SETTLEMENT AGREEMENT
This
Settlement Agreement (the “Agreement”)
is
made as of September 21, 2007, by and among Xxxxx Xxxxxxxxx, in his individual
capacity (“Xxxxx”),
Xxxxx
Xxxxxxxxx, in her individual capacity (“Elise”
and
together with Xxxxx, the “Greenbergs”),
the
Elise Trust (the “Trust”),
Raintree Development, LLC (“Raintree”),
XX
Xxxxx LLC (“XX
Xxxxx”),
and
Braintree Properties, LLC (“Braintree”
and,
together with the Greenbergs, the Trust, Raintree, and XX Xxxxx, the
“Xxxxxxxxx
Parties”),
and
The Center For Wound Healing, Inc., a Nevada corporation (“CFWH”).
(The
Greenbergs, the Trust, Raintree, XX Xxxxx, Braintree, and CFWH are each referred
to herein as a “Party”
or,
collectively, as the “Parties”).
Recitals
WHEREAS,
CFWH has had a longstanding business relationship with the Xxxxxxxxx Parties;
and
WHEREAS,
CFWH and the Xxxxxxxxx Parties have entered into multiple written or oral
contracts, agreements, licenses, sublicenses, leases, subleases, guaranties,
commitments, undertakings or other similar binding arrangements, whether express
or implied (the “Contracts”)
WHEREAS,
on or about December 1, 2005, Elise and CFWH entered into an employment
agreement, pursuant to which Elise serves as CFWH’s Director of Human Resources
(the “Elise
Employment Agreement”);
and
WHEREAS,
on or about December 7, 2005, XX Xxxxx and CFWH entered into an independent
contractor agreement, pursuant to which XX Xxxxx was engaged to introduce CFWH
to potential clients for the purpose of CFWH selling its products and/or
services to such potential clients (the “XX
Xxxxx Agreement”
and
together with the Contracts and the Elise Employment Agreement, “the
“Xxxxxxxxx
Agreements”);
and
WHEREAS,
various disputes have arisen regarding the rights and obligations of each of
the
Parties under the Xxxxxxxxx Agreements; and
WHEREAS,
the Parties wish to resolve all disputes that have arisen under the Xxxxxxxxx
Agreements and otherwise and avoid the expense, risk and uncertainty of
litigation;
NOW,
THEREFORE, in consideration of the representations, acknowledgements, promises
and covenants contained herein, and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, each of the Parties hereby
voluntarily, intentionally, and upon the advice and guidance of counsel, agrees
as follows:
ARTICLE
1
SETTLEMENT
AND EFFECTIVE DATE
1.1. Denial
of Liability.
This
Agreement is entered into only for the purposes of settlement and compromise
of
the matters covered by this Agreement in order to avoid the uncertainties,
risks
and expenses attendant to litigation among the Parties. Neither this Agreement,
nor anything contained herein, nor any act or thing done or to be done in
connection herewith, is intended to be, or shall be construed or deemed to
be,
an admission or a denial by any of the Parties of any liability, fault or
wrongdoing.
1.2. Effective
Date.
This
Agreement shall become effective and its terms enforceable by the Parties upon
the close of business on the seventh (7th) day following the execution by each
of the Parties of the signature pages (the “Effective
Date”).
ARTICLE
2
NON-COMPETION
PROVISIONS
2.1. Termination
of Contracts.
The
Parties hereby agree that all Xxxxxxxxx Agreements, including, without
limitation, the Elise Employment Agreement and the XX Xxxxx Agreement shall
be
deemed to have terminated effective as of July 31, 2007 No provision of any
Xxxxxxxxx Agreement shall be enforceable by or against any of the Parties or
any
other person after the occurrence of the Effective Date.
2.2. Non-Compete
Covenant. Other than the Schedule 2.12(a) Centers, the Xxxxxxxxx Parties
covenant and agree that, for a period of five (5) years from the Effective
Date,
the Xxxxxxxxx Parties shall not, directly or indirectly, (though affiliated
persons or otherwise, including, without limitation, any Related Party) perform
duties or services within the United States or Canada that are substantially
similar to the services provided by CFWH as of the date hereof or that are
related, directly or indirectly, to hyperbaric and wound care treatment
(collectively, the “CFWH
Treatments”)
for,
with respect to or in connection with any of the Xxxxxxxxx Parties, any Related
Party or any other person or entity that provides any of the CFWH Treatments.
As
used in this Agreement, “Related
Party”
means
any
individual (including, without limitation, Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxx, Xxx Xxxxx and any family member, heir, friend, business
partner, or joint venture partner of such individual), Med-Air Consultants,
Inc., Xxxxx Xxxx LLC, and any other corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company, limited
liability partnership, unincorporated organization, or other entity
engaged
at any time from and after the date hereof in a business substantially similar
to CFWH’s business as of the date hereof. Notwithstanding the foregoing or any
other provision of this Agreement, nothing contained in this Agreement shall
prevent any of the Xxxxxxxxx Parties from owning, managing or in any way being
employed by or providing services to Axcess, Inc. or any other entity that
is
affiliated with or related to the Xxxxxxxxx Parties (collectively, “Axcess”)
so
long as Axcess has not and is not engaged in any way with the business of
providing services directly or indirectly related to the CFWH Treatments (the
“Axcess Conditions”). In addition, the Xxxxxxxxx Parties hereby covenant and
agree that the Xxxxxxxxx Parties and Axcess (i) shall not derive any economic
benefit from services directly or indirectly related wound care or hyperbaric
treatments (whether rendered by Axcess or any other party or entity); and (ii)
at all times shall use their best efforts to promote and market to its customers
and clients CFWH’s hyperbaric and wound care treatment centers and refrain from
promoting or marketing any such center owned or operated by a party or entity
other than CFWH (with the agreements set forth in this sentence being referred
to herein, collectively, as the “Axcess Covenants”).
