Exhibit 10.1
TERMINATION, NONCOMPETITION AND MUTUAL RELEASE AGREEMENT
THIS AGREEMENT is effective as of the 23rd day of November, 1998, by
and between NuMED Home Health Care, Inc., a Nevada corporation (together with
any and all affiliates and subsidiaries, the "Former Employer"), and Xxxxx X.
Xxxxxx (the "Former Executive").
WITNESSETH
WHEREAS, the Former Executive was employed by the Former Employer under
that certain Employment Agreement by and between Former Employer and Former
Executive dated September 1, 1995 and amended September 30, 1996 and renewed
annually by the Board of Directors thereafter (the "Terminated Agreement") ,
until the date hereof; and
WHEREAS, the Former Executive and the Former Employer have determined
that it is in their mutual best interests to terminate the Terminated Agreement
and their relationship as employee and employer as of the date hereof; and
WHEREAS, the Former Employer desires to assure itself of the Former
Executive's continued noncompetition obligations pursuant to the terms hereof;
and
WHEREAS, the Former Employer and Former Executive desire to mutually
release each other from any and all claims that they might have against each
other and all of their other obligations under the Terminated Agreement and to
enter into this Agreement in full and final settlement pursuant to the terms
hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. Termination of Employment Relationship. The Terminated Agreement is
hereby terminated, and the Former Employer and the Former Executive
hereby agree to terminate their employment relationship.
2. Consideration.
A. In consideration for the Former Executive's release of his
rights under the Terminated Agreement, his noncompetition and
non-disclosure covenants, the mutual release, and the
tendering of Former Executive's resignation from any and all
positions as an officer (but not as a director) of the Former
Employer (which includes any and all subsidiaries and
affiliates as defined above), the Former Employer shall (i)
pay the Former Executive (a) the sum of Two Hundred Fifty
Thousand Dollars
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($250,000) in cash (the "Cash Payment") payable in equal
monthly installments at the Former Executive's most recent
annual salary rate until the Former Employer receives the
final payment in connection with the Rosewood Care Center
settlement (the "Rosewood Receivable"), at which time the
Former Employer shall pay the Former Executive the sum of
$250,000 less monthly installments made in accordance with
this subsection through the date thereof, and (b) 744,680
shares of the Former Employer's common stock (the "Common
Stock") (which number of shares represents $350,000 worth of
the Common Stock based on the average closing price for the
last five (5) trading days) which shares of Common Stock shall
be delivered upon the execution and delivery of this
Agreement, and (ii) extend the term of all of Former
Executive's existing options and warrants for a term of three
years from the date hereof.
B. As security for the Cash Payment set forth in subsection A.
above, Former Employer hereby grants to Former Executive a
security interest in the Rosewood Receivable and all proceeds
thereof and hereby covenants and agrees to execute and deliver
to Former Executive a UCC-1 Financing Statement perfecting
such security interest within three days after receipt from
Former Executive's legal counsel. The Former Employer shall
execute and deliver all documents, provide all information and
take or forbear from all such action as may be necessary or
appropriate to grant or perfect the security interest created
hereby and achieve the purpose of this subsection B.
Additionally, if the Cash Payment is not paid in full within
ninety (90) days after the date hereof, interest shall accrue
on the unpaid balance at the prime rate of interest of First
Union Bank, N.A. from time to time. Moreover, Former Executive
shall be allowed to retain his current physical office
location until the Cash Payment is paid in full.
3. Noncompetition and Non-Disclosure Requirements.
A. Rationale for Restrictions. Former Executive acknowledges that
his past services to the Former Employer were of a special,
unique, extraordinary and intellectual character, and his
position with the Former Employer placed him in a position of
confidence with customers, suppliers and employees of Former
Employer and other Related Entities. The Former Executive
further acknowledges that the rendering of services to the
Former Employer necessarily required the disclosure to him of
confidential information (as defined below) of the Former
Employer and, to the extent that the Former Employer shall
have any parent, subsidiary, affiliated corporations,
partnerships, or joint venture (collectively "Related
Entities"), of the Related Entities. The Former Executive and
the Former Employer agree that during his course of
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employment with the Former Employer, the Former Executive
developed personal relationships with the Former Employer's
financiers, customers, suppliers and employees, and the Former
Executive agrees that it is reasonable and necessary for the
protection of the goodwill and legitimate business interests
of the Former Employer and Related Entities that the Former
Executive make the covenants contained herein, that the
covenants are a material inducement for the Former Employer to
enter into this Agreement, and that the covenants are given as
an integral part of and incident to this Agreement.
