1
Exhibit 10.21
SEPARATION AND MUTUAL GENERAL RELEASE AGREEMENT
This Separation and Mutual General Release Agreement ("Agreement"),
made this 17th day of March 1999, by and between Xxxxxx X. Xxxxxxx, an
individual ("Xxxxxxx"), and ARV Assisted Living, Inc., a corporation ("ARV") is
a separation agreement which includes a mutual general release of claims. Lazard
Freres Real Estate Investors L.L.C. ("Lazard") is a party to this Agreement only
with respect to paragraphs 2, 6, 8, 9, 14, 15, and 18-27.
In consideration of the covenants undertaken and the releases
contained in this Agreement, Xxxxxxx and ARV agree, and Lazard agrees with
respect to paragraphs 2, 6, 8, 9, 14, 15, and 18-27, as follows:
1. Xxxxxxx'x position as Senior Vice President and General
Counsel of ARV is terminated, such termination to be effective
March 17, 1999 (the "Separation Date").
2. That certain April 23, 1997 Employment Agreement ("Employment
Agreement") and the October 21, 1997 Amendment to that
Employment Agreement ("Amended Employment Agreement") between
Xxxxxxx and ARV shall terminate, such termination to be
effective March 15, 1999. All payments due to Xxxxxxx from
ARV shall be determined under this Agreement and the
Consulting Agreement, and no payments shall be made under the
Employment Agreement or Amended Employment Agreement. All
payments due to Xxxxxxx under this Agreement shall be the sole
responsibility of ARV and not of Lazard or any of Lazard's
affiliates.
3. Concurrently with the execution of this Agreement, and in
consideration of the promises given and payments made
hereunder, Xxxxxxx and ARV shall execute the Consulting
Agreement attached hereto as Exhibit A. Any breach of the
Consulting Agreement shall also constitute a breach of this
Agreement.
4. ARV shall pay to Xxxxxxx severance in a total amount of
$185,000.00, less standard withholding and authorized
deductions. One-half of such amount ($92,500.00) shall be paid
to Xxxxxxx on or before ten (10) days after Xxxxxxx'x
execution of this Agreement. The remaining one-half shall be
paid to Xxxxxxx on the earlier of (i) May 31, 1999, (ii) the
date on which the Company terminates the Consulting Agreement
for reasons other than a breach by Xxxxxxx, or (iii) ten (10)
days after the date ARV closes its pending financing
transaction with Bank One. In addition, Xxxxxxx acknowledges
that she has already received through direct deposit her
accrued but unpaid salary through March 15, 1999. On March
1
2
17, 1999, ARV shall pay to Xxxxxxx accrued but unused vacation
in the amount of $21,346.18, and unpaid salary in the amount
of $1,422.88, each less standard withholding and authorized
deductions.
5. During the term of the Consulting Agreement, ARV shall
reimburse Xxxxxxx for the amount of her premiums for COBRA
continuation coverage under ARV's welfare benefit plans.
6. Xxxxxxx on the one hand, and ARV and Lazard collectively on
the other, agree that each shall not (1) directly or
indirectly, make or ratify any statement, public or private,
oral or written, that disparages, either professionally or
personally, the other party or parties, the other party or
parties' subsidiaries and affiliates, past and present, and
each of them, as well as its and their trustees, directors,
officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past
and present, and each of them, or (2) make any statement or
engage in any conduct that has the purpose or effect of
disrupting the business of the other party or parties. The
parties hereby agree that any statement made in violation of
the foregoing shall constitute and be treated as a material
breach of this Agreement. This Section 6 shall not apply to
or in any way limit (i) statements made by a party in any
court, arbitral or governmental proceeding or (ii) a party's
private consultation with its attorneys or other professional
advisors.
7. ARV expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations.
Accordingly, while this Agreement resolves all issues between
Xxxxxxx and ARV relating to any alleged violation of ARV's
policies or procedures or any state or federal law or
regulation, this Agreement does not constitute an adjudication
or finding on the merits and it is not, and shall not be
construed as, an admission by ARV of any violation of its
policies, procedures, state or federal laws or regulations.