2
2.3. Nonsolicitation
of Employees. The Xxxxxxxxx Parties covenant and agree that, for a period of
five (5) years following Effective Date, the Xxxxxxxxx Parties shall not, and
shall not permit the Schedule 2.12(a) Centers to, directly or indirectly (though
affiliated persons or otherwise, including, without limitation, any Related
Party), solicit or take away, or attempt to solicit for employment, or to employ
(whether as an employee, consultant, independent contractor or otherwise) any
person who is currently or hereinafter becomes an employee of CFWH or an
employee of any of CFWH’s affiliated and related entities (hereinafter referred
to collectively as the “CFWH
Affiliates”
or,
individually, as a “CFWH
Affiliate”),
either on behalf of any of the Xxxxxxxxx Parties on behalf of any Related Party
or other individual or entity; provided, that, if any such
employee responds, without any direct solicitation by the Xxxxxxxxx Parties
to a
general solicitation advertising a job opening posted in the public media (such
as through an internet job posting site (such as Xxxxxxx.xxx), a newspaper,
or
magazine), the solicitation of such employee shall not constitute of breach
of
this Section 2.3.
2.4. Nonsolicitation
of Customers, Business Partners, and Exclusive Suppliers. The Xxxxxxxxx
Parties covenant and agree that, for a period of five (5) years following the
Effective Date, the Xxxxxxxxx Parties shall not, and shall not permit the
Schedule 2.12(a) Centers to, directly or indirectly (through affiliated persons,
agents or otherwise, including without limitation, any Related Party), solicit,
call upon, divert or take away, or attempt to solicit, call upon, divert or
take
away, for the purpose of competing with CFWH or any CFWH Affiliate in the
Business or with the Business, (a) any business or joint venture partner,
customer or exclusive supplier of (i) CFWH, (ii) any CFWH Affiliate or (iii)
any
hospital or health-care provider with which CFWH transacts business or (b)
any
medical professional or referral service utilized by or with whom CFWH or any
CFWH Affiliate transacts business; provided, however, that nothing
contained in this Agreement shall prevent any of the Xxxxxxxxx Parties from
soliciting business for or on behalf of Axcess so long as the Axcess Conditions
have been and continue to be satisfied and
the
Axcess Covenants have not been breached.
The
Xxxxxxxxx Parties further covenant and agree that, for a period of five (5)
years following the Effective Date, the Xxxxxxxxx Parties shall not directly
or
indirectly (through affiliated persons, agents or otherwise, including, without
limitation, any Related Party) solicit or call upon, or attempt to solicit
or
call upon, any agent or agency, broker, broker-dealer, financial planner,
registered principal or representative, non-exclusive supplier or service
provider of any entity or person, if the purpose of such solicitation is either
(i) to compete with CFWH or any CFWH Affiliate in the Business or with the
Business or (ii) to encourage that person or entity to terminate, diminish
or
alter the business relationship between CFWH or any CFWH Affiliate and that
person or entity as related to the Business. As used in this Agreement,
“Business”
means
the development and management of businesses involving CFWH
Treatments.
2.5. Nondisclosure
of Trade Secrets. Except to the extent required in connection with operating
the Schedule 2.12(a) Centers, the Xxxxxxxxx Parties hereby covenant and agree
that for a period of five (5) years following the Effective Date, the Xxxxxxxxx
Parties will not directly or indirectly use or disclose any Trade Secret of
CFWH
or the CFWH Affiliates for so long as such information remains a Trade Secret;
provided, however, that nothing contained in this Agreement shall
prevent any of the Xxxxxxxxx Parties from using programs, methods, techniques
or
processes used by CFWH solely in connection with the operation of the business
of Axcess so long as the Axcess Conditions have been and continue to be
satisfied and the Axcess Covenants have not been breached. As used in this
Agreement, a “Trade
Secret”
means
any technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process, financial data,
financial plans, product plans, or a list of actual or potential customers
or
suppliers which: (i) derives economic value, actual or potential, from not
being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use; (ii)
is
the subject of reasonable efforts by CFWH or any CFWH Affiliate to maintain
its
secrecy; and (iii) is not otherwise in the public domain.
3
2.6. Nondisclosure
of Confidential Information. Except to the extent required in connection
with operating the Schedule 2.12(a) Centers, the Xxxxxxxxx Parties hereby agree
that for a period of five (5) years following the Effective Date, the Xxxxxxxxx
Parties will not directly or indirectly use or disclose any Confidential
Information that the Xxxxxxxxx Parties may have acquired (whether or not
developed or compiled by the Xxxxxxxxx Parties and whether or not the Xxxxxxxxx
Parties were authorized to have access to such information) during the term
of,
in the course of, or as a result of the Xxxxxxxxx Parties’ services to, for, or
for the benefit of, CFWH or any CFWH Affiliate; provided, however,
that nothing contained in this Agreement shall prevent any of the Xxxxxxxxx
Parties from using practices, methodologies, business strategies or models
used
by CFWH solely in connection with the operation of the business of Axcess
so
long
as the Axcess Conditions have been and continue to be satisfied and the Axcess
Covenants have not been breached.