B. Noncompetition In Related Business. As used herein, the term
"Restrictive Period" means the time period commencing on the
date of this Agreement and ending two (2) years after the date
hereof. The Former Executive agrees not to utilize his
knowledge of the business of the Former Employer or his
relationships with investors, suppliers, customers, clients,
or financial institutions to compete with the Former Employer
or any of the Related Entities in any business which is the
same as, or substantially similar to, the business conducted
by the Former Employer or any of the Related Entities on the
date hereof. Pursuant to these covenants, the Former Executive
agrees that he will not, during the Restrictive Period:
i. directly or indirectly engage in, continue in, be
employed by, or carry on any business, including
owning or controlling any financial interest in any
corporation, partnership, firm, or other form of
business organization, which competes with, or is
engaged in, or carries on any aspect of such business
or any business substantially similar to, the Former
Employer's or Related Entities' business as it exists
on the date hereof;
ii. directly or indirectly, assist, promote or encourage
any employees or clients, or potential employees or
clients, of the Former Employer or Related Entities
to terminate or discontinue their relationship in
order to pursue opportunities or employment with any
competitor of the Former Employer or Related
Entities.
iii. consult with, advise or assist in any way, whether or
not for consideration, any corporation, partnership,
firm or other business organization which is now,
becomes or may become a competitor of the Former
Employer or Related Entities in any aspect of the
Former Employer's or Related Entities' business as it
exists on the date hereof.
C. Disclosure of Confidential Information. The Former Executive
acknowledges that the inventions, innovations, software, trade
secrets,
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business plans, financial strategies, finances, and all other
confidential or proprietary information with respect to the
business and operations of the Former Employer and Related
Entities are valuable, special and unique assets of the Former
Employer. The Former Executive agrees not to, at any time
during or after the Restrictive Period, except (i) when
compelled by legal process or as otherwise required by law,
and (ii) when necessary to defend any action brought against
Former Executive relating to the Former Employer or Related
Entities, disclose, directly or indirectly, to any person or
entity, or use or authorize or purpose to authorize any person
or entity to use any confidential or proprietary information
with respect to the Former Employer or Related Entities
without the prior written consent of the Former Employer,
including, without limitation, information as to the financial
condition, results of operations, identities of clients or
prospective clients, products under development, acquisition
strategies or acquisitions under consideration, pricing or
cost information, marketing strategies or any other
information relating to the Former Employer or any of the
Related Entities which could be reasonably regarded as
confidential. Provided, however, information which is or may
become generally available to the public shall not constitute
confidential information which is subject to the restrictions
set forth herein.
D. The Former Executive agrees that the geographic scope of this
covenant not to compete shall extend to any and all markets in
which the Former Employer operates in the United States as of
the date of this Agreement and any Geographic area in which
the Former Employer expands its operations to include (whether
by acquisition or otherwise) during the Restrictive Period.
E. In the event of any breach of this covenant not to compete,
the Former Executive recognizes that the remedies at law will
be inadequate and that in addition to any relief at law which
may be available to the Former Employer for such violation or
breach and regardless of any other provision contained in this
Agreement, the Former Employer shall be entitled to equitable
remedies (including an injunction) and such other relief as a
court may grant after considering the intent of this Section
3.
F. In the event a court of competent jurisdiction determines that
the provision of this covenant not to compete are excessively
broad as to duration, geographic scope, prohibited activities
or otherwise, the parties agree that this covenant shall be
reduced or curtailed to the extent necessary to render it
enforceable.