Moreover, neither this Agreement nor anything in this
Agreement shall be construed to be or shall be admissible in
any proceeding as evidence of or an admission by ARV of any
violation of its policies, procedures, state or federal laws
or regulations. This Agreement may be introduced, however, in
any proceeding to enforce the Agreement. Such introduction
shall be pursuant to a stipulation agreeing to an order
protecting its confidentiality.
8. Except for those obligations created by or arising out of
this Agreement or the Consulting Agreement, Xxxxxxx on behalf
of herself, her descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them,
hereby covenants not to xxx and fully releases and discharges
ARV, Xxxxxx, XX Strategic Realty Investors II L.P., LFSRI II
Alternative Partnership LP, LFSRI II-CADIM Alternative
Partnership L.P., Atria Communities, Inc., Kapson Senior
Quarters Corp., Prometheus
2
3
Assisted Living LLC, their respective predecessors, successors
and assigns, and their respective past, present and future
parents, subsidiaries, affiliates, trustees, executors,
administrators, officers, directors, owners, associates,
heirs, agents, insurers, stockholders, partners, employees,
licensees, representatives, lawyers, consultants, investment
bankers, accountants or any of them and including, without
limitation, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxx, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and
from any and all manner of action or actions, cause or causes
of action, in law or equity, and any suits, debts, liens,
liabilities, claims, counter-claims, cross-claims, demands,
rights, obligations, damages, losses, costs, expenses,
attorneys' fees, judgments, orders or indemnities, of all and
any nature whatsoever, whether individual or derivative, state
or federal, known or unknown, fixed or contingent, suspected
or unsuspected, and whether or not concealed or hidden, that
against said Releasees, or any of them, Xxxxxxx: (i) may have
or may now have up to the date of this Agreement; or (ii) may
hereafter have based upon, arising out of, related to or in
any way connected with her service as an officer or employee
of ARV, her separation from her position as Senior Vice
President and General Counsel of ARV or her employment by, or
status as an officer of, any ARV affiliate, or any other
transactions, occurrences, acts or omissions or any loss,
damage or injury whatever, known or unknown, suspected or
unsuspected, resulting from any act or omission by or on the
part of said Releasees, or any of them, committed or omitted
prior to the date of this Agreement including, without
limiting the generality of the foregoing, any claim that was
or could have been alleged in, or any of the facts giving rise
to or allegedly giving rise to, those certain actions entitled
ARV Assisted Living, Inc. x. Xxxxxx Freres Real Estate
Investors LLC et al., Case No. 794211, Superior Court for the
State of California for the County of Orange and related
cross-actions ("ARV v. LFREI") and/or Prometheus Assisted
Living LLC x. Xxxxxx X. Xxxxxxxxx et al., Civil Action No.
16846 In the Court of Chancery of the State of Delaware in and
for New Castle County ("Prometheus x. Xxxxxxxxx"), any claim
under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993,
the California Fair Employment and Housing Act, the California
Family Rights Act, or any claim for severance pay, bonus, sick
leave, holiday pay, vacation pay, life insurance, health or
medical insurance or any other fringe benefit, workers'
compensation or disability. Notwithstanding anything to the
contrary herein, the releases given herein do not include any
claim Xxxxxxx now has or may hereafter have for
indemnification under that certain Indemnification Agreement
between Xxxxxxx and ARV dated August 13, 1996 (the "Indemnity
Agreement") or under ARV's Articles of Incorporation or By
Laws.
3
4
Except for those obligations created by or arising out of this
Agreement, the Consulting Agreement, or the Indemnity Agreement, ARV and Lazard
hereby acknowledge full and complete satisfaction of and release and discharge,
and covenant not to xxx, Xxxxxxx from and with respect to any and all claims,
agreements, obligations, losses, damages, injuries, demands and causes of
action, known or unknown, suspected or unsuspected, arising out of or in any way
connected with Xxxxxxx'x service as Senior Vice President and General Counsel of
ARV or as any officer or director of any ARV subsidiaries, or the separation
from such positions, or any other transactions, occurrences, acts or omissions
or any loss, damage or injury whatever, known or unknown, suspected or
unsuspected, resulting from any act or omission by or on the part of Xxxxxxx
committed or omitted prior to the date of this Agreement which ARV and/or Lazard
now owns or holds or has at any time heretofore owned or held as against Xxxxxxx
including, without limiting the generality of the foregoing, any claim that was
or could have been alleged against Xxxxxxx in ARV v. LFREI and/or Prometheus x.