As used
in this Agreement, “Confidential
Information”
means
any secret, confidential or proprietary information of CFWH or any CFWH
Affiliate, including without limitation, projects, practices, customer contacts,
potential customers, methodologies, business strategies and models, materials
provided to or obtained by any member of CFWH’s Board of Directors in connection
with board meetings or in their capacity as a board member and management
philosophy relating to CFWH’s Business, not otherwise included in the definition
of “Trade Secret” in Section 2.5 of this Agreement. The term “Confidential
Information” does not include (i) information that has become generally
available to the public (unless the Xxxxxxxxx Parties are aware that such
information has been made public in contravention of a contractual, statutory
or
fiduciary duty), or (ii) information that is not the subject of reasonable
efforts to maintain confidentiality. Notwithstanding anything contained in
this
Agreement to the contrary, no Xxxxxxxxx Party shall use any proprietary
information of CFWH or any CFWH Affiliate, including, without limitation, in
connection with the ownership and operation of Axcess.
2.7. Non-Disparagement.
Except as otherwise required by law, for a period of five (5) years following
the Effective Date, (a) the Xxxxxxxxx Parties hereby agree and covenant that
the
Xxxxxxxxx Parties shall not make any statement, written or verbal, in any forum
or media, or take any other action, in disparagement of CFWH or any CFWH
Affiliate other than to or as directed by CFWH’s Chief Executive Officer and/or
President and (b) CFWH hereby agrees and covenants that it shall not make any
statement, written or verbal, in any forum or media, or take any other action,
in disparagement of the Xxxxxxxxx Parties. Without limiting the foregoing,
the
statements prohibited by this section include negative references to CFWH’s or
any CFWH Affiliates’ products, services, corporate policy, officers and/or
directors. Nothing herein shall be deemed to constrain a Party’s cooperation in
any governmental action.
4
2.8. Return
of CFWH Property. The Xxxxxxxxx Parties agree that no documents, records or
other media, including all electronic media, or information belonging to CFWH
or
any CFWH Affiliate, whether prepared by the Xxxxxxxxx Parties or otherwise,
and
relating in any way to the Business of CFWH or any CFWH Affiliate (“CFWH
Property”),
shall
be taken or kept by the Xxxxxxxxx Parties without the written consent of CFWH.
On the Effective Date, or such later date as the Parties may agree, the
Xxxxxxxxx Parties shall return all CFWH Property in their possession or control
to CFWH. The Xxxxxxxxx Parties covenant to CFWH and agree that, from and after
April 27, 2007, no Xxxxxxxxx Party has or shall obtain, retain or convey to
any
third party any CFWH Property without the prior consent of CFWH;
provided, however, that, in connection with providing services to
CFWH pursuant to Section 2.11 hereof, Xxxxx xxx possess and use CFWH Property
in
connection with and while providing such services and to distribute only
information approved by the Chief Executive Officer and/or President of CFWH
for
distribution to third parties and for no other purpose. Xxxxx further agrees
to
return all CFWH Property obtained while providing services to CFWH pursuant
to
Section 2.11 hereof immediately to CFWH upon oral or written request by CFWH.
2.9. Remedies
Not Exclusive. The Xxxxxxxxx Parties hereby acknowledge and agree that the
prohibitions against disclosure of Confidential Information or Trade Secrets
recited herein are in addition to, and not in lieu of, any rights or remedies
that CFWH or any CFWH Affiliate may have available pursuant to the laws of
any
jurisdiction or common law or judicial precedent, to prevent the disclosure
of
trade secrets or proprietary information, and the enforcement by CFWH or any
CFWH Affiliate of their rights and remedies pursuant to this Agreement shall
not
be construed as a waiver of any other rights or available remedies that they
may
possess in law or equity absent this Agreement.
2.10. Consideration
to Xxxxx.
In
consideration for the termination of the Xxxxxxxxx Agreements, the agreements
of
the Xxxxxxxxx Parties made in this Agreement, including, without limitation,
the
non-compete, non-solicitation and non-disclosure provisions contained in
Sections 2.2 through 2.7, and the other good and valuable consideration received
from the Xxxxxxxxx Parties as described herein, CFWH agrees to pay Xxxxx or
his
designee the sum of $120,000.00 for each of the five (5) years following the
Effective Date payable in equal installments over the two (2) year period
commencing on the Effective Date. The payments owing under this Section 2.10
(totaling $600,000.00) shall be made on a bi-weekly basis (in an amount equal
to
$11,538.46) and shall be made on each bi-weekly date CFWH pays its employees,
independent contractors, and consultants their salaries and wages; provided,
that,
CFWH
shall have the right to cure any default in the payment of such amounts when
due
at any time prior to the thirtieth (30th) day following the date any such
payment was required to be made. Xxxxx and CFWH agree that Xxxxx is not and
will
not be a CFWH employee and, as such, all payments made pursuant to this Section
2.10 shall be made without CFWH withholding any payroll or other taxes on
Keith’s behalf. Xxxxx and CFWH further agree that if CFWH changes its payment
policies with respect to independent contractors and consultants, the remaining
payments owing under this Section 2.10 shall be made in accordance with CFWH’s
newly-implemented payment policies with respect to independent contractors
and
consultants and will not be made on the bi-weekly basis described above;
provided,
however,
that in
no event shall Xxxxx be paid less than once per month. Notwithstanding anything
herein to the contrary, upon the termination of certain provisions of this
Agreement pursuant to Section 2.13, CFWH shall have no further obligation to
pay
any outstanding amounts owing pursuant to this Section 2.10 or pursuant to
Article V hereof. Without limitation of any right or remedy CFWH might otherwise
have pursuant to this Agreement or applicable law, should any Xxxxxxxxx Party
breach Sections 2.2, 2.3, 2.4, 2.5, 2.6 or 2.7 of this Agreement, CFWH’s
obligation to make or provide any further payments under this Section 2.10
or
under Article V hereof shall cease and Xxxxx shall be obligated to and shall
immediately return to CFWH any and all installments previously paid by CFWH
to
Xxxxx pursuant to this Section 2.10. To the extent that CFWH defaults in its
payment obligations under this Section 2.10 and such default is not timely
cured, Xxxxx shall have the option to either (i) terminate the provisions of
Section 2.2 of this Agreement by providing written notice (the “Notice”) to CFWH
within ten (10) days following expiration of the applicable cure period (“Option
One”) or (ii) retain his rights against CFWH to be paid pursuant to this Section
2.10 (“Option Two”). If Xxxxx timely elects Option One, CFWH’s obligations under
this Section 2.10 and Article V hereof shall be terminated and of no further
force or effect. To the extent that Xxxxx elects Option Two, all of the
provisions of this Agreement, including, without limitation, the Xxxxxxxxx
Parties’ obligations under Section 2.2, shall remain in full force and
effect.