4. General Mutual Release.
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A. Former Executive, on his own behalf and on behalf of his heirs
and representatives, hereby releases and forever discharges
Former Employer, along with its respective officers,
directors, employees, assigns, successors, and representatives
from all manner of civil actions, contract actions, tort
actions, statutory actions, administrative actions, injuries,
damages, loss of services, constitutional claims, charges of
discrimination and claims for costs, expenses or attorney's
fees which he had, has, or hereafter can, or may have against
the Former Employer arising out of any event, act or
occurrence in any way based on the employment of the Former
Executive by the Former Employer, including but not limited to
any and all claims, damages or losses, known or unknown,
directly or indirectly sustained by the Former Executive in
connection with any matter arising out of their employment
relationship, except for the provisions of this Agreement.
B. Former Employer, on its own behalf and on behalf of its
successors and assigns, hereby releases and forever discharges
Former Executive, along with his heirs, successors, and
representatives from all manner of civil actions, contract
actions, tort actions, statutory actions, administrative
actions, injuries, damages, loss of services, constitutional
claims, charges of discrimination and claims for costs,
expenses or attorney's fees which it had, has, or hereafter
can, or may have against the Former Executive arising out of
any event, act or occurrence in any way based on (i) the
employment of the Former Executive by the Former Employer or
(ii) actions or inaction of Former Executive as a director
prior to and including the date hereof, including but not
limited to any and all claims, damages or losses, known or
unknown, directly or indirectly sustained by the Former
Employer in connection with any matter arising out of their
employment relationship or service by Former Executive on the
Former Employer's board of directors, except for the
provisions of this Agreement.
5. Demand Registration Rights.
A. Right to Demand Registration. Upon the written request of
Former Executive at any time after one year after the date of
this Agreement (which request shall specify the Common Stock
intended to be disposed of by Former Executive and the
intended method of distribution thereof), the Former Employer
shall:
i. Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration
statement under the Securities Act of 1933 (the
"Act") with respect to such Common Stock to the
extent required to permit the disposition of such
Common Stock so to be registered in accordance with
the intended method
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of distribution thereof specified in such request and
use its reasonable best efforts to cause such
registration statement to become effective, and keep
such registration statement effective for not less
than one year thereafter or such earlier date as all
securities offered are sold.
ii. Prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection with such
registration statement as may be necessary to comply
with the provisions of the Act with respect to the
disposition of all Common Stock covered by such
registration statement.
iii. Furnish to the Former Executive such numbers of
copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of
the Act, and such other documents as it may
reasonably request in order to facilitate the
disposition of such Common Stock owned by it.
iv. Use its reasonable best efforts to Register and
qualify such Common Stock covered by such
registration statement under the Blue Sky laws of
such jurisdictions as shall be reasonably requested
by the Former Executive, provided that the Former
Employer shall not be required in connection
therewith or as a condition thereto to qualify to do
business or to file a general consent to service of
process in any such states or jurisdiction.
B. Expenses of Registration. All expenses incurred in connection
with any registration or qualification, including, without
limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the
Former Employer and expenses of any special audits incidental
to or required by such registration, qualification or
compliance shall be borne by the Former Employer, except that
the Former Employer shall not be required to pay underwriters'
discounts, commissions, or stock transfer taxes relating to
the Common Stock or the fees and disbursements of counsel to
the Former Executive.