Xxxxxxxxx.
9. Xxxxxxx, ARV, and Lazard, and each of them, hereby represent,
warrant, and acknowledge to each other, that they have
received independent legal advice from their respective
attorneys regarding the advisability of executing this
Agreement and giving the releases provided for herein, and
hereby acknowledge the provisions of Section 1542 of the
California Civil Code, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Xxxxxxx, ARV and Lazard, and each of them, being aware of Section 1542, hereby
expressly waive and relinquish any rights or benefits they have or may have
thereunder in connection with the releases provided herein, as well as under any
other California or any Federal or state statute or common law principle of
similar effect. Each of Xxxxxxx, ARV and Lazard acknowledges that it is aware
that it or its attorney may hereafter discover facts different from or in
addition to the facts which it or its attorney now knows or believes to be true
with respect to the subject matter of this Agreement but that it is their
intention hereby to settle and release fully, finally, absolutely and forever
any and all claims, disputes and differences, known or unknown, suspected or
unsuspected, which now exist, may hereafter exist, or heretofore have existed
arising from, related to or in any way connected with the released matters set
forth in paragraph 8 of this Agreement, and without regard to the subsequent
discovery or existence of such different or additional facts except as expressly
set forth herein, which do now exist or heretofore have existed between the
parties. In furtherance of this intention, the releases herein given shall be
and remain in effect as full and complete releases, except as expressly set
forth herein, notwithstanding the discovery of any such additional facts.
Xxxxxxx, ARV and Lazard acknowledge that they understand the significance and
consequence of such release and such specific waiver of SECTION 1542. The
parties, and each of them, hereby further represent, warrant, and acknowledge to
the other parties, and each of them, that there is a risk that,
4
5
subsequent to the date of this Agreement, they will incur damage or loss that
they deem in some way attributable to the subject matter of this Agreement, or
to the actions prior to the date of this Agreement of Xxxxxxx, ARV, Xxxxxx, XX
Strategic Realty Investors II L.P., LFSRI II Alternative Partnership LP, LFSRI
II-CADIM Alternative Partnership L.P., Atria Communities, Inc., Kapson Senior
Quarters Corp., Prometheus Assisted Living LLC, Xxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxx, or Xxxxxxx X. Xxxxxx, as the case may be, but which are unknown and
unanticipated as of the date of this Agreement, or that damages presently known
may become progressive, greater or more serious than is now known, expected or
anticipated, or that facts alleged in the subject matter of this Agreement are
found to be different from the facts now believed by them to be true. The
parties hereby expressly accept such risks and agree that this Agreement is and
will remain effective notwithstanding such risks, if they occur.
10. Xxxxxxx expressly acknowledges and agrees that, by entering
into this Agreement, she is waiving any and all rights or
claims that she may have arising under the Age Discrimination
in Employment Act of 1967, as amended, which have arisen on or
before the date of execution of this Agreement. Xxxxxxx
further expressly acknowledges and agrees that:
a. In return for this Agreement, she will receive consideration (the
releases given herein) beyond that which she was already entitled to
receive before entering into this Agreement;
b. She was orally advised by ARV and is hereby advised in writing by
this Agreement to consult with an attorney before signing this
Agreement;
c. She was given a copy of this Agreement on March 17, 1999, and
informed that she had 21 days within which to consider the
Agreement; and
d. She was informed that she has seven (7) days following the date
of execution of the Agreement in which to revoke the Agreement.
11. Xxxxxxx acknowledges that by reason of her position with ARV
she has been given access to, received, and been entrusted
with confidential information, including but in no way limited
to development, marketing, organizational, financial,
management, administrative, production, distribution and sales
information, data, specifications and processes owned by ARV
or its agents or consultants, or used in the course of its
business that is not otherwise part of the public domain
(collectively, the "Confidential Material"). Xxxxxxx
represents that she has held all Confidential Material
confidential and will continue to do so, and that she will not
use Confidential Material for any business (which term herein
includes a partnership, firm, corporation or any other entity)
without the prior written consent of ARV. Xxxxxxx hereby
acknowledges that the sale or unauthorized use or disclosure
of any of ARV's Confidential Material by any means whatsoever
shall constitute unfair competition.
5
6
Xxxxxxx agrees that she shall not engage in unfair competition
at any time on or after the date of this Agreement.