5
2.11. Post-Effective
Date Services. Xxxxx hereby agrees and covenants to CFWH that (i) for a
period of two (2) years following the Effective Date and (ii) for the period
from the second (2nd) anniversary of the Effective Date through the fifth (5th)
anniversary of the Effective Date, he will undertake marketing and/or business
development responsibilities on behalf of CFWH that CFWH reasonably requests
Xxxxx to undertake and that are reasonably acceptable to Xxxxx, including,
without limitation, assistance with respect to (a) revitalizing existing,
underperforming hyperbaric and wound care centers, (b) identifying and
developing new hyperbaric and wound care centers, and (c) marketing and
developing new hyperbaric and wound care centers contracted for by CFWH. Other
than as set forth in Section 2.10 and Article 5 of this Agreement, Xxxxx shall
not be entitled to receive any additional compensation in any form or other
payments for the services he will provide under this Section 2.11;
provided, however, to the extent that CFWH requests that Xxxxx
perform services during the period in clause (ii) of the immediately preceding
sentence, Xxxxx shall be compensated at the rate of $200 per hour (in addition
to the amounts paid as set forth in Section 2.10 of this Agreement) for any
such
services actually performed. In the event that CFWH fails to pay Xxxxx any
amounts owed pursuant to Section 2.10 of this Agreement and such default is
not
timely cured, Keith’s obligation to provide services to CFWH pursuant to this
Section 2.11 shall immediately terminate.
2.12. Excluded
Centers. Schedule 2.12(a) hereto sets forth the legal and business names and
business address of all hyperbaric and wound care centers (a) that any Xxxxxxxxx
Party and/or any Related Party has opened or has entered into a contract with
respect to, in each case on or prior to April 27, 2007, and (b) in which any
Xxxxxxxxx Party has an ownership interest (the “Schedule
2.12(a) Centers”),
and
the Xxxxxxxxx Parties hereby represent and warrant to CFWH that Schedule 2.12(a)
is a complete and accurate list of all such entities. The Parties agree that
the
participation of any Xxxxxxxxx Party in any hyperbaric and wound care center,
other than a Schedule 2.12(a) Center, after April 27, 2007 shall constitute
a
breach of this Agreement. Schedule 2.12(b) hereto sets forth the proposed names
and business address as well as a description of all hyperbaric and wound care
centers (the “Schedule
2.12(b) Centers”)
with
respect to which any Xxxxxxxxx Party engaged in any discussions or negotiations
(other than the Schedule 2.12(a) Centers), and the Xxxxxxxxx Parties hereby
represent and warrant to CFWH that Schedule 2.12(b) is a complete and accurate
list of all such entities. The Xxxxxxxxx Parties hereby agree that, in the
sole
and absolute discretion of CFWH, the Xxxxxxxxx Parties shall, with no additional
consideration being paid to the Xxxxxxxxx Parties, (i) immediately transfer
and
convey all of their right, title and interest in and to the Schedule 2.12(b)
Centers and all related agreements and contracts to CFWH or its designee, (ii)
take all actions reasonably necessary to effectuate such transfers, (iii) use
their best efforts to facilitate, and assist CFWH in, the development and
opening of the Schedule 2.12(b) Centers, (iv) use their best efforts to assist
CFWH in its discussions, negotiations and interaction with any and all
individuals, entities, business or joint venture partners, customers, suppliers,
hospitals, health-care providers, medical professionals, referral services,
agents, brokers or other parties each of the Schedule 2.12(b) Centers currently
involved or intended to be involved in, or related or associated with, the
Schedule 2.12(b) Centers, and (v) on or prior to the Effective Date, deliver
to
CFWH the originals (or copies where the originals are not available) of all
contracts, agreements, documents and other information related to the Schedule
2.12(b) Centers, including, without limitation, the name, title and all contact
information for any and all individuals, entities, business or joint venture
partners, customers, suppliers, hospitals, health-care providers, medical
professionals, referral services, agents, brokers or other parties currently
involved or intended to be involved in, or related or associated with, each
of
the Schedule 2.12(b) Centers. The Xxxxxxxxx Parties hereby agree that any breach
of the representations and warranties or covenants contained in this Section
2.12 shall constitute a breach of this Agreement and CFWH shall thereafter
have
no further obligations to pay any outstanding amounts owing to any Xxxxxxxxx
Party pursuant to this Agreement.