C. Indemnification. In the event of (i) the registration of any
Common Stock under the Act pursuant to the provisions of this
Agreement and to the extent permitted by applicable law, the
Former Employer agrees to indemnify and hold harmless the
Former Executive, and each other person, if any, who controls
the Former Executive within the meaning of the Act, from and
against any and all losses, claims, damages, or liabilities
(or actions in respect thereof) which arise out of or are
based upon any untrue statement or alleged untrue statement of
any material
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fact contained in any registration statement under which such
Common Stock was Registered under the Act or any prospectus
contained therein, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the
Former Executive, and each such controlling person, for any
legal or any other expenses reasonably incurred by Former
Executive, or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability, or action provided, however, that the Former
Employer will not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement or such prospectus in reliance upon,
and in conformity with, information furnished to the Former
Employer by the Former Executive or such controlling person,
specifically for use in preparation thereof; (ii) the
registration of any Common Stock under the Act pursuant to the
provisions of this Agreement and to the extent permitted by
applicable law, the Former Executive, and each other person,
if any, who controls the Former Executive within the meaning
of the Act, agrees to indemnify and hold harmless the Former
Employer, each person who controls the Former Employer within
the meaning of the Act, and each officer and director of the
Former Employer from and against any losses, claims, damages,
or liabilities, joint or several, to which the Former
Employer, such controlling person, or any such officer or
director may become subject under the Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such
Common Stock was registered under the Act or any prospectus
contained therein, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or
alleged untrue statement or omission or alleged omission was
made therein in reliance upon, and in conformity with,
information furnished to the Former Employer by the Former
Executive or such controlling person specifically for use in
connection with the preparation thereof; and will reimburse
the Former Employer, each such controlling person and each
such officer or director for any legal or any other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or
action; (iii) the registration of any Common Stock under the
Act pursuant to the provisions of this Agreement, promptly
after receipt by an indemnified party of notice of the
commencement of any action or the assertion of a claim which
may be subject to indemnification hereunder, such indemnified
party will, if a
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claim in respect thereof is to be made against an indemnifying
party, give written notice to such indemnifying party of the
commencement or assertion thereof, but the omission so to
notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise
than pursuant to the provisions of this paragraph 5C. In case
any such action is brought or such assertion made against any
indemnified party, and it notifies any indemnifying party of
such commencement or assertion made against any indemnified
party, the indemnifying party will be entitled to participate
in and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, and to assume the
defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof, other than the reasonable cost of
investigation.
6. Return of Former Employer's Property. Simultaneously with the execution
hereof, the Former Executive covenants that he is returning any and all
material records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, software and other property
delivered to or compiled by the Former Executive by or on behalf of the
Former Employer or its representatives, vendors or customers which
pertain to the business of the Former Employer and acknowledges that
such property is and shall remain the property of the Former Employer.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be
deemed to have been duly given when hand-delivered, sent by telecopier,
facsimile transmission or other electronic means of transmitting
written documents (as long as receipt is acknowledged) or mailed by
United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to Former Executive:
Xx. Xxxxx X. Xxxxxx
--------------------------
--------------------------
If to Former Employer:
NuMED Home Health Care, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
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Attn: Chief Executive Officer
Facsimile: (000) 000-0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Complete Agreement. Former Executive has no oral representations,
understandings or agreements with the Former Employer or any of its
officers, directors or representatives covering the same subject matter
as this Agreement. This written Agreement is the final, complete and
exclusive statement and expression of the agreement between the Former
Employer and Former Executive and of all the terms of this Agreement,
and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written
Agreement may not be later modified except by a further writing signed
by a duly authorized officer of the Former Employer and Former
Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.
9. Expenses Incurred in Connection with the Enforcement of this Agreement.
The Former Employer, if it prevails, and the Former Executive, if he
prevails, shall be entitled to reimbursement for any costs, including
legal fees, incurred in connection with the enforcement of the this
Agreement.
10. Change in Control. Employee understands and acknowledges that the
Former Employer may be merged, sold, or consolidated with or into
another entity and that such entity shall automatically succeed to the
rights and obligations of the Former Employer.
11. Indemnification
A. Indemnification by Former Employer. Former Employer agrees to
indemnify and defend Former Executive and hold him harmless
from and against any and all claims, demands, losses, costs,
expenses, damages, and deficiencies, including, without
limitation, interest, penalties, and attorneys= fees, that
Former Executive shall suffer or incur because of any act or
event occurring prior to the date hereof, including without
limitation, acts or inaction by Former Executive as a director
of Former Employer.
B. Third Party Claims.
i. Promptly after receipt by Former Executive of notice
of the commencement of any proceeding against it,
such indemnified party will, if a claim is to be made
against Former Employer under paragraph 11A, give
notice to Former Employer of the commencement of such
claim, but the failure to notify Former
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Employer will not relieve Former Employer of any
liability that it may have Former Executive, except
to the extent that the Former Employer demonstrates
that the defense of such action is prejudiced by
Former Executive's failure to give such notice.