12. Xxxxxxx promises and agrees that she will not, during her
engagement pursuant to the Consulting Agreement attached
hereto as Exhibit A and for a period of one year following
termination of such engagement or the expiration of the
Consulting Agreement, influence or attempt to influence
customers of ARV or any of its present or future subsidiaries
or affiliates, either directly or indirectly, to divert their
business to any individual, partnership, firm, corporation or
other entity then in competition with the business of ARV, or
any subsidiary or affiliate of ARV. The performance of legal
services for an ARV competitor after the termination of the
Consulting Agreement shall not itself constitute a violation
of this Section 12, provided, however, that such legal
services provided by Xxxxxxx in no way relate to any
proceeding or transaction in which ARV is a subject, party, or
participant.
13. Xxxxxxx promises and agrees that she will not, during her
engagement pursuant to the Consulting Agreement attached
hereto as Exhibit A and for a period of one year following the
earlier of termination of such engagement or the expiration of
the Consulting Agreement, directly or indirectly solicit any
ARV employees who earned annually $25,000 or more as an ARV
employee during the last six months of his or her own
employment to work for any business, individual, partnership,
firm, corporation, or other entity then in competition with
the business of ARV or any subsidiary or affiliate of ARV.
14. Xxxxxxx, ARV and Lazard agree that the terms and conditions of
this Agreement shall remain confidential as between the
parties and they shall not (except as required by law,
including disclosures required to shareholders or regulators,
and in a press release provided for herein) disclose them to
any other person. The parties shall mutually agree upon the
text of a press release announcing the separation of Xxxxxxx
from her position as Senior Vice President and General Counsel
at ARV and the substance of any other comments (including any
announcement to ARV employees) regarding the fact of Xxxxxxx'x
separation from such position and the reasons therefor. Except
as provided for in the mutually agreed disclosures, the
parties will not respond to or in any way participate in or
contribute to any public discussion, notice or other publicity
concerning, or in any way relating to, execution of this
Agreement or the events (including any negotiations) which led
to its execution. Without limiting the generality of the
foregoing, the parties specifically agree that they shall not
disclose information regarding this Agreement to any current
or former employee of ARV or any of its subsidiaries. The
parties hereby agree that disclosure by them of any of the
terms and conditions of the Agreement in violation of the
foregoing shall constitute and be treated as a
6
7
material breach of this Agreement. This Section 14 shall not
apply to or in any way limit (i) statements made by a party in
any court, arbitral or governmental proceeding or (ii) a
party's private consultation with its attorneys or other
professional advisors.
15. Xxxxxxx, ARV and Lazard each warrant and represent that there
has been no assignment or other transfer of any interest in
the released matters set forth in Sections 8 or 9 of this
Agreement, any claims, counterclaims, cross-claims, demands,
causes of action, or any part or portion thereof, that, but
for such assignment or transfer, would be subject to the
releases set forth in Sections 8 or 9 of this Agreement and
each agrees to indemnify, defend and hold harmless the others
from any liabilities, action or actions, cause or causes of
action in law or equity, suits, debts, liens, and from any
claims made upon, demands upon, damages asserted against, and
costs, expenses and attorneys' fees incurred (whether or not
litigation is actually commenced) by the other parties, or any
of them, based on or in connection with or arising out of any
such assignment or transfer made, purported or claimed.
16. Xxxxxxx and ARV acknowledge that they have no further
employment or contractual relationship except as arises out of
this Agreement and as set forth in (i) the Consulting
Agreement attached hereto as Exhibit A and (ii) the Indemnity
Agreement, and that Xxxxxxx waives any right or claim to
reinstatement as an employee of ARV.
17. This instrument, the Consulting Agreement attached hereto as
Exhibit A, and the Indemnity Agreement constitute and contain
the entire agreement and understanding concerning Xxxxxxx'x
relationship with ARV and the other subject matters addressed
herein between the parties, and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters
hereof. This is an integrated document.
18. Xxxxxxx may revoke this Agreement in its entirety during the
seven (7) days following execution of the Agreement by
Xxxxxxx. Any revocation of the Agreement must be in writing
and hand delivered during the revocation period. This
Agreement and the Consulting Agreement will become effective
and enforceable seven (7) days following execution by Xxxxxxx,
unless this Agreement is revoked during the seven-day period.