6
2.13. Applicability
of Article 2. The provisions of Sections 2.2 and 2.4 of this Agreement shall
automatically terminate upon the liquidation of CFWH or any other cessation
of
CFWH’s business. Notwithstanding anything to the contrary in this Section 2.13,
if (i) CFWH fails to pay all outstanding amounts due at the stated maturity
date
of March 31, 2008 under the 8% Secured Convertible Debentures issued by CFWH,
as
such date may be extended by agreement or otherwise (the “Debentures”),
(ii)
such default is not cured or waived, (iii) the holders of the Debentures
exercise their right to and, in fact, elect a majority of the members of CFWH’s
Board of Directors (the “Debenture
Board Members”),
and
(iv) the Debenture Board Members serve as members of CFWH’s Board of Directors
for at least thirty (30) consecutive days, the provisions of Section 2.2 of
this
Agreement shall terminate and shall have no further force or effect.
ARTICLE
3
ELISE
EMPLOYMENT AGREEMENT
3.1. Termination
of Elise Employment Agreement.
Elise
and CFWH hereby agree that the Elise Employment Agreement shall be deemed to
have terminated effective as of July 31, 2007. No provision of the Elise
Employment Agreement shall be enforceable by or against Elise or CFWH or any
other person after the occurrence of the Effective Date.
3.2. Waiver
of Claims. Elise hereby releases, discharges, and covenants not to xxx CFWH
and/or any of CFWH’s respective predecessors, successors, parents, subsidiaries,
affiliates, divisions, assigns, employees, officers, directors, shareholders,
representatives, attorneys, and agents (collectively the “Releasees”)
from
any and all claims, causes of action, liabilities, and judgments of every type
and description whatsoever, known and unknown, arising under any state, local,
federal, administrative or foreign law (including, but not limited to, claims
for declaratory judgment, equitable relief, or attorney’s fees and any and all
claims related to Elise’s employment for wages, benefits, vacation pay, sick
pay, expense reimbursement or otherwise) which Xxxxx xxx have or claim to have
against any of the Releasees for any reason whatsoever, including failure to
make any payments owed or owing under the Elise Employment Agreement.
Notwithstanding anything contained herein to the contrary, nothing in this
Section 3.2 shall prevent Elise from bringing a claim or claims to enforce
the
terms of this Agreement.
7
3.3. Post-Effective
Date Services. Elise hereby covenants to CFWH as follows:
(a) Elise
shall continue to serve as CFWH’s Director of Human Resources from and after the
Effective Date and to fulfill all duties and responsibilities of such position
until such time as a replacement Director of Human Resources (the “New
HR Director”)
is
hired and trained and CFWH determines that Elise’s services as Director of Human
Resources are no longer needed;
(b) Elise
shall perform tasks reasonably requested by CFWH to train the New HR Director
and to otherwise facilitate the transition of oversight of CFWH’s human
resources department to the New HR Director; and
(c) From
and
after the date that CFWH determines that Elise’s services as Director of Human
Resources are no longer needed, Elise shall remain reasonably available to
answer any questions the New HR Director may have and to otherwise assist with
respect to any transition issues as to which CFWH or the New HR Director
reasonably requests Elise’s assistance.
3.4. Retention
of New HR Director. CFWH hereby covenants to Elise that it will use
commercially reasonable efforts to identify, hire, and train the New HR Director
by September 30, 2007; provided, however, that if CFWH is unable
to do so, Elise’s obligations under Sections 3.3(a) and (b) of this Agreement
shall continue until such date as CFWH is able to identify, hire, and train
the
New HR Director; provided, however, that Elise shall have no
obligations under Sections 3.3(a) and (b) of this Agreement after October 31,
2007.
3.5. Post-Effective
Date Compensation.
From
and after the Effective Date, Elise and CFWH hereby agree that Elise shall
not
receive compensation in any form or other payments (other than as set forth
in
Section 3.6 of this Agreement) for the services Elise will provide pursuant
to
Section 3.3 of this Agreement; provided,
however,
that
CFWH shall reimburse Elise for all reasonable business expenses that are
approved in writing by CFWH, in its sole discretion, prior to such expenses
being incurred.
3.6. COBRA.
From
and after the Effective Date, Elise hereby elects continuation coverage of
her
health insurance on the same terms as she and her family currently have health
care coverage in accordance with COBRA and its guidelines and CFWH agrees to
reimburse Elise for the premium costs of her COBRA continuation coverage for
the
first twelve (12) months such COBRA continuation coverage is in place, with
such
reimbursement to terminate effective as of the thirteenth (13th) month of COBRA
continuation coverage. Elise hereby agrees to notify CFWH of any cancellation
or
other termination of COBRA continuation coverage within three (3) business
days
of such cancellation or termination.
8
3.7. Release
of Claims Arising under the ADEA.
(a) In
addition to the waiver of claims pursuant to Section 3.2 of this Agreement,
Elise hereby knowingly and voluntarily releases and discharges the Releasees,
collectively, separately and severally, from and for any and all liability,
claims, allegations, and causes of action arising under the Age Discrimination
in Employment Act of 1967, as amended (“ADEA”),
which
she and/or her heirs, administrators, executors, personal representatives,
beneficiaries, and assigns may have or claim to have against the Releasees.
Notwithstanding anything contained herein to the contrary, Elise does not hereby
waive any rights or claims under the ADEA that may arise after the date on
which
she executes this Agreement; and
(b) Elise
hereby acknowledges and represents to CFWH that (i) she has been given a period
of at least twenty-one (21) days to consider the terms of this Agreement, (ii)
the Company has advised (or hereby advises) Elise in writing to consult with
an
attorney prior to executing this Agreement, and (iii) she has received valuable
and good consideration to which she is otherwise not entitled in exchange for
her execution of this Agreement; and
(c) Elise
and
CFWH hereby acknowledge this Agreement shall not become effective or enforceable
until the Effective Date and that Xxxxx xxx revoke her release of ADEA claims
at
any time before the Effective Date; and
(d) In
the
event Elise revokes her release of ADEA claims, she shall notify CFWH in writing
to its designated agent for this purpose at any time before the Effective Date.
