eight and one half percent
(8.5%) for the first year of the term hereof, and at the following
rates for each year of the term thereafter:
Year 2 - 9.5%
Year 3 - 10.5%
Year 4 - 11.5%
Year 5 - 12.5%
Year 6 - 13.5%
-2-
(b) Interest shall be payable quarterly in arrears, commencing
on the fifth (5th) business day after the scheduled quarterly dividend
payment on ElderTrust common shares of beneficial interest is made by
ElderTrust for the quarter ending September 30, 1999, and continuing
thereafter upon either: (i) the fifth (5th) business day after the
scheduled quarterly dividend payment on ElderTrust common shares of
beneficial interest is made by ElderTrust, or if , for any quarter, no
such dividend is paid, then (ii) on each January 1, April 1, July 1,
and October 1 until the Maturity Date (as such term is hereinafter
defined). The total unpaid principal balance and all accrued and unpaid
interest shall be due and payable on the Maturity Date.
(c) All payments of principal or interest shall be made to the
Holder of this Note not later than 1:00 p.m. on the date and at the
place of payment designated by the Holder hereof as aforesaid (or at
such other place as the Holder hereof may from time to time designate),
and any payment received on such date but after such hour shall be
deemed to have been paid to and received by the Holder on the next
succeeding business day. If the date on which any payment is required
to be made pursuant to this Note is not a business day, then such
payment shall be due and payable on the next succeeding day which is
not a Saturday, Sunday or legal holiday in the Commonwealth of
Pennsylvania.
(d) As used in the Note, the term "Maturity Date" shall mean
July 29, 2005.
(e) All payments hereof shall be made without reduction, and
shall not be subject to any claim or offset of any kind or nature
whatsoever.
2. Prepayments.
------------
(a) Permitted Prepayments. Provided Maker is not in default
under this Note or under any other document relating to or executed in
connection with this Note (collectively, the "Documents"), the
principal amount of this Note or any other amounts owed under this Note
at any time, and from time to time, may be prepaid in whole or in part,
together with interest accrued thereon to the date of such prepayment,
without premium, upon not less than ten (10) days' prior written notice
to the Holder at the place of payment designated above.
(b) Mandatory Prepayments. Upon the sale, assignment or
transfer by Maker of any of the 370,600 common shares of beneficial
interest of ElderTrust or 118,750 units of limited partnership of
Holder as of the date hereof ("Maker's Common Shares and Units"), Maker
agrees to make a prepayment of the Loan to the extent of $2.05 per such
share or unit sold, assigned or transferred. Such mandatory prepayment
shall be made within ten (10) days of the date of such sale, assignment
or transfer.
-3-
Notwithstanding the foregoing, no such mandatory prepayment shall be
due upon: (i) the grant of a security interest equivalent to that
existing on the date hereof under the Loan and Security Agreement and
any related documents between Maker and Summit Bank dated as of January
28, 1998 (the "Summit Bank Documents") in any such shares or units by
Maker to a person or entity for the purpose of refinancing Maker's
obligations to Summit Bank under the Summit Bank Documents; provided
that such refinancing is not for an amount greater than the obligations
outstanding under the Summit Bank Documents as of the date hereof; and
further provided that the terms upon which such transfer or assignment
is made do not affect, limit or hinder the Holder's right and ability
hereunder to receive such mandatory prepayments in the event of any
other sale, assignment or transfer thereof; or (ii) the redemption by
Maker of any of his units of limited partnership interest in Holder for
common shares of beneficial interest of ElderTrust in accordance with
the terms of the Second and Amended and Restated Agreement of Limited
Partnership of Holder (but such Common Shares issued in exchange for
Units shall be added to the Maker's Common Shares already subject to
this mandatory prepayment obligation).
3. Other Agreements. (a) Maker agrees to notify Holder in writing of
any sale, transfer or assignment of any of Maker's Common Shares and Units
within one (1) business day after any such sale, transfer or assignment.
(b) Maker also agrees and covenants that he shall not directly or
indirectly create, incur, assume or permit to exist any lien (statutory or
otherwise), charge (whether fixed or floating), mortgage, pledge, assignment
(other than an assignment covered by paragraph 2(b) hereof, above), encumbrance,
claim, option, condition, restriction, or other security or preferential
arrangement of any kind or nature whatsoever upon or with respect to any of
Maker's Common Shares and Units, except the lien in favor of Summit Bank, to the
extent the same may be perfected as of the date hereof, arising in connection
with that certain Loan and Security Agreement between Maker and Summit Bank,
dated January 28, 1998.
4. Events of Default.
-----------------
At the option of Holder, the principal amount of this Note shall be
accelerated, and shall become immediately due and payable, without notice or
demand, upon the occurrence at any time of any of the following ("Events of
Default"):
(a) failure to pay when due, as set forth herein, any
principal or interest payments or other payment under the Documents; or
(b) the commencement of any case action or proceeding whether
voluntary or involuntary (which, in the case of an involuntary
proceeding, is not dismissed within sixty (60) days from the date it is
filed), under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute, or any
assignment for the benefit of creditors; or
-4-
(c) the occurrence of any other default or breach by Maker of
any covenant, term or condition of this Note which remains uncured for
more than ten (10) days; or
(d) the occurrence of any other default or Event of Default
under any other Document executed in connection herewith which is not
cured within any cure period that may be provided for under any such
Loan Document.