ii. If any proceeding is brought against Former Executive
and he gives notice to Former Employer of the
commencement of such proceeding, Former Employer will
be entitled to participate in such proceeding and, to
the extent that it wishes (unless (i) Former Employer
is also a party to such proceeding and Former
Executive determines in good faith that joint
representation would be inappropriate, or (ii) Former
Employer fails to provide reasonable assurance to
Former Executive of its financial capacity to defend
such proceeding and provide indemnification with
respect to such proceeding), to assume the defense of
such proceeding with counsel satisfactory to Former
Executive and, after notice from Former Employer to
Former Executive of its election to assume the
defense of such proceeding, Former Employer will not,
as long as it diligently conducts such defense, be
liable to Former Executive under this paragraph 11
for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in
each case subsequently incurred by Former Executive
in connection with the defense of such proceeding,
other than reasonable costs of investigation. If
Former Employer assumes the defense of a proceeding,
(i) it will be conclusively established for purposes
of this Agreement that the claims made in that
proceeding are within the scope of and subject to
indemnification hereunder; (ii) no compromise or
settlement of such claims may be effected by Former
Employer without Former Executive's consent unless
(A) there is no finding or admission of any violation
of law or any violation of the rights of any person
and no effect on any other claims that may be made
against Former Executive, and (B) the sole relief
provided is monetary damages that are paid in full by
Former Employer; and (iii) Former Executive will have
no liability with respect to any compromise or
settlement of such claims effected without his
consent. If notice is given to Former Employer of the
commencement of any proceeding and Former Employer
does not, within ten days after Former Executive's
notice is given, give notice to Former Executive of
its election to assume the defense of such
proceeding, Former Employer will be bound by any
determination made in such proceeding or any
compromise or settlement effected by Former
Executive.
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iii. Notwithstanding the foregoing, if Former Executive
determines in good faith that there is a reasonable
probability that a proceeding may adversely affect
him or his affiliates other than as a result of
monetary damages for which he would be entitled to
indemnification under this Agreement, Former
Executive may, by notice to Former Employer, assume
the exclusive right to defend, compromise, or settle
such proceeding, but Former Employer will not be
bound by any determination of a proceeding so
defended or any compromise or settlement effected
without its consent (which may not be unreasonably
withheld).
iv. Former Employer hereby consents to the non-exclusive
jurisdiction of any court in which a proceeding is
brought against Former Executive for purposes of any
claim that Former Executive may have under this
Agreement with respect to such proceeding or the
matters alleged therein.
C. Cooperation. In the event of any claim or litigation with a
third party to which the foregoing provisions of this Section
relate, Former Executive agrees to cooperate with Former
Employer in connection therewith and to make all books,
records, and documents relating to the claim being brought, in
Former Executive's possession or under its control, available
to Former Employer or its duly authorized representatives,
upon request, for inspection and copying at the Former
Employer's expense. Nothing contained herein shall be
construed to limit the rights of the parties to discovery
under the procedural rules relevant to any proceeding.
D. Remedies. Each party shall have, and without notice may
exercise in any order, any and all rights and remedies,
whether in law or equity, now or hereafter provided to it
under this Agreement and any other agreement and applicable
law, all of which shall be cumulative and non-exclusive; the
exercise, non-exercise, waiver, or delay in exercise of any
such rights or remedies shall not constitute an election of
remedies or preclude the simultaneous or subsequent exercise
of the same or any other right or remedy.
12. Miscellaneous. This Agreement shall be binding upon, and inure to the
benefit of, the Former Employer, its respective successors and assigns,
and the Former Executive and his heirs, executors, administrators and
legal representatives. The parties agree that if any provision of this
Agreement shall under any circumstances be deemed invalid or
inoperative, the Agreements shall be construed with the invalid or
inoperative provision deleted and the rights and obligations of the
parties shall be construed and enforced accordingly. The validity,
interpretation, construction and performance of this Agreement shall be
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governed by the internal laws of the State of Florida. This Agreement
may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together will constitute but
one and the same instrument.
13. Counterparts; Facsimile Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
This Agreement may be effective upon the execution and delivery by any
party hereto of facsimile copies of signature pages hereto duly
executed by such party.
14. Default and Cure Period. In the event of a breach by either party of
the terms of this Agreement, the nonbreaching party will give prompt
written notice of such breach to the other and afford the breaching
party 30 days from receipt of such notice to cure such breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NuMED Home Health Care, Inc.,
a Nevada corporation
("Former Employer")
By: /s/
Its:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
("Former Executive")
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