Such notice shall be delivered to CFWH by national overnight delivery service
such as Federal Express or United Parcel Service, the receipt of which shall
be
tracked by the delivery service, and addressed as follows:
000
Xxxxx
0 Xxxxx,
Xxxxxx,
Xxx Xxxxxx 00000
Attention:
Chief Executive Officer
Copy
to:
King
& Spalding LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000; and
(e) Elise
acknowledges and agrees that she shall not be entitled to any payments or
benefits under this Agreement, including the releases granted pursuant to
Article 6 of this Agreement, if she timely revokes this release of ADEA claims
and, in such event, this Agreement shall be rendered null and void and of no
further force or effect.
9
ARTICLE
4
XX
XXXXX AGREEMENT
4.1. Termination
of XX Xxxxx Agreement.
XX
Xxxxx and CFWH hereby agree that the XX Xxxxx Agreement shall be deemed to
have
terminated effective as of July 31, 2007. No provision of the XX Xxxxx Agreement
shall be enforceable by or against XX Xxxxx or CFWH or any other person after
the occurrence of the Effective Date.
4.2. Waiver
of Payments.
XX
Xxxxx hereby releases, discharges, and covenants not to xxx CFWH and/or any
of
the Releasees from
any
and all claims, causes of action, liabilities, and judgments of every type
and
description whatsoever, known and unknown, arising under any state, local,
federal, administrative or foreign law (including, but not limited to, claims
for declaratory judgment, equitable relief, or attorney’s fees) which JD Xxxxx
xxx have or claim to have against any of the Releasees for any reason
whatsoever, including, without limitation, (a) breach of the XX Xxxxx Agreement,
(b) failure to make any incentive payments that have been due to XX Xxxxx or
(c)
payments in connection with any hyperbaric medicine and wound care centers
that
are currently operating or expected to be operating the future that were
identified by XX Xxxxx and/or presented or to be presented by XX Xxxxx to CFWH
for its consideration. Notwithstanding anything contained herein to the
contrary, nothing in this subparagraph shall prevent XX Xxxxx from bringing
a
claim or claims to enforce the terms of this Agreement.
4.3. Release
of Claims Arising under the ADEA.
(a) In
addition to the waiver of claims pursuant to Section 4.2 of this Agreement,
Xxxxx hereby knowingly and voluntarily releases and discharges the Releasees,
collectively, separately and severally, from and for any and all liability,
claims, allegations, and causes of action arising under the ADEA, which he
and/or his heirs, administrators, executors, personal representatives,
beneficiaries, and assigns may have or claim to have against the Releasees.
Notwithstanding anything contained herein to the contrary, Xxxxx does not hereby
waive any rights or claims under the ADEA that may arise after the date on
which
he executes this Agreement; and
(b) Xxxxx
hereby acknowledges and represents to CFWH that (i) he has been given a period
of at least twenty-one (21) days to consider the terms of this Agreement, (ii)
the Company has advised (or hereby advises) Xxxxx in writing to consult with
an
attorney prior to executing this Agreement, and (iii) he has received valuable
and good consideration to which he is otherwise not entitled in exchange for
his
execution of this Agreement; and
(c) Xxxxx
and
CFWH hereby acknowledge this Agreement shall not become effective or enforceable
until the Effective Date and that Xxxxx xxx revoke his release of ADEA claims
at
any time before the Effective Date; and
(d) In
the
event Xxxxx revokes his release of ADEA claims, he shall notify CFWH in writing
to its designated agent for this purpose at any time before the Effective Date.
Such notice shall be delivered to CFWH by national overnight delivery service
such as Federal Express or United Parcel Service, the receipt of which shall
be
tracked by the delivery service, and addressed as follows:
10
000
Xxxxx
0 Xxxxx,
Xxxxxx,
Xxx Xxxxxx 00000
Attention:
Chief Executive Officer
Copy
to:
King
& Spalding LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000; and
(e) Xxxxx
acknowledges and agrees that he shall not be entitled to any payments or
benefits under this Agreement, including the releases granted pursuant to
Article 6 of this Agreement, if he timely revokes this release of ADEA claims
and, in such event, this Agreement shall be rendered null and void and of no
further force or effect.
ARTICLE
5
XXXXX
EXPENSES AND AUTOMOBILE ALLOWANCE
5.1. Automobile
Allowance.
In
furtherance of Keith’s post-Effective Date obligations set forth in Section 2.11
of this Agreement, CFWH shall provide Xxxxx with a monthly automobile allowance
in an amount not to exceed (a) $2,000 per month ($24,000 per annum) for the
period from the Effective Date through the one-year anniversary of the Effective
Date and (b) $1,200 per month ($14,400 per annum) for the period from the
one-year anniversary of the Effective Date through the two-year anniversary
of
the Effective Date. Xxxxx shall not be entitled to receive reimbursement from
CFWH for any other automobile expense, including, without limitation, insurance,
mileage, gas, tolls, and parking. CFWH hereby agrees to continue to provide
Xxxxx automobile insurance coverage on two vehicles that Xxxxx owns through
February 2008; provided,
however,
that
Xxxxx will be solely responsible for the payment of the insurance premiums
associated with those two vehicles and Xxxxx will reimburse CFWH for the payment
of such insurance premiums in a manner that is agreed to between Xxxxx and
CFWH.