(e) any representation or warranty made by Maker herein or in
any Document executed in connection herewith which shall have been
incorrect in any material respect when made.
For purposes of subparagraphs (d) and (e) hereof, provided
Maker has shown evidence satisfactory to Holder in its sole discretion of
Maker's good faith efforts to cure any default or Event of Default set forth in
such subparagraph, then Holder agrees to forbear from exercising its rights
hereunder until the earlier of an additional ninety (90) days or such time as
Holder is no longer satisfied with Maker's good faith efforts to cure any such
default or Event of Default.
5. Remedies.
---------
(a) If any payment, including each quarterly interest payment
and Mandatory Prepayment required by this Note, is not made when due,
such unpaid amount shall, itself, accrue interest. Additionally, upon
any Event of Default under this Note, including any such payment
default, the interest rate provided for herein shall immediately,
without notice, increase to two percent (2%) over the interest rate set
forth in paragraph (a) on page two hereof (the `"Default Interest
Rate").
(b) Upon the occurrence of an Event of Default, Holder may
exercise any remedy provided hereunder, or at law, and subject to the
provisions of paragraph 4.
(c) Maker promises to pay all costs of collection, including
without limitation, attorneys' fees, and all expenses in connection
with the protection or realization on any collateral securing this
Note, whether or not suit is brought hereon. Such costs and expenses
shall include, without limitation, all fees, costs, attorneys' fees and
expenses incurred by the Holder hereof in connection with any suit to
enforce any Document, any insolvency, bankruptcy, reorganization,
arrangement or other similar proceedings involving Maker, which in any
way affects the rights of the Holder to exercise its rights and
remedies under this Note.
-5-
6. Miscellaneous.
--------------
(a) Maker hereby expressly waives presentment, demand,
protest, notices of protest, dishonor and non-payment of this Note and
all notices of every kind. To the extent permitted by applicable law,
the defense of the statute of limitations hereby is waived by Maker.
(b) No single or partial exercise of any power hereunder or
under any Document executed in connection herewith shall preclude other
or further exercise thereof or the exercise of any other right or power
in connection with the enforcement of this Note. No delay or omission
on the part of the Holder hereof in exercising any right hereunder
shall operate as a waiver of such right or of any other right under
this Note.
(c) This Note shall be governed by and construed under the
laws of the Commonwealth of Pennsylvania. Maker hereby submits to
personal jurisdiction in said Commonwealth for the enforcement of
Maker's obligations hereunder, and waives any and all rights to object
to jurisdiction within such Commonwealth in connection with litigation
to enforce rights under this Note or any other Document executed in
connection herewith. In the event such litigation is commenced, Maker
agrees that service of process may be made and personal jurisdiction
over Maker obtained, by service of a copy of the summons, complaint and
other pleadings required to commence such litigation upon Maker at his
place of business or last-known place of residence. Maker may designate
a substitute agent, or change the address to which said copies shall be
sent, by notice to Holder at the place designated for payment hereof by
Holder.
MAKER:
--------------------------------
Xxxxxx X. Xxxxxxx, Xx.
-6-
EXHIBIT B
SECTION 5.1 OF EMPLOYMENT AGREEMENT
5.1 Discoveries. Employee shall communicate to Employer and preserve as
confidential information of Employer each discovery, idea, design, invention and
improvement relating in any manner to Employer's business, whether or not
patentable and whether or not reduced to practice, which is conceived, developed
or made by Employee, whether alone, or jointly with others, at any time during
the Term hereof (such discoveries, ideas, designs, inventions and improvements
are referred to as "Employee's Discoveries"). All of Employee's Discoveries
shall be Employer's exclusive property, and all of Employee's right, title and
interest therein are hereby irrevocably assigned to Employer, Employee shall
not, except with Employer's express prior written consent, or except in the
proper course of his employment with Employer, use any of Employee's Discoveries
for his own benefit or the benefit of any Person (as defined herein), or
disclose any of Employee's Discoveries to any outside Person through publication
or in any other manner.
For purposes of this Agreement, the term "Person" means a natural
person, corporation, partnership, trust, estate, joint venture, sole
proprietorship, government (and any branch or subdivision thereof), governmental
agency, association, cooperative or other entity.
EXHIBIT C
[ELDERTRUST LETTERHEAD]
________ ___, 1999
TO WHOM IT MAY CONCERN:
This letter will confirm that Xxxxxx X. Xxxxxxx, Xx. served as the
Company's President and Chief Executive Officer from September 23, 1997 through
July 28, 1999, when he resigned his employment to pursue other business
interests. During his tenure, he guided the Company through its successful
initial public offering, completed in January 1998, which raised approximately
$125 million. He also administered the Company's affairs for approximately two
years.
At the time of Xx. Xxxxxxx'x departure, the Company had total assets of
approximately $273 million, including direct equity investment interests in 22
buildings and nine term and construction loans secured by a like number of
healthcare facilities. In addition, the Company had indirect investments in
entities owning interests in nine healthcare facilities and having total assets
of approximately $110 million.
I wish Ed the best in his future endeavors.
Sincerely yours,
D. Xxx XxXxxxxx, Xx.
Acting President and
Chief Executive Officer
