Exhibit 6
BINDING TERM SHEET AGREEMENT
This Binding Term Sheet Agreement ("Binding Term Sheet"), dated as of July
28, 2002, is entered into by and among, Genesis Health Ventures, Inc., a
Pennsylvania corporation ("Parent"), NCS HealthCare, Inc., a Delaware
corporation (the "Company") and Xxx X. Xxxxxxx ("Xxxxxxx"), the current chairman
of the Board of Directors of the Company. The Parent, Company and Xxxxxxx are
sometimes collectively referred to herein as the "Parties" and individually as a
"Party".
WHEREAS, the Company, Parent and a wholly owned subsidiary of Parent are
parties to an Agreement and Plan of Merger, dated as of the date hereof (as the
same may be modified or amended from time to time, the "Merger Agreement"); and
WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings assigned such terms in the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, each of the parties hereto agree to the
following binding terms:
1. Salary Continuation Agreement.
(a) Payments. In satisfaction of the Company's obligation to make such
payments under the Salary Continuation Agreement dated September 29,
2000 and as subsequently amended on November 29, 2000 and March 13,
2001, Parent will pay, or cause the Company to pay, Xxxxxxx two
payments equal to his current annual base salary, each in the amount
of Two Hundred Thousand Dollars ($200,000), on the Closing Date and
the first anniversary of the Closing Date;
(b) Benefits/Perks. Xxxxxxx will continue to receive all benefits and
perks that he currently enjoys until the Closing Date; and
(c) Success Fee. Parent will pay, or cause the Company to pay, Xxxxxxx
the success fee in the sum of Two Hundred Thousand Dollars
($200,000) (the "Success Fee") consistent with, and in satisfaction
of,
the agreement between the Company and Xxxxxxx, as reflected in the
minutes of the meeting of the Company's Board of Directors dated
November 29, 2000 (the "Minutes"), for completing the Restructuring
Plan (as defined in the Minutes). Parent will pay the Success Fee in
immediately available funds on the Closing Date.
2. Consulting Agreement.
(a) Consulting Fee. Parent will hire Xxxxxxx as a non-employee
consultant for a guaranteed four (4) year term beginning on the
Closing Date with the consultant fee structured as
follows:
(i) One Hundred Seventy-five Thousand Dollars ($175,000) per
annum; and
(ii) Parent shall continue to pay all consulting fees provided for
under paragraph 2.a) hereof, and the payments provided for
under paragraph 1.a) hereof, in the event of Xxxxxxx'x death
or disability.
(b) Benefits/Perks. Xxxxxxx will receive full reimbursement from Parent
for customary benefits and perks for a period of four (4) years,
including but not limited to, health insurance and life insurance.
Further, Xxxxxxx shall continue to occupy his office at the
Beachwood, Ohio facility so long as the Surviving Company maintains
operations at such facility, but in no instance for a period less
than one (1) year nor greater than four (4) years from the Closing
Date. So long as Xxxxxxx occupies an office at the Beachwood, Ohio
facility, the Parent shall pay for secretarial assistance,
comparable to what Xxxxxxx currently receives, and parking charges
at the Beachwood, Ohio facility.
(c) Charitable Contributions. At the direction of Xxxxxxx, Parent agrees
to make charitable contributions to not-for-profit institutions
identified by Xxxxxxx in the aggregate amount up to One Hundred
Thousand Dollars ($100,000) per year, rather than pay Xxxxxxx such
sums in the form of consulting fees as provided under paragraph 2.a)
hereof. For example, Xxxxxxx may direct Parent to pay him $100,000
and make a charitable contribution in the sum of $75,000 in lieu of
paying Xxxxxxx consulting fees in the sum of $175,000.
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3. Fee Letter Agreement. Parent shall pay all attorneys fees incurred by Xxxxxxx
in connection with the negotiation of any and all aspects of the proposed Merger
Agreement, and all transactions and agreements incidental thereto, currently
estimated to be Thirty-five Thousand Dollars ($35,000).
4. Board Seat Genesis Health Ventures, Inc. Parent covenants to seriously
consider Xxxxxxx to fill the next available Board of Directors seat of Parent.
Further, Parent agrees to convey Founder's status on Xxxxxxx effective as of the
Closing Date.
5. Best Efforts. Each of the Parties to this Binding Term Sheet agree to use
best efforts to take, or cause to be taken, all actions, and to do so, or cause
to be done, and to assist and cooperate with the other parties to this Agreement
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Binding Term Sheet.
6. Amendment; Termination; Modification. This Agreement may not be modified,
amended, altered or supplemented, except upon the execution and delivery of a
written agreement executed by all parties hereto.
7. Successors and Assigns. The provisions of this Binding Term Sheet shall be
binding upon and inure to the benefit of the Parties hereto and their respective
legal successors (including, in the case of Xxxxxxx, any executors,
administrators, estates, legal representatives and heirs) and permitted assigns;
provided, however, that, except as otherwise provided in this Binding Term
Sheet, no party may assign, delegate or otherwise transfer any of its rights or
obligations, under this Agreement, without (a) the consent of Parent and the
Company, in the case of Xxxxxxx, (b) the consent of Xxxxxxx, in the case of
Parent or the Company.
8. Governing Law; Submission to Jurisdiction. This Agreement shall be governed
by, and construed and enforced in accordance with, the domestic laws of the
State of Ohio without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Ohio or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Ohio. Each of the Parties hereto irrevocably agrees that any legal action or
proceeding with respect to this Binding Term Sheet or for recognition and
enforcement of any judgment in respect hereof brought by any other party hereto
or its successors or assigns shall be brought and determined in the state and
federal courts of the State of
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Ohio, and each of the parties hereto hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the exclusive jurisdiction of the aforesaid
courts. Each of the parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this agreement, any claim (a) that it is not
personally subject to the jurisdiction of the aforesaid courts for any reason,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of judgment, execution of judgment, or otherwise), and (c) to the
fullest extent permitted by the applicable law, that (i) the suit, action or
proceeding in such courts is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this agreement, or the
subject matter hereof, may not be enforced in or by such courts.
9. Invalid Provisions. If any provision of this Binding Term Sheet shall be
invalid or unenforceable under applicable law, such provision shall be
ineffective to the extent of such invalidity or unenforceability only, without
it affecting the remaining provisions of this Binding Term Sheet.
10. Executed in Counterparts. This Binding Term Sheet may be executed in
counterparts each of which shall be an original with the same effect as if the
signatures hereto and thereto were upon the same instrument.
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IN WITNESS WHEREOF, Parent, Company and Xxxxxxx have signed this Binding
Term Sheet Agreement as of the date first written above.
GENESIS HEALTH VENTURES, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President and
Chief Financial Officer
NCS HEALTHCARE, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
/s/ Xxx X. Xxxxxxx
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XXX X. XXXXXXX
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