5.2. Expense
Reimbursement.
In
connection with the performance of Keith’s obligations set forth in Section 2.11
of this Agreement, CFWH shall reimburse Xxxxx for all reasonable entertainment
expenses and travel costs, including airfare, out-of-town car rentals,
out-of-town lodging, and meals that are reasonably incurred in the performance
of services by Xxxxx specifically authorized or directed by CFWH, in its sole
discretion, prior to such expenses being incurred. All reimbursement pursuant
to
this Section 5.2 shall be made in the same manner that CFWH reimburses its
independent contractors and consultants.
11
ARTICLE
6
RELEASES
6.1. Releases
Relating to Certain Specified Transactions. On the Effective Date, CFWH and
the Xxxxxxxxx Parties shall release any and all claims or causes of action,
whether known or unknown, relating to each of the transactions set forth on
Schedule 6.1 (the “Schedule
6.1 Transactions”)
hereto
and the Xxxxxxxxx Parties acknowledge and accept CFWH’s treatment of each of the
Schedule 6.1 Transactions on its books and records. In consideration of the
foregoing release by CFWH, on the Effective Date, the Xxxxxxxxx Parties other
than the Trust and Raintree shall execute and deliver to CFWH a promissory
note
in favor of CFWH in the form annexed hereto as Exhibit “A” (the “Note”) in the
principal amount of $180,000.00. The Note shall mature on the three-year
anniversary of the Effective Date (the “Maturity Date”), bear no interest prior
to a default and require no principal payments until the Maturity Date.
Moreover, the principal amount outstanding under the Note shall be reduced
as
follows: (a) upon the opening by CFWH of the first of the Schedule 2.12(b)
Centers, the principal amount of the Note shall be reduced by $60,000.00; (b)
upon the opening by CFWH of the second of the Schedule 2.12(b) Centers, the
principal amount of the Note shall be reduced by an additional $60,000.00;
and
(c) upon the opening by CFWH of the third of the Schedule 2.12(b) Centers, the
principal amount of the Note shall be reduced by an additional
$60,000.00.
6.2. General
Release.
EFFECTIVE AS OF THE EFFECTIVE DATE, (I) CFWH AND THE CFWH AFFILIATES HEREBY
FULLY AND FINALLY WAIVE, RELEASE, ACQUIT AND FOREVER DISCHARGE EACH OF THE
XXXXXXXXX PARTIES, AND (II) THE XXXXXXXXX PARTIES HEREBY FULLY AND FINALLY
WAIVE, RELEASE, ACQUIT AND FOREVER DISCHARGE CFWH AND THE CFWH AFFILATES FROM
ANY AND ALL CAUSES OF ACTION, CLAIMS, COUNTERCLAIMS, SUITS, ATTORNEYS’ FEES,
COSTS, CONTROVERSIES, DEMANDS AND OTHER OBLIGATIONS AND LIABILITIES OF ANY
KIND,
INCLUDING CLAIMS FOR SALARY, EMPLOYEE BENEFITS, VACATION, AND EXPENSE
REIMBURSEMENT, WHETHER IN LAW OR EQUITY, AND WHETHER KNOWN OR UNKNOWN, THAT
SUCH
RELEASING PARTY HAD OR NOW HAS, AND ANY CLAIM THAT WAS OR MIGHT HAVE BEEN
ALLEGED BY ANY SUCH RELEASING PARTY, IN CONNECTION WITH, ARISING OUT OF OR
RELATING TO THE XXXXXXXXX AGREEMENTS IN RESPECT OF THE PERIOD PRIOR TO, ON
OR
AFTER THE EFFECTIVE DATE, NOTWITHSTANDING THE FAULT, STRICT LIABILITY, BREACH
OF
CONTRACT OR NEGLIGENCE, WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE,
OF THE PERSON RELEASED BY THIS PARAGRAPH 6.2 OR WHETHER ASSERTED IN CONTRACT,
IN
WARRANTY, IN TORT, BY STATUTE OR OTHERWISE.
ARTICLE
7
MISCELLANEOUS
7.1. Successors
and Assigns. The Xxxxxxxxx Parties agree that, in the event that CFWH is
acquired by or merges into another entity, CFWH may transfer all of its rights
and obligations under this Agreement to such other entity without the consent
of
the Xxxxxxxxx Parties; provided, that, the transferee assumes the
obligations of CFWH under this Agreement. Except as provided in the immediately
preceding sentence, no Party hereto shall assign this Agreement or any rights
or
obligations hereunder without the prior written consent of the other Parties
hereto, and any such attempted assignment without such prior written consent
shall be void and of no force and effect. This Agreement shall inure to the
benefit of and shall be binding upon the successors and permitted assigns of
the
Parties hereto.
12
7.2. Governing
Law; Jurisdiction.
This
Agreement shall be construed, performed and enforced in accordance with, and
governed by, the Laws of the State of New York (without giving effect to the
principles of conflicts of Laws thereof). Any legal action or proceeding with
respect to this Agreement or the transactions contemplated hereby may be brought
in the courts of the State of New York sitting in Manhattan or of the United
States for the Southern District of New York, and by execution and delivery
of
this Agreement, each of the Parties consents to the nonexclusive jurisdiction
of
those courts. Each of the Parties irrevocably waives any objection, including
any objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any action
or
proceeding in such jurisdiction in respect of this Agreement or the transactions
contemplated hereby.
7.3. Mutual
Drafting.