19. If any provision of this Agreement or the application thereof
is held invalid, the invalidity shall not affect other
provisions or applications of the Agreement which can be given
effect without the invalid provisions or applications and to
this end the provisions of this Agreement are declared to be
severable.
7
8
20. This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and
obligations of the parties hereunder shall be construed and
enforced in accordance with, and governed by, the laws of the
State of California without regard to principles of conflict
of laws.
21. Each party has cooperated in the drafting and preparation of
this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party
on the basis that the party was the drafter.
22. This Agreement may be executed in counterparts, and each
counterpart, when executed, shall have the efficacy of a
signed original. Photographic copies of such signed
counterparts may be used in lieu of the originals for any
purpose.
23. Any controversy arising out of or relating to this Agreement,
its enforcement or interpretation, or because of an alleged
breach, default, or misrepresentation in connection with any
of its provisions, shall be submitted to arbitration in Orange
County, California, before a sole arbitrator selected from
Judicial Arbitration and Mediation Services, Inc., Orange
County, California, or its successor ("JAMS"), or if JAMS is
no longer able to supply the arbitrator, such arbitrator shall
be selected from the American Arbitration Association, and
shall be conducted in accordance with the provisions of
California Civil Procedure Code Sections 1280 et seq. as the
exclusive remedy of such dispute; provided, however, that
provisional injunctive relief may, but need not, be sought in
a court of law while arbitration proceedings are pending, and
any provisional injunctive relief granted by such court shall
remain effective until the matter is finally determined by the
Arbitrator. Final resolution of any dispute through
arbitration may include any remedy or relief which the
Arbitrator deems just and equitable, including permanent
injunctive relief or specific performance, or both, and the
Arbitrator is hereby empowered to award such relief. Any award
or relief granted by the Arbitrator hereunder shall be final
and binding on the parties hereto and may be enforced by any
court of competent jurisdiction. Xxxxxxx and ARV understand
and agree that they are hereby waiving any rights to trial by
jury in any action, proceeding or counterclaim brought by
either of the parties against the other in connection with any
matter whatsoever arising out of or in any way connected with
this Agreement.
24. In the event of litigation or arbitration in connection with
or concerning the subject matter of this Agreement, the
prevailing party (as determined by the tribunal or arbitrator)
shall be entitled to recover all costs and expenses incurred
by such party in connection therewith, including reasonable
attorneys' fees.
8
9
25. No waiver of any breach of any term or provision of this
Agreement shall be construed to be, or shall be, a waiver of
any other breach of this Agreement. No waiver shall be binding
unless in writing and signed by the party waiving the breach.
26. In entering this Agreement, the parties represent that they
have relied upon the advice of their attorneys, who are
attorneys of their own choice, and that the terms of this
Agreement have been completely read and explained to them by
their attorneys, and that those terms are fully understood and
voluntarily accepted by them.
27. All parties agree to cooperate fully and to execute any and
all supplementary documents and to take all additional actions
that may be necessary or appropriate to give full force to the
basic terms and intent of this Agreement and which are not
inconsistent with its terms.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
EXECUTED this 17th day of March 1999, at Orange County, California.
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Approved as to form:
PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx
Attorneys for Xxxxxx X. Xxxxxxx
EXECUTED this 17th day of March 1999, at Orange County, California.
ARV Assisted Living, Inc.
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Its President and Chief Operations
Officer
Approved as to form:
9
10
O'MELVENY & XXXXX LLP
By /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx
Attorneys for ARV Assisted Living, Inc.
EXECUTED this _____ day of March 1999, at ________________ County,
_____________.
Lazard Freres Real Estate Investors L.L.C.,
with respect to paragraphs 2, 6, 8, 9, 14,
15, 18-27 only
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Its Principal
Approved as to form:
XXXXX, XXXXXXX, XXXXXXXX,
XXXXXX & XXXXXX, LLP
By /s/ Xxxx X. Xxxxx
---------------------------------
Attorneys for Lazard Freres
Real Estate Investors L.L.C.
Xxxx X. Xxxxx
10
11
ENDORSEMENT
I, Xxxxxx X. Xxxxxxx, hereby acknowledge that I was given 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this 17th day of March 1999, at Orange County, California.
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
11