This
Agreement is the result of the joint efforts of the Xxxxxxxxx Parties and CFWH,
and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of the parties and there is to be no construction
against either party based on any presumption of that party’s involvement in the
drafting thereof.
7.4. Expenses.
Except
as otherwise provided herein, each of the Parties hereto shall pay its own
expenses in connection with this Agreement and the transactions contemplated
hereby, including any legal and accounting fees, whether or not the transactions
contemplated hereby are consummated.
7.5. Severability.
Except
as set forth herein, in the event that any part of this Agreement is declared
by
any court or other judicial or administrative body to be null, void or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement shall remain in full force
and
effect only if, after excluding the portion deemed to be unenforceable, the
remaining terms shall provide for the consummation of the transactions
contemplated hereby in substantially the same manner as originally set forth
at
the later of the date this Agreement was executed or last amended.
7.6. Notices.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given: (a) on the date
of
service if served personally on the party to whom notice is to be given; (b)
on
the day of transmission if sent via facsimile transmission to the facsimile
number given below and confirmation of successful transmission is obtained
(for
this purpose, an activity report of the sender’s facsimile machine showing the
confirmation of successful transmission is sufficient); (c) on the day after
delivery to Federal Express or similar overnight courier or the Express Mail
service maintained by the United States Postal Service or (d) on the fifth
(5th)
day after mailing, if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid and properly
addressed, to the party as follows:
13
If
to
CFWH:
000
Xxxxx
0 Xxxxx,
Xxxxxx,
Xxx Xxxxxx 00000
Attention: Chief
Executive Officer
Copy
to:
King
& Spalding LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention: Xxxxx
X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to
Xxxxx Xxxxxxxxx:
Xxxxx
Xxxxxxxxx
X.X.
Xxx
000
Xxxxxxx
Xxxxxx, XX 00000
Copy
to:
Moritt
Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to
Xxxxx Xxxxxxxxx:
Xxxxx
Xxxxxxxxx
X.X.
Xxx
000
Xxxxxxx
Xxxxxx, XX 00000
Copy
to:
Moritt
Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
14
If
to the
Elise Trust:
Elise
Trust
c/o
Moritt Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to
Raintree Development, LLC:
Raintree
Development, LLC
c/o
Moritt Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to XX
Xxxxx LLC:
XX
Xxxxx
LLC
c/o
Xxxxx
Xxxxxxxxx
X.X.
Xxx
000
Xxxxxxx
Xxxxxx, XX 00000
Copy
to:
Moritt
Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to
Braintree Properties, LLC:
Braintree
Properties, LLC
c/o Moritt
Xxxx Hamroff & Xxxxxxxx LLP
000
Xxxxxx Xxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X'Xxxxxx, Esq.
Facsimile:
(000) 000-0000
Any
Party
may change its address for the purpose of this Section 7.6 by giving the other
party written notice of its new address in the manner set forth
above.
7.7. Amendments;
Waivers.
This
Agreement may be amended or modified, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. Any waiver by any party of any condition,
or of
the breach of any provision, term, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall not be deemed
to be nor construed as a furthering or continuing waiver of any such condition,
or of the breach of any other provision, term, covenant, representation or
warranty of this Agreement.
15
7.8. Entire
Settlement Agreement.
This
Agreement contains the entire understanding among the Parties hereto with
respect to the transactions contemplated hereby and supersede and replace all
prior and contemporaneous agreements and understandings, oral or written, with
regard to such transactions. All Exhibits hereto and any documents and
instruments delivered pursuant to any provision hereof are expressly made a
part
of this Agreement as fully as though completely set forth herein.
7.9. Parties
in Interest.
The
Releasees (other than CFWH) shall be third-party beneficiaries of this Agreement
for the purposes of enforcing any provisions hereof. Except as expressly
provided herein, there are no third party beneficiaries of this Agreement.
7.10. Headings.
The
article and section headings in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this
Agreement.
7.11. Construction.
Unless
the context of this Agreement otherwise requires, (i) words of any gender
include the other gender, (ii) words using the singular or plural number also
include the plural or singular number, respectively, (iii) the terms “hereof,”
“herein,” “hereby,” and derivative or similar words refer to this entire
Agreement as a whole and not to any other particular Article, Section or other
subdivision, (iv) the words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation,” (v) “shall,” “will,”
or “agrees” are mandatory, and “may” is permissive, and (vi) “or” is not
exclusive.
7.12. Currency.
Except
where otherwise expressly provided, all amounts in this Agreement are stated
and
shall be paid in United States currency.
7.13. Time
of Essence.
Time is
of the essence in this Agreement.
7.14. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute the same agreement. The delivery
of
an executed counterpart of this Agreement by facsimile or pdf shall be deemed
to
be valid delivery thereof. It shall be sufficient in making proof of this
Agreement to produce or account for a facsimile or pdf copy of an executed
counterpart of this Agreement.
[SIGNATURES
ON FOLLOWING PAGES]
16
IN
WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to
be
executed by their respective officers thereunto duly authorized as of the date
first above written.
|
By:
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||
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Name:
|
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|
Title:
|
||
|
XXXXX
XXXXXXXXX
|
||
|
XXXXX
XXXXXXXXX
|
||
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ELISE
TRUST
|
||
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By:
|
||
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Name:
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Title:
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||
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RAINTREE
DEVELOPMENT, LLC
|
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By:
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Name:
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Title:
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||
17
|
XX
XXXXX LLC
|
||
|
By:
|
||
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Name:
|
||
|
Title:
|
||
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BRAINTREE
PROPERTIES, LLC
|
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By:
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Name:
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Title:
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